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2026 IECA 88

Approved No redactions required THE COURT OF APPEAL CIVIL Appeal Number: 2022/139 Neutral Citation: [2026] IECA 88 Collins J. Binchy J. Butler J. TRAFALGAR DEVELOPMENTS LIMITED, INSTANTANIA HOLDINGS LIMITED, KAMARA LIMITED AND BAIRIKI INCORPORATED Plaintiffs/Respondents AND DMITRY MAZEPIN, OJSC UNITED CHEMICAL COMPANY URALCHEM, URALCHEM HOLDING PLC, EUROTOAZ LIMITED, ANDREY GENNADYEVICH BABICHEV, YULIA BOLOTNIKOVA, BELPORT INVESTMENTS LIMITED, MILKO EMILOV MINKOVSKI, ANDROULA CHARILAOU, DMITRY KONYAEV AND YEVGENIY YAKOVLEVICH SEDYKIN AND BY ORDER JSC KHIMAKTIVINVEST AND AKTUM LIMITED LIABILITY COMPANY Defendants/Appellants RULING of the Court delivered on 14 May 2026 Page 1 of 34 (Costs and Final Orders) PRELIMINARY

  1. The Court gave judgment on this appeal on 19 December 2025 ([2019] IECA 280) (“the Principal Judgment”). This Ruling should be read together with the Principal Judgment and the parties are referred to in the manner set out in that judgment. Abbreviations used in the Principal Judgment are maintained here.
  2. For the reasons set out in the Principal Judgment, the Court allowed the appeal of the UCCU Defendants. The judgment set out the order that, in the Court’s view, followed from that conclusion, namely that the High Court’s Order of 7 November 2016 giving the Plaintiffs leave to serve out on the Russian UCCU Defendants should be set aside and that, as regards Holding, the Court should make an order setting aside service of the proceedings on it (Judgment, §462). The terms of that order are not in dispute.
  3. As regards costs, the Court indicated that, the appeal having been successful, it appeared to follow that the Plaintiffs should pay the UCCU Defendants’ costs of the appeal, and of the proceedings to date. However, the Court indicated that it would give the Plaintiffs an opportunity to consider its judgment before proceeding to make any order for costs and in the event that the Plaintiffs wished to contend for a different order, they would be given an opportunity to be heard (Judgement, §463).
  4. The parties subsequently corresponded on the issue of costs and related issues regarding the final orders and agreed a timetable for the exchange of written submissions on those Page 2 of 34 issues. Submissions were duly exchanged in accordance with that timetable. Having considered the correspondence and the submissions, the Court indicated to the parties it considered that it was in a position to adjudicate on those issues without the necessity for a further hearing but that it would review that position in the event that either party was of the view that such a hearing was necessary. In response, both parties indicated that they were satisfied for the Court to proceed on the basis of the written material and without a further hearing. Page 3 of 34 THE ISSUES IN DISPUTE
  5. The parties agree that the ordinary rule that costs follow the event applies here and that, as a result, the UCCU Defendants (the First, Second, Third, Sixth and Tenth Defendants) are entitled to the costs of (a) their unsuccessful application to the High Court pursuant to Notice of Motion dated 3 October 2018, (b) their successful appeal to this Court and (c) the proceedings against them.
  6. It is also agreed that the costs of the Twelfth Defendant, JSC Khimaktivinvest (KAI) joined as a Defendant subsequent to the hearing of the application in the High Court – fall outside the scope of the appeal.
  7. The Plaintiffs identify the issues in dispute as follows:

(1)Whether the “costs of the proceedings” include costs of other interlocutory motions where the High Court made orders in respect of costs which were not appealed;
(2)Whether the “costs of the proceedings” include the costs of contempt applications brought by the Plaintiffs;
(3)Whether the outcome of those contempt applications may have a bearing on the costs order to be made; Page 4 of 34 8.
(4)Whether costs should be awarded other than on a party and party basis; and
(5)Whether the Court should grant a stay on the order costs In addition to these issues, the UCCU Defendants seek liberty to apply for an order joining Sergei Makhlai – said by the UCCU Defendants to be the beneficial owner of the Plaintiffs and/or the person directing these proceedings – and possibly other individuals and entities as parties for the purposes of seeking orders for costs against them in reliance on Moorview Developments Ltd v First Active plc [2011] IEHC 117, [2011] 3 IR 615 (H Ct); [2018] IESC 33, [2019] 1 IR 417 (S Ct) (“Moorview”). Page 5 of 34 DISCUSSION
  1. Subject to any appeal to the Supreme Court – and with possible exception of the contempt applications discussed further below - the Orders following from this Court’s Judgment will bring an end to the Plaintiffs’ claims against the UCCU Defendants. That is the context in which the issues above fall to be considered.
  2. The Plaintiffs have indicated that they intend to seek leave to appeal to the Supreme Court and the issue of a stay (issue
(5)above) arises in that context. Issue
(1)– The costs of the two interlocutory motions
  1. While the Plaintiffs accept that it follows from this Court’s Judgment that the UCCU Defendants should have the costs of the proceedings, they contend that the costs of two interlocutory motions should be excluded from those costs.
