FILED: NEW YORK COUNTY CLERK 08/24/ :49 PM INDEX NO /2016 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 08/24/2016 EXHIBIT 2

Transcription

1 FILED: NEW YORK COUNTY CLERK 08/24/ :49 PM INDEX NO /2016 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 08/24/2016 EXHIBIT 2

2 IN THE MATTER OF THE ARBITRATION ACT 1996 AND IN THE MATTER OF AN ARBITRATION BETWEEN E.G ARGHYRAKIS & CO (CLAIMANTS) AND ASTILLEROS De VENEZUELA C.A OF VENEZUELA (ASTIVENCA) (RESPONDENTS) RETAINER CONTRACT DATED 15 OCTOBER 2013 FINAL AWARD WHEREAS: (A) By a retainer contract in the form of a Letter of Engagement and Terms of Business dated 15 October 2013 ("the retainer") and signed by both E. G. Arghyrakis & Co, London Solicitors, ("the Claimants") and Astilleros de Venezuela, C.A. of Venezuela, ("Astivenca" or "the Respondents"), Astivenca instructed the Claimants to act on their behalf in relation to disputes arising under charterparties dated 22 January 2008 for the Amethyst and the Turquoise, and such other instructions as may be received in the future. (B) Pursuant to the above retainer agreement further instructions were received to act on behalf of Astivenca in relation to disputes arising under a Service Contract dated 14 February 2008 between Astivenca and PDVSA Petroleo SA ("PDVP"), in relation to which Astivenca were claiming sums being due to them from PDVP in connection with the vessels: Amethyst, Turquoise, Armada Tuah and Isla Ballena, which had been used by Astivenca to provide services to PDVP. (C) The Terms of Business provided, inter alia, as follows:

3 (a) by Clause 1.4: "... [the Claimants'] bills, whether interim or not, are payable upon presentation... (b) by CI 4.3: For the avoidance of doubt [the Claimants] reserve the right to charge interest on [the Claimants'] bills in accordance with the Late Payment of Commercial Debts (Interest) Act 1998 at the relevant rate in force. (c) by clause 8.2: [the Claimants] may decide to stop acting for [Astivenca] // [Astivenca] fail to pay any bill or fail to comply with a request for payment on account. In such circumstances [the Claimants] shall give [Astivenca] reasonable notice to terminate the retainer. [The Claimants] will continue to charge [Astivenca] until such notices expire. (d) by clause 12: Any disputes arising hereunder shall be referred exclusively to arbitration by three arbitrators in London, English Law to apply. One arbitrator to be appointed by each party and the third by the two so chosen. All arbitrators shall be practicing barristers or members of the LMAA. (D) The Claimants rely on the retainer contract for its full terms and effect. (E) A dispute did arise between the parties concerning the payment of some outstanding fees and disbursements of the Claimants, which are shown below (at para I), and the Claimants terminated the retainer on 16 November 2015 at hours, pursuant to clause 8.2 of the retainer. (F) On 5 February 2016, for the determination of the dispute, the Claimants appointed the Undersigned, Dr Aleka Mandaraka Sheppard, of Quadrant House, 10 Fleet Street, London EC4Y 1 AU, and called upon the Respondents to appoint their own arbitrator pursuant to clause 12 of the retainer. The Respondents, having failed to appoint their own arbitrator within the time prescribed by the Arbitration Act 1996 (section 16(5)(a)) (i.e. 14 days from the date of service of the arbitration notice), the Claimants sought my agreement to act as a sole arbitrator in this reference. (G) On 3 March 2016, I accepted to act as a sole arbitrator under the LMAA Terms I confirm I am a member of the LMAA, as is required by the Arbitration clause. (H) The seat of the Arbitration is London, England. (I) On 4 March 2016, the Claimants served their Claim Submissions with attached documents and they claim from the Respondents the sum of GBP 325, representing outstanding fees and disbursements, plus interest at the rate of 8.50%

