CRF I Limited v Banco Nacional De Cuba & Anor

The Court has to resolve certain matters concerning costs relating to a matter heard by Cockerill J in January/February 2023.

In brief, the Claimant (‘CRF’) brought a claim based on two debt agreements binding on the first Defendant (‘BNC’) and an associated guarantee of the second Defendant (‘Cuba’). CRF was not an original party to either of those debt agreements or the guarantee, but it contended that the debts and the guarantee had been assigned to it by their previous holder.

Each of the two debt agreements contained a clause saying that assignment could only happen with the prior consent of BNC, such consent not to be unreasonably withheld. The guarantee contained an identical provision, save that it was Cuba’s prior consent which was required.

The debts and guarantee contained non-exclusive jurisdiction agreements in favour of the English courts. If the assignments of the debts and guarantee to CRF were valid, CRF had the benefit of those provisions.

On 26 May 2020, BNC and Cuba brought a challenge to the English Court’s jurisdiction. Their position was, broadly, that they had neither given consent to the assignments nor unreasonably withheld their consent to them. If that was right, CRF had not received a valid assignment of either the debts or the guarantee, did not have the benefit of the jurisdiction agreements and, indeed, had no claim at all.

The jurisdiction challenge was heard over 8 days in January / February 2023. Cockerill J handed down judgment on 19 April 2023. In summary, BNC’s jurisdiction challenge failed, but Cuba’s succeeded.

Immediately following the handing down of her judgment, Cockerill J conducted a consequentials hearing. The consequential matters included costs. At that hearing, Cuba’s position was that it should be granted its costs of the jurisdiction challenge, save for those relating to an allegation which the Defendants had made that one of CRF’s employees had bribed an employee of BNC to assist in obtaining consent to the assignments (‘the Bribery allegations’), to be the subject of detailed assessment on the standard basis. In the alternative, it sought 50% of the costs incurred by both BNC and Cuba in the jurisdiction challenge, less the costs of the Bribery allegations. In any event it sought an interim payment on account of somewhat more than £1 million.

CRF’s position was that:

Having heard oral submissions, Cockerill J gave judgment (‘the Consequentials Judgment’). This included the following:

‘[3.] …There is agreement on one thing and that is the costs of the bribery allegations. It is agreed that the bribery allegations, the costs of those, fall to be recovered by CRF on the indemnity basis. Now that does mean that there will be in any event a process of carving certain amounts out of the litigation costs for the purposes of making that approach.

[4.] We then have the question of the fact that CRF has been successful against BNC. Although there were issues which were lost in the course of that, all the main issues were won. Yet at the same time it has lost as against Cuba. Some of the same tangential issues were also lost but there was a determinative loss.

[5.] In relation to BNC, it seems to me that the order in principle should be that CRF is entitled to the costs of the application on the standard basis, to be assessed if not agreed, save as regards the costs of the bribery allegations which are to be on the indemnity basis. So the order in relation to the first application is relatively straightforward.

[6.] In relation to Cuba, one then has the question of how one deals with the costs of an application where Cuba won, but a significant portion of those costs are effectively costs which would have been incurred in the BNC application in any event and where most of those issues are ones which Cuba lost.

[7.] Now in the ordinary course of events, if there were not the separate BNC application, Cuba would have won and would get those costs. However, there are two features of note here. The first is that there is the parallel application and in that application all those issues have been won. The second is the further complicating factor of already being involved in carving out issue-based costs in relation to bribery. With the two things coming together, it seems to me that the more realistic approach on costs in relation to Cuba’s success is to make an order that Cuba recover the costs of the issues on which it was successful.

[8.] That is predominantly what [Counsel for CRF] has called “the 1976 issue” but also, in so far as they arise in relation to the Cuba case, the other more minor issues such as the 2020 request for consent and so forth.

[9.] In relation to 1976, that will cover not simply the expert evidence but any relevant disclosure and witness evidence. It will cover any other Cuba-specific disclosure and evidence. So there will need to be some reference, it seems to me, to the disclosure list of issues and potentially to the main list of issues.

[10.] […]

[11.] We then get to payment on account of costs. This is where the issues on who was to pay really bit at this stage. Since I have now carved down what Cuba is going to be recovering, so Cuba is not recovering the costs of the entirety of the application, so you do not have that question of assignment of the costs of the two issues between the two applications. That will have an impact mathematically in terms of what would be sought which will need to be considered.’