  2. Those motions are, first, a motion for judgment in default of appearance as against the UCCU Defendants. That motion issued in June 2018 following a prolonged period of procedural default on the part of the UCCU Defendants. On 23 July 2018 the motion was struck out on consent, save in relation to costs and on 25 April 2022 Barniville J (as the President of the High Court then was) directed the UCCU Defendants to pay the costs of the motion and refused to grant a stay on that order. That costs order was not appealed. The second motion was a motion brought by the Plaintiffs to join the Fifth to Fourteen Plaintiffs to the proceedings. That motion was opposed by the UCCU Page 6 of 34 Defendants. However, on 10 July 2023 the High Court (McDonald J) made the order for joinder, expressly making no order for costs. Again, that order was not appealed.
  3. The Plaintiffs say that these orders remain valid and binding and that the UCCU Defendants’ application for the costs of those two motions would involve this Court overturning orders of the High Court that are not the subject of appeal. Separately, they say that there is in any event no basis on which this Court could properly conclude that the orders were outside the range of orders reasonably open to the High Court in the circumstances so as justify interfering with those orders (citing in this respect this Court’s decision in Pembroke Equity Partners Ltd v Corrigan [2022] IECA 142, §19).
  4. According to the UCCU Defendants, these submissions miss the essential point that this Court has now determined that the Irish courts do not have jurisdiction to hear and determine the Plaintiffs’ claim against them. They say that but for the inappropriate issue of those proceedings in this jurisdiction, the costs associated with the motions for judgment and joinder would never have arisen and it must follow (so it is said) that they are entitled to the costs of the motions and that position trumps any argument that the costs orders should remain undisturbed because they were not appealed. The Court’s View
  5. It is common case that the two orders at issue here were not appealed. That being so, the Court is of the view that it has no power to interfere with them. It may be that may be exceptional circumstances in which this Court may to vary or set aside an otherwise Page 7 of 34 final order made by the High Court even where that order has not been appealed but no such circumstances have identified by the UCCU Defendants here. It was open to the Plaintiffs to appeal the orders made but they did not so. In the absence of any such appeal within the prescribed time for an appeal, the orders are final.
  6. In any event, even if the Court was entitled in principle to interfere with the orders at issue, no basis for doing so has been made out here. While these proceedings were before the High Court, the parties were subject to the normal procedural regime governing litigation in that Court, including the requirement for defendants to enter an appearance in accordance with Order 12 RSC. The fact that the UCCU Defendants intended to contest jurisdiction did not absolve them from compliance with Order 12 RSC and the fact that their jurisdiction objection has now succeeded in this Court does not have the effect of retrospectively excusing their default in doing so. The order of 25 April 2022 was clearly one which Barniville J was entitled to make and in the circumstances the Court can see no basis for interfering with it.
  7. Similarly, the order of 10 July 2023 was one which the High Court (McDonald J) was clearly entitled to make, given that the UCCU Defendants had unsuccessfully opposed the application for joinder. McDonald J clearly considered that, as mandated by Order 99, Rule 3
(2)RSC, it was appropriate to make a final order in relation to costs rather than reserving the costs or making them costs in the case. It is also clear that he considered that an order for costs in favour of either party was not appropriate. Rather, the parties to the joinder motion were each to bear their own costs. That the UCCU Defendants have subsequently prevailed in their jurisdictional challenge (subject to any Page 8 of 34 appeal to the Supreme Court) does not provide any basis for unravelling that assessment or interfering with the order of McDonald J. Issue
(2)– The costs of the contempt applications
  1. The Plaintiffs issued contempt applications in December 2021 and May 2022 in respect of the First and Second Defendants (Mr Mazepin and UCCU respectively) as well as an officer of UCCU (a Mr Ermizin ) arising from what was said to have been serious breaches of an undertaking given by the UCCU Defendants and recorded in an Order made by Barniville J on 27 June 2019 (as amended on 2 July 2019) (referred to as the “First Undertaking” in our Judgment, §34). Those applications were heard some time ago by the High Court (Sanfey J) with judgment reserved. The applications were vigorously defended by the UCCU Defendants, without prejudice to their contention that the Irish courts lacked jurisdiction. It appears that the High Court decided not to give its judgment pending this Court’s decision on the UCCU Defendants’ appeal and, after this Court gave judgment, the Plaintiffs informed Sanfey J that they did not seek delivery of his judgment until the determination of any appeal to the Supreme Court.
  2. The UCCU Defendants contend that the costs of the proceedings to which they are entitled necessarily include the costs of the contempt applications. Their essential point is the same as that advanced in relation to issue
(1)above i.e. that, on the basis of the Principal Judgment, the Irish courts never had jurisdiction to entertain the Plaintiffs’ proceedings against the UCCU Defendants and therefore the contempt applications Page 9 of 34 would never have arisen but for the Plaintiffs wrongful assertion of jurisdiction. In light of this Court’s Judgment (so it is said), the High Court has no power to determine the applications or make any order in respect of the costs of those applications.
