Dana Gas PJSC v (1) Dana Gas Sukuk Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Leggatt |
| Judgment Date | 22 February 2018 |
| Neutral Citation | [2018] EWHC 332 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: FL-2017-000004 |
| Date | 22 February 2018 |
[2018] EWHC 332 (Comm)
Lord Justice Leggatt
Case No: FL-2017-000004
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND WALES
COMMERCIAL COURT
FINANCIAL LIST (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Daniel Hubbard (instructed by Squire Patton Boggs (UK) LLP) for the Claimant
Mr Andrew Scott (instructed by Weil, Gotshal & Manges (London) LLP) for the Fifth Defendant
This judgment gives my ruling on two applications made by the fifth defendant (BlackRock) under CPR r.44.2(8) for payments on account of costs which the claimant (Dana Gas) has been ordered to pay BlackRock subject to detailed assessment. The applications have been dealt with in writing in accordance with directions given when the underlying costs orders were made.
The costs awarded
As described in earlier judgments, BlackRock intervened in these proceedings after an injunction was granted by a court in Sharjah in the United Arab Emirates which prohibited the original four defendants to the English action and Dana Gas from proceeding with the litigation before the English court. The Sharjah injunction was obtained by three shareholders of Dana Gas on Sunday, 17 September 2017, the day before the trial of the English action was due to start. On the Monday BlackRock applied to this court without notice for and obtained an interim anti-suit injunction prohibiting Dana Gas and its shareholders from pursuing or taking any further step for the time being in the Sharjah proceedings (other than to seek permission from the Sharjah court to participate in the trial before the English court). Following hearings on 19 and 21 September 2017 in which Dana Gas took part, BlackRock was added as a defendant to this action and directions were given for the trial of a preliminary issue of English law. For the purpose of that trial, BlackRock adopted the written submissions and instructed the counsel previously instructed by the second defendant (the Delegate). Oral submissions were made on behalf of BlackRock on 25 September 2017. BlackRock also opposed applications made by Dana Gas on 13 October and 13 November 2017 to adjourn the date set for the hearing of any further oral submissions.
Judgment on the preliminary issue was handed down on 17 November 2017 (the “November judgment”). BlackRock was the successful party and Dana Gas has been ordered to pay its costs of the preliminary issue trial, including the costs of its applications to be joined to the proceedings and for an interim anti-suit injunction and its costs of opposing adjournments. BlackRock has produced an estimate of those costs which (expressed in sterling and as a round number) amount in total to £408,000. BlackRock has asked the court to order Dana Gas to pay 60% of this sum on account.
The second costs order in respect of which BlackRock seeks a payment on account relates to applications heard over three days between 30 January and 1 February 2018. These applications comprised: (i) an application by Dana Gas under CPR r.39.3 to set aside the November judgment; (ii) an application by BlackRock for summary judgment for further declaratory relief consequential on the November judgment; (iii) an application by BlackRock for a permanent anti-suit injunction; (iv) a cross-application by Dana Gas to vary an earlier order for directions and to stay part of the English proceedings; (v) an application by BlackRock to discharge an interim injunction previously granted to Dana Gas by this court; and (vi) a cross-application by Dana Gas to continue that injunction.
On all these applications BlackRock was the successful party and Dana Gas was ordered to pay its costs. BlackRock has submitted a statement of costs in a total amount (again expressed in sterling) of £1,473,087. Again, BlackRock seeks 60% of this sum as a payment on account.
Applicable principles
The court's task under CPR r.44.2(8) is to identify what is “a reasonable sum on account of costs”. I respectfully agree with Christopher Clarke LJ when he said in Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), at para 22, that this test does not require the court to find the irreducible minimum which would be recovered on a detailed assessment (unless in the particular case that happens to be the reasonable sum to award). What is a reasonable sum to be paid on account will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty, the extent of which may differ widely from case to case, as to what will be allowed on detailed assessment: see the Excalibur case at para 23. A logical approach is to start by estimating the amount of costs likely to be recovered on a detailed assessment and then to discount this figure by an appropriate margin to allow for error in the estimation.
The rationale for making such a discount, as I see it, is that in general the prejudice involved in being ordered to pay money which turns out not to be due and then having to recover it is likely to exceed the prejudice suffered by the party entitled to its costs of having to wait for payment until the amount receivable has been assessed (particularly when interest will be running in the meantime). Accordingly, any payment on account should generally tend to err on the side of awarding less than is ultimately likely to be recovered on detailed...
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