Euroil Ltd v Cameroon Offshore Petroleum Sarl

Following delivery of my extempore judgment ([2014] EWHC 52 (Comm)) in which I set aside the injunction originally granted on 6 January 2014 there was insufficient time to deal fully with the question of costs. As I was due to be sitting out of London for the next six weeks I ordered that the claimant Euroil should pay the defendant Camop’s costs of the application to discharge the injunction, that such costs should be summarily assessed on the standard basis, and that the parties should make written submissions as to quantum, with Euroil making such points as it wished to on the schedule of costs which had been served by Camop, followed by a response from Camop, after which I would assess the costs to be paid.

At that stage Camop had served a schedule of costs for the application totalling £236,651, which compared with a schedule served by Euroil totalling £58,513. As directed, Euroil served its written submissions, but instead of confining these to the quantum of costs for summary assessment, it reiterated its submission that the matter was more suitable for detailed assessment, principally because it was apparent from the Camop schedule that some of the costs claimed related to work which was part of the arbitration process, that other costs represented costs of attending the meetings in Cameroon which could not be regarded as costs of the application to discharge, and that while it was therefore clear that some of the costs claimed would have to be disallowed, there was insufficient information in the schedule to enable the assessment of which costs were attributable to the application to discharge to be carried out with reasonable accuracy. There appeared at first sight to be force in these points. Having done that, Euroil made a series of points as to why it said that the figures claimed by Camop were too high.

In response, Camop has rightly acknowledged the validity of some of the points made by Euroil, explaining that (understandably) its schedule had been prepared in considerable haste, and putting forward a revised schedule showing a total costs figure of £213,932. This led, reasonably enough, to an indication by Euroil’s solicitors that they would wish to have the opportunity to make submissions on the revised schedule before I carried out the assessment which had been envisaged.

It was my intention at the hearing, and I ordered, that Camop’s costs should be summarily assessed, that being in general the appropriate course for a hearing which lasted for a long half day. However, the exchanges to which I have referred and the understandable changes in the costs now sought by Camop have shown that a summary assessment procedure would now be somewhat more protracted than then envisaged. I could hardly refuse Euroil the opportunity to comment on the new schedule which is now put forward by Camop, and it is likely that Camop would then wish to answer whatever criticisms of its new schedule might be made. The benefit of a summary assessment to the parties is precisely that the assessment should be summary, thereby saving costs, even if this results in a more approximate figure than would be obtained on a detailed assessment. However, the current position, with what may become lengthy exchanges of correspondence, seems to me to represent an unsatisfactory half way house between the two procedures.

I am persuaded, therefore, that in this case where the assessment is not altogether straightforward and a substantial costs sum is in issue, the right course is to order that there should after all be a detailed assessment, together with a payment on account in the sum of £120,000 in accordance with Camop’s alternative submission. I am satisfied that this is the minimum figure which Camop will recover and is a reasonable figure to award in accordance with CPR 44.2 (8).

I should also make the following observations for the assistance of the parties and, if necessary, the costs judge who will carry out the detailed assessment:

Finally, Camop seeks an order for an inquiry as to damages on the cross undertaking given by Euroil’s parent company Bowleven Plc. As shown by the recent judgment of Blair J in Malhotra v Malhotra [2014] EWHC 113 (Comm), the question whether to order such an inquiry is not always straightforward. If such an order is to be sought, there should be an application supported by evidence and, in any event, such an application would be better made in what is still a developing situation once it is possible for Camop to give a realistic assessment of what loss, if any, it claims to have suffered as a result of the order.