Mr Justice Tugendhat :
This is the hearing of an application by the Second Defendant ('Ra.')
made by notice filed on 13 June 2003, under CPR Part 3.1.2(a) and 52.6,
to vary the time limit for filing a notice of appeal from the order of Master
Leslie dated 1 May 2001. Ra. is an Iraqi state owned Bank. The Master
ordered that the judgment as against Ra. dated 27 September 2000 of
the President of the District Court in Amsterdam be registered in this
court pursuant to the Civil Jurisdiction and Judgments Act 1982.
That judgment was in respect of a debt alleged to be due to the Claimants
('C.bank') arising out of various documentary credits issued in 1989
by one or other of the Defendants (both of which are Iraqi state banks
having their principal place of business in Baghdad). The credits related
to the export of goods from Turkey to Iraq in 1989 and 1990. The
proceedings had commenced on 23rd May 2000, and the judgment
entered was in the sum of US$11,431,893.85 plus costs. According
to C.bank's claim, the two banks have common capital and they were
apparently treated as one entity by the Dutch court.
In the evidence before me Mr A., the Chief Legal Adviser of Ra. is cited as
saying that although both Defendants are owned by the Iraqi government,
under Iraqi law they are separate corporate legal entities and one bank is
not liable for the debt of the other. Other defences which, it is submitted,
were available in the Dutch proceedings, but not taken, were a limitation
defence, an argument that the proper claimant was not C.bank but its
customer, a frustration defence (arising out of the first Gulf war) and a
part payment for which no credit has been given by C.bank. The reasons
why none of these defences were raised, it is said, is that the effect of
sanctions on Ra.'s ability to fund legal representation deprived it of access
to justice and other fair trial rights guaranteed by Art 6 of the European
Convention on Human Rights, and that it was not served with the Dutch
proceedings far enough in advance of the application for the default
judgment to allow it to mount any defence to C.bank's application.
The Master further ordered that Ra. should have liberty within one month
of service on it of notice of registration of the judgment to appeal against
such registration and that execution should not issue to enforce the
judgment until after the expiry of that period or until such appeal has
been determined. In fact this part of the order was explanatory only. Ra.
did not require permission to appeal, and the period for appealing was
two months, not one: Rules of the Supreme Court Order 71 rule 33(1)(a).
The application is made in an Appellant's Notice, and the time limit for
appealing is agreed to have expired on 21 May 2002. The reason why that
time does not begin to run until so long after the Master's order relates
to the time taken for service, which was ultimately effected on M. Z. & Co
("the solicitors"), who had instructions to accept service in March 2002. It
is now accepted that service was effected on 21 March 2002.
The grounds relied on, both for this application, and for the appeal if an
extension of time is granted, are that the Defendants were effectively
denied access to legal representation, and so to justice, by the sanctions
that have been imposed since 1990. They rely on Art 6 of the European
Convention of Human Rights.
The military annexation by Iraq of Kuwait on 2nd August 1990 led the
United Nations Security Council to adopt on the same day Resolution 661
(1990). By article 4 States were required not to make available to the
Government of Iraq or to any commercial undertaking in Iraq any funds
or any other financial or economic resources except payments exclusively
for strictly medical or humanitarian purposes. This was implemented
in this jurisdiction and in other States of the European Community by
Regulations and other provisions the details of which I do not need to set
out, save to say that they applied to Ra.. Sanctions were brought to an
end here on 21 May 2003 by the United Nations Sanctions (Amendment)
Order 2003 SI 2003 No 1342.
It is submitted by Mr Lyon QC on behalf of Ra. that it has been unable to
appeal, or apply for an extension of time to appeal, due to the sanctions
which, it is submitted, are circumstances beyond its control. It is said
that the effect of the sanctions is that it was denied representation to
defend the proceedings in the Netherlands and to defend its interests in
the recognition and enforcement proceedings in this jurisdiction.
It is submitted by Mr Stephen Phillips QC for C.bank, who are the
Claimants in the action and in the enforcement proceedings, and the
Respondent to this application, that this court has no jurisdiction to grant
the extension of time, or, if it has, that such extension should be refused
as a matter of discretion.
On 25th March 2003 C.bank was granted a third party debt order in
respect of assets held by Ra. at Deutsche Bank in London. The hearing of
the application to make that order final was listed before Master Foster on
29th July 2003, together with applications by two other creditors, who are
not parties to the proceedings before me.