  1. The Plaintiffs say that the High Court remains seised of the contempt applications and that all matters relating to those applications, including the issue of costs, remain a matter for the High Court. Equally, it is said, it is a matter for the High Court to determine whether to deliver its judgment or not. According to the Plaintiffs, it is not the case that, where an order for service out is discharged on appeal, the High Court immediately is deprived of jurisdiction to deal with alleged past incidents of contempt. A court order (and, by extension, an undertaking, which is the equivalent of a court order) has to be obeyed unless and until set aside or varied and a person cannot lawfully act in a manner inconsistent with such an order, even if it later transpires that the order was made in error (citing R (Majera) v Secretary of State for the Home Department [2021] UKSC 46, [2022] AC 461). It is, the Plaintiffs say, an important feature of the contempt jurisdiction that it may be invoked in respect of past behaviour (citing Reynolds v McDermott [2014] IEHC 219). It would seriously circumscribe the High court’s ability to deal with past acts of contempt were this Court to determine that the High Court no longer had jurisdiction to deliver judgment in the applications or deal with the costs. These are, it is said, matters for the High Court to consider, not matters for this Court. The Plaintiffs also rely on the terms of the First Undertaking which, they say, clearly contemplates that the UCCU Defendants would not do certain things unless and until its jurisdictional challenge succeeded. They say that they relied on the Page 10 of 34 Undertaking and that the UCCU Defendants are estopped from advancing any position inconsistent with its terms. The Court’s View
  2. The First Undertaking is set out in full in the Plaintiffs’ submissions. By its express terms, UCCU undertook that it, its servants, agents, nominees, shareholders, assignees and/or representatives would not take any steps or do anything, directly or indirectly, to execute or enforce or to authorise, cause, permit, facilitate, assist or solicit the execution or enforcement by any third party of any judgment in the Article 159
(4)Civil Claim brought by UCCU in the Article 159
(4)Criminal proceedings (the criminal proceedings, and UCCU’s civil claim for damages made in those proceedings are referred to in more detail in the Principal Judgment). The undertaking was stated to apply “[u]ntil the earlier of (
  1. i)a determination in their favour by the High Court of the UCCU Defendants’ challenge to jurisdiction or (
  2. ii)the determination by the High Court of the proceedings numbered 9981P/2016” (i.e. the substantive action). However, it also provided that it could be terminated by UCCU by giving not less than 30 days’ notice (but in the event that the Plaintiffs brought a further injunction application within that period the Undertaking would remain in place pending the determination of that application). 22. The First Undertaking was recorded in the Order of the High Court (Barniville J) of 27 June 2019 (amended on 2 July 2019). Page 11 of 34 23. In June 2020 UCCU gave notice to terminate the First Undertaking and the Plaintiffs brought a further injunction application, which was compromised by the giving of a further undertaking by the UCCU (“the Second Undertaking”) (Principal Judgement, §34). That undertaking was recorded in a further Order of the High Court (Barniville J) of 2 March 2021 which also noted that the First Undertaking would continue in force. In June 2025, UCCU again confirmed and undertook that the commitments given in its earlier undertakings would remain in force and binding on UCCU until the earlier of the final determination of the jurisdiction challenge or the final determination of the proceedings. 24. The contempt applications, which issued in December 2021 and May 2022, allege “deliberate and grave breaches” of the First Undertaking. According to the Plaintiffs, the respondents to the contempt applications (including UCCU) actively participated in and supported enforcement of the judgment given by Judge Kirillov in the Article 159
(4)Civil Claim against the Plaintiffs’ assets (this Judgment and its consequences for the Plaintiffs is referred to in the Principal Judgment, §33 and following). As already noted, the contempt applications were heard by the High Court (Sanfey J) some time ago but he refrained from giving judgment pending the determination of the jurisdiction appeal and the Plaintiffs’ position is that they are not seeking delivery of judgment pending the determination of any appeal that may be permitted to the Supreme Court.
  1. In this Court’s view, the High Court (Sanfey J) clearly has seisin of the contempt applications and it is a matter for that Court to determine whether, in light of this Court’s judgment and order on the jurisdiction appeal (and again subject to any appeal to the Page 12 of 34 Supreme Court), it should proceed to adjudicate on the substance of those applications and, if so, to determine what order or orders (including any order or orders for costs) if any - should be made in relation to the applications.
  2. An undertaking given to a court and recorded in its order is, for all practical purposes, equivalent to an order made by the court itself: Competition Authority v Licensed Vintners’ Association [2009] IEHC 439, per McKechnie J at §15, as well as Eady et al, Arlidge, Eady & Smith on Contempt (5th ed; 2017) §12-201 and following.
  3. UCCU was bound to comply with the First Undertaking as long as it remained in place, in precisely the same way as it would have been bound to comply with a court order made in the terms of the undertaking. The fact that, at the time that the undertaking was given, UCCU and the other UCCU Defendants were challenging the jurisdiction of the High Court to hear and determine the Plaintiffs’ claim against them did not qualify the binding character of the undertaking or render it conditional or provisional in its effect. While the undertaking was indeed qualified by reference to the UCCU Defendants’ pending jurisdictional challenge, that qualification simply identified a potential endpoint for the undertaking and did not affect its status and effect while in force. Equally, the fact that this Court subsequently reached the conclusions that it did in the Principal Judgment does not retrospectively nullify the First Undertaking or operate to immunise UCCU or the other respondents to the contempt applications from the potential consequences of having acted in breach of the Undertaking while it remained in force (assuming of course that such breach is established as a matter of fact). Page 13 of 34
  4. It is a fundamental constitutional principle that court orders must be obeyed unless or until set aside or varied, regardless of whether the order concerned was valid or invalid, regular or irregular or whether made by a court of unlimited or limited jurisdiction. That principle is illustrated by the decision of the UK Supreme Court in R(Majera) v Home Secretary [2021] UKSC 46, [2022] AC 461, per Lord Reed at §§43-
  5. The principle is fundamental to the rule of law and applies even to orders that are “null”: such orders must be obeyed unless and until set aside (§45).
