The Court of Appeal's decision in ETI Euro Telecom International v Republic of Bolivia clarifies the limits of the courts' jurisdiction to grant interim relief "in support of" other proceedings.
In its claim against Bolivia at ICSID, Dutch company ETI alleged that Bolivia had breached the Netherlands/Bolivia bilateral investment treaty by nationalising Entel, a Bolivian communications company in which ETI held shares. As well as seeking a freezing order in New York, ETI initially obtained a freezing order in the UK for assets within the jurisdiction. The High Court subsequently set aside this order, however, stating that such a request ought to be dealt with by the ICSID tribunal. The Court of Appeal has now rejected ETI's appeal for the following reasons:
- Interim relief under English Law
Although the courts can grant freezing injunctions in support of arbitration (section 44, Arbitration Act 1996), this does not apply to ICSID arbitrations. The Lord Chancellor has the power to direct that section 44 should apply (pursuant to the Arbitration (International Investment Disputes) Act 1966), but no such order has yet been made.
In addition, the English courts' power to grant interim relief in connection with certain types of proceedings pending outside of England (Section 25 Civil Jurisdiction and Judgments Act 1982) was interpreted to be limited to assisting substantive proceedings in foreign courts, rather than arbitration (having been overridden to that extent by the Arbitration Act). Nor could the power be used to grant a freezing injunction in the UK to support the New York proceedings because those proceedings were completely separate, pertaining solely to assets in New York.
Even if jurisdiction had been found to grant the injunction, the Court held that it would not be "expedient" to do so given that the tribunal had the relevant jurisdiction.
- State Immunity
An additional element to this case was Bolivia's alleged entitlement to state immunity. English law provides that, subject to certain listed exceptions, injunctions shall not be given against a State. Since the exceptions did not apply, Bolivia was held to be immune to the grant of a freezing injunction by the English courts.
This decision highlights the self-contained nature of ICSID arbitration, which is not anchored to a supervisory jurisdiction in the usual sense. If a party is seeking a provisional measure, unless the parties specifically consent to go to the courts, the party should submit its request for provisional measures only to an ICSID tribunal.