Euro-Asian Oil SA v Credit Suisse AG
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cranston |
| Judgment Date | 23 January 2017 |
| Neutral Citation | [2017] EWHC B7 Comm |
| Date | 23 January 2017 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2013-000605 |
[2017] EWHC B7 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Courtroom No. 27
Rolls Building
7 Rolls Building
Fetter Lane
London
EC4A 1NL
The Honourable Mr Justice Cranston
Case No: CL-2013-000605
Mr S Swaroop QC and Mr R Marven appeared on behalf of the Claimant
Mr J Gruder QC and Ms C Jung appeared on behalf of the Defendant
Mr D Igniska appeared IN PERSON
JUDGMENT (Approved)
This is the hearing of ancillary matters following the handing down of my judgment in late December, [2016] EWHC 3340 (Comm).
The first issue relates to costs. For Euro-Asian Mr Swaroop QC contends that the costs should be awarded in Euro-Asian's favour on an indemnity basis. He rests his case in particular on the words of the letter of indemnity. They refer to: 'To protect, indemnify and to hold you [Euro-Asian] harmless from and against any and all damages, costs and expenses (including reasonable attorney fees) which you [Euro-Asian] may suffer by reason of the shipping documents, including the original clean and negotiable bills of lading remaining outstanding or by reason of a breach of the warranties given'. Mr Swaroop underlines in particular the phrase 'all and any'. In reply to an argument advanced by Mr Gruder QC he points to the word 'including' and its expansive effect. The upshot, he submits, is that indemnity costs should be awarded.
Mr Swaroop also invokes authority. He relies in particular to Littlestone v Macleish [2016] EWCA Civ 127 [2016] 1 WLR 3289 and quotes paragraph 41 of the judgment of Briggs LJ, which was agreed to by Black and Gloster LJJ. Although in that case the phraseology of the relevant provision of the contract did not include the word "indemnity", Briggs LJ said that it constituted an indemnity and it should be given effect.
Mr Swaroop also submits that the provisions in the CPR support his argument on the contractual right to indemnity costs. In that regard he cites the decision Chaplair Limited v Kumari [2015] EWCA Civ 798 and the passages of Arden LJ's judgment at paragraphs 34 and 35, which are supported by the short concurring judgment of Patten LJ. In Mr Swaroop's submission, that authority leads to the conclusion that the court should exercise its powers to award costs under the CPR in accordance with any contractual provisions.
In my view, firstly, the authorities Mr Swaroop cites are not on all fours with the current case. Littlestone v McLeish was a case where what was read as an indemnity provision did not contain what I regard as the crucial words 'reasonable attorney's fees'. It simply said, 'All costs and expenses, including legal costs, which may be incurred'. In other words, there was not the limitation as there is in our case as to the nature of attorney's fees which can be awarded. As far as the Chaplair case is concerned, on its facts the right to indemnity costs was clear.
In my view Mr Swaroop's submissions fail on the wording of the letter of indemnity itself. First, there is Mr Gruder's point, which I alluded to earlier, that the language does not cover the situation here, being confined to where the shipping documents have remained outstanding or by reason of a breach of the warranties given or something like this. I need reach no final conclusion about this argument because the crucial point, as I have said, is that the language expressly provides the limitation to reasonable attorney's fees. In this case indemnity costs cannot be regarded as reasonable.
To my mind, CPR 44.5 makes clear that where the court does assess costs payable under a contract the costs are payable under those terms unless the contract expressly provides otherwise. As a result of the phrase 'reasonable attorney's fees', I take the view that the contract does not provide for indemnity costs because they would not be reasonable. Consequently, Euro-Asian's contractual right to costs and its right under the Rules to costs are confined to costs on a standard basis.
Mr Swaroop next contended that indemnity costs should also flow from the Part 36 offer which Euro-Asian made in July of 2014. That offer was $15 million. As a result of my judgment Euro-Asian did somewhat better.
Previous CPR Rule 36.14 and current Rule 36.17 provide that the court should take into account the circumstances of the case, including the stage at...
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Indemnity Costs Awarded Based On The Contractual Terms Of A Contract Providing For 'All Reasonable Costs'
...upon a similar contractual provision. The Court declined to follow the decision of Cranston J in Euro-Asian Oil SA v. Credit Suisse [2017] EWHC B7 (Comm) which distinguished Macleish on the basis that the indemnity provision considered by Briggs LJ did not contain the word "reasonable". Mou......