Société Africaine de Raffinage v Savannah SA

The jurisdictional threshold for security for costs under Civil Procedure Rules 1998, rule 25.13(2)(a), does not by itself justify an order. The court must identify objectively justified grounds for treating the claimant differently, such as a real risk of substantial obstacles to enforcement or a material additional burden of cost or delay. The security ordered should be proportionate and tailored to the risk demonstrated. Speculative possibilities, unsupported assertions and evidence of only marginal procedural expense are insufficient. The application was therefore dismissed where Senegalese law provided machinery for enforcement, the claimant could meet a costs order, and no real risk of non-enforcement or material additional burden was established.

Société Africaine de Raffinage (SAR) sought approximately €7 million from Savannah SA under contracts for the supply of light naphtha and naphtha. Savannah accepted that the contractual debt arose but intended to plead an equitable set-off based on damages claimed in separate proceedings concerning an alleged wrongful repudiation by SAR.

Savannah applied for security for its costs in SAR’s claim under rule 25.13(2)(a) and sought an extension of time to serve its defence. The issue was whether it was just to order security, having regard to the alleged risks of enforcing an English costs order in Senegal.

1. Application dismissed. The formal jurisdictional threshold in rule 25.13(2)(a) of the Civil Procedure Rules 1998 was satisfied because SAR was resident in Senegal, which was not bound by the 2005 Hague Convention. That threshold gave the court a discretion but could not, by itself, justify security. Reliance on it alone would be discriminatory.
2. The applicable test, stated in Bestfort Developments LLP v Ras Al Khaimah Investment Authority [2016] EWCA Civ 1099 and Danilina v Chernukhin [2018] EWCA Civ 1802, required objectively justified grounds relating to obstacles to, or the burden of, enforcement in the particular foreign country. The relevant question was whether there was a real risk of substantial obstacles to enforcement or of an additional burden in cost or delay.
3. Any security should be tailored to the risk demonstrated. A risk of wholesale non-enforcement might justify security based on likely recoverable costs. A risk confined to procedural obstacles would ordinarily justify only a reasonable estimate of the cost of overcoming them.
4. The evidence did not establish the necessary real risk. The evidence concerning Senegalese enforcement was limited and speculative. The need for an exequatur order and a possible judicatum solvi bond under article 110 of the Senegalese Civil Procedural Code showed, at most, a possible marginal cost or delay. There was no evidence of a real risk that SAR’s costs liability would not be enforced, nor of a material additional burden relative to enforcement in England. SAR’s state ownership did not create a defence to enforcement and its ability to pay was not disputed.
5. The court directed SAR to remove specified anticipatory pleading from its particulars of claim, without prejudice to repleading the matters in reply, and extended the time for Savannah’s defence. The separate claim by Savannah was stayed pending provision of the remaining security ordered in that action.