The High Court grants the security for costs pending challenge of an award.
The claimants, three companies incorporated in Mauritius, challenge, before the High Court, one of the arbitral awards in favour of the Respondent, the Islamic Republic of Pakistan, obliging them to pay the costs arising from the arbitration procedure.
The Respondent then brought a parallel procedure before the High Court to obtain security for costs and for the Claimants to be forced to set aside the sums due in the arbitration before the Court.
The Court granted the Respondent’s first request regarding the security for costs as the Claimants had enough funding to challenge an award and could therefore seek an order against its funder at the end of the proceedings on the merits of the case.
However, the Court denied the Respondent’s request to order the Claimants to pay into the Court the monies awarded in arbitration. Indeed, such order can be made when the challenge is “flimsy or otherwise lacks substance” and when the challenge in some way prejudices the ability of a defendant to enforce the award or diminishes the claimant’s ability to honour the award. Here, allowing such a measure would have put the Respondent in a better position than that before the challenge of the award and there was no proof that the Claimants were going to squander their assets.