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	England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Cedar Mundi (Holding) SAL v Attieh & Ors [2025] EWHC 1930 (Comm) (25 July 2025) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2025/1930.html Cite as: [2025] EWHC 1930 (Comm)

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IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT

		Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL
		25/07/2025

This judgment was handed down remotely at 10.30am on 25 July 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives. .............................

RICHARD MILLETT KC (Sitting as a Deputy Judge of the High Court) :

Introduction

1. I have before me an application notice issued on 1 April 2025 by which the Defendants applied for an order for security for costs of these consolidated proceedings against the Claimant ("Cedar Mundi") in the amount of £2.5 million. The application was listed, unusually, as a heavy application and took a full day of pre-reading and a full day of oral argument, which included extensive citation of authority from a bundle of authorities running to some 31 cases and materials. This may seem surprising given that the court's gateway jurisdiction to make the order is not in issue, and the contest is over discretion: but as always with a set of principles which govern the exercise of the court's discretion, they are easier to state than to apply. The application was very well prepared by the solicitors on both sides, and attractively and succinctly argued by both leading and (on the Defendants' side) junior counsel, and I am grateful for the assistance.
2. Pursuant to directions given by Andrew Baker J at the case management conference on 31 March 2025, the consolidated claims are listed for a four week trial between 25 February and 24 March 2026. The parties are currently undertaking disclosure.
3. Before I turn to the issues which I have to decide, it is necessary for me to set out in brief the factual and procedural background that have brought the parties to court. I adopt them, with all due deference and some abbreviation, principally from the parties' skeleton arguments, which were provided to me in Word precisely so that I would not have to spend time composing my own summary from scratch. However, I have checked them against the material at the references I was given.

The factual background

4. Cedar Mundi is a Lebanese company formed to operate a closed-end venture capital fund investing in Lebanese tech start-ups. Cedar Mundi's investor/shareholders were the Fourth Defendant ("MABIL") and eleven Lebanese banks. The banks are known as the "C-331 Shareholders", because their participation in Cedar Mundi took place under Circular 331 issued by the Lebanese Central Bank ("the BdL").
5. MABIL is part of a group, owned by the Kuwaiti Al Bahar family of whom the Second Defendant ("Mr Al Bahar") is a member. The First Defendant ("Mr Attieh") was one of Cedar Mundi's directors.
6. Société Générale de Banque au Liban ("SGBL") acts as the lead C-331 shareholder and sat (and still sits) on Cedar Mundi's board. Cedar Mundi currently has no known employees. Its board comprises SGBL itself, an SGBL employee (a Mr Saghbini) and four other C-331 Shareholder banks.^[1] Cedar Mundi's lawyers take their instructions from SGBL.
7. Under subordinated credit facilities, MABIL and the C-331 Shareholders contributed capital to Cedar Mundi following two capital calls in 2016 and 2017. In March 2019, Cedar Mundi made a third capital call. MABIL paid in full, but all but one of the C-331 Shareholders did not.
8. From August 2019, Lebanon experienced a financial crisis marked by a shortage of foreign currency. Lebanese banks ceased to honour instructions to transfer foreign currency abroad. The Lebanese Pound devalued substantially against the US Dollar. Cedar Mundi admits that it had difficulties accessing US Dollars transferable outside Lebanon. The Lebanese financial crisis and its impact on depositors' ability to transfer funds out of Lebanon has been well chronicled by judges in this court: see for example Picken J's summary of the crisis in Manoukian v SGBL & Bank Audi [2022] EWHC 669 (QB) at [19]-[25], and Bitar v Bank of Beirut [2022] EWHC 2163 (QB).
9. In December 2019, the C-331 Shareholders paid part of the third capital call. All but one bank paid in Lebanese Pounds and not US Dollars. The Defendants' case is that, as a result, the C-331 Shareholders defaulted under their subordinated credit facilities and risked Cedar Mundi declaring a default and (ultimately) compelling a sale of their interests. The C-331 Shareholders (through Cedar Mundi) dispute that there was such a default.
10. Against that backdrop, in March 2020 Mr Attieh caused Cedar Mundi to enter into a Portfolio Preservation and Continuity Agreement ("the PPC Agreement") which involved the transfer of some of Cedar Mundi's portfolio to the Third Defendant ("IFAC") in return for Cedar Mundi acquiring an interest in IFAC. IFAC is part of the IFA Group, in which the Al Bahar family have a minority interest.
11. Mr Attieh's object was to facilitate the provision of US Dollar funding to the portfolio, given that little was forthcoming from the C-331 Shareholders. Cedar Mundi's case in these proceedings is that the PPC Agreement was unauthorised and part of a fraud on Cedar Mundi perpetrated by the First to Fourth Defendants, although the loss and damage appears yet to be identified and quantified. It is the Defendants' case that there was none, and that after a trust instrument was signed Cedar Mundi became the sole beneficial owner of IFAC.
12. The Defendants allege that by August 2020 it was clear that Cedar Mundi's fund was no longer sustainable. The C-331 Shareholders could or would not contribute further capital in freely transferable US Dollars. Mr Attieh and SGBL began discussions about the terms of an exit for the investors. In February 2021, the Al Bahar group offered to purchase most of Cedar Mundi's portfolio for US$ 27 million. The terms of a sale transaction were negotiated in March and April 2021. The proposed buyer was the Fifth Defendant ("Cedar II"), a Cayman entity formed for the purpose, to which MABIL and other investors contributed capital.
13. On 13 April 2021, Cedar Mundi's board unanimously voted to approve Mr Attieh concluding on Cedar Mundi's behalf a sale on certain terms set out in resolutions. The proposed sale included a term, proposed by SGBL, permitting an upwards adjustment in the consideration if, within a certain period, an SGBL-appointed valuer found that the value of the portfolio assets was more than 10% above the price.
14. It is common ground that SGBL never appointed such a valuer and that those board resolutions were never ratified by shareholders at a general assembly.
15. On 28 June 2021, Cedar Mundi (through Mr Attieh) and Cedar II entered into an English law sale and purchase agreement ("the SPA"), under which Cedar Mundi sold to Cedar II certain portfolio assets comprising shares and other investments, and its interest in IFAC. The consideration was payable partly in cash and partly by setting-off the price against sums owed by Cedar Mundi to MABIL, which debts had been assigned as part of the transaction to Cedar II.
16. As for the cash consideration, Cedar II paid about US$16.6m into Cedar Mundi's account with BEMO Bank in Lebanon. The US$27m consideration was revised down to some US$25.6m in September 2021, because Cedar Mundi had been unable to procure the transfer of its interests in three Lebanese entities. Save for those, title to the shares and other interests was transferred and (where registrable) registered in Cedar II's name.
17. After the conclusion of the transaction in September 2021, Mr Attieh (and others) resigned from Cedar Mundi's board.
18. On 25 October 2021, the C-331 Shareholders elected what is now its current board. At the same time, that board resolved (in a board resolution) that the SPA was invalid and that the transfer of assets to Cedar II was unlawful and irregular.
19. The Defendants all contest that resolution, and say that the C-331 Shareholders had all agreed to the deal reflected in the SPA, and now simply seek to renege on it. They reject Cedar Mundi's allegations of fraud.

