Civil war, competing Governments and a dangerous environment. None of these factors ultimately swayed the UK Supreme Court on 25 June, which held that an English court cannot simply dispense with service of the claim form in proceedings against a State, however difficult service may seem.
General Dynamics, a global defence conglomerate, was contracted by the sovereign state of Libya to provide it with communications systems. The systems were provided but General Dynamics claimed not to have received full payment. Arbitration proceedings were commenced and, in 2016, an ICC Tribunal awarded General Dynamics £16 million (plus interest and costs). Libya, however, took no steps to pay.
As a result, in 2018, General Dynamics issued proceedings in the High Court to enforce the arbitral award in England pursuant to section 101 of the Arbitration Act 1996. At first instance, the High Court exercised its discretion to dispense with formal service of the arbitration claim form and enforcement order; according to General Dynamics, Libya was well aware of the arbitral award and the ongoing civil war in the country presented many difficulties – the fact that there were two entities claiming to be the legitimate Libyan State being the most serious.
Libya, however, applied to the High Court seeking to vary the enforcement order and requiring the arbitration claim form to be served, formally, in accordance with section 12 of the State Immunity Act 1978 (SIA). This section requires service of "any writ or other document required to be served for instituting proceedings against a State" to be transmitted to that country's Ministry of Foreign Affairs by the UK's Foreign, Commonwealth and Development Office (FCDO). Libya succeeded and the order giving permission to enforce the arbitral award was set aside.
The Court of Appeal restored the High Court's initial order and considered that section 12 of the SIA only applied to a document that instituted proceedings and was required to be served. In this case, since Libya was aware of the arbitral award, the Court of Appeal considered that the arbitral claim form did not need to be served and therefore no service was required via the FCDO.
Libya appealed to the Supreme Court.
With a 3:2 majority in its favour, Libya's appeal succeeded on the three issues of principle in dispute.
Issue 1: Was the claim form or the order permitting enforcement of an arbitral award a document "required to be served for instituting proceedings" under section 12(1) of the SIA?
The Supreme Court held that the words of the section were wide enough to apply to all documents by which notice of proceedings in the UK is given to a defendant State. In the context of this case, it meant the claim form or otherwise the order enforcing the arbitral award.
Issue 2: If the answer to Issue 1 was yes, would such document cease to be one "required to be served" if, in exceptional circumstances, the court decides to dispense with service under CPR 6.16 or 6.28?
No. The Supreme Court held that the CPR do not supplant the requirements of section 12(1) of the SIA. The section must be considered mandatory for service against a State and the role of the FCDO essential in transmitting the documents.
Issue 3: Must section 12(1) of the SIA be interpreted as allowing the court to make alternative directions as to service in exceptional circumstances where the claimant’s right of access to the Court would otherwise be infringed, in accordance with s3 of the Human Rights Act 1998 (HRA)?
No. The Supreme Court held that section 12(1) of the SIA offers a proportionate and workable method for service against a foreign State. Due to the mandatory nature of section 12(1) and the role of the FCDO, allowing substituted service would "go against the grain" of the legislation, as Lady Arden described it.
General Dynamics' attempt to dispense with formal service of the arbitration claim form and the enforcement order ultimately backfired. The consequences have been to delay enforcement of the arbitral award, increase costs, and confirm that formal service through the FCDO is required. The company still faces its original difficulty – service in a dangerous and difficult jurisdiction.
Although it is not uncommon for the High Court to vary service requirements where service on private parties may be difficult or even impossible, the courts must be particularly mindful of the privileges of States. One lesson from this case is that simply because formal service can be hard to undertake does not give a claimant licence to dispense with it.
That is not to say that the rules always require precisely the same process to be followed. In Certain Underwriters at Lloyd’s v Syrian Arab Republic  EWHC 385 (Comm) the claimant complied with the SIA by obtaining agreement for the FCDO (then known as the Foreign & Commonwealth Office) to courier documents to the Syrian Ministry of Foreign Affairs in Damascus. This scenario was probably not what was envisaged during the drafting of the SIA – a courier delivery has less formality than a diplomat flashing his credentials to a guard outside a palace compound and solemnly serving the documents. However, the Court approved, the FCO provided a certificate of service and the method accorded with the SIA's demand that documents by "transmitted" through the FCO.
What is the broader relevance of this, otherwise niche, case? It serves as a reminder to all claimants that strict compliance with the rules is key. A hitherto unresponsive defendant, as in this case, will readily challenge any perceived procedural flaw to disrupt a claim. A claimant may have only one opportunity to serve correctly; it cannot afford to let it slip.
General Dynamics United Kingdom Ltd v State of Libya  UKSC 22