On 4 July 2003 Ra.'s application was refused by the single judge on paper,
on the basis that there was no jurisdiction to grant the extension of time
requested. He also expressed the view that there was nothing to prevent
an application being lodged on the basis of the difficulties created by the
imposition of sanctions within the two months. He noted that there does
not seem to have been any material change in the funding problems when
this application was lodged. Ra. Bank have applied for an oral hearing.
The matter came before me on 28 July 2003. Because my decision might
affect the proceedings listed on 29 July, I indicated at the end of the
hearing that I refused the application in the exercise of my discretion, and
would give my reasons later. This I now do.
JURISDICTION
It is submitted by Mr Phillips QC on behalf of C.bank that there is no
jurisdiction under the applicable statutory provisions and rules of court.
The parties agree that the relevant statutory provisions are those in
the Brussels Convention 1982 ('the Convention') which is set out in the
Civil Jurisdiction and Judgments Act 1982. This has been replaced by
the Judgment Regulation (Council Regulation (EC) No. 44/2001 of 22nd
December 2000) with effect from 1 March 2002, but there is no difference
in wording material to the present case.
The Convention includes the following:
'Article 26
A judgment given in a Contracting State shall be recognised in the other
Contracting States without any special procedure being required.
Any interested party who raises the recognition of a judgment as the
principal issue in a dispute may, in accordance with the procedures
provided for in Sections 2 and 3 [Text] of this Title apply for a decision
that the judgment be recognised.
If the outcome of proceedings in a court of a Contracting State depends
on the determination of an incidental question of recognition that court
shall have jurisdiction over that question.
Article 27
A judgment shall not be recognised: 1. if such recognition is contrary
to public policy in the State in which recognition is sought; 2. where it
was given in default of appearance, if the defendant was not duly served
with the document which instituted the proceedings or with an equivalent
document in sufficient time to enable him to arrange for his defence; …
Article 29
Under no circumstances may a foreign judgment be reviewed as to its
substance…
Article 31
A judgment given in a Contracting State and enforceable in that State
shall be enforced in another Contracting State when, on the application of
any interested party, it has been declared enforceable there.
However, in the United Kingdom, such a judgment shall be enforced in
England and Wales, in Scotland, or in Northern Ireland when, on the
application of any interested party, it has been registered for enforcement
in that part of the United Kingdom….
Article 36
If enforcement is authorised, the party against whom enforcement is
sought may appeal against the decision within one month of service
thereof.
If that party is domiciled in a Contracting State other than that in which
the decision authorising enforcement was given, the time for appealing
shall be two months and shall run from the date of service, either on him
in person or at his residence. No extension of time may be granted on
account of distance.
Article 37
1. An appeal against the decision authorising enforcement shall be lodged
in accordance with the rules governing procedure in contentious matters:
…'
The rules governing such procedure in this jurisdiction are those set
out now in the CPR Parts 52 and 74. Part 74 was added by the Civil
Procedure (Amendment) Rules 2002 SI 2002 No 2058 with effect from 2
December 2002. The rules applicable before that date were the Rules of
the Supreme Court Order 71. While there is some difference in wording,
the substance is the same. This application was made after Part 74 came
into force, and it relates to an appeal against the granting of registration
under the 1982 Act. It appears to me that it is the provisions of CPR Part
74 that apply. Having been shown the provisions of the RSC, I can see
no reason why a different result should follow if (contrary to my view) I
ought to have regard to those provisions.
CPR Part 74.8 provides:
'Appeals
(1) An appeal against the granting or the refusal of registration under the
1982 Act or the Judgments Regulation must be made in accordance with
Part 52, subject to the following provisions of this rule.
(2) Permission is not required—
(a) to appeal; or
(b) to put in evidence.
(3) If—
(a) the judgment debtor is not domiciled within a Contracting State or a
Regulation State, as the case may be, and
(b) an application to extend the time for appealing is made within
two months of service of the registration order, the court may extend
the period for filing an appellant's notice against the order granting
registration, but not on grounds of distance.
(4) The appellant's notice must be served—
(a) where the appeal is against the granting of registration, within—
(i) one month; or
(ii) where service is to be effected on a party not domiciled within the
jurisdiction, two months, of service of the registration order;
(b) where the appeal is against the refusal of registration, within one
month of the decision on the application for registration'.
