Viking Trading OU v Louis Dreyfus Company Suisse SA
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bright |
| Judgment Date | 25 August 2023 |
| Neutral Citation | [2023] EWHC 2160 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2023-000133 |
[2023] EWHC 2160 (Comm)
Mr Justice Bright
Case No: CL-2023-000133
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
COMMERCIAL COURT (KBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, WC4A 1NL
Michael Nolan KC (instructed by W Legal Limited) for the Claimants
Jason Robinson (instructed by Hill Dickinson LLP) for the Defendants
Decided on documents, without a hearing
Approved Judgment
This judgment was handed down remotely at 10.30am on 25 August 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This judgment arises from an arbitration claim, which arose from arbitration proceedings, which themselves arose from a contract for the sale and purchase of 25,000 mt Ukrainian yellow feed maize.
Under the contract, the Defendant (“LDC”) was the Seller and the Claimant (“Viking”) was the Buyer. The contract was not performed. Arbitration proceedings were commenced by LDC. The ultimate outcome of the arbitration was that LDC's claim against Viking succeeded.
Viking's application of 8 March 2023 for s. 69 permission to appeal
Viking sought to appeal on the basis that the arbitrators' decision was affected by various errors of law. On 8 March 2023, Viking issued an arbitration claim form seeking permission to appeal pursuant to s. 69(2) and (3) of the Arbitration Act 1996 and costs, supported by a witness statement from Mr James Sleightholme of its solicitors, W Legal Limited (“W Legal”) and a skeleton argument.
LDC opposed Viking's application for permission. On 27 April 2023, it served and filed a Respondent's Notice, a witness statement from Ms Amy Glover of its solicitors Hill Dickinson LLC (“Hill Dickinson”) and a skeleton argument.
Viking served and filed a reply skeleton on 10 May 2023.
As is usual, Viking's application for permission was dealt with on documents. I refused the application by an order dated 15 June 2023. That order was sealed on 20 June 2023.
Nowhere in its Respondent's Notice, witness statement or skeleton argument did LDC state that it sought to recover its costs. My experience is that most respondents to arbitration claims of this kind indicate that they want costs to be ordered in their favour. Some do not; in those cases, my experience has been that, if the claim is dismissed on documents, that is the end of the matter.
My ruling on Viking's application for permission to appeal ordered that the application was dismissed and gave brief reasons, but it gave no other relief. It said nothing about costs. This was deliberate. I was conscious that LDC had not asked for costs and I therefore did not address costs in my order.
LDC's ex post facto costs application
Following my order of 15 June 2023, on 4 July 2023, Hill Dickinson wrote to Viking and to W Legal requesting the payment by Viking of damages, interest and arbitral fees, etc. Their letter also sought the costs incurred by LDC in resisting the application for permission to appeal, in the sum of £24,608.50, and attached a schedule of these costs. It stated that if Viking did not pay LDC's costs, LDC would apply to the court.
W Legal did not respond to this letter. Viking did respond, by an email of 13 July 2023. In relation to the costs of the application for permission to appeal, Viking noted that my order had not ordered costs in LDC's favour and referred to CPR 44.10(1), stating that where the court makes an order which does not mention costs, no party is entitled to costs. The email said nothing about the quantum of the costs set out in Hill Dickinson's schedule.
On 18 July 2023, LDC made the application to this court that had been presaged by Hill Dickinson's letter of 4 July 2023. This application was made on notice, by a letter from Hill Dickinson, attaching the exchanges of 4 and 13 July 2023 and the schedule of costs, and citing the decision of the Court of Appeal in Timokhina v Timokhin [2019] 1 WLR 5458. I was asked to deal with the application on paper, without a hearing.
I should add, for completeness, that I was not asked to deal with the costs of this further application, and that the schedule of costs only included costs incurred on dates up to 20 June 2023 – i.e., LDC once again did not appear to be seeking the costs of the instant application.
Nothing more having been said by Viking or W Legal, I dealt with that application on 25 July 2023. There were two aspects. The first was whether I had jurisdiction to or should make an order for costs in LDC's favour, having already made my final order on the substantive matter without mentioning costs. The second was quantum.
On jurisdiction, I noted that Viking had referred to CPR 44.10(1) and that LDC's answer to this was its citation of Timokhina v Timokhin. On quantum, I had less to go on, because Viking's email of 13 July 2023 had been silent on this topic.
