Put Up or Shut Up: the need for offshore entities to provide security for costs in English litigation

In SARPD Oil International Ltd v Addax Energy SA & Anor [2016] EWCA Civ 120 (03 March 2016), the English Court of Appeal decided that, if an offshore entity is given every opportunity to show that it can pay a defendant’s costs of English litigation and deliberately refuses to do so, there is every reason to believe that, if and when it is required to pay a defendant’s costs, it will then be unable to do so.

The English Court of Appeal said that a practice of the English court that security for costs will often be granted against a foreign company who is not obliged to publish accounts, has no discernible assets and declines to reveal anything about its financial position, is a sound one.

Offshore entities considering litigation in the English Courts should generally be prepared, therefore, to provide security for the likely costs of losing: Put Up or Shut Up.

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