CPR Part 3.1 provides as follows:
'The court's general powers of management
(1) The list of powers in this rule is in addition to any powers given to the
court by any other rule or practice direction or by any other enactment or
any powers it may otherwise have.
(2) Except where these Rules provide otherwise, the court may—
(a) extend or shorten the time for compliance with any rule, practice
direction or court order (even if an application for extension is made after
the time for compliance has expired); …'
CPR Part 52.6 provides as follows:
'Variation of time
(1) An application to vary the time limit for filing an appeal notice must be
made to the appeal court.
(2) The parties may not agree to extend any date or time limit set by—
(a) these Rules;
(b) the relevant practice direction; or
(c) an order of the appeal court or the lower court.
(Rule 3.1(2)(a) provides that the court may extend or shorten the time
for compliance with any rule, practice direction or court order (even if
an application for extension is made after the time for compliance has
expired)).'
Mr Phillips QC submits that the power to extend time under Part 74.8
is conditional on an application being made within the time period
stipulated. For the purposes of CPR Part 3.1 it is a case where the rules
'provide otherwise'. In support of his submission he refers to the notes in
the White Book which are now to be found at 74.11.37 as follows:
'… as the Convention has established an enforcement procedure which
constitutes an autonomous and complete system independent of the legal
systems of the Contracting States, the provisions relating to the stay of
proceedings pending appeal against registration must be restrictively
and uniformly applied so as to avoid derogation from the Convention's
object of establishing a simple and rapid machinery for the enforcement
of judgments enforceable in the state of origin'.
He points out that, unlike domestic judgment which are enforceable
immediately (subject to any stay that may be granted), enforcement of
judgments under the Convention is tied to the exhaustion of rights of
appeal.
Mr Lyon QC submits that the requirement in Part 74.8(4) that the
appellant's notice 'must be served' within the one or two month period
there specified is not sufficient to 'provide otherwise', that is to exclude
the application of Part 3.1(2)(a). He notes that if an application is made
under Part 74.8(3) within the two months applicable to a judgment debtor
not domiciled within a Contracting State, the court may extend the period
for filing an appellant's notice (although not on grounds of distance). He
submits that this rule is drafted on the understanding that Article 36 of
the Convention does permit an extension of time, and that this power is
implicit in the final sentence of the article: 'No extension of time may be
granted on account of distance'. He notes that there is no reference to a
power to extend time (whether subject to conditions or at all) in relation
to a judgment debtor who is domiciled within a Contracting or Regulation
State, and so that there are no words in the rule which could be construed
as excluding the power to extend time under Part 3.1(2)(a) in relation to
them.
Mr Lyon QC also points out that the word 'must' is also used in Part
52.4(2) in relation to the time for filing an appeal notice, but that is
subject to the provision in Part 52.6 for extension of time. So the word
'must' there is expressly not a provision excluding Rule 3.1(2)(a). To
exclude Rule 3.1(2)(a) he says that clearer words are required, such as
appear in Part 7.6(3): 'If the claimant applies for an order to extend the
time for service of the claim form after the end of the period specified by
rule 7.5 … the court may make such an order only if  …' (and conditions
are specified).
It is also to be noted that there is a difference in the structure of Art
36 compared with Part 74. Art 36 refers to only two classes of party
against whom enforcement is sought. There are those domiciled within
a Contracting State other than that in which the decision authorising
enforcement was given, for whom the time for appealing is two months.
And there are all others, for whom the period for appealing is one
month. But all the others will include those who are domiciled in a non-
Contracting State (which by definition will be a state other than that
in which the decision authorising enforcement was given). It is not
clear why they should have less than two months. It is for those parties
that provision is made in CPR Part 74.8(3). Ra. is such a party, that
is, it is domiciled in a non-Contracting State. If the Convention were
to be construed so strictly that the national rules governing procedure
permitted no extension of time to be granted after the two month period
granted by Part 74.8(3), it would also be for consideration whether Part
74.8(3) were not itself outside what is authorised by Art 36. Art 36 does
not contemplate that such parties should have two months in the first
place. The CPR give a general extension of one month to such parties.
