Energy Venture Partners Ltd v Malabu Oil & Gas Ltd

A court may have power under an express liberty to apply, or under CPR 3.1(7), to vary an order with continuing consequences. The existence of that power does not mean that variation should be granted. A party’s later change of position, including a decision to pursue its own appeal, does not of itself justify stopping post-judgment interest. Whether to continue an appeal and accept the associated commercial risk remains a decision for the appealing party.

An express liberty to apply concerning stays of execution may permit consequential directions concerning money held under the stay. It may therefore justify varying the order so that accrued post-judgment interest is paid to solicitors to be held under an undertaking, even where the original order made no express provision for that interest.

The proceedings followed a trial in which Gloster LJ awarded Energy Venture Partners Ltd a reasonable fee of US$110.5 million against Malabu Oil and Gas Ltd, together with interest and costs. The consequential order included stays of execution, provision for sums to be held by solicitors under undertakings, and liberty to apply.

Malabu applied to vary the order so that post-judgment interest ceased to run when Energy Venture Partners later pursued a free-standing appeal. It also applied for directions concerning costs assessment. Energy Venture Partners applied for accrued and future interest to be paid out of court to its solicitors under the existing undertaking.

1. Malabu’s application to stop interest. The court assumed, without deciding, that it had power under the express liberty to apply in paragraph 8.4 of the order, alternatively under CPR 3.1(7), to vary paragraph 1 and impose an end-date for post-judgment interest.

2. The application was dismissed. Energy Venture Partners had changed its position after the order by pursuing its own free-standing appeal, but that did not mean Malabu had no choice but to continue its appeal. Malabu could pay the judgment sum and withdraw its appeal. The decision whether to do so was ultimately a commercial decision for Malabu, having regard to the prospects of its appeal and the risks created by Energy Venture Partners’ appeal. There was therefore no sufficient reason to stop interest accruing.

3. The court was also unpersuaded that the order would necessarily have been different had Energy Venture Partners stated at the consequential hearing that it intended to pursue its own appeal.

4. Interest payment application. The application by Energy Venture Partners fell within the express liberty to apply because it was, in substance, an application to vary paragraph 8.1 concerning the operation of the stay. The fact that Energy Venture Partners had not originally requested equivalent treatment for accruing interest did not prevent relief under the express liberty.

5. There was good reason to direct payment of the accrued post-judgment interest to Energy Venture Partners’ solicitors, to be held under the existing undertaking. That arrangement could improve the return on the money for Malabu and make the funds more readily available to Energy Venture Partners when the stay ended. The application was granted, subject to modified wording.

6. Malabu’s costs-assessment application was adjourned with liberty to apply.

The judgment itself records the procedural history of the underlying proceedings:

• Commercial Court: Following trial, Gloster LJ awarded Energy Venture Partners Ltd US$110.5 million plus interest and costs. The consequential order dated 18 July 2013 imposed stays of execution and granted liberty to apply.
• High Court (Commercial Court): The present court dismissed Malabu’s application to stop post-judgment interest, granted Energy Venture Partners’ application for payment of accrued interest subject to modified wording, and adjourned the costs-assessment application.