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Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

Selected Articles 2025

In honour of the twelve days of Christmas, we give you the twelve articles of 2025, highlighting cases and developments of general interest this year. Sadly, we do not have ten lords a leaping but we can offer you five Supreme Court justices (who are also lords) leaping on a party who tried to get costs paid in a rapidly depreciating currency and resolving the issue of the currency in which costs should be paid.

Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

The UK-US Transatlantic Taskforce for Markets of the Future

Notwithstanding some observers’ comments about its cost to the taxpayers, President Trump’s recent (and second) state visit has been hailed by the UK government as bringing £150bn of investment to the country.

The UK government was quick to point to Microsoft’s promise to invest USD 30bn over the next four years in (amongst other things) a new supercomputer. However, the visit also appears to have prompted longer-term and less ostentatious projects. On 22 September 2025, the UK’s HM Treasury and the US’s Treasury Department jointly announced the establishment of a “Transatlantic Taskforce for Markets of the Future” (the “Taskforce”).

The Taskforce will be chaired by officials from both departments and include representatives of regulators from both countries responsible for capital markets and digital assets, principally the FCA and the SEC.

The stated purpose of the Taskforce is, within 180 days, to “report back to both finance ministries, via the UK-US Financial Regulatory Working Group …, on recommendations to enhance collaboration on capital markets and digital assets and other innovative financial activities.” In particular, the Taskforce will consider (1) short-term collaboration on digital assets as markets develop (as well as longer-term opportunities for innovation in digital markets) and (2) options for improving links between UK and US capital markets, including reducing burdens on UK and US firms seeking to raise capital across borders.

The Taskforce is also supposed to consult with industry players.

It remains to be seen what impact this will have in the longer term but the direction of travel – towards increasing UK-US collaboration in regulating financial markets and increasing access to capital markets across the Atlantic – appears clear.

Simon Winter, Partner

Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

Expert Witnesses in the Dock

“I think the people in this country have had enough of experts from organisations with acronyms saying that they know what is best and getting it consistently wrong.”

Michael Gove, then Lord Chancellor, June 2016

The much-cited (but mostly misquoted) statement above suggests increasing scepticism about the reliability of experts in general. In the criminal courts, there have been a number of scandals involving supposed medical experts whose (inaccurate) assurances resulted in serious miscarriages of justice and (as we shall see) procedural safeguards being imposed. The civil courts also now seem to be taking a harder line with expert witnesses.

A recent High Court decision in commercial litigation has generated what the Law Society Gazette tactfully calls “significant interest in the expert witness community”. It might have been less tactful but more accurate in describe it as “concern” – or (possibly) “alarm”.

The question raised by that decision is whether expert witnesses have a duty to disclose previous judicial criticism of their evidence.

In practice, well-advised parties always ask proposed expert witnesses about this topic as soon as possible: it is one of the first questions this firm will ask of expert witnesses. Nor do we take their word for it – we will conduct our own due diligence on legal databases.

But what of the theory? There is no obligation to make any such disclosure in Part 35 of the Civil Procedure Rules, which governs expert evidence, or its accompanying Practice Direction. The Civil Justice Council Guidance for the instruction of experts in civil claims (still in force in its 2014 form) does not refer to any such duty.

Hodgkinson and James suggest in Expert Evidence: Law and Practice that such a duty exists because of the terms of Rule 19.3(3)(c) of the Criminal Procedure Rules, which requires a party seeking to introduce expert evidence of anything other than admitted fact to serve a report together with “notice of anything of which the party serving it is aware which might reasonably be thought capable of undermining the reliability of the expert’s opinion, or detracting from the credibility or impartiality of the expert”. The expert has the same personal duty by virtue of rule 19.2(d)(ii) of the Criminal Procedure Rules.

In the criminal courts, then, expert witnesses have a duty of candour. Until recently, however, most practitioners would have said that no such duty arose in the civil courts.

In JSC Commercial Bank Privatbank v. Kolomoisky and others [2025] EWHC 1987 (Ch), however, Trower J appears to have extended the duty of candour to experts giving evidence in civil proceedings – or assumed that such a duty simply existed in any event. In short, this was a dispute between a Ukrainian bank and two of its founding shareholders over substantial sums said to have been extracted from the bank. Expert witnesses were called to value various assets and one expert gave evidence on the value of an aircraft.

While Trower J found that his opinions were offered honestly without straying into advocacy, his credibility was undermined by his failure to disclose criticism of his evidence made in two previous judgments. In the first of those decisions, it was found that he had failed to disclose unhelpful material he had learned from his work on another case and so was in breach of Practice Direction 35 by failing to consider material facts which detracted from his opinion. In the second, it was found (for reasons which are not stated in the judgment) that he should have disclosed this earlier criticism – but the same judgment went on to prefer much of his evidence over that relied upon the opponent.

