An arbitrator has found that the government of Comoros, an Indian Ocean archipelago located between Mozambique and Madagascar, showed ‘total disregard for the principle of the rule of law’ by failing to comply with relatively modest English Court costs orders.
The ruling follows an appeal by the Government of the Union of the Comoros, which was dismissed by Mr. Justice Males of the English Commercial Court. At the same hearing, the Court made an order that unless the Comoros Government pays the outstanding costs orders, said to be in the order of £110,000, they would be debarred from challenging the arbitration award on grounds of alleged serious irregularity.
The development follows ongoing arbitration between the Comoros Government and Dubai company Union Marine over a contractual agreement regarding the country’s maritime affairs. The dispute concerned the authorisation of Union Marine to administrate over maritime matters on behalf of the Comoros Government, including registration of vessels under the Comoros flag. The 2007 agreement was for a fixed term of 25 years with a guaranteed term of 10 years.
Yet on 17 April 2012, the Government gave Union Marine notice of its intention to terminate the agreement, leading Union Marine to argue that this early termination notice was invalid. The Government responded by alleging that it was entitled to terminate the agreement due to various breaches by Union Marine.
Selected for its impartiality, the English Court appointed Mr. Bruce Harris, a well-known London Maritime Arbitrator, as sole arbitrator. In his final award, Mr. Harris decided: “My conclusion is clearly that the government was not entitled to terminate the agreement and accordingly that, in fact, it was the government in repudiatory breach itself.”
Kartik Mittal of Zaiwalla & Co. Solicitors, the City of London-based international law firm representing Union Marine in the English Courts, said: “It is regrettable that a member of the United Nations should show such a callous disregard to the principle of the Rule of Law. The Comoros Government’s refusal to abide by the English Court costs order on the grounds that it has no money and not act in accordance with the arbitrator’s decision on the contract with Union Marine is totally unacceptable”.
Through their legal representatives, Union Marine have said that the Government of Comoros has “failed to comply with its legal obligation to act in accordance with the terms of the arbitrator’s decision that the Government of Comoros did not have the legal right to terminate the contract with Union Marine.”
Another company has now been appointed in place of Union Marine to manage Union of the Comoros maritime affairs.
