Olympic Airlines SA v ACG Acquisition XX LLC

Under CPR Part 52.9, the Court of Appeal may make an appeal conditional only where there is a compelling reason. The assessment turns on justice in the circumstances.

A compelling reason may arise where an insolvent corporate appellant seeks to continue an appeal while avoiding the risk of paying the respondent’s costs. The court may consider the appellant’s assets and the ability of those with the principal interest in the appeal to provide support. A condition requiring money to be paid into court may also be justified where direct overseas enforcement would be costly and delayed, and payment into court preserves the parties’ rights pending a later determination of entitlement.

ACG obtained judgment against Olympic in consolidated Commercial Court proceedings. Teare J also ordered Olympic to pay £500,000 on account of ACG’s costs. Olympic, then in a Greek special liquidation, appealed the substantive judgment with permission, but did not make the interim costs payment.

Olympic applied for a stay of Teare J’s order. It relied on Greek insolvency-law evidence that its liquidator could not lawfully pay ACG except through the liquidation process. ACG sought conditions on Olympic’s appeal under CPR Part 52.9: security for its appeal costs and compliance with the interim payment order.

The central issue was whether there was a compelling reason to impose those conditions despite the unresolved dispute about Greek law.

1. ACG’s application was granted and Olympic’s stay application was dismissed. Rimer LJ, with whom Rix LJ agreed, would make Olympic’s appeal conditional upon payment into court of £82,500 as security for ACG’s appeal costs and £500,000 in respect of Teare J’s interim payment order. The timing of compliance was left for submissions.

2. CPR Part 52.9 confers a discretionary jurisdiction to impose conditions on an appeal, exercisable only for a compelling reason. The court could not finally resolve the conflicting Greek-law expert evidence on the applications, because that would require oral evidence and cross-examination. It was sufficient that Olympic had an arguable Greek-law case, while ACG had a good arguable issue-estoppel answer arising from the earlier English proceedings.

3. There was a compelling reason for security. ACG had succeeded at first instance and it would be unjust to require it to resist an appeal by an insolvent corporate appellant without protection for its costs. Olympic had assets, and the court could consider the ability of the Greek State, which had the principal interest in the liquidation, to support the appeal. The order would not stifle the appeal. Money paid into court would not be released to ACG automatically, but only by consent or after an inquiry into the Greek-law and issue-estoppel issues.

4. There was also a compelling reason to require the £500,000 to be paid into court. Enforcement in Greece was likely to be protracted and expensive. Olympic had previously contested, and lost, the contention that Greek law prevented payment of such costs, and had then paid an earlier costs order. It had assets to comply, and payment into court safeguarded the unresolved question of ACG’s eventual entitlement.

1. Court of Appeal (Civil Division) — In [2012] EWCA Civ 1659, the court imposed conditions on Olympic’s pending substantive appeal and dismissed its application to stay the Commercial Court order.

2. High Court of Justice, Queen’s Bench Division, Commercial Court (Teare J) — By an order of 1 June 2012, judgment and interest were entered for ACG for more than US$10 million, Olympic’s counterclaim was dismissed, and Olympic was ordered to pay £500,000 on account of ACG’s costs. Teare J refused permission to appeal.