Bestfort Developments Llp and Others v Ras Al Khaimah Investment Authority and Others

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLady Justice Gloster,Lord Justice Briggs,Lady Justice Black
Judgment Date08 November 2016
Neutral Citation[2016] EWCA Civ 1099
Date08 November 2016
Docket NumberCase No: A3/2015/3642

[2016] EWCA Civ 1099

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Mr Justice David Richards

CH/2015/0494

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lady Justice Black

Lady Justice Gloster

and

Lord Justice Briggs

Case No: A3/2015/3642

Between:
Bestfort Developments Llp And Others
Appellants
and
Ras Al Khaimah Investment Authority And Others
Respondents

Philip Marshall QC, Ruth den Besten and James Mather (instructed by Peters and Peters Solicitors LLP) for the Appellants

Richard Millett QC and Andrew Holden (instructed by Dechert LLP) for the Respondents

Hearing date: 9 February 2016

Further submissions received 23 June 2016 and 11 July 2016

Approved Judgment

Lady Justice Gloster

Introduction

1

There is one appeal and one application for security for costs before the court.

2

The appeal, in Case No: A 3/2015/3642 ("the security appeal"), is a second appeal by the 1st to 6th, 8th and 10th to 14th Defendants ("the appellants" or "the appellants/defendants"), against the order of David Richards J dated 5 November 2015 dismissing the appellants' appeal against the order of Master Bowles dated 16 October 2015 whereby he refused to require the claimants, Ras Al Khaimah Investment Authority and others ("the respondents" or "the respondents/claimants"), all of which are incorporated and resident outside the jurisdiction and the EU, and whose only assets are in Ras Al-Khaimah (in the United Arab Emirates) and in Georgia, to provide security for the appellants' costs of proceedings brought by the respondents/claimants against them and others under section 25 of the Civil Jurisdiction and Judgments Act 1982 ("the section 25 proceedings").

3

Permission to appeal was granted by Patten LJ on 9 November 2015 on the basis that the security appeal raised an issue of principle suitable for a second appeal.

4

That issue of principle was said to be the correct evidential threshold for the grant of an order for security for costs under CPR r 23.13(2)(a). That provision permits an order for security to be made where the claimant is resident out of the jurisdiction but "not resident in a Brussels Contracting State, a State bound by the Lugano Convention or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982" ("a non-Convention state"). The issue is said to be whether an applicant for security must prove that it is more likely than not (i.e. on the balance of probabilities) that it will be difficult or impossible to enforce an English costs order against such a respondent or merely that there is a real risk that this will be the case.

5

It was common ground that the determination of that issue would involve consideration inter alia of this court's decision in Nasser v United Bank of Kuwait [2002] 1 WLR 1868. That was a case where the court held that, in order to comply with Articles 6 and 14 of the European Convention on Human Rights ("the ECHR") (preventing discrimination on the grounds of national origin with respect to access to the courts), the English court may only exercise its discretion to order security for costs in a manner that is not discriminatory.

6

Both the Master and David Richards J held that the appropriate test is one of likelihood, rather than some lower standard based on risk or possibility. They decided that, for an order for security to be granted, it was not sufficient that there was a real risk that enforcement of any costs order made in the appellants' favour would prove impossible or impracticable or difficult in the relevant foreign jurisdictions.

7

The second matter before the court is an application by the appellants/defendants to this Court issued on 3 February 2016 under Case No: A3/2015/4051A, for an order requiring the respondents/claimants to provide security in the sum of £208,014.56 for the appellants/defendants' costs of the respondents/claimants' appeal against an order of Rose J dated 30 November 2015 dismissing the section 25 proceedings "or otherwise for a like order under CPR r 52.9 that such security be provided as a condition of allowing [the respondents/claimants'] appeal to proceed" ("the security for costs application").

8

In this court Mr Philip Marshall QC, Miss Ruth den Besten and Mr James Mather appeared for the appellants/defendants; Mr Richard Millett QC and Mr Andrew Holden appeared for the respondents/claimants.

The procedural background to the security appeal and the security for costs application

9

It is necessary for the purposes of this judgment to summarise the procedural background in some detail.

