Summary

An order that a Kazakhstan law firm pay interim costs stayed on condition that it pay that sum into court immediately, otherwise its pending appeal would be stayed. It was also just for the firm to pay a sum into court as security for the respondents' costs of the appeal.

Facts

The applicant solicitors firm (M) applied to stay an order for interim payment of costs ordered against it following the failure of part of its claim against the respondents (S), pending the determination of its appeal. S applied for security for costs of £150,000.

M, which was based in Kazakhstan, and S had been involved in arbitration and litigation in the United Kingdom and elsewhere. Part of M's claim against S in the UK was dismissed for abuse of process, although the judge granted M permission to appeal on that issue. M was ordered to pay interim costs of £150,000.

M contended that if it paid the interim costs outright it was uncertain whether they could be recovered from S; M therefore offered to pay that sum into court immediately. S argued that unless those moneys were paid within a short length of time, the court dismiss M's appeal. In respect of security for costs, M submitted that it was a very successful law firm in Kazakhstan with a large annual turnover, and that in the UK litigation all orders for costs had been met. It asserted that, even though there might be prima facie jurisdiction to order security for costs under CPR r.25.15(1) taken together with CPR r.25.13(2)(a)(i) because it was resident outside of the jurisdiction but not an EU member state, it would nevertheless be unjust to make an order.

Held

(1) It was appropriate to grant a stay of the payment of interim costs on condition that M paid £150,000 into court immediately, as soon as an international transfer could be made. There would be a stay of the appeal if that payment was not made within three days (see paras 4-6 of judgment). (2) The Arbitration Tribunal, which was a distinguished tribunal, had in its arbitration award made strictures about M's principal, as had the court in an earlier judgment, Emmott v Michael Wilson & Partners Ltd [2009] EWHC 1 (Comm), [2009] 2 All E.R. (Comm) 856 considered. In those circumstances, it was necessary for the court to be cautious in approaching the question of security for costs. The court was not required to make an ultimate judgment about where the merits of M's appeal lay, only about security. It was just to require M to secure S's appeal costs, pending the appeal. M was therefore ordered to pay £150,000 into court as security for costs within 14 days, and if that was not paid the appeal should be stayed (paras 8-10).

Applications granted