4 pursuant to the Late Payment of Commercial Debts (Interest) Act 1998 from 11 April 2014 on the amounts outstanding, or at such other rates and periods as the Tribunal sees fit, plus costs. (J) Alternatively, the Claimants claim damages, plus interest and costs. (K) On 14 March 2016, I made an Order that the Respondents serve their defence submissions by 1 April 2016, i.e. 28 days after the service of the claim submissions. There was no communication nor was a defence received from the Respondents. (L) On 3 April 2016, I issued a Peremptory Order requesting the Respondents to serve their defence, if any, by 8 April 2016 and stipulated that, in the event of noncompliance with the Tribunal's peremptory order, the Tribunal would proceed to its Final Award on the basis of the submissions and evidence properly provided to it by the Claimants, pursuant to section 41(7)(c) of the Arbitration Act (M)On 14 April 2016, since the Respondents had not complied with my Peremptory Order, as aforesaid, I notified the Respondents that I would now proceed to my Final Award on the basis of the material before me, and I now proceed to do so. The Facts and Findings 1. The Claimants represented Astivenca in High Court proceedings and in mediation. During the course of the retainer, a number of bills were issued by the Claimants with regard to their fees and disbursements, some of which were paid by Astivenca or by parties related to Astivenca. 2. The Claimants attach a schedule of all their bills, paid and unpaid, at page 17 of their submissions with dates of issuing, ranging from 21 October 2013 to 21 January The outstanding balance shown as unpaid on this schedule is 325, Following periods of non-payment of the Claimants' bills, a notice of termination of the retainer was sent to Astivenca on 16 November 2015 ("the termination"), whereupon the Claimants filed with the High Court a notice of change of legal representatives on 7 July On 21 January 2016, the Claimants issued their final bill and a final statement of account of 325,221.80, which Astivenca have failed to pay. 5. It is stated in the Claimants' submissions that Astivenca have admitted they owe the sum stated above, first, during a telephone conversation between Enoc Martinez (the

5 President of Astivenca) and George Arghyrakis, Elizabeth Watton, and Isabel Roncero of the Claimants, on 1 June 2015 and, second, in a 'Whatsapp' message between Enoc Martinez and George Arghyrakis on 17 July 2015, evidence of which is provided in the form of file notes recording the conversations (pp 7, 7B of the submissions). 6. Having ordered the Respondents to serve submissions they might have by way of defence and having not heard or received any evidence from them denying any of the matters stated herein, or contradicting the evidence I have before me, I accept the Claimants' evidence (on the facts and matters stated) as true and I am satisfied to accept it. 7. This is an undisputed and admitted claim and the Claimants are entitled to the sum of 325, claimed, as a debt, for outstanding fees and disbursements being due and owing to them by the Respondents since the last statement of account issued and served upon the Respondents on 21 January I find, therefore, the Respondents are liable to pay this debt to the Claimants forthwith. Interest 8. The Claimants further claim interest on the above sum at the rate of 8.50%, pursuant to the Late Payment of Commercial debts (Interest) Act 1998 ("the Act"), from 11 April 2014 on the amounts outstanding (as set out in the final Statement of Account), or at such other rates and periods as the Tribunal sees fit. 9. The Act applies to qualifying debts arising under commercial contracts for the supply of goods and services (section 2) and implies a term into such contracts that such debts are to carry statutory interest in the same way as interest carried under an express contractual term (section 1). For the avoidance of doubt, the retainer, in clause 4.3, stipulates that the Claimants reserve the right to charge interest on outstanding bills in accordance with the Act. 10. Since the coming into force of the Act (which was amended by a statutory instrument 2013 No 395 upon the implementation of the European Directive 2011/7/EU, which however does not apply in this case, and in any event it does not affect the essence of the Act for the present purposes), the rate of statutory interest is set at 8% above the Bank of England base rate applicable from time to time (section 6 of the Act). The Bank of England base rate has been 0.5% during the last two years. 11. There is an important decision of the English court in Martrade Shipping & Transport GmbH v United Enterprises Corporation [2014] EWHC 1884 (Comm), in which Mr Justice Popplewell interprets the application of the Act. Three important points of the decision (at paras 12,13) are relevant here:

6 a. The judge states that the interest rate is not intended to be compensatory because it exceeds the rate at which most commercial creditors would be likely to have to borrow whilst being kept out of their money. So it can properly be regarded as a penal rate which is intended to act as a deterrent so as to promote the purpose of the Act as reflected in section 6. b. The application of the rate is not limited to commercial debtors or creditors of a particular size or kind and it is not discretionary, save to the extent that the conduct of the parties may justify its disapplication in whole or in part (section 5). The Act intends to promote prompt payments of all commercial debts and to discourage delay in payment not only for the protection of the vulnerable but also as a matter of general policy. c. The Act applies to international contracts, or contracts with an international dimension, in certain circumstances. Section 12(1) of the Act provides that where the parties to a contract with an international dimension have chosen English law to govern the contract, the choice of English law of itself is not sufficient to attract the application of the Act. However, it will apply if there is a "significant connection" between the contract and England, or the contract would be governed by English law in any event, apart from the choice of English law. 12. The contract of the retainer between English solicitors and a client registered and domiciled in Venezuela is a contract of an international dimension. English law is the choice of law to govern the contract but regardless of the parties' choice of law, the contact has a real and significant connection with England. The solicitors are English, their legal services were provided in England, and the contract would be governed by English law had English law not been agreed. Therefore, it is my finding that the Act applies to this retainer contract by law. 13. As to the time from which the statutory interest starts to run, section 4 (2A)(a) of the Act provides that, where there is an agreed payment day between the parties, the interest starts to run on the day after the 'relevant day' for the debt. The relevant day in the present case (according to clause 1.4 of the retainer) is stipulated to be the day of "presentation" of the bills, interim or not. 14. I find that the 8.50% rate of statutory interest applies to the debt which I have found to be owed to the Claimants (para 7 above) and runs from the day after the day of the presentation of each interim and/or final bills, so long as they remain unpaid.

