Court of Appeal

Published October 9, 2008

ETI Euro Telecom International NV v Republic of Bolivia and Another

Before Lord Justice Tuckey, Lord Justice Lawrence Collins and Lord Justice Stanley Burnton

Judgment July 28, 2008

International investment dispute arbitrations, not subject to any national law, were not legal proceedings that enabled an English court to grant injunctive relief to one party against the moneys of another in England pending the outcome of the arbitration.

The Court of Appeal so stated dismissing the appeal of the claimant, ETI Euro Telecom International NV, a Netherlands company, from Mr Justice Andrew Smith ([2008] EWHC 1689 (Comm)) who set aside ex parte asset-freezing orders granted in favour of ETI in aid of an international arbitration commenced against the defendants, the Republic of Bolivia and Empresa Nacional de Telecomunicaciones Entel SA, under the auspices of the International Center for Settlement of Investment Disputes, based in Washington, DC.

After ETI had invested large sums in Entel, a Bolivian company, the government of Bolivia nationalised it without, ETI claimed, adequately compensating it.

ETI applied under section 25 of the Civil Jurisdiction and Judgments Act 1982, as extended by the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order (SI 1997 No 302), to freeze US$50 million being held by Deutsche Bank in London in an account in the name of Entel. Bolivia claimed state immunity. Mr Gabriel Moss, QC and Mr Marcus Haywood for ETI; Mr Joe Smouha, QC and Mr Paul McGrath for Bolivia; Mr Jeffrey Gruder, QC, for Entel.

LORD JUSTICE LAWRENCE COLLINS said that “proceedings” in section 25(3) of the 1982 Act and the 1997 Order did not encompass the ICSID arbitration.

It was clear from section 1(1) of the State Immunity Act 1978 that the court should give effect to immunity even if the state did not appear and that Bolivia was entitled to immunity.

Lord Justice Stanley Burnton delivered a concurring judgment and Lord Justice Tuckey agreed. Solicitors: Orrick Herrington & Sutcliffe; Stephenson Harwood; Reed Smith.

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