O'Melveny Persuades United Kingdom Supreme Court To Uphold Vivendi Victory

November 18, 2009

Piper Hall
O'Melveny & Myers LLP

Sonia O'Brien
O'Melveny & Myers LLP

London - November 18, 2009 - A London-based team from O'Melveny & Myers LLP has successfully prevented a challenge in the Supreme Court to its victory in The Court of Appeal for client Vivendi.
The case relates to an LCIA arbitration between Vivendi and its Polish telecoms partner Elektrim, concerning an investment in one of Poland's largest mobile telephone operators.

Elektrim had challenged the validity of an arbitration award in Vivendi’s favour. The challenge was made on the grounds that Elektrim’s insolvency in Poland deprived the Tribunal of jurisdiction in the London arbitration. The key issue in the case was whether the effect of Elektrim’s insolvency upon the London arbitration was governed by Polish law or by English law.

At a first instance hearing in October 2008, Mr Justice Clarke accepted Vivendi's argument that it was the law of the seat of the arbitration which determined whether the arbitration should proceed or be suspended. Then in July this year, The Court of Appeal (Lords Justice Longmore, Mummery, and Patten) upheld that decision, essentially for the same reasons.

Elektrim applied for permission to appeal to the Supreme Court (which replaced the House of Lords in October 2009) arguing that the Court of Appeal had incorrectly interpreted the conflicts of law rules in the EC Insolvency Regulation. Elektrim also asked the Supreme Court to refer the question of interpretation to the European Court of Justice, because it raised a point of EU law. O’Melveny filed a Response on behalf of Vivendi arguing that the decision of the Court of Appeal was plainly correct.

In one of the first orders made by the new Supreme Court, the Court refused Elektrim permission to appeal on the grounds that Elektrim’s case did not raise an arguable point of law of general public importance, the threshold that needs to be met before permission to appeal can be granted. The Supreme Court also refused to refer the matter to the European Court of Justice saying that “the correct application of Community law is so obvious as to leave no scope for any reasonable doubt”.

The rejection marks a decisive victory for Vivendi in this case - there being no further avenues of appeal for Elektrim to pursue - and clears the path for Vivendi to continue with enforcement proceedings in Poland to recover the EUR 1.9 billion award made to Vivendi by the Tribunal in the underlying London Arbitration.

O'Melveny's team for Vivendi is led by London partner David Foster, who was assisted by associates Hayley Ichilcik, Michael Plumbridge, and Anne-Caroline Meyer.

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