Palladian Partners LP & Ors v The Republic of Argentina & Anor

A stay of execution is exceptional. The applicant must establish solid grounds, after which the court balances the risks of injustice, with primary attention to any irremediable harm if enforcement proceeds. Temporary inconvenience and the ordinary risk of living with an unfavourable judgment are insufficient. A stay may properly distinguish between monetary and specific-performance relief. Where payment may cause evidenced irremediable harm to a population, a short stay may be justified even though the judgment creditor has been kept out of its money. A conditional payment into escrow is discretionary and depends on the particular balance of prejudice.

This was a consequentials hearing following the court’s substantive judgment of 5 April 2023 in the claim by four investment entities against Argentina and the trustee of certain securities. Argentina sought a stay pending an intended appeal of orders requiring payment of approximately €1.33 billion and specific performance for later reference years. It relied on evidence concerning its economic circumstances, budgetary constraints and possible harm to the Argentine population. The claimants opposed a stay and alternatively sought a condition requiring payment of approximately 25% into escrow. The court also considered a stay of detailed costs assessment.

1. Approach to a stay. The usual position under Civil Procedure Rules 1998, CPR 52.16, is that there should be no stay. The court nevertheless has a broad discretion. The essential question is whether refusing or granting a stay creates a risk of injustice: Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065 at [22]. The applicant must put forward solid grounds, followed by a balancing exercise focused principally on irremediable harm: Department for Environment, Food and Rural Affairs v Down [2009] EWCA Civ 257 at [8]-[9].
2. Specific performance. No stay was granted for the specific-performance orders. The work was capable of performance, its cost was modest relative to the claim, and delay would unfairly postpone relief to which the claimants had established a contractual entitlement. The work was also unlikely to be completed before any appeal concluded.
3. Payment. A stay was granted for the €1.33 billion payment obligation. Although the evidence was subject to reservations, Argentina established, at least to some degree, a risk of irremediable harm to its population. Payment into escrow removed any substantial risk that the money could not be recovered if the appeal succeeded. The stay was therefore justified and expected to be short, depending on whether permission to appeal was obtained.
4. Conditional payment. The court refused to require payment of 25% into escrow. Novus International Aviation v Alubaf Arab International Bank [2016] EWHC 1937 (Comm); [2016] 4 CLR 705 involved a different balance, principally concerning repayment risk and delay. The additional factor of population-wide irremediable harm made it inappropriate to impose that condition. The question could instead be raised before the single Lord or Lady Justice considering permission to appeal.
5. A stay was also granted for detailed costs assessment, since an interim payment protected the claimants and commencing assessment would waste resources while an appeal application remained pending.

The judgment followed the court’s substantive judgment of 5 April 2023. The court refused Argentina leave to appeal and stated that any further application for permission, and any conditions attached to it, would be matters for the single Lord or Lady Justice.