Czech Republic v Diag Human SE & Anor [2023] EWHC 1691 (Comm) (07 July 2023)

Czech Republic v Diag Human SE & Anor [2023] EWHC 1691 (Comm) (07 July 2023)

Security for costs was refused because the Claimant, a sovereign state, provided a formal undertaking to comply with any costs order, and there was insufficient evidence that its assets were unavailable or that it had taken steps to frustrate enforcement. Security for the award was refused because the Defendants failed to show the Claimant's challenge was flimsy or that there was a real risk of dissipation or prejudice to enforcement during the challenge.

Citation
[2023] EWHC 1691 (Comm)
Parties
Claimant: The Czech Republic; First Defendant: Diag Human SE; Second Defendant: Mr Josef Stava
Jurisdiction
England and Wales
Judgment Date
07 July 2023
Procedural Posture
Arbitration Challenge (ss. 67 and 68 Arbitration Act 1996) / Interlocutory Applications for Security for Costs and Security for Award
Outcome
Both applications for security (costs and award) dismissed.
Legal Topics
Security for Costs, Security for Award, Enforcement of Arbitral Awards, Jurisdictional Challenge, Serious Irregularity Challenge
Arbitration Commercial Law Security for Costs Security for Award Enforcement of Arbitral Awards Jurisdictional Challenge Serious Irregularity Challenge

Case Brief

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Parties

The Czech Republic

Claimant

Diag Human SE

First Defendant

Mr Josef Stava

Second Defendant

Procedural Posture

Arbitration Challenge (ss. 67 and 68 Arbitration Act 1996) / Interlocutory Applications for Security for Costs and Security for Award

Legal Issues

  1. 1 Whether security for costs should be ordered under s. 70(6) Arbitration Act 1996
  2. 2 Whether security for the arbitral award should be ordered under s. 70(7) Arbitration Act 1996

Ratio Decidendi

Security for costs was refused because the Claimant, a sovereign state, provided a formal undertaking to comply with any costs order, and there was insufficient evidence that its assets were unavailable or that it had taken steps to frustrate enforcement. Security for the award was refused because the Defendants failed to show the Claimant's challenge was flimsy or that there was a real risk of dissipation or prejudice to enforcement during the challenge.

Court Disposition

Both applications for security (costs and award) dismissed.

Orders

  • Application for security for costs under s. 70(6) Arbitration Act 1996 dismissed.
  • Application for security for the 2022 BIT Award under s. 70(7) Arbitration Act 1996 dismissed.