Tulip Trading Limited v Bitcoin Association for BSV & Ors.

The discretion to stay or adjourn proceedings under CPR 3.1(2)(b) and (f) is open-ended and must be exercised in accordance with the overriding objective. The court must consider all the circumstances, with the balance of prejudice as the main consideration.

There is no general rule requiring a stay merely because a higher court may shortly decide a related point of law. The court may proceed where refusal of a stay will not finally defeat the claim, procedural difficulties can be managed, and the balance of prejudice favours determination. A jurisdiction challenge under Part 11 should generally be dealt with promptly, although a short and controlled delay may be justified.

The claimant sought a stay and adjournment of the jurisdiction challenge brought by the fourteenth defendant. The underlying claim concerned alleged fiduciary and tortious duties owed by developers of digital asset networks after the claimant’s private keys were stolen.

The other defendants’ jurisdiction challenges had previously succeeded, and the claimant had obtained permission to appeal. The claimant accepted that there was no material difference between the fourteenth defendant’s position and that of the other defendants for the purposes of the challenge. It argued that determination should await the Court of Appeal’s decision. The central issue was whether the balance of prejudice justified delaying the jurisdiction application.

1. Application dismissed. The claimant’s application for a stay and adjournment of the fourteenth defendant’s jurisdiction challenge was refused.
2. Under CPR 3.1(2)(b) and (f), the discretion to stay or adjourn is open and must be exercised in accordance with the overriding objective. The court must consider all the circumstances. The main consideration is the balance of prejudice, drawing on Kingcastle Ltd v Owen-Owen, Re Yates’ Settlement Trust and Johns v Solent SD Ltd.
3. The claimant’s proposed costs savings did not justify a stay. If the appeal succeeded, the relevant costs could be recovered. If the claimant wished to repeat arguments in the jurisdiction application which would properly arise in the appeal, the resulting costs were not properly treated as prejudice.
4. The authorities did not establish that a claim must be stayed or could not be determined whenever a higher court might reverse the applicable law. Derby v Weldon (No.3) and Johns supported only the more limited proposition that the court may take the possibility of reversal into account, particularly where refusal would finally extinguish a claim.
5. The court accepted the Part 11 principle that jurisdiction challenges should generally be dealt with promptly, as explained in Cavell USA Inc & Anor v Seaton Insurance Company & Anor. The circumstances here differed because any delay was expected to be limited and the related appeals could be managed together or sequentially.
6. The significant prejudice to the fourteenth defendant was the risk of being denied a right to participate in related appeals. The claimant could avoid that prejudice by accepting the open July draft order. The claimant’s delay in applying, and its change of position concerning the alleged factual differences, also weighed against a stay.

The judgment records that permission to appeal the earlier order concerning the other defendants was granted by Andrews LJ on 11 August 2022. The related appeal was listed for December 2022. This judgment concerned the separate application to stay or adjourn the fourteenth defendant’s jurisdiction challenge.