Koza Ltd v Koza Altin Isletmeleri as
| Jurisdiction | England & Wales |
| Judge | Mr Jeremy Cousins,Jeremy Cousins |
| Judgment Date | 12 May 2020 |
| Neutral Citation | [2020] EWHC 1092 (Ch) |
| Date | 12 May 2020 |
| Docket Number | Claim No: HC-2016-002407 |
| Court | Chancery Division |
[2020] EWHC 1092 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building, Fetter Lane,
LONDON EC4A 1NL
Mr Jeremy Cousins QC, SITTING AS A DEPUTY JUDGE OF THE CHANCERY DIVISION
Claim No: HC-2016-002407
Mr Jonathan Crow QC and Mr David Caplan (instructed by Mishcon de Reya LLP, of Africa House, 70, Kingsway, LONDON WC2B 6AH) for the Defendant/Applicant
Mr Stephen Innes (instructed by Latham & Watkins (London) LLP, of 99, Bishopsgate, LONDON EC2M 3XF) for the Claimants/Respondents
Approved Judgment
Main hearing dates: 10 th and 11 th February
Consequential matters were dealt with by written submissions
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Jeremy Cousins QC
Mr Jeremy Cousins QC:
My judgment on the Application in this matter (“the Main Judgment”), the terms used in which I adopt below, was handed down on Monday 23 rd March 2020. I directed on that occasion that, until further order, Koza must not, and Mr Ipek must not cause Koza to, provide or bind itself to provide the Investment Arbitration Expenditure as defined in the order of Mr Richard Spearman QC (sitting as a Deputy High Court Judge) dated 20 th December 2017, or otherwise use its funds or assets or bind itself to use its funds or assets to finance IIL's Arbitration against Turkey. I gave directions for dealing with consequential matters in writing, and made provision for time for seeking permission to appeal to be extended until 21 days after I had disposed of such matters. This judgment deals with the consequential orders that I have been asked to make.
I have received from the parties the following written submissions on consequential matters:
(i) For Koza Altin, dated 30 th March 2020 (from Mr Caplan).
(ii) For Koza and Mr Ipek, dated 6 th April 2020. These were prepared by Mr Innes, who had not appeared for the Claimants on the hearing of the substantive Application.
(iii) For Koza Altin, dated 14 th April 2020 (from Mr Crow QC and Mr Caplan).
(iv) For Koza and Mr Ipek, dated 17 th April 2020 (from Mr Innes).
The agreed directions for the making of submissions, which I had given on 23 rd March, did not contemplate that there would be any further written submissions going beyond Koza Altin's reply submissions of 14 th April, but I have felt it appropriate to take Mr Innes' submissions of 17 th April, like all others that I have received, fully into account. Koza Altin has not sought to respond further.
I should explain that although the position was not clear from Mr Innes' submissions of 6 th April, in his later submissions he explained that Koza and Mr Ipek have sought permission to appeal the Main Judgment directly from the Court of Appeal, on an expedited basis, and that accordingly I am not asked to consider the issue of whether to grant such permission. In the circumstances I have not been supplied with the draft grounds of appeal, or any written submissions made in support of the application for permission to appeal, and Mr Innes has confirmed that therefore I am not asked to take such submissions into account for present purposes, though, of course, I do take into account, having regard to Mr Innes' submission that I should order a stay of execution pending appeal, the fact that an application is presently pending in the Court of Appeal.
An overview of the parties' respective contentions
Koza Altin's position can be stated briefly. It is that it was the successful party and therefore, in the usual way, should recover its costs. Despite what Mr Crow and Mr Caplan describe as root and branch opposition to the grant of the injunction which I granted, they do not ask me to award costs on the indemnity basis, and in my view that was a realistic and appropriate stance to take. I do not regard the manner in which the Claimants had conducted the Application as taking the case out of the norm.
Mr Crow and Mr Caplan do maintain, however, that Mr Ipek alone should be ordered to pay Koza Altin's costs, and in that respect they rely upon the fact that this was the course adopted by the Supreme Court when, on 12 th November 2019, it made its order consequent upon that Court's disposal of the appeal earlier that year. As well as maintaining that the Supreme Court thereby decided the principle of Mr Ipek's being solely liable for costs in the present circumstances, Mr Crow and Mr Caplan contend that justice demands that Mr Ipek alone should bear responsibility for costs, since otherwise he could route costs through Koza, without risk to himself, whilst being free to claim costs should his case prevail. As well as this objection founded upon asymmetry, it was said that in reality the Application before me concerned an attempt by Mr Ipek to cause Koza to fund a claim being prosecuted by IIL primarily for his benefit and that of his family, rather than for Koza.
