VTB Commodities Trading DAC v JSC Antipinsky Refinery [2022] EWHC 2795 (Comm) (04 November 2022)

VTB Commodities Trading DAC v JSC Antipinsky Refinery [2022] EWHC 2795 (Comm) (04 November 2022)

Security for costs was refused because VTB, in resisting Petraco's claim under the cross-undertaking in damages, was not in the position of a claimant for security for costs purposes, and the usual sanction for non-provision (striking out the defence and counterclaim) would unduly prejudice VTB's ability to resist enforcement. The trial was adjourned due to VTB's inability to pay legal fees or progress the case as a result of sanctions, and the OFSI General Licence did not enable payment of the necessary legal costs. VTB was ordered to make a contingent application to OFSI for a licence to pay any future adverse costs liability.

Citation
[2022] EWHC 2795 (Comm)
Parties
Claimant/arbitration Claimant: VTB Commodities Trading DAC; Defendant/arbitration Respondent: JSC Antipinsky Refinery; Intervener: Petraco Oil Company SA
Jurisdiction
England and Wales
Judgment Date
04 November 2022
Procedural Posture
Commercial Court Proceedings (with Arbitration Context) / Interlocutory Applications and Case Management Before Trial
Outcome
Security for costs refused; trial adjourned; VTB ordered to progress RFI and disclosure and to apply for OFSI licence for adverse costs.
Legal Topics
Security for Costs, Sanctions and Licensing, Case Management, Cross Undertaking in Damages, Representation of Sanctioned Entities
Commercial Law Sanctions Law Civil Procedure Security for Costs Sanctions and Licensing Case Management Cross Undertaking in Damages Representation of Sanctioned Entities

Case Brief

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Parties

VTB Commodities Trading DAC

Claimant/arbitration Claimant

JSC Antipinsky Refinery

Defendant/arbitration Respondent

Petraco Oil Company SA

Intervener

Procedural Posture

Commercial Court Proceedings (with Arbitration Context) / Interlocutory Applications and Case Management Before Trial

Legal Issues

  1. 1 Whether security for costs should be ordered against VTB in favour of Petraco in the context of sanctions and the nature of the claim/counterclaim
  2. 2 Whether the trial date should be maintained or adjourned due to VTB's inability to pay legal fees as a result of sanctions
  3. 3 Whether VTB should be compelled to respond to a Request for Further Information (RFI) and progress disclosure despite sanctions

Ratio Decidendi

Security for costs was refused because VTB, in resisting Petraco's claim under the cross-undertaking in damages, was not in the position of a claimant for security for costs purposes, and the usual sanction for non-provision (striking out the defence and counterclaim) would unduly prejudice VTB's ability to resist enforcement. The trial was adjourned due to VTB's inability to pay legal fees or progress the case as a result of sanctions, and the OFSI General Licence did not enable payment of the necessary legal costs. VTB was ordered to make a contingent application to OFSI for a licence to pay any future adverse costs liability.

Court Disposition

Security for costs refused; trial adjourned; VTB ordered to progress RFI and disclosure and to apply for OFSI licence for adverse costs.

Orders

  • Security for costs application by Petraco refused.
  • Cargo Trial adjourned to November 2023.