Shackleton and Associates Ltd v Ali Marzook Ali Bin Kamil Al Shamsi and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 23 February 2017 |
| Neutral Citation | [2017] EWHC 304 (Comm) |
| Date | 23 February 2017 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2014-000882 |
[2017] EWHC 304 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Mr. Justice Teare
Case No: CL-2014-000882
John Snider and Stewart Shackleton (instructed by Gateley Plc) for the Claimant
Elizabeth Weaver (instructed by Fladgate LLP) for the Respondents
Hearing date: 15 February 2017
Approved Judgment
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.
This is an application issued on 9 June 2016 for an order for costs and for further orders relating to the issue of costs. It is unusual for costs matters to generate their own application. The explanation for the application in this case is as follows. The application arises out of a long drawn out dispute between the Claimant and its former clients concerning the Claimant's fees for acting for the Defendants in a London arbitration. The dispute began in 2011. In March 2013 the Claimant secured an ICC arbitration award in its favour for payment of its fees. The Defendants did not participate in the arbitration apart from making a written submission that the tribunal lacked jurisdiction. The Claimant has successfully resisted attempts to set aside that award (again on jurisdictional grounds) before the French courts, including the French Supreme Court, the Cour de cassation. In this jurisdiction there were proceedings to enforce the award and the costs of certain hearings were reserved. Once the appeal to the Cour de cassation failed in March 2016 this application for costs was issued. Unfortunately, the disputes between the parties continued and there were further applications in this court in 2016. I am told that the position now is that the award and associated costs orders have been paid. What remains, at any rate in this jurisdiction, is the Claimant's application for costs in relation to the English proceedings.
The court must now decide the incidence of those costs which were reserved. In addition the court must decide whether the Claimant is entitled to costs on an indemnity basis or only on the standard basis. Finally, the court must decide whether the Claimant, as part of its recoverable costs, is entitled to compensation for the time spent on the English proceedings by Mr. Shackleton, a solicitor advocate and sole shareholder of the Claimant, in circumstances where the Claimant engaged the services of a solicitor and, for some hearings, including this one, counsel and is not liable to pay Mr. Shackleton in respect of these services.
Mr. Snider appeared (with Mr. Shackleton) for the Claimant. He identified the following hearings as those in respect of which costs had been reserved: a hearing before Phillips J. on 24 April 2015, a hearing before Flaux J. on 19 May 2015, a hearing before Males J. on 28 August 2015 and a hearing before Walker J. on 10 June 2016. But happily Ms. Weaver, who appeared for the Defendants, helpfully and reasonably accepted that there was only one hearing in respect of which the Defendants could resist an order that the Defendants pay the costs, namely, the hearing before Flaux J on 19 May 2015. She submitted that there should be no order as to the costs of that hearing.
It is necessary to describe the nature of the proceedings in this jurisdiction.