Cockerill J gave effect to her judgment on jurisdiction and her Consequentials Judgment in an order (‘the Judgment Order’). It provided, in part:

‘Costs

6.

The First Defendant shall pay the Claimant’s costs of and occasioned by the First Defendant’s Application, including the Claimant’s Reserved Bribery Costs, such costs to be the subject of detailed assessment on the standard basis if not agreed, save as regards the Claimant’s Reserved Bribery Costs which shall be the subject of detailed assessment on the indemnity basis if not agreed.

7.

The First Defendant shall make an interim payment to the Claimant in the sum of £575,000, on account of the costs ordered under paragraph 6 above…

8.

The Second Defendant is entitled to its costs of and occasioned by the issues specifically raised by the Second Defendant’s Application on which the Second Defendant was successful. Such issues are to be determined at the Case Management Conference to be fixed in accordance with paragraph 12 below.

9.

The Second Defendant is entitled to an interim payment on account of the costs ordered under paragraph 8 above. The amount of such payment is to be determined at the Case Management Conference to be fixed in accordance with paragraph 12 below.

10.

The party by whom or the mechanism by which the costs ordered under paragraph 8 above and the interim payment on account of such costs under paragraph 9 above are to be paid is to be determined at the Case Management Conference to be fixed in accordance with paragraph 12 below. […]

Directions

12.

A Case Management Conference in this matter shall be listed for the first mutually convenient date, with a time estimate of 2 hours (before Cockerill J if possible).’

After this, BNC appealed to the Court of Appeal against Cockerill J’s determination of its jurisdiction challenge. That appeal was dismissed in November 2024. An application for permission to appeal to the Supreme Court was refused on 31 March 2025.

On 18 March 2025 Cockerill J had made an order varying paragraphs 8, 9 and 10 of the Judgment Order, such that the issues identified in those paragraphs were to be addressed, not at the CMC, but at a stand-alone costs hearing. On 6 June 2025, Cockerill J made a further order that, if CRF were to make an application for permission to commence a detailed assessment of its costs against BNC, such application could be decided at the costs hearing. On 17 September 2025, CRF made such an application.

It proved impossible for the costs hearing to be listed before Cockerill J prior to her elevation to the Court of Appeal, and the costs hearing was listed before me on 3 October 2025. There were two applications before the court: Cuba’s application for a payment on account, and CRF’s application for the detailed assessment of its costs of BNC’s application to be commenced forthwith.

The first key issue which arises in this regard is as to what issues fall into the category of ‘issues specifically raised by [Cuba’s] Application on which [Cuba] was successful’ within paragraph 8 of the Judgment Order.

In my view, what was meant by the ‘issues specifically raised by [Cuba’s] Application’ means the issues specific to Cuba’s application; and that an issue which was raised by both Cuba’s and BNC’s applications was not specific to Cuba’s application.

That that should have been the effect of paragraph 8 would be consistent with an intention on Cockerill J’s part not to undermine the order which she made in paragraph 6 of the Judgment Order that CRF should have all the costs of BNC’s application, notwithstanding that there were some issues on which CRF had not prevailed.

I regard this understanding of paragraph 8 as being supported by paragraphs 6-9 and 11 of the Consequentials Judgment. In paragraph 7, what she was saying, as I understand it, is that because in the BNC application, CRF had been successful, and because an exercise of carving out costs of issues was in any event going to take place because of the Bribery allegations, the appropriate course was to make an issues-based order; and that Cuba should be entitled to the costs of those issues on which it was successful, which went outside those issues which it had argued in common with BNC.

In paragraph 8 the judge had identified the most important of those issues, which she called, using the terminology which had been employed by CRF’s counsel, ‘the 1976 issue’ (‘the 1976 Issue’). There is no doubt that those were costs which related only to Cuba’s application. She had then said that they also included ‘in so far as they arise in relation to the Cuba case, the other more minor issues such as the 2020 request for consent and so forth.’ Mr Dudnikov KC says that the reference to the 2020 request is important, because that, he says, was an issue common to both the BNC and Cuba applications and that that shows that Cockerill J intended that common costs should be included in the order in favour of Cuba. I consider, however, that Mr Khurshid KC is correct to say that it is significant that Cockerill J said that costs in relation to the ‘other more minor issues’ would only be Cuba’s ‘in so far as they [arose] in relation to the Cuba case’. That is to say, they would be Cuba’s only insofar as there were additional costs specific to such issues as they arose in relation to Cuba. That is consistent with the judge’s reference in paragraph 9 of the Consequentials Judgment, albeit as regards the 1976 Issue, to ‘Cuba-specific disclosure and evidence’. What she had in mind were costs which were specific to Cuba, rather than overlapping costs which also arose on the BNC application.