Notwithstanding that Trower J found the expert’s evidence in the present case to be reliable, he nevertheless found the failure to disclose these previous criticisms to be “a breach of his own personal duty to the court.” It is unclear what consequences flowed from that finding since Trower J followed the expert’s evidence in some respects.

(Pausing there, the case was bedevilled by problems with the expert witnesses to an extraordinary degree. A different expert witness for the principal Defendant was discovered to be have been removed from the ICAEW’s register for failing to co-operate with regard to complaints (which he had not previously mentioned) and filed a witness statement shortly before trial pleading the common law privilege against self-incrimination with respect to answering any questions about the circumstances in which he had been removed as a trustee from two charities (which he had also not previously mentioned).)

It is important to note that there was no suggestion that the expert had in the second previous judgment or in the present case failed to disclose a material fact which might detract from his opinion, as had been the case in the first judgment. This was therefore a matter which only went to the expert’s credibility and not to any material issue before the court. The effect of this ruling – or assumption (also apparently shared with the judge who gave the second judgment noted above) – therefore appears to be to impose a duty of candour only codified in the rules governing criminal proceedings on experts in civil claims – who apparently have no such clear obligation.

Well-advised parties will wish to ensure they conduct thorough due diligence on their expert witnesses.

Simon Winter, Partner

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The Proper Currency for Costs: Guidance from the UK Supreme Court

Regular readers of the legal press may well recall a scandal involving an arbitration between The Federal Republic of Nigeria (“FRN”) and Process and Industrial Developments Limited (“P&ID”), in which the High Court found that arbitral awards, which totalled USD 11 billion by the time of trial, in favour of P&ID should be set aside because they had been procured by fraud.

The latest round in that litigation raises an issue of general importance to practitioners in international disputes: in particular, in what currency should awards of costs be paid? This was highly material in this case since FRN’s own currency, the naira, had fallen in value substantially since 2019 and P&ID was facing a costs liability in excess of £44 million.

In practice, international parties who litigate in England and Wales expect to engage local lawyers who will require to be paid in the local currency, which is sterling, because that is also the currency in which those lawyers have to pay their own bills. That is also what happened in this case: FRN paid its English solicitors in sterling. Before the Supreme Court, there was argument about whether FRN had converted naira into sterling to pay its lawyers but the Supreme Court declined to resolve the dispute, finding that such disputes would give rise to satellite litigation.

However, there is no statutory provision or rule which requires parties to pay their bills in sterling or to seek recovery of costs in sterling.

There appears to be only one decision in which the High Court awarded costs in a currency other than sterling, which is Cathay Pacific Airlines Limited v. Lufthansa Technik AG [2019] EWHC 715 (Ch). Lufthansa had been charged in euros and paid in euros and the Court awarded Lufthansa its cost in euros.

So far, this all seems rather obvious. A party can be awarded costs in the currency in which it was charged and paid them.

But the decision in Cathay appears to suggest a different principle is at work, namely that “the award of costs to a successful party should be made in the currency which most accurately reflects the loss suffered by that party in funding its litigation.” This is a recipe for argument, especially where international parties are involved and the opportunity arises to engage in currency arbitrage and enquiries into funding.

P&ID argued (unsuccessfully) that an award of costs was a kind of compensation, which it is now generally accepted can be paid in any relevant currency sought, and so the principle set out in Cathay applied and FRN should be awarded its costs in naira – not sterling.

The Supreme Court rejected this argument, noting that the ability to recover costs was only a right to contribution:

“An award of costs is no indemnity. It is a statutorily authorised award of a contribution toward the costs incurred in litigating in the courts of England and Wales.”

The Supreme Court noted further that all kinds of costs inherent in funding litigation, most obviously the fees or interest payable to a commercial funder, could not be recovered any more than the costs of converting one currency into another to pay lawyers’ bills. There would be no investigation into such matters because an award of costs had a technical meaning, citing a Court of Appeal decision from 1987 to the effect that “costs” had “a restricted meaning which could almost be described as conventional in a certain pragmatic sense”.

The Supreme Court has therefore foreclosed all such arguments. But parties should always think ahead about such issues and how they will fund their costs and seek to recover those costs if successful. As this case amply demonstrates, there is no limit to the ingenuity or determination of parties who face substantial costs bills.

