Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Kent (aka Joannis Kent)

Under CPR 25.13, residence outside the jurisdiction does not by itself justify security for costs. The discretion must be exercised on objectively justified grounds connected with obstacles to, or the additional burden of, enforcing a costs order. The court must assess the particular evidence and must not speculate that enforcement will fail. Evidence of a lengthy or costly foreign enforcement process may justify security limited to that additional burden, provided the order does not prevent the claimant pursuing the claim.

The claimant, a wealthy UAE national resident in Abu Dhabi, brought substantial contractual claims against the defendant concerning hotel investments. The defendant sought security for the whole action under CPR 25.13, relying on the claimant’s foreign residence and evidence concerning recognition and enforcement of English costs orders in the UAE.

The parties accepted that the relevant condition in CPR 25.13 applied. The central issue was whether enforcement in the UAE would present such obstacles that the defendant was likely to be deprived of the ability to recover costs, and, if not, whether a more limited order could address the additional cost of enforcement.

1. The application for security for the entirety of the action was not justified on the evidence. The issue under CPR 25.13 was whether enforcement of an English costs order in the UAE would involve obstacles such that the defendant was likely to be deprived of recovery.

2. The approach in Nasser v United Bank of Kuwait [2002] 1 WLR 1868 requires objectively justified grounds relating to enforcement obstacles or an additional burden. The discretion must not operate discriminatorily against foreign residents.

3. The evidence identified significant procedural difficulties under Article 235 of the UAE Civil Procedures Code, including issues of reciprocity, jurisdiction and public order. It did not establish that enforcement would fail. It would be speculative to infer that the defendant was likely to be unable to enforce a costs order.

4. A security order could nevertheless be appropriate if tailored to the additional costs of pursuing enforcement in the UAE. Such an order would be limited in amount and would not prevent the claimant pursuing the claim. The application as drafted did not quantify that additional burden.

5. The court invited written submissions on whether a tailored order could be agreed or whether a further hearing was required.