Excalibur Ventures LLC v Texas Keystone Inc & Ors (Rev 2)

Excalibur Ventures LLC v Texas Keystone Inc & Ors (Rev 2)

Non-party funders who finance speculative and opportunistic litigation for their own benefit, whether by funding litigation expenses or security for costs, are liable for indemnity costs to the extent of their funding (the Arkin cap), including parent entities where they are the economic reality behind the funding. Liability is joint and several, apportioned by the timing and amount of funding, and applies to costs incurred after each funder's involvement.

Parties
Claimant: Excalibur Ventures LLC; Defendant/costs Claimant: Texas Keystone Inc.; Defendant/costs Claimant: Gulf Keystone Petroleum Limited; Defendant/costs Claimant: Gulf Keystone Petroleum International Limited; Defendant/costs Claimant: Gulf Keystone Petroleum (UK) Limited; Costs Defendant: Psari Holdings Limited; Costs Defendant: Mr Andonis Lemos; Costs Defendant: Blackrobe Capital Partners LLC; Costs Defendant: Blackrobe AEO I Investors LLC; Costs Defendant: Platinum Partners Value Arbitrage Fund LP; Costs Defendant: Hamilton Capital LLC; Costs Defendant: JH Funding LLC; Costs Defendant: Huron Capital LLC; Costs Defendant: Platinum Partners Credit Opportunities Master Fund LP
Jurisdiction
England and Wales
Judgment Date
23 October 2014
Procedural Posture
Commercial/costs Ruling / Post Trial Costs Determination
Outcome
Non-party funders held jointly and severally liable for indemnity costs, subject to the Arkin cap and timing of their funding.
Legal Topics
Non Party Costs Orders, Indemnity Costs, Litigation Funding Liability, Arkin Cap, Section 51 Senior Courts Act 1981
Civil Procedure Costs Litigation Funding Non Party Costs Orders Indemnity Costs Litigation Funding Liability Arkin Cap Section 51 Senior Courts Act 1981

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Parties

Excalibur Ventures LLC

Claimant

Texas Keystone Inc.

Defendant/costs Claimant

Gulf Keystone Petroleum Limited

Defendant/costs Claimant

Gulf Keystone Petroleum International Limited

Defendant/costs Claimant

Gulf Keystone Petroleum (UK) Limited

Defendant/costs Claimant

Psari Holdings Limited

Costs Defendant

Mr Andonis Lemos

Costs Defendant

Blackrobe Capital Partners LLC

Costs Defendant

Blackrobe AEO I Investors LLC

Costs Defendant

Platinum Partners Value Arbitrage Fund LP

Costs Defendant

Hamilton Capital LLC

Costs Defendant

JH Funding LLC

Costs Defendant

Huron Capital LLC

Costs Defendant

Platinum Partners Credit Opportunities Master Fund LP

Costs Defendant

Procedural Posture

Commercial/costs Ruling / Post Trial Costs Determination

Legal Issues

  1. 1 Should non-party funders be held liable for indemnity costs?
  2. 2 How should the Arkin cap be applied to litigation funders?
  3. 3 Are funders liable for costs relating to security for costs as well as litigation expenses?

Ratio Decidendi

Non-party funders who finance speculative and opportunistic litigation for their own benefit, whether by funding litigation expenses or security for costs, are liable for indemnity costs to the extent of their funding (the Arkin cap), including parent entities where they are the economic reality behind the funding. Liability is joint and several, apportioned by the timing and amount of funding, and applies to costs incurred after each funder's involvement.

Court Disposition

Non-party funders held jointly and severally liable for indemnity costs, subject to the Arkin cap and timing of their funding.

Orders

  • Psari Holdings Limited and Mr Andonis Lemos jointly and severally liable for indemnity costs up to £13.75 million.
  • Hamilton Capital LLC and Platinum Partners Credit Opportunities Master Fund LP jointly and severally liable for indemnity costs incurred on or after 30 March 2012 up to £7 million.