Simon Winter, Partner

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A Cautionary Tale for Arbitration Drafting and Enforcement: Insights from the Deutsche Telekomv. India Enforcement Battle

A recent case in the United States Court of Appeals raises a point which should concern all those drafting or interpreting the scope of arbitration clauses and considering enforcement options.

The facts were relatively straightforward. Through a subsidiary in Singapore, Deutsche Telekom AG (“DT”) had invested around USD 100 million for a 20 per cent stake in an Indian company called Devas Multimedia Private Limited (“Devas”) which provided satellite-based telecommunications. Devas had an agreement in 2005 with a company wholly owned by the Indian government called Antrix Corporation Limited (“Antrix”) to lease a portion of the electromagnetic spectrum on two satellites that Antrix would launch into space. Devas would then provide multimedia services throughout India. In 2011, however, the Indian government changed its mind about the use of that part of the spectrum and Antrix cancelled the lease.

DT was determined to seek compensation for the loss of its investment and so invoked the terms of a bilateral investment treaty between India and Germany. That treaty provided (in short) that investors from either country were entitled to be treated fairly and to arbitration of investment disputes under the well-known UNCITRAL rules.

DT therefore began arbitration in Switzerland under the relevant treaty. India disputed the claim at every turn. India objected that the dispute was not arbitrable because (a) DT was not a covered investor because its investment in Devas occurred through a Singapore-based entity and (b) Devas’s activities in India were not covered investments, but rather pre-investment activities. Both these arguments failed before the panel and subsequently before the Courts of Switzerland, Germany and Singapore.

DT then sought recognition of the award in the United States. At first instance, the Court rejected India’s arguments and confirmed the award.

On appeal, however, the Court of Appeals ruled that the first instance Court had not considered the issues correctly and sent the case back to the first instance Court for further consideration.

While it rejected arguments about sovereign immunity and forum non conveniens (which could not succeed in circumstances where the foreign government concerned had agreed to arbitrate), the Court of Appeals noted there was a distinction between jurisdictional arguments and merits arguments. In the United States, an objection challenging the existence of an arbitration agreement counts as a jurisdictional defence but an objection that the dispute falls outside the scope of an arbitration agreement is treated as a merits defence under the New York Convention.

The key issue, which was (for the reasons already given above) a merits rather than a jurisdictional argument, was the arbitrators’ authority to decide the scope of their own jurisdiction, often called the competence-competence.

DT pointed to the fact that the relevant treaty incorporated (in particular) UNCITRAL Arbitration Rules art. 21.1 (1976): the “arbitral tribunal shall have the power to rule on objections that it has no jurisdiction.” The United States Court of Appeals has twice ruled that this was sufficient to establish the arbitrators’ conclusive authority in that matter and so DT must have been confident in its position.

Unfortunately, however, the Court of Appeals considered that the approach taken by the first instance Court was wrong. Arbitration is a matter of contract and therefore of contractual interpretation, in which context always matters.

The Court of Appeals was swayed by the fact that in both India and Germany, courts always have the power to review the question of the jurisdiction of arbitrators even if the arbitrators have ruled on the issue themselves. That was the legal context in which the parties would understand the incorporated rule, which (on a narrow reading) simply gave arbitrators the power to deal with objections to their jurisdiction and did not preclude courts from considering the issue or expressing a different view.

Principles of both Indian and German law on confirmation of awards were also expressly stated in the treaty. The treaty required that any award “shall be enforced in accordance with national laws of the [state] where the investment has been made.” The Court of Appeals noted: “Here, that country was India, and its law sharply distinguishes between authorizing arbitrators to consider arbitrability on the front end and foreclosing courts from doing so on the back end.”

The Court of Appeals therefore concluded that the first instance Court would have to consider afresh whether the claim made by DT was in fact within the scope of the arbitration provisions of the treaty.

This case is a salutary reminder to practitioners of a number of important considerations.

First, arbitration agreements (even ones supplied ready-made by treaty and international rules) are contracts which will be interpreted like other contracts. The legal backdrop in the parties’ “home” jurisdictions is important and must be considered.

Second, careful consideration must always be given at the outset to the practicalities of enforcement through state Courts in a jurisdiction which may not even appear relevant at first.

This case concerned enforcement in the United States of an award made in Switzerland as the result of an investment by a Singapore-based subsidiary of a German company in an Indian company.

Simon Winter, Partner

Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

Disposing of Claims with Certainty in Arbitration Awards

Arbitration awards typically fall into two parts: first, a section where the tribunal sets out its reasons for its findings on the issues before it and, second, a “dispositive” section where the tribunal formally states its decisions on the issues and specifies the relief granted. The former is like a judgment and the latter like an order in court proceedings.