10

As David Richards J summarised in paragraphs 2 to 4 of his judgment, the section 25 proceedings were originally brought by the respondents/claimants under section 25 of the Civil Jurisdiction and Judgments Act 1982 for a worldwide freezing order and associated disclosure orders against the appellants/defendants and others and for the appointment of receivers ("proceedings"). These orders were sought in support of pending or intended proceedings by the respondents against a Mr Mikadze in Georgia and in Ras Al Khaimah in the United Arab Emirates. The respondents/claimants are entities associated with the government of Ras Al Khaimah and the claims are said to arise out of dealings between them and Mr Mikadze, a citizen of Georgia, in respect of property developments in Georgia. It is alleged that Mr Mikadze misappropriated large sums and the claim against him is said to be for US $42 million. The allegations are strongly denied. The respondents/claimants allege, among other things, that the appellants/defendants are beneficially owned or controlled by Mr Mikadze, and that it will be possible to enforce a judgment against Mr Mikadze against the appellants/defendants' assets. This allegation is denied by the appellants/defendants. The detail of the claims made or to be made in the foreign proceedings and in the present proceedings are not relevant for present purposes.

11

The section 25 proceedings were issued on 1 May 2015 and evidence of both fact and Georgian law was filed. At the time of the hearing before the judge, the application had been set down and was due to be heard in the Chancery Division with an estimate of three days starting on 9 November 2015.

12

The application for security for costs was made by all the defendants, except the 7 th and 9 th defendants who were not represented in the proceedings, by an application notice issued on 21 August 2015. Evidence of fact and expert evidence of Georgian law was filed on the application which was heard by Master Bowles on 7 October 2015. Towards the end of the hearing he invited further written submissions on a particular topic and submissions were supplied to him between 8 and 12 October 2015. The Master gave judgment on 16 October 2015 dismissing the application. He held that the court needed to be satisfied that there was likely to be an obstacle or burden to enforcement, purportedly basing himself on the terms of the judgment of Mance LJ in Nasser and on a subsequent decision by Hamblen J in Dumrul v Standard Chartered Bank [2010] EWHC 26 25 (Comm). In effect the Master proceeded on the basis that "likely" meant "more likely than not" or "likely on the balance of probabilities".

13

The Master dealt with the issue in his judgment as follows:

"

25. I turn therefore to the question of whether such grounds exist, and to the question as to the burden to be satisfied by an applicant for security where security is sought upon such grounds. As to the latter I find myself in complete agreement with Hamblen J in Dumrul v Standard Chartered Bank [2010] EWHC, 2625 (Comm); namely that, as a matter of both principle and authority (the authority being Nasser) the court needs to be satisfied that there is likely to be an obstacle, or burden, to enforcement, by which is meant, in accord with paragraph 62 of Nasser, that there is likely to be a substantial obstacle, or burden, to enforcement, and that a real possibility that such an obstacle or burden might exist is insufficient. The point of principle identified by Hamblen J. that a mere, or real, possibility that there might be a substantial obstacle or burden in respect of enforcement should not be sufficient to justify different treatment being applied to a resident outside the UK, EEA or EU, as compared with a person resident within those jurisdictions.

49. However, in my judgment, that is not sufficient to enable a court to conclude in reliance on, or in respect of, Article 68(2)(e) that it is likely that there may be substantial difficulties in recognition or enforcement arising from the lack of a bilateral arrangement. It is undoubtedly possible, but not, on the evidence as I see it, likely."

14

Thus, whilst the Master held that there was a real possibility that such an obstacle or burden might exist, he decided that he was not satisfied on the evidence before him that there was likely to be a substantial obstacle, or burden, in respect of enforcement.

15

The appellants/defendants then applied for permission to appeal against the dismissal of their application for security for their costs of the section 25 proceedings and, if permission were granted, for the order below to be set aside and for an order for security for costs to be made in their favour. The main ground on which they sought to appeal the Master's order was the threshold test of the standard to which the court must be satisfied that there will be potential difficulties or burdens of enforcement in the relevant non-Convention state.

16

The hearing before David Richards J proceeded...

