Paris Court of Appeal, No. 16/09363 | Rory Wheeler, avocat (Paris) & solicitor (England)

Court of Appeal Paris, 5 October 2016, n° 16/09363.

SOCIÉTÉ VETERAN PETROLEUM LIMITED Vs. SA ARIANESPACE

FACTS AND PROCEEDINGS

The Cypriot company Veteran Petroleum Limited was a shareholder in the Russian oil company Yukos between 1999 and 2007, when it was expropriated by the Russian Federation.

On 18 July 2014 an arbitral tribunal in The Hague issued a final award, following arbitration proceedings, noting the failure by the Russian Federation to fulfill its obligations under the Energy Charter Treaty and ordering it to pay to the company Veteran Petroleum Limited compensation of USD 8,203,032,751 USD as well as EUR 695,327 for the reimbursement of arbitration fees and USD 9,839,533 for legal fees incurred by the Veteran Petroleum Limited.

By exequatur order of 1 December 2014, the President of the Paris Tribunal de Grande Instance made the final award enforceable.

On 18 January 2016, Veteran Petroleum Limited proceeded with a garnishment in the hands of Arianespace SA, rendering the latter’s obligations towards the Russian Federation, including its federal agencies, in particular Roscosmos, the Russian federal space agency, unavailable. This garnishment was notified to the Russian Federation by deed delivered to the public prosecutor’s office of the Evry district court on 26 January 2016. court of Evry on 26 January 2016 for service through diplomatic channels.

By summons notified respectively on 5 and 12 February 2016, SA Arianespace, Roscosmos Russian Federal Space Agency (hereinafter Roscosmos), in liquidation, and Roscosmos Corporation Corporation seized the execution judge of Evry in dispute of the seizure-attribution. The cases were joined in the course of the proceedings.

By a contradictory judgment of 12 April 2016 (No. RG 16/01068), the execution judge:

Ordered the release of the seizure of assets carried out on 18 January 2016 in the hands of Arianespace SA against the Russian federal space agency Roscosmos,
dismissed the rest of further or contrary claims,
ruled that there was no need to apply Article 700 of the Code of Civil Procedure,
ordered Veteran Petroleum Limited to pay the costs.

Veteran Petroleum Limited appealed against this decision on 12 April 2016.

By deeds dated 25 and 28 April 2016, Veteran Petroleum Limited summoned SA Arianespace, the Russian Federal Space Agency Roscosmos in the person of its director of the liquidation committee and Roscosmos State Corporation before the First President of the Paris Court of Appeal for a hearing on 26 October 2016, on the basis of Articles L. 111-5 of the Code of Code, R 121-22 of the Code of Civil Enforcement R 121-22 of the code of civil enforcement procedures, 455 and 700 of the code of procedure, seeking an order to suspend the execution of the measures the enforcement of the measures taken by the enforcement judge and to condemn SA Arianespace, Roscosmos Russian Federal Space Agency and Roscosmos State Corporation at the costs and to pay him the sum of EUR 15,000 in application of article 700 of the code of civil procedure.

At the request of all parties, the hearing was brought forward to 7 September 2016, at which they voluntarily appeared.

By submissions filed and supported orally argued at the hearing, Veteran Petroleum Limited maintains its request for a stay of execution of the judgment while requesting the dismissal of the counterclaims made by the opposing parties and increasing the compensation under Article 700 of the Code of Civil Procedure to the sum of EUR 30,000.

Veteran Petroleum limited claims that:

As the release decision has not been implemented, the claim of Arianespace and Roscosmos that the application for a stay of execution is devoid of object is unfounded,
the Paris Court of Appeal, ruling in matters of enforcement, is not competent and / or does not have the power to examine requests from the Russian Federation to challenge the exequatur order on the basis of which the company Veteran Petroleum Limited is entitled to carry out enforcement measures against the said order, and furthermore that requests for nullity and lapses of the garnishment are unfounded,
the execution judge of the Evry Tribunal de Grande Instance violated the obligation of reasoning and impartiality by issuing an unmotivated judgment on 12 April 2016, which was subsequently completed,
the debts seized on 18 January 2016, arising from contracts entered into by Roscosmos as the Russian Federation, are assets belonging to its debtor the Russian Federation ,
Roscosmos is an emanation of the Russian State.

