Commercial Disputes Weekly – Issue 24520 May 2025

ARBITRATION
The Commercial Court has refused an application from one party to an arbitration to prevent a law firm that had acted for its opponent in that arbitration from acting for a different party in a second arbitration involving a sister company of the applicant. The first arbitration was between the applicant A and B. The law firm’s London office acted for B. The second arbitration involved D (a company in the same beneficial ownership as A) and C, represented by the Asia office of the law firm. After a detailed review of the obligation of arbitral confidentiality, the court held that there had been no breach, because some of the information fell outside the duty and other information fell within a relevant exception. The court was also satisfied that there was no realistic possibility of a future breach due to actions taken by the law firm. In the circumstances it was not just and equitable to grant an injunction preventing the law firm from acting.
A Corporation v Firm B and another [2025] EWHC 1092 (Comm), 8 May 2025

SANCTIONS
In a dispute about breaches of aircraft lease agreements, the defendant guarantor was ordered in February 2025 to make interim payments of over US$200 m in respect of its liability under the guarantees. This recent judgment relates to an application by the defendant to vary the interim payment order so that its payment obligations only commence after licences from OFSI or OFAC were obtained as appropriate (the defendant’s ultimate beneficial owner was a designated individual for sanctions purposes). The court decided not to exercise its discretion in favour of varying the order. There was insufficient evidence that the court that made the order overlooked the possible effect of sanctions legislation when making the order, nor was there a material change of circumstances since making the order. Further the defendant waited until the last day for payment before making this application and had not taken any steps to apply for the relevant licences before the day for payment.
Celestial Aviation Trading Ireland Ltd and other companies v Volga-Dnepr Logistics BV [2025] EWHC 1156 (Comm), 13 May 2025

COSTS – LITIGATION FUNDING
The successful defendants of a claim for conspiracy to injure by unlawful means have been awarded a third party costs order against a third party funder. The dispute related to the purchase of a company that owned vintage cars. The court held that the funding agreement coupled with a vehicle sale agreement (at a fraction of the value of the car but with buyback option) was a loan without interest but upon security. The funds were to be used to meet litigation costs. The third party was a co-owner of the litigation and a commercial litigation funder (rather than pure funder) as his fortunes were bound up with those of the claimant. It was appropriate for him to pay a significant proportion of the costs. His contributions caused the defendants to incur costs.
Maranello Rosso Ltd v Lohomij BV and others [2025] EWHC 1112 (Ch), 12 May 2025

ADJUDICATION – ENFORCEMENT
The claimant contractor under a JCT design and build subcontract 2011 obtained an adjudication award holding that the defendant was to pay the sum of £1,551,528. The defendant refused to pay the amount owing and so the claimant sought enforcement. The claimant company was in administration and the defendant therefore applied for security for costs. The court ordered security for costs and weighed up the appropriate level to be awarded. It rejected the claimant’s attempt to stage the security, which may impact the progress of the proceedings and considered the actual issues to be determined in the final proceedings, as well as the likely recoverable costs (rather than likely incurred costs). It also recognised that the amount could be adjusted once the proceedings reach the stage of exchanging cost budgets.
Midas Construction Ltd (in administration) v Harmsworth Pension Funds Trustees Ltd [2025] EWHC 1122 (TCC), 9 May 2025