Caucedo Investments Inc & Anor v Saipem SA & Anor

An arbitration award should ordinarily be honoured when due. A short period may be allowed to arrange payment, but delay is not thereby excused. Where a party causes enforcement costs by refusing to authorise its solicitors to accept service, the court may award the reasonable and proportionate costs thereby incurred. The overriding objective applies to the parties as well as the court. The relevant question is whether the steps taken were reasonable and proportionate in the circumstances. Recoverable costs remain subject to detailed summary assessment, and excessive time or unnecessary translation work may be disallowed.

The claimants obtained an order under section 66 of the Arbitration Act 1996 granting leave to enforce an arbitration award and entering judgment for $12,927,472. The defendants delayed payment and their solicitors declined to accept service. The claimants consequently obtained permission to serve documents in France and later sought recovery of the associated enforcement costs. The defendants applied to set aside the costs order and challenged the amount claimed. The central issues were whether the French service costs were recoverable and what sum was reasonable on assessment.

1. The defendants’ application to set aside the order requiring payment of the claimants’ enforcement costs was dismissed. The order of 30 July 2013 remained in force.
2. Under section 66(1) and (2) of the Arbitration Act 1996, an award may be enforced by leave of the court in the same manner as a judgment, and judgment may be entered in its terms. The award sum was due from the date of the award. Failure to honour it was, among other things, a breach of contract.
3. The court accepted that a losing party might require some time to collect funds, particularly where insurers were involved. That could explain delay, but would not ordinarily excuse it. The defendants had created the additional enforcement costs by failing to authorise their solicitors to accept service and by directing that documents sent to their UK office should instead be served in France.
4. The overriding objective applied to the parties. The claimants had to act cost-efficiently and proportionately, but they had behaved reasonably in seeking permission to serve out of the jurisdiction after repeated opportunities for the defendants to avoid that course.
5. The court rejected the argument that the arbitration service provisions in CPR Part 62 and Practice Direction 62 governed these enforcement proceedings. Paragraph 3.1 of the Practice Direction concerned arbitration claims under Section I of Part 62, whereas the present proceedings fell within Section III. The relevant issue was whether the steps taken were reasonable and proportionate.
6. The claimed costs exceeded £61,000. On summary assessment, the court allowed £21,855 for English solicitors’ costs, £185 for court fees, £300 for disbursements, £5,000 for translations, £450.71 for French bailiff costs, £4,877.66 for French legal counsel and £75 for domestic counsel. VAT was disallowed. The defendants were ordered to pay £32,743.37 within 14 days.