Rudan Business Holding SA v Tridan Trusted Advisors AG & Ors

1. This was the hearing of an application by the Petitioner and an application by the First and Second Respondents (together “ the Respondents ”) to vary their respective costs budgets previously approved by Deputy ICC Judge Lambert pursuant to orders made on 21 March 2022 (in the case of the Respondents) and 28 April 2022 (in the case of the Petitioner). At the end of the hearing on 18 December 2025 I informed the parties that I would produce a draft judgment dealing with the principle of whether to allow variations to be made to the parties’ respective budgeted costs, but not the quantum of any variations. The Petition

2. The Petitioner and the First Respondent are each 50% shareholders in Leo Services Holding Limited (“ the Company ”). Leo Trust Switzerland AG (“ Leo Trust ”) and Leo Trust Cyprus Ltd (“ Leo Cyprus ”) were both wholly owned subsidiaries of the Company with Leo Trust being the principal operating subsidiary.

3. The Petitioner is a Panamanian company and the corporate vehicle of the Capri Family Trust. The First Respondent is a company incorporated under the laws of Switzerland. Its shares are held, directly or indirectly, by the Second Respondent. It is common ground that in October 2017 the Petitioner and the First Respondent each appointed two directors to Leo Trust, the Petitioner’s nominees being Mr Schwarz and Mr Kircher and the First Respondent’s nominees being the Second Respondent and Mr Keller.

4. The Petitioner has presented a petition under section 994 of the Companies Act 2006 and claims that the affairs of the Company have been and/or are being conducted in a manner that is unfairly prejudicial to its interests as a member of the Company. By way of summary, the Petitioner alleges that: 4.1. there was an agreement or understanding between the parties as to the way that the affairs of the Company and its subsidiaries were to be conducted and there existed between them a quasi-partnership. This is disputed by the Respondents; 4.2. in about mid-2019 Mr Schwarz, Mr Kircher and Mr Keller came to know of serious allegations concerning the Second Respondent, namely, that he had falsified a loan agreement in the sum of about $1.35 billion and that the agreement had been presented in evidence in legal proceedings in Monaco. The Petitioner asserts that the Second Respondent admitted to falsifying the loan agreement, but the Second Respondent denies both this and the allegation of falsification; 4.3. in February 2020, Mr Schwarz, Mr Kircher and Mr Keller engaged a Swiss law firm, inter alia, to conduct an assessment of the risks to Leo Trust arising out of the falsification allegation; 4.4. following that, on 27 February 2020, the Second Respondent, as the sole director of the Company, purportedly removed Mr Schwarz and Mr Kircher as directors of Leo Trust so that the Petitioner no longer had any nominees on the board of that company, and on 30 March 2020 also removed Mr Keller; 4.5. by acting as set out above, the Second Respondent breached his directors’ duties to the Company and/or acted in breach of the understanding between the parties and/or in excess of authority. This is denied by the Respondents.

5. Following service of the Petition, the shares in Leo Trust and Leo Cyrpus were purportedly transferred by the Second Respondent to entities wholly owned by him. There is a dispute between the parties as to the validity and effect of those transfers. Procedural Chronology

6. The procedural background is relevant to the parties’ respective applications to revise their costs budgets and is summarised below.

7. The first costs and case management conference came on before Deputy ICC Judge Lambert on 21 March 2022 and 28 April 2022. On 21 March 2022 the judge made an order (sealed on 19 April 2022) giving directions down to the trial of issues of liability (“ the Liability Issues ”) (with the trial on issues of share valuation (“ Share Valuation Issues ”) to follow). The directions included a direction that the parties should give extended disclosure by issue in accordance with the models set out in Schedule 1 in relation to both the Liability Issues and the Share Valuation Issues and that the trial would take place in the window between 18 April 2023 and 31 July 2023 with a time estimate of 8 days, to include 1 day’s judge’s pre-reading time. The judge also gave permission to the Petitioner to amend its Petition and approved the costs budgets of the Respondents and of the Company in respect of the Liability Issues to trial. On 28 April 2022 the Judge approved the Petitioner’s costs budget of the Liability Issues to trial.

8. The Petitioner filed and served its amended Petition on 12 April 2022. On 12 May 2022 the Respondents filed and served amended Points of Defence and a Counter-Petition (“ the Amended Defence ”). The amendments made to the Points of Defence introduced substantial additional allegations against the Petitioner, Mr Schwarz, Mr Kircher and Mr Keller, including allegations that: (i) they had sought to capitalise on the allegations of forgery to regain control of Leo Trust and pressurise the Second Respondent; (ii) the relationship between the parties had broken down because of certain failures by the Capri Family Trust; (iii) the removal of Mr Schwarz, Mr Kircher and Mr Keller as directors of Leo Trust was justified and was in the interests of the Company and that since that time, Mr Schwarz, Mr Kircher and Mr Keller had been pursuing a damaging campaign towards the Company, impacting its reputation and trading prospects; (iv) the transfer of Leo Trust and Leo Cyprus had been necessary due to matters set out above; and (v), at all material times since December 2019, the Company had no, or no material value.

9. On 21 July 2022 Deputy ICC Judge Greenwood (as he then was) made an order by consent, extending the procedural timetable. On 9 August 2022 the Petitioner filed and served Amended Points of Reply and a Defence to the Counter-Petition (“ the Amended Reply ”). Following the amendments to the parties’ statements of case, between 19 August 2022 and the end of November 2022 communications took place between the parties regarding the revisions to be made to both sections 1 and 2 of the disclosure review document (“ DRD ”).

10. Further extensions of time were granted by Deputy ICC Judge Passfield on 21 November 2022 and ICC Judge Barber on 5 January 2023 and on 20 January 2023 the parties exchanged Disclosure Certificates and Lists of Documents. In their Disclosure Certificate, the Respondents stated that: “ There are documents within the joint power, possession and control of the First and Second Respondents and Leo Trust AG which are responsive to the issues in dispute and potentially disclosable, subject to obtaining the approval of the Swiss Ministry of Justice and/or the Swiss Court”. In light of this, the Petitioner applied to extend time for inspection of its documents.

11. In the meantime, on 5 January 2023 the Respondents served a revised costs budget and Precedent T on the Petitioner (“ Rs’ January Budget” ) and in a letter dated 17 January 2023 Freshfields LLP (“ Freshfields ”), the Petitioner’s solicitors, stated that the Petitioner would also be updating its costs budget following disclosure. The Petitioner did not comment on, or agree, Rs’ January Budget. It also never appears to be have been filed at Court, although, as I understand it, it was included in the exhibit to a witness statement made in support of the Respondents’ application for security for costs, which was filed on 6 April 2023.

12. On 2 February 2023 at the hearing of the Petitioner’s application to extend time for inspection of documents, ICC Judge Greenwood vacated the trial and the pre-trial review (“ PTR ”), extended the time for inspection of documents, service of witness statements and service of expert reports until further order and ordered that a further costs and case management conference should be held (“ the Further CCMC ”). A costs management conference was ordered in addition to a case management conference, because, as the order records, the Respondents had indicated that they intended to issue applications for a revised costs budget as well as for security for costs by 16 February 2023. This did not happen. On 3 March 2023 ICC Judge Greenwood made an order listing the Further CCMC for 2 and 3 November 2023.