  6. In any event, the High Court Order of 27 June 2019 (as amended on 2 July 2019) which recorded the First Undertaking was not, on any view, a nullity. The High Court clearly had jurisdiction to deal with the proceedings and that jurisdiction was not subject to some form of retrospective ouster by virtue of any order that might subsequently be made by that Court, or by this Court on appeal, on the UCCU Defendants’ jurisdictional challenge.
  7. In this regard, the structure and effect of Order 11 RSC is clear. Once an order is made giving leave to serve out under Order 11
(1)and proceedings are served in accordance with such an order, the High Court then has jurisdiction in respect of those proceedings unless and until an order is made by that Court (or by this Court or the Supreme Court on appeal) setting aside the order for service out or staying the further prosecution of the proceedings on forum non conveniens grounds (or otherwise determining that the Court does not have and/or should not exercise jurisdiction over the claim). While the proceedings are before the High Court, it may make whatever orders appear appropriate in relation to the proceedings and (subject to appeal) such orders must be complied Page 14 of 34 with. Similarly, where undertakings are given to the High Court (as here), such undertakings must be complied with. Any other position would be fundamentally inconsistent with the rule of law and the principle of legal certainty.
  1. Similarly, once proceedings are served out of the jurisdiction in accordance with Order 11C RSC, the High Court has jurisdiction in respect of those proceedings unless and until that Court (or this Court or the Supreme Court on appeal) determines otherwise.
  2. While this Court is not aware of the specifics of the contempt applications, it is clear that all the relevant elements – the giving of the Undertaking, the alleged breach(es) of it and the bringing of the contempt applications themselves – all long predate the Principal Judgment.
  3. In these circumstances, the UCCU Defendants’ contention that the costs of the contempt applications should follow the event cannot be accepted. Even if this Court had power to make such an order – and that is, in the Court’s view, highly questionable given that the High Court clearly has seisin of the applications – it would not be appropriate to do so. It is, in the first instance at least, a matter for Sanfey J to decide whether to proceed to adjudicate on the contempt applications. Whether the Supreme Court gives leave to appeal and, if it does, what the outcome of such appeal may be will, no doubt, be factors in that assessment. Even if it remains the case that the action cannot proceed further as against the UCCU Defendants in this jurisdiction – the position following from the Principal Judgment - it does not necessarily follow that deciding on the applications would serve no purpose or that, if contempt is found to have been established, the High Page 15 of 34 Court would not be in a position to grant a remedy to the Plaintiffs. It may be open to the Court to make a formal finding of contempt, without necessarily making any coercive order: B (A Minor suing by his mother and next friend Y) v Child and Family Agency [2025] IESC 2 and it would also be open to the High Court to reflect such a finding in any costs order that it may make. But these are matters for the High Court, not for this Court.
  4. In short, the Court considers that the costs of the contempt applications are distinct from the costs of the proceedings generally and, those applications having been heard by the High Court (Sanfey J), the costs of those applications are, in the first instance, a matter for Sanfey J. Those costs are therefore excluded from the scope of the costs orders made by this Court. Furthermore, in this Court’s view, Sanfey J’s power to make an order in respect of those costs is unaffected by the judgment and order of this Court (which, in any event, is going to be stayed pending the Plaintiffs’ intended application for leave to appeal to the Supreme Court). The Court proposes to make that clear in its final Order. Issue
(3)–Are the contempt applications relevant to the costs order to be made by this Court
  1. This issue arises from the same contempt applications. The Plaintiffs contend that in the event that those applications are successful, that would be a material consideration in deciding whether, even if otherwise entirely successful, the UCCU Defendants are entitled to their costs. That is, according to the Plaintiffs, a further reason for any costs order to be stayed pending determination of the contempt applications and a reason why Page 16 of 34 they should have liberty to apply regarding costs following the determination of those applications.
  2. The UCCU Defendants say that the Court should proceed to make final costs orders now (though any such order would, of course, be subject to any appeal to the Supreme Court). There is, they say, no basis for making a costs order that is conditional on some future application (and they reiterate their view that, in any event, the High Court has no jurisdiction to deliver judgment in the contempt applications unless the Plaintiffs succeed in their intended appeal to the Supreme Court). They also observe that certain of the UCCU Defendants –the Third, Sixth and Tenth Defendants - were not respondents to the contempt applications in any event. The Court’s View
  3. The Court is of the view that it should proceed to adjudicate finally on the costs of this appeal at this stage. The Court has already determined that the costs of the contempt applications should be dealt with separately, by the High Court Judge who heard those applications. In the event that the Judge considers that it is appropriate that the Plaintiffs should have the costs of those applications – and this Court expresses no view whatever on that question – he may make an order to that effect. It is neither necessary nor appropriate to defer dealing with the costs of the appeal pending the making of any further orders in the contempt applications. Nor would it be appropriate to make some form of conditional or provisional order for costs, as the Plaintiffs appear to invite the Page 17 of 34 Court to do. The Court has determined this appeal and should now proceed to make final orders in respect of all aspects of the appeal, including costs.