The claims and these proceedings

20. On 5 April 2022, Cedar Mundi began writing to its former portfolio companies alleging fraud and asserting that Cedar Mundi was "currently initiating all necessary…legal actions" to reverse the transfers. However, Cedar Mundi did not then follow up with a claim against Cedar II to impugn the SPA and recover the assets transferred thereunder. Nonetheless, the Defendants say that the fact it had publicly voiced those allegations made third parties reluctant to deal with Cedar II.

20. It is not clear what exactly happened between April 2022 and October 2023, but on 25 October 2023 Cedar II issued proceedings against Cedar Mundi in this court seeking two declarations: (1) that the SPA was valid; and (2) that it acquired title to the assets purchased thereunder.
21. After some months had elapsed during which, as I was told, Cedar II served its claim out of the jurisdiction and some extensions of time were agreed, on 14 June 2024 Cedar Mundi served its Defence and Counterclaim which ran to some 40 pages. It was then significantly amended and extended on 23 October 2024 and runs to some 64 pages. Cedar Mundi's case was that:

a. The PPC Agreement was unauthorised in the absence of a board resolution or shareholders' resolution. The SPA was unauthorised in the absence of a shareholders' resolution.

b. The PPC Agreement and the SPA were in any event part of a fraud perpetrated on Cedar Mundi by the First and Second Defendants (using the Third to Fifth Defendants) and so were unauthorised for that reason. The Defendants (and others) are alleged to have committed various BVI law and Lebanese law crimes.

c. Cedar Mundi counterclaimed against Cedar II for declarations that the PPC and SPA were not binding or were void, an order that Cedar II return the assets it received under them, an account of profits and equitable compensation or compensation for Lebanese law torts.

22. On 21 August 2024, Cedar Mundi issued a fresh claim against all Defendants. The Particulars of Claim essentially repeated what had been its Defence and Counterclaim in the first action as against Cedar II but now also brought claims for an account and compensation (under English and Lebanese law) against the First to Fourth Defendants.
23. On 10 October 2024, Cedar Mundi applied for a proprietary injunction restraining Cedar II from freely dealing with the portfolio assets. That was resolved by consent by which Cedar II gave undertakings, which were recorded in an order dated 19 March 2025. Cedar Mundi gave the usual cross-undertaking in damages and agreed to fortify it. Cedar Mundi provided an on-demand guarantee drawn on JP Morgan Bank (in London) to pay £100,000.
24. On 14 October 2024 Cockerill J consolidated the two claims into the present proceedings with Cedar Mundi as claimant, following which, on 23 October 2024, Cedar Mundi served a consolidated PoC.
25. On 10 December 2024 the Defendants then served a composite Defence and Counterclaim. The counterclaim included what had originally been Cedar II's claim for declarations in its own claim, namely that the SPA was valid and it had acquired title to the portfolio assets. Cedar II and IFAC brought a further counterclaim, contingent on the SPA being set aside, for restitution to Cedar II of the cash consideration and payment of their costs and expenses incurred in maintaining the portfolio. MABIL counterclaimed for certain capital contributions it had made to Cedar Mundi which it says are repayable if the SPA is set aside.
26. On 27 January 2025 Cedar Mundi served its Reply and Defence to Counterclaim.
27. On 26 February 2025 the Defendants' solicitors, Pinsent Masons, demanded security for costs in the amount of £2.5 million. On 10 March 2025 Cedar Mundi's solicitors refused to give it on the basis that there was complete overlap between the Defendants' counterclaims and Cedar Mundi's claims and that therefore, pursuant to the principle in B J Crabtree (Insulations) Ltd v GPT Communications Systems Ltd (1990) 59 BLR 43 ("the Crabtree principle") no security for costs should be ordered. There then ensued correspondence, running up to and past the case management conference, culminating in the Defendants' issuing their application on 1 April 2025.

The issues on this application

28. The Defendants claim jurisdiction for security for costs on two grounds, first, that Cedar Mundi is "resident out of the jurisdiction" for the purposes of CPR 25.27(b)(i); and secondly that, for the purposes of CPR 25.27(b)(ii), Cedar Mundi is a company and "there is reason to believe that it will be unable to pay the defendant's costs if ordered to do so."^[2] It is well established that these grounds operate differently, in that in the case of residence, the amount of security is limited to the extra costs of overcoming obstacles to or burdens of enforcement (see Nasser v United Bank of Kuwait [2002] 1 WLR 1868), whereas in the case of what one might loosely call corporate impecuniosity full security is available. Since full security is sought by the Defendants, the focus of the parties' submissions is the corporate impecuniosity ground of jurisdiction.
29. Cedar Mundi accepts that each of these grounds of jurisdiction are satisfied. However, CPR rule 25.27 provides that "the Court may make an order for security for costs if (a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order." There is, over and above that requirement, a broad residual discretion whether or not to make an order, to be exercised in accordance with the overriding objective.
30. The dispute before me is confined to whether I should be satisfied that it is just to make the order, and the exercise of the residual discretion. Cedar Mundi says that I should not be so satisfied, or that I should exercise my discretion against the making of an order, for the following reasons:

a. The Crabtree principle operates in this case as a powerful, but admittedly not an absolute, determinant against security for costs in favour of Cedar II because, in the light of the nature of the claims and counterclaims, and their history, an award of security in favour of the Defendants would amount to giving parties who are in reality claimants security for costs against a defendant. This does not affect the application so far as made by the First to Fourth Defendants, who make no counterclaim. This is "issue 1".

b. The "Dumrul undertaking" offered by all the Defendants (in accordance with the decision of Hamblen J in Dumrul v Standard Chartered Bank [2010] EWHC 2625 (at [19])) does not cure the Crabtree objection as it lies against Cedar II. This is "issue 2"

c. There are additional discretionary factors militating against an award of security for costs in favour of all the Defendants, which is "issue 3", namely:

i. the lateness of this application;

ii. recognition and enforcement against Cedar Mundi in Lebanon is possible;

iii. any impecuniosity of Cedar Mundi has been caused by the actions of the Defendants;

iv. as a "responsive point", it does not assist the Defendants to say that Cedar Mundi's costs are being funded by the C-331 Shareholders; and

v. so far as the First to Fourth Defendants are concerned, there is no evidence that they (as opposed to Cedar II) will actually bear any costs.