7 15. In the Claimants' Statement of Account there is a series of bills delivered from 21 November 2013 almost every month in various amounts. During 2013 and until 4 November 2014, Astivenca was paying either over the billed amount, or a part, of each delivered bill shortly after its delivery, or within a month or two. The balance on either side was credited or debited in the next bill. From the end of November 2014, the pattern of payments changed. For example, with regard to the bills presented to Astevinca dated 28 November 2014 ( 26,017.20), 15 December 2014 ( 49,448.45), and 14 January 2015 ( 57,671.99), amounting (with the previous outstanding balances) to 154,104.00, payment of 32, was received by the Claimants on 3 February A further bill was delivered on 27 February 2015 in the amount of 86, increasing the previous balance to 207, On 2 March 2015, Astivenca paid 64,209.58, which was the las payment. After a transfer of 1, from client account to the Claimants' office account on the same day, the outstanding balance was 141, Additional bills dated 27 March 2015 ( 80,713.76), 7 May 2015 (33,489.65) and 21 January 2016 ( 69,229.52) remain unpaid and together with the previous outstanding balance owed, as at 2 March 2015, of 141,788.87, the total outstanding fees amount to 325,221.80, which is the amount claimed. 17. As the Statement of Account shows, the Respondents were paying parts of the bills or the whole amounts billed until 2 March Therefore, I consider that it would be fair and just to allow the rate of statutory interest of 8.50% to run, for the first period, i.e. from 2 March 2015 until 27 March 2015 (when the outstanding balance was increased by the new bill delivered) on the then outstanding sum of 141, I find that the interest for this period (i.e. for 24 days) is The next period(s) for which I determine the statutory interest should apply is from the day after 27 March 2015 up to and including 7 May 2015 (41 days) on the then balance of 222,502.63, namely in the amount of 2,124.45, and for the subsequent period from the day after 7 May 2015 up to and including 21 January 2016 (221 days) on the then outstanding sum of 255,992.28, namely in the amount of 13, With regard to the final outstanding total balance (i.e. 325,221.80), I award the statutory interest of 8.50% on that sum from the day after 21 January 2016 up to the day of payment. Costs 19. The Claimants, in addition, claim their costs. I hold that they are entitled to recover a reasonable amount of their costs, reasonably incurred, to bring their claim for outstanding fees against the Respondents to arbitration, the costs of this Award, and their costs to recover the sums awarded in this my Award from the Respondents, to

8 My Award be assessed pursuant to section 63 of the Arbitration Act 1996, if not agreed, for which matter I reserve my jurisdiction. Now I, the said Aleka Mandaraka Sheppard, having taken upon myself the burden of this arbitration and having carefully and conscientiously considered the evidence put before me and the submissions made on behalf of the Claimants, and having received no submissions, or a challenge to the claim, by the Respondents, and having given due weight thereto, DO HEREBY MAKE, ISSUE AND PUBLISH this my AWARD as follows: 1. I FIND AND HOLD that the Claimants' claim succeeds in full in the sum of GBP 325,221.80, as an outstanding debt being due and owing, plus statutory interest and costs. 2. I THEREFORE AWARD, ADJUDGE AND DIRECT that the Respondents shall pay to the Claimants forthwith the sum of GBP 325, (three hundred and twenty five thousand and two hundred twenty one Pounds Sterling and eighty pence) together with statutory interest on this sum at the rate of 8.50% per annum and pro rata pursuant to the Late Payment of Commercial Debts (Interest) Act 1998 from the day after 21 January 2016 up to the day of payment, and in addition the statutory interest of 8.50% on the previously outstanding sums, as follows: (i) GBP for the period of 24 days (para 17, above); (ii) GBP 2, for the period of 41 days (para 18, above); GBP 13, for the period of 221 days (para 18, above), being a total of GBP 16, I FURTHER AWARD, ADJUDGE AND DIRECT that the Respondents shall pay to the Claimants their recoverable legal costs of this arbitration, together with interest on the said costs at the rate of 4.50% per annum or pro-rata, compounded with three monthly rests from the date of this Award until payment of the said costs, and further the Respondents shall reimburse the Claimants the amount of my fee for this Award and interlocutory fees in the total amount of GBP 3, (three thousand, eight hundred and fifty Pounds Sterling). 4. I DECLARE that this my AWARD is FINAL as to matters determined herewith, and I RESERVE JURISDICTION to myself to make a further Award or Awards as may be appropriate in respect of any further disputes.

9 Given under my hand in London on this day of 25 April 2016 Dr Aleka Mandaraka Sheppard The Tribunal