Awendale Resources Incorporated v Pyxis Capital Management Ltd

Where a party unsuccessfully applies for a stay under Regulation (EC) No. 1215/2012, the normal rule is that costs follow the event. The court may reserve costs where future developments could make the costs of the application wasted, but reservation is inappropriate where the parties may never return to court and the present court is better placed to assess the issue. Detailed assessment is appropriate where costs are substantial, materially disproportionate between the parties, or include disputed VAT issues unsuitable for summary determination. A payment on account may be ordered and the costs order may itself be stayed for a defined period where the outcome of related foreign proceedings may affect the parties’ future applications.

The claimant, Awendale Resources Incorporated, sought costs directions following the defendant’s successful application to stay the English proceedings under Article 29 of Regulation (EC) No. 1215/2012. In the earlier judgment, [2020] EWHC 1286 (Ch), the court found that the English and Cypriot proceedings involved the same cause of action between the same parties and that the Cypriot court was first seised.

The parties agreed the form of stay order and undertaking, but disputed whether costs should be reserved, summarily assessed, or dealt with by detailed assessment, the appropriate payment on account, and whether payment should be deferred. The central issues concerned the proper costs order and the effect of the continuing Cypriot proceedings.

1. The claimant was the unsuccessful party on the stay application. The normal rule therefore applied: costs followed the event. Although the court would have been prepared to reserve costs because the merits of the Cypriot proceedings had not been examined and the application costs might ultimately prove wasted, reservation was inappropriate because the parties might never return to court and the present court was better placed to assess costs.

2. The costs were not suitable for summary assessment. The defendant’s costs were £198,546.40, compared with the claimant’s £96,028.99, and the claimant disputed liability for the VAT element. Those matters were better addressed on detailed assessment.

3. A payment on account of £120,000 was ordered. The court considered that figure appropriate, representing just over 60 per cent of the defendant’s claimed costs.

4. The order for payment of costs, including the payment on account, was stayed for nine months. During that period the claimant had liberty to apply to vary or discharge the costs orders if it applied to lift the stay. If no such application was made, the stay would expire automatically and the defendant would be entitled to payment on account within 14 days. The stay did not prevent detailed assessment proceedings or agreement of a final costs figure.

5. The defendant’s undertaking was approved subject to modification so that it extended to the Cypriot proceedings being struck out on appeal as well as at first instance.

This was a costs judgment following the court’s earlier procedural decision in the same proceedings:

• High Court (Chancery Division): the English proceedings were stayed under Article 29 of Regulation (EC) No. 1215/2012 in [2020] EWHC 1286 (Ch). The present judgment determined the consequential costs issues.