By written submissions submitted and supported orally at the hearing, Roscosmos Russian Federal Space Agency, “in liquidation”, and Roscosmos Corporation, plead, on the basis of Articles R. 121-15, R.121-18, R. 121-22 et seq. Of the Code of Civil Enforcement Procedures ,Articles 452, 453, 455, 458, 649, 693, 694 and 700 of the Code of Civil Procedure, to dismiss the opposing claims and request that Veteran Petroleum Limited be ordered to pay Petroleum Limited to pay them EUR 1,000,000 in damages for abusive proceedings, in addition to EUR 20,000 each pursuant to Article 700 of the Code of Civil Procedure, the company Veteran Petroleum Limited being furthermore ordered to pay payment of a civil fine on the basis of article R. 121-22 of the code of civil enforcement procedures and to pay the costs.

Roscosmos Russian Federal Space Agency and Roscosmos Corporation argue that:

the action of Veteran Petroleum Limited before the President has no object since the unavailability of the funds ceased before the claimant’s appeal,
there are no serious grounds for setting aside of the judgment of 12 April 2016 given that:
the garnishment is null and void since Roscosmos is not the Russian Federation and cannot be assimilated to it, and for lack of the mentions required by the Code of Civil Enforcement Procedure,
the garnishment is null and void in application of Article R 211-3 of the Code of Civil Procedure,
the execution judge gave reasons for his decision and respected the principle of contradiction,
Roscosmos has autonomy of management and heritage and is not an emanation of the Federation from Russia,
the company Veteran Petroleum Limited has no right to seize the debts owed by the SA Arianespace in Roscosmos

By submissions filed and supported orally at the hearing, Arianespace SA asks the present jurisdiction, on the basis of articles R. 121-15, R. 121-18 and R. 121-22 of the Code of Civil Enforcement Procedures, articles 452, 453, 455, 458, 649, 693, 694 and 700 of the Code of Civil Procedure, for :

as a primary claim, dismiss Veteran Petroleum Limited’s for a stay of execution for lack of object,
as a subsidiary claim, dismiss Veteran Petroleum Limited’s claim for a stay of execution for lack of serious grounds for annulment and/or the reversal of the said decision,
as a counterclaim, order the company Veteran Petroleum Limited to pay him the sum of EUR 100,000 in damages for abusive proceedings,
order the company Veteran Petroleum Limited to pay the costs and pay it a sum of EUR 20,000 in application of article 700 of the code of civil procedure.

It further argues that:

the request for a stay of execution of the judgment of 12 April 2016 is irrelevant since the unavailability of the seized debts has definitively ceased before the application for a stay of execution of the decision ordering the release of the garnishment order of 18 January 2016 was filed, and this due to the waiver of regularized notification to the clerk’s office of the enforcement judge by Arianespace SA on 22 April 2016,
there is no serious means of annulment and / or reversal of the judgment of 19 January 2016:
on the one hand, the enforcement judge has complied with the provisions of Articles 452 and 453 of Code of Civil Procedure concerning to the pronouncement and provision of its decision which is, furthermore, reasoned and detailed in accordance with article 458 of the code of civil procedure,
since, on the other hand, Roscosmos is a separate entity and autonomous, is not an emanation of the Russian Federation, has not acted on behalf of and for the account of the latter in its relations with Arianespace SA, and since the debts of Arianespace SA are not allocated to the Russian Federation, Roscosmos is not responsible for the debts of the Federation of Russia,and the debts seized in the hands of the SA Arianespace cannot serve as a pledge to the company Veteran Petroleum Limited within the meaning of Articles 2285 of the Civil Code and L. 112-1 of the French Code des civil enforcement proceedings, the SA Arianespace is not in debt to the Federation of Russia.

By submissions in “incidental voluntary intervention” filed and argued at the hearing on the Russian Federation requests, on the basis of the articles 328, 330, 1504, 1514, 1516 and 1520 of the Code of Civil Procedure, Article L. 111-2 and Article L. 111-2 of the of the Code of Civil Enforcement Proceedings, to receive it in its voluntary incidental intervention and to “find admissible and well-founded all the claims of Roscosmos agency Russian Federal Space Agency, Roscosmos Corporation and Arianespace SA, arising from the irregularity of the seizures made by the Veteran company Petroleum Limited”.

It argues that the title on which the Veteran Petroleum Limited relied to operate its garnishment has become null and void due to the setting aside of the arbitral award.

The public prosecutor concluded orally that the request for a stay of proceedings was well-founded.