I made an order for costs in LDC's favour of £20,000. However, as is usual where applications like this are disposed of on documents alone, the order stipulated:
“This Order having been made without hearing the parties in person or giving them an opportunity to make representations in person, any party affected may apply to vary or set aside this order providing any such application is issued by no later than 4 pm 7 days after service of this order on the party making the application.”
This order was sealed and sent to Viking on 26 July 2023.
Viking's application of 2 August 2023 to vary my costs order
Viking responded within the permitted 7 days, by a letter from W Legal of 2 August 2023 which sought to set aside the order of 25 July 2023. This letter was reasonably long and considered. It proceeded as follows:
i) Viking's primary position was that my order of 15 June 2023 was a final order which disposed of the arbitration claim in its entirety, so that there were no longer any proceedings before the court and the court was functus officio. I therefore had no jurisdiction to making an order of costs in LDC's favour on 25 July 2023. In this regard, Viking referred to Daniel Terry v BCS Corporate Acceptances Ltd [2018] EWCA Civ 2422 per Hamblen LJ at [54] and Anan Kasei Co. Ltd v Neo Chemicals & Oxides (Europe) Ltd [2022] EWHC 1643 (Ch), per Bacon J at [7].
ii) Viking further relied on CPR 44.10(1), providing that, subject to paragraphs (2) and (3) (which do not apply) where a court has made an order which does not mention costs, “the general rule is that no party is entitled (i) to costs… in relation to that order”.
iii) Viking said that Timokhina v Timokhin was distinguishable because (1) the case was still ongoing, (2) the order was made following an urgent application and, while the relevant application was not part-heard, there were related matters that were listed to be heard subsequently, at a hearing where the application for costs was then made, and (3) this was a case under the Family Procedure Rules, which provide that the court may make an order for costs “at any time”.
iv) There are various provisions of the CPR pursuant to which a court can re-open an order, but none of them applies here. Viking referred to (a) CPR 52.20; (b) CPR 3.1(7); and (c) CPR 40.12(1).
v) Next, Viking said that Hill Dickinson's costs schedule had not been prepared properly, that the hourly rates were excessive, that the time spent on the case by various fee earners was excessive and that counsel's fees were excessive. Viking said that the costs allowable should be no more than £12,355.60, but this should be reduced again because of the additional work Viking had to undertake because of the deficiencies in Hill Dickinson's schedule.
vi) Viking sought its own costs and indicated that a schedule would be produced. Viking's draft order included provision for costs in its favour, summarily assessed.
vii) The court was asked to deal with the application on documents.
LDC responded by a letter from Hill Dickinson of 8 August 2023.
i) The one point of agreement was that I should deal with Viking's application on documents.
ii) LDC said that the court could not be functus officio following the order of 15 June 2023, because (i) s. 51 of the Senior Courts Act 1981 gives the court a general discretionary power in respect of costs, which continues into CPR 44 and is reflected by Timokhina v Timokhin, and (ii) it was still open to Viking to seek permission to appeal from that order under s. 69(6).
iii) Cases such as Daniel Terry v BCS Corporate Acceptances Ltd and Anan Kasei Co. Ltd v Neo Chemicals & Oxides (Europe) Ltd were not concerned with costs.
iv) CPR 62.12 does not say that a respondent must ask for costs if it wants to recover them.
v) On quantum, Viking's email of 13 July 2023 said nothing about the quantum of the costs claimed by LDC. If Viking had taken a point at that stage about quantum, it would no doubt have been possible to reach a compromise.
vi) The reductions now contended for by Viking were excessive.
vii) The court was invited to refuse Viking's application of 2 August 2023. However, if the court were minded to re-assess LDC's costs and make further reductions, LDC would then want to apply on an indemnity basis for the costs of having to respond to Viking's application of 2 August 2023. Thus, if the court were to reduce LDC's costs, it should reserve the costs of the application of 2 August 2023.
viii) LDC enclosed a schedule updating its previous schedule of costs. This covered LDC's costs from 29 June to 7 August 2023, i.e., it included not only the costs of responding to Viking's letter of 2 August 2023, but also LDC's costs of its own application of 18 July 2023 – which LDC had not previously asked for.
Viking filed reply...
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