31. Cedar Mundi contends, in the alternative, that security should be limited in certain specific respects.

Security for costs: the principles

32. The overarching legal principles applicable to an application such as the present are well established. I am greatly assisted by the recent summary of the law by Peter McDonald Eggers KC (sitting as a Deputy Judge of the High Court) in Explosive Learning Solutions Limited v Landmarc Support Services Ltd [2023] EWHC 1263, at [17] to [24]:

"…

17. First, the basis of the jurisdiction being that there is a " reason to believe " that the Claimant will be unable to comply with a costs order, if made, signifies that the Defendant does not have to prove that there is a likelihood or probability that the Claimant will be unable to pay (Jirehouse Capital v Beller [2008] EWCA Civ 908; [2009] 1 WLR 751, para. 26-35). That said, the Defendant must establish that there is reason to believe that the Claimant will not be able to pay the ordered costs. Furthermore, there must be justification for the reason for that belief and evidence for that justification. It is not sufficient if there is no more than a doubt that the Claimant is able to pay or if it is established that the Claimant might be unable to pay (Phaestos Ltd v Ho [2012] EWHC 662 (TCC), para. 71; Abbotswood Shipping Corporation v Air Pacific Limited [2019] EWHC 1641 (Comm), para. 17).

18.  Second, the burden of proof rests on the Defendant applicant for security for costs. The Court's inquiry is not to be addressed as to the Claimant's current inability to pay a costs order (unless the costs order is imminent), but an order requiring costs to be made at some future time, often after the trial of the action ( Guest Supplies Intl Limited v South Place Hotel Limited [2020] EWHC 3307 (QB), para. 65). If, however, the Defendant establishes legitimate concerns about the Claimant's financial position, and if the Claimant provides no evidence to override those concerns, the Court may be justified in concluding that the Claimant will be unable to pay the costs order which might be made. The Court therefore will take into account the totality of the evidence, including the absence of relevant evidence from the Claimant (considering that the Claimant is in most cases in the best position to provide such evidence) and the lack of any adequate explanation for any discrepancies between accounting documents ( Abbotswood Shipping Corporation v Air Pacific Limited [2019] EWHC 1641 (Comm), para. 17 ; Guest Supplies Intl Limited v South Place Hotel Limited [2020] EWHC 3307 (QB), para. 95). However, the Court will not ordinarily assess the merits of the Claimant's claim in deciding whether to grant security for costs ( Keary Developments Ltd v Tarmac Constructions Ltd [1995] 3 All ER 534, 540; Commercial Court Guide at Appendix 10, para. 4).

19.  Third, if it is established that there is reason to believe that the Claimant will be unable to pay the Defendant's costs, if ordered to do so, the Court may make an order for security for costs only if it is also satisfied that it is just to make an order for security for costs ( CPR rule 25.13(1)(a) ). However, it has been said that once it is established that there is reason to believe that the Claimant will not be able to comply with a future costs order, it will ordinarily be just to grant security for costs ( World Challenge Expeditions Limited v Zurich Insurance Plc [2022] EWHC 1365 (Comm), para. 10 ). This is because the jurisdiction is founded on inability to pay and so such an inability must have been envisaged as entitling a defendant in many cases to an order for security and, further, the interests of justice are generally best served if successful litigants recoup much of their costs and unsuccessful litigants pay those costs ( Keary Developments Ltd v Tarmac Constructions Ltd [1995] 3 All ER 534, 536, 539-540 ).

20.  Fourth, if the Court is satisfied that it has jurisdiction to grant an order for security for costs, the Court still has a broad discretion to determine whether or not it will make such an order, to be exercised in accordance with the overriding objective. Of course, there may be circumstances where such an order, even if there is reason to believe that the Claimant will not pay a costs order in favour of the Defendant and it is just to order security for costs, will not be appropriate.

21.  Where, as in the present case, the Defendant applying for an order for security for costs in respect of its defence of the Claimant's claim is advancing a counterclaim and that counterclaim is based wholly or in a very substantial part on the same facts or substantially the same facts as the Claimant's own claim, additional considerations arise in respect of the application for security for costs. In such cases, what may be described as the default principle is that the Court will not order security for costs against the Claimant. The principle was summarised by Moore-Bick, LJ in Anglo Irish Asset Finance Plc v Flood [2011] EWCA Civ 799, at para. 20 :

"If the claim and counterclaim raise the same issues it may well be a matter of chance which party is the claimant and which a counterclaiming defendant and in such a case it will not usually be just to make an order for security for costs in favour of the defendant, although the court must always have regard to the particular circumstances of the case."

22.  The rationale for this principle is that the sanction for not complying with the security for costs order is that if security were ordered and not provided, the claim might well be dismissed (Commercial Court Guide, Appendix 10, para. 6; Dumrul v Standard Chartered Bank [2010] EWHC 2625 (Comm); [2010] 2 CLC 661, para. 19 ) but the same underlying factual issues would still be litigated in the trial of the counterclaim ( BJ Crabtree (Insulations) Ltd v GPT Communication Systems Ltd (1990) 59 BLR 43 ; Dumrul v Standard Chartered Bank [2010] EWHC 2625 (Comm); [2010] 2 CLC 661, para. 18 ; Ardila Investments NV v ENRC NV [2015] EWHC 1667 (Comm), para. 67 ; Abbotswood Shipping Corporation v Air Pacific Limited [2019] EWHC 1641 (Comm), para. 29 ).

23.  That said, the fact that there is a claim and counterclaim arising out of the same or substantially the same facts and matters does not, of itself, mean that the defendant must be denied security for costs ( Jones v Environcom Ltd [2009] EWHC 16 (Comm); [2010] Lloyd's Rep IR 190, para. 17-27 ). For example, if it is established that the Defendant would not have advanced its counterclaim had the Claimant not instituted proceedings, that well may be a relevant consideration in granting security for costs ( Autoweld Systems Ltd v Kito Enterprises LLC [2010] EWCA Civ 1469, para. 58-60 ). If, however, both parties - the Claimant and the Defendant - were intending to advance a claim and it was only a matter of chance of who instituted proceedings first, the Court might in those circumstances refuse to order security for costs, or it might order that both parties should provide security for costs, assuming that it had jurisdiction to do so ( The Silver Fir [1980] 1 Lloyd's Law Reports 371 ; Petromin SA v Secnav Marine Ltd [1995] 1 Lloyd's Law Rep 603).

