Shagang Shipping Company Ltd v HNA Group Company Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore |
| Judgment Date | 13 July 2017 |
| Neutral Citation | [2017] EWCA Civ 1335 |
| Docket Number | Case Nos: A3/2016/2338 & (A), (B), (C) & (D) |
| Court | Court of Appeal (Civil Division) |
| Date | 13 July 2017 |
[2017] EWCA 1335 Civ
IN THE COURT OF APPEAL
CIVIL DIVISION
Courtroom No. 67
Room E311
The Royal Courts of Justice
Strand
London
WC2A 2LL
THE RIGHT HONOURABLE Lord Justice Longmore
Case Nos: A3/2016/2338 & (A), (B), (C) & (D)
Miss D Rose QC, Miss R Hosking & Miss C Pounds (instructed by HFW) appeared on behalf of the Claimant
Mr J Smouha QC & Mr E Brown and Mr M Fordham QC & Ms J Boyd (instructed by Hogan Lovells International) appeared on behalf of the Defendant
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The court has dealt with a number of applications already this morning and will in principle grant to HNA permission to appeal, adjourn all questions of permission to amend the grounds of appeal and adduce further evidence to the full court and will also order security for costs of the appeal in the sum which is apparently agreed to be paid into court or otherwise held in London within 22 days.
The remaining bone of contention is whether permission to appeal should be conditional on the judgment sum and the sum ordered by way of interim payment on account of costs being paid into court.
Miss Rose QC submits that that should be done because, she says, HNA are taking every step to avoid enforcement, and they have certainly not paid the interim costs order and have no proposals to do so.
Mr Smouha QC submits that this is just an ordinary case in which Shagang, the successful party in the judgment below, is seeking to improve its unsecured position by requiring the judgment sum to be secured as a condition of an appeal which is wrong in principle.
Miss Rose ripostes that the appellant's positive activities in resisting enforcement take this case out of the ordinary.
There is now a number of authorities which have considered the question whether non-payment of a judgment sum and particularly interim costs orders afford ‘a compelling reason’ to make an order for permission to appeal conditional which is what CPR 52.9 requires if a condition is to be imposed. The general principle that a condition ought not to be imposed so that the respondent to an appeal improves his unsecured position is not in doubt. See Royal Bank of Scotland v Hicks & Ors [2012] EWCA Civ 1743 and Gold Harp Properties Ltd v McLeod & Ors [2014] EWCA Civ 532 per Lewison LJ and Rimer LJ respectively.
In Sebastian Holdings, Inc v Deutsche Bank AG [2014] EWCA Civ 1100 Tomlinson LJ said in paragraph 34, with my agreement:-
‘Mr Railton drew to our attention, by means of a very helpful note, a good many more judgments either of single Lord or Lady Justices or of courts comprised of two Lord/Lady Justices in which the principles are discussed. I unhesitatingly accept that all these cases indicate that it is inappropriate to use the power to impose conditions on an appeal simply as a means of securing enforcement of the judgment debt. That plainly is not the touchstone of the jurisdiction. The touchstone is rather the taking of steps out of the ordinary course of business with a view to frustrating the normal enforcement process’.
The most recent case to which I have been referred is Merchant International Company Ltd. v Natsionalna Aktsionerna Kompaniia Naftogaz Ukrainy (Rev 1) [2016] EWCA Civ 710 where Christopher Clarke LJ referred to a number of previous authorities, including Bell Electric Ltd v Aweco Appliance Systems GmbH & Co [2002] EWCA Civ 1501, Cruz City 1 Mauritius Holdings v Unitech Ltd. [2013] EWCA Civ 1512 and Goldtrail Travel Ltd v Aydin & Ors [2015] EWCA Civ 926. He then said this at paragraphs 37 to 40:
‘In the light of those authorities it seems to me that certain matters are clear:
(a) The essential question is whether or not there is a compelling reason to make payment in of the judgment sum, plus costs and interest (or some part thereof) a condition for further pursuit of the appeal – hereafter “a security payment order”;
(b) Whether there is a compelling reason is a value judgment to be made on the...
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