Deutsche Bank AG (London Branch) v Central Bank of Venezuela

Permission to appeal may exceptionally be granted for some other compelling reason despite there being no real prospect of success, where a uniquely important case raises novel or insufficiently ventilated questions capable of affecting the development of substantive law.

Costs ordinarily follow the event. An issue-based costs order is nevertheless justified where a discrete, unsuccessful and costly issue has dominated the preparation of the case, and separating that issue is more practicable and just than applying a percentage reduction. The court may reflect limited overlap and conduct by denying the overall winner its costs of that issue without ordering it to pay the other party's costs.

Following the remittal of issues concerning whether judgments of the Venezuelan Supreme Tribunal of Justice could be recognised or given effect in England, the Maduro Board sought permission to appeal Mrs Justice Cockerill's determination of the remitted issues.

The Guaidó Board also sought its costs of the preliminary and remitted issues, with an interim payment. The Maduro Board contended that the court lacked jurisdiction over the preliminary-issue costs and that the Guaidó Board's unsuccessful case concerning the independence and impartiality of the Venezuelan tribunal required an issue-based costs order.

The court had to decide permission to appeal, the proper costs order, and whether an interim payment should be ordered.

1. Permission to appeal was granted on the “some other compelling reason” ground. There was no real prospect that an appeal would change the outcome. The Maduro Board had to succeed on all of Issues 2 to 4, but had lost Issues 2, 3 and 4A. Its proposed expansion of the common law on Issue 2 was particularly untenable, and Issue 4A depended on evaluative findings of live evidence which an appellate court would rarely disturb.

   Nevertheless, the case was exceptional. It concerned a very substantial part of a foreign state's gold reserves, had already engaged the Supreme Court, raised unprecedented questions about the operation of a foreign apex court, and involved novel or little-ventilated points important to substantive law's development.

2. The court had jurisdiction to determine costs of both the preliminary and remitted issues. The remittal meant that the Commercial Court was again seised of the proceedings. The eventual result on the remitted issues was necessary to resolve the preliminary issues. It would be illogical for the Court of Appeal's costs order, founded on a view of the law subsequently overtaken and criticised, to remain determinative.

3. An issue-based costs order was appropriate for Issue 4B. Although costs normally follow the event, as explained in Fox v Foundation Piling [2011] 6 Costs LR 961, Issue 4B was a discrete issue which the Maduro Board won. It had dominated preparation and generated extensive evidence, but was analytically subsidiary and could have been advanced less exhaustively. Separating it was practicable and more just than an imprecise percentage reduction.

   The Guaidó Board was therefore denied its costs of Issue 4B, but was not ordered to pay the Maduro Board's costs of that issue. It recovered its costs of the remaining matters, subject to detailed assessment if not agreed.

4. An interim payment was ordered. The usual approach should apply: overpayment was unlikely, the appeal lacked strong prospects, the Maduro Board was unlikely to be the ultimate winner, and its satisfaction arguments effectively repeated points rejected by the Supreme Court. The court ordered an interim payment of 45% of the Guaidó Board's preliminary-issue costs, namely £1.44 million. The interim payment concerning the remitted issue required further consideration.

• Commercial Court: Following a Supreme Court remittal, Mrs Justice Cockerill determined the remitted issues and then decided permission to appeal and consequential costs.
• Supreme Court: The judgment states that the Supreme Court vindicated the Guaidó Board on recognition and gave it a partial victory on justiciability, while remitting issues necessary to resolve the proceedings.
• Court of Appeal: The judgment states that the Court of Appeal overturned Teare J on recognition and justiciability, and made costs orders on the basis that its decision was determinative.
• Commercial Court: Teare J had awarded the Guaidó Board its costs of the preliminary issues.