24.  Insofar as any unfairness arising from this state of affairs might exist, if such unfairness can be neutralised, that may sweep aside any concerns entertained by the Court in allowing the application for security for costs. Thus, in Dumrul v Standard Chartered Bank [2010] EWHC 2625 (Comm); [2010] 2 CLC 661 , Hamblen, J said at para. 19:

"If security is not put up the likely outcome is dismissal of the claim. If the Bank wishes to obtain security it should make it clear now what its position would be in that eventuality. If it was prepared to undertake to consent to the dismissal of the counterclaim in the event of the Claimant's claims being dismissed for failure to put up security then the difficulty raised by the Crabtree principle would be avoided. However, unless an undertaking is given to that effect, I do not consider that it would be appropriate to exercise my discretion to order security."

…"

33. In addressing the issues below I have had regard to these principles.

Issue 1: the application of the Crabtree principle

34. The Crabtree principle appears, from the judgment of Bingham LJ at pages 52 and 53 of the report, to rest on two related rationales: first, that where a claimant has failed to put up security and his claim is dismissed as a consequence, but the counterclaim against him continues, he should not be disentitled from defending himself by reliance on the matters he had pleaded in his now dismissed claim; and second, that a claimant or counterclaimant should not have security for costs of his claim or counterclaim. The question in all cases is whether the counterclaim serves any purpose other than to seek resolution of the factual and legal issues the subject of the claim, so as to make it a matter of chance whether or not the defendant is a counterclaimant or an original claimant.
35. In this case, Cedar II's original claim was for positive declarations as to the validity of the SPA. It was necessary to bring it because Cedar Mundi had made assertions to third parties with whom Cedar II was dealing that the SPA was invalid, and that no property passed thereunder, and Cedar II had to come to this court (the SPA containing an exclusive jurisdiction clause (clause 6) in favour of the English courts) as claimant in order to vindicate its title in a public judgment. Since Cedar Mundi was "willing to wound, but yet afraid to strike",^[3] Cedar II says that the motivation for doing so was to get Cedar Mundi to "put up or shut up". Its position, so submits Mr Montagu-Smith KC, was purely defensive. In effect, its original claim, and its counterclaim in the proceedings then begun by Cedar Mundi, was for negative declaratory relief. Once the claim had been brought by Cedar Mundi, there was no real purpose served by the counterclaim.
36. Mr Montagu-Smith KC relied heavily on the decision of Gloster J in Jones v Environcom Ltd [2009] EWHC 16 at [17-27]. In that case the claimant Lloyd's underwriters brought proceedings against the assureds for declarations that the policies of insurance were avoided for material non-disclosure; and the assureds counterclaimed for indemnity under the policies. Since there was no defence to indemnity other than avoidance, once the counterclaims had been brought the underwriters had no further interest in the claim for avoidance because it was in reality the defence to the claim for indemnity, which the assureds had to bring in order to recover.
37. Mr Wilson KC sought to distinguish this case on the basis that the claim in the Jones case was merely a claim for a negative declaration as to personal liability, whereas in this case it was a positive claim as to title.
38. I can see some force in Mr Montagu-Smith's reliance on Jones here. In many cases there may be no difference between a declaration that the claimant is not personally liable for a claim (in the face of that alleged claim) and a claim that a contract is valid (in the face of an allegation that it is invalid). Jones was such a case.
39. However, Jones is not authority for the proposition that a counterclaim for a declaration that is merely the reverse side of the relief sought by the claimant can never attract the Crabtree principle. It depends. If the purpose of a claim for a declaration that a contract is valid is not to establish a right to recovery from the defendant but to be able to tell third parties that a court of competent jurisdiction has upheld the validity of a sale contract and that the claimant received good title to the assets transferred under it, the claimant has a distinct interest in maintaining the claim if the challenge to validity were not otherwise to be adjudicated. I would distinguish Jones on the basis that, in that case, the claim for avoidance was simply a defence to the assureds' putative claim for indemnity, which the assureds had to bring (and brought by counterclaim) in order to obtain recovery from the claimant underwriters. The substantive heart of the proceedings was the counterclaim for an indemnity under the policy, and the avoidance claims were merely a defence to it. In this case, by contrast, the substantive heart of these two sets of proceedings before me is whether the SPA is valid or invalid and whether property validly passed under it. That is an issue in which the parties' interests are not equal and opposite. Cedar Mundi wishes to invalidate the SPA and recover the assets thereunder. Cedar II does not seek to enforce the SPA or to recover anything from Cedar Mundi (other than by contingent claim). It seeks the declarations of validity not (or not only) to avoid liability to Cedar Mundi but to be able to pass clean title to its assets and to regulate its dealings with third parties.
40. That is reinforced by the fact that once Cedar Mundi did "put up" and commence its claims to impugn the SPA, Cedar II did not abandon its own proceedings but continued them within the new proceedings brought by Cedar Mundi in the same terms as its original claim; and it has continued them in the consolidated proceedings. That rather suggests that the aim of the original claim was rather more than stimulating Cedar Mundi to bringing its claims which it could then defend and seek to defeat.
41. There is no real dispute that the claim and counterclaim in the proceedings brought by Cedar Mundi (which are the proceedings in which the security for costs is sought) raise the same issues as between Cedar Mundi and Cedar II, and that it was a matter of chance who sued first (in the sense that Cedar Mundi could have sued first, and on Cedar II's case should have done). Although it is also true that Cedar II's counterclaim is, as a matter of pleading, nothing more than the reflection of a defence to Cedar Mundi's impeachment of the SPA (see Anglo Irish Asset Finance v Flood [2011] EWCA Civ 799 at [20], where Moore-Bick LJ said that that might provide an "argument" that Crabtree principle should not apply) that is not the end of it. If the true rationale for the Crabtree principle is as I have stated it, then the fact that the counterclaim is, as a matter of pleading, purely defensive will not always preclude its application. If the defendant counterclaimant has broader commercial reasons for pursuing the counterclaim even though the claimant is barred from advancing his own claim, or fails or refuses to do so, then in my judgment the Crabtree principle will apply in order to eliminate the risk of unfairness which would or might result from an order for security.
42. In this case Cedar II's claim, and its counterclaim in like terms, amount to a defence which has a positive outcome needed by Cedar II regardless of whether Cedar Mundi pursues its claim. Had Cedar Mundi not launched its claim then Cedar II would have continued with its own prior claim down to judgment, in order to obtain the commercial certainty it needed in its dealings with third parties rather than its dealings with Cedar Mundi. Indeed, as Pinsent Masons said in terms in its letter of 13 March 2025:

"In reality, if Cedar Mundi elected not to pursue its allegations, whether at the outset or now, then there would be no need for these proceedings to continue as Cedar II would have the certainty it needs to continue with its business dealings with the Portfolio Assets in the normal course." (my emphasis)

43. Accordingly, I accept Cedar Mundi's submission that in the particular circumstances of this case the Crabtree principle does apply.
44. However, that then raises the question of whether Cedar II has given an effective "Dumrul undertaking" so as to neutralise any concerns which have led to me to apply the Crabtree principle.