But what if there is a discrepancy between the reasoning and the dispositive sections? And an opponent keen to avoid the consequences of losing?

In Nigeria LNG Limited v. Taleveras Petroleum Trading DMCC and others [2025] EWCA Civ 457, the Court of Appeal provided guidance on the proper interpretation of arbitral awards. The technical issue before the court was whether orders made by an arbitral tribunal were (a) limited to those contained in the final dispositive section of its award, often (as in this case) headed “Award”, or (b) also encompassed matters the tribunal stated that it was ordering in an earlier section (in this case, headed "Analysis") but which were not to be found in the final dispositive section.

In short, Nigeria LNG failed in breach of contract to deliver 19 cargoes of liquefied natural gas (LNG) to Taleveras, causing Taleveras in turn to breach onward supply contracts with Vitol and Glencore. In January 2023, the arbitral tribunal awarded Taleveras USD 24m in damages and an indemnity for liabilities which might be incurred to Vitol and Glencore. Paragraph 607 of the tribunal’s reasons suggested that the tribunals dealing with arbitrations with Vitol and Glencore should state in their awards whether the indemnities responded to the sums they awarded. But the dispositive section, while dealing carefully with issues such as compromise, referred to no such requirement.

In December 2023, an award was issued in separate arbitration proceedings by which Taleveras was liable to pay Vitol over USD 233m (excluding interest and costs). But the award made no mention of the indemnity. Taleveras demanded payment in full from Nigeria LNG under the indemnity.

In early 2024, Nigeria LNG applied to the High Court to prevent enforcement of the indemnity on the basis that the indemnity did not respond to the Vitol award because the arbitral tribunal dealing with Vitol’s claim had not dealt with the indemnity.

Talevera then secured a further award from the Vitol tribunal to the effect that all the sums awarded were within the scope of the indemnity – but Nigeria LNG disputed that the tribunal had any power left after delivery of its final award. In the time-honoured phrase, having done its job, it was functus officio.

At first instance, HHJ Pelling KC dismissed Nigeria LNG’s arguments. The Court of Appeal left open the question of the validity of the second award by the Vitol tribunal because it was not necessary to decide it.

Phillips LJ found that the key issue was whether the indemnity granted in the dispositive section was qualified by language in the reasoning section of the award. Like any other document, an arbitral award should be interpreted as a whole and in a reasonable and commercial manner.

Where an award (like the award in the present case) includes a clear dispositive section that contains a comprehensive list of relief granted by the arbitral tribunal, that is highly likely to be the end of the matter. Phillips LJ held that the final section of the award (actually entitled “Award” and beginning with the words “For the reasons set out above, the Tribunal hereby DECIDES AND AWARDS as follows …”) was intended to serve the same purpose as a court order following a reasoned judgment and set out the relief granted in formal terms. This section was intended to be a self-contained and comprehensive statement of that relief. The fact that the tribunal had used directive language (such as “The Tribunal further orders that…”) in the earlier analysis section of the award did not mean that the reader had to refer back to that section. If the tribunal had wished to refer back, it would have done so clearly – and it had not.

In many respects this will seem an obvious response to an attempt by a party to evade its obligations. However, the Court of Appeal is adopting a principled approach to the distinction between awards and their reasons, which (in accordance with a long-standing policy to encourage arbitration) promotes the enforceability of awards, reduces the risk of messy disputes about interpretation and seeks to ensure that arbitral awards are indeed final.

Simon Winter, Partner

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A Sea Change in US Corruption Enforcement?

On 10 February 2025, President Trump paused enforcement action under the Foreign Corrupt Practices Act (15 U.S.C. 78dd-1 et seq.) (the “FCPA”) and directed the Attorney General of the United States to review enforcement policy.

The principal reason given was that (according to the words of the relevant executive order), the FCPA had been “systematically, and to a steadily increasing degree, stretched beyond proper bounds and abused in a manner that harms the interests of the United States … [and] overexpansive and unpredictable FCPA enforcement against American citizens and businesses — by our own Government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security.”

On 9 June 2025, the Department of Justice (the “DOJ”) issued a memorandum setting out its new policy on enforcement in response to the President’s order. That memorandum requires prosecutors to obtain authority from a senior official before commencing any investigation and to consider a list of four specific “non-exhaustive factors”, namely:-

(a) the President’s priority to eliminate cartels and trans-national criminal organisations, which will continue to be a high priority for law enforcement;

(b) whether bribery demanded by foreign officials has affected specific US business interests;

(c) advancing US national security, particularly in cases involving bribery affecting defence, intelligence and critical infrastructure projects; and

(d) prioritising allegations of serious misconduct over low-value matters which reflect “generally accepted business courtesies” in accordance with local business customs.

