Sheikh Mohammed Omar Kassem Alesayi v Bank Audi S.A.L.

Costs following an appeal concerning disclosure in a Part 11 jurisdiction challenge are determined by substance and reality. Success below and success on appeal are distinct questions, assessed by comparing the relevant starting point with the disclosure orders as they stand after appeal.

The general rule in Civil Procedure Rules 1998, r 44.2 remains subject to a proportionate assessment of partial success, conduct and the issues which occupied the court. A payment on account is ordinarily required where costs are subject to detailed assessment, absent good reason. Interim costs should generally be paid directly and should not be adjusted against disputed foreign bank balances or placed in escrow without reliable evidence justifying that course.

The judgment determined consequential costs issues arising from the court’s substantive appeal judgment, [2025] EWHC 440 (KB). The appeal had reversed or narrowed most disclosure orders made by Master McCloud in the claimant’s Part 11 jurisdiction challenge, while leaving some disclosure in place.

The parties disputed the effect of that outcome on costs below, which party had succeeded on appeal, the appropriate percentage of costs, repayment of sums paid on account, the method of payment, costs of an extension application and costs of the consequentials hearing.

1. The Armstrong costs order was varied rather than set aside. Success had to be assessed by looking at the substance and reality of the proceedings and at the disclosure orders as corrected on appeal. The claimant defeated the defendant’s complete opposition to disclosure and obtained disclosure in two important areas, but failed in most of the 14 areas sought and obtained materially narrower orders. The claimant was therefore awarded 70 per cent of the costs below.

2. Success below and success on appeal were different questions. On appeal, the relevant comparison was between the McCloud order and the orders remaining after appeal. Since most orders had been reversed or substantially narrowed, the defendant substantially succeeded on the crux of the appeal.

3. The defendant’s appeal costs were reduced to reflect its failure on the governing disclosure test and other issues. The defendant was awarded 65 per cent of its appeal costs, subject to detailed assessment on the standard basis.

4. The costs of disclosure undertaken pursuant to orders later set aside were agreed to be subject to detailed assessment. The description of those costs as wasted was not included.

5. The costs award concerned interim or interlocutory matters and should be dealt with on a pay-as-you-go basis. There was no reliable evidence of impending capital controls or of any present illegality in payment. Sums were therefore to be paid directly to the defendant, rather than deducted from Lebanese accounts or held in escrow.

6. Under CPR 44.2(8), payment on account was presumed unless there was good reason otherwise. The claimant was ordered to pay 70 per cent of the defendant’s total appeal costs on account. The second extension application and the consequentials hearing were costs in the jurisdiction application.

• High Court (King’s Bench Division): the substantive appeal was determined in [2025] EWHC 440 (KB), reversing or narrowing most disclosure orders made below.
• High Court (King’s Bench Division): in the present judgment, the consequential costs orders were made as set out above.