13. In a letter dated 21 March 2023 Freshfields asked the Respondents’ solicitors, Gresham Legal, whether the Respondents intended to provide the parties with a further updated draft revised costs budget which provided for further developments in the proceedings since Rs’ January Budget. On 29 March 2023 Gresham Legal informed Freshfields: (i) that the Respondents intended to provide the Petitioner with a further updated revised costs budget; and (ii) that it would be prepared within the course of the next month once the scope of the work associated with the application for mutual legal assistance and issues of foreign law had become clearer. In their letter, Gresham Legal stated that this was “ a sensible and proportionate approach and avoids the risk of having multiple costs budgets in short succession ”.

14. The Petitioner decided that it should also seek authority from the Swiss court regarding some of its disclosure. Therefore on 23 June 2023 the Petitioner and the Respondents each issued an application requesting the issue of Letters of Request under the Hague Convention of 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters to the court in Switzerland seeking disclosure of documents from the parties’ respective Swiss-based custodians. The applications were granted by ICC Judge Burton on 14 July 2023.

15. The Letters of Request were filed on 17 August 2023 and on 16 September 2023 were transmitted to the Obergericht des Kantons Zurich (“ the Swiss Court ”). By 9 October 2023 it had become apparent that the Swiss Court would not be able to deal with the Letters of Request prior to the Further CCMC listed for 2 November 2023. Therefore on that date, ICC Judge Greenwood adjourned the Further CCMC to a date not before 3 February 2024. The Further CCMC was subsequently re-listed for 14 June 2024.

16. The Swiss Court had originally required the parties’ Swiss affiliates to submit their relevant documents by 3 December 2023. However, this deadline was repeatedly extended on the application of Leo Trust, the Respondents’ Swiss affiliate, with similar applications then being made by the Petitioner’s Swiss affiliate to ensure that the parties’ applications proceeded in step with each other. The Swiss Court finally ordered that the affiliates’ submission of documents must take place by the non-extendable deadline of 29 April 2024, which duly happened. In May 2024 the Swiss Court provided the parties’ extended disclosure documents to the Court.

17. As the parties were not ready to proceed with the Further CCMC by 14 June 2024, by consent it was vacated and re-listed for 6 and 7 May 2025.

18. On 17 March 2025 ICC Judge Mullen made a consent order, recording that the Swiss Court had provided the parties’ extended disclosure documents to the Court pursuant to the Hague Convention and ordering that the parties should, on the date 14 days from the date of the order, give Extended Disclosure by issue and according to the models set out in the order dated 21 March 2022, and that any requests for inspection or copies of disclosed documents should be made by a date to be determined by the Court at the Further CCMC.

19. On 2 April 2025 the parties exchanged Disclosure Lists and the Respondents served a further Certificate of Disclosure in respect of those documents which the Swiss Court had granted permission to disclose. The parties subsequently agreed that production and exchange of copies of disclosed documents would take place by consent.

20. On 10 April 2025 Freshfields notified Gresham Legal that the Petitioner intended to exchange revised costs budgets in advance of the Further CCMC. The Petitioner’s revised costs budget was subsequently sent to the Respondents on 24 April 2025 and filed with the court on 29 April 2025. On 30 April 2025 the Respondents sent their revised costs budget to the Petitioner, although particulars relating to the breakdown in terms of hours spent and to be spent were not served until shortly before the hearing before me on 18 December 2025.

21. On 6 May 2025 the hearing of the Further CCMC took place at which Deputy ICC Judge Jones made further directions to trial, including a direction that the trial be listed to take place in the window beginning on 29 June 2026 with a time estimate of 16 days (including 2 days’ judge’s pre-reading). He then adjourned consideration of the revised costs budgets (which the order records as having been filed) to the first available date, which was later fixed for 18 December 2025. The reason for the adjournment was that both parties believed that they and the court might benefit from an adjournment as it would give the parties further time to try and reach agreement on their respective costs, and, insofar as these could not be agreed, the issues between the parties could be identified and narrowed. They also highlighted the fact that depending on the court’s decision as to the trial format and length, they might have to further revise their costs budgets. The Variations sought by the parties to their costs budgets The revisions sought by the Petitioner

22. Counsel for the Respondents, Ms Page, very helpfully provided tables that summarised the revisions sought respectively by the Petitioner and the Respondents. I set out below those tables, subject to some amendments. Petitioner's Budget Phase Amount in approved budget Additional sum sought by way of variation Total budget post-variation Pre-Action £294,703 £0 £294,703 Issue/SOC £269,766 £422,000 £691,766 CMC £199,662 £225,500 £425,162 Disclosure £120,205.08 £571,000 £640,840 Witness statements £128,250 £393,650 £521,900 Expert reports £69,375 £99,695 £169,070 PTR £49,775 £40,330 £90,105 Trial prep £249,675 £249,725 £499,400 Trial £249,625 £144,725 £394,350 ADR/Settlement £77,375 £6,705 £84,080 Contingent costs Interim injunction £265,034 £0 £265,034 CMC (quantum trial) £61,125 £0 £61,125 Expert reports (quantum trial) £103,325 £0 £103,325 PTR (quantum trial) £73,425 £0 £73,425 Trial prep (quantum trial) £134,675 £0 £134,675 Trial (quantum trial) £63,900 £0 £63,900 Security for costs £79,385 £62,010 £141,395 Preliminary issue £2,124 £0 £2,124 Swiss law disclosure application £78,825 £54,155 £132,980 Totals £2,674,309 £2,269,495 £4,839,724.58 First and Second Respondents' Budget UPDATED Phase Amount in approved budget Additional sum sought by way of variation January 2023 budget) Additional sum sought by way of variation (April 2025 budget) Total budget post-variation (Approved budget + April 2025 variations) Pre-Action £0 Issue/SOC £130,878 £114,299 £185,784 £316,662 CMC £86,868 £219 £87,087 Disclosure £242,306 £778,741 £1,013,305 £1,255,611 Witness statements £132,250 £33,250 £81,500 £213,750 Expert reports £108,609 £32,462 £69,087 £177,696 PTR £49,150 £9,600 £46,125 £95,275 Trial prep £341,240 -£33,740 £115,010 £456,250 Trial £120,380 £92,320 £139,270 £259,650 ADR/Settlement £54,097 £27,925 £16,925 £71,022 Contingent costs* £0 Trial on Quantum £171,310 £0 -£171,310 £0 Trial on preliminary issues £7,355 £0 £7,355 Swiss law disclosure application £120,422 -£57,127 -£32,477 £87,945 Injunction applications £126,881 -£34,200 £92,681 Security for costs £60,080 £38,403 £49,770 £109,850 Additional and adjourned CMCs £136,500 £19,835 Petitioner application for extension of time for disclosure £14,510 Further CMC £60,346 Specific disclosure £70,346 Totals £1,751,826 £1,138,652 £1,644,045 £3,395,871 ( Respondents’ note) “* NB This entry was deleted from the Precedent Ts filed in January 2023 and April 2025 as it was contended that there should be a single trial. It is, however, acknowledged that there is a chance that the Judge hearing the case may require a further hearing to determine quantum. This entry should therefore remain in place. ” The Law

