SC DG Petrol SRL & Ors v Vitol Broking Ltd

Relief from sanctions for failing to provide security for costs requires consideration of all the circumstances, with particular weight given to efficient, proportionate litigation and enforcement of compliance with court orders. A non-trivial default places the burden on the defaulting party to show a good reason for relief. Difficulties in realising chosen assets will not ordinarily justify continued default where other means of compliance were available. The amended approach in CPR 3.9(1) also informs applications for extensions of time in complex cases. A party cannot use relief proceedings to challenge the original order; that requires an appeal or, exceptionally, an application under CPR 3.1(7).

The claimant brought a tort claim governed by Romanian law against the defendants. The court had ordered security for costs, first allowing 28 days and later extending the period to 17 October 2013. The claimant failed to provide security within either period. The order provided for automatic strike-out unless a different order was made in time.

The claimant applied on the expiry date for a further extension and, alternatively, relief from sanctions. It relied on difficulties in realising land, filling stations and other assets. The central issue was whether the court should extend time or relieve the claimant from the sanction of strike-out under the approach required by CPR 3.9(1).

1. Application refused. The court refused both the further extension of time and relief from the sanction of strike-out. The non-compliance was substantial, the claimant had already received an extension, and no good reason for the continuing default had been shown.
2. Under CPR 3.9(1), the court must consider all the circumstances, but the need for efficient litigation at proportionate cost and the need to enforce compliance with rules, practice directions and orders are of paramount importance. The guidance in Andrew Mitchell MP v News Group Newspapers Limited [2013] EWCA Civ 1537 was applied.
3. Where the default is not trivial, the burden lies on the defaulting party to justify relief. Later events may constitute a good reason where they show that the original period was unreasonable or where circumstances outside the party’s control caused the default. Here, the claimant had confined its efforts to selected assets and had not adequately addressed alternatives, including possible funding by creditors.
4. The same CPR 3.9 approach should inform an application for an extension of time under CPR 3.1(2) in a complex case. The court applied the reasoning in Sayers v Clark Walker (a firm) [2002] EWCA Civ 645.
5. The claimant had not applied under CPR 3.1(7) to vary or revoke the earlier order. Such an application would ordinarily require a material change of circumstances, misstated facts or a manifest mistake, and must be made promptly. Those observations, based on Tibbles v SIG plc (trading as Asphaltic Roofing Supplies) [2012] EWCA Civ 518, were not directly determinative because no such application was before the court.
6. The court added that CPR 3.9 is not an enhanced tactical weapon for non-defaulting parties and that the court should apply the governing principles rather than treat examples from other cases as a checklist. The jurisdiction should ideally be exercised without detailed citation of decisions on different facts, echoing the observation in The Spiliada [1987] AC 456.

First-instance decision. No prior appellate decision in the same litigation is stated in the judgment.