Mobil Cerro Negro Ltd v Petroleos De Venezuela SA

Mobil Cerro Negro Ltd v Petroleos De Venezuela SA

Mobil failed to demonstrate a good arguable case of unjustifiable conduct or real risk of dissipation of assets by PDVSA. There was no urgency justifying interim relief under s 44(3) Arbitration Act 1996. In the absence of fraud or substantial assets in England and Wales, and with the seat of arbitration in New York, it was inappropriate for the English court to continue the worldwide freezing order. The order was set aside.

Parties
Claimant: Mobil Cerro Negro Limited; Defendant: Petroleos de Venezuela S.A. (PDVSA)
Jurisdiction
England and Wales
Judgment Date
18 March 2008
Procedural Posture
Commercial Arbitration Related Application / Application to Set Aside Freezing Order / Cross Application to Continue Order
Outcome
Application to set aside freezing order granted; cross-application to continue order refused.
Legal Topics
Freezing Orders (mareva Injunctions), Jurisdiction for Interim Relief in Support of Arbitration, Comity and Enforcement of Foreign Arbitral Awards, Service Out of Jurisdiction, Urgency in Interim Relief, Dissipation of Assets
Arbitration Civil Procedure Injunctions Freezing Orders (mareva Injunctions) Jurisdiction for Interim Relief in Support of Arbitration Comity and Enforcement of Foreign Arbitral Awards Service Out of Jurisdiction Urgency in Interim Relief +1 more

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Parties

Mobil Cerro Negro Limited

Claimant

Petroleos de Venezuela S.A. (PDVSA)

Defendant

Procedural Posture

Commercial Arbitration Related Application / Application to Set Aside Freezing Order / Cross Application to Continue Order

Legal Issues

  1. 1 Whether the English court should continue or set aside a worldwide freezing order against a foreign state-owned company in support of foreign-seated arbitration under s 44 Arbitration Act 1996
  2. 2 Whether the applicant demonstrated a real risk of dissipation of assets justifying a freezing order
  3. 3 Whether the case was one of urgency under s 44(3) Arbitration Act 1996

Ratio Decidendi

Mobil failed to demonstrate a good arguable case of unjustifiable conduct or real risk of dissipation of assets by PDVSA. There was no urgency justifying interim relief under s 44(3) Arbitration Act 1996. In the absence of fraud or substantial assets in England and Wales, and with the seat of arbitration in New York, it was inappropriate for the English court to continue the worldwide freezing order. The order was set aside.

Court Disposition

Application to set aside freezing order granted; cross-application to continue order refused.

Orders

  • The freezing order made on 24 January 2008 is set aside.
  • The application for service by an alternative method is refused.