JSC VTB Bank (a company incorporated in Russia) v Pavel Valerjevich Skurikhin and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Simon |
| Judgment Date | 07 March 2014 |
| Neutral Citation | [2014] EWHC 1053 (Comm) |
| Docket Number | Case No: 2012 Folio 1105 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 07 March 2014 |
[2014] EWHC 1053 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Leeds Combined Court Centre
1 Oxford Row
Leeds LS1 3BG
Mr Justice Simon
Case No: 2012 Folio 1105
Mr Tim Penny (instructed by PCB Litigation LLP) appeared on behalf of the Claimant
Mr Ian Quirk (instructed by Fried, Frank, Harris, Shriver & Jacobson LLP) appeared on behalf of the Defendants
Two issues arise at this stage: First, the proportion of costs to be borne by each side; and second, the basis on which costs should be assessed. So far as the proportion is concerned, VTB has succeeded on the Part 24 application in respect of the substantial proportion of the claim, but has failed on one discrete issue, what has been described as the "penalty" issue. For this reason, and to this extent, it is accepted, on behalf of the claimant, that there must be an abatement of costs ordered in its favour.
The issue between the parties is the extent of the abatement. Mr Penny, for the claimant, says that it should be 5 per cent. Mr Quirk, for the first defendant, says it should be 20 per cent and that there should be an order that VTB should pay 20 per cent of the first defendant's costs. Mr Penny draws to my attention that in relation to the "penalty" issue there was very little evidence and that only 3 out of 54 pages in the first defendant's written submissions related to the point, and it engaged only 45 mintues argument. Mr Quirk, for Mr Skurikhin, points out that the effect of the judgment was that VTB failed in one fifth of its monetary claim. He pointed out that it was a bold claim, in any event, since VTB had not made the "penalty" element of its claim the subject of injunctive relief. It seems to me that I should take into account both the amount of time taken to prepare and to argue the point, but also the amount of money in issue.
I have concluded that the abatement should be 10 per cent and this percentage should apply in each direction. It follows that VTB should recover 90 per cent of its costs and should be liable for 10 per cent of the first defendant's costs.
The second issue is the basis on which VTB should recover 90 per cent of its costs. Mr Penny submits that the circumstances are such that it should recover its costs on an indemnity basis. Mr Quirk urges that this is not a case which warrants such an approach. The principles are conveniently and comprehensively set out in the judgment of Tomlinson J, as he then was, in Three Rivers DC v Bank of England [2006] EWHC 816 at paragraph 25. I do not propose to rehearse what is said there, but I take it into account, the comments at paragraphs 84 and 95 in the judgment. Mr Quirk submits that there must be a substantial level of unreasonableness and the fact that a hopeless defence is raised is not sufficient for the award of indemnity costs. I accept both those submissions.
In my view, the case advance by the first defendant in opposition to the substance of the claim excluding the "penalty" element as well as the manner in which it was advanced can properly be characterised as unreasonable. This was a claim by a bank against a sophisticated customer...
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