In 2005 the State Union of Serbia and Montenegro entered into a contract with Imagesat NV for the purchase of a satellite ground control station and certain exclusive rights regarding two of Imagesat’s satellites. The State Union did not pay any of the sums due and in February 2006 declared itself not bound by the contract. In accordance with an arbitration clause in the contract, in May 2006 Imagesat sent a Request for Arbitration to the International Chamber of Commerce Court of Arbitration. In June 2006 Montenegro declared itself an independent sovereign State. Although the Republic of Serbia signed the Terms of Reference (subject to certain conditions), it subsequently claimed that it was not in law the continuation of the State Union but a new State and that, although it was bound as a successor by the State Union’s international legal obligations, it was not bound by its private law obligations. Hence, it claimed, the Tribunal had no jurisdiction over the dispute. Serbia also argued that the State Union was not bound by the contract and raised other defences on the merits. The sole arbitrator, Professor Michael Pryles, dismissed all of Serbia’s challenges and awarded Imagesat damages of €30.5 million plus interest. Serbia then challenged the Tribunal’s jurisdiction in the Commercial Court. The Court (Beatson J) dismissed the challenge.
Maurice Mendelson QC appeared for Imagesat before the Tribunal and the Commercial Court