Boris Bannai v Eitan Erez

JurisdictionEngland & Wales
JudgeMr Justice Burton
Judgment Date16 December 2013
Neutral Citation[2013] EWHC 4287 (Comm)
Docket NumberCase No: 2013 Folio 1039 & 1073
CourtQueen's Bench Division (Commercial Court)
Date16 December 2013

[2013] EWHC 4287 (Comm)




The Rolls Building

5th Floor

7 Rolls Buildings

Fetter Lane




Mr Justice Burton

Case No: 2013 Folio 1039 & 1073

Boris Bannai
Eitan Erez

Mr Paul Key QC (instructed by Dallas & Co) appeared on behalf of the Claimant

Ms Lisa Lacob appeared on behalf of the Defendant

Approved Judgment

Mr Justice Burton

This has been the short hearing of an issue which remained live as a result of the hearing of the consequential matters arising out of my judgment in this case delivered on 2 nd December 2012.


The issue relates to whether the order that I make in favour of the Claimant and in respect of payment of costs and an interim order for costs on account should be made against Mr Erez, the trustee in bankruptcy of Mr Reichmann, who, as I have found, was acting in breach of contract in seeking to bring proceedings in Israel against Mr Bannai in breach of the terms of an arbitration agreement which bound both the bankrupt and the Claimant. The order that I made was for indemnity costs, because of the convention in this court that where there is such an action in breach of contract, by way of an analogy with the damages for breach of contract, including the recoverability of costs thrown away by the innocent party, the costs should be assessed on the indemnity basis.


The submissions that have been made by Mr Paul Key QC for the Claimant and Miss Lacob for the Defendant have been very helpful in clarifying the position for me. I am satisfied and indeed, Miss Lacob does not dispute that these proceedings are not insolvency proceedings. These proceedings are a claim by the Claimant for an injunction arising out of the breach of contract of the bankrupt in seeking to bring proceedings in breach of the arbitration clause.


If they were insolvency proceedings, then by analogy with how insolvency proceedings would be dealt with in this court, as Miss Lacob invites me to proceed, the Insolvency Rules 1986 would apply, which would bring the position within Chapter 6, relating to costs in connection with insolvency proceedings, as appears from Rule 7.33A and that, of course, would relate to the costs of the trustee himself and also any costs for which the trustee would be otherwise liable, as here. 7.39 provides that:

" 7.39. Without prejudice to any provision of the Act or Rules by virtue of which the official receiver is not in any event to be liable for costs and expenses, where the official receiver or a responsible insolvency practitioner is made a party to any proceedings on the application of another party to the proceedings, he shall not be personally liable for costs unless the court otherwise directs."


Mr Key makes the point that it cannot be said here that the trustee has been made a party to any proceedings on the application of another party to the proceedings when in fact, in substance the insolvency practitioner here is making a claim in breach of the arbitration agreement and in due course in the arbitration proceedings which will now follow. But I am prepared to assume in Miss Lacob's favour that he is in substance a defendant, given that this is an application for an injunction being brought against him, and thus he is being made a party to these injunction proceedings on the application of another party to the proceedings being the Claimant. However, what is clear is that Rule 7.39 has no applicability in any event, not only because these are not English insolvency but further, because these are not insolvency...

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