Soprim Construction SARL v The Republic of Djibouti

Whether a party is a “defendant” entitled to seek security for costs under Civil Procedure Rules 1998, rule 25.26, depends on substance rather than procedural form. There is no rule that an objecting or intervening party is always, or never, a defendant.

The court must assess the proceedings as a whole and consider the nature and target of the claim, the parties, how and why the applicant was joined, its role, and any relief sought by or against it. The fact that a party has a substantial interest in the outcome, or is required to participate in a trial, is not sufficient. Where the applicant is not a defendant, the court has no jurisdiction to order security under rule 25.26.

Soprim sought to make final a charging order over monies held in London bank accounts in the name of Doraleh Container Terminal SA. It alleged that the Republic of Djibouti was the beneficial owner of those monies. DP World Djibouti FZCO, a minority shareholder in Doraleh and a party joined to object to the charging order, applied for security for costs under rule 25.26 of the Civil Procedure Rules 1998.

Soprim accepted that it was resident abroad and impecunious, but disputed the court’s jurisdiction on the basis that DP World was not a “defendant to any claim”. The central issue was whether DP World’s role in resisting the charging order and seeking related relief made it a defendant in substance.

Application dismissed. DP World was not a “defendant” for the purposes of rule 25.26 of the Civil Procedure Rules 1998. The court therefore had no jurisdiction to order security for costs.

1. The inquiry is one of substance rather than form. The formal description of a party is not determinative.
2. There is no general rule that a party joined to proceedings and applying for security can never be a defendant, nor that it must always be one. Joinder because a party’s interests may be affected does not, without more, confer defendant status.
3. The assessment is highly contextual and fact-sensitive. Relevant matters include the nature and purpose of the claim, its target, the other parties, the applicant’s nature, how and why it was joined, its role, and any relief sought by or against it.
4. The notion of being “compelled” to litigate is of limited assistance where the applicant is an interested party which chose to join. It is more useful to ask whether joinder was objectively necessary, viewed in context.
5. The court should generally focus on the status of the applicant itself, rather than infer it from the characterisation of the respondent.
6. Here, the target of Soprim’s claim was the Republic and the disputed assets were said to belong either to the Republic or to Doraleh, not to DP World. Doraleh was already contesting the charging order and could advance the same arguments. DP World’s substantial interest, procedural participation, contractual rights and application to set aside the Enforcement Order did not make its role other than defensive.
7. Alternatively, if jurisdiction had existed, the court would have refused security in its discretion. DP World could have sought payment of its outstanding dividend from the accounts, subject to variation of the freezing order. Its decision not to do so weakened the asserted need to preserve its interest by joining the proceedings. A competing creditor’s objection to enforcement does not, without more, justify security for costs.

not stated in the judgment.