23. The relevant provisions relating to costs management are set out in CPR 3.12 to 3.18. The material provisions for the purposes of the applications are as follows: 23.1. CPR 3.12 (2) which provides that: “The purpose of costs management is that the court should manage both the steps to be taken and the costs to be incurred by the parties to any proceedings (or variation costs as provided in rule 3.15A) so as to further the overriding objective ”; 23.2. CPR 3.15 provides so far as relevant: “Costs management orders (1) In addition to exercising its other powers, the court may manage the costs to be incurred (the budgeted costs) by any party in any proceedings. (2) The court may at any time make a ‘costs management order’. Where costs budgets have been filed and exchanged the court will make a costs management order unless it is satisfied that the litigation can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made. By a costs management order the court will:- (a) record the extent to which the budgeted costs are agreed between the parties; (b) in respect of the budgeted costs which are not agreed, record the court’s approval after making appropriate revisions; (c) record the extent (if any) to which incurred costs are agreed. (3) If a costs management order has been made, the court will thereafter control the parties’ budgets in respect of recoverable costs. (4) Whether or not the court makes a costs management order, it may record on the face of any case management order any comments it has about the incurred costs which are to be taken into account in any subsequent assessment proceedings. ……. (5) A costs management order concerns the totals allowed for each phase of the budget, and while the underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes to assist the court in fixing a budget, it is not the role of the court in the costs management hearing to fix or approve the hourly rates claimed in the budget. ” 23.3. CPR 3.15A which provides: “(1) A party (”the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions. (2) Any budgets revised in accordance with paragraph (1) must be submitted promptly by the revising party to the other parties for agreement, and subsequently to the court, in accordance with paragraphs (3) to (5). (3) The revising party must — (a) serve particulars of the variation proposed on every other party, using the form prescribed by Practice Direction 3E; (b) confine the particulars to the additional costs occasioned by the significant development; and (c) certify, in the form prescribed by Practice Direction 3E, that the additional costs are not included in any previous budgeted costs or variation. (4) The revising party must submit the particulars of variation promptly to the court, together with the last approved or agreed budget, and with an explanation of the points of difference if they have not been agreed. (5) The court may approve, vary or disallow the proposed variations, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed, or may list a further costs management hearing. (6) Where the court makes an order for variation, it may vary the budget for costs related to that variation which have been incurred prior to the order for variation but after the costs management order” ; and 23.4. CPR 3.17(3) which provides: “ Subject to rule 3.15A, the court – (a) may not approve costs incurred up to and including the date of any costs management hearing; but (b) may record its comments on those costs and take those costs into account when considering the reasonableness and proportionality of all budgeted costs ”; and 23.5. CPR 3.18, which provides: “ In any case where a costs management orders has been made, when assessing costs on the standard basis, the court will – (a) have regard to the receiving party’s last approved or agreed budgeted costs for each phase of the proceedings; (b) not depart from such approved or agreed budgeted costs unless satisfied that there is good reason to do so; and (c) take into account any comments made pursuant to CPR 3.15(4) or 3.17(3) recorded on the face of the order ”.

24. As shown by CPR 3.12 and 3.15 the primary function of the court in relation to costs management is to manage costs to be incurred and to ensure that proposed case management steps can be conducted reasonably and at proportionate cost; in other words, costs management is concerned with approving future budgeted costs, not incurred costs.

25. However, in the leading case of Persimmon Homes Ltd v Osbourne Clark LLP [2021] EWHC 841 (“ Persimmon ”) Master Kaye expressly recognised that the direction to approve only future costs has a degree of unreality about it, because parties will continue to work on a case after costs budgets have been filed. Therefore, in the case of a revised costs budget, some of the budgeted revised costs are likely to have been incurred by the time the revised costs budget is considered by the court. It was to meet this problem that CPR 3.15A(6) was introduced (see [111]). However, this rule is to be interpreted having regard to the threshold requirement of promptness; it is not to be seen as giving a party licence to delay service or submission of its revised costs budget until after costs have been incurred. This is reflected at [134] – [136] of Master Kaye’s judgment where she states as follows: “134. I do not accept Miss Barton’s argument that an application to amend a costs budget can be made after all the costs have been incurred and/or retrospectively after the full extent of the effect of the significant development is understood. That is not what the clear wording of CPR 3.15A says nor is it the actual or intended purpose or effect of CPR 3.15A(6). The proposed variations must be submitted promptly after the identification of a significant development said to warrant a revision of the costs budget.

135. Whilst CPR 3.15A(6) specifically recognises that there may be some incurred costs at the point at which an application is made, in respect of which the court may be persuaded to exercise discretion, the purpose of costs management is to provide the court with the ability to control costs not to enable parties to retrospectively adjust for any overspend or miscalculation in respect of budgeted costs. CPR 3.15A (6) was never intended to and is not open season to come back and vary a costs budget after the event.

136. Whilst conceptually I can envisage circumstances in which an urgent significant development might result in the costs the subject of an application to vary being substantially incurred by the time a prompt application is made or heard, I am not currently persuaded that where a phase, including the costs for which a variation is sought, have been fully incurred before the application to vary is made that there would be any jurisdiction to approve a variation to the last approved costs budget for those phases after the event. Thus, if no application to vary is made promptly, and the costs are then fully incurred such costs would, it seems to me, either be subject to the question of whether there was a good reason to depart from the last approved costs budget or the costs would be at large and in either case it would be a matter for the costs judge in due course. ”

26. Pursuant to CPR 3.15A, where there is a significant development in the litigation which warrants the revision of budgeted costs, a party is under a mandatory obligation to revise its budgeted costs, whether upwards or downwards. As to the approach that the court is to take in deciding whether or not to approve revised budgeted costs, CPR 3.15A(1) provides that there are two threshold requirements that a party must satisfy and, if satisfied, and only then, the court may consider whether, in its discretion, it should allow a revision to the budgeted costs, and, if so, in what amount.

27. The two threshold requirements are as follows (as confirmed by Master Kaye in Persimmon at [20]): 27.1. first, that there has been a significant development in the litigation since the last approved or agreed budget which warrants a revision (upwards or downwards) to the last approved or agreed budget; and 27.2. second, that the particulars of the variation have been submitted promptly, both to the other parties and the court in accordance with 3.15A(2) to (4).

28. As to the meaning of “significant developments” in the litigation, in John Michael Sharp v Sir Maurice Victor Blanks and others [2017] EWHC 3390 (Ch) (“ Sharp ”) Chief Master Marsh stated at [33], [35] and [37], in relation to the former similar provisions in paragraph 7.6 of PD3E as follows: “33. The circumstances in which 7.6 is engaged are fact specific. Significance must be understood in light of the claim – its size, complexity and the manner in which the litigation has unfolded – and also from the likely additional costs that have been or are expected to be, incurred. The amount of the additional expenses is not determinative, but it is difficult to conceive that a development leading to modest additional legal expenditure, that is modest in proportion to the amount in the relevant budget phase or phases, is likely to be a significant development ”. ………………….

35. One momentous event may be significant for these purposes, but a series of events that, taken singly or together, may not be. Use of the plural in the paragraph 7.6 suggests to me that the court should not over-analyse developments and break them down into smaller pieces before considering whether the test in paragraph 7.6 has been satisfied. Although it is likely to be helpful; to consider the developments by reference to the phases in the budget they affect, whether a development is significant must be looked at in the way it affects the litigation as a whole. …………………….

37. ……It is obvious…that a mistake in the preparation of a budget, or a failure to appreciate what the litigation actually entailed., will not usually permit a party to claim later there has been a significant development because the word “development” connotes a change to the status quo that has happened since the budget was prepared. If the mistake could have been avoided, or the proper nature of the claim understood at the time that the budget was prepared, there has been no change or development in the litigation. By contrast, if the claim develops into more complex and costly litigation than could reasonably have been envisaged, that may well be the result of one or more significant developments.”

