Ras Al Khaimah Investment Authority & Ors v Bestfort Development LLP & Ors

For security for costs based on a claimant’s residence outside the United Kingdom or a Convention state, objective justification requires a likelihood of substantial obstacles or an additional burden in enforcing a costs order. A merely real or fanciful risk is insufficient. The meaning of “likely” depends on context and does not invariably mean more likely than not. The court must then consider whether security is just in all the circumstances, including the weight of any undertaking offered by the claimant. An appellate court will not interfere with the first-instance assessment of those matters absent an error of principle.

The defendants appealed, and sought permission to appeal, against Master Bowles’s dismissal of their application for security for costs. The underlying proceedings were brought under section 25 of the Civil Jurisdiction and Judgments Act 1982 in support of foreign proceedings. The claimants were resident outside the United Kingdom and Convention states and had no assets in those jurisdictions. The appeal concerned the proper threshold for showing enforcement difficulties, the relevance of undertakings, and alleged late reliance on Georgian law and public policy.

1. Permission and disposition. Permission was granted on the threshold issue and the consequential ground, but the appeal was dismissed. Permission was refused on the remaining ground.
2. Under CPR 25.13(2)(a), an order for security may engage articles 6 and 14 of the European Convention on Human Rights. Differential treatment based on foreign residence is objectively justified only where enforcement abroad is likely to involve substantial obstacles or a substantial additional burden, such as costs or delay, compared with enforcement in the United Kingdom or a Convention state. This followed Nasser v United Bank of Kuwait [2001] EWCA Civ 556.
3. The court rejected the submission that a real risk alone sufficed. Dumrul v Standard Chartered Bank [2010] EWHC 2625 (Comm) correctly adopted the likelihood threshold, and that approach had been approved in Star Reefers Pool Inc v JFC Group [2011] EWCA Civ 1065. The word “likely” remains context-dependent and does not necessarily mean more likely than not.
4. De Beer v Kanaar [2003] 1 WLR 38 did not establish a different threshold. Its references to risk arose in a case where the parties had accepted that approach, and the judgment did not decide the legal standard.
5. The Master was entitled, and required, to assess the claimants’ undertakings to meet any costs order and not oppose recognition in Georgia. The weight given to them was a matter of evaluation, and no appellate error was shown.
6. Late reliance on Article 68.2(g) of the Law of Georgia on International Private Law was properly rejected. The defendants had provided no adequate expert evidence establishing a likelihood of non-recognition or delay, and a solicitors’ letter was insufficient. The Master was also entitled to disregard new submissions outside the permission granted for further written argument.

High Court (Chancery Division): Master Bowles dismissed the defendants’ application for security for costs on 16 October 2015. On appeal, Mr Justice David Richards granted limited permission but dismissed the appeal and refused permission on the remaining ground.