Celestial Aviation Trading Ireland Limited & Ors v Volga-Dnepr Logistics B.V.

The power to vary an interim payment order is discretionary but should be exercised on principled grounds. Relevant considerations ordinarily include a material change of circumstances, a material misstatement of the facts underlying the original decision, whether the issue was overlooked, the reason it was not raised earlier, and any delay. Sanctions-related difficulty in paying an order is a factor, but does not require variation where the order itself is lawful and payment can be pursued through licensing and foreign-court procedures. The court should also consider the realistic risk of sanctions enforcement and the effect of variation on enforcement.

The claimants obtained an interim payment order requiring the defendant to pay approximately USD 202.8 million and £50,000 on account of costs. The defendant, a Dutch company within a Russian group, applied on the payment date to vary the order so that payment obligations would begin only after it obtained licences from OFSI or OFAC. It relied on the designation of its ultimate beneficial owner, the sanctions regimes, and the risk of unlawful payment or contempt. The court considered whether the sanctions issue had been overlooked, whether circumstances had materially changed, and whether payment under the order risked breach of UK or US sanctions.

1. Application dismissed. The court refused to vary the Interim Payment Order.
2. CPR 25.20(6)(b) confers a discretionary power to adjust, vary or discharge an interim payment order. The power is not unfettered because of finality, the avoidance of repeated applications and the need to preserve the proper appellate process. The principles concerning CPR 3.1(7) provide useful guidance. Variation will ordinarily require a material change of circumstances or a material misstatement of facts material to the original exercise of discretion, although the categories are not exhaustive.
3. The court should consider why the relied-on matter was not raised at the original hearing and whether the application was made promptly. The defendant had been represented during the part of the hearing dealing with sanctions, and the evidence did not establish that the possible effect of sanctions on payment had been overlooked. The defendant also waited until the payment deadline to apply and did not seek licences until later.
4. The making of the order did not itself breach UK or US sanctions. The risk that performance might require a licence was relevant but had no priority over other factors and did not compel variation. The available funds were subject to a Dutch garnishee order, ING would not release them without an OFAC licence, and there was no realistic prospect of payment in breach of US sanctions.
5. The court was not persuaded that payment into a UK account would create a real risk of breach of regulation 11 of the Russia (Sanctions) (EU Exit) Regulations 2019 or section 45 of the Serious Crime Act 2007. The claimants’ assurance that they would not pursue contempt proceedings was sufficient.

This was a first-instance application to vary an interim payment order made by Bryan J on 11 February 2025. The underlying summary judgment and related interim payment issues had been adjourned, but the interim payment application was heard and the order was made.