29. Chief Master Marsh then gave at [60] the following example of what might come within the meaning of “significant developments”: “ At the time the budget is prepared, for example, it might not be anticipated that the other party would apply for permission to amend its statement of case to make a substantial change to it. A consequence of giving permission to amend a statement of case could be to open up new lines of factual inquiry, further disclosure, a need to re-interview witnesses (or interview additional witnesses) and lead to a longer trial. It is likely that the additional work that is consequential upon the amendment would be regarded as a serious of significant developments, affecting a number of budget phases …. ”.

30. In Persimmon Master Kaye commented as follows on the meaning of “significant developments” (at [116] to [118]): “116. Although it depends on the circumstances of each case, some significant developments will be more obvious and easier to identify than others. Clearly, where the proposed variation is to add in a new phase such as expert evidence, where no expert evidence had previously been permitted, and connected to that to vary the trial phase to include, for example, expert costs of attending trial and the additional costs of an extended trial length, the court may require very little supporting information or evidence to be satisfied that the proposed variations to the costs budget relate to the significant development and do not interfere with the original cost budgeting exercise.

117. However, where the significant development is said to be a change to an existing phase, and in particular a mixed phase, such as disclosure it is necessary for the court to look more closely at whether what is contended for is a significant development at all since the last approved costs budget. Do the matters raised by the applicant, in fact, change the overall scope and likely cost of that phase? Were they, or should they have been, expressly or impliedly taken into account when the last costs budget was approved?

118. In such a case the court would need to be confident that the proposed variation related only to the additional impact of what is contended to be a significant development rather than an attempt to carry out a root and branch revision to the phases of the last approved costs budget. Whilst the court should not consider the costs at a granular level nor micromanage the costs it must be able to say that it is not interfering with the discretionary exercise carried out by the Deputy Master who approved the last costs budget. It is for the party seeking the variation to provide sufficient information and evidence with their application to satisfy the court that the variation is not simply an attempt to address a miscalculation or an overspend or to claw back previously disallowed costs. They would have to be able to satisfy the court that the variation only related to the significant development and did not interfere with the exercise carried out by the Deputy Master. ”

31. Specific examples from the cases, where developments have or have not been held to be significant, were cited to me by counsel for the Respondents and included the following: 31.1. an increase in the number of days needed for trial and the receipt of far more documents by way of disclosure than could reasonably have been foreseen may be a significant development ( Asghur v Bhatti [2017] EWHC 1702 (QB) and Sharp ); 31.2. an adjournment of a trial may be a significant development, although in Online Case 32 Churchill v Boot [2016] EWHC 1322 (QB) , on the facts of that case, the court held that an adjournment of 6 to 9 months was not a significant development; 31.3. an order for further disclosure given after the CCMC was held not to be a significant development in Churchill v Boot where it was apparent from correspondence from the defendant that further disclosure would be sought and the disclosure that was ordered would fall within standard disclosure, such that it should have been anticipated.

32. As to the threshold requirement of “promptness”, Master Kaye in Persimmon emphasised that to satisfy this, a party must both submit and seek to agree the proposed variations promptly and must also submit an application to vary its costs budget promptly to the court.

33. As to what is meant by “prompt” Master Kaye stated at [100] and [121] as follows: “ 100 . ….Promptness is a mandatory requirement and the second part of the threshold test. The purpose of costs budgeting is to enable the court to control the parties’ recoverable costs prospectively not retrospectively. What is prompt will, of course, depend on context . ……..

121. In most cases the two aspects of the mandatory requirement for prompt submission in CPR 3.15A(2) and (4) will be closely aligned. However, there cannot be any hard and fast rule. It will depend on the facts of each case; the chronology and the nature of the variations being sought. Consistent with the overriding objective, if the parties are co-operating in narrowing the areas of disagreement in relation to the proposed variations, what constitutes “submitted promptly” may differ from what might be considered prompt submission if no such cooperation or engagement were to take place. ”

34. In light of the above, Master Kaye held in that case that the threshold of promptness had not been met where a revised costs budget had been submitted to the court: (i) four months after the costs of a Request for Further Information and the Response had been fully incurred and ten months after the Request had been served; (ii) fourth months after a further CMC had taken place and all the costs had been incurred; and (iii) twelve months after disclosure had been changed to Model C or eight to ten months after the implications of the change to Model C were said to have been fully understood.

35. If a party satisfies the two threshold requirements in relation to any proposed variation to its costs budget, the court will then consider whether it should exercise its discretion to allow, vary or disallow the proposed variations. It is at this stage that the court will consider the quantum of the variations sought. As Master Kaye stated at [102] of her judgment in Persimmon , in exercising its discretion the court is to have regard to the overriding objective and all the circumstances, including the need to deal with cases justly and at proportionate cost and to consider the prejudice to the applicant if the budget is not varied, and to the respondent, if it is varied.

36. However, the potential limit of the court’s discretion to decline to vary a costs budget if an applicant satisfies the two threshold requirements is quite limited. As stated by Chief Master Marsh at [68] of Sharp : “… If there have been significant developments and the parties asked the court to revise budgets, it would be unusual for the court simply to refuse to make an order at all. The logic of the cost management regime is that where there have been significant developments, the parties must apply for revisions and the court will normally wish to ensure that appropriate revisions are made to fulfil the objectives of costs management. ”

37. Finally, I would add that in both Persimmon (at [84]) and in Sharp (at [45]) the court held that, in considering the overall impact of approving or not approving a revised costs budget, the court should also take into account the policy purpose of the costs budgeting regime, which is as follows: 37.1. the benefit to the parties of knowing their potential exposure to costs; 37.2. greater predictability in costs recovery where there are accurate approved budgets; 37.3. the likely reduction in the costs of detailed assessment where accurate approved budgets are in place; and 37.4. the inherent desirability of significant developments being reflected in the costs budgets. The Revisions sought by the Parties

38. As will be seen from the tables set out above, both parties seek revisions to their costs budgets in respect of each of the phases to, and including, trial. Different variations are then sought by them in relation to contingent costs. I shall deal first of all with whether the proposed variations to their budgeted costs arise from significant developments in the litigation that warrant a revision being made, secondly, with whether or not they have acted promptly, and, finally, if they satisfy both of the jurisdictional requirements in relation to any phase, whether, as a matter of my discretion, an order for the costs budgets to be revised should be made. Significant Developments Statements of Case

39. In respect of statements of case, further budgeted costs in the sum of: (i) £422,000 are sought by the Petitioner; and (ii) £185,784 by the Respondents. Both parties contend that the Amended Defence and the Amended Reply were significant developments in the litigation. I agree.

40. The Amended Defence introduced many additional issues which are in dispute between the parties and which were not consequential upon the Petitioner’s amendments to the Petition served on the Respondents on 12 April 2022. Although some of the amendments to the Defence would have been responsive amendments to the Amended Petition and therefore should have been reasonably anticipated and included in the parties’ respective approved costs budgets, many of the issues introduced did not fall within this category, but raised new issues which could not have been reasonably anticipated when the costs budgets were approved. The Amended Defence expanded the defence of the Respondents from being a 21 page document to a 51 page document.

41. The Amended Defence also caused the Petitioner to make substantial amendments to its Points of Reply and necessitated the service of a Defence to the Counter-Petition. Again, although some of these amendments would have arisen from the Respondents’ responses to the Amended Petition and therefore should have been reasonably anticipated and included in the Petitioner’s approved costs budget, many of the other amendments were responses to the new issues pleaded by the Respondents. The effect of the amendments to the Amended Defence was to cause the Amended Reply to increase in length from a document of 7 ½ pages to a document of 34 pages. CCMC

42. In respect of the CCMC stage, further budgeted costs in the sum of: (i) £225,500 are sought by the Petitioner; and (ii) £80,181 by the Respondents (under Contingent Costs F and H).