Issue 2: The Dumrul undertaking

45. Pinsent Masons' statement in its letter of 13 March 2025 that I have recited above was not, as Cedar II submitted it was, an undertaking sufficient to neutralise the application of the Crabtree principle. In its reply evidence of 21 May 2025 (Gardiner 3, at [7]) Cedar II indicated that if security was ordered and not provided such that Cedar Mundi's claim was stayed or struck out, Cedar would be content for its own claim to be stayed. That was, in essence, repeated in its skeleton argument. On 7 July 2025, the day before the hearing, Pinsent Masons (on behalf not only of Cedar II but all the Defendants, despite the latter not being original claimants and having made no relevant counterclaim) made a formal offer to the effect that if the court ordered security for costs which Cedar Mundi did not then put up, it undertook to consent to or procure an order for:

"if the claimant's claim is stayed, the stay of the defendants' counterclaims and if the claimant's claim is dismissed, the dismissal of the defendants' counterclaims."

46. In Explosive Learning Mr McDonald Eggers KC said that a Dumrul undertaking would "sweep away any concerns entertained by the court in allowing the application". That formulation should not be misunderstood as a hard-edged rule. We are here in the field of discretion, and so in any given case the terms of the undertaking proffered by the applicant for security for costs must meet the court's "concerns" based on the application of the Crabtree principle that would otherwise lead it to refuse an order for security. Leaving aside the question of whether that should have been provided earlier, the question is whether what the Defendants have offered is an effective Dumrul undertaking in the circumstances of this case.
47. In this case the Crabtree concerns are that Cedar II would have a good commercial reason to continue with its counterclaim regardless of whether Cedar Mundi chose to pursue its own claim to invalidate the SPA. Those concerns are in my judgment met by the undertaking now proffered by Cedar II. As at the time of Dumrul, it remains the practice in the Commercial Court not to stay proceedings pending the provision of security for costs, but to dismiss them following a second stage hearing: see The Commercial Court Guide, 11^th Edition (2022), Appendix 10, para 6. That gives the claimant an opportunity to elect whether to provide the security and pursue the claim or have it dismissed. The gist of Hamblen J's decision in Dumrul (at [19]) is that the court would make the order for security if the applicant made clear in advance that its counterclaim would be dismissed once and for all if the claimant elected not to put up the security and would have its claim dismissed. The underlying purpose of an effective Dumrul undertaking is certainty at the point that the order for security is made.
48. Although Cedar II's undertaking still holds out the prospect of a stay as well as dismissal, that may simply reflect Cedar II's desire to preserve something of the earlier offers of undertakings (perhaps for costs reasons), which did not extend to outright dismissal. However, the offer of outright dismissal made on 7July 2025 was both sufficient and necessary, and the fact that it also provided for a stay does not detract from that.
49. Accordingly, in my judgment the potential for injustice of an order in favour of Cedar II by reason of the application of the Crabtree principles is eliminated by the Dumrul undertaking now offered by Cedar II.
50. The outcome is that, unless displaced by the discretionary factors to which I turn next, Cedar II should have security for the costs of its defence.

Issue 3: the additional discretionary factors

51. I address the remaining issues on the basis that it does not matter whether they go to the justice of making an order in all the circumstances of this case or the broader residual discretion, and it is fair to say that Cedar Mundi drew no distinction of principle.

(a) Lateness

52. As Cedar Mundi has submitted, in the Commercial Court first applications for security for costs should not be made later than at the case management conference (Commercial Court Guide, Appendix 10 para 1). The cases have repeatedly emphasised that an application for security for costs should be made promptly, as soon as the facts justifying the order are known; and delay is a factor relevant to the exercise of the court's discretion: Alta Trading UK Ltd v Bosworth [2025] EWHC 1097, at [78] Henshaw J.
53. In that case, Henshaw J (at [78]) adopted the analysis I offered in Re Bennet Invest Ltd (Hniazdzilau v Vajgel) [2015] EWHC 1582 at [28], which had been approved by Marcus Smith J in Santina v Rare Art (London) [2023] EWHC 807 at [26]:

"…

28.  Delay in making the application is one of the circumstances to which the court will have regard when exercising its discretion to order security. The court may refuse to order security where delay has deprived the claimant of the time to collect the security, or led the claimant to act to his detriment or may cause hardship in the future costs of the action. The court may deprive a tardy applicant of security for some or all of his past costs or restrict the security to future costs (see CPR 25.12.6). The question of delay must be assessed at moment when the application is made, although of course the court must take into account the impact of an order at the time it is made. That is because, as the Court of Appeal said in Prince Radu of Hohernzollern v Houston [2006] EWCA Civ 1575 (cited at White Book p 823–4), the order for security for costs comes with a sanction which gives a claimant a choice whether to put up security and go on or to withdraw his claim; that choice is meant to be a proper choice, and the claimant is to have a generous time with which to comply with it. As Waller LJ pointed out (at [18]), the making of an order for security for costs is not intended to be a weapon whereby a defendant can obtain a speedy summary judgment without a trial."

