Can a respondent who was present when permission to appeal was granted still ask the Court of Appeal for security for the costs of the appeal? Yes, held the Court of Appeal on 22 October 2026 in The Russian Federation v Hulley Enterprises Limited and others [2026] EWCA Civ 1353. Fancourt LJ, with whom Phillips LJ agreed, ordered Russia to provide £975,000 by 1 March 2027 or have its appeal struck out. In fixing that figure, the court cut down a costs schedule that included a £2 million brief fee for leading counsel, describing the proposed counsel’s fees as astonishing, at least for the purposes of security.
What the case was about
Since 2015 the respondents have been seeking to enforce in England three arbitration awards, seated in the Netherlands, under which Russia was found liable to pay them about US$50 billion plus interest (para 2). After a state immunity challenge failed, Bright J decided further preliminary issues in the respondents’ favour on 2 March 2026 and ordered Russia to pay costs, including an interim payment of £2.5 million by 1 June 2026 (paras 3–4). He gave permission to appeal on one ground; Males LJ later gave permission on two more, and provisionally on five others (paras 5–6).
With earlier costs orders still unpaid, the respondents applied for conditions on the appeal and for security for its costs (paras 1, 7). By the hearing, Russia had paid the outstanding costs into court, and the interim costs late (paras 12–13). Russia said there was no evidence of a real risk that it would not pay, and that the court had no power to order security: because the respondents had been present when Bright J granted permission, CPR 52.18(3) barred any later application for conditions, and security on these terms was a condition by another name (para 35).
What the Court of Appeal decided
No conditions. Now that the principal sums had been paid into court, there was no compelling reason to attach conditions to the appeal: the interest still owed was small, and paying the money out to the respondents was an administrative matter for the court. Conditions would very likely have been imposed had the costs still been unpaid at the hearing (paras 26–28, 30). Permission on the provisional grounds was confirmed (para 31).
Power to order security. An application for security for the costs of an appeal under CPR 25.29 is not an application for a condition under rule 52.18(1)(c). The rules are distinct, and rule 52.18(3) does not constrain rule 25.29 (paras 70–71). Russia’s argument rested on a misreading of Spar Shipping and Spicejet (paras 63, 69). Requiring a successful party to apply for security there and then at the permission stage would, the court thought, surprise most practitioners (para 60).
Justice of the order. As a foreign state, Russia is resident outside the jurisdiction, the gateway for an order (paras 18, 32). Its payment history gave little comfort and was equally consistent with paying when it suited it (para 40), and its explanation for paying late was wholly unconvincing (para 45). This was a rare case in which the court could conclude without evidence that there was self-evidently a real risk that these respondents could not enforce a costs order in Russia, a conclusion the court said sets no precedent for what is needed to show such a risk in other cases (para 55). The evidence also showed there could be serious delay in payment even if Russia were willing to pay (para 56). The disadvantage to Russia, which could plainly pay, was very slight (para 57). Security must be paid by 4pm on 1 March 2027, failing which the appeal stands struck out without further order; there is no stay meanwhile, and the appeal will not be listed before 9 June 2027 (paras 80–81).
Amount. The respondents’ schedule came to about £3.64 million for a four-day appeal, mostly counsel’s fees, and they sought 70% of it (para 82). For the purposes of security, the court said the proposed counsel’s fees, including the £2 million brief fee, were astonishing and could not be justified: seniority and market rates have little relevance to the standard-basis assessment a costs judge would apply, and a paying party can only be expected to pay what is reasonable and proportionate (paras 84–85). It fixed security at £600,000 for counsel’s fees and £375,000 for solicitors’ costs and other disbursements, a total of £975,000, while stressing that this does not limit the costs judge’s discretion on any later assessment (paras 83, 86, 89–90).
Why it matters
- Security is a separate route from conditions. A respondent who was present when permission was granted can still apply for security for the costs of the appeal under CPR 25.29 (paras 70–71).
- Conditions are a different matter. A party present when permission is granted cannot later apply for conditions under rule 52.18(1)(c), a rule the court said is perhaps not as well known as it needs to be. An unless order under rule 52.18(1)(a) remains possible, but will usually need a material change of circumstances (paras 17, 60, 66–67).
- Avoid twin-track applications. The court suggested parties should not seek both security and a separate condition that the security be paid (para 73).
- Costs schedules will be tested, whatever the stakes. Even in a multi-billion-dollar dispute, security reflects what a costs judge is likely to allow, not what a party chooses to spend (paras 83, 85).
- In our view, the court’s comments on the brief fee are likely to be cited whenever a paying party challenges counsel’s fees on an assessment or a security application.
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Read the full judgment: The Russian Federation v Hulley Enterprises Limited and others [2026] EWCA Civ 1353 (The National Archives).