UPON WHICH

1 - on the admissibility of the request for a stay of execution

- on the assessment of the validity of the enforcement order

Whereas in application of Article L. 111-3 of the Code of Civil Enforcement Procedures, an arbitral award declared enforceable by a decision that is not subject to a claimant’s right for a stay of execution, constitutes an enforceable title;

Moreover, Article 1526 , paragraph 1 of the Civil Procedure Code stipulates that an action to set aside an award and an appeal against the exequatur order do not have suspensive/staying effect;

Whereas by order of 1 December 2014 the president of the tribunal de grande instance of Paris has granted exequatur to the final award of the 18 July 2014 issued by a foreign arbitral tribunal; whereas although the Federation of Russia has appealed against this decision on 3 June 2015 in application of the provisions of Article 1525 of the Code of Civil Procedure, this appeal is not suspensive pursuant to the aforementioned provisions;

That it is established that the contested protective seizure was carried out on the basis of the final award of 18 July 2014 issued by a foreign arbitral tribunal and became enforceable by the enforcement order 1st December 2014 of the President of the Paris Tribunal de Grande Instance;

Whereas the Russian Federation requests the court ruling on the grounds of execution of a judgment to declare “lapsed” the document on the basis of the of which the enforcement measure was carried out on the grounds that the final award of 18 July 2014 was annulled by the District Court of The Hague on 20 April 2016;

Whereas, however, the challenge of the validity of the final enforced award which has been declared enforceable falls within the jurisdiction of the court of appeal already seized by the Russian Federation on 3 June 2015 of the appeal against the order of exequatur, and which is responsible to examine the complaints relating to this decision and impact of setting aside the final award made by a foreign arbitral tribunal on the order granting the exequatur;

the ground developed by the Russian Federation must therefore be dismissed;

- on the existence of a subject matter at the request of the company Veteran Petroleum Limited and unavailability funds

Whereas Article R. 121-8 of the Code of Civil Enforcement Procedures provides that the decision of the release of enforcement measures or orders for the release of protective measures shall prevail, within the limit of its object, suspension of proceedings as soon as it is pronounced and elimination of any unavailability effect upon notification ;

That in application of the provisions of article R. 121-15 of this same code each of the parties may inform the registry that it waives notification of the decision to it by registered letter with request for acknowledgment of receipt and in this case it is deemed to be notified on the date of its pronouncement; Whereas Arianespace SA, Roscomos and Roscosmos State Corporation argue that the SA Arianespace having renounced by letter of 22 April 2016 addressed to the enforcement judge of the court of the High Court of Evry to be notified of the judgment ordering the seizure, the latter deleted as soon as it is pronounced and this retroactively - and with regard to Arianespace SA - any effect unavailability of seized funds and that consequently the summons for the purpose of suspension of the execution of the judgment that was issued on April 25, 2016, i.e. after the date on which this decision was taken away its deliberative effects, the request of the company Veteran Petroleum Limited would be without object;

Whereas, however, the unilateral waiver of notification by Arianespace SA cannot have effect only in its regard;

That furthermore, pursuant to Article 503 of the Code of Civil Procedure, judgments cannot be executed against those to whom they are opposed only after having been notified to them unless execution is not voluntary;

That in this case the clerk’s office of the enforcement judge of the Evry tribunal de grande instance notified the judgment to Veteran Petroleum Limited on 2 May 2016 in accordance with the terms and conditions set out in paragraph 1 er of article R.121-15 of the aforementioned code;

That therefore the company Veteran Petroleum Limited could not be deprived of its right to request a stay of execution of the judgment even before it is notified to him;

That consequently the unilateral waiver of notification to Arianespace SA had no effect release or did not carry execution of the judgment of release;

That the request for stay filed by the company Veteran Petroleum Limited is, therefore, not devoid of a subject matter; that the ground alleged by the SA Arianespace and Roscosmos State corporation must therefore be rejected;

2 - on the merits of the request for a stay of execution

Whereas Article R 121-22 of the Code of Civil Enforcement Procedures provides that “In the event of an appeal, a suspension of the execution of decisions taken by the execution judge may be requested from the first president of the court of appeal. The request is made by summary summons issued to the opposing party and denounced, if applicable, to the third party in whose hands the seizure was made.

Until the day of the pronouncement of the order by the first president, the request for a stay of execution suspends the proceedings if the contested decision has not called into question their continuation; it extends the effects attached to the attachment and to the provisional measures if the contested decision ordered the lifting of the measure.

The stay of execution is only granted if there are serious grounds for annulment or reformation of the decision referred to the court.