54. Lateness is a relative concept in many areas of case management. The procedural chronology in this case shows that in the Commercial Court it is possible to have a case management conference in a complex multi-party case only two months after the close of pleadings, and a four week trial eleven months later. Complaints of lateness often, as in this case, boil down to a few weeks or one or two months. The shorter the period of delay complained of, the stronger the need to show that it made a difference to the respondent's decision-making about whether to provide security as ordered or withdraw the claim and throw away the costs invested thus far in the proceedings: see Absolute Living Developments Ltd (in liquidation) v DS7 Ltd [2018] EWHC 1432 at [38], Marcus Smith J.
55. In this case there is no particularly good reason why the Defendants did not first demand security when they saw Cedar Mundi's Counterclaim in Cedar II's proceedings on 14 June 2023, or its Particulars of Claim in Cedar Mundi's own claim when it was served in August 2024. There was nothing in the procedural steps thereafter which would explain or justify making it at any time thereafter. The Defendants do not, for example, say that it was essential first to see Cedar Mundi's reply and defence to counterclaim (which was served on 27 January 2025) or even why it was necessary to wait a further month thereafter. Mr Watson, who addressed me briefly on the issue, submitted that matters were held up by the resolution of the question over who was funding Cedar Mundi's claim, but I cannot see that that was a reason not to launch the application a good deal sooner than 1 April 2025 so that it could be heard at the case management conference. I accept that this was a heavy application requiring a special listing, and that a period of negotiation in correspondence was appropriate, but I see no good reason why the five weeks which elapsed between 26 February 2025, when the Defendants first made their demand for security, and 1 April 2025 when the application was issued, could not have been earlier.
56. On the other hand, Cedar Mundi has not identified any prejudice at all. It simply relies on the fact of lateness. Indeed, it did not raise any lateness objection until it served its skeleton in opposition to the application. It has not advanced any reason for its own delay in raising its lateness objection, all of which suggests that it has suffered no prejudice. Cedar Mundi has not said, for example, that if the demand for security had been made before 26 February 2025, or at any time after June or August 2024 so that the application could be entertained at the case management conference in late March 2025, then Cedar Mundi would not, or might well not, have proceeded with the claim if it judged that it was at risk of having to put it up (even had a Dumrul undertaking been offered by Cedar II at that stage). On the contrary, Mr Wilson KC made it plain in oral submissions that if an order for security were to be made Cedar Mundi would comply with it. He did not say, and there was no evidence to suggest, that the amount of Cedar Mundi's own costs already sunk in this litigation is now too much to write off as the price of not putting up security.
57. Accordingly, although in my judgment the Defendants could and should have demanded their security earlier and in good time for the application to be dealt with at the case management conference, it has not caused Cedar Mundi any prejudice. In the exercise of my discretion, therefore, I reject the relative lateness of the application to deny the Defendants any security at all. That would not be justified.
58. It is of course open to me to refuse the Defendants security for some of their past costs or to limit the security to future costs, as the court did in Warren v Marsden [2014] EWHC 4410 (at [21]). I do not propose to do that, first because of the absence of any prejudice to Cedar Mundi flowing from lateness and secondly because any intermediate start date for the Defendants' costs would involve an element of guesswork. Nor would it be proportionate to award future costs only, even though some 70% of the total costs estimate down to the end of trial are estimated future costs. Furthermore, the Defendants have discounted their overall incurred and future estimated costs by 25%, which caters for most of their past incurred costs anyway. That is not to say that no further discounts should be made (as to which see below on quantum) for other reasons, but an order for security for future costs only would not be a fair or proportionate response to the delay.

(b) The possibility of recognition and enforcement in Lebanon

59. Cedar Mundi prays in aid the fact, as it alleges, that it has assets that are available for enforcement of any costs order in favour of the Defendants. It lists in particular the sum of about US $330,000 in cash sitting in a bank account with J P Morgan in the USA of which Societe General de Banque au Liban ("SGBL") is the account-holder, some shares in and convertible loans to a handful of Lebanese tech start-ups, and, as the most significant asset the sum of about US $16.6 million held in an account with BEMO bank in Lebanon.
60. Mr Montagu-Smith advanced a threshold objection to the effect that Cedar Mundi's acceptance of the court's jurisdiction on the grounds that there is reason to believe that it will not be able to pay the Defendants' costs precludes Cedar Mundi from seeking to rely on availability of assets as a matter going to discretion. In essence, he submitted that if there is reason to believe that Cedar Mundi will be unable to meet an order for costs, as it admits, then there is no room for the exercise of discretion against the grant of an order on the grounds that it has assets with which it might do so. I accept that submission in the circumstances of this case because it is the very inability of Cedar Mundi to remove the assets or their value from Lebanon or to use them to provide liquidity with which to meet an order for costs which has led it, rightly, to accept the court's jurisdiction to make an order for security for costs under CPR 25.27(b)(ii) in the first place.
61. I should record the fact that Mr Wilson clarified the scope of his concession as to jurisdiction, which is that Cedar Mundi would not have the readily realisable assets to do so with 14 days, which is the normal period provided for in orders for security for costs. Implicit in that was that Cedar Mundi would have assets available to meet an order at some later time, which is a point that, he submitted, would go to discretion. I can see the force of that but Cedar Mundi did not identify any particular period within which it would be able to meet an order for costs after it had been made; and without any evidence or submission as to that, the uncertainties inherent in the limitation of the concession do little to persuade me that my discretion should be exercised against the making of an order.
62. Nor does Cedar Mundi allege that its claim will be stifled if an order for security for costs were to be made. On the contrary, as I have already said, Mr Wilson told me that were an order to be made Cedar Mundi would comply with it.
63. Accordingly, there is no need to analyse closely the precise asset position or value, or the intricacies of Lebanese law on the subject. However, even if there were any room for the exercise of discretion on that issue, in due deference to the arguments, I would anyway not be deflected from making an order for security for the following reasons:

a. As to the US $330,000 held by Cedar Mundi in an account with SGBL, this is obviously far from enough to meet a costs order in the Defendants' favour, although it could go to reduce the overall quantum if it were immediately amenable to enforcement by the Defendants. However, it is not clear from the evidence that it is so amenable since the funds are held pursuant to correspondent bank arrangements between J P Morgan and SGBL which are not in evidence before the court. It is possible that enforcement against that amount would involve both enforcement in Lebanon and then some steps involving J P Morgan. According to Cedar Mundi's own expert on Lebanese law, enforcement in Lebanon requires Cedar Mundi's written authorisation under section 4 of the Banking Secrecy Law. That has now been (or I am told would be) provided, but it is not clear how the funds at J P Morgan will then be reached. Although I cannot say that the US $330,000 will not be ultimately available, nor can I say that it will be without significant and expensive steps. Even if it is available it is possible that the sums will be applied in repaying the C-331 Shareholders part of what they have lent Cedar Mundi by way of funding the claim. Taking account of the relative size of that asset and the uncertainties surrounding its availability to meet a costs order means that it is not a good reason for me to refuse to make an order.

b. As to the Lebanese shares and convertible loans, they are said by Cedar Mundi to have a market value of US $800,244.23. However, even though they may be amenable to enforcement, there are, in respect of each of the companies, very serious reasons to be sceptical about their liquidity, whether there is an available market for them, whether they can be transferred out of Lebanon and the current values given that some of the values attributed by Cedar Mundi are many years out of date. Mr Wilson offered little resistance to the concerns of this nature expressed in Mr Montagu Smith's skeleton. Taking account of the uncertainties I reject the suggestion that the shares and convertible loans provide a justification for declining to order security.

