Natalia Nikolaevna Potanina v Vladimir Olegovich Potanin (No 2) (Costs)

On 4 September 2025, this court handed down judgment on an appeal brought by the Appellant (hereafter the ‘wife’) against the refusal of her application for leave to make an application under Part III of the Matrimonial and Family Proceedings Act 1984. That judgment is published under the neutral citation number: [2025] EWCA Civ 1136.

This short judgment deals with question of costs arising from and related to the appeal.

There is no dispute between the parties that the Respondent (‘husband’) should pay the wife’s costs of the appeal before us on a standard basis to be assessed if not agreed. It is also agreed that a licence needs to be obtained in order for this sum to be paid to the wife given that the husband is a designated person under the Russia (Sanctions) (EU Exit) Regulations 2019.

The parties are not agreed as to the following matters:

For context, it is necessary to reference two previous costs orders made on the appeals within this protracted litigation.

On 13 May 2021, this court made a costs order in the following terms:

“(6)

The Respondent (husband) do pay the Appellant (wife)'s costs of and incidental to this appeal …, with such costs to be the subject of a detailed assessment on the standard basis, unless the quantum of the same can be agreed, and the Respondent do pay to the Appellant the sum of £255,301.20 by 4pm on 20 May 2021 on account of those costs.

(7)

The Respondent do pay the Appellant's costs of and incidental to the Respondent's set aside application, with such costs to be the subject of a detailed assessment on the standard basis, unless the quantum of the same can be agreed, and the Respondent do pay to the Appellant the sum of £236,138.60 by 4pm on 20 May 2021 on account of those costs.”

On 28 March 2024, the Supreme Court made a costs order in these terms:

“1.

The Respondent (wife) pay 50% of the Appellant’s (husband’s) costs of the appeal, subject to a detailed assessment on the standard basis if not agreed, in accordance with the terms of the licence referred to at paragraph 1(a)(i) below, but that the sum shall not become payable by the Respondent to the Appellant, and interest at the applicable judgment rate shall not begin to accrue, until:

a.

90 clear days have elapsed from the later of the following events:

i.

the wife has obtained a licence authorising her to comply with this costs order (for which she shall apply as soon as reasonably practicable);

ii.

the conclusion of the detailed assessment or the date on which the quantum of the costs payable by the Respondent is agreed between the parties; or

iii.

the final determination of the wife’s substantive Part III claim (including, if permission to appeal be granted, the determination of any appeal(s) therefrom).

or

b.

further order”.

The wife contends that the 2021 costs order should remain unaltered. She argues that she comprehensively succeeded in demonstrating in the earlier appeal that Cohen J had not been materially misled by her at a without notice hearing in January 2019; the husband had not challenged this court’s conclusions on that issue on his further appeal to the Supreme Court. The husband had succeeded in his appeal in the Supreme Court on an argument which had not previously been raised.

The husband contends that the 2021 orders should be varied in light of the subsequent decision of the Supreme Court; he accepts that he should be liable for the wife’s costs of Cohen J’s de novo determination of her application for leave and in relation to the case arising under the Maintenance Regulation, but does not agree that he should pay her costs of the set aside aspect of the proceedings and associated appeal. Indeed he suggests that the wife should be ordered to pay his costs of that part. That all said, he proposes as a compromise that he should pay 50% of the costs of the 2021 appeal and 50% of the costs before Cohen J, on the basis that each party has succeeded in their respective appeals. 

In relation to the payment on account, the wife seeks an order for the payment of £350,000, representing c.72% of her total costs. The husband disputes that there should be any payment on account; if a payment on account is to be made, he does not appear to dispute the figure.

The wife invites the court to order that the husband should make payment of the costs award within 14 days of her obtaining a licence for him to transfer the money to her out of Russia. The husbandseeks 90 days; he points to (what he describes as) the “formidable practical difficulties” which are likely to arise given that the funds must be routed through intermediary banks in different jurisdictions and at each stage the relevant compliance requirements must be met. He cites potential delays beyond his control. He further points to the fact that in its costs order of March 2024 (see [1(a)] at §7 above) the Supreme Court allowed 90 days for him to comply with sanctions requirements. The wife counters this by arguing that this time-frame was imposed at that time at her request because of her own personal banking difficulties.

The husband wishes to be able to offset from his liability for costs the amount which the wife was ordered to pay in the Supreme Court.  The wife opposes this on the basis that under the Supreme Court order, she has until the conclusion of the whole proceedings to pay those costs (see [1(a)(iii)] of the Supreme Court costs order at §7 above).

We largely favour the wife’s arguments on the issue of costs. We are persuaded not to disturb the award of costs from this court in 2021; we accept that the fundamental basis on which she had succeeded in her appeal before this court in 2021 was not materially challenged in, let alone disturbed by, the Supreme Court, which decided the husband’s appeal on previously unargued grounds (see [40] of the Supreme Court’s decision: [2024] UKSC 3). Further, standing back from the history of the various appeals, the wife can properly be described as the successful party, as she has been given leave to pursue her financial application and, although the general rule does not apply to an appeal from the Family Division (CPR 44.2(3)(a)), there is no good reason why this should not be the “decisive factor” in this case: Baker v Rowe [2009] EWCA Civ 1162, at [25].

In line with CPR rule 44.2(8) we are satisfied that there is no good reason that the wife should not receive a reasonable sum on account of her costs, and the sum claimed (a little over 70% of the total costs claim per her form N260) is in our view appropriate.

It is not open to us to vary the costs order made by the Supreme Court, and therefore reject the husband’s claim for an ‘offset’ of his costs liability.

As for the time for payment, we take the view that the husband should have 60 days to comply with the costs’ orders following notification that the wife has obtained the relevant licence(s) authorising her to receive funds; 90 days seemed to us to be excessive, but we accept the husband’s contention that 14 days imposes an unrealistic time-frame upon him.

Accordingly the order we make is as follows: