VITOL SA v GENSER ENERGY GHANA LIMITED

The court has an absolute discretion to allow more than 14 days for payment of a judgment debt. An extension requires proper justification, ordinarily supported by evidence. Mere inability to pay will usually be insufficient, but a genuine payment constraint caused by financing arrangements may justify an exceptional extension where payment remains possible.

The court may award interest on costs from a date before judgment. The purpose is compensatory: to reflect the claimant’s loss of the use of money paid, or borrowed to pay, its solicitors. For substantial commercial litigation, interest may run from the relevant invoices. The appropriate rate depends on the claimant’s borrowing status and may include a modest uplift over the Bank of England base rate.

This was a supplementary first-instance judgment following the court’s earlier decision, [2022] EWHC 1812 (Comm). Genser was ordered to pay Vitol the balance of the Settlement Amount claim, interest and £580,000 on account of costs.

Two consequential issues remained. First, the court had to determine whether payment should be made within the usual 14 days or whether Genser should have until 2 September 2022 because its financing arrangements required the Senior Agent’s consent. Secondly, the court had to decide whether Vitol should receive interest on its costs, and, if so, the applicable rate and period.

1. Time for payment. The usual rule under Civil Procedure Rules 1998, rule 40.11, is that a judgment debt is payable within 14 days, but the court has an absolute discretion to order a different period.
2. The principles identified in Gipping Construction Limited v Eaves Limited [2008] EWHC 3134 (TCC) were applied. An applicant seeking longer must provide proper justification, normally supported by evidence. A genuine payment problem should ordinarily be discussed between commercial parties first. Mere inability to pay will generally not suffice. Here, however, the evidence at trial established financing constraints requiring Senior Agent consent. This was not inability to pay, and an exceptional extension to 2 September 2022 was justified.
3. Interest on costs. Under Civil Procedure Rules 1998, rule 44.2(6)(g), the court may order interest on costs from before judgment. The purpose is to compensate for the loss of the use of money paid, or borrowed to pay, solicitors’ costs. The court accepted the guidance in Sharp and others v Blank and others [2020] Costs LR 835 and Involnert Management Inc v Aprilgrange Limited and others [2015] 2 CKC 405.
4. It was appropriate to award Vitol interest because these were substantial commercial proceedings and Vitol had been out of its money. Interest was ordered from the date of each relevant invoice until three months after judgment, namely 30 September 2022, with judgment-rate interest thereafter if the costs remained unpaid. Following Involnert Management Inc v Aprilgrange Limited and others [2015] 2 CKC 405 and Hyde v Nygate [2021] EWHC 1150 (Ch), this gave Genser an opportunity to assess its liability.
5. The appropriate rate was 1% above the Bank of England base rate. Vitol was a first-class borrower, so the relevant starting point was the short-term cost of unsecured borrowing for that class of borrower. The court applied the approach in SOS for the Department of Energy and Climate Change v Jeffrey Jones and others [2014] EWCA Civ 363, but considered 2% above base excessive.

The parties were invited to agree the final minute of order for approval.

This was a supplementary first-instance judgment following the court’s earlier judgment in [2022] EWHC 1812 (Comm). No appeal history was stated.