Read the full judgment text of FACV 5, 6 & 7 of 2010 on BabelCite. This Court of Final Appeal judgment was delivered on 6 January 2012 before Bokhary PJ, Chan PJ, Ribeiro PJ, Mortimer NPJ, Mason NPJ.
Civil procedure – costs – party-and-party basis – costs following the event – state immunity – locus to argue state immunity – enforcement of arbitral award against foreign state – seizure of 'entry fees' payable to Democratic Republic of the Congo under mining/infrastructure agreements – China Railway defendants joined to reach those funds – whether China Railway defendants entitled to be heard on the issue of DRC's state immunity and to recover their costs of doing so – whether any part of China Railway defendants' costs should be disallowed – interlocutory summons of 11 July 2008 – costs orders in the Court of Appeal and security for costs on appeal – preservation of costs orders previously made below – release of security paid into court – matter of costs of interlocutory summons to be raised with taxing master. Facts: The underlying dispute concerned FG Hemisphere Associates LLC's attempt to enforce an arbitral award against the Democratic Republic of the Congo (DRC) by seizing 'entry fees' payable to the DRC under mining/infrastructure agreements. FG Hemisphere joined the China Railway group of companies as defendants in order to reach those funds. The Court of Final Appeal, in its final judgment dated 8 September 2011, determined the substantive state immunity issue in favour of the DRC. This judgment deals with the consequential costs orders. Legal issue / holding: Whether the China Railway defendants' costs should be disallowed on the basis that they lacked locus to argue the state immunity issue. Held: No. The China Railway defendants were made parties by FG Hemisphere precisely to enable seizure of the 'entry fees' payable to the DRC, so they plainly had standing to advance any legal argument – including state immunity – as to why the Court should not permit interference with implementation of those agreements. FG Hemisphere's prior conduct in seeking undifferentiated costs orders against all defendants in the Court of Appeal and in taking security for costs from the China Railway defendants on appeal sat uncomfortably with the argument it now advanced. The China Railway defendants had adopted a moderate approach to incurring costs (junior counsel at first instance and in the Court of Appeal, leading counsel only in this Court), and FG Hemisphere never suggested the Court should not have heard counsel for them. Outcome: FG Hemisphere ordered to pay the costs of the DRC and the China Railway defendants in the Court of Final Appeal and in the Courts below on a party-and-party basis, to be taxed if not agreed, leaving undisturbed the costs orders previously made below. Sums in court standing to the credit of the China Railway defendants, paid in by them as security for costs, directed to be released to their solicitors. The costs of an interlocutory summons dated 11 July 2008 (as to which no order had yet been made) to be raised with the taxing master, if not agreed. The Secretary for Justice did not seek any order for costs.
Legal issues: Whether the China Railway defendants' costs should be disallowed for lacking locus to argue state immunity
Outcome: FG Hemisphere ordered to pay the costs of the DRC and the China Railway defendants in the Court of Final Appeal and in the Courts below on a party-and-party basis; previously undisturbed costs orders below to stand.