Finally, Koza Altin seeks a payment on account of costs, pursuant to CPR 44.2(8) in the sum of £150,000, to be paid within a period of 14 days.
In short, Mr Innes submitted that I should order that costs be costs in the case, or that costs should be reserved. In the event that I should be minded to make a costs order now in favour of Koza Altin, he contended that it should be for just 70 per cent of its costs, and that any such order should be made against both Koza and Mr Ipek. Further, he maintained that there should be a set-off of costs orders reflecting the order made in favour of Koza by the Court of Appeal on 23 rd May 2019, relating to the appeal concerning the application which had come before Morgan J which was concerned with extradition expenses, as explained in the Main Judgment. If successful as to the principle of such set-off, there should be no order for a payment on account of costs in favour of Koza Altin, which, in any event, it was said, should not exceed a sum just below £83,000. Finally, both Koza and Mr Ipek ask me to grant a stay of execution of any costs order pending determination of the appeal as to which they seek permission from the Court of Appeal.
It is convenient for me to deal with these issues in respect of consequential matters individually, and to elaborate as I do so, upon Mr Innes' submissions, and those in response on behalf of Koza Altin.
The appropriate form of costs order
In support of his invitation to me to order costs in the case, or that costs be reserved, Mr Innes relied upon the decision of Neuberger J, as he then was, in Picnic at Ascot Inc v Derigs [2001] FSR 2. Mr Innes, referring also to the decision of Rose J, as she then was, in Hospital Metalcraft Ltd v Optimus Metalcraft [2015] EWHC 3093 (Ch), at para 9, described Picnic at Ascot as the leading case in relation to costs where an applicant obtains an interlocutory injunction on the basis of the balance of convenience. Mr Innes relied, in particular, on the following paras (with numbering as appears in the FSR) in Neuberger J's decision:
“6. It seemed to me that the following guidance can be obtained from the cases to which I have been referred:
7. (1) In a case without any other special factors, where a claimant obtains an interlocutory injunction on the basis of the balance of convenience, the court normally reserves the costs. While one can see an argument, particularly under the new regime, for saying that an order more favourable to the claimant should be made on the basis that the claimant has won the issue in respect of which the costs have been directly incurred—namely, whether an interlocutory injunction should be granted or not—it seems to me that the reasoning of the Court of Appeal in the so far unreported case of Desquenne et Giral U.K. Ltd v. Richardson [now reported at [2001] FSR 1], indicates that an order reserving the costs is appropriate.
8. In that case the judge at first instance had ordered the trial of a preliminary issue but had continued the interlocutory injunction until the hearing of the preliminary issue, despite the defendant's contention that the injunction—which had been granted without notice—should be discharged, on the basis of the balance of convenience. While accepting that the question of costs was a matter for the judge's discretion, Morritt L.J. was on ( sic) the view that the Court of Appeal was “entitled and indeed bound, to interfere with” that exercise of discretion. He said this:
“It is quite plain from the passage in the judge's judgment … that he granted or continued the injunction on the basis of the balance of convenience in order to hold the ring until the dispute between the parties could be properly decided at a trial. It is inconsistent with an order such as that, that there should be successful or unsuccessful parties for the purposes of the rules either new or old.”
8. He then stated that, while the judge was right to consider the question of costs in the context of CPR rule 44.3, he was wrong to decide that the defendant was the unsuccessful party or that the claimant was the successful party. He said that the order which the judge had made—which was for costs in favour of the claimant and indeed an order assessing the costs to be paid forthwith—was wrong because
“there were no successful or unsuccessful parties at that stage, and the proper orders to be considered were those under the terms of the practice direction to which I have referred”.
8. The practice direction to which he referred contains the following...
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Koza Ltd v Koza Altin Isletmeleri as
...issue and the conclusion of the Court of Appeal that Mr Spearman QC was plainly correct on this point. 40 In his judgment on costs ( [2020] EWHC 1092 (Ch)), Mr Cousins QC made an order for costs against Mr Ipek alone holding (at paragraphs 28 and 29) that it would be unjust for an order to......