Xtellus Capital Partners Inc v DL Invest Group PM S.A.

Interest on a judgment debt is compensatory. Where the judgment is expressed in a foreign currency, the court may adopt a broad-brush borrowing-cost measure in that currency rather than investigate the claimant’s actual use of the money or its actual loss. The same principle applies to post-judgment interest, although the rate should reflect the period for which payment is delayed.

Indemnity costs require conduct or circumstances taking the case outside the norm of ordinary and reasonable litigation. A thin, far-fetched or constantly changing case, particularly one irreconcilable with contemporaneous documents, may justify indemnity costs. Once indemnity costs are ordered, the court may depart from the approved budget without needing the standard-basis requirement of good reason.

The judgment concerned consequential matters following judgment for the claimant in a contractual claim for success fees. The claimant had obtained judgment for €1,792,247.93 in respect of two financing facilities.

The court determined when the success fees became due, the appropriate rates of pre- and post-judgment interest, the effect of currency fluctuations, the basis of costs assessment, a proposed costs-budget variation, interest on costs, and a payment on account of costs.

1. Due dates. Clause 4 of the Mandate was ambiguous as to when the success fee became due. Applying the interpretation most consistent with business common sense, the fee fell due when each facility agreement was entered into. The first fee was nevertheless treated as due on 3 October 2022 because the invoice amounted to a waiver of the claimant’s strict contractual rights. The second fee fell due on 23 May 2023.
2. Pre-judgment interest. The court adopted a broad-brush approach, applying Euribor plus one percentage point. A weighted average of historic 12-month Euribor rates better reflected the compensatory principle than the forward-looking rate proposed by the defendant. The rate was fixed at 4.24 per cent.
3. Currency fluctuations. The court rejected the argument that exchange-rate movements eliminated the claimant’s loss. The appropriate fiction was that the claimant would borrow the judgment sum in the currency in which it was payable. The court would not investigate what the claimant actually did with the money or speculate about its actual loss.
4. Post-judgment interest. The inquiry was forward-looking and concerned the cost of borrowing the judgment sum in broadly comparable circumstances. A rate of 3.05 per cent was appropriate. An 8 per cent rate would overcompensate the claimant.
5. Indemnity costs. The defendant’s conduct was well outside ordinary and reasonable litigation conduct. Its case was thin and far-fetched, its evidence was in significant respects unsupported or patently false, and it advanced a changing case during the litigation. That conduct justified indemnity costs across the whole assessment, rather than only for particular phases. The breach of Civil Procedure Rules 1998 CPR 57A was serious but was given no particular weight.
6. Budget and costs orders. CPR 3.18 did not apply on an indemnity assessment, although the budget remained potentially relevant under CPR 44.4(3)(h). The court declined to determine the variation application. Interest on costs was awarded at Bank of England base rate plus one percentage point. The defendant was ordered to pay £700,000 on account of costs, together with £36,750 interest.

This was a consequential first-instance judgment following the court’s substantive judgment handed down on 28 July 2025 in the same proceedings.