Pablo Star Limited v Emirates Integrated Telecommunications Company

The Court of Appeal dismissed the defendant's application under CPR 52.9 to set aside the grant of permission to appeal and refused the defendant's applications to revoke the stay of a costs order and to obtain security for costs. The judge accepted that Pablo Star is effectively insolvent but found a good arguable case that purchase order 2127 may constitute an 11‑month "take or pay" contract and that the reference to "attached EITC terms and conditions" was a live point on incorporation and proper law under the Rome Convention. The court also gave guidance on procedural matters: new evidence on foreign law must meet the Ladd v Marshall tests and interlocutory courts should be cautious about deciding novelty in that context. The stay of the assessed costs below (£10,000) was continued and the appeal was permitted to proceed.

This is an interlocutory judgment dealing with four interim applications made by Emirates Integrated Telecommunications Company (EITC) in relation to an extant appeal by Pablo Star Limited. The underlying claim concerns disputed contractual relations and payment obligations said to arise under purchase orders (notably purchase order 2127) and a claim limited to £50,000. The appeal proceeds from the Mercantile Court before His Honour Judge Simon Brown QC, and permission to appeal had earlier been renewed by the Court of Appeal ([2009] EWCA Civ 128).

The applications determined were: (i) under CPR 52.9 to set aside in whole or in part the permission to appeal (and alternatively to impose security for costs); (ii) to revoke a stay of an order below requiring Pablo Star to pay assessed costs of £10,000; (iii) for security for costs for the appeal (a sum in the region of £30,000 was sought); and (iv) to clarify the position as to new evidence on appeal, in particular expert material on UAE law and the incorporation of an arbitration clause.

The court framed the principal issues as jurisdiction and service out, incorporation of EITC's terms and conditions by reference in purchase order 2127, the proper law of the contract under the Rome Convention, where breaches (if any) occurred for forum purposes, and the exercise of the court's discretion on security for costs and stays. The judge concluded that the CPR 52.9 jurisdiction was not engaged: the court had neither been misled nor had it overlooked decisive authority, and there were not the exceptional circumstances required to set aside the grant of permission. On the merits of the underlying dispute the judge accepted there was a good arguable case that purchase order 2127 created an on‑going minimum monthly payment obligation and that the incorporation point (the absence of attached terms) was a real issue. Taking an overall view, the judge found force in Pablo Star's case and considered EITC's conduct in resisting the proceedings to have been oppressive; for those reasons he refused to order security for costs and continued the stay of the costs order below. On new evidence, the court noted that evidence about UAE law on incorporation and arbitration appears credible but that the usual Ladd v Marshall tests for new evidence on appeal would apply; the court declined to admit or decide the issue finally at interlocutory stage and left the matter for the appeal or trial as appropriate. The judge invited the parties to consider mediation under the Court of Appeal scheme.

Appeal permissions and interlocutory applications: the court dismissed EITC's application under CPR 52.9 to set aside permission to appeal, refused the applications to revoke the stay of the assessed costs and to order security for costs, and left the appeal to proceed. Rationale: no evidence of the court having been misled or of overlooked decisive authority; purchase order 2127 raised a good arguable case on incorporation and proper law; EITC had acted oppressively in its litigation conduct and ordering security would likely stifle a reasonably arguable appeal; new foreign law evidence must satisfy Ladd v Marshall tests and is better considered at appeal or trial.

Appeal from High Court of Justice, Queen's Bench Division, Mercantile Court (His Honour Judge Simon Brown QC). Permission to appeal had been renewed by the Court of Appeal on 28 January 2009 ([2009] EWCA Civ 128). The present judgment disposes of interlocutory applications and allows the appeal to proceed.