Post-Judgment Security For Costs – Has The Court Jurisdiction To Grant It?

Security for costs is a key strategic consideration for defendants. It is usually vital in ensuring that a successful defendant is able to recover its costs and discouraging more speculative claims. If a claimant is unwilling or unable to put up such security, the court can refuse to hear their claim.

There has been some controversy about whether the court has jurisdiction to grant security post-judgment. Even if it does, on a practical level, what sanction does the court have to enforce compliance post-judgment?

These issues came before Flaux J recently in the case of Republic of Djibouti and others v Abdourahman Boreh and Others 2016 EWHC 1035 (Comm).

The Republic's Claim Against Mr Boreh

Judgment was handed down in Republic of Djibouti and others v Abdourahman Boreh and Others [2016] EWHC 405 (Comm) on 2 March 2016 following a 10 week trial in the Commercial Court in late 2015. The case came to prominence in March 2015 when Mr Justice Flaux held that he had been deliberately misled by the Republic and its lawyers, Gibson Dunn and Crutcher, when granting a freezing order over Mr Boreh's assets (Abdourahman Boreh and Others v Republic of Djibouti and others [2015] EWHC 769 (Comm)).

The substantive case centred on Mr Boreh's role in the various investments in port development projects in Djibouti. The Republic alleged that Mr Boreh took bribes and abused his position to procure secret payments for himself and his companies. In his judgment Mr Justice Flaux dismissed every one of the Republic's claims, finding in the process that the action had been part of a politically-motivated campaign by the President of Djibouti against Mr Boreh whom he perceived as a political rival.

Security For Costs Provided Before Trial

Before trial, Mr Boreh had been granted approximately £9.3million as security for his costs of the proceedings. As a result of the circumstances of the Defendants' victory:

The Republic agreed that the Defendants' costs should be assessed on the indemnity basis. Interest should be paid on costs from the date of payment of those costs; and A contractual success fee became payable to Mr Boreh's lawyers. These factors meant that there was a significant shortfall between the security provided and Mr Boreh's total costs. Mr Boreh therefore applied for further security to cover the shortfall on the basis that he was likely to recover substantially more than £9.3million. He also applied for security for the costs of the detailed...