Olympic Airlines SA v ACG Acquisition XX Llc

Issue estoppel is not lost merely because the party seeking to rely on it has allowed the other party to investigate the merits or has raised the point late. Timing is governed by ordinary case-management and amendment principles, with costs available to address prejudice. The estoppel requires a final determination by a competent court of the same question between the same parties, and the determination must have been necessary and fundamental to the decision. An exception may arise for genuinely new material that could not have been adduced with reasonable diligence, including a subsequent change in law. It does not assist a party that chose not to obtain available evidence or voluntarily incurred the relevant risk in pursuing an appeal.

ACG obtained judgment and costs orders against Olympic from Teare J in the Commercial Court on 1 June 2012. The order included £500,000 on account of costs and dismissed Olympic’s counterclaim. Permission to appeal was made conditional on Olympic paying £82,500 security and the £500,000 into court. The appeal was later dismissed: [2013] EWCA Civ 369.

Olympic then sought release of the money, asserting that Greek law prevented its liquidator from paying ACG. ACG relied on issue estoppel arising from Steel J’s order of 22 July 2011 requiring payment of an earlier costs order or strike-out. The Court of Appeal had to decide whether ACG was too late to raise that estoppel and, if not, whether Olympic could reopen the Greek-law issue.

Disposition. Lord Justice Rimer dismissed Olympic’s application and ordered the £582,500 paid out to ACG. Lord Justice Moore-Bick agreed. The court therefore did not determine the Greek-law issue.

1. Late reliance. ACG had not represented or promised that it would not rely on issue estoppel. Olympic had not relied on any such representation, suffered no relevant detriment, and could not establish estoppel by convention. There was also no election, waiver, acquiescence, laches or unconscionable conduct. The prior exchange of Greek-law evidence did not remove the issue to which the estoppel could attach. A late legal defence may be dealt with under ordinary case-management and amendment principles, with costs available to compensate any prejudice.
2. Existence of the estoppel. The requirements identified in Carl Zeiss Stiftung v. Rayner & Keeler Ltd and Others (No 3) [1970] 1 Ch 506 were satisfied. Steel J was a competent court; his decision was final; it determined the same Greek-law question; and the parties were the same. Although the formal order did not mention Greek law, the determination was necessary and fundamental because acceptance of Olympic’s point would have constituted an exceptional feature justifying refusal of the unless order.
3. Exception. Arnold and Others v. National Westminster Bank Plc [1991] 2 AC 93 recognises a narrow exception where further relevant material could not, with reasonable diligence, have been adduced earlier. Olympic could have obtained independent expert evidence before Steel J but deliberately chose not to incur the cost. Its later attempt to obtain support from the Athens court could also have been made earlier.
4. The payment of £582,500 into court was voluntary and made to secure the right to pursue the appeal. Olympic had knowingly incurred the risk that the money would be paid to ACG. Those self-created circumstances did not justify reopening the estoppel. Olympic was barred from denying ACG’s entitlement.

1. Court of Appeal (Civil Division). In the present decision, the court determined the preliminary issue concerning release of the money paid into court and ordered payment to ACG: [2014] EWCA Civ 821.
2. Court of Appeal (Civil Division). On Olympic’s original appeal against Teare J’s order, the court dismissed the appeal with costs and gave liberty to apply for release of the sums paid into court: [2013] EWCA Civ 369. Permission had previously been made conditional by an order reported at [2012] EWCA Civ 1659.
3. High Court of Justice, Queen’s Bench Division, Commercial Court. Teare J entered judgment for ACG, ordered payment of £500,000 on account of costs, and dismissed Olympic’s counterclaim.