“71. There was an agreement or understanding (express or implied) between the Republic (acting through the President) and DCT (acting in its own right or by its administrator or liquidator) that DCT would hold the SCB Amount on behalf of the Republic (the Agreement/Understanding). 72. The Agreement/Understanding was entered into in or around late 2018, alternatively in or around December 2023, and can be inferred from: 72.1. The President’s control over Djibouti in general and all matters relating to the operation of the Terminal… 72.2. …the facts that (i) the President passed decrees transferring ownership of DCT’s assets to SGTD and the Djiboutian state; (ii) the President passed a decree transferring PDSA’s shareholding in DCT to the state; (iii) the President procured the Djiboutian Courts to make an order transferring all powers formerly held by DCT’s board to Ms Tadoral, who has thereafter acted at his behest; and (iv) the President procured the Djibouti Courts to make an order appointing Mr Youssouf as liquidator of DCT, who has thereafter acted at his behest. 72.3. The failure of DCT to apply since 2017…to demonstrate its separate legal existence. 72.4. Ms Tadoral’s failure to take any steps to enforce DCT’s substantial awards (totalling over US$474 million in damages and legal costs) against the Republic… 72.5. Ms Tadoral’s steps to prevent enforcement of those awards by arguing Quinn Emanuel did not have authority to represent DCT in the D.C. Proceedings. 72.6. Mr Youssouf’s statement that he intends to attempt “to repatriat[e] the funds held” by SCB (via letter to DPWD dated13 May 2025 ). By this statement, Mr Youssouff meant that he wished to return the funds held in the SCB Accounts to Djibouti so that they could be dealt with in accordance with the President’s instructions; and/or 72.7. Mr Youssouf’s repetition of his stated intention of repatriating the SCB Amount in a letter dated25 May 2025 including that he had also communicated this to SCB. 73. In the premises: 73.1. DCT holds the SCB Accounts on bare trust or as nominee for the Republic because the Republic has the right to call for the SCB Account, and DCT (via its administrator or liquidator) would comply with that request; and/or 73.2. The Republic has de facto control over DCT to such a degree that DCT does not have any discretion as to what it does with the SCB Accounts.” 72.1. The President’s control over Djibouti in general and all matters relating to the operation of the Terminal… 72.2. …the facts that (i) the President passed decrees transferring ownership of DCT’s assets to SGTD and the Djiboutian state; (ii) the President passed a decree transferring PDSA’s shareholding in DCT to the state; (iii) the President procured the Djiboutian Courts to make an order transferring all powers formerly held by DCT’s board to Ms Tadoral, who has thereafter acted at his behest; and (iv) the President procured the Djibouti Courts to make an order appointing Mr Youssouf as liquidator of DCT, who has thereafter acted at his behest. 72.3. The failure of DCT to apply since 2017…to demonstrate its separate legal existence. 72.4. Ms Tadoral’s failure to take any steps to enforce DCT’s substantial awards (totalling over US$474 million in damages and legal costs) against the Republic… 72.5. Ms Tadoral’s steps to prevent enforcement of those awards by arguing Quinn Emanuel did not have authority to represent DCT in the D.C. Proceedings. 72.6. Mr Youssouf’s statement that he intends to attempt “to repatriat[e] the funds held” by SCB (via letter to DPWD dated13 May 2025 ). By this statement, Mr Youssouff meant that he wished to return the funds held in the SCB Accounts to Djibouti so that they could be dealt with in accordance with the President’s instructions; and/or 72.7. Mr Youssouf’s repetition of his stated intention of repatriating the SCB Amount in a letter dated25 May 2025 including that he had also communicated this to SCB. 73.1. DCT holds the SCB Accounts on bare trust or as nominee for the Republic because the Republic has the right to call for the SCB Account, and DCT (via its administrator or liquidator) would comply with that request; and/or 73.2. The Republic has de facto control over DCT to such a degree that DCT does not have any discretion as to what it does with the SCB Accounts.”
“If a third party is given leave to defend the action alone, plainly he then becomes in the position of a defendant in the action. If he is given leave to defend jointly with the defendant, in my view, he would also become a defendant. In such circumstances, I have no doubt that it would be open to him to apply for security for costs. But when he applied for directions that he should be given leave to defend the action, the plaintiff would be entitled to be heard and might be able to persuade the judge that no such direction should be given. In the present case no such order has been made, and this court cannot know whether any application for such an order will be made much less whether any such application would be successful.”
