Alliance Petrochemical Investment (Singapore) Pte Limited v Mazzagatti & Anor

Wednesday, 3 December 2025 Mr Justice Andrew Baker:

1. I refuse permission to appeal, sought by Mr Jahanpour.

2. Taking the points in reverse order, I understand the suggestion that there may in this case prove to be a range of benefits established at trial, where, if the defendants have liability in respect of them, they will be seen to be equivalent to the £3m of profit that in Charter v City Index was conceded as having been retained. However it seems to me that, in this case, that that does not translate into an ability to say at this stage that there is no serious issue to be tried as to the way in which, when the full facts are investigated and findings are made at a trial, the proposition that retained benefit cannot generate a contribution claim will pay out on those facts. I consider that is so for payments currently accepted by the defendants to have been in some way for their direct or indirect benefit when made, bearing in mind that for the most part they were not payments made to them personally; all the more so it is true for other payments.

3. As regards the first point, I agree as a matter of logic that it is not, in the abstract, a necessary consequence of the fact of the illegitimacy of some payment to an individual or company that any given (actual or shadow) director of a company must have appreciated or been reckless as to that illegitimacy. The conclusion that I reached on the facts and circumstances as currently pleaded in this case, though, was specific to those facts and circumstances, and the proper arguability of the proposition, given the nature and basis of the illegitimacy, as alleged, of payments in large amounts that, when made, are alleged to have been payments directly or indirectly in some way to benefit the defendants, that someone in Mr Jahanpour’s position, in control of the claimant companies, if he was, as the defendants allege that he was, must have appreciated or shut his eyes to that obvious illegitimacy.

4. So the judgment that one basis of claim survives against Mr Jahanpour is based upon a set of conclusions that are specific to the facts and circumstances of this case and the way in which claims, or arguable claims, may or may not arise in those particular circumstances. In my judgment there is no realistic prospect of the Court of Appeal interfering with the result that this court has come to under the judgment that I have now handed down. LATER

5. The claimant, API, brings claims against the defendants that are, as far as the court can assess these matters on an application of this kind, brought in good faith on the part effectively of the directors of the claimant who are responsible for the litigation. It is not now said, although it may at one point have been suggested, that the court might say the claimant is pursuing the claim as a nominee for another. Those claims have at least reasonably good prospects of success.

6. It is submitted that this is one of those rare cases, as recognised by, for example, the original leading case of Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420 , at 423 E to F, often applied since, where it can be said, without the sort of detailed enquiry that would turn the security for costs application into some species of mini trial, that there is a very high probability of success. I am not persuaded that the matter can be put that highly.

7. I do see that there are a number of individual points on which it is likely to be the case that the defendants may have to work quite hard to rebut what are said to be certain specific inferences. On the other hand, there are a number of striking features about the case that, as it presently seems to me, are or may well be consistent with the defendants’ basic position that Mr Jahanpour, the first third party, is and was at all material times the relevant party controlling matters, rather than that it was Mr Mazzagatti assisted by his co-defendant, Mr Dixit.

8. So I proceed, for the purposes of considering security for costs, on the basis that API has at least reasonably good prospects of success and, it may be, prospects of success that would deserve a stronger prognosis than that, but it is not a case in which I can say that there is a very high probability of success.

9. There have been various admissions of particular matters of fact by the defendants, but not any material admissions of liability, or that would be sufficient to found liability. There is nothing in the nature of a payment or offer on open terms to resolve the matter. It is said with obvious force that the claimant’s relative want of means – that is in comparison not only to the sums at stake in the litigation, but even as to the sums likely to be involved by way of legal costs in aggregate on both sides – has been brought about, if API is correct in its claims, by the wrongful conduct of the defendants which they allege.

10. However, I do not accept that the application for security is being used or has been pursued in any way oppressively. There is no basis for the suggestion, and Mr Potts did not press it, that an order for an appropriate amount of security, by reference to what the court makes of the estimate of costs put forward on the defendants’ side, would stifle the pursuit of the claim. The application for security was made promptly at an early stage of the proceedings. Even now, a significant gap of time having arisen for other reasons between the issue of the application and its being heard today, we are still some three months or so in advance of a first main CMC in the proceedings.

11. If I therefore have power to order security, there are, in the way I have just indicated, factors that would weigh in the balance on both sides. Taking those factors as, for example, summarised relatively recently in Deleclass Shipping Company Ltd v Ingosstrakh Insurance Company Ltd [2018] EWHC 1149 (Comm) at [20], my overall conclusion, weighing them in that balance, is, by a relatively clear margin, that the greater injustice would be done in this case by the defendants succeeding at trial and finding that the costs entitlement that that success generated in reality could not be satisfied or realised because of the claimant’s want of means, than that of the inconvenience and relevant marginal cost required of the claimant to make whatever will be the arrangements it will make to meet the order for security for costs, if then, at the end of the trial, it prevails such that it could say, looking back, that it never incurred a costs liability that needed to be secured.