43. In its commentary given in support of the proposed revised costs for this stage, the Petitioner explains that “ overall the increase in its costs to this phase have arisen due to the combination of: (i) the Petitioner preparing for the Further CCMC in 2024 (which was subsequently adjourned and re-listed); and (ii) the Petitioner preparing for the Further CCMC listed on 6 and 7 May 2025”. The preparatory work on both occasions is claimed to have included a number of letters written to the Respondents to agree directions, which, it is said, were not responded to. Mr Griffiths pointed that out that a petitioner always bears the greater burden in preparing for CCMCs. He also said that the preparatory work carried out for the adjourned CCMC on 14 June 2024 could not be transferred easily over to the later CCMC listed for 6 and 7 May 2025.

44. The Respondents in their commentary on the proposed revised budgeted costs sought for this phase state that the increases are for the CMC held in February 2023, the adjourned CCMC on 10 October 2024 (this appears to be a mistake and must relate to the adjourned CCMC on 14 June 2024) and the CCMC listed for 6 and 7 May which were not previously budgeted for.

45. I accept that neither the wasted costs of the adjourned Further CCMC listed for 14 June 2024 nor the costs of the hearing held on 2 February 2023 nor the costs of the effective Further CCMC listed for 6 and 7 May 2025 (including the preparatory work in relation to the same) were included in either the Petitioner’s or the Respondents’ approved costs budgets. Nor, in my judgment, could they, in light of the then known circumstances, have been reasonably anticipated by the parties at that time.

46. Dealing first with the adjourned CCMC listed for 14 June 2024 (the costs of which have not been separately itemised by any of the parties), it would appear from the Petitioner’s explanation in its revised costs budget that the Petitioner does not seek to claim that the wasted preparatory work for this hearing was by itself a significant development in the litigation. This also appears to be the Respondents’ position whose counsel submitted at the hearing that the adjournment was not a significant development, but was a normal part of litigation. In my judgment, in the context of this case, the Respondents’ submission is correct. I find that the adjournment of the CCMC for 14 June 2024 was not a significant development in the litigation and, indeed, there is no evidence that the parties regarded it as such at the time.

47. Moving on then to the two other hearings, I accept that potentially, an unanticipated further CMC can be a significant development in the litigation. The hearing before ICC Judge Greenwood on 2 February 2023 was, however, not listed as a CMC; its purpose was for the court to determine the Petitioner’s application to extend time for inspection of documents, albeit that the Judge ended up making further directions in the case. It therefore does not appear to fall within the CMC costs, but, in any event, is unlikely to have taken a significant amount of time and costs (as appears to be implicit in the amount of the Respondents’ revised costs sought for both this hearing and the adjourned CCMC for 14 June 2025 and the fact that the Petitioner does not seek to revise its costs to cover this hearing). In my judgment, it was therefore not a significant development in the litigation.

48. As to the Further CCMC listed for 6 and 7 May 2025 and held on 6 May 2025 and 18 December 2025, in my judgment, this was a significant development in the litigation, which had not been, and could not reasonably have been, anticipated by any of the parties when their costs budgets were approved. I appreciate that part of the time estimate for the hearing was to deal not with normal CCMC matters, but with other separate applications issued by the parties, which would fall under different headings in the costs budgets, including the Respondents’ application for security for costs and the Petitioner’s application to re-amend its Petition. So far as case management directions are concerned, the main purpose of the CCMC was to re-set the timetable for the remaining procedural steps set out in 21 March Order, to re-consider whether there should be a separate trial on liability and quantum, to decide on the length of trial, as well as the parties’ revised costs budgets and for the court to approve a list of issues and case summary. Disclosure

49. In respect of disclosure, further budgeted costs in the sum of: (i) £571,000 are sought by the Petitioner; and (ii) £1,013,305 by the Respondents.

50. Both the Petitioner and the Respondents submit that disclosure was a significant development in the litigation as a result of the expansion of issues arising from the Respondents’ non-consequential amendments to their Defence in May 2022. The Respondents also rely upon the fact that at the time of their original costs budget they did not know what the size of the universe of documents for collection would be nor whether the services of an e-disclosure provider would be needed.

51. The Petitioner’s Precedent H shows that the Petitioner, in preparing its original costs budget, had estimated a population review of between 250-300 documents and the production of 2,000 documents by the Respondents, which the Petitioner stated would be reviewed by it using the Eclipse document review platform. Instead, the Petitioner had to carry out a population review of 9,722 documents, which were predominantly in English and German, although some were in French, Spanish and Hebrew. Save for the four Hebrew documents, where an external translator had to be engaged, the other foreign language documents were reviewed by paralegals conversant in the relevant language and overseen by an associate. The explanatory note to its revised budgeted costs for this phase also states that the Petitioner understood that the Respondents were due to produce about 4,000 documents. It also states that in addition to the increases in the number of hours required for disclosure review, the Petitioner’s solicitors fees had increased since the date of the original costs budget.

52. As to the Respondents., they said that the disclosure exercise that they had to carry out was dramatically different from that which they had reasonably anticipated in their original costs budget (which contained no assumptions on review or production size, and which expressly excluded the costs of a disclosure provider based on what was then known about the potential volume of documents) and that the scale of data to be collected and the increased number of disclosure issues arising from the Amended Defence and Amended Reply were significant developments. As I understand it, a total of 3,340,540 documents were collected of which 91,710 were migrated to a Review Workspace. As a result of the extent of the potential disclosure and its complexity, the Respondents had to engage an e-disclosure provider, namely, FTI Consulting LLP. They also refer to costs being increased as a result of a much larger number of documents than they had anticipated being in foreign languages and also to document collection having to be performed in Switzerland in a highly controlled manner to comply with Swiss law.

53. I accept both parties’ submissions. In my judgment, there were significant developments in the disclosure phase which arose from: (i) the non-consequential amendments to the Points of Defence and the responses to those amendments in the Amended Reply; and (ii) in the case of the Respondents, the extent of the data collection that they had to carry out. Neither of these matters were included in the parties’ original budgets; nor could they have been reasonably anticipated. Witness statements

54. In respect of witness statements, further budgeted costs in the sum of: (i) £393,650 are sought by the Petitioner; and (ii) £81,500 by the Respondents.

55. The Petitioner in its explanatory note for this phase states that the revisions are sought because it is anticipated that the scope of the witness evidence will increase as a direct result of the amended statements of case and the increased scope of the disclosure exercise. Overall, it has estimated that a further 500 hours of work by the Petitioner’s legal team will be required to deal with these matters. A similar explanation is provided by the Respondents who estimate that solicitors’ time costs will be 430 hours instead of 190 hours. The Respondents, however, also state that their costs for this phase have been revised following a change of solicitors by the Respondents to Gresham Legal and the different approach taken by Gresham Legal to resourcing the matter. For example, whereas the Respondents’ original costs budget was based on junior counsel having day to day conduct, this has now been moved to senior level solicitors.