  4. As the Plaintiffs expressly accept, the costs of this appeal, as well as the costs of the application in the High Court and the costs of the proceedings against the UCCU Defendants, follow the event and an order for those costs is therefore to be made against the Plaintiffs and in favour of the UCCU Defendants. That concession was inevitable in the circumstances here: the UCCU Defendants succeeded entirely in their application and that success brings to an end the proceedings against them (subject to any appeal) and they are clearly entitled to such costs as a result. The Plaintiffs’ submissions on this issue are inconsistent with that concession. In any event, even if the High Court was to proceed to make findings of contempt against such of the UCCU Defendants as are respondents to the contempt applications (and it is important to emphasise that this Court is not aware of the precise grounds for the applications and is not in a position to form any view as to the merits of those applications), that would not, in this Court’s view, affect the entitlement of the UCCU Defendants to have those costs. Accordingly, the Court considers that it should proceed to deal finally with all costs issues now (subject to the question of whether there should be a stay pending the Plaintiffs’ intended application for leave to appeal to the Supreme Court, which is addressed below). Page 18 of 34 Issue
(4)- Whether costs should be awarded other than on a party and party basis
  1. The next issue relates to the basis on which costs should be awarded. The UCCU Defendants say that costs should be awarded on a legal practitioner and own client basis (previously known as “solicitor and own client” costs). Here, they say, the Plaintiffs joined Eurotoaz as a mere device for the improper purpose of seeking to establish jurisdiction over the UCCU Defendants. That, it is said, is “quintessentially” a case meriting an award of costs on a legal practitioner/own client basis.
  2. The Plaintiffs dispute that there is any basis for costs being awarded on such a basis. They say that even an award of costs on a legal practitioner and client basis (a less generous measure than legal practitioner/own client costs) has been characterised in the authorities as “extremely rare” “exceptional” and “to be used sparingly.” According to the Plaintiffs, the fact that the UCCU Defendants were put to the cost of defending the proceedings, in circumstances where the service out order was subsequently discharged, “comes nowhere near” what is necessary to justify a departure from standard party and party costs.
  3. The parties agree that the relevant principles are set out in the judgment of Barniville J (as he then was) in a judgment given at an earlier stage of these proceedings, Trafalgar Developments Ltd v Mazepin [2020] IEHC
  4. Page 19 of 34 The Court’s View
  5. Prior to the coming into operation of the relevant provisions of the Legal Services Regulation Act 2015 (on 7 October 2019) and the consequent recasting of Order 99 RSC (effective 3 December 2019), Order 99 contemplated three different forms of costs orders – or, perhaps more correctly, three different bases for the taxation of costs – namely party and party costs/taxation (Order 99, Rule 10
(2), solicitor client costs/taxation (Order 99, Rule 11
(1)) and solicitor and own client taxation (Order 99, Rule 11
(3)). 43. Where by or under any order of the court, costs were payable by one party to proceedings to another, the default rule was such costs should be taxed on the party and party basis (Order 99, Rule 10
(2)) but the court might “in any case in which it thinks fit to do so, order or direct that the costs shall be taxed on the solicitor and client basis” (Order 99, Rule 10
(3)). 44. Fortunately, it is not necessary to consider the intricacies of the distinctions between taxations on these different bases. It is sufficient to note that, while Order 99, Rule 10
(2)RSC provided that on a party and party taxation “all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed” should be allowed, and while the underlying principle for recovery was (and is) that of indemnity, it was well established in the authorities that a party awarded costs on that basis was not entitled to a full indemnity in respect of the costs they incurred: see, for instance, Kelly v Hoey (Unreported, High Court, Butler J, Page 20 of 34 18 December 1973). In practice, the costs recoverable on a party and party basis might fall significantly short of the costs actually payable by the successful party to his or her own lawyers.1 Costs taxed on a solicitor client basis - and more so again costs taxed on a solicitor and own client basis – more closely approximated the actual costs burden of the successful party. 45. Although Order 99, Rule 10
(3)RSC referred to an order or direction that the costs be taxed on “the solicitor and client basis”, from time to time courts have been invited to make orders for costs on a solicitor and own client basis. However, while courts appear to have proceeded on the assumption that they have power to make an order in such terms – and the jurisdiction to make such an order was assumed by the High Court in Trafalgar Developments Ltd v Mazepin – there appear to be only very limited instances in which such an order has actually been made.2 46. The Legal Services Regulation Act 2015 is silent as to the specific forms of costs orders that may be made by the court. However, Part III of the recast Order 99 contains 1 Alock, The Law of Costs in Ireland
(2020)suggests that party and party costs ordinarily amount to between 60% and 75% of the party’s own costs: page 15, footnote
  1. 2 Such an order appears to have been made by the High Court in Rippington v Cox but that was a wills suit and in any event the order was set aside by this Court on appeal and an order for costs on the ordinary party and party basis substituted for it: [2017] IECA
  2. An orders for costs to be taxed on a “solicitor and own client basis” was also made in McGory v Express Newspapers Plc (Unreported, High Court, Murphy J, 21 July 1995) but again the circumstances were particular – the order was made on consent in order to give effect to a settlement providing for the costs of the proceedings to be paid on “an indemnity basis”. Page 21 of 34 provisions similar to those referred to above. Order 99, Rule 10
(2)provides that costs to which Part III applies (which includes costs which by or under the Rules or any order or direction of the Court are to be paid to a party to any proceedings by another party) “shall be adjudicated on a party and party basis in accordance with section 155 and Schedule 1 to the 2015 Act” but that is subject to Order 99, Rule 10
(3)which provides that the Court in awarding such costs “may in any case in which it thinks fit to do so, order or direct that the costs shall be adjudicated on a legal practitioner and client basis.” A legal practitioner and client taxation is also governed by section 155 and Schedule 1: Order 99, Rule 11
(1). Before making any order for costs under the 2015 Act, the court concerned must have regard to the matters set out in section 169
(1)of the Act: Order 99, Rule 3
(1).
