PDVSA Servicios S.A. v Clyde & Co LLP & Ors

PDVSA Servicios S.A. v Clyde & Co LLP & Ors

The Tripartite Agreement governing the escrow account did not create a trust of the escrow monies; it was a contractual stakeholder arrangement. There were no clear words creating a trust, and the context and commercial sense pointed against such an intention. Upon the arbitral tribunal's final award, the escrow arrangement ceased and the funds were to be paid to POS as ordered. PDVSA had no real prospect of establishing a trust or entitlement to directions under CPR 64.2, nor of continuing the injunction.

Parties
Claimant: PDVSA Servicios S.A.; First Defendant: Clyde & Co LLP; Second Defendant: PetroSaudi Oil Services (Venezuela) Limited
Jurisdiction
England and Wales
Judgment Date
23 October 2020
Procedural Posture
Civil (trusts/escrow/arbitration Related) / Judgment on Application for Interim Injunction and Summary Judgment/strike Out
Outcome
Claim dismissed; summary judgment for Clyde & Co LLP and POS; interim injunction discharged.
Legal Topics
Escrow Arrangements, Trust Creation, Interim Injunctions, Summary Judgment, Enforcement of Arbitral Awards
Trusts and Equity Arbitration Contract Law Escrow Arrangements Trust Creation Interim Injunctions Summary Judgment Enforcement of Arbitral Awards

Case Brief

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Parties

PDVSA Servicios S.A.

Claimant

Clyde & Co LLP

First Defendant

PetroSaudi Oil Services (Venezuela) Limited

Second Defendant

Procedural Posture

Civil (trusts/escrow/arbitration Related) / Judgment on Application for Interim Injunction and Summary Judgment/strike Out

Legal Issues

  1. 1 Whether the escrow arrangement created a trust under English law entitling PDVSA to seek directions under CPR 64.2
  2. 2 Whether the escrow arrangement survived the arbitral tribunal's final award
  3. 3 Whether an interim injunction restraining distribution of escrow funds should be continued

Ratio Decidendi

The Tripartite Agreement governing the escrow account did not create a trust of the escrow monies; it was a contractual stakeholder arrangement. There were no clear words creating a trust, and the context and commercial sense pointed against such an intention. Upon the arbitral tribunal's final award, the escrow arrangement ceased and the funds were to be paid to POS as ordered. PDVSA had no real prospect of establishing a trust or entitlement to directions under CPR 64.2, nor of continuing the injunction.

Court Disposition

Claim dismissed; summary judgment for Clyde & Co LLP and POS; interim injunction discharged.

Orders

  • Interim injunction restraining distribution of escrow funds not continued.
  • Summary judgment entered for Clyde & Co LLP and POS on the Part 8 claim.