56. I accept that because of the increased scope of the issues to be decided following the non-consequential amendments in the Amended Defence and the Amended Reply and also the expanded scope of disclosure, the consequent expansion of the witness statements and their preparation are significant developments. However, the change of solicitors by the Respondents and the consequent re-distribution of work between counsel and solicitors, insofar as it relates to work included within the original approved budget of the Respondents is not, in my judgment, a significant development in the litigation, but is a matter that arises solely from the choice of the Respondents. Therefore, to the extent that any of the claimed revised costs of the Respondents relate to work which was included within the original approved budget, such revised costs (whether downwards for counsel and upwards for the solicitors) are disallowed and should remain the same. However, for the purposes of any costs assessment, it seems to me that if the overall total amount of the approved budgeted costs for this phase has not changed as a result of the re-distribution of work between counsel and solicitors, then the Respondents should not be penalised merely because of that change. If though any additional costs are claimed over and above the total approved amount, this will be a matter to be dealt with at a detailed costs assessment. I would add that this observation applies equally to any other phases where the Respondents have claimed a variation arising from a redistribution of work. Expert Evidence

57. In respect of expert evidence, further budgeted costs in the sum of: (i) £99,695 are sought by the Petitioner; and (ii) £81,500 by the Respondents.

58. The Petitioner in its explanatory note for this phrase states that there are two reasons for revising its costs. The first is that it is anticipated that there will be more issues for the experts to consider than were originally budgeted for. The example given is the introduction of the issue that the transfer of the shares in Leo Trust and Leo Cyprus were transactions falling within section 190 of the Companies Act 2006 , which will require the experts to give an opinion on whether the transactions were “substantial” within the meaning of section 191 and cause Freshfields to incur more time costs by instructing and liaising with the expert on these additional issues. The second reason, and what is termed as constituting the majority of the increased costs for this phase, arises from a 25% increase in Freshfields’ legal fee rates which occurred on 18 June 2024.

59. The Respondents in their explanatory note for this phase state that the revisions sought arise from the re-distribution of work between Gresham Legal and counsel and a Panamanian expert no longer being required.

60. I find that there has not been a significant development in the litigation that warrants a revision of either the Petitioner’s or the Respondents’ budgeted costs for the expert evidence phase.

61. As regards the Petitioner, my reasons are twofold: 61.1.1. first, the only additional issue cited requiring “additional” expert evidence is the issue under section 191 of the Companies Act 2006 . I note, however, that this issue was introduced by the Petitioner’s Amended Petition, permission for which was granted by Deputy ICC Judge Lambert in her order made on 21 March 2022. Further, paragraph 12 of that order made provision for there to be expert reports on the value of the entire issued share capital of Leo Trust as at July 2020 and the value of the entire issued share capital of Leo Cyprus as at 11 October 2021. These are the dates when the shares in those companies were transferred, allegedly in breach of section 190 of the CA 2006 . The costs of the expert valuation evidence should, therefore, have been included in the Petitioner’s costs budget approved on 28 April 2022. Accordingly, there would appear to be no justification for increasing costs based on alleged further issues that the expert will have to consider; 61.1.2. second, the substantial increase in the Petitioner’s solicitors’ hourly rates cannot be regarded as a significant development in the litigation that warrants a revision to previously approved budgeted costs. It is a matter between the solicitors and their client. In any event, there is no evidence that in June 2024, when Freshfields’ hourly rates were increased, the Petitioner considered this to be a significant development; nor is it readily apparent from the Petitioner’s explanatory note how that increase accounts for the majority of the sum of £89,695 claimed when an increase of 25% on the approved time costs of £29,375 comes to only £36,718.75.

62. As to the revised costs sought by the Respondents, I note that they include an increase in expert fees from £45,000 to £65,000, although no explanation for this is given. Indeed, the only change explained is the fact that an anticipated Panamanian legal advice expert will no longer be required, something that would reduce expert fees, not increase them. As the Respondents have not explained how the reduction in experts impacts the original approved costs budget, I am unable to find that it is a significant development in the litigation. Further, as stated above, in my judgment, the re-distribution of work covered by the Respondents’ approved costs budget is not a significant development in the litigation that warrants any revision in the Respondents’ budgeted costs. It is merely an internal matter as to how a party chooses to conduct the litigation. PTR

63. In respect of the PTR, further budgeted costs in the sum of: (i) £40,330 are sought by the Petitioner; and (ii) £46,125 by the Respondents.

64. The explanatory note to the Petitioner’s revised costs budget states that more preparation will be required for the PTR due to the additional issues raised by the Amended Defence and the Amended Reply and the additional evidence that the parties will have to adduce as a result of the consequential expansion in scope, complexity and volume of documentary, factual witness and expert evidence. The note then adds that the majority of the increase in costs for this phase is primarily attributable to the increase in fee rates rather than a pure increase in hours of work required.

65. The explanatory note to the Respondents’ revised costs budget states that revised costs are sought because of the new hourly rates charged by Gresham Legal, although the amount of those increases is not stated.

66. For the reasons already given, in my judgment, neither of the explanations given by the parties for the proposed increase in costs are significant developments in the litigation. Further, in light of the amount of the increases sought in comparison to the overall total costs budgets, the costs are not significant. Trial Preparation

67. In respect of trial preparation, further budgeted costs in the sum of: (i) £249,725 are sought by the Petitioner; and (ii) £115,010 by the Respondents.

68. There are essentially two grounds for the proposed increase given by the Petitioner. The first is that, as a result of the additional issues raised by the Amended Defence and the Amended Reply, the trial is now listed for 16 days to include 2 days’ judge’s pre-reading time and an interval between the close of evidence and final submissions of 3 days, giving 11 hearing days. This is to be compared with the original order where there was a time estimate of 8 days, to include 1 day’s judge’s pre-reading time and additionally an interval between the close of evidence and final submissions of 2 days, giving 7 hearing days.

69. The second ground is that the adjournment of the trial from being listed to be heard in the window between 3 July 2023 and 20 July 2023 to a window where the trial is listed to be heard in a window beginning on 29 June 2026 (effectively an adjournment of about three years, and possibly more), is a significant development in the litigation as litigation in 2026 is more expensive than it was in 2023. As stated above, Freshfields’ hourly rates increased on average by about 25%. Further, on 1 May 2024, as I understand it, counsel’s rates increased on average by about 22%.

70. The explanation given by the Respondents in their explanatory note for the proposed increase to their budgeted costs is that the trial engages complex matters of fact and law, that the hours allocated for trial preparation have increased from 200 hours to 495 hours and counsels’ fees have been reduced on the basis that junior counsel will be led by senior junior counsel rather than by leading counsel.

71. I accept that the additional work now required for trial preparation arising out of the new issues pleaded in the Amended Defence and the Amended Reply and the increased length of the trial are significant developments in the litigation that warrant a revision to both parties’ costs’ budgets.

72. However, in the case of the Petitioner, I do not accept that there is any proper justification for re-visiting the costs for the original work included within the approved budget. Whilst an adjournment of a trial might in some circumstances be a significant development in the litigation, for example, where parties incur significant costs in taking steps to prepare for a trial and it is then adjourned shortly before it is due to take place, in my judgment, an adjournment during which lawyers raise their fees, does not fall within this category.

73. There is, in any event, no evidence that the Petitioner considered the adjournment with the increase in fees to be a significant development in the litigation at the time that their fees were increased. Further, even in the unlikely event that increases of 25% and 22% were to be considered reasonable and proportionate, roughly speaking an additional 25% on the original approved time costs is £29,943.75 and an additional 22% on counsel’s approved budget is £34,100, neither of which is a particularly significant increase, having regard to the overall costs of the parties.