In my judgment Art 36 does permit an extension of time to be granted
(otherwise than on account of distance), and there is nothing in Art 36
or Part 74.8 which provides otherwise than Part 3.1(2)(a). Accordingly I
conclude that I have jurisdiction under Part 3.1(2)(a) to extend the time
notwithstanding that the application is made after the time for compliance
has expired.
DISCRETION
Mr Lyon QC invites me to approach the question whether or not to accede
to the application having regard to the overriding objective and to CPR
Part 3.9 which reads:
'Relief from sanctions
(1) On an application for relief from any sanction imposed for a failure
to comply with any rule, practice direction or court order the court will
consider all the circumstances including—
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure;
(e) the extent to which the party in default has complied with other rules,
practice directions and court orders and any relevant pre-action protocol;
(f) whether the failure to comply was caused by the party or his legal
representative;
(g) whether the trial date or the likely date can still be met if relief is
granted;
(h) the effect which the failure to comply had on each party; and
(i) the effect which the granting of relief would have on each party.
(2) An application for relief must be supported by evidence.'
The evidence relied on (as required by Part 3.9(2)) is the second witness
statement of Mr S. Z., the senior partner of the solicitors, dated 12 June
2003. He says his firm was first instructed by Ra. in around August 2001.
In his witness statement Mr Z. says:
'3. I make this witness statement on the basis of my own experience
in acting for the [Ra.] Bank in this jurisdiction, of my communications
with Ms B. N. H. and Mr H. A. A. of Ra. Bank in Baghdad ("the Bank's
officers") and of my communications with a Dutch law firm, H. B., who
represented the Bank in the Netherlands to the limited extent described
below. I should also say that since 11th March 2003 I have not had any
communication or further instructions from Ra. Bank… for the last two
years my firm has had very significant difficulties in communicating with
the Bank….
5. … Until the [second Gulf] war, I was able to communicate with my
clients by an occasional fax transmission and occasional e-mail, or by
asking third parties to take documents with them to Iraq and hand them
in to the Bank's offices in person…
14. The Bank was afforded a rather skeletal level of representation by the
firm H. B., although even that did not extend to representing the Bank
at any hearing, or otherwise alerting the Dutch Court to any relevant
defences to the claims on the letters of credit. My understanding is that
this work was, in practice, limited to corresponding with the Bank and
making some (unsuccessful) efforts with the opponents to have the Dutch
Judgment set aside, after the event. When I met Ms B. N. H. of Ra. Bank
in Baghdad in February 2002, I had enquired of her if any Dutch lawyers
had tried to apply for release of the frozen funds to pay legal fees to
defend the proceedings in Amsterdam. Ms B. answer was in the negative…
15. … I have no cover from clients at present for my firms own fees or
counsel's fees. I am hoping these will be paid now that the situation
concerning the sanctions regime will be changing …
33. On 25th December 2000 the Bank (B. N. H.) returned a form which it
had received from W. M. P. in which it stated that the Bank did not intend
to comply with the judgment of the Dutch Court dated 27th September
2000'.
Mr Z. also states that there are the defences outlined above on the
merits to the claim brought in the Dutch court. He also takes a point that
service was not effected as required by Art 27(2). However, the evidence
for this is uncertain. He says: 'I am told by Mr M. H. of H. B. that it is
almost certain that the Dutch Department of Foreign Affairs did not serve
the legal documents regarding C.bank's claim against Ra. Bank in the
Netherlands through the appropriate diplomatic channels… The Bank was
sent the Petition [ie commencing the Dutch proceedings] under cover of
a letter of 6th June 2000, although it is unclear when that letter reached
Baghdad'.
The point that Mr Z. takes under Art 27(1) is that there were breaches of
the requirements of Art 6 of the ECHR, in that Ra. was unrepresented by
no fault of its own, being deprived by the sanctions of access to the frozen
funds, both here and in Amsterdam.
Mr Z. also states that the main cause of the delay in making this
application has been Ra.'s inability to instruct and pay for lawyers to
mount any timely appeal. He quotes extensively from correspondence
over the twelve months from August 2001 which he has exchanged with
the Treasury Solicitor and HM Treasury in which he attempted to secure
the release of funds for Ra.'s defence. That was an application for the
release of frozen funds under art 5 of the Iraq (United Nations Sanctions)
Order 2000, SI 2000 No 3241). The application was rejected by letter
dated 4th September 2001, and again on 19 June 2002.