  1. Neither the 2015 Act nor Order 99 make any reference to the adjudication of costs on a legal practitioner and own client basis. However, the UCCU Defendants did not dispute the Court’s entitlement to make an order for costs on such a basis. In any event, it is clear that this Court is empowered to depart from the default position – that of party and party costs - and to order that the costs at issue here should be adjudicated on a legal practitioner and client basis.
  2. That brings us to Trafalgar Developments Ltd v Mazepin, which in fact involved an application for costs to be taxed on a solicitor and client basis (the pre-2015 Act equivalent of adjudication on a legal practitioner and client basis). The Plaintiffs had brought a motion for judgment in default of appearance against the Ninth Defendant, Ms Charilaou. Before the hearing date of the motion, Ms Charilaou entered an Page 22 of 34 unconditional appearance and conceded that she should pay the costs of the motion on the usual party and party basis. However, the Plaintiffs rejected that concession and instead applied for an order for costs on a solicitor and client basis.
  3. Having referred to Order 99, rule 10 (in its pre-2019 form) and to a number of Irish authorities including Geaney v Elan Corporation Plc [2005] IEHC 111, Shell E & P Ireland Limited v McGrath (No 3) [2007] 4 IR 277, Dunnes Stores v An Bord Pleanala [2016] IEHC 697, and Flynn v Breccia [2017] IECA 163, as well as a number of decisions from England and Wales, Barniville J identified the following as the principles that should inform the court’s discretion to make an order for costs on the solicitor and client basis (at §54): “
(1)The normal position is that where costs are awarded against one party in favour of on other, those costs will be taxed or adjudicated on the party and party basis.
(2)The court has a discretion to depart from the normal position in the particular circumstances of the case, where the court thinks fit to do so, and to direct that the costs be taxed or adjudicated on the solicitor and client basis.
(3)There has to be a good reason for the court to depart from the normal position and to make an order for costs on the solicitor and client basis (or on the even more severe basis, the solicitor and own client basis). Page 23 of 34
(4)The court may exercise its discretion to order costs on the solicitor and client basis where it wishes to mark its disapproval of or displeasure at the conduct of the party against which the order for costs is being made.
(5)The conduct in question can include: (
  1. a)A particularly serious breach of the party's discovery obligations; (
  2. b)An abuse of process by that party in commencing and maintaining proceedings for an improper purpose or for an ulterior motive, designed to seek a collateral and improper advantage; (
  3. c)The failure to exercise the requisite caution in commencing proceedings making claims of fraud or dishonesty or conspiracy without ensuring there exists clear evidence supporting a prima facie case in relation to such claims; (
  4. d)Any other conduct in relation to the commencement or conduct of the proceedings, or any aspect of the proceedings, which the court considers merits be marked by the court's displeasure or disapproval, such as a particularly serious or blatant breach of a court order, the directions of the court or the Rules of the Superior Courts.
(6)In considering whether the conduct of a party is such that the court should exercise its discretion to make an order for costs on the solicitor and client basis, the court should: - Page 24 of 34 (
  1. a)Clearly identify the particular conduct or behaviour of the party which is said to afford the basis for the court exercising its discretion to award costs on the solicitor and client basis; (
  2. b)Carefully examine and consider the explanation (if any) offered by the party for the conduct or behaviour in question; (
  3. c)Carefully consider and examine the consequences (if any) of the conduct or behaviour in question for the other party, whether in terms of delay or costs or any other form of prejudice to that party; (
  4. d)in light of the above, determine whether, in all the circumstances, it would be appropriate and in the interests of justice to award costs on the solicitor and client basis under O. 99, r 10
(3).
