Celtic Bioenergy Ltd v Knowles Ltd

A stay of enforcement of a judgment not under appeal is exceptional in an ordinary commercial case. A party seeking a stay must identify a real, rather than speculative, connection between pending proceedings and the judgment to be enforced. The court may also consider whether payment would cause irrecoverable prejudice, but that requires evidence of a serious repayment risk. Remote contingencies, uncertainty about future financial circumstances and unsupported inferences do not justify a stay. The court retains a broad discretion, but the ordinary entitlement of a judgment creditor to immediate enforcement is an important starting point.

An arbitrator awarded the claimant £309,285.12 in costs arising from disputes concerning fees and counterclaims. The claimant obtained an order under section 66 of the Arbitration Act 1996 permitting enforcement of the award as a judgment.

The defendant did not apply to set aside that order within the permitted period. Instead, it sought a stay pending an outstanding appeal concerning the assessment of costs in a separate section 68 challenge. It argued that the appeal might lead to findings about the claimant’s conditional fee agreement which could eventually affect the enforceability of the arbitrator’s costs award. It also alleged that the claimant might be unable to repay the sums if enforcement proceeded. The issue was whether the circumstances justified a stay.

1. The application was dismissed. The enforcement order remained effective.
2. A stay of a judgment which is not itself under appeal is available in the court’s discretion, but in ordinary commercial cases a stay other than for a short period to permit payment is exceptional. A judgment creditor is ordinarily entitled to immediate enforcement.
3. The defendant’s proposed link between the pending appeal and the arbitrator’s costs award was speculative and groundless. The evidence established that the costs being enforced were claimed under standard terms of engagement and not under the conditional fee agreement. The defendant’s late arguments based on correspondence and the arbitrator’s costs assessment did not establish otherwise.
4. The claimant’s evidence was accepted. There was no proper basis for drawing an adverse inference from its refusal to disclose the privileged conditional fee agreement. The signed bills of costs were ordinarily final and the court applied the principle described as the rule of Bailey.
5. The alleged risk that the claimant would be unable to repay sums paid under the enforcement order was not serious. The claimant had complied with previous costs orders, remained a going concern and was not facing impending insolvency. The possibility of a materially different financial position at some remote future date was insufficient.
6. Even if exceptional circumstances were not required, the balance of prejudice and the court’s general discretion provided no basis for a stay. The application was therefore dismissed.

The judgment was a first-instance determination of the defendant’s application to stay an enforcement order. It also records that an appeal concerning an earlier costs assessment had been permitted and stayed by the Court of Appeal, but that appeal was not the appeal before this court.