Democratic Republic of the Congo and Others v. Fg Hemisphere Associates Llc

FACV Nos 5, 6 & 7 of 2010

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NOS 5, 6 & 7 OF 2010 (CIVIL)

(ON APPEAL FROM CACV NO S 373 OF 2008 AND 43 OF 2009)

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Between:

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JUDGMENT ON COSTS

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Mr Justice Ribeiro PJ:

1.This is the judgment of the Court.  Pursuant to the final judgment dated 8 September 2011,[1] the parties have lodged written submissions as to costs. 

2.The DRC and the China Railway defendants seek orders for costs against FG Hemisphere here and below on the basis that costs should follow the event.  FG Hemisphere does not object to paying such costs subject to a point concerning the China Railway defendants dealt with below.   The Secretary for Justice does not seek any order for costs.   The parties are all agreed that other costs orders made below should remain undisturbed.

3.FG Hemisphere submits that the China Railway defendants unnecessarily involved themselves in arguing the question of state immunity when they had no claim to such immunity themselves; when they had only been joined to secure the “entry fees” payable to the DRC; and when it should have been clear that the state immunity issue would be sufficiently argued by the DRC and by the Intervener.  FG Hemisphere therefore invites the Court to hold that the China Railway defendants lacked locus to be heard on the state immunity issue and to direct that all costs incurred by them in that connexion should be disallowed.

4.We do not consider such an order justified. 

(a) The China Railway defendants were made parties by FG Hemisphere with a view to seizing funds in their hands representing the “entry fees” payable to the DRC under the agreements described in the Court’s provisional judgment.[2]  The China Railway defendants plainly had standing to advance any legal argument – including DRC’s state immunity – as to why the Court should not permit interference with implementation of those agreements. 

(b) When FG Hemisphere succeeded in the Court of Appeal, they sought and obtained costs orders against all the defendants without distinction – a point of some significance since enforcement of a costs order against the DRC would undoubtedly have been problematical.  And when the China Railway defendants sought leave to appeal, FG Hemisphere obtained security for its costs of the appeal.  Its approach hitherto sits uncomfortably with the argument it presently seeks to advance.

(c) It is true that the China Railway defendants could take comfort from the presence of counsel for the DRC and the Secretary for Justice and could expect that the issue would be properly aired.  But they were nonetheless entitled to representation of their own to protect their interests.  They in fact adopted a moderate approach to incurring legal costs. At first instance, junior counsel was only instructed to appear on the third day of the three-day hearing.  In the Court of Appeal, they were represented by junior counsel.  It was only in this Court that leading counsel was briefed.  It was never suggested to us by FG Hemisphere that we should not have heard Counsel for the China Railway defendants.

5.We accordingly do not accept that any part of the China Railway defendants’ costs should be disallowed on the grounds advanced.   We therefore :

(a)     Order FG Hemisphere to pay the costs of the DRC and the China Railway defendants here and in the Courts below on a party-and-party basis to be taxed if not agreed, leaving undisturbed costs orders previously made below; and,

(b)    Direct that the sums in court standing to the credit of the China Railway defendants, paid in by them as security for costs, be released to their solicitors.

6.FG Hemisphere also made submissions regarding an interlocutory summons dated 11 July 2008 taken out by the China Railway defendants where no order as to costs has yet been made.  That is not a matter to be dealt with by this Court and should be raised with the taxing master, if not agreed.

Written submissions by Mr Barrie Barlow SC (instructed by Messrs Orrick, Herrington & Sutcliffe) for the 1st appellant, the Congo

Written submissions by Mr Gerard McCoy SC and Mr Richard Zimmern (instructed by Messrs DLA Piper Hong Kong) for the 2nd to 5th appellants, the CR subsidiaries and the CR parent

Written submissions by Mr Benjamin Yu SC, Ms Teresa Cheng SC and Mr Adrian Lai (instructed by the Department of Justice) for the 6th appellant, the Intervener

Written submissions by Ms Zabrina Lau (instructed by Messrs Sidley Austin) for the respondent, FG