QUEEN'S BENCH DIVISION
Fetter Lane, London, EC4A 1NL
B e f o r e :
| (1) QUADRA COMMODITIES S.A.
(2) IFCHOR (SWITZERLAND) SA
(3) AMAGGI S.A.
- and –
|International Bank of St-Petersburg (Joint Stock Company)
David Allen QC and Jason Robinson (instructed by 7KBW) for the Defendant
Hearing dates: 22nd January 2021
Crown Copyright ©
MR JUSTICE JACOBS
"9. Consequently, I do not agree with Dr Gerbutov's key conclusion in his report that the costs award can be paid voluntarily by the defendant without it being recognised by a Russian court (and without regard to various other provisions of Russian bankruptcy law).
10. If the defendant were to pay the costs award without it being recognised in Russia first, the DIA (or its employees) would be exposed to civil, administrative and possible criminal liability."
"Unless and until the Claimants follow the procedures outlined above, the Defendant is not permitted to pay the Costs Award, as a matter of Russian law governing its insolvency proceedings. If the Defendant were to pay the Costs Award in defiance of the requirements of Russian law, the DIA would be exposed to potential civil claims from other creditors of the Defendant and possibly even criminal liability".
Decision in relation to costs
1. It does seem to me that the point on Russian law could have been articulated earlier than it was articulated on 30 November 2020 by Mr Melnikov. To that extent, at least to some extent, the defendant has brought this application upon itself, at least up until the time when the argument was first put forward.
2. I think it is also fair to say that the way in which it was put forward by Mr Melnikov on 30 November 2020 did not go into a significant amount of detail as to the Russian law. It is also reasonable to comment that, although Mr Allen has made case management considerations and put those rightly, in my view, at the forefront of his submissions today, the focus of his skeleton argument was very much on the Russian law issues.
3. All of that said, the position here is that the defendant is the successful party in relation to this aspect of the case, where there has been a separate hearing. The defendant is therefore entitled to be paid at least some costs. I consider that it is appropriate to make some deduction for the fact that the point was not taken in correspondence prior to Mr. Melnikov's statement on 30 November. I think it is also appropriate to take into account the fact that Mr Simonov's witness statement was not served until a very, very late stage. I do not know what costs were incurred at what stage, but I think that the claimants were entitled to a reasonable time, once Mr Melnikov's witness statement had been put in, to consider their position.
4. I will therefore order that the defendant is entitled to its costs on and after 14 December 2020, save for the costs of and relating to Mr Simonov's report. The costs of that report include not just the work on the report itself by Mr Simonov, but any work by the solicitors and counsel related to that. That seems to me to reflect the justice of the case.
5. The costs should be set off against the £100,000 owed, and I am perfectly happy to summarily assess those costs myself at a later stage by reference to submissions in writing, but I think that there is probably good sense in the judge who deals with this in March dealing with any issues of summary assessment. I think the judge will be able to pick up quite quickly what this hearing was all about and work out what costs were and were not reasonable in the light of whatever arguments are put forward as to reasonableness on that occasion.