74. Finally, as regards the proposed reduction in counsel’s fees arising from junior counsel being led by senior junior counsel, rather than leading counsel, in light of the recent announcement that Mr Griffiths is to be appointed a KC, I assume that this variation will no longer be sought by the Respondents. This has since been confirmed by the Respondents and I therefore do not propose to consider the variation sought by them. Trial

75. In respect of trial preparation, further budgeted costs in the sum of: (i) £144,725 are sought by the Petitioner; and (ii) £139,270 by the Respondents.

76. Both the Petitioner and the Respondents seek an increase in budgeted trial costs because the length of the trial has increased from an estimated time of 8 days to 16 days, of which there are four additional court days and one additional day for preparation of closing submissions. I accept that this increase is a significant development in the litigation that warrants an increase in the parties’ budgeted costs.

77. The Respondents, however, also seek an increase on the basis that Gresham Legal have allocated additional resources to the matter to make it consistent (in terms of the number of fee earners) with those that have been deployed by the Petitioner since the outset of the matter with a view to redressing an imbalance in resourcing levels. In so far as this relates to work already covered by the Respondents’ approved budget, such additional resourcing for that work is not a significant step in the litigation, but arises from a potential mistake made by the Respondents’ original solicitors in estimating costs, which Gresham Legal believes needs to be rectified. The proposed increases in costs to work already covered by the Respondents’ approved costs budget and which arise from such additional resourcing are therefore not approved. ADR

78. Whilst both parties seek an increase for this phase, neither party contends that there has been a significant development in the litigation justifying the increases and the sums claimed are small. The increases are therefore not approved. The Petitioner’s Contingent Costs

79. Whilst the Petitioner seeks an increase in its costs in respect of the Respondents’ security for costs application and the applications for Letters of Request, it has not explained what is alleged to have been the significant development in the litigation relating to these matters and on which it seeks to base the increases sought. The Petitioner merely appears to rely upon the fact that the costs incurred by it were in fact greater than its approved budgeted costs. Overspend by a party is not a significant development in the litigation. The proposed increases are therefore not approved. The Respondents’ Contingent Costs

80. I can deal with these costs fairly quickly: 80.1. in relation to section A, Trial on Quantum, the Respondents seek a reduction of £171,310. As there is now to be a split trial, this sum should remain in the Respondents’ budget. The variation is therefore not approved; 80.2. in relation to section C, application relating to Swiss Law/disclosure, the Respondents seek an overall reduction of £32,477, arising from counsels’ involvement not being as much as envisaged and solicitors’ time costs increasing. These are not, however, significant developments in the litigation, but merely arise from the Respondents originally overestimating counsels’ costs and underestimating solicitors’ costs. The variations are therefore not approved; 80.3. in relation to D, injunction application, the Respondents seek a reduction of £34,200 on the grounds that such an application is no longer anticipated. This is, in my judgment, a significant development in the litigation which warrants a reduction of these costs; 80.4. in relation to E, security for costs, the Respondents seek an increase of £49,770 on the grounds that their approved costs budget did not include a contested hearing for their application for security for costs nor make provision for the Petitioner’s application for security for costs. As regards the former application, in my judgment, the Respondents have not demonstrated that there has been a significant development in the litigation; they should have anticipated that there might be a contested hearing and should have made provision for such a hearing in their original costs budget. In any event, security has now been provided by the Petitioner without a contested application, although the parties did not agree the amount of the security and the Respondents’ application has been adjourned generally with liberty to restore. As to the Petitioner’s application, which was made on 16 April 2025, it would appear that this application could not have been reasonably anticipated at the time the Respondents’ costs budget was approved. Directions for the service of evidence by the Respondents in relation to this application were given by Deputy ICC Jones on 6 May 2025. However, by a letter dated 13 May 2025 Freshfields notified the court that the Petitioner’s application had been withdrawn. In light of this, I do not consider that the Petitioner’s application for security for costs was a significant development in the litigation; 80.5. in relation to G, the Petitioner’s application for an extension of time regarding disclosure, the Respondents seek an increase in their costs of £14,510 on the grounds that neither the application nor the costs were anticipated at the time the Respondents’ costs budget was approved. Having regard to the size of the increase compared to the costs of the disclosure phase and, taking into account that such applications are part and parcel of normal litigation, I do not consider that this application constitutes a significant development in the litigation. The costs are therefore not approved; 80.6. finally, in relation to I, specific disclosure, the Respondents seek additional costs of £70,346 for an application for specific disclosure anticipated to be dealt with at the CCMC on 6 and 7 May, which had not been previously budgeted for. As far as I am aware no application has been issued; nor has any evidence been provided by the Respondents to satisfy me that it is more likely than not that such an application will be made. The increase sought is therefore not approved. Promptness

81. The parties’ arguments on whether they had each acted promptly in relation to the proposed revisions to their costs budgets were not the same.

82. Mr Griffiths for the Petitioner submitted that the term “prompt” had to be judged according to the circumstances of the case. Having referred me to correspondence between the parties, he pointed out that the Petitioner and the Respondents knew by January 2023 that there had been significant developments in the litigation and understood that their costs budgets needed to be amended. He said that they also understood that the approval of revised costs would be dealt with at a further CCMC. After 2 February 2023 the proceedings were then effectively paused whilst the parties pursued their Letters of Request and orders from the Swiss court authorising disclosure of documents held by their respective affiliates in Switzerland. Revised costs budgets were filed and served before the first effective Further CCMC, which took place on 6 May 2025. This occurred after the Swiss proceedings and disclosure had been completed. The Petitioner’s revised costs budget was filed and served on 24 April 2025 and the Respondents’ on 30 April 2025.

83. In light of this, Mr Griffiths argued that both the Petitioner and the Respondents had dealt with revised costs budgets in a sensible and proportionate way by serving and filing just one version of their revised costs budgets prior to the effective Further CCMC, instead of filing and serving multiple revisions of it, when not much was happening in the proceedings. He also argued that none of the parties had been prejudiced by taking this course of action. Therefore, in the context of these proceedings, the parties had acted promptly and should not be left to argue for these additional costs at a detailed assessment. He finally made the point that it would be to the benefit of the parties to know what the exposure to costs might be at this stage rather than having to argue such costs at a detailed assessment after judgment.

84. Ms Page, acting for the Respondents, accepted that promptness had to be looked at in context. However, she argued that the parties and the court still needed to take into account the primary purpose of costs budgeting, which was to budget for future costs, and not incurred costs. She further pointed out that parties are expected to keep their costs budgets under review and to deal with significant developments as and when they arise.

85. As to whether the parties had acted promptly, Ms Page’s primary argument for steps that the Respondents had taken in relation to their revised costs budget was that they had acted promptly by serving R’s January Budget on the Petitioner on 4 January 2023. She asserted that this updated costs budget had been “submitted” to the Court, although it was not clear whether or not it was before ICC Judge Greenwood at the directions hearing held on 2 February 2023.

86. She submitted that it could not be said that the Petitioner had acted promptly and, although the Petitioner had indicated in January 2023 that it was going to serve a revised costs budget, the Petitioner had waited nearly three years to April 2025 to do this. Such action, she said, could not be considered to be prompt and whilst it was true that revised costs were to be considered at a Further CCMC, this did not mean that the parties were excused from the requirements of the CPR of acting promptly. Ms Page argued that part of the reason for this requirement was to avoid the position that the parties found themselves in whereby there was a plethora of increases and where it was difficult to work out what costs related to what. The reason for the requirement of promptness was so that the parties and the court could understand how a particular significant development affected a party’s costs. Ms Page accepted that if I did not accede to her arguments relating to Rs’ January Budget, then the Respondents’ revised costs budget was be treated in exactly the same way as the Petitioner’s when considering the issue of promptness.

