Security for costs

Diag Human SE v Czech Republic [2013] EWHC 3190 (Comm), [2013] All ER (D) 309 (Oct); NLJ 8 November

Under art III of the NY Convention, the local court was free to impose its own procedural conditions, such as orders for disclosure, time limits for evidence and, in respect of compliance with those conditions, to make final or unless orders and, in the event of failure to comply with such orders, to impose sanctions including dismissal. That also included security for costs, if otherwise appropriate, and so long as it is non-discriminatory. The fact that there was an express remedy given by art VI whereby a defendant might be liable for security in respect of the award and/or for costs did not take away the effect of art III. There was no reason why, unless disqualified from obtaining security by virtue of the fact that the onus of proof was upon him, a purely passive defendant in award enforcement proceedings should not be able to seek, like any other defendant, security for costs in defending such an application. Consequently, if security for costs was available to a defendant in relation to enforcement of a domestic award (where he was not making an offensive application under ss67–69 of the Arbitration Act 1996), then it might also be available to a defendant resisting enforcement of a NY Convention award by reference to art V(e).