12. Considering then whether I do have a discretion to exercise, I am content to proceed, although it is a slightly oddity that the relevant payable of $29m-odd to APT has continued to be recognised in API’s accounts, that that payable is not a real liability that ought to be considered when assessing the claimant’s current and likely future means. But even on that basis one sees a claimant whose financial position, at its most optimistic, is such that it is, on the face of things, liable to run out of its own resources simply by paying its lawyers here and abroad to conduct to completion the litigation that is currently in train, leaving, to put it shortly, nothing there against which successful defendants, after a trial, would be able to enforce what on any view, by then, if they have succeeded, is likely to be a multi-million-pound costs entitlement. In those circumstances, there is without doubt, in my judgment, strong reason to believe that the claimant will be unable to pay the defendants’ costs if ordered to do so at the end of trial, and I adhere to the view I indicated in the course of the submissions by counsel that I am surprised that that was not simply conceded, so plain is it the position.

13. As then to quantum and timing, considering the pattern upon which it is estimated that the defendants will incur the costs they presently estimate may be incurred by the end of trial, it seems to me appropriate to order now a reasonable amount to stand as security for the defendants’ costs incurred, and to be incurred, up to the completion of the case management conference currently listed for dates in March 2026. I shall direct further that, unless agreed, the question of the number of any further tranches of security and the amounts to be provided by way of security for costs to be incurred after the CMC is a matter to be dealt with at that CMC hearing.

14. The broad picture is this, the defendants having used a Precedent H format to provide their current estimated total costs, albeit this is a case in which, unless there is some application made or agreement between the parties, costs budgeting will not apply. Using that format, the defendants’ solicitors estimate a total cost of these proceedings on the defendants’ side of, in round figures, £8m. I find myself considering that that seems at least a touch on the high side, but equally, based on my exposure to this litigation to date through the matters I have been dealing with and the general experience of litigation in this court that one gains on the bench, I consider that, on the defendants’ part, litigating the matter through to completion of a trial for anything less than £5-6m would be very unlikely, and the suggested estimated total of £8m, whilst, as I said, perhaps a touch on the high side, does not strike me as self-evidently excessive, unreasonable or disproportionate.

15. Particular points are made and I do take them into account, similar in kind to the sorts of points that are legitimately made when one is dealing with, say, a summary assessment of costs, or costs budgeting, or payments on account of costs, relating to hourly rates indicated, relating to potentially excessive elements of the estimates here and there, relating to potentially excessive manpower here and there.

16. Taking all of those factors into account and noting that of the £8m-odd total, the estimate is that by the completion of the CMC the defendants will have incurred just under £2.1m, in my judgment the appropriate quantum to order by way of security for the costs incurred to date and to be incurred by the defendants between now and the completion of the CMC is £1.4,m. That will be ordered to be provided by way of payment into court or the provision of such other form of security as may be agreed between the parties, or approved by the court in case of disagreement, any such approval to be dealt with by the court at the request of the claimant as the party to provide security, but to be dealt with without a hearing unless separate request is made for a hearing of that question, and bearing in mind when the CMC has been listed for and where we are now on the calendar, I propose to say that the security is to be provided not later than by 4.00 pm on Friday, 23 January.

17. I say that specifically on the basis that, it seems to me, without needing to consider any question of exactly why as much time has gone by as has gone by now since the application was issued, the fact is we are 3 December, the claimant needs to be given a reasonable period of time to sort out internally how it is going to propose to put up security and, if it is not going to put cash into court, to make its proposals to the defendants to which the defendants can then respond. Obviously if the parties are able to agree matters very quickly, or if in fact the claimant prefers, at least for this first tranche of security, simply to make a payment into court, it can get on and do so more quickly than that if it wishes to do so. But anticipating at least the realistic possibility that there may need to be collaborative correspondence and engagement on the form of security, I think I should recognise the likely intervention of the Christmas period, and ordering that security ultimately is to be provided by that Friday in January allows enough time for that to happen and for the claimant, if necessary, to come back to court on paper in that first week of the new term, week commencing 12 January, for any ruling that may be required on the form in which security is to be provided, which can then be done in time for it to comply with that deadline. LATER

18. In general – and I am grateful to Mr Potts for being realistic as to this – the costs order on the security for costs application should be a costs order in the defendants’ favour as successful applicants where the nature of the dispute was not just a matter of amounts and timing or the like, which I might well have treated as a matter of case management and costs in the case, but was rather a resistance in principle to the idea that costs should properly be ordered, both as a matter even of whether there was jurisdiction to order costs and as to whether, if there was jurisdiction, it should be exercised in favour of ordering the security.

19. That said, I agree both with the submission made by Mr Potts that the application was brought on a much more wide-ranging basis than was realistic and raised a series of matters that were unnecessary for the making good of a straightforward application for security based on the claimant’s likely inability to pay and the absence of stifling, and which individually were bad points liable to increase the costs of the application, and also with the submission of Mr Cathro that there was a degree of the same on the other side, so that what is sauce for the goose is sauce for the gander.

20. The effect of Mr Cathro’s submission, though, is not that therefore there should be full recovery, subject to taxation. It is just that if the costs burden had been the other way round, I would have been likely to say to the claimants, having defeated the application, that they should not recover costs at 100% following detailed assessment.

21. In my judgment, the appropriate recovery in principle is that the defendant should have two-thirds of their costs of the security for costs application assessed by detailed assessment if not agreed. The application of that two-thirds to the just shy of £160,000 suggested costs on the defendants’ side would bring the costs claim down to something around £105,000, by reference to which, in my judgment, it is appropriate to order a payment on account, payable within the next 14 days, of £65,000. ______________