Mahan Air & Anor v Blue Sky One Ltd & Ors

Costs ordinarily follow the event. Costs arising from unsuccessful applications, including applications for permission to appeal, security for costs and stays of execution, may therefore be ordered against the unsuccessful party. Where renewed permission applications are granted, their costs will normally be costs in the relevant appeals. Costs that are too complex for summary assessment should be determined by detailed assessment on the standard basis, unless agreed. The court may also order interim payments on account of costs within a specified period.

The Court of Appeal considered written submissions on costs following its earlier judgment of 11 May 2011. The proceedings involved appeals and applications by Mahan Air and Blue Sky Aviation Co FZE, Blue Sky companies and associated parties, and PK AirFinance US Inc.

The applications concerned permission to appeal, the admission of new evidence, security for costs, conditions on the appeals and a stay of execution. The court determined responsibility for the costs of those applications, the basis of assessment and interim payments on account.

1. Costs of unsuccessful applications. The Mahan Parties were ordered to bear their own costs of their renewed ex parte application concerning the location of Aircraft 2. No order was made as to the costs incurred by the other parties in relation to that application. The Mahan Parties accepted, and were ordered to pay, PK’s costs of their unsuccessful application for permission to adduce new evidence concerning Aircraft 2.
2. The Mahan Parties were ordered to pay PK’s and the Balli Parties’ costs of the applications for security for costs and for the imposition of a condition on the appeals, together with the Mahan Parties’ application for a stay of execution. The court stated that those costs followed the event.
3. Granted permission applications. The costs of the renewed applications for permission to appeal which had been granted were ordered to be costs in the respective appeals, as was normal.
4. Assessment and payment. All ordered costs were to be determined by detailed assessment on the standard basis if not agreed. Summary assessment was inappropriate because the assessment was too complex. The Mahan Parties were also ordered to make interim payments on account of costs of £45,000 to PK and £25,000 to the Balli Parties, each within 28 days of the order.

• Court of Appeal (Civil Division): following its earlier judgment of 11 May 2011, the court determined the costs issues and made detailed costs and interim-payment orders in [2011] EWCA Civ 771.
• High Court of Justice, Queen’s Bench Division, Commercial Court: the appeals arose from proceedings before Mr Justice Beatson.