The author of a manifestly abusive request for a stay of execution may be condemned by the first president to a civil fine of a maximum amount of EUR 3,000, without prejudice to any damages that could be claimed.”

The decision of the first president cannot be appealed.

- on the lack of motivation and impartiality of the enforcement judge

Whereas in application of article 454 of the code of civil procedure the judgment issued on behalf of French people, including the indication of its date, the name of the judges who deliberated on it, parties and lawyers who, where appropriate, represented or assisted them;

That Article 455 of the Code of Civil Procedure also provides that the judgment must be reasoned and that it state the decision in operative form;

Whereas in support of its request for a stay of execution, the company Veteran Petroleum Limited claims that the judgment of 12 April 2016 should be annulled in so far as it was issued in violation of the obligation to state reasons for court decisions and the obligation of impartiality of judges arguing that an undated and unsigned judgment was made available to the registry on 12 April 2016 limited to a mechanism in which the execution judge of Evry decided the dispute without justifying his decision, which would not be completed until 27 April 2016 when the judgment was issued to parts in its entirety and whose mechanism would be different from the mechanism submitted on 12 April 2016;

that it argues that the judgment of the execution judge could “proceed only from an assessment personal and necessarily follows from a preconceived opinion that the parties' means were not likely to influence”;

Whereas it is established that the company Veteran Petroleum Limited appealed against a judgment RG 16/01068 issued on 12 April 2016 by the execution judge of the Evry Tribunal de Grande Instance, on the basis of which it seized the present jurisdiction so that its execution is suspended;

That this decision, which includes a statement of the facts and the claims of the parties, includes also a motivation on “the validity of the entry”, and this on two pages, as well as on “damages"and “on costs”;

that thus motivated this decision is in accordance with provisions of article 455 of the code of civil procedure; that the grievance of a personal assessment of the execution judge that the grounds of the parties would not have been likely to influence is then not established; That the existence of an “undated and unsigned judgment limited to a device” whose parties would have learned on 12 April 2016 is not reported in this case while the company Veteran Petroleum Limited communicates judgment n ° RG 16/01068 of April 12, 2016 against which it appealed and which includes the particulars provided for in article 454 of the code of civil procedure and is drafted in accordance with article 455 of the code of civil procedure as well as this court has previously established; That in addition the company Veteran Petroleum Limited has not made any registration of forgery against contested judgment;

That consequently the ground alleging a violation by the judge of the execution of its obligations motivation and impartiality is devoid of the seriousness required by article R 121-22 of the civil enforcement proceedings and must be dismissed;

- on the ownership of seized debts

Whereas in application of Article L 211-1 of the Code of Civil Enforcement Proceedings “All creditor with an enforceable title establishing a liquid and payable debt may, in order to obtain the payment, seize into the hands of a third party the debts of his debtor relating to a sum money, subject to the specific provisions for the entry of remuneration provided for by the labor code.” ;

Whereas the conditions of validity of an implementing measure are exclusively determined by French law; that therefore the defendants are not entitled to invoke the application of foreign law to determine what property can be seized;

Whereas in this case, to order the release of the attachment, the enforcement judge noted that it had not been established that the claims attached belonged “exclusively to the Russian Federation”, considered that the seizure of the award had been irregular because Veteran Petroleum Limited had failed to seize the property belonging to the Russian Federation debtor of the obligation;

Whereas the final award of 18 July 2014 ordered the Russian Federation to pay to the Veteran Petroleum Limited a compensation USD 8,203,032,751 and USD 695,327SD. Euros for the reimbursement of arbitration costs and USD 9,839,533 for legal fees presented by the company;

That on 18 January 2016 Veteran Petroleum Limited carried out a garnishment made in the hands of Arianespace SA for the Russian Federation “including its subdivisions political, territorial, ministerial or ministerial administrative bodies, its agencies, and its entities and/or structures asset management companies, regardless of their previous or current name, including in particular (…) Roscosmos”;

That following this seizure, Arianespace SA transmitted the 22 January 2016 to bailiff one " statement of receivables held by Roscosmos on SA Arianespace in accordance with the provisions governing (its) relationship(s) with this entity”;

That these claims appear to arise from the same contracts that those who gave rise to the claims made unavailable due to the seizure of the 30 June 2015 practiced by the company Hulley Enterprises Limited, other former shareholder also a creditor of the Russian Federation under an arbitral award of 18 July 2014;

That these contracts indicate that they were concluded between SA Arianespace on the one hand and “AGENCY FEDERALE SPATIALE federal body of executive power of the Russian Federation (…) below referred to as Roscosmos “in particular on the other hand;

