Bank St Petersburg PJSC & Anor v Arkhangelsky & Ors [2018] EWHC 2817 (Ch)


This case concerns itself with the costs awarded following a lengthy, 6 month Trial concerning the Claimant’s claim on guarantees and the Defendant’s Counter Claim. The Claimant was successful in the main action, with the Counter Claim being dismissed in its entirety. It would normally follow therefore (if costs follow the event) that the Claimant would be awarded their costs at the Defendant’s expense.

However, as (in my view) should be the case, the Judge was required to consider the parties conduct throughout the Claim to determine if a discount to the costs sought should be imposed.

Mr  Justice Hildyard considered the evidence presented before him and came to the conclusion that the Claimant had provided unreliable sworn evidence, which proved nothing but to advance and increase costs and that therefore “some discount is required”. In his Judgement he specifically stated that the “dishonest chorus”, the unreliability of some of the Bank’s evidence which it illustrated, and the further issues to which it gave rise were not only unsettling in themselves: they led to further difficulty in unravelling the true facts, especially in relation to Morskoy Bank (and thus an issue which was of some importance), and provided a readily understandable basis for the Counterclaimants’ general concerns.”

As a direct result of the Judge’s finding, and the agreement between both the Claimant and the Defendant, a broad brush approach was adopted when the issue of discount was considered. The Judge held that the Defendant was to be paid 75% of their costs in the Counterclaim, despite its dismissal, to be assessed on the standard basis, with the Claimant also to have her costs of the main action, paid on the Standard Basis. Clearly this is another case that highlights the fact that parties have to remember that conduct can have a significant impact upon the level of recovery of costs. The Courts have a wide discretion in relation to costs and as such litigators must be alive to this during litigation and consider the impact any potential conduct points may have upon the costs recovery.


Helen Appleby