Hulley Enterprises Limited & Ors v The Russian Federation

Permission to appeal requires a real prospect of success or some other compelling reason. A point may be novel without being genuinely arguable, particularly where the decision rests on fundamental principle and logic. English law principles are not displaced merely because the dispute concerns state immunity; the State Immunity Act contains no such disapplication. Issue estoppel may therefore be available against a foreign state. The “special circumstances” jurisdiction is narrow. Alleged fraud concerning case management, foreign court decisions, or a possible reference to the CJEU does not satisfy it without a legally relevant basis. An evidential complaint about an expert affords a prospect of success only if it could affect the outcome. Costs may be ordered on account despite asserted payment difficulties where the evidence does not establish inability to pay.

The claimants sought permission to appeal from an earlier judgment concerning the availability of issue estoppel against the Russian Federation, the interaction between that issue and section 31 of the Civil Jurisdiction and Judgments Act, special circumstances, treaty law, and expert evidence. The court also considered consequential questions concerning payment on account of costs, interest on costs, and case management of proceedings stayed pending related proceedings in the Netherlands.

Mrs Justice Cockerill considered six proposed appeal grounds and whether they satisfied either the real-prospect-of-success test or the “some other compelling reason” test.

1. Permission to appeal refused. None of the six grounds had a real prospect of success. The case was not the exceptionally rare case warranting permission on the “some other compelling reason” ground.
2. The conclusion that issue estoppel is available against a foreign state was based on fundamental principle and logic. The surrounding authorities merely assumed the point. The State Immunity Act did not state that English law principles were disapplied, and the comprehensive-code argument did not alter that conclusion.
3. The proposed challenge under section 31 of the Civil Jurisdiction and Judgments Act failed because it misunderstood the way section 31 entered the analysis.
4. The special-circumstances ground disclosed no real prospect of success. Fraud concerned case management rather than special circumstances. Foreign decisions were irrelevant to whether there was a real possibility of a CJEU reference in these proceedings, and the appeal grounds did not engage with the Dutch-law issue actually decided. The treaty-law ground identified no error of law.
5. The challenge to the treatment of the expert could not affect the outcome. The court had scrutinised impartiality, moderated its conclusions, and independently found that the expert’s analytical arguments were weaker. The detailed Dutch-law analysis was not addressed by the proposed grounds.
6. The claimants were awarded £1.5 million on account of costs, with 28 days for payment. The court was not satisfied that the evidence established that the Russian Federation could not pay more than £550,000. Interest at 1 per cent above base rate was ordered on recoverable costs. The stay was proactively case-managed so that the proceedings could progress efficiently after the Netherlands proceedings concluded.

The judgment concerned the claimants’ application for permission to appeal from the court’s earlier judgment. Permission was refused on both the real-prospect-of-success and some-other-compelling-reason grounds.