58 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 59 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C dismissed if the order is not complied with.” Dismissing the Defendants’ application, Bright J affirmed the test set out by Longmore J in Azov Shipping Co [1999] 2 Lloyd’s Rep 39: that, only in rare cases, would a court or arbitrator order security for costs where the respondent has (1) sufficient assets to meet any order for costs; and (2) those assets are available for satisfaction of any such order for costs. In his judgment, Bright J rejected suggestions that previous case-law (namely Konkola [2014] EWHC 2146 and Kazakhstan v Istil [2005] EWCA 1468) indicated that the approach to determining applications for security for costs under section 70(6) of the Act should replicate the approach taken in Rules 25.12 and 25.13 of the Civil Procedure Rules (“CPR”), i.e. that the court should not apply the additional test of “ready availability.” Importantly, Bright J noted that the approach taken under section 70(6) of the Act could not mirror the approach taken under the CPR as it effectively excluded the ground that is one of the most commonly relied on under the CPR: that the claimant is resident out of the jurisdiction and not resident in a Hague Convention state. In contrast, section 70(6) of the Act states that an order for security for costs shall not be exercised on the ground that the applicant is “an individual ordinarily resident outside the United Kingdom…or a corporation or associated incorporated or formed… outside the United Kingdom, or whose central management and control is exercised outside the United Kingdom.” Disagreeing with the Defendants’ contention that the Czech Republic’s assets were not within reach for the purposes of enforcement (i.e., they were not readily available), Bright J provided useful insight into what factors might influence the court’s discretion to grant security for costs under section 70(6) of the Act: 1. Non-compliance with court orders Where a claimant has not complied with previous court orders, the court will distinguish between (1) orders permitting defendants to enforce against the claimant; and (2) orders requiring a claimant to make payment. If the claimant’s non-compliance falls into the former category, rather than the latter, they are unlikely to be considered by the court to be persuasive. 2. Overall conduct The court will only take into account the claimant’s conduct to the extent that it indicates a propensity to dissipate assets which may otherwise be available to meet a costs order. 3. Undertakings The provision of an undertaking to comply with an order for costs creates a strong presumption in favor of that party’s compliance. Accordingly, only persuasive evidence to the contrary will compel the court to depart from that presumption. 4. Quantum The court will only make an order for costs for security if the sum requested is considered reasonable in the circumstances. This is a highly factdependent analysis. The Economic Crime and Corporate Transparency Act: The Expansion of Corporate Criminal Liability in the UK The recently implemented Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) is expected to result in an increase in corporate criminal liability via: (i) changes to the “identification doctrine,” which is the legal test for attributing liability for an individual’s actions to a corporate; and (ii) the creation of a new failure to prevent fraud offense. The identification doctrine As of 26 December 2023, if a senior manager of a body corporate or partnership, acting within the actual or apparent scope of their authority, commits a “relevant offense,” then the organization will also be guilty of that offense (s.196 of ECCTA). A “senior manager” is an individual who plays a significant role in: (i) making decisions about how the whole or a substantial part of the company’s activities are managed or organized; or (ii) actually managing or organizing International Arbitration I N T
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