(7)While a failure to comply with the provisions of the Rules of the Superior Courts or of a direction or order of the court will normally merit the award of costs against the party in default, such costs will normally be awarded on the party and party basis. It will generally only be if the breach or failure to comply is of a particularly blatant or serious nature, having serious consequences for the other party, that the court will be justified, in the exercise of its discretion, to award costs on the solicitor and client basis (or, exceptionally, on the solicitor and own client basis).” Page 25 of 34
  1. Applying those principles, Barniville J concluded that there was no proper basis for departing from the normal position and awarded costs on the usual party and party basis: §§80-
  3. The application for a special costs order here is not based on any procedural default such as was at issue before Barniville J. What the UCCU Defendants say, in effect, is that the jurisdiction of the Irish courts was improperly invoked by the Plaintiffs in circumstances where the Plaintiffs sued Eurotoaz as a “mere device” for the purpose of seeking to establish jurisdiction over the UCCU Defendants.
  4. This Court did indeed find that the Plaintiffs’ claim against Eurotoaz was a “mere device” in the sense in which that expression was used by Fennelly J in Analog devices and therefore that the action against Eurotoaz was not “properly brought” for the purposes of Order 11
(1)(
  1. h)RSC: §272. That was one of the grounds on which the Court concluded that leave to serve out should be set aside, the other being that Ireland was not, in any event the proper forum for hearing and determining the claim against the Russian UCCU Defendants: §§387-388. In the context of the claim against Holdings, the Court similarly found that the “sole object” of the claim against Eurotoaz was to provide a basis for asserting jurisdiction over Holdings under Article 8 of the Recast Brussels: §459. Again, that was not the only ground on which the Court held against the Plaintiffs – the Court also held that that the Plaintiffs had failed to demonstrate that the claims against Eurotoaz and Holdings were “closely connected” for the purposes of Article 8: §§441-442. That was, in fact, the principal basis for the Court’s decision on the Article 8 issue. Page 26 of 34 53. In the Principal Judgment, the Court noted that, while the term “mere device” had pejorative connotations, it was intended simply to convey that Eurotoaz would not have been sued if it were not for the jurisdictional advantage thereby conferred: §266. That was the essential finding made by the Court. The Court did not find that the Plaintiffs did not have a stateable claim against Eurotoaz (and as the Principal Judgment noted, Eurotoaz had previously failed to have the proceedings dismissed as unstateable) still less did it find that the Plaintiffs did not have a stateable claim against the UCCU Defendants (that was not disputed by the UCCU Defendants) or that the Plaintiffs were pursuing that claim for any ulterior or improper purpose. This aspect of the Court’s findings (in which the Court differed from the findings made in the High Court) was narrow in scope: in the Court’s view the absence of any discernible benefit to the Plaintiffs in suing Eurotoaz to judgment (assuming that it ultimately succeeded in obtaining judgment against
  2. it)led to the conclusion that Eurotoaz had been sued for the purpose of providing a jurisdictional hook against the UCCU Defendants and was, in that specific sense, a “mere device”. That finding was not expressed as, and is not to be understood as, a finding that the claim against the UCCU Defendants amounted to an abuse of process or involved any form of litigation misconduct. The basis on which the Plaintiffs asserted that the Irish courts had jurisdiction over both the Russian UCCU Defendants and Holdings was clear from the outset. It was disputed, unsuccessfully, before the High Court and this Court took a different view on appeal. That is all. Page 27 of 34 54. In these circumstances, the Court is not satisfied that its conclusions in its Principal Judgment provide any sufficient basis for departing from the default position that the costs to be recovered by the UCCU Defendants should be party and party costs. Issue
(5)– Should there be a stay ? 55. The Plaintiffs seek a stay on any costs order pending determination of their intended application for leave to appeal to the Supreme Court and, in the event that leave is granted, pending determination of the appeal. The UCCU Defendants say in response that a stay would cause unfair prejudice to them in circumstances where the Plaintiffs “flatly refuse” to give information on their source of funding to maintain these proceedings. In any event, they say that any stay should not go beyond the determination of any application for leave to appeal. The Court’s View 56. In the Court’s view, it is clearly appropriate that a stay should be granted on this Court’s order in the usual terms pending the making by the Plaintiffs of an application for leave to appeal to the Supreme Court. That stay should apply to the entirety of this Court’s order, not simply those aspects dealing with costs. It would not be appropriate for any part of this Court’s order to become enforceable prior to the determination of the Plaintiffs’ intended appeal to the Supreme Court or ( in the event that leave to appeal is granted) prior to the determination of that appeal. Page 28 of 34 57. Therefore the Court will (
  1. a)stay its order for a period of 21 days to allow the Plaintiffs to lodge an application for leave to appeal in accordance with Order 58, Rule 16 RSC; (
  2. b)in the event that an application for leave is lodged, that stay shall continue pending the determination of the leave application and (