On 12th September 2001 the solicitors wrote to HM Treasury indicating
that their clients were minded to make an application for judicial review of
the Ministerial Decision not to release funds. They argued that the policy
was incompatible with Articles 6 of the European Convention on Human
Rights, and with Article 1 of the First Protocol.
On 6th November 2001 HM Treasury reminded the solicitors that the
exception provided for in Resolution 661 was confined to payments for
medical or humanitarian purposes, and did not extend to payment of legal
fees. The letter went on to say that as a matter of discretion, the Treasury
had allowed the release of frozen assets for legal fees in some cases, and
continued: 'Following complaints raised about the UK's position on this
issue in the context of cases being heard before the UN Compensation
Committee, in 1998 the Treasury and Foreign and Commonwealth Office
Ministers agreed to bring the regime implemented in the UK into line with
Resolution 661 by amending the policy to the end that frozen funds may
be released to cover legal fees in relation to cases which commenced prior
to 27 October 1997'.
On 25th February 2002 HM Treasury informed the solicitors that
Government policy on the release of frozen assets was as stated in
answer to a Parliamentary Question on 18 June 1998: 'Since 29 October
1997, any application for Iraqi frozen assets to be released to cover legal
fees had to be considered by Ministers. In the taking of decisions, there is
a presumption against the release of assets'.
On 19th June 2002 HM Treasury wrote a three page letter concluding:
'In summary, Ra. Bank is owned and controlled by the Government of
Iraq, which has access to funds in hard currency that can be used to pay
the legal fees in this case. Refusing to grant a licence for the release of
frozen funds to pay for legal fees therefore does not deny Ra. Bank a fair
hearing, equality of arms or access to justice'.
Commenting on this Mr Z. says 'I have never seen any evidence at all for
the assertion that Ra. Bank has some source of non-frozen funds available
for its defence'. If he sought Ra.'s instructions as to whether they had
such funds, or what answer he should give to HM Treasury, he does not
say so in his witness statement.
In a letter of 18th July 2002 HM Treasury explained their position. They
said that the fact that Ra. is a state owned entity suggests that it 'has
access to funds via the Iraqi regime, which was able to obtain up to $3
billion of non-UN authorized revenue in 2001'. This figure was derived
from details which the Foreign Office provided to HM Treasury regarding
the extent to which the Iraqi regime was then able to raise hard currency
in breach of UN sanctions.
In a letter dated 19th July 2002 the solicitors informed HM Treasury that
if the Minister did not reconsider the request for release of funds 'then a
judicial review application to the High Court of HM Treasury's decision is
likely to follow'.
Mr Z. also states that 'what resources I was able to commit to helping the
Bank was thus channelled towards writing to the Treasury to try to ensure
that my firm's fees would be met for the work already done and the work
which needed to be done in the future.'
On 20 December 2002 the Treasury Solicitor wrote to the solicitors
rejecting a request for the release of frozen assets to pay legal fees for
an application for judicial review of the decision not to release such funds
for the C.bank case. The letter goes on to say that 'Non-frozen Iraqi funds
paid direct into your office account as payment to you for services you
have already rendered would not be subject to the need for a licence.
This is because the services have been provided and once in your account
such funds are your property and not the property of your client… Non-
frozen funds paid on account of future legal work would however be
frozen on receipt and you would need a licence to use such funds'. The
letter suggests that, without prejudging any decision, since such funds
would have been non-frozen immediately before release, a licence might
be granted subject to conditions, for example the submission of proper
invoices.
Other correspondence submitted to me includes the solicitors'
communications with the Coalition Partners Authority ("CPA") for Iraq.
That is the body that now administers Iraq. In an e-mail message from
Mr Pendleton dated 14th July 2003 he describes himself as the 'US
Treasury Advisor to Ra. Bank' and states: 'This will confirm that the Board
of Directors of Ra. Bank would like your firm to continue to represent
Ra. Bank in the matter of C.bank NA v Raf. Bank and Ra. Bank'. On
22nd July Mr Pendleton speaks of the difficulties still encountered in
communications and adds: 'If you can be paid from our account there,
then your recommendations are accepted. That is to hire the legal
specialist that you recommend'. The solicitors' letter to him of 7th July
had set out advice, and stated that the firm could not continue to act
without funds.
