The Federal Republic of Nigeria v VR Global Partners LP & Ors

There is no presumption that an application for a third-party costs order must be determined before, or in tandem with, detailed assessment. The sequence is a case-management decision governed by the interests of justice and the overriding objective, including proportionate cost and proper allocation of court resources. Relevant considerations include genuine uncertainty about whether further costs are payable, the likely amount, the scope and expense of the third-party application, prejudice from delay, and the needs of other court users. A judge has a wide discretion and may stay the application until assessment, provided the reasons are sufficient to make the decision understood. A short extempore ruling may satisfy the duty to give reasons in a busy interim application.

The Federal Republic of Nigeria succeeded in setting aside arbitration awards obtained by Process & Industrial Developments Ltd and obtained an order for its costs, subject to detailed assessment. The relevant High Court judgment was reported as [2023] EWHC 2638 and [2024] 1 Lloyd’s Rep 1.

Nigeria then applied under section 51 of the Senior Courts Act 1981 and CPR 46.2 for third-party costs orders against companies in the VR Capital group and Richard Deitz, who had funded P&ID’s litigation. The High Court stayed that application, and related disclosure applications, until completion of the detailed assessment. The central issues were whether the judge had given adequate reasons and whether the case-management decision was plainly wrong or perverse.

1. Appeal dismissed. The court unanimously held that the High Court judge acted within his wide case-management discretion in staying the third-party costs application until completion of the detailed assessment.
2. The governing question was whether a stay was in the interests of justice in the particular circumstances. There was no presumption against a stay requiring a powerful reason to displace it. The court applied the overriding objective in the Civil Procedure Rules 1998, including dealing with cases justly and at proportionate cost, active case management, and the powers to determine the order in which issues should be resolved.
3. The judge was entitled to regard it as a live question whether anything further would be payable by P&ID and, if so, how much. The scale and expense of the detailed assessment, the potential scale of the third-party application, the effect of the assessment on disclosure and joinder, and the interests of other court users all supported resolving the assessment first. Assessment was necessary in any event unless quantum was agreed, so the relevant prejudice was only the additional delay in determining the third-party application. That prejudice was addressed by the judge’s intention to proceed rapidly after assessment, with interest accruing in the meantime.
4. Speculation about possible settlement negotiations was irrelevant because the case-management decision had to be made on the assumption that the litigation would proceed. The respondents’ refusal to undertake liability was merely a forensic point, since an accepted liability would make the third-party application unnecessary.
5. The judge’s brief extempore ruling was sufficient. Although fuller reasons would have been preferable, the ruling enabled the parties and the appellate court to understand the decision in its context. The approach in GLAS SAS v European Topsoho Sarl [2025] EWCA Civ 933 supported that conclusion.

Detailed assessment guidance

Lord Justice Males added that, if preliminary issues did not resolve the matter, the costs judge should adopt a firm approach, limit the parties to a reasonable allocation of further court time and, if necessary, use sampling to achieve a fair and proportionate result. Lady Justice Andrews expressly associated herself with that guidance. It was additional guidance rather than a necessary basis for dismissing the appeal.

• Court of Appeal (Civil Division): dismissed the appeal and upheld the stay of the third-party costs and related disclosure applications.
• High Court of Justice, Commercial Court: on 2 October 2025, stayed the applications until completion of the detailed assessment process.