Qatar Investment and Projects Development Holing Co & Anor v Phoenix Ancient Art S.A. & Ors

An application for security for costs involves a two-stage inquiry. The court must first determine whether a specified condition is satisfied, then decide whether security is just in all the circumstances. A foreign appellant’s residence may justify security only where enforcement presents an objectively justified additional burden. Separate evidence of inability to pay or steps making enforcement difficult can independently justify an order. The amount must be reasonable and proportionate to the costs properly recoverable on the appeal. Costs of a respondent’s notice seeking to uphold an underlying merits order should not be included where those costs would not have been recoverable as security at first instance.

The claimants brought two related actions concerning artefacts purchased from Phoenix Ancient Art S.A., alleging that they were forgeries and seeking rescission, damages in deceit and conspiracy, and related relief. In April 2025, Garnham J debarred the appellants from defending the 2023 Action and entered summary judgment; in the 2020 Action he entered summary judgment on claims based on fraud, dishonesty and fraudulent misrepresentation. The appellants obtained limited permission to appeal.

The claimants applied for security for the appeal costs of approximately US$229,000. They relied on the appellants’ foreign residence, Phoenix’s alleged inability to pay, and dealings with assets said to make enforcement difficult. The central issues were whether the relevant conditions were satisfied, whether security was just, and the proper amount.

1. Application allowed in part. The court applied the two-stage inquiry: first, whether a condition in CPR 25.27(b) was satisfied; secondly, whether an order was just in all the circumstances.
2. Residence outside the jurisdiction satisfied CPR 25.27(b)(i) for all three appellants. The 2025 Rules contained no transitional provision preserving the pre-Brexit regime for the 2020 Action, and there was no proper basis for implying such a carve-out.
3. There was reason to believe that Phoenix would be unable to satisfy a costs award. Its disclosed stock valuation was substantially out of line with other evidence, its principal debtor appeared financially distressed, and its position had worsened since the last accounts. The threshold required more than doubt or concern, but did not require proof on the balance of probabilities.
4. CPR 25.27(b)(vi) was satisfied. The relevant inquiry was objective and concerned whether steps taken in relation to assets would make enforcement difficult. Dishonesty or a risk of future dissipation, without evidence of dealings with assets, was insufficient. Here, the disposal of interests for no consideration, unexplained monthly payments, and failures to disclose assets supported the inference that assets had been placed beyond the reach of creditors. Equity in properties abroad did not answer that conclusion where substantial local debts made the equity precarious and insufficient.
5. Security was just under conditions (ii) and (vi). The risk of dissipation, disclosure failures and late payment of prior costs orders were relevant discretionary factors, and there was no suggestion that security would stifle the appeal. Any reliance on residence abroad had to be non-discriminatory and based on objectively justified enforcement difficulties.
6. The claimants’ anticipated costs were disproportionate. Security was limited to £70,000, representing the reasonable and proportionate costs of responding to the appeal, excluding costs of the respondent’s notice seeking to uphold summary judgment on the merits. Lord Justice Males agreed.

• Court of Appeal (Civil Division): The application for security for costs was allowed in part. Security was ordered in the sum of £70,000.
• High Court of Justice, King’s Bench Division: Garnham J made orders dated 11 and 29 April 2025, including debarment, striking out and summary judgment. The appeal proceeded under limited permission. Decision cited as [2025] EWHC 898 (KB).