A case update from Eversheds - security for costs against UAE claimant limited to the additional costs of overseas enforcement.

1. Legal Updates from Eversheds’
Lawyer Development Team
B-Brief
Security for costs against UAE claimant limited to
additional costs of overseas enforcement
Sheikh Tahnoon Bin Saeed Bin Shakhboot
Al Nehayan v Kent (aka Joannis Kent)
[2016] EWHC 623 (QB)
1 April 2016
Press To

2. Eversheds LLP | 31/03/2016 |
• Claimant (C) was UAE national, and member of the ruling
family in Abu Dhabi
• C invested money with the defendant (D) for the purpose of
a hotel business and claimed that D had failed to discharge
operational debts and owed further monies under a
Promissory Note, in the order of £18 million
• D defended the action and counterclaimed to obtain release
of certain personal guarantees, and sought declaratory relief
and equitable compensation on grounds of economic duress,
undue influence and/or negligent misrepresentation
• D applied for security for costs in the sum of £1 million, on
grounds that he would face substantial difficulties in
enforcing any costs award against C
Background
Legal Updates from Eversheds’ Lawyer Development Team

3. Eversheds LLP | 31/03/2016 |
• D claimed he would have “serious and substantial difficulty”
enforcing a costs order against C on basis of C’s family status
and position generally regarding enforcement of English
judgments in the UAE as grounds for application
• A 2014 United Nations report highlighting shortcomings in the
UAE justice system which “are serious and negatively affect the
delivery of justice , the enjoyment of human rights and the
public’s confidence in the judiciary” was submitted as evidence
• C accepted that provisions of CPR 25.13(2) were satisfied but
asserted that he had more than sufficient assets to meet any
costs order, and had promptly satisfied two previous costs
orders
• C also relied on B J Crabtree (Insulations) Limited v GPT
Communication Systems Limited (1990) 59 BLR 43 as an
example of security for costs being used to obtain a tactical
advantage rather than obtain protection, where the defendant is
also a counterclaimant
Security for costs application
Legal Updates from Eversheds’ Lawyer Development Team

4. Eversheds LLP | 31/03/2016 |
• Court must not speculate or draw inferences from the
evidence submitted
• D might face considerable difficulties in enforcing costs order
against C but there are not objectively justified grounds to
conclude that it would be impossible
• Rather, D would have to embark on a potentially lengthy and
costly legal process to obtain enforcement in the UAE
• In the circumstances D would be better protected by a
security for costs order tailored to the additional costs which
he would incur in pursuing the matter in the UAE
• Application as drafted did not quantify the additional cost D
might face
• Parties invited to provide written submissions as to whether
such a course could be agreed
The Court’s decision
Legal Updates from Eversheds’ Lawyer Development Team

5. Eversheds LLP | 31/03/2016 |
• Even where the provisions of CPR 25.13 are satisfied, the
court still has a discretion whether to make an order, if it
would be just in all the circumstances of the case
• It is not the job of the court to speculate or make inferences
as to the likelihood of being able to enforce an English
judgment or costs order overseas
• Just because a defendant may face difficulty enforcing
overseas does not mean that it will be impossible to do so –
relief may be granted but limited to the additional cost of
enforcing overseas
• D did not include a claim for the additional cost in his
application so the judge did not make the order – consider
all the possible outcomes when drafting your
application
Learning points
Legal Updates from Eversheds’ Lawyer Development Team

6. WARNING
1. For the purpose of abbreviation and presentation, only
the main aspects of the case have been mentioned
2. This information is for guidance only and should not be
regarded as a substitute for research or taking legal
advice
3. ANOTHER CASE UPDATE FROM EVERSHEDS
Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v
Kent (aka Joannis Kent) [2016] EWHC 623 (QB)
EVERSHEDS LLP 2016. The content and design of this briefing are subject to copyright owned by Eversheds or used
under licence from third party copyright owners. Eversheds LLP is a limited liability partnership.