“Policy considerations support the same conclusion. The purpose of the jurisdiction to order security for costs is to prevent the injustice which would result if a plaintiff who was in effect immune from orders for costs were free to litigate at the defendant’s expense even if unsuccessful. Such an order can be made only against a plaintiff; it cannot be made against a defendant. That is because a plaintiff institutes proceedings voluntarily. If he chooses to bring proceedings against an insolvent company with limited liability, he does so with his eyes open; he takes the risk that he may not recover his costs even if successful, but it is his own decision to take that risk. The defendant, however, has no choice in the matter. He is compelled to litigate or submit to the plaintiff’s demands. He must be allowed to defend himself without being subjected to the embarrassment of having to provide security for the plaintiff’s costs. This involves being free to take whatever steps and make whatever applications are necessary in order to enable him to defend the proceedings. “It has long been firmly established by authority that the court cannot award security for costs against a defendant, and that in considering whether a party is a plaintiff or a defendant the court must have regard to the substantial and not the nominal position of the parties. The question in every case is whether the party against whom an order for security is sought is in the position of plaintiff in the proceeding in question…. If attention is concentrated on the defendant’s application to enforce the plaintiff’s cross-undertaking in damages, the defendant certainly has the appearance of a plaintiff. It claims that it has suffered loss for which the plaintiff is responsible and it seeks compensation for that loss. If the plaintiff recognises that it is likely to be ordered to pay something, though not as much as the defendant claims, it can protect its position by making a payment into court. It certainly looks like a defendant. But…it is necessary to consider the whole litigation between the parties in order to determine which of them is really in the position of a plaintiff and which a defendant. If the proceedings are considered as a whole, then it is apparent that the parties have never exchanged roles, and that the defendant has done nothing to justify being treated as a plaintiff. It was the plaintiff which chose to bring the proceedings and take the risk of failing to recover its costs even if successful. It was the plaintiff which chose to apply for interlocutory relief and to offer the court a cross-undertaking in damages as the price of obtaining such relief. It must have known that the injunction which it obtained might cause the defendant loss, that it might subsequently be established that the injunction should not have been granted, and that the defendant might seek to recover its loss by applying to enforce the cross-undertaking. It must have known that, if it chose to resist such an application, it might incur further irrecoverable costs. It did not qualify its cross-undertaking by making its enforcement conditional on the defendant providing security for costs. Had it attempted to do so, its cross-undertaking would have been rejected and its application for an injunction refused. Having offered the court an unqualified cross-undertaking, it now seeks to protect itself against a situation which it must have been able to foresee. That it should succeed is not an attractive proposition. As for the defendant, it has had no choice in the matter. It has done nothing beyond reacting to the steps which the plaintiff has taken against it. The plaintiff brought the proceedings; the defendant has been compelled to defend them. The plaintiff obtained an injunction against it which the defendant claims ought not to have been granted; the defendant has obtained its discharge. The defendant claims that the existence of the injunction caused it loss; it seeks to recover the loss. It seeks only to be restored, so far as compensation can achieve it, to the position it was in before the proceedings began. The defendant must counter-attack to recover ground lost by an earlier defeat, but it makes no territorial claim of its own; it cannot fairly be described as an aggressor. Although the defendant is claiming monetary compensation for loss which it alleges it has sustained as a result of the injunction, it has no independent cause of action to recover such loss. It cannot bring separate proceedings, whether by writ or counterclaim in the existing proceedings. Its claim arises out of and is wholly dependent upon the plaintiff’s cross-undertaking. Its only remedy is to enforce the cross-undertaking by applying under the liberty to apply in the proceedings in which the cross-undertaking was given.”
“The applications in the present case were originating applications falling within the expressions I have just quoted. They brought before the court issues which were not previously before the court, and which would not otherwise have been before the court; and, although brought in the context of a winding up ordered by, and under the ultimate supervision of, the court, these applications were essentially free-standing… The winding up proceedings merely provided the forensic framework in which the applications were made, or the procedural launch pad from which the applications were issued.”
“… The application to set aside the recognition order is part and parcel of the proceedings or claim that was commenced by Mr Nogotkov when he applied for the recognition order. The set-aside application cannot be regarded as free-standing, entirely separate from the order which it seeks to challenge. Whether or not the Hermitage parties were defendants to Mr Nogotkov’s claim or proceeding at the moment it was initiated, they have certainly become defendants now that they challenge the making of the recognition order. They should not be deprived of the status of defendants for the purposes of the security for costs jurisdiction by the fact that Mr Nogotkov failed to mention what he knew about the troubled history of DSL at the ex parte hearing before the registrar. Mr Nogotkov must have realised that a subsequent application under section 236 against the Hermitage parties would be stoutly resisted, rightly or wrongly, on the grounds on which they now rely.”
“…it has not been considered in my clients’ interest to apply to vary or discharge the WFO while proceedings elsewhere are ongoing against the Republic and PDSA. From DPW’s perspective, the WFO protects the SCB Amount from being accessed by the Republic and its affiliates. In other words, DPW has remained content in the knowledge that DCT was in funds to pay DPW’s share of the 2017 dividend when convenient.”
“Soprim should not be allowed to steal a march on other victims of the Republic’s conduct as it is seeking to do by keeping the US$39m for itself and further undermine DPW’s efforts to enforce its rights under and in relation to the joint venture.”