Te Hsing Maritime SA v CertAsig SA & Anor

Security for costs against a claimant resident outside the jurisdiction is justified only where enforcement of a costs judgment would be impossible, or would involve additional obstacles or burdens beyond those applicable in a Brussels or Lugano state. The applicant must establish a likely obstacle or burden, not merely a possible risk. Where enforcement remains available, security should be limited to the additional enforcement burden, rather than the full anticipated costs. The court must then decide whether an order is just in all the circumstances, taking account of available assets and other effective security.

The claimants brought a marine insurance claim for an alleged constructive total loss and related salvage and general average sums. The first defendant applied for security for costs under CPR 25.13 because the claimants were resident in Taiwan.

The jurisdictional condition was accepted. The central issues were whether an English costs judgment would be enforceable in Taiwan, what additional enforcement burden would arise compared with enforcement in a Brussels or Lugano state, and whether security was just in the circumstances.

1. Application dismissed. The court held that the claimants’ residence outside the jurisdiction satisfied the relevant condition under CPR 25.13, but an order remained discretionary and had to be just.
2. Following and applying Nasser v United Bank of Kuwait [2002] 1 WLR 1868, and Dumrul v Standard Chartered Bank [2010] EWHC 2625 (Comm), security on this ground is available only for obstacles or burdens of enforcement additional to those encountered in a Brussels or Lugano state. If enforcement is unavailable altogether, security may in principle cover the full likely costs. If enforcement is available but more burdensome, security should be limited to the additional cost or delay.
3. The applicant must show that an obstacle or burden is likely. A mere risk or real possibility is insufficient. The evidence established that English judgments were enforceable in Taiwan, although enforcement might involve delay, fees, bonds and possible appeals.
4. The evidence did not establish a significant or precisely quantifiable additional burden. The court estimated the maximum likely additional cost at about £20,000. That modest figure, the second claimant’s substantial vessel assets, the acceptance of joint and several liability for any costs order, and the defendants’ potential general average recovery meant that it was not just to order security.
5. The court did not rely on the timing of the application or the claimants’ ATE policy. The application was dismissed.