  3. c)in the event that leave to appeal is granted that stay shall continue pending the determination of the appeal, save as otherwise may be directed by the Supreme Court. Joinder of Mr Makhlai 58. The UCCU Defendants raise a further issue in their submissions. They say that the Plaintiffs are not the beneficial owners of the ToAZ shares and that they have no assets, in Ireland or elsewhere. The Plaintiffs have (so the UCCU Defendants say) repeatedly refused to provide any information regarding their assets or financial position. Yet the Plaintiffs have been able to maintain these proceedings. That is (so the UCCU Defendants assert) because the proceedings are being funded (and directed) by Mr Makhlai (and/or others). That is, the UCCU Defendants say, a classic example of persons (whether Mr Makhlai and/or others) seeking to have a “free ride” in litigation, utilising “empty shells” to conduct expensive litigation and that position comes squarely within the circumstances in which a costs order should be made against a non-party in accordance with Moorview. While the UCCU Defendants accept that it would be premature to bring an application to join Mr Makhlai (and/or other persons) at this stage, given the Plaintiffs’ intention to seek leave to appeal, they wish to reserve the entitlement to being such an application and seek the inclusion in this Court’s order of Page 29 of 34 liberty to apply for such an order, as well as any necessary consequential relief, including as to disclosure of the persons/entities funding the litigation. 59. The issue of the joinder of Mr Makhlai (and/or others) is not addressed in the submissions of the Plaintiffs. The Court’s View 60. That a non-party may in certain circumstances be joined as a party for the purpose of having an application for costs made against them is clear as a matter of principle: see, in addition to Moorview, the decisions of the Supreme Court in Byrne v John S O’ Connor & Co [2006] IESC 30, [2006] 3 IR 379 (which predates Moorview) and WL Construction Ltd v Chawke [2019] IESC 74, [2020] 1 ILRM 50 (which post-dates Moorview). In addition, in Moorview both the High Court and the Supreme Court considered that, in any event, an order for costs may, in principle, be made directly against a non-party pursuant to section 53 of the Supreme Court of Judicature Act 1877. However, the Supreme Court has subsequently expressed doubts as to whether section 53 of the 1877 Act remains operative: Little v Chief Appeals Officer [2024] IESC 53. 61. However, no application to join any non-party, whether Mr Makhlai or anyone else, for the purpose of seeking costs against them is before this Court nor has the Court been invited to make any costs order against anyone other than the Plaintiffs in the proceedings. Page 30 of 34 62. The UCCU Defendants do not require the leave of this Court to bring a non-party costs application. Their concern appears to be that, in the event that the Supreme Court were to refuse leave to appeal, it might not be possible to bring such an application because this Court’s order would then become operative. 63. The Court is obviously not in a position to form any view as to whether there may be a basis for the UCCU Defendants to seek costs against Mr Makhlai, and/or any other nonparty. However, it would clearly not be fair or just if the UCCU Defendants were to be de facto precluded from bringing such an application by the Order made by this Court on this appeal. 64. In the circumstances, the Court considers it appropriate (and sufficient) to provide in its final Order that it does not operate to prevent the UCCU Defendants from bringing an application for costs against any non-party, whether pursuant to Order 15, Rule 13 RSC, section 53 of the 1877 Act or otherwise. Page 31 of 34 THE ORDER TO BE MADE 65. Accordingly, and subject to what is said in the next paragraph, the Order that the Court proposes to make is as follows: 1. The High Court’s Order of 7 November 2016 giving the Plaintiffs leave to serve out on the Russian UCCU Defendants is set aside; 2. The service of these proceedings on Holdings is set aside. 3. The Plaintiffs shall pay the UCCU Defendants their costs of (
  4. a)their unsuccessful application to the High Court pursuant to Notice of Motion dated 3 October 2018, (
  5. b)their successful appeal to this Court and (
  6. c)the proceedings against them. In default of agreement, such costs shall be adjudicated on a party and party basis in accordance with section 155 and Schedule 1 to the 2015 Act. 4. The costs order at paragraph 3 does not include the costs of the Plaintiffs’ motion for judgment in default of appearance as against the UCCU Defendants which was struck out by consent by the High Court (Barniville J) on 23 July 2018 or the costs of the motion brought by the Plaintiffs to join the Fifth to Fourteen Plaintiffs to the proceedings dealt with by Order of the High Court (McDonald J) of 10 July 2023. The costs of those motions shall be dealt with in accordance Page 32 of 34 with (respectively) the Order of the High Court (Barniville J) made on 25 April 2022 and the Order of 10 July 2023. 5. The costs order at paragraph 3 also does not include the costs of the contempt applications issued by the Plaintiffs in December 2021 and May 2022 and which have been heard by the High Court (Sanfey J). Nothing in this Court’s Order on this appeal is intended to affect the power of the High Court to adjudicate on those applications and/or to adjudicate on the costs of them. 6. Nothing in this Court’s Order on this appeal operates to prevent the UCCU Defendants from bringing an application for costs against any non-party, whether pursuant to Order 15, Rule 13 RSC, section 53 of the 1877 Act or otherwise. 7. Finally, the Court grants a stay on the orders at paragraphs 1-3 above (inclusive) for a period of 21 days from the perfection of this Court’s Order to allow the Plaintiffs to lodge an application for leave to appeal in accordance with Order 58, Rule 16 RSC. In the event that an application for leave is lodged, that stay shall continue pending the determination of the leave application and in the event that leave to appeal is granted the stay shall continue pending the determination of the appeal, save as otherwise may be directed by the Supreme Court. Page 33 of 34 66. The intended effect of this Order is clear. In the event that either party has any difficulty with the form of the Order or any concern as to the efficacy or enforceability of an Order made in such terms, it should identify those concerns to the Court (and to the other side) within a period of 7 days. The Court will give liberty to apply to both parties for that purpose. Otherwise the Court will proceed to finalise and prefect its Order in the terms set out above. Page 34 of 34

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