The doctrine of abuse of process operates to ensure finality in litigation by preventing a party from raising matters that have, or could have, been determined in earlier proceedings. Arguments that a claim is an abuse of process may be relied upon by a non‑party to the earlier proceedings, and, as addressed in a previous edition of this briefing, abuse of process may also be relied upon where the earlier decision was that of an arbitral tribunal rather than a court. In the recent case of OMV Petrom SA v Glencore International AG, the Commercial Court went on to consider how the doctrine operates in relation to defences raised in previous arbitral proceedings.
The underlying dispute concerned contracts for the supply of crude oil between Petex, a commission agent, and Glencore. In the arbitral proceedings the tribunal had rejected Glencore’s defence that the claims were brought too late on the basis that relevant facts had been deliberately concealed. However, ultimately Glencore successfully defended the claims as it was held that Petex had not suffered any actionable loss, given that its principals had ceased to exist and it had not informed the apparent successor in title, Petrom, about the proceedings and did not intend to account to anyone for the amounts recovered. Subsequently Petex assigned its rights and Petrom commenced litigation against Glencore. Glencore again sought to argue that the claims were time barred, as well as denying any wrongdoing. However, Petrom contended that it would be manifestly unfair for Glencore to be permitted to challenge the conclusions reached by the arbitral tribunal and so submitted that issues that had arisen in the arbitration should be treated as settled in the court proceedings, or alternatively that parts of the defence should be struck out as an abuse of process.
Although Glencore sought to contend that its status as a defendant in both the arbitration and the litigation was sufficient reason to refuse the relief sought, the Commercial Court disagreed, holding that it can be an abuse of process for a party which was successful overall in earlier proceedings to seek to re‑litigate an issue on which it was unsuccessful, even in circumstances where a particular finding was not necessary to the ultimate decision. However, the Court went on to note that in this case the effect of Petrom’s application would be to foreclose the question of whether Glencore had acted dishonestly. Endorsing the view that the court should be slower in preventing a party from continuing to deny serious charges of which another court has previously found him guilty than in preventing such a party from initiating proceedings for the purpose of re‑litigating the question of whether he was guilty of the charges, the Commercial Court considered this was sufficient to decide the application against Petrom and the application was dismissed.
The serious nature of the findings against Glencore in the arbitration were thus, in this case, sufficient for the Court to hold that it would not be appropriate for the defendant to be debarred from disputing them in further proceedings. However, the finding that it can be an abuse of process for a defendant to raise a defence which has already been determined in arbitration should serve as an important warning to parties that they may not be able to re‑argue points that have already been determined against them, even in proceedings involving different parties.
OMV Petrom SA v Glencore International AG  EWHC 242 (Comm)