Ziyavudin Magomedov & Ors v TPG Group Holdings (SBS), LP & Ors

When ordering an interim payment on account of costs, the court need not identify the irreducible minimum of the receiving party’s recovery. It should estimate the likely recovery and include an appropriate margin for error. The assessment is necessarily broadbrush and need not be precisely correct, since detailed assessment provides the final determination and any overpayment can be reimbursed.

Earlier estimates may provide a useful cross-check, but an estimate made for security for costs is not a costs budget and cannot determine objectively reasonable costs. The court may consider the complexity, length and significance of the litigation, the party’s role, the costs actually incurred and the basis of assessment.

The judgment concerned consequential matters following the court’s substantive judgment of 17 January 2025 on the defendants’ applications for summary judgment and challenges to jurisdiction. Interim costs orders had been indicated in favour of several successful defendants, but the quantum of those payments and the timing of payment remained unresolved.

Agreements had been reached with some defendants. The remaining dispute concerned payments to TPG, Domidias, Felix, DP World, FESCO, Transneft, Mr Garber and GHP, including whether Felix and Mr Garber and GHP should receive payments and when sums exceeding security held by the claimants’ solicitors should be paid.

1. The court ordered interim payments on account of costs to the remaining successful defendants. The amounts were £1,616,315.52 to TPG, £508,454 to Domidias, £211,283 to Felix, £1,110,000 to DP World, £1,400,000 to FESCO, £1,917,228 to Transneft, and £766,762 jointly to Mr Garber and GHP.
2. The proper approach was to begin with costs actually incurred, consider the May 2024 estimates and the defendant’s role in the litigation and hearing, apply any reduction already determined, and then apply a further percentage reflecting the basis of assessment. The judge used 70% for indemnity costs and 60% for standard-basis costs. The result had to allow a sufficient margin of error.
3. The May 2024 security-for-costs exercise was not costs budgeting. An underestimate or overestimate could not affect the objectively reasonable sum incurred by January 2025. Nevertheless, the estimates provided a rudimentary cross-check. Later developments, additional issues and evidential investigations could properly explain increased costs.
4. The assessment was necessarily broadbrush. Interim payment figures need to be reasonable but need not be precisely correct. Any excessive payment could be addressed on detailed assessment through reimbursement.
5. The claimants’ request for three months was refused. Their evidence concerning the sources and location of litigation funding was vague, second-hand and unsatisfactory. They were allowed a further 21 days from judgment, until 7 March 2025, to make the payments.