Whereas on the day of the seizure of the 18 January 2016 Roscosmos Federal Space Agency was governed by a decree of the Russian government, constitute act defining its status (Roscosmos Regulation);

that this document determines when Roscosmos, state organ, acts as the Federation of Russia in the framework of the mandates given to him assigned by the Russian State or as a a separate legal entity under Russian law ;

That Chapter I on “General Provisions” of these Rules provides in Article 1 as “The Federal Space Agency (Roscosmos) is a federal body mandated with executive power exercising the functions of controlling the implementation of national policy and normative regulation and in matters of law, provision of public services and management of public goods in the field of space activities, international cooperation in carrying out projects and mixed programs in the space field (…) “;

That its article 2 provides that “The activities of the Federal Space Agency are managed by the Government of the Russian Federation “;

That chapter II relating to “Mandates” specifies in article 5 that “The Federal Space Agency carries out

the following mandates in the established field of activity:

(…) 5.3. On the basis and in accordance with the procedures established by federal laws, the acts of the President of the Russia and the Russian Government, the Federal Space Agency performs the following functions in the field of management of public goods and provision of public services in the field of activities established: (…) 5.3.19: concludes agreements (contracts) with foreign partners in accordance with the terms in force, including contracts for the implementation of international space programs and projects commercial “;

That, through its Regulations, the Federal Space Agency (Roscosmos) has a mandate from executive power, the Russian Federation, to conclude contracts for the performance of international commercial space programs and projects;

Also expected in view of the independent audit report communicated by the company Veteran Petroleum Limited (its Exhibit 46) retracing the payment transactions taking place between the various banks when Arianespace NV makes a payment for the benefit of Roscosmos under the contracts, that these funds are stored to the credit of a bank account - the “Interregional Directorate operations of the Federal Treasury “- open to the Bank of Russia and constitute means of “Federal budget”;

That the claims arising from contracts concluded by Roscosmos mandated by the Russian Federation are therefore part of the budget of this Federation;

Whereas it follows from all of these findings and statements that the complaint developed by the company Veteran Petroleum Limited alleging failure to take into consideration the mandate given by the Russian Federation in Roscosmos within the framework of the contracts concluded with Arianespace SA and this while the claims resulting from these contracts are part of the federal budget and the federal treasury of the Russian State and that the seized debts are the property of the Russian Federation, constitutes a serious means of reversing decision n °RG 16/01068 rendered on 12 April 2016 by the judge of the execution of the Paris tribunal de grande instance;

That it is therefore appropriate to suspend the execution of this decision;

3 - on other requests

Whereas the SA Arianespace, Roscosmos and Roscosmos State Corporation not characterizing a fault of the company Veteran Petroleum Limited, whose claim is upheld, causing to degenerate in abuse the right to take legal action, their claims for damages for abusive proceedings must be rejected;

Whereas Roscosmos and Roscosmos State Corporation are inadmissible to request the ordering the company Veteran Petroleum Limited to pay a civil fine, this request coming under the judge’s office;

Whereas it is necessary to grant the request of the company Veteran Petroleum Limited presented on the basis of article 700 of the code of civil procedure; that SA Arianespace, Roscosmos and Roscosmos State Corporation are ordered to pay it in this respect the sum referred to in this decision;

That SA Arianespace, Roscosmos and Roscosmos State Corporation, losing parties, will support the burden of costs.

FOR THESE REASONS

Orders the suspension of the execution of judgment n ° RG 16/01068 issued on 12 April 2016 by the judge of the execution of the high court of Evry,

Condemns SA Arianespace, Roscosmos Russian Federal Space Agency and Roscosmos State corporation to pay the company Veteran Petroleum Limited the sum of EUR 10,000 in respect of article 700 of the code of civil procedure,

Dismisses Arianespace SA, Roscosmos Russian Federal Space Agency and Roscosmos Corporation state of their claims for damages for abusive proceedings and compensation for article 700 of the code of civil procedure,

Declares Roscosmos Russian Federal Space Agency and Roscosmos State Corporation inadmissible in their application for an order against the company Veteran Petroleum Limited to pay a civil fine,

Condemns SA Arianespace, Roscosmos Russian Federal Space Agency and Roscosmos State corporation at the expense of these proceedings.

ORDER issued by making it available to the Registry of the Court, the parties having been previously notified under the conditions provided for in the second paragraph of article 450 of the Civil Procedure.