Summary

In September 2010 PetroSaudi Oil Services (Venezuela) Ltd ("POS") (a Barbadian company) contracted with the Claimant ("PDV") (a Venezuelan state-owned entity) to provide a drilling rig and associated drilling services on a day rate basis for a term of seven years ("the Contract"). The Contract contained an arbitration clause. The Contract was governed by Venezuelan law.

PDV had a long-established reputation for late payment or even non-payment of contractors. POS therefore regarded it as an essential precondition to entering the Contract that there should be a performance guarantee. This was provided by a Portuguese bank upon the application, not of PDV, but of an associated company. It took the form of a standby letter of credit ("SBLC") subject to English law and jurisdiction. In the event that PDV did not pay an invoice rendered by POS then POS could make demand upon the bank and obtain payment of the sum due under the Contract even if there were a dispute between the parties as to whether the invoiced sum was in fact due; and it was essential that PDV could not by action or inaction stymie the operation of the SBLC. (On this see the observations of Christopher Clarke LJ in other litigation between POS and PDV concerning the SBLC at [2017] EWCA Civ 19 at [55]-[57] and [70]).

In August 2015 an UNCITRAL arbitration was initiated by PDV, the seat of which was in Paris. PDV claimed US$0.934 billion as damages for breach of the Contract: POS defended that claim and counterclaimed for unpaid invoices.

In March 2017 POS made demand under the SBLC in respect of unpaid invoices. On 31 March 2017 the three arbitrators ("the Tribunal") made what has been called "a super-interim order" directing the creation of an escrow account into which the proceeds of that demand upon the SBLC should be paid. The holder of the escrow account was a firm of English solicitors, Clyde & Co LLP. They acted for POS in the arbitration; but their role as stakeholders is separate, and there is an information barrier between those at Clyde & Co overseeing the escrow account and those at Clyde & Co acting in the arbitration. In their role as escrow account holders I will refer to them as "Clyde". During the course of the arbitration there were authorised periodic debits (enabling POS to pay its operating expenses) and some sums were released to pay the costs of the arbitration and the legal fees of both POS and PDV. The escrow account now contains something in excess of US$300 million.

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For these reasons I will not continue the Interim Injunction and I will give summary judgment for Clyde and for POS on the Part 8 claim brought by PDV. As both Zacaroli J and I observed in the course of the hearings before us, what PDV is really seeking is a "freezing order" against POS to preserve the sum received by it from the escrow account pending PDV's attack upon the Final Award by virtue of which POS became entitled to it. But PDV seeks to avoid the rather more stringent requirements for the grant of such relief by the use of CPR 64. However, the arguments for the existence of the trust relationship upon which CPR 64 depends are fanciful.

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OGEL:

• PDVSA Servicios SA v Clyde & Co LLP & Anor [2020] EWHC 3430 (Ch) (15 December 2020)
• PDVSA Servicios SA v Clyde & Co LLP & Anor [2020] EWHC 3297 (Ch) (02 December 2020)
• PDVSA Servicios SA v Clyde & Co LLP 2020 EWHC 2819 Ch - 23 October 2020
• PDVSA Servicios SA v Clyde & Co LLP 2020 EWHC 2322 Ch - Approved Judgment by Mr Justice Snowden - 26 August 2020
• PDVSA Servicios SA v Clyde & Co LLP 2020 EWHC 2202 Ch - Approved Judgment by Mr Justice Zacaroli - 04 August 2020

TDM:

• PDVSA Servicios SA v Clyde & Co LLP & Anor [2020] EWHC 3430 (Ch) (15 December 2020)
• PDVSA Servicios SA v Clyde & Co LLP & Anor [2020] EWHC 3297 (Ch) (02 December 2020)
• PDVSA Servicios SA v Clyde & Co LLP 2020 EWHC 2819 Ch - 23 October 2020
• PDVSA Servicios SA v Clyde & Co LLP 2020 EWHC 2322 Ch - Approved Judgment by Mr Justice Snowden - 26 August 2020
• PDVSA Servicios SA v Clyde & Co LLP 2020 EWHC 2202 Ch - Approved Judgment by Mr Justice Zacaroli - 04 August 2020