Mengiste & Anor v Endowment Fund for the Rehabilitation of Tigray & Ors

Permission to appeal may be made conditional on compliance with an unpaid costs order. The condition is justified where the proposed appellant has defaulted for a substantial period and has failed to satisfy the court that payment is impossible. The appellate court may require payment directly to the respondent, rather than into court, where the respondent has already incurred substantial costs. An arguable challenge to the fairness or impartiality of foreign proceedings may justify permission to appeal, even where a foreign review mechanism contains a time bar, but the merits remain for the appeal.

The claimants brought proceedings in England alleging that Ethiopian judgments against them had been procured by fraud and through the withholding of material evidence. The Chancery Division stayed the proceedings so that the claimants could seek review in Ethiopia. After the Ethiopian review application and a further application to the Court of Cassation failed, the claimants applied to lift the stay. Peter Smith J refused that application, declined to vary an unpaid order for £200,000 on account of costs, and dismissed the action.

The claimants sought permission to appeal. The central issues were whether their challenges concerning judicial impartiality, the Ethiopian review time bar and the fairness of the proceedings were arguable, and whether permission should be conditional on payment of the outstanding costs.

1. Permission to appeal. The claimants had an arguable case that the Ethiopian proceedings, including the involvement of Judge Mehretab, raised serious questions about impartiality and fairness.
2. The claimants also had an arguable case concerning the application and effect of Article 6 of the Ethiopian Civil Code. It was arguable that the one-month time limit did not govern complaints about the right to an impartial tribunal, or that its application could itself produce irremediable unfairness. It was further arguable that the judge had applied too demanding a standard by requiring compelling evidence, rather than asking whether a fair-minded and informed observer would conclude that there was a real possibility of an unfair trial.
3. The court declined to refuse permission solely because the claimants remained in default under the agreed order to pay £200,000 on account of costs. However, the court had power to make permission conditional on compliance with that order. The claimants had failed to satisfy the judge that they could not pay, and it would be unjust to expose the defendants to the costs of an appeal while the order remained defied.
4. Payment was therefore to be made to the defendants, not into court. The claimants were given until 31 March 2016 to satisfy the condition. If payment was not made by that date, permission to appeal would not be available.

• Court of Appeal (Civil Division): Permission to appeal was granted conditionally, subject to payment of £200,000 on account of costs by 31 March 2016.
• Chancery Division: Peter Smith J refused the application to lift the stay, declined to vary the costs order and dismissed the action.