[2025] EWHC 1930 (Comm)

Fecha: 25-Jul-2025

The issues on this application

29.

The Defendants claim jurisdiction for security for costs on two grounds, first, that Cedar Mundi is “resident out of the jurisdiction” for the purposes of CPR 25.27(b)(i); and secondly that, for the purposes of CPR 25.27(b)(ii), Cedar Mundi is a company and “there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so.” (Footnote: ²) It is well established that these grounds operate differently, in that in the case of residence, the amount of security is limited to the extra costs of overcoming obstacles to or burdens of enforcement (see Nasser v United Bank of Kuwait [2002] 1 WLR 1868), whereas in the case of what one might loosely call corporate impecuniosity full security is available. Since full security is sought by the Defendants, the focus of the parties’ submissions is the corporate impecuniosity ground of jurisdiction.

30.

Cedar Mundi accepts that each of these grounds of jurisdiction are satisfied. However, CPR rule 25.27 provides that “the Court may make an order for security for costs if (a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order.” There is, over and above that requirement, a broad residual discretion whether or not to make an order, to be exercised in accordance with the overriding objective.

31.

The dispute before me is confined to whether I should be satisfied that it is just to make the order, and the exercise of the residual discretion. Cedar Mundi says that I should not be so satisfied, or that I should exercise my discretion against the making of an order, for the following reasons:

The Crabtree principle operates in this case as a powerful, but admittedly not an absolute, determinant against security for costs in favour of Cedar II because, in the light of the nature of the claims and counterclaims, and their history, an award of security in favour of the Defendants would amount to giving parties who are in reality claimants security for costs against a defendant. This does not affect the application so far as made by the First to Fourth Defendants, who make no counterclaim. This is “issue 1”.

The “Dumrul undertaking” offered by all the Defendants (in accordance with the decision of Hamblen J in Dumrul v Standard Chartered Bank [2010] EWHC 2625 (at [19])) does not cure the Crabtree objection as it lies against Cedar II. This is “issue 2”

There are additional discretionary factors militating against an award of security for costs in favour of all the Defendants, which is “issue 3”, namely:

the lateness of this application;

ii.

recognition and enforcement against Cedar Mundi in Lebanon is possible;

iii.

any impecuniosity of Cedar Mundi has been caused by the actions of the Defendants;

iv.

as a “responsive point”, it does not assist the Defendants to say that Cedar Mundi’s costs are being funded by the C-331 Shareholders; and

so far as the First to Fourth Defendants are concerned, there is no evidence that they (as opposed to Cedar II) will actually bear any costs.

32.

Cedar Mundi contends, in the alternative, that security should be limited in certain specific respects.