On 24 October 2014 the Claimant obtained an order for the registration of a judgment of the Paris Court of Appeal and on 4 November 2014 permission was given to enforce the ICC award as a judgment. On 23 December 2014 the Defendant issued an application notice seeking an order (i) that the registration of the Paris Court of Appeal judgment be set aside, alternatively adjourned until after the disposal of a pending appeal against the judgment and (ii) that the permission to enforce the award as a judgment be set aside, alternatively adjourned until after the final disposal of proceedings in France to set aside the award. The reasons for the orders which were sought were stated in the application to be that an appeal was pending before the French Supreme Court against the judgment of the Paris Court of Appeal and that an application to set aside the award had been made to the French courts. Mr. Abu-Manneh, a partner in Mayer Brown who acted for the Defendants, made a witness statement dated 23 December 2014 in support of the application. He referred to the parties, the English proceedings, the background, the Claimant's fees and the arbitration in relation to the dispute concerning those fees. This was done in 18 short paragraphs effectively setting out the context of the application. At paragraph 19 reference was made to the appeal against the Paris Court of Appeal judgment to the Cour de cassation on 25 August 2014 and to a witness statement of Me Khayat, a partner in Mayer Brown. In paragraphs 20 and 21 reference was made to the financial position of the Claimant and in paragraph 22 it was stated that the Defendant would not object to it "being made a condition of the adjournments which they seek that suitable security be given." Me Khayat also made a witness statement dated 23 December 2014 in support of the application. He gave evidence of the proceedings before the Paris Court of Appeal, the appeal before the Court de cassation and the grounds of the appeal (of which there were two) which he described as "serious". They concerned the jurisdiction of the arbitrator. In response Mr. Shackleton made a witness statement dated 9 January 2015. Remarkably it ran to 97 pages and 292 paragraphs. In response Mr. Abu-Manneh made a further witness statement dated 6 February 2015. He noted his surprise at the length of Mr. Shackleton's statement and that it contained an exhibit of over 900 pages. He correctly judged that it would not assist the court were he to respond to each and every point raised by Mr. Shackleton. He restricted himself to addressing 8 topics which he did in 8 pages and 40 paragraphs.
That exchange of evidence led to a dispute between the parties as to what were the relevant issues on the Defendants' application. On 24 April 2015 a CMC took place before Phillips J. He made certain directions. In the course of the hearing he said:
"I think that it seems absolutely plain what the issue is, which is whether or not this award should be enforced pending the appeal in France."
The order of Phillips J. made clear that some 8 issues, identified in a schedule, were not relevant. Those issues broadly reflected the 8 topics which Mr. Abu-Manneh had mentioned in his second statement.
Following the CMC and the directions made by Phillips J. for the exchange of expert evidence the Defendants provided expert evidence of French law from Professor Audit. In his statement dated 5 May 2015 Professor Audit considered the Defendants' prospects of success before the Court de cassation. He concluded that with regard to the point at issue there was no precedent in French law, that the solution adopted by the Paris Court of Appeal to the question whether the holder of a power of attorney could conclude an arbitration agreement on behalf of his client was highly criticised by pre-eminent French academics specialised in the field of arbitration and that consequently the Defendant had "an arguable case" before the Court de cassation. Although he had been specifically asked to say what the prospects of success were he did not do so. M. Derains, the French law expert instructed by the Claimant described the grounds of appeal as "without merit", "unsustainable" and "having no real prospect of success". He regarded the opinion of Professor Audit, that the appeal was arguable, as "wishful thinking that the Cour de cassation might possibly, and suddenly, undertake a Copernican revolution to abandon its established view". He regarded the prospect of success as "most improbable."
Before the hearing of the Defendants' applications the parties reached agreement that enforcement of the ICC award be adjourned until the result of the appeal to the Cour de cassation was known on terms that the Defendants paid the sum claimed into court. In the course of the parties' correspondence "without prejudice save as to costs" the Claimant expressed its willingness to agree such an adjournment but wished to reserve its position that in fact the Defendants were not entitled to an adjournment and that the question of the costs of the Defendants' application be reserved to be dealt with at the hearing which would take place after the decision by the Cour de cassation; see the letter dated 6 May 2015 from Mundays. There was however a dispute as to whether the security should be provided in 30 days (as suggested by the Claimant) or 77 days (as suggested by the Defendants). Flaux J decided on 19 May 2015 that the Defendants should have the 77 days they sought. His order stated that any application to extend the time for the provision of security would require "very cogent evidence indeed". In the course of the hearing before Flaux J. it was necessary to consider the ambit of the Defendants' applications notwithstanding that that matter had been clearly stated by Phillips J. Flaux J said
"Lest there be any doubt about this and so that this whole sorry matter does not recur and waste yet more time in this court ……………..the nature of the application that was being made by [the Defendants] was as plain as a pikestaff from 23 December 2014 onwards…………It is plain to me that the nature of the application was an order that the...
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