Supreme Court unanimously upholds appeal in Republic of Mozambique ‘hidden debts’ litigation
The Supreme Court has today given judgment in The Republic of Mozambique (acting through its Attorney General) (Appellant) v Privinvest Shipbuilding SAL (Holding) and Others (Respondents)  UKSC 32.
In a judgment given by Lord Hodge, Deputy President of the Supreme Court, with whom Lord Lloyd-Jones, Lord Hamblen, Lord Leggatt and Lord Richards agree, the Supreme Court has unanimously upheld the Republic’s appeal as to the correct interpretation of section 9 Arbitration Act 1996. It held that none of the relevant claims that the Republic makes against Privinvest should be stayed.
The Supreme Court’s judgment is an extremely significant authority on the proper interpretation of when a mandatory stay in favour of arbitration must be granted under section 9 Arbitration Act 1996. It will also be of considerable interest to practitioners in jurisdictions which contain a similar statutory provision.
Following a meticulous consideration of the domestic and foreign authorities, Lord Hodge concluded that none of the Republic’s claims in issue on appeal were “matters” in respect of which the proceedings were brought, which fell within the scope of the arbitration agreements. Lord Hodge further commented, endorsing the Lombard North Central potential exception to granting such a stay where it would serve no proper purpose, that even had he concluded that part of the claim was within scope of the relevant arbitration agreements, that it was difficult to see a real or proper purpose to a stay in the context of the proceedings underway.
The appeal arises out of ongoing litigation before the Commercial Court in which Peters & Peters has acted for the Republic of Mozambique since 2019. In the proceedings, the Republic alleges a fraud and conspiracy involving bribery, corruption and other unlawful conduct with the aim of procuring purported sovereign guarantees with a face value of circa $2 billion. The Commercial Court trial is listed for three months starting on 2 October 2023 before Mr Justice Robin Knowles CBE.
Nathan Pillow KC (Essex Court), Richard Blakeley (Brick Court) and Ryan Ferro (3 Verulam Buildings) appeared for the Republic in the Supreme Court, instructed by Sarah Gabriel (Partner), Philip Gardner (Senior Associate) and Stephanie Williams (Associate) of Peters & Peters.