c. As to the US $16.6 million, the short point is that this is held in an account with BEMO bank in Lebanon as "Lollars", i.e. US Dollars which were held in Lebanon before 19 October 2019 and which Cedar Mundi accepts cannot be transferred outside Lebanon. Cedar Mundi says, relying on its Lebanese law expert Mr Soumrani, that BEMO Bank could sell the Lollars for "fresh" US Dollars and then transfer those out of Lebanon, at a prevailing exchange rate of 15%-17% which would yield some US $2,475,000 to US $2,805,000 outside Lebanon. That evidence is not admissible as Mr Soumrani has been called to state what is Lebanese law, and not as to current foreign exchange practices in Lebanon, on which he professes no expertise. In any event, even were I to admit it, I would give it very little weight since on his own opinion BEMO bank would not be able to use its own US Dollars to effect the exchange but would have to undertake a swap trade with another BEMO customer holding fresh US Dollars who wanted to buy Lollars: and there is no evidence as to how easy or quick that might be or how liquid that "internal" exchange market is.

64. Accordingly I reject the suggestion that in the exercise of my discretion Cedar Mundi's assets position militates against making any order for security. I can also add at this stage that I also reject the suggestion that the presence of these assets can and should persuade me to "tailor" the order for security by reducing the quantum to reflect the risks of non-enforcement. It is well established that that is not an appropriate exercise of discretion to grade the risk on a sliding scale and reduce quantum accordingly: Danilina v Chernukhin [2018] EWCA Civ 1802.

(c) The impecuniosity of Cedar Mundi has been caused by the actions of the Defendants

65. The short point made by Cedar Mundi is that the material cause of Cedar Mundi's financial position is the actions of the Defendants themselves, in reliance on the well-known principles set out in Keary Developments Ltd v Tarmac Construction Ltd [1995] All ER 543 at 540 (Peter Gibson LJ) and Lindsay Parkinson v Triplan [1973] QB 609 at 623. The Defendants' specific action was, says Cedar Mundi, in structuring the SPA so that the consideration for the assets acquired by Cedar II thereunder was in Lollars, which has led to Cedar Mundi not having US Dollars.
66. I cannot accept that submission. The SPA provided in terms at clause 2.1 that the Consideration (defined thereunder) would be paid "exclusively and entirely in local non-fresh United States dollars held at Lebanese Banks ("Local Non-Fresh USD or L$")". That was the contract to which Cedar Mundi bound itself and which it now seeks to impugn by these proceedings. As matters stand on the evidence before me, the cause of Cedar Mundi having Lollars and not US Dollars was its own agreement to receive Lollars by way of consideration. To the extent that Cedar Mundi blames Cedar II or the other Defendants for its entry into the SPA in the first place, that is a matter for trial. Mr Wilson rightly did not invite me to investigate the merits, and as a matter of practice the court is strongly discouraged from doing so save in the most obvious cases: Commercial Court Guide, Appendix 10, paragraph 4.

(d) The funding by the C-331 Shareholders

67. Cedar Mundi says that it does not assist the Defendants to complain that the claim is being funded by the C-331 Shareholders. I disagree. The fact that the C-331 Shareholders are funding the claim (which does not appear to be in issue) explains how Cedar Mundi, despite there being reason to believe that it will not be able to meet a costs order when the time comes, is able to pursue its claims and why in turn the Defendants have incurred and are at risk of having to incur further substantial legal costs which they may not be able to recover from Cedar Mundi. It is no answer to an application for security for costs that the applicant can apply for a third party costs order under section 51 of the Senior Courts Act 1981 and CPR 46.2 following trial. On the contrary, it would be unjust that neither Cedar Mundi nor the C-331 Shareholders should take all the benefits of being able to advance their claims against the Defendants without assuming a concomitant risk as to the costs incurred by the Defendants as they are incurred.

(e) The First to Fourth Defendants

68. The Defendants' application for security for costs was made by and on behalf of all of them without distinction between them. The effect of the application of the Crabtree principle, however, would (but for the effective Dumrul undertaking) have been that only the First to Fourth Defendants would be entitled to security for their own costs. Cedar Mundi submitted that it would not be just to order security against the First to Fourth Defendants if they could not demonstrate by evidence not only that they were legally liable to their solicitors to pay them but that they had actually paid and would continue actually to pay them themselves; or in other words that nobody (such as Cedar II) was discharging their liability for them.
69. The point had not been flagged in the parties' skeleton arguments and really only emerged during oral argument by Mr Wilson in response to the application. I enquired whether there was any authority on the point. After the hearing had concluded I received, unwontedly, a number of rounds of email submission, and two further (short) sets of written submissions, for which I gave permission. I have considered those submissions carefully, as well as the decision of the Court of Appeal in Heathfield International LLC v Axiom Stone (London) Ltd [2021] Costs LR 819 relied on by Cedar Mundi.
70. In my judgment there is nothing in Cedar Mundi's point. First, since I have held that Cedar II is entitled to security for costs (because of its Dumrul undertaking), if it is actually paying all or any of the costs of the First to Fourth Defendants' costs (as Cedar Mundi suggests) then the absence of any evidence as to how the First to Fourth Defendants actually propose to discharge their own liability (if they have any) is neither here nor there. Cedar Mundi rightly accepts at paragraph 1 of its post-hearing note of 11 July 2025 that the issue only arises at all if I am against the Defendants on the effect of the Dumrul undertaking, which I am not.
71. Secondly, in the Heathfield case the Court of Appeal expressly disavowed any general principle that parties should routinely disclose their source of funding in security applications in order to persuade the court to exercise its evaluation, or its broader discretion, to order security for costs (see Nugee LJ at [28]). The point being taken on appeal was that the judge below in that case should not have taken account of the fact that he did not know who was actually discharging the defendant's liability for its costs, in the context of a wider mystery about why either side was litigating at all. All that the Court of Appeal held was that that was a matter which was relevant to the exercise of the judge's discretion in the particular circumstances of that case and that the appellate challenge to the exercise of his discretion should fail (see Nugee LJ at [30]).
72. Thirdly, as a general principle it would in my judgment introduce a burdensome and highly intrusive requirement if every applicant for security for costs was required to satisfy the court with positive evidence not only as to his liability for the costs but the absence of any other person who might discharge that liability before the discretion to order security could be exercised in his favour. There is no justification for making a defendant prove on a security for costs application that which he would not be required to prove in order to obtain an order for a summary assessment of costs, or a payment on account of costs, at the interlocutory stage or even an order for costs at the end of the proceedings. Provided the indemnity principle is engaged, that is all that matters; and it is engaged by the fact of liability, not by further proof that the relevant party will actually pay. Security for costs is intended to secure against the liability which is engaged by the indemnity principle.
73. Fourthly, Cedar Mundi submits that the court should infer from the absence of any evidence about the funding arrangements as between the various defendants that Cedar II is funding all of the Defendants' costs. As I say, even if that inference were properly open to me and I were to draw it, it would make no difference since Cedar II is entitled to an order for security for its costs. In any event, I decline to draw that inference. It has now been confirmed by Pinsent Masons that notwithstanding that they remain jointly and severally liable for the whole of the legal costs, the five Defendants have agreed between themselves to bear 20% of those costs. Cedar Mundi says that I should reject that assertion on the grounds that it is not credible because it conflicts with Mr Gardiner's previous evidence and should have been raised earlier. I am unpersuaded by that. The issue of who was bearing the liability as between the five Defendants was never properly and clearly canvassed in the inter-solicitor correspondence before the application was made, or since, was not addressed in the evidence, and was not the subject of written submission. Although there was much discussion of the allocation of the Defendants' costs as between issues in which Cedar II was interested as part of its counterclaim and the incremental costs of the issues only going to the defence of the First to Fourth Defendants, that was important because Cedar Mundi accepted that its Crabtree point did not affect the First to Fourth Defendants. The discussion was about the costs of issues, not who was bearing how much of all the costs. I do not think that Pinsent Masons can fairly be criticised for not making the costs-sharing position clearer earlier, and there is no basis on which I can fairly reject a representation of fact made by leading counsel on instructions from Pinsent Masons.
74. The real gist of Cedar Mundi's complaint is that there is a risk that each Defendant might be oversecured for his costs exposure. That is not a real risk given that each Defendant still bears joint and several liability for all of the costs. The 20% arrangement is simply a costs-sharing arrangement as between the Defendants. As I understand it the arrangement does not limit Pinsent Masons to a 20% recovery from each Defendant.

