Google LLC & Ors v Nao Tsargrad Media & Ors

These applications arise out of anti-suit injunctions and anti-enforcement injunctions granted by Henshaw J on 22 January this year. In his order, he also made provision for an inquiry as to damages occasioned to the claimants by breach of the various jurisdiction provisions, such inquiry to be referred to a King’s Bench master with ancillary directions for exchange of evidence and a one-day hearing. He also ordered payment of the claimants’ costs on an indemnity basis with an interim payment of US$1.82 million in total. He included a paragraph obliging the defendants to apply to OFSI, the CBI, and OFAC for the relevant licenses permitting payment to be made.

The applications before me today are brought by the claimant (“Google”) for unless orders: (i) debarring the defendants from defending or participating in the inquiry as to damages ordered by Henshaw J; (ii) varying that order to provide for the assessment of costs to be carried out on a summary assessment basis rather than detailed assessment; and (iii) further debarring the defendants from defending or participating in that assessment. They also seek declarations that the defendants are in breach of Henshaw J’s orders, and for an order that the inquiry as to damages be retained in the Commercial Court rather than being transferred to a King’s Bench Master. Neither of those two heads of relief are opposed.

The background to the anti-suit and anti-enforcement injunctions is fully set out in Henshaw J’s judgment and I do not rehearse it here. However, what is relevant is that the defendants have, as they accept, failed to comply with those orders. I am satisfied on the basis of the evidence before me today that that non-compliance is both flagrant and contumacious. Not only have the defendants failed to ensure the withdrawal of the various sets of enforcement proceedings in some nine jurisdictions, albeit those proceedings are only live in seven, but they have taken some positive steps to further the process of enforcement, including as recently as within the last month.

As I say, this non-compliance is not contested or disputed. On the contrary, the defendants accept that the declarations sought by the claimant that they are in breach are appropriate. Nor has any suggestion been made that the non-compliance is justified beyond an early assertion that the defendants were not obliged to comply with the orders pending an appeal. Since that appeal was comprehensively dismissed, no such excuse can be maintained now, even as a fig leaf. Furthermore, the defendants have routinely ignored correspondence when one would have expected at least the courtesy of acknowledgement. By way of example, the claimant’s repeated requests for confirmation that the defendants intend to comply with the anti-enforcement injunction have largely been met with a wall of silence. Requests for updates on the applications to OFSI and OFAC for a licence to permit payment of the costs order have likewise been met with no response.

It is fair to point out that there was no positive obligation on the defendants under Henshaw J’s order to do anything other than advise the claimants of the outcome of those license applications, and it appears that the current position is that they are still ongoing and have not been resolved. However, Mr Stewart-Parker was unable to offer any justification or explanation as to why the defendants could not unbend sufficiently even to tell the claimants that much. This is not the standard of cooperative behaviour that is expected in the Commercial Court, and it is unacceptable.

The inevitable inference that I draw is that the defendants have a settled intention to continue to disregard the injunctions granted by Henshaw J, not only by omission in the sense of failing to take any steps to withdraw the enforcement proceedings, but, as I have indicated above, also by taking positive steps in some jurisdictions to further the enforcement process. That is a flagrant disregard, not only of their contractual obligations, but also of the orders of the court. Litigants who adopt such an attitude cannot expect to be given the benefit of any doubt or accorded any latitude.

Moreover, such conduct gives no confidence that the defendants have any intention to participate meaningfully in any inquiry as to damages or assessment of costs. Mr Stewart-Parker says that there is no evidence that they will not, but he has at the same time scrupulously avoided giving any positive confirmation that they will. All he could say was that the defendants had attended today’s hearing and that evidence in relation to the inquiry as to damages had been filed in April in accordance with Henshaw J’s orders. This is not impressive. I am left to draw the conclusion that the defendants have done the barest minimum and this fuels an entirely legitimate concern on the part of both the claimants and the court that requiring a full-blooded inquiry as to damages and a detailed costs assessment will achieve very little except a significant waste of costs and time for all concerned. I make it clear that this is not a criticism directed at the defendant’s legal advisers who are no doubt acting on instructions. I am, however, quite clear that court’s disapproval should be marked in principle. The question is how.

The claimants do not apply to commit the defendants for contempt, although that would have been a possible course of action. Mr Houseman, on behalf of Google, pointed to a recent trend of seeking alternative orders which might be seen to be less inflammatory than an order for committal: see, for example, Merck KGaA v Merck Sharp and Dohme LLC, [2025] EWCA Civ 343. Thus, Google instead seek unless orders with a debarring sanction attached.

