Petromec Inc v Petroleo Brasileiro Sa Petrobras: CA 19 Jul 2006

A Mr Efremovich, a third party to the action was ordered to pay the costs of Petrobras and Brasoil which on the failure of its claim against them had been ordered to be paid by Petromec. The judge found that Mr Efromovich controlled the proceedings brought by Petromec, funded those proceedings and would have benefited from them if they had been successful. He therefore thought it right that Mr Efromovich should pay the successful parties their costs, to be assessed, of defending themselves against the unsuccessful claims.
Held: The court rejected three grounds of appeal, (1) there was no evidence to support the judge’s finding that Mr Efromovich controlled the proceedings brought by Petromec, (2) it was a condition of jurisdiction under section 51(3) that Mr Efromovich had funded the proceedings but he had not and (3) in the exercise of his discretion the judge had failed to take into account the fact that the defendant Petrobras had been entitled to and did obtain some security for its costs. Longmore LJ said: ‘although funding took place in most of the reported cases, it is not, in my view, essential, in the sense of being a jurisdictional pre-requisite to the exercise of the court’s discretion. If the evidence is that a respondent (whether director or shareholder or controller of a relevant company) has effectively controlled the proceedings and has sought to derive potential benefit from them, that will be enough to establish the jurisdiction. Whether such jurisdiction should be exercised is, of course, another matter entirely and the extent to which a respondent has, in fact, funded any proceedings may be very relevant to the exercise of discretion.’ and ‘But the fact that in the course of the proceedings a judge (Andrew Smith J in this case) ordered security which, in the event, has turned out to be inadequate should not be any reason for declining to exercise jurisdiction in an otherwise appropriate case. As the judge said in paragraph 43 ‘it is no more unjust to make the backers of an insolvent company liable for the costs than it is to require them to provide security for costs on its behalf’.’

Longmore LJ, Laws and Ward LJJ
[2006] EWCA Civ 1038, [2007] 2 Costs LR 212
Bailii
Supreme Court Act 1981 51(3)
England and Wales
Citing:
See AlsoPetromec Inc v Petroleo Brasileiro S A Petrobras and others ComC 18-Feb-2003
. .
See AlsoPetromec Inc and Petroleo Brasileiro S A Petrobras, Braspetro Oil Services Company v Petromec Inc, Petro-Deep Inc, Maritima Petroleo E Engenharia Ltda QBD 2-Feb-2004
The parties entered into a complex group of inter-related contracts for the purpose of purchasing and upgrading an oil production platform for use by Petrobras in the South Marlim oilfield. At a very early stage it was agreed that the upgrade . .
See AlsoPetromec Inc v Petroleo Brasileiro Sa Petrobras, Braspetro Oil Services Company, Societa Armamento Navi Appoggio Spa, Den Norske Bank Asa CA 17-Feb-2004
. .
See AlsoPetromec Inc v Petroleo Brasileiro SA Petrobrasbraspetro Oil Services etc ComC 20-May-2004
. .
See AlsoPetromec Inc Petro-Deep Inc and others v Petroleo Brasileiro Sa and others CA 15-Jul-2005
. .
See AlsoPetroleo Brasileiro SA and Another v Petromec Inc and others ComC 3-Nov-2005
. .
See AlsoPetromec Inc v Petroleo Brasiliero Sa Petrobras and Another ComC 16-Jun-2006
. .

Cited by:
CitedDolphin Quays Developments Ltd v Mills and others CA 17-May-2007
The owner had agreed to sell a long lease of an apartment to the defendant. Part of the price was to be by way of set off of an existing debt, but ths was not set out in the contract. The claimant bought the land and the benfit of the contract from . .
See AlsoPetromec Inc v Petroleo Brasileiro Sa Petrobras and others ComC 7-Dec-2006
. .
See AlsoPetromec Inc v Petrobras ComC 11-May-2007
Defendant’s application for security for costs. . .
See AlsoPetromec Inc v Etroleo Brasileiro Sa Petrobras and others ComC 6-Jul-2007
. .
See AlsoPetromec Inc v Petroleo Brasileiro SA Petrobras and others CA 21-Dec-2007
. .
See AlsoPetromec Inc v Petroleo Brasileiro Sa Petrobras and others CA 23-Jan-2008
Short order. . .
CitedLingfield Properties (Darlington) Ltd v Padgett Lavender Associates QBD 18-Nov-2008
Application for non-party costs order against litigation funder. The third party denied that he was a person against whom an order could be made, and denied his formal involvement in the companies funding the litigation.
Held: Such an order . .

Lists of cited by and citing cases may be incomplete.

Contract, Costs

Updated: 09 November 2021; Ref: scu.243325