Glencore International AG v Metro Trading International Inc Credit Lyonnais (France) SA & Ors

Where a costs order made after one phase of complex litigation is likely to depend on pending substantive appeals or cross-appeals, the application for permission to appeal the costs order should be considered by the court hearing those appeals. That court can assess the costs discretion with full knowledge of the substantive issues and any resulting change in outcome. An earlier paper refusal of permission does not prevent adjournment when later procedural developments make the costs order potentially contingent.

The litigation concerned competing proprietary claims to oil held by a court-appointed receiver. Following Phase II, Mr Justice Moore-Bick ordered Metro to pay 80 per cent of Glencore’s costs, applying an issues-based rather than outcome-based approach under the CPR. Metro contended that it had effectively succeeded because it was likely to establish ownership of the largest part of the oil, although the result followed the insurers’ alternative case.

Permission to appeal the costs order had initially been refused on paper. The judge subsequently granted permission for substantive appeals concerning Phase I and Phase II findings and permitted Metro to cross-appeal. The central issue was whether permission to appeal the costs order should be granted immediately or considered after the substantive appeals.

The application for permission to appeal was adjourned to be heard immediately after the substantive appeals and cross-appeals.

1. Lord Justice Potter’s initial view remained that the costs submissions had been fully and carefully considered by the judge, who was exercising an undoubted discretion under the post-CPR approach, and that there was no apparent error of principle.
2. The subsequent grant of permission for substantive appeals and Metro’s cross-appeal altered the procedural context. The costs order was likely to be contingent upon the outcome of those appeals and cross-appeals.
3. It was therefore inappropriate to grant permission to appeal the costs order at that stage. The proper course was to adjourn the application so that the court hearing the substantive appeals could determine the appropriateness of the costs order with full knowledge of the underlying issues and any effect of the substantive outcome.
4. Lord Justice Kay agreed.

• Court of Appeal (Civil Division): Adjourned the application for permission to appeal the Phase II costs order until immediately after the substantive appeals and cross-appeals.
• High Court, Queen’s Bench Division, Commercial Court: Mr Justice Moore-Bick ordered Metro to pay 80 per cent of Glencore’s Phase II costs.