This is confirmed by paragraph 11 of the Consequentials Judgment, which says that, in light of the approach she is adopting, ‘you do not have that question of assignment of the costs of the two issues between the two applications’. That shows, to my mind, that the judge considered that there would not be a question of apportioning common costs of the 2020 request issue (or, as I think she meant, any other of the ‘more minor issues’) between the two applications. The only costs she was saying should be Cuba’s were costs specific to Cuba. It was because of that, that the judge considered that she had, as she put to counsel immediately after delivering the Consequentials Judgment, ‘carved a swathe’ through the way in which Cuba had presented its application to her for an interim payment.

As to what issues should be regarded as ‘issues specifically raised by [Cuba’s] application’, I accept the submissions made by Mr Khurshid KC, that these were:

The question then arises as to what level of interim payment is to be ordered. Cuba has not, for the purposes of the current hearing, done an exercise which seeks to strip out Cuba-specific costs in the way in which I consider and have found was intended by Cockerill J’s order.

I reject the suggestion made by CRF that I should therefore make an order for an interim payment of £0. It is clear that there are costs to which Cuba is entitled, and that there should be an interim payment.

It is not easy to make an assessment of what costs are to be assigned to Cuba-specific issues, because the exercise has not yet been properly done. Mr Khurshid KC suggested that it might be a sum in the region of £200,000-£250,000, but contemplated that it might be a sum of £500,000. I considered that it was unlikely to be a sum as low as £200,000-£250,000; and that it was reasonable for present purposes, in the absence of a breakdown of costs by Cuba which reflected the order in its favour, to take the sum of £500,000. That is not to say that Cuba will not be able, once it has performed a proper breakdown, to recover a greater sum, but is the sum which I consider it safe to use for the purposes of the present application.

I will make an order for an interim payment on account of 60% of those costs, namely £300,000.

Mr Khurshid KC did not pursue any suggestion that any payment on account should be ordered to be paid, whether by way of a Sanderson or Bullock order, by BNC.

What he did submit was that a sum of some £375,000 had been ‘set aside from the interim payment that BNC would otherwise have made to CRF’ for the purpose of discharging any costs liability that CRF might have to Cuba, and that the sum which I have ordered should be paid by way of an interim payment should be met by BNC turning over that amount to Cuba.

Mr Dudnikov KC was, however, in my view correct to say that there was no sum of £375,000 which can be regarded as ‘set aside’. All that there is, is the possibility of a further application for an interim payment by BNC, which is a separate entity from Cuba. I do not consider that that possibility gives a good ground for making anything other than a conventional order, that is that CRF shall make the payment of £300,000 as set out above, to Cuba within 21 days of the date of the order herein.

CRF had issued an application seeking permission to commence a detailed assessment of its costs of BNC’s application forthwith. Little was said about that application on behalf of CRF. The Defendants contended that this application should be dismissed because it amounted to an impermissible attempt to revisit paragraph 6 of the Judgment Order, which was a final order; and, in any event was without merit.

Even if I assume that it is open to CRF to invite the revisiting of paragraph 6 of the Judgment Order, I decline to order the immediate detailed assessment of CRF’s costs. The general rule is that the costs of any proceedings are not to be assessed by way of detailed assessment until the conclusion of the proceedings (CPR r. 47.1). There seems to me no good reason why that general position should be disapplied, in circumstances where CRF has already received a substantial payment on account, and where the Judgment Order provides for interest on costs. An immediate detailed assessment would also require the parties to engage in a complex and time-consuming process at the same time as progressing the matter to trial. Accordingly I refuse CRF’s application in this respect.

There will be an order for a payment on account by CRF to Cuba in the amount and on the terms I have identified. The Detailed Assessment application is dismissed.

I trust that the parties will be able to agree an order giving effect to the above decisions.