Arkin v Borchard Lines Ltd & Ors No.3 [2003] EWHC 3088 (Comm) (16 December 2003)

Arkin v Borchard Lines Ltd & Ors No.3 [2003] EWHC 3088 (Comm) (16 December 2003)

The court held that, in the absence of exceptional circumstances, the separability of Part 20 proceedings must be maintained and costs should follow the event. Borchard, having joined the Part 20 defendants with knowledge of the claimant's impecuniosity and without co-operation or agreement on cost-sharing, must bear the costs orders in favour of the Part 20 defendants. There is no justification for a cut-through or cost-sharing order in this case.

Citation
[2003] EWHC 3088 (Comm)
Parties
Claimant: Yeshekel Arkin; 1st Defendant: Borchard Lines Limited; 2nd Defendant: Camomile Lines Ltd; 3rd Defendant: Furness Withy (Shipping) Ltd; 4th Defendant: Manchester Lines Ltd; Part 20 Defendant: Zim Israel Navigation Company Ltd; Part 20 Defendant: KNSM; Part 20 Defendant: DNOL; Advocate for 1st and 6th Part 20 Defendant: Berwin Leighton Paisner
Jurisdiction
England and Wales
Judgment Date
16 December 2003
Procedural Posture
Commercial Court Litigation With Part 20 Proceedings (third Party Claims) / Post Trial Costs Ruling
Outcome
Orders for costs in favour of Part 20 defendants against Borchard; Borchard entitled to add those costs to its costs recoverable from Mr Arkin.
Legal Topics
Costs Orders, Part 20 Proceedings, Joinder of Parties, Impecuniosity of Claimant, Contribution and Indemnity, Competition Law (articles 81 and 82 Rome Treaty)
Civil Procedure Competition Law Costs Orders Part 20 Proceedings Joinder of Parties Impecuniosity of Claimant Contribution and Indemnity Competition Law (articles 81 and 82 Rome Treaty)

Case Brief

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Parties

Yeshekel Arkin

Claimant

Borchard Lines Limited

1st Defendant

Camomile Lines Ltd

2nd Defendant

Furness Withy (Shipping) Ltd

3rd Defendant

Manchester Lines Ltd

4th Defendant

Zim Israel Navigation Company Ltd

Part 20 Defendant

KNSM

Part 20 Defendant

DNOL

Part 20 Defendant

Berwin Leighton Paisner

Advocate for 1st and 6th Part 20 Defendant

Procedural Posture

Commercial Court Litigation With Part 20 Proceedings (third Party Claims) / Post Trial Costs Ruling

Legal Issues

  1. 1 Whether Borchard should bear the costs of Part 20 defendants (Zim, KNSM, DNOL) given the claimant's impecuniosity
  2. 2 Whether a cut-through (Sanderson) order or cost-sharing order is appropriate in Part 20 proceedings where the main action claimant is insolvent
  3. 3 Whether the separability principle of Part 20 proceedings should be departed from in exceptional circumstances

Ratio Decidendi

The court held that, in the absence of exceptional circumstances, the separability of Part 20 proceedings must be maintained and costs should follow the event. Borchard, having joined the Part 20 defendants with knowledge of the claimant's impecuniosity and without co-operation or agreement on cost-sharing, must bear the costs orders in favour of the Part 20 defendants. There is no justification for a cut-through or cost-sharing order in this case.

Court Disposition

Orders for costs in favour of Part 20 defendants against Borchard; Borchard entitled to add those costs to its costs recoverable from Mr Arkin.

Orders

  • Zim entitled to recover 90% of its costs from Borchard.
  • KNSM and DNOL (DAC Part 20 defendants) entitled to recover 80% of their costs from Borchard.