Akenhead J has refused to set aside an order awarding claimants their costs relating to the service of proceedings out of the jurisdiction, in circumstances where the defendants' solicitors did not accept service of proceedings within the jurisdiction.

The claimants sought to enforce an arbitration award, following the French defendants' failure to pay. The defendants' English solicitors during the arbitration stated that they did not have instructions to accept service of the enforcement proceedings. The claimants' solicitors informed them that they would serve the defendants directly and would look to the defendants for the costs of doing so. The court granted permission to serve the proceedings out of the jurisdiction, and ordered costs in the case. An attempt to serve the proceedings at a UK branch of the defendants failed and service was effected in France. The defendants ultimately paid the award.

The defendants applied to set aside an order to pay the claimants' costs associated with the enforcement proceedings.

Akenhead J concluded the claimants and their solicitors had not behaved unreasonably in seeking to serve out of the jurisdiction. The inference of the refusal to accept service was that the defendants were trying to gain time for payment of the award. There had been numerous opportunities for the defendants to avoid the costs of service out of the jurisdiction and they were, therefore "authors of their own misfortune". The court did not accept the defendants submissions based on the case of Cruz City Mauritius Holdings v Unitech Ltd [2013] EWHC 1323 (Comm) (see Legal update, Court affirms invariable practice of permitting service of arbitration claim form on solicitors within jurisdiction). Cruz City was not a case concerned with costs as such.

This decision illustrates the potential adverse consequences of unreasonably refusing to accept service of proceedings within the jurisdiction.

Case: Caucedo Investments Inc and another v Saipem SA and another [2013] EWHC 3375 (4 November 2013).