The principles for the grant of a debarring order were unsurprisingly not in dispute. The court has a broad discretion to be exercised in the light of all material circumstances, including, where appropriate, the availability of alternative orders. Debarring orders should usually be attached to an unless order, as is sought here, and it is also necessary to consider the impact on the defendant and whether their Article 6 rights would be unfairly or disproportionately prejudiced.

I bear in mind that, as it seems to me, the claimant’s concern is in fact mainly with expedition, in other words, achieving a quantification of damages and costs with a minimum delay and an additional expense to them. How that is achieved is perhaps of secondary importance.

I should, however, deal with a preliminary point. Mr Houseman invited me, if I was minded in principle to impose the unless orders sought, to proceed immediately to assess costs summarily and to assess damages today, even if only on a contingent basis. As I indicated at the conclusion of argument, I am not prepared to do that. It seems to me to be wrong in principle to impose a debarring sanction, which is contingent, but then proceed immediately to an assessment as if that sanction had already taken effect. Mr Houseman submitted that that was an illusory concern because in fact the defendant was actually present today and could make such submissions as they wished. But, however remote, there is still a theoretical possibility that the defendants might yet comply with Henshaw J’s injunctions, in which case they might have further submissions that they would want to make which they would not have had an opportunity to advance. That seems to me to be unfair and wrong in principle. Even a defendant in contumacious breach is entitled to the application of due process.

I turn then to the two aspects of the relief sought, the first being the inquiry as to damages. In his orders, Henshaw J gave directions for the service of evidence. This has been complied with. The claimant’s evidence is contained in Walker 6; the defendants’ responsive evidence is in Botiuk 4. The defendants take points on the insufficiency of evidence as to the losses claimed – which in fact all relate to legal costs – and the reasonableness and proportionality of the costs claimed. They also complain about the redactions which have been applied to the invoices and bills, which they say make it impossible to assess the reasonableness and proportionality of the costs. (I should say that the claimants make the point that proportionality in fact has no part to play in the assessment of damages for breach of contract, which is effectively what this inquiry.)

In these circumstances, Mr Houseman fairly points out that there is in fact nothing further to do in relation to the inquiries to damages bar the judicial assessment. He submits that Botiuk 4 is before the court in any event and that claimants will have to deal with the points raised as part of discharging their burden of proof. He says that the gravity of the defendants’ conduct in relation to the enforcement proceedings should weigh heavily in the court’s consideration. In response, Mr Stewart-Parker for the defendants submits that the court should not make any debarring order in the absence of a nexus between the defendants’ default and the subject matter of the debarring order. He submits that the defendants’ conduct in relation to enforcement has no connection at all with the inquiry as to damages and that debarring the defendants from participating in the inquiry would do nothing to achieve compliance with the injunction.

I have to say that I do not find this an altogether attractive argument, which seems to me to be tantamount to saying, “I am in such flagrant breach of your order about which I am not going to do anything that there is no point in punishing me.” I accept Mr Houseman’s submission that even without a strict causal nexus, the quality and extent of a defendant’s default can justify an intervention of this nature in order to mark the court’s disapproval and to discourage other litigants from similar disobedience.

Mr Houseman also makes the point that there is in fact a causal nexus between the defendants’ noncompliance and the debarring order. This is because their continuing disobedience means that the enforcement actions are continuing in various jurisdictions and that the claimant is therefore exposed to ongoing costs and the risks associated with a possible adverse outcome to those proceedings. He says that that directly affects the inquiry into damages. Whilst accepting the factual premise of his argument I am doubtful as to whether it takes him much further. Any continuing disobedience to the orders of Henshaw J cannot affect the costs which have already been incurred. The only consequence, it seems to me, would be that any inquiries to damages could only relate to damages as at today’s date, leaving any further damages to be assessed in the future. But in any event, Mr Houseman indicated that those were likely to be at a comparatively low level and that Google might simply take a pragmatic view to let them go in the interests of finality.

Nonetheless, I do regard this as a case where the interests of justice outweigh the lack of any direct nexus such as might otherwise have existed, for example, in the case of a non-payment of a cost order: see Pipia v BGEO Group Ltd, [2022] Costs LR 773 (per Henshaw J). Here, the non-compliance is deliberate and cynical, and that considerably weighs in favour of the court marking its disapproval. Even if imposing a sanction on the inquiry as to damages is unlikely to prompt compliance by the defendants with the anti-enforcement injunctions it does, to my mind, send a worthwhile signal.

Having considered all the submissions from both sides, therefore, I consider that the appropriate order would be to make unless orders as asked and that in default of compliance, the defendants should be debarred from making any further written or oral submissions in relation to the inquiry as to damages and that the matter should be listed for a hearing, whether that be for one day or half a day, on the first available date after the grace period has expired.