Correspondence between the parties was also submitted to me in a
bundle with a Skeleton Argument for C.bank. On 12 March 2002 the
solicitors had told C.bank's solicitors that they had 'today received
instructions from Ra. Bank to accept service' of the Notice of Registration
of the Dutch judgment. There then follow nearly thirty pages of
correspondence in which the solicitors were saying, amongst other things,
that service had not been validly effected (a point abandoned by the time
the present application was made). On 6th June 2002 they said: 'Our
instructions have been to apply to set aside the default judgment against
our clients, once the service has been properly effected on us'.
By letter dated 24th June 2002, solicitors for C.bank record that on 21st
June 2002 the solicitors, by Ms Munshi, attended a hearing before Master
Turner concerning Interim Third Party Debt Orders against HSBC, Lloyds
and Barclays. The Master refused to adjourn the matter at the request
of Ms Munshi, for a hearing to consider whether the Order dated May
2001 and the notice of registration of the Dutch judgment were properly
served on Ra.. C.bank's solicitors indicated that Ra. should issue the
appropriate applications and serve supporting evidence if this point was
to be pursued. The solicitors responded by letter 1st July 2002: 'Upon
proper service of Master Rose's Order we will arrange for a representative
of this firm to travel to Baghdad with the Order and inform our client of
the same. It is only after service of the Order is effected that they will
obtain authority from their Board regarding the application to aside the
registration'. It is clear that absence of funding was not the problem.
What has changed since May 2002 (the expiry of the time for appealing)
is that sanctions have been lifted, and some indication has been given by
the CPA that the solicitors may be put in funds. The solicitors have not yet
been put in funds, but they have nevertheless now made this application.
The interests of the administration of justice is the first matter referred
to in Part 3.9. Mr Lyon QC submits that it is important that C.bank's
requirement for speed should not prevail over the need to dispose of the
matter justly. He says there are substantial points of law involved in the
appeal and they would be frustrated were the matter to founder at the
threshold presented by CPR Part 74.8(3).
I accept that Art 6 applies both to the proceedings in Amsterdam and
to the enforcement proceedings in this jurisdiction. The requirements of
Art 6 include the rights of Ra. to be afforded a reasonable opportunity to
present its case under conditions which do not place it at a substantial
disadvantage vis a vis its opponent. They also include the independent
right of C.bank and Ra. to a determination of the proceedings within a
reasonable time (see Porter v Magill [2001] UKHL 67; [2002] 2 AC [108]).
This is the hearing of an application for an extension of time to appeal,
not the appeal itself, and no cases on the content of Art 6 (as opposed to
its applicability) were cited to me by either party.
I also accept that it is open to a judgment debtor to appeal against
registration of a judgment under the Convention on the ground that the
proceedings in which the judgment was given did not comply with Art 6:
Maronier v Larmer [2002] EWCA Civ 774; [2002] 3 WLR 1060. On the
other hand, it seems to me that the particular points proposed to be taken
in the present case may well not be available in this jurisdiction by reason
of Art 29 of the Brussels Convention, absent an explanation of what, if
any, steps were taken to challenge the Dutch judgment by appeal in The
Netherlands.
However, even assuming that the point is available to be taken in this
jurisdiction, in so far as it is submitted that the sanctions themselves
made the proceedings in Amsterdam, and in this jurisdiction, in breach of
the requirements of a fair trial in Art 6, I do not consider that Ra.'s case
is strong. It is common for a defendant to lack money to pay for legal
representation. In some cases that may give rise to non-compliance with
Art 6, but only in exceptional cases. So far as there is evidence before
me, it is to the effect cited above, namely that Ra. did make, through
Dutch lawyers 'some (unsuccessful) efforts with the opponents to have
the Dutch Judgment set aside, after the event'. No further explanation is
given of what steps were taken, or why they were unsuccessful. And Mr
Z. says that 'When I met Ms B. N. H. of Ra. Bank in Baghdad in February
2002, I had enquired of her if any Dutch lawyers had tried to apply for
release of the frozen funds to pay legal fees to defend the proceedings in
Amsterdam. Ms B. answer was in the negative…'. No explanation for the
omission to apply for release of funds is given. On this evidence the case
for saying that the Dutch judgment ought not be enforced under Art 27.1
on grounds of public policy seems weak.
