Quadra Commodities S.A. v International Bank of St-Petersburg (Joint-Stock Company) ((in Liquidation))
| Jurisdiction | England & Wales |
| Judge | Mr Justice Jacobs |
| Judgment Date | 22 March 2021 |
| Neutral Citation | [2021] EWHC 730 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 22 March 2021 |
| Docket Number | Case No: CL-2020-000576 |
[2021] EWHC 730 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
IN THE MATTER OF AN ARBITRATION CLAIM
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Jacobs
Case No: CL-2020-000576
Jawdat Khurshid QC and Sushma Ananda for the Claimant
David Allen QC and Jason Robinson for the Defendant
Hearing dates: 12 th March 2021
This judgment is concerned with a number of consequential matters, principally issues concerning costs, arising from my earlier judgments in this case on 22 January 2021 and 12 March 2021. Both parties were agreeable to costs being the subject of written submissions and determination on the documents. I have therefore considered the costs issues addressed in the Defendant's original skeleton argument for the 12 March 2021 hearing, together with two rounds of further submissions from the Claimants and Defendant. A further issue developed between the parties relating to publication of the 12 March 2021 judgment, and this was the subject of written submissions in e-mails from the parties.
Costs of the 22 January hearing
The Claimants were ordered to pay the Defendant's costs of the 22 January 2021 hearing, excluding certain costs which I disallowed. The amount claimed is £ 78,426.68 plus Russian VAT for a total of £ 94,112.01.
Whilst I agree that the hearing was of considerable importance to the Defendant, I agree with the Claimants' submissions that the Defendant's costs are extraordinarily high. The hearing was ultimately a half-day hearing concerned with whether or not the Defendant should be debarred from making submissions at a further hearing. It was not the substantive hearing of the application. I accept that the hearing raised issues which were not altogether straightforward. I also accept that to some extent costs may have been increased because of the Claimants' successful application for there to be a hearing of the debarring issue separate from the main application. I also accept that, in order to prepare properly for the debarring order hearing, it was necessary for the Defendant's legal team to understand the arbitral background to the application, and also the nature of the substantive application. Nevertheless, the costs remain extraordinarily high.
Apart from those general observations, I consider that the Claimants should not reasonably be expected to pay for: the high rates of Linklaters, even allowing for the fact that the existing Grade rates are out of date; the attendance at the hearing of four fee earners from Linklaters, together with two counsel; the very significant amount of work on documents, in circumstances where certain costs are not claimable pursuant to my order. The fact that, as the Defendant says, it has excluded those irrecoverable costs serves to demonstrate the very high nature of the costs that are claimed.
It may be that, as the Defendant suggests, the Claimants themselves incurred similar levels of costs in respect of that hearing. But even if I make that assumption, it does not follow that the costs claimed by the Defendant are reasonable and proportionate, and should be paid by the Claimants on a summary assessment.
The Claimants suggest that £ 30,000 is reasonable. I consider that this is on the low side. Taking all the above matters in the round, I summarily assess the Defendant's costs of that hearing at £ 45,000.
Costs of the 12 March 2021 hearing
I consider that the Defendant was the successful party on the Claimants' application. The Claimants made the application, which was the subject of the 12 March hearing, in order to obtain the relief set out in the order attached to their original application notice. The formulation there was consistent with the way in which the Claimants had interpreted the effect of the relevant undertaking and proviso in their letter of 21 October 2020. That letter was sent prior to the 22 October 2020 letter from the Defendant's solicitors, on which the Claimants have placed reliance as the reason for the present application. Furthermore, the formulation in the letter dated 21 October 2020, and later in the application notice, is also consistent with the way in which the case, as to the meaning of the undertaking and proviso, was advanced to the arbitrators. I have not accepted the Claimants' case as to the effect of the undertaking and its proviso. The order ultimately made is some very considerable distance from the Claimants' case originally formulated in October/ November 2020 and then revised in March 2021.
Overall, I agree with the Defendant's submission that the significant reason for the application was to obtain relief which would have given the Claimants a significant advantage in the arbitration, and that this result has not been achieved. Whilst it may be that the Defendant's case as advanced in correspondence has been modified to a degree, I do not consider that this warrants any alteration of the general rule that the unsuccessful party should pay the successful party's costs.
The Claimants should therefore pay the...
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