VITOL SA v GENSER ENERGY GHANA LIMITED

1. This short judgment is to be read as supplementing the Judgment which I have already handed down with short title [2022] EWHC 1812 (Comm). The parties have largely been able to agree the terms of the draft Order following that Judgment but two issues remain for me to resolve: (a) whether (as Vitol contends) the payments ordered to be made by Genser in respect of the judgment sum and payment on account of costs should be paid within 14 days or rather (as Genser submits) it should be given 6 weeks (to 2 September 2022) to make those payments and (b) whether (as Vitol contends) Genser should be ordered to pay interest on the costs incurred by Vitol, and if so, for what periods. I am grateful to both parties for their short further written submissions. 2. The effect of my Judgment is that Genser has been ordered to pay (i) USD 3,295,019.26 by way of the balance of the Settlement Amount claim; (ii) USD 2,631,064.70 by way of interest on that sum and (iii) £580,000.00 as a payment on account of Vitol’s costs. Time for payment 3. The usual rule is that judgment debts must be paid within 14 days of the relevant order – see CPR 1998 rule 40.11. However, it is clear that the Court has a discretion to make a different order. Genser seeks a different order (namely that it be permitted until 2 September 2022 to make payment) on the following grounds. As appeared in the evidence before me at the trial, Genser has a substantial finance facility with a syndicated group of lenders who act through a Senior Agent. Genser says that it is unable to discharge the sums ordered to be paid by it to Vitol without first obtaining the consent of the Senior Agent because the liabilities exceed its authority to make payment without that consent and because the payments would constitute expenditure which is outside the budget approved by the Senior Agent. Essentially, whilst Genser does not anticipate any problem obtaining that consent, it requires time to do so. 4. Vitol opposes Genser’s request. It submits that the principles which apply to an application for an extension of time for payment of a judgment debt were set out in Gipping Construction Limited v Eaves Limited [2008] EWHC 3134 (TCC) at [11] as follows: … the normal rule is that judgment sums should be paid within 14 days unless the judge otherwise orders. The judge has an absolute discretion. It seems to me that the following principles or practice can and should apply. First, if a party wishes to persuade the court that a period greater than 14 days should be allowed for payment, it is necessary that that application is supported by proper evidence. Secondly, it is much better generally that, if there is a genuine problem about the defendant paying, or being able to pay, that that is a matter first fully discussed on a “without prejudice” or even open basis between the parties. Ultimately, of course, the court can be asked to rule upon it, but it is much better if commercial parties meet and discuss the issue between themselves and it would only be if they were unable to agree that the court should consider an alternative longer period. It is unlikely that mere inability to pay will suffice to justify the extension of the normal fourteen day period; usually, inability to pay is no defence and an insolvent debtor must take the usual consequences of its insolvency.” 5. Vitol’s position is that, at least in the post-trial correspondence, Genser had provided no adequate explanation for the request for additional time, let alone supported it with proper evidence. 6. I am, exceptionally, here satisfied that it is appropriate to give Genser until 2 September 2022 to make the payments. Although Genser has not put in separate evidence in support of the application for an extension of time, I had heard evidence in the course of the trial which supports the matters which are now relied on by Genser, in particular, as to its funding arrangements and that those facilities were subject to consents by the Senior Agent. Whilst, it is right to note that even now Genser has not identified with any precision how long obtaining that consent will take, I am willing to infer that it is likely to be weeks rather than days. This is not case where Genser is unable to pay, rather that there are constraints about making the payments. Interest on costs 7. Two issues arise here: (a) whether I should order Genser to pay interest on Vitol’s costs and (b) if so, at what rate and for what period. 8. The starting point is CPR 1998 rule 44.2(6)(g) which provides that the Court has the power to order the payment of interest on costs from a date prior to judgment. I have been reminded (by reference to the decisions in Sharp and others v Blank and others [2020] Costs LR 835 and [22] and he decision of Leggatt J (as he then was) in Involnert Management Inc v Aprilgrange Limited and others [2015] 2 CKC 405 at [7]) that the essential purpose of such an order it to compensate the party who has lost the benefit of monies which it has had to pay to its solicitors or has had to borrow it and that such orders are commonly made in the courts, especially I would add in the Commercial Court. On behalf of Genser, it was submitted that thi is a relatively novel jurisdiction and that the task is to assess what is reasonable for both parties, especially having regard to the class of litigant to which they belong (see SOS for the Department of Energy and Climate Change v Jeffrey Jones and others [2014] EWCA Civ 363 at [17]). 9. Here, the claim was commenced in February 2020, almost two and a half years ago. The parties are commercial parties. Vitol is one of the largest oil traders in the world and Genser is a significant player in the energy market. Vitol has incurred significant costs in pursuing the claim which has been defended vigorously by Genser throughout. As I I noted in my main Judgment, Genser’s case has undergone several changes of direction all of which has added to the costs. 10. Although Genser submits that I should not make an order in the absence of evidence to establish precisely what costs were paid by Vitol and when, I am not satisfied that is the correct position when how and when the payments were made can be easily established and is unlikely to be in issue. In my judgment, this is an appropriate case to award interest on costs to Vitol. These are substantial commercial proceedings and it is right that Vitol should be compensated for being out of its money. I will order that interest is paid from the date of the relevant invoice until three months after the date of the Judgment (ie 30 September 2022) after which, if the costs have not been paid, interest will run at the judgment rate. This was the approach adopted in Involnert and Hyde v Nygate [2021] EWHC 1150 (Ch) and provides Genser with the opportunity to take a view on its liability. 11. Turning to the appropriate rate, Vitol contends that the correct rate is at the Bank of England’s base rate + 2% which, it submits, is a small uplift on the actual rate for a large period of the litigation (0.1%). For Genser, I was referred to the observation in the Jeffrey Jones case at [17] and [18] to the observations there that the rate of interest may depend on the class of borrower. There is no doubt here that Vitol falls within the category of “first class borrower” and in my judgment the correct rate is that set by the short-term cost of unsecured borrowing for that type of borrower. For most of the period of the litigation, that has been 0.1%. In my judgment, it is proper to reflect some uplift on that figure but that the 2% above base is too high. I order that interest be payable on costs at the rate of 1% over the base rate for the time being of the Bank of England. 12. I invite the parties to agree the final minute of order for my approval.