Cedar Mundi's alternative position: security should be limited

75. As its fall-back, Cedar Mundi submitted that if the Court were minded to order security in principle, its alternative position is that any such security should be limited as follows:

a. It should be referable only to the additional costs of the personal claims (i.e. the claims made against the First to Fourth Defendants);

b. It should cover only future costs, not incurred costs (given in particular the lateness of this application);

c. It should be for only a reasonable and proportionate part of those costs;

d. If the Court is minded to make any significant order for costs, an initial tranche should be payable within 28 days, with the Defendants having liberty to apply in the event that the parties cannot agree later tranches.

76. I can deal with these in short order.

a. The question of the quantum of the additional costs of the personal claims against the First to Fourth Defendants does not arise because I propose to order security for costs in respect of the costs of all the Defendants. I do not need to investigate Mr Wilson's granular submissions about how to strip out those costs and what they should be.

b. I do not intend to restrict the order for security for costs to future costs only. Although the application could and should have been brought earlier, it would to my mind not be fair to limit the Defendants to future costs where the lateness has caused no prejudice to Cedar Mundi, and the delay is not particularly egregious. However, I do see force in Cedar Mundi's submission that sum of £447,522.68 incurred by Cedar II in its own claim should be disallowed because, but for the Dumrul undertaking, the Crabtree principle would have applied to have knocked it out anyway; and in any event they are not costs incurred by the First to Fourth Defendants. The pertinent question is whether by giving the Dumrul undertaking security should extend to those costs. I do not see why it should not, since they are costs as much attributable to the costs of Cedar II's claim as to the counterclaim. However, any security for that amount should only be given to Cedar II and not the First to Fourth Defendants not least since those legal costs will only have been incurred by Cedar II for its own benefit. It is unlikely that the First to Fourth Defendants would have agreed to be liable for them, and they have not said that they have so agreed. I propose that the order for security should cover those costs, but the order must be clear that security in respect of those specific costs is put up only in favour of Cedar II and not the First to Fourth Defendants.

c. I agree with Cedar Mundi that the quantum of the security should be for the reasonable and proportionate part of the Defendants' costs. The applicable principles were set out by Henshaw J in Pisante v Logothetis [2020] EWHC 3332 at [88] and are not in dispute before me. The Defendants seek just under 75% of the total past incurred and future estimated costs which in their May spreadsheet stood at £3,346,916.94. Although, as Cedar Mundi submitted, this is a complex case, I see no reason to depart from the normal expected proportion of recoverable costs after a detailed assessment, namely 65%: see for example Peak Hotels and Resorts Ltd v Tarek Investments Ltd [2015] EWHC 386, at [92], Henderson J. I would also apply a further discount of 5% to reflect the fact, as I see it, that the Defendants have chosen to staff the case with two Grade A and one Grade B solicitors with no Grades C or D solicitors. I have no difficulty with the hours or the rates per se, given the nature of the case, but I do think that savings could be made by using more junior solicitors. I am not able to say, as Mr Wilson submitted, whether the rates for experts are or are not excessive, or whether the incurred costs thus far are "unusually high", or whether the future time estimates are "at the very top end of what might be incurred". My overall assessment is that the amount of security to be provided to Cedar II is £2,008,149.60, which is 60% of the total of £3,346,916.94. For convenience I round that down to a clear £2 million. So far as security to be provided to the First to Fourth Defendants is concerned, it will be limited to £1,552,477 out of the £2 million to reflect my decision in respect of the sums incurred by Cedar II of £447,522.68 I have referred to above.

d. I see no reason to depart from the usual order that the full amount of security should be provided within 14 days. Although Mr Wilson sought a more attenuated order, with a first tranche in 28 days and liberty to the Defendants to apply thereafter for further tranches, I saw no evidence to justify such an order, which to my mind would prejudice the Defendants and only encourage further dispute and add further to the costs.

77. I would invite the parties immediately to seek to agree a form of order giving effect to my judgment and to submit it to me for approval as soon as possible, and to put their costs and any other consequential submissions succinctly in writing, limited to three pages, and I will deal with those also in writing.

Note 1    Blom Bank SAL, Bank Audi SAL, Fransabank SAL, and Bank of Beirut SAL.    [Back]

Note 2    The numbering of the rules changed on 6 April 2025, a few days after the application was issued, but nothing appears to turn on any changes to the text. I have used the post 6 April 2025 rules.    [Back]

Note 3   Alexander Pope, Epistle to Dr Arbuthnot.    [Back]