The High Court has set aside an order allowing Yukos Capital S.A.R.L. to serve proceedings in Ireland on Russian oil company OAO Tomskneft VNK. The court refused to assume jurisdiction over the respondent, leaving the underlying application to enforce an arbitral award undecided.
Mr Justice Kelly’s judgment, delivered on 13 March 2014, concerned the respondent’s challenge to an order made by Mr Justice Peart on 8 February 2013. That earlier order allowed service outside Ireland and permitted substituted service. The challenge was brought under Order 12, rule 26 of the Rules of the Superior Courts.
Yukos Capital seeks to enforce an International Chamber of Commerce arbitral award made in New York in February 2007. The award followed three loans made in 2004, under which Yukos Capital advanced a total of 4.35 billion Russian roubles. The arbitrator found that the respondent was entitled to repayment of principal, interest and penalties, among other amounts. Tomskneft did not participate in the arbitration after disputing the validity of the amendments that provided for ICC arbitration. The award records that communications were sent to it by courier and received.
The judgment recounts that Russian courts refused recognition and enforcement in 2010, and that a French appellate court overturned an initial enforcement order in January 2013 over concerns about the provision of documents during the arbitration. An appeal in France was pending. Yukos Capital had also applied in Singapore. Those foreign proceedings formed part of the background to the Irish court’s assessment; the High Court did not decide the merits of the award or whether it should ultimately be enforced in Ireland.
Justice Kelly held that an applicant seeking to serve a foreign respondent in Ireland must satisfy the relevant rules on service outside the jurisdiction before the court considers enforcement. Although the rules did not make Irish assets a precondition, he found that Tomskneft had no assets or other connection with Ireland and that there was no realistic prospect of assets becoming available here. He also found little evidence of a practical benefit to Yukos Capital from obtaining an Irish order, given the other enforcement proceedings.
The judge concluded that this was not a proper case for Ireland to exercise jurisdiction over the foreign respondent. He set aside the February 2013 order and refused to assume jurisdiction. As a result, he said it was unnecessary to consider the other relief sought in the challenge.