Nor do I consider that the two month time limit under CPR Part 74.8
is unfair or not in compliance with Art 6. Time limits are necessary to
protect the right to a hearing within a reasonable time.
Accordingly, while I assume for the purposes of this judgment (without
deciding) that an appeal may have a realistic prospect of success, under
either or both of Art 37.1 or 37.2, the interests of justice do not appear to
me to weigh heavily in favour of granting an extension of time.
The next three topics I take together: whether the application for relief
has been made promptly, whether the failure was intentional and whether
there is a good explanation for the failure.
Clearly the application has not been made promptly.
As to whether the failure was intentional, or was that of the solicitors,
the evidence is not satisfactory. The evidence does not appear to me
to provide any express explanation for what Ra. were intending in
relation to these proceedings, nor any express explanation of why there
were no non-frozen funds from which they could have paid for legal
representation, had they so wished. HM Treasury took the view that there
were such funds, and Mr Z., while saying he did not understand where
such funds might have been, was in no position to contradict HM Treasury.
Whether or not the solicitors were in funds, Ra. could, in my judgment,
have filed a timely appellant's notice under Part 74.8. That required
very little. Had they done so, the conduct of an appeal without legal
representation might have presented problems, although for reasons
given below, I do not think it would. If I am wrong about that, Ra. could,
by correspondence have told C.bank or the court of any difficulties they
faced in obtaining funds for legal representation. Had they done so, there
might, or might not, have been an adjournment of the appeal, whether by
agreement or by order of the court.
There is no adequate explanation of the delay. There might have been,
at any time up to the start of the second Gulf war, evidence from the
officers of the Bank as to what they understood or intended. I am not told
whether those individuals are still available to give evidence or not. It
does appear from Mr Z.'s evidence, and from the correspondence, that he
did a great deal of work, which included a visit to Baghdad, and sending
Ms Munshi to attend at the hearing before the Master. I cannot accept that
Ra. were unable to file an appellant's notice.
In the light of the evidence set out above, I infer that the decisions
not to defend the Dutch proceedings, and not to file a timely notice of
appeal against the registration of the Dutch judgment were intentional.
Para 14 of Mr Z.'s witness statement shows that Ms B. told him that no
attempt was made to apply for the release of funds to pay legal fees
in Amsterdam. The correspondence with HM Treasury and the Treasury
Solicitor leads me to infer that Ra. were using this litigation as a platform
for a challenge to UN sanctions which they were contemplating making,
based on Art 6 of the ECHR. And whether that be so or not, the letter
from the Treasury Solicitor dated 20th December 2002 demonstrates that,
if the solicitors have not been paid for past work, that is not because of
sanctions, but because Ra., or the Iraqi government, has chosen not to
provide funds from non-frozen sources which, as I find on the material
before me, they were always in a position to do. Once C.bank obtained
their Interim Order, this delay could not continue, and these proceedings
are now the occasion for raising the Art 6 point that was to have been
raised in a judicial review.
The next question of significance to this case is the effect that the failure
to comply and the grant of relief have had, and would have, on the
parties. Mr Lyon QC points out that C.bank did not register the judgment
in this jurisdiction until May 2001 and did not serve Notice of Registration
until March 2002, and that they are secured by an Interim Third Party
Debt Order over assets of Ra. held by Deutsche Bank in London. He
submits that granting relief will cause C.bank little inconvenience,
but failure to grant relief will deprive Ra. of the opportunity of ever
challenging the judgment.
However, C.bank have not been idle. They have gone to trouble and
expense in attempting to enforce the Dutch judgment. It is accepted that
on 21st December 2000 the court in Brussels authorised enforcement in
Belgium of the Dutch judgment, and that the Belgian order was notified
to Ra. by a bailiff of the Belgian court on 29 March 2001. Mr Phillips QC
relies on the fact that C.bank attempted to serve Ra. under cover of a
letter dated 22nd May 2001 from their then solicitors.
There is force in these points made by Mr Lyon QC, but there must be
finality in litigation, and it cannot suffice to extend time for appealing
that that will cause little harm to C.bank. I must also have regard to the
matters considered earlier, and in particular to what I regard as the lack
of any adequate explanation for the omissions of Ra..
In all these circumstances, I declined to exercise my discretion in favour
of granting the extension of time sought.