Excalibur Ventures LLC v Texas Keystone Inc & Ors [2016] EWCA Civ 1144 (18 November 2016)

Excalibur Ventures LLC v Texas Keystone Inc & Ors [2016] EWCA Civ 1144 (18 November 2016)

Commercial litigation funders who fund speculative and opportunistic claims, and stand to benefit substantially, are ordinarily liable for indemnity costs under section 51(3) SCA 1981 when the claim fails, regardless of their personal conduct, and the Arkin cap includes all sums advanced for the litigation,...

Source-derived case information.

Citation
[2016] EWCA Civ 1144
Parties
Claimant: Excalibur Ventures LLC; Defendant/costs Claimant/respondent: Texas Keystone Inc; Defendant/costs Claimant/respondent: Gulf Keystone Petroleum Limited; Defendant/costs Claimant/respondent: Gulf Keystone Petroleum International Limited; Defendant/costs Claimant/respondent: Gulf Keystone Petroleum (UK) Limited; Costs Defendant/appellant: Psari Holdings Limited; Costs Defendant/appellant: Mr Andonis Lemos; Costs Defendant: Blackrobe Capital Partners LLC; Costs Defendant: Blackrobe Aeo 1 Investors LLC; Costs Defendant/appellant: Platinum Partners Value Arbitrage Fund LP; Costs Defendant/appellant: Hamilton Capital LLC; Costs Defendant/appellant: JH Funding LLC; Costs Defendant/appellant: Huron Capital LLC; Costs Defendant: Platinum Partners Credit Opportunities Master Fund LP; Intervener: The Association of Litigation Funders of England & Wales
Jurisdiction
England and Wales
Judgment Date
18 November 2016
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Costs Orders Against Third Party Funders
Outcome
Appeal dismissed; costs orders against funders affirmed.
Legal Topics
Third Party Funding Liability, Indemnity Costs, Section 51 Senior Courts Act 1981, Arkin Cap, Corporate Veil, Security for Costs
Civil Procedure Costs Litigation Funding Third Party Funding Liability Indemnity Costs Section 51 Senior Courts Act 1981 Arkin Cap Corporate Veil +1 more

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Parties

Excalibur Ventures LLC

Claimant

Texas Keystone Inc

Defendant/costs Claimant/respondent

Gulf Keystone Petroleum Limited

Defendant/costs Claimant/respondent

Gulf Keystone Petroleum International Limited

Defendant/costs Claimant/respondent

Gulf Keystone Petroleum (UK) Limited

Defendant/costs Claimant/respondent

Psari Holdings Limited

Costs Defendant/appellant

Mr Andonis Lemos

Costs Defendant/appellant

Blackrobe Capital Partners LLC

Costs Defendant

Blackrobe Aeo 1 Investors LLC

Costs Defendant

Platinum Partners Value Arbitrage Fund LP

Costs Defendant/appellant

Hamilton Capital LLC

Costs Defendant/appellant

JH Funding LLC

Costs Defendant/appellant

Huron Capital LLC

Costs Defendant/appellant

Platinum Partners Credit Opportunities Master Fund LP

Costs Defendant

The Association of Litigation Funders of England & Wales

Intervener

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Costs Orders Against Third Party Funders

Legal Issues

  1. 1 Whether commercial litigation funders should be liable for indemnity costs under section 51(3) SCA 1981 when the funded claim fails and is found to be speculative and opportunistic; whether funds advanced solely for security for costs count towards the Arkin cap; whether parent or associated companies providing funds via subsidiaries can be held liable for costs; whether the corporate veil should be pierced in the context of litigation funding.

Ratio Decidendi

Commercial litigation funders who fund speculative and opportunistic claims, and stand to benefit substantially, are ordinarily liable for indemnity costs under section 51(3) SCA 1981 when the claim fails, regardless of their personal conduct, and the Arkin cap includes all sums advanced for the litigation, including security for costs. The court may look to the economic reality and hold parent or associated companies liable as funders.

Court Disposition

Appeal dismissed; costs orders against funders affirmed.

Orders

  • Funders (including Psari, Mr Lemos, Platinum entities, and associated companies) are jointly and severally liable for Defendants' costs on the indemnity basis, subject to the Arkin cap, including sums advanced for security for costs.
  • No reduction of liability for funders who only provided security for costs; all funding counts towards the Arkin cap.