Political obstacles can trump legal obstacles when a court is considering enforcement in security for costs applications, as was seen recently in Haque v Hussain.(1)
In September 2020 the claimant, Syed Aminul Haque, brought an action on behalf of the unincorporated association known as the "Muttahida Quami Movement Pakistan" (MQM Pakistan), against an unincorporated association based in London known as the "Muttahida Quami Movement" (MQM London). Both MQM Pakistan and MQM London claimed that their organisation stemmed from the Muttahida Quami Movement, a political party which had been founded by the first defendant in Pakistan in approximately 1984.
The claimant asserted that MQM Pakistan was the beneficial owner of six properties, the legal titles to which were in the names of the defendants, and that MQM Pakistan was entitled to the proceeds of the sale of a seventh property. Meanwhile, the defendants asserted that MQM London was the beneficial owner of these properties and the proceeds of the seventh property's sale.
Security for costs
An application for security for costs was made by the first defendant under Civil Procedure Rule (CPR) 25.13. The relevant provisions state that the court may make an order if it is satisfied, having regarded all the circumstances of the case, that it is just to make such an order and that one of the conditions in CPR 25.13(2) is satisfied. One such condition is that the claimant is resident out of the jurisdiction but not resident in a state bound by the Hague Convention 2005, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982. Having satisfied herself that this condition was met, the judge noted that where this ground is relied on, impecuniosity would be relevant to how the court exercised its discretion only to the extent that it would serve:
(i) to preclude or hinder or add to the burden of enforcement abroad against such assets as do exist abroad or (ii) as a practical matter, to make it more likely that the claimant would take advantage of any available opportunity to avoid or hinder such enforcement abroad.(2)
The claimant had not provided evidence as to his means in either Pakistan or the United Kingdom; the judge proceeded on the basis that the claimant would be unable personally to satisfy a costs judgment made against him.
Legal obstacles to enforcement
Although there is a legal framework to enforce English judgments in Pakistan, the first defendant argued that there were certain provisions in the Civil Procedure Code of Pakistan 1908 that would give rise to obstacles to enforcing a judgment against the claimant in this case. However, the judge rejected these arguments, stating that they fell short of showing a "real risk" of substantial obstacles to enforcement. A key factor in the judge's conclusion on this point was the lack of expert evidence relating to Pakistani law in relation to these provisions.
The first defendant argued that because the representative claimant did not have any apparent means to fulfil a costs judgment against him, the only realistic route to recovery was seeking to enforce against other members of MQM Pakistan, and that this would be an additional risk and burden of enforcement. From the English law position, CPR 19.6(4) would require the defendants to seek the permission of the court prior to enforcement, and it would then be open to any non-party to put forward special reasons why the costs order should not be enforced against them.(3) Additionally, in Pakistan, it was contended that other members of MQM Pakistan would try to prevent enforcement by suggesting that they had never approved of the English action or that they had insufficient knowledge of the costs implications of the case. The judge rejected both of these arguments, stating once more that there was insufficient evidence in relation to Pakistani law and that the difficulties in recovering costs could be attributed to the representative nature of the claim rather than the jurisdiction. Further, the fact that CPR 19.6(4) would need to be fulfilled was equally not enough of a barrier to enforcing an order against the claimant.
Political and practical obstacles to enforcement
The judge found that there were four key features of the claim and in the evidence that indicated, in her judgment, that there would be a real risk of substantial obstacles to the enforcement of a costs order by the defendants against the claimant:
(1) the claimant's status as a government minister, in his capacity as a member of MQM Pakistan;
(2) MQM London's status as a political party which (for whatever reasons) is effectively outlawed in Pakistan;
(3) the first defendant's status as a high profile and controversial political figure, who has been accused of serious criminal offences including money laundering (and convicted in Pakistan, in his absence, of murder), as well as facing criminal charges in London pursued with the co-operation of the Government of Pakistan; and
(4) the material from [the] two watchdog organisations as to the level of corruption in the court system generally, and specifically of the politicisation of the judiciary.(4)
A certificate of guarantee offered by the claimant as security for the defendants' costs was similarly found to face the same political obstacles to enforcement as a judgment would.
In exercising her discretion and making an order for security for costs in relation to the claim, the judge found that political obstacles to enforcement, rather than legal obstacles to enforcement, were key factors in her decision. This judgment also reinforces the message that evidence relating to the law of another jurisdiction should be presented by an expert in the field, or it may risk being deemed inadmissible.
For further information on this topic please contact Nina Pulimood or Simon Hart at RPC by telephone (+44 20 3060 6000) or email ([email protected] or [email protected]). The RPC website can be accessed at www.rpc.co.uk.
Endnotes
(1) [2021] EWHC 2347 (Ch) [52].
(2) Lord Justice Mance at 62, in Nasser v United Bank of Kuwait [2002] 1 WLR 1868; [2002] 1 All ER 401, CA.
(3) Howells v Dominion Insurance Company [2005] EWHC 552 (QB) at 25 and 28.