Viking Trading OU v Louis Dreyfus Company Suisse SA

Where an order is silent on costs, the general rule is that no party is entitled to costs. That rule does not remove the court’s residual discretion to make an ex post facto costs order. The discretion applies even where the order was final and disposed of the relevant application. It is exceptional in character and should not be exercised lightly, particularly where a respondent to a paper application failed to request costs at the proper time. A respondent opposing an application for permission to appeal under Arbitration Act 1996 s 69 should request costs in its respondent’s notice and provide a proportionate costs statement. Excessive, unnecessary or duplicated work will be discounted.

The claimant sought permission under s 69 of the Arbitration Act 1996 to appeal an arbitral award arising from a failed sale contract. The application was determined on documents and dismissed by an order dated 15 June 2023. That order did not mention costs, and the defendant had not requested them.

The defendant subsequently applied for its costs. The court made an order for £20,000, subject to a right to apply to vary or set it aside. The claimant challenged the court’s jurisdiction and the exercise and amount of the costs discretion. The issues were whether the court retained power to award costs after the final order, whether that discretion should be exercised, and what sum was appropriate.

1. Power to award costs. CPR 44.10(1)(a) establishes a general rule, not an absolute bar. The exceptions in CPR 44.10(2) are examples, while the court retains a general residual discretion. That discretion remains available after a final order which wholly disposes of the relevant application.
2. Exercise of discretion. The power should not be assumed to operate in favour of a respondent who failed to seek costs when opposing a paper application. The discretion was exercised here because the defendant had always intended to seek costs, there was no clear guidance on the point, and the original order was subject to a prompt challenge. The decision was described as a close-run thing.
3. Quantum. The reasonable costs of the original permission application were assessed at £17,500. Unnecessary witness-statement work, duplication, excessive hours and disproportionate counsel’s fees were discounted. The claimant’s costs of the later application were assessed at £2,250 and netted off, producing a final award of £15,250 to the defendant.
4. Future s 69 applications. A respondent should state in its respondent’s notice that it seeks costs. Its skeleton argument should be concise, and a witness statement is recoverable only if necessary. A proportionate costs statement should ordinarily accompany the respondent’s notice and skeleton, or the respondent should explain when it will be provided. The claimant’s application to set aside failed on jurisdiction, but the costs award was reduced to £15,250.