To continue reading

Request your trial
16 cases
  • Lolita Vladimirovna Danilina v (1) Vladimir Anatolevich Chernukhin
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 19 January 2018
    ...21 Thirdly there is the question of the appropriate test. On this they rely on the judgment of Gloster LJ in Ras al Khaimar Investment Authority v Bestfort Developments LLP [2016] EWCA Civ 1099 [2017] CP Rep 9 resolving the controversy which had previously surrounded this issue. This establ......
  • Roman Pipia v BGEO Group Ltd (Formerly known as BGEO Group Plc)
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 22 February 2019
    ...who are resident in Georgia as well as nationals of Georgia. In this regard the observations of Gloster LJ in Bestfort Developments LLP v Ras Al Khaimah Investment Authority [2016] EWCA Civ 1099 at [59] are equally applicable in my 13 Accordingly I do not accept that the Association Agreem......
  • Tetiana Ieremeieva v Sergii Lagur
    • Caribbean Community
    • Eastern Caribbean Supreme Court
    • 4 April 2019
    ...J0120–1, at paragraph [18] (Farara J (Ag)). 2 [1995] 3 All ER 534, at 539h–540j. 3 Claim No. BVIHC ( Com) 0126 of 2011, at [11]. 4 [2016] EWCA Civ 1099 at paragraph [77] (Gloster 5 [2018] EWCA Civ 1802 at [64]. 6 Wang Zhongyong v Union Zone Management Ltd Claim No. BVIHC (Com) 0126 of 20......
  • Tetiana Ieremeieva and Roman Yeremeiev v Estera Corporate Services (BVI) Ltd, Sergii Lagur, Stephan Ivakhiv, Sofia Yeremeieva (A Minor)
    • Caribbean Community
    • Eastern Caribbean Supreme Court
    • 5 December 2019
    ...J0120–1, at paragraph [18] (Farara J (Ag)). 2 [1995] 3 All ER 534, at 539h–540j. 3 Claim No. BVIHC ( Com) 0126 of 2011, at [11]. 4 [2016] EWCA Civ 1099 at paragraph [77] (Gloster 5 [2018] EWCA Civ 1802 at [64]. 6 Wang Zhongyong v Union Zone Management Ltd Claim No. BVIHC (Com) 0126 of 20......
  • Request a trial to view additional results
5 firm's commentaries
  • Security For Costs
    • United Kingdom
    • Mondaq UK
    • 17 May 2017
    ...Eiroholdings Invest (2016) EWHC 874 (Ch)). In Bestfort Developments LLP and others v Ras Al Khaimah Investment Authority and Others [2016] EWCA Civ 1099, Gloster LJ concluded that the European Human Rights Convention does not require the higher "likelihood" burden to be applied. T......
  • Court Of Appeal Rejects 'Sliding Scale' Approach To Level Of Security For Costs When Real Risk Of Non-Enforcement Established
    • United Kingdom
    • Mondaq UK
    • 6 September 2018
    ...[2002] 1 WLR 1868, De Beer v Kanaar & Co [2003] 1 WLR 38 and Bestfort Developments LLP v Ras Al Khaimah Investment Authority [2016] EWCA Civ 1099. The guidance provided by these authorities could be summarised as To establish jurisdiction under CPR 25.13(2)(a) the claimant has to be res......
  • Recent Developments - Security For Costs
    • United Kingdom
    • Mondaq UK
    • 8 December 2016
    ...Gloster, in her judgment of 8 November 2016 in Bestfort Developments LLP and others v Ras Al Khaimah Investment Authority and Others [2016] EWCA Civ 1099, considered whether the provisions of and case law on the European Human Rights Convention might require a more stringent application of ......
  • Court of Appeal provides much needed clarity on security for costs
    • United Kingdom
    • JD Supra United Kingdom
    • 15 December 2016
    ...Stefan Nigam] Bestfort Developments LLP & ors v Ras Al Khaimah Investment Authority & ors [2016] EWCA Civ 1099, 8 November 2016 The Court of Appeal has clarified the test to be met in an application for security for costs on the basis that a claimant is resident outside the jurisdic......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT