Pablo Star Ltd v Emirates Integrated Telecommunications Company

Permission to appeal should be set aside under CPR 52.9 only in very exceptional circumstances, such as where the court was misled or overlooked decisive authority or legislation. A court considering security for costs must exercise its discretion so that an order does not stifle an appeal with reasonable prospects. It may consider the overall merits, the impecunious party’s means, the likely effect of security, the opponent’s conduct and whether the amount sought is proportionate. A stay of costs may properly continue where withdrawal of the stay would effectively defeat such an appeal. Questions concerning new evidence are ordinarily best left to the court hearing the appeal, but the party seeking admission must satisfy the Ladd v Marshall tests.

The judgment concerned four interim applications by Emirates Integrated Telecommunications Company (EITC) in pending appeal proceedings brought by Pablo Star. EITC sought to set aside or limit permission to appeal under CPR 52.9, alternatively to obtain security for costs; to revoke a stay of a £10,000 costs order made below; and to clarify the treatment of new evidence on appeal.

The applications arose from a jurisdiction dispute concerning an alleged contract, the incorporation of EITC’s terms and conditions, and possible UAE law or Dubai arbitration provisions. The court also considered the arguable merits of Pablo Star’s case, its impecuniosity, EITC’s conduct, and proposed evidence about UAE law.

1. CPR 52.9. The application to set aside or limit permission to appeal was dismissed. The jurisdiction is exceptional and is not intended for tactical interlocutory skirmishing. The relevant circumstances identified in Nathan v Smilovitch and Barings Bank (in liquidation) v Coopers & Lybrand included the court being misled or a decisive authority or statutory provision having been overlooked. Neither circumstance was established.
2. The alleged inaccuracy in a witness statement did not show deliberate deception. The statement had to be assessed against the documents and the history of EITC’s late reliance on UAE law and Dubai arbitration. The central arguable issues remained the effect of the reference to unattached EITC terms and conditions in purchase order 2127, the possible existence of an 11-month or one-year take-or-pay contract, and where any breach occurred.
3. Security for costs and stay. Although the court had jurisdiction to order security and Pablo Star had provided inadequate evidence of its means, security of about £30,000 would probably stifle the appeal. The court could take account of the overall merits, which included a fair arguable case that the purchase order created a monthly minimum-fee obligation, together with EITC’s oppressive and disproportionate conduct. The application for security was therefore refused, and the stay of the £10,000 costs order was continued.
4. New evidence. The proposed evidence that UAE law imposed stricter requirements for incorporating an arbitration clause was credible, but its relevance was uncertain because the appeal might not reach arbitration. Pablo Star would still have to satisfy the Ladd v Marshall criteria. The interlocutory court left admission of the evidence to the appeal court and directed that unnecessary expert-evidence costs should be avoided.
5. The appeal was to proceed on its merits. The court encouraged mediation and directed that the parties receive information about the Court of Appeal mediation scheme. The applications were refused.

• Court of Appeal (Civil Division): EITC’s interim applications were refused. Permission to appeal was not set aside or limited, the stay of the costs order was continued, and no security for costs was ordered. The substantive appeal was to proceed.
• High Court of Justice, Queen’s Bench Division, Mercantile Court: HHJ Simon Brown QC made the underlying order requiring Pablo Star to pay assessed costs of £10,000 and decided the jurisdiction issue in EITC’s favour, as described in the judgment.