87. Whilst I agree that whether or not a party has acted promptly must be considered in context, I do not accept Mr Griffiths’ submissions that, in the context of this case, that excused the parties from promptly revising their costs budgets until before the first effective Further CCMC occurred, which was not until 6 May 2025. As Master Kaye stated at [79] of Persimmon , this appears “ to be approaching costs budgeting from the wrong direction ”. CPR 3.15 and 3.15A and the case law on these rules show that the primary role of the court in costs management is to manage prospective costs. As Master Kaye further stated at [94] “ The purpose of costs budgeting is to allow the parties to predict their potential exposure to costs on the basis of the facts known at the time of the costs budgeting process. Costs budgeting is intended to provide prospective predictability and certainty .” It is not to approve incurred costs.

88. If therefore a significant development in litigation occurs which warrants a change in a party’s budgeted costs, that party is required promptly to revise its budgeted costs in relation to that development. This may result in several revisions to costs budgets to deal with significant developments in litigation which occur at different times. However, by dealing with it in this way, it enables the other party and the court to understand what additional costs are predicted to be incurred in respect of the particular significant development. If a party does not act promptly and later revises its budget on the basis of costs that have already been incurred, not only does this defeat the purpose of costs budgeting and make it difficult for the court and the other party to work out what all of the costs claimed relate to, but in essence it changes the function of the court from approving predicted budgeted costs to carrying out a task which is more akin to a summary assessment of costs.

89. As to Ms Page’s argument about Rs’ January Budget, it does not appear that the Respondents seek the approval of the court to this revised costs budget, but only to the revised costs budget served on 30 April 2025, where the figures are significantly different from the earlier costs budget. In such circumstances, it is not clear why this draft revised costs budget is relevant. Whilst it was served on the Petitioner, it was never filed with the Court and no application was made by the Respondents in respect of it. It is clear from the recital to the order of ICC Judge Greenwood dated 2 February 2023 that he did not have a copy of Rs’ January Budget in front of him and the only trace of it in the court documents is its appearance in an exhibit to a witness statement made in support of the Respondents’ application for security for costs filed on 6 April 2023. This does not, however, constitute submission of a cost budget to the court.

90. I shall now consider whether the parties acted promptly in relation to those phases where I have found that significant developments occurred which warrant an increase in their budgeted costs. Statements of Case

91. In my judgment, during the course of their preparation of the Amended Defence, in the case of the Respondents, and, after it had been served, in the case of the Petitioner, the parties should have realised that many of the new issues introduced by the Amended Defence constituted significant developments in the litigation. Therefore, at some time shortly afterwards, but before the costs were incurred or fully incurred, the parties should have prepared revised budgeted costs for statements of case. However, no steps were taken by the Petitioner to serve or file revisions to its budgeted costs for this phase until 24 April 2025, nearly three years after service of the Amended Defence and over 2 years 8 months after service of the Amended Reply. In my judgment, this cannot on any interpretation be considered as “prompt”.

92. The Respondents’ revised budgeted costs also suffer from the same problem, the revised budget which it seeks to rely upon having been filed and served after a period of nearly three years after service of its Amended Defence. Even if the Respondents had sought to have the revised costs in R’s January Budget approved, they cannot be considered to have acted promptly as the revised budget was served on the Petitioner nearly eight months after the Respondents had served their Amended Defence and nearly five months after the Petitioner had served its Amended Reply and was never submitted to the court. Rs’ January Budget and its final revised budget served on 30 April 2025 also highlight the difficulties faced by a court in being asked to approve incurred costs, as opposed to prospective costs. The additional amount for which approval was sought in the Rs’ January Budget was £114,299, but this was increased by £71,485 to £185,784 in the revised costs budget filed in April 2025, without any explanation for the increase being provided to the court. CCMC listed for 6 and 7 May 2025

93. I am satisfied that both parties acted promptly in relation to their budgeted costs for the CCMC for 6 and 7 May 2025. It seems to me that it would have been difficult for the parties to have provided estimated revised budgeted costs until they knew what issues needed to be dealt with at the CCMC, which, apart from re-setting the timetable, would only have become apparent during the course of the parties corresponding with each other in preparation of the CCMC. Disclosure

94. In my judgment, none of the parties acted promptly in submitting their revised budgeted costs for disclosure, either to each other or to the court for the reasons set out below. As stated above, although the Respondents did on 4 January 2023 serve Rs’ January Budget, the revised budgeted costs in that budget have never been submitted to the Court for its approval and I was not asked to approve them.

95. After discussions relating to the DRD following service of the Amended Defence and the Amended Reply, on 20 January 2023, the parties exchanged Disclosure Certificates and Lists of Documents. By that stage, both parties had completed the disclosure exercise referred to in paragraphs 51 and 52 above and had incurred the costs of that exercise. The Petitioner disclosed on its List of Documents all of its disclosable documents, namely, 875 documents. The Respondents disclosed on their List of Documents all disclosable documents, save for those which were physically located in Switzerland and were in the joint possession and control of the Respondents and Leo Trust Switzerland AG, or within the sole possession and control of Leo Trust Switzerland AG, but could not be disclosed without the approval of the Swiss Ministry of Justice and/or the Swiss courts. The documents on the Respondents’ List of Documents numbered about 300, but by this stage the Respondents would have been aware that, if they obtained Swiss authorisation, an additional 3,700 documents would need to be disclosed, which is what happened, when Further Lists of Documents were exchanged on 2 April 2025. Further, in light of the Petitioner’s original estimate that it would have to review about 2,000 documents from the Respondents, by this stage the Petitioner must have reasonably anticipated that the documents they would have to review would be substantially more than this having regard to the expansion of issues between the parties.

96. In light of the above, the revised budgeted costs, in respect of which the parties now seek the Court’s approval. should, in my judgment, have been submitted before 20 January 2023. The submission of such budgeted costs over two years later was too late and cannot be regarded as prompt in the circumstances. Witness statements

97. In my judgment, the parties have not acted promptly in seeking to revise their budgeted costs for witness statements. As both parties admit, they have known the extent of the factual disputes between them since August 2022. By 20 January 2023 they had also both carried out the disclosure exercise. They should therefore have been in a position to have estimated the increased costs for witness statements arising out of the new issues introduced by the Amended Defence and the Amended Reply between August 2022 and 20 January 2023. In light of the above, the submission of revised budgeted costs between over two years three months or two years eight months later cannot be regarded as prompt. Trial preparation and trial

98. Although the additional issues that the parties had to deal with were known from August 2022, the issue relating to trial length and the work required for trial preparation could not, in my judgment, be properly assessed by the parties until the approach of the hearing of the Further CCMC on 6 and 7 May 2025. In these circumstances, I am satisfied that the revised budgets for trial preparation and trial costs were submitted promptly by both parties. Conclusion

99. In my judgment, the Petitioner and the Respondents have satisfied the two threshold tests in respect of the proposed increase of their costs in relation to the CCMC listed for 6 and 7 May (but in fact held on 6 May and 18 December 2025) and the trial preparation and the trial phases. In my discretion, increases to the parties’ costs in the above three areas will be allowed. However, the amount of such increases has yet to be decided and it is hoped that they may be agreed between the parties.