Alliance Petrochemical Investment (Singapore) Pte Limited v Mazzagatti & Anor

Permission to appeal may be refused where the first-instance conclusions are fact-specific and there is no realistic prospect of appellate interference. On an application for security for costs, the court should assess the claimant’s prospects, means, the risk that an order may stifle the claim, the likely recoverable costs, and the overall justice of requiring security. A very high probability of success is an exceptional conclusion and should not be reached without a sufficiently clear evidential basis. Where the claimant is likely to be unable to satisfy a substantial costs order and the claim would not be stifled, security may properly be ordered in staged tranches.

The claimant brought substantial claims against the defendants and related Part 20 defendants. The court had previously ruled that one basis of claim against Mr Jahanpour survived and that the claimant’s claims had reasonably good prospects of success. Mr Jahanpour sought permission to appeal. The defendants also sought security for costs, relying on the claimant’s limited means and estimated costs of the litigation. The issues were whether permission should be granted, whether the court had jurisdiction and should exercise its discretion to order security, and, if so, the appropriate amount and timing.

1. Permission to appeal. Permission was refused. The conclusion that Mr Jahanpour’s appreciation or recklessness as to the alleged illegitimacy of payments was properly arguable was specific to the pleaded facts and circumstances. Illegitimacy of a payment does not, as an abstract proposition, necessarily establish that a director appreciated or was reckless as to that illegitimacy. There was no realistic prospect of the Court of Appeal interfering with the result.
2. Security for costs. The claimant’s claims were brought in good faith and had at least reasonably good prospects of success. The court declined to characterise them as having a very high probability of success, in the exceptional sense discussed in Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420. The defendants’ admissions did not amount to material admissions of liability.
3. The claimant’s relative lack of means was alleged to have resulted from the defendants’ wrongdoing, but the application was not oppressive and there was no sufficient basis for concluding that security would stifle the claim. The balance of injustice favoured protecting the defendants against the real risk that a successful costs entitlement could not be enforced.
4. Applying the factors summarised in Deleclass Shipping Company Ltd v Ingosstrakh Insurance Company Ltd [2018] EWHC 1149 (Comm) at [20], the court ordered £1.4 million as security for costs incurred and to be incurred up to completion of the March 2026 case management conference. Further tranches and amounts were left for agreement or determination at that conference.
5. Security was to be provided by payment into court or another agreed or court-approved form by 4.00 pm on 23 January 2026. The defendants were awarded two-thirds of their costs of the security application, with £65,000 payable on account within 14 days.

This was a first-instance decision. The court refused permission to appeal from its earlier judgment in the proceedings and determined the defendants’ security for costs application.