NoCopyrightSounds Limited v AEI Music Limited & Anor

On an application for an interim payment under the Civil Procedure Rules 1998 r. 25.23(c), the applicant must satisfy the court, on the balance of probabilities, that it would succeed at trial and obtain a substantial monetary judgment. Showing only that recovery is likely is insufficient, although language of likelihood may address the amount sought rather than liability. Once the threshold is met, the court should order payment unless a sufficient specific reason exists. The amount must be no more than a reasonable proportion of the likely final judgment, with counterclaims and set-off taken into account. The court may reject a defence without a mini-trial where, taking the defendant’s factual case at its highest, it cannot defeat the entitlement to payment. A representation that payment need not be immediate was, at most, suspensory.

The claimant held rights in a music and sound-recording catalogue which the defendants were authorised to exploit in return for revenue accounting and payments. After disputes about termination, a High Court judge granted an interim injunction restraining exploitation, but did not determine the defendants’ alternative defences or the sums due.

The claimant later sought interim accounts and a £3 million interim payment. The first defendant agreed to provide interim accounts, leaving whether an interim payment should be ordered. The defendants relied on abuse of process, the interim-payment threshold, disputed factual and legal issues, waiver and estoppel, and the reliability and pleading of the figures. The central issue was whether the claimant would obtain judgment for a substantial amount and, if so, what constituted a reasonable proportion of the likely judgment.

The application was granted. AEI was ordered to make an interim payment of £1.4 million. The interest rate, calculation of interest and other consequential matters were reserved; interim accounts had already been agreed.

1. Earlier order. The application was not an abusive collateral attack. The earlier injunction decision addressed contractual termination and injunctive relief. It left alternative defences, including novation and estoppel, undecided and did not determine the sums due.
2. Threshold. Under the Civil Procedure Rules 1998 r. 25.23(c), the claimant had to establish on the balance of probabilities that it would succeed at trial and obtain a substantial sum. The court applied HMRC v GKN Group [2012] EWCA Civ 57. A merely likely recovery would not satisfy the threshold. Read in context, however, the references to likely recovery in the claimant’s evidence concerned quantification, not the prospect of liability or substantial recovery.
3. Mini-trial and estoppel. The court accepted that an interim-payment application should not become a mini-trial, consistently with El-Demellawy v European Bank for Reconstruction & Development [2015] EWHC 2382 (QB) and Trebor Bassett Holdings Ltd (in liquidation) v ADT Fire and Security plc [2012] EWHC 3365 (TCC). Applying the flexible, fact-dependent approach to estoppel described in ING Bank NV v Ros Roca SA [2012] 1 WLR 472, the court assumed the defendants’ account of the conversations. At most, the alleged representation suspended payment temporarily or allowed a reasonable time to pay. It did not extinguish the obligation or defer payment indefinitely. A formal demand and the proceedings ended any suspension, and no repayment plan or reasonable period had been identified.
4. Amount and discretion. Once the threshold was met, the court should order payment unless there was a sufficient specific reason not to do so. Under rules 25.20(1) and 25.20(2), the payment had to be a reasonable proportion of the likely final judgment and counterclaims and set-off had to be taken into account. Following the policy identified in Dolmon v Rowe [2005] EWCA Civ 715, the court proceeded conservatively. It accepted an acknowledged principal balance of US$6,126,037.43, deducted £3.06 million for the counterclaims, and rounded the balance to approximately £1.4 million. Concerns about repayment did not amount to a good reason to refuse payment.
5. Interest. The applicability of the Late Payment of Commercial Debts (Interest) Act 1998 was left open for trial or further submissions. The court’s preliminary view was that some interest was due in any event and that, if the Act did not apply, two percentage points above base rate might be reasonable.

No appellate history is stated in the judgment. It records that, in January 2026, HHJ Jarman KC, sitting as a High Court judge, granted an interim injunction restraining exploitation until trial or further order.