I do not consider that orders of this nature involves any infringement of the defendants’ Article 6 rights. Those rights are not in any event absolute. The defendants have adduced no evidence at all to support an argument that they would be unfairly prejudiced and I am not persuaded that they would be. The debarring is not in relation to the substantive relief in this action which has already been determined by Henshaw J’s orders. It only relates to an ancillary matter as to which the defendants have had and have taken the opportunity to adduce evidence. Furthermore, this would not be a question of the court denying access to the defendants. If they were debarred from participation, it would be as a consequence of their own actions in persisting in their non-compliance. They have produced no evidence that compliance with the anti-enforcement injunctions would be impossible or difficult and there is a public interest in sanctioning disobedience, which seems to me to be sufficient to outweigh any lingering concerns about Article 6.

Nor have the defendants been able to point to any satisfactory alternative sanction. Mr Stewart-Parker rather faintly suggested the possibility of a costs sanction, but where the defendants have yet to obtain licences to enable satisfaction of the orders for interim payment made as long ago as January, it seems to me that that is wholly unrealistic. The claimant also has rights under Article 6 and these too are entitled to consideration. For these reasons, I am therefore satisfied that this is the just and proportionate order to make.

As regards retention of the inquiry in the commercial court, both parties have agreed to this and that seems to me sensible.

Turning then to the assessment of costs, what is sought is effectively a variation of Henshaw J’s orders so as to provide for summary assessment rather than detailed assessment. Like Henshaw J in Pipia, I doubt that material change of circumstances is an immutable precondition to obtaining a variation. It seems to me rather that it is a factor to be weighed in the balance, albeit it will be a very significant factor where it applies. Ultimately, however, this is again a question for the discretion of the court taking account of all the circumstances. Moreover, as Mr Houseman pertinently observed in reply, this is not a question of seeking a variation of what Henshaw J ordered – which was payment of costs on an indemnity basis – but rather how that was to be achieved, namely by detailed or summary assessment. To that extent, it is not really a variation of the orders at all, save as to mechanics.

The relevant circumstances here are, again, that the defendants are in contumacious breach of the orders and are continuing to breach them positively. It seems to me that in the light of their conduct to date and their attitude to correspondence, there is no realistic prospect of engagement in the cost assessment process which would justify going to a detailed assessment. The evidence in Walker 9, which has not been challenged, is that were the defendants to participate, a detailed assessment would take some 17 days and even if they did not, it would still take some 10 days. I doubt that those figures have been underestimated but even taking them with a pinch of salt, it seems to me it would be utterly futile to require this exercise to be carried out and would only serve to waste the time and costs of both the parties and the court.

The defendants have had a general idea of the level of the claimants’ costs since January when Henshaw J was satisfied that at least £1.82 million would be recoverable since that was the amount he ordered by way of interim payment. They have had a further updated schedule attached to Walker 9 since mid-August and they have not to date put forward any grounds which would suggest that a detailed assessment is required and that a summary assessment would not be sufficient. The furthest they have gone is to query the proportionality and reasonableness of the costs that the claimants have claimed in their cost schedule for today’s hearing.

Standing back, it seems to me that the fair and proportionate order in each case on this limb of the application should be that unless there is compliance within 14 days with the unless order there should be a summary assessment of costs on the papers, and that the defendants should be permitted to put in written submissions on the latest cost schedule limited to a maximum of 10 pages.

As to declaratory relief, as I have said, there is no objection to this and I am satisfied that it would not be a futile exercise. I take the view that the enforcing courts may well be assisted by a clear statement from the English court that the judgment they are being asked to enforce was obtained in breach of contract and that enforcement is in breach of an English court order.

Finally, there is the question of the application to adduce evidence in Walker 9. As I said during the course of argument, this seemed to me to be rather a storm in a teacup. The statement did three things. It provided a factual update on the status of enforcement in the various jurisdictions; it provided an updated cost schedule which has in fact now been overtaken by a further update; and it also provided what was said to be an update on the defendant’s failure to put in any evidence in opposition to the applications for unless orders. It is questionable whether a witness statement was in fact required for any of these matters at all.

Mr Stewart-Parker submitted that the claimants were effectively trying to sneak in further evidence as to material change of circumstances in support of their application for Pipia relief, and that the costs schedule should in any event have been attached to Walker 8 back in June. I am not particularly impressed by either point. The claimants were entitled to provide an update on the factual position. Indeed, the court may well have asked for one if they had not. There can have been no objection to them stating the position orally and the fact that they gave advance notice by way of witness statement can only have worked in the defendants’ favour. The defendants have in any event had ample time to consider the costs schedule and in view of the order which I intend to make I discern no prejudice there either.

In all those circumstances it seems to me that the appropriate order in relation to Walker 9 is simply to make no order at all.