Overall, the current focus is therefore on offences committed by those acting for criminal organisations, such as laundering the profits of the illegal drugs trade, or on offences which affect US critical infrastructure. Other matters will not be a priority for the DOJ.

In particular, the DOJ now proposes focus on the nationality of the victim and not on the nationality of the potentially culpable parties and there is a clear focus on harm to US companies and individuals. This suggests that the DOJ may be less interested in pursuing cases against US companies, unless the case involves a priority area of enforcement.

It appears some ongoing investigations have already been stopped. New investigations will have to be approved by senior officials rather than individual prosecutors using their discretion.

Most commentators agree that this reflects a more business-friendly culture in the US Department of Justice to prosecutions, at least as far as US companies are concerned. Some commentators have suggested that US companies might benefit from disclosing information about their competitors paying bribes and foreign officials demanding them, even if that company has historically violated the FCPA’s provisions.

Non-US companies doing business in the US, especially those involved with any US critical infrastructure projects, should therefore assume a greater risk of enforcement action than previously.

Simon Winter, Partner

Postscript

Since this article was written and first published, there have been no further official announcements by the DOJ on policy, but various news sources have reported on a deferred prosecution agreement made under the new policy.

That agreement concerns a Guatemalan company which the DOJ alleged to have bribed local government officials in order to procure business advantages. It appears the DOJ became involved because the alleged bribery took place in Florida. Commentators have referred to this as an example of increasing DOJ scrutiny of Latin America, which seems plausible in light of wellknown foreign policy developments, but also as evidence of an “America First” agenda, which seems far less plausible.

As matters stand, there is nowhere near enough evidence yet to offer any meaningful comment on the impact of the new policy and those potentially affected must continue to watch out for developments.

Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

Third Time Lucky? A Recent Case on Re-opening Judgments

“If at first, you don’t succeed, try, try again.”

While this sentiment has often been associated with Robert the Bruce observing a tenacious spider, it appears in fact to be a quotation from an improving song published in 1836 by Edward Hickson. It is also a sentiment wholeheartedly embraced by commercial litigants over many years.

A recent case involving the Commercial Bank of Dubai’s (“CBD’s”) latest attempts to enforce judgment debts against the Al Sari family reminds us not only of the opening quotation but also of a rule first articulated in House of Spring Gardens v. Waite (No 2) [1991] 1 QB 241.

Simply stated, that rule is twofold:-

(a) First, that the English court will consider a fraud defence to an action to enforce a foreign judgment in England and Wales and that remains the case even if fraud was raised as a defence to the original claim and rejected by the foreign court;

(b) Second, however, a defendant who did not raise fraud as a defence, but instead brought separate proceedings in the same jurisdiction to set aside the judgment for fraud but failed, cannot raise the same argument to resist enforcement of the judgment in England and Wales.

In House of Spring Gardens, the claimant sued various defendants for breach of confidence in the Republic of Ireland and obtained judgment from Costello J. Undeterred, the defendants commenced fresh proceedings in Ireland to set aside that judgment for fraud (based upon allegedly fresh evidence). Egan J rejected the suggestion that the previous judgment had been obtained by fraud. The claimant then sought to enforce the first judgment in England and Wales. Again undeterred, the defendants claimed that the judgment had been obtained by fraud (based upon the same evidence which Egan J had rejected). They did not succeed. In the Court of Appeal, Stuart-Smith LJ held that the fundamental issue was: “whether it would be in the interests of justice and public policy to allow the issue of fraud to be litigated again in this court, it having been tried and determined by Egan J. in Ireland. In my judgment it would not; indeed, I think it would be a travesty of justice.”

It is difficult to disagree with the outcome. But what if the rule developed in that decision worked in another case to produce a quite different outcome? This was the issue faced by the Commercial Court in Commercial Bank of Dubai PSC v. Mr Abdalla Juma Majid Al Sari & Others [2025] EWHC 1810 (Comm).

The complexities of the facts of the case are difficult to summarise but, in short, it was said that various members of the Al Sari family had taken steps to prevent effective enforcement action against properties in London owned by various BVI companies. According to the judgment, this scheme involved the creation of various documents which purported to impose a debt in the region of £115m on the BVI companies in favour of one of the defendants, a company called Globe Investment Holdings Limited (“Globe”). In the midst of enforcement action by CBD, Globe had brought proceedings in Sharjah, UAE, against the BVI companies, seeking judgment on the basis of those documents, apparently with a view to shielding the London properties from future enforcement action.

The Sharjah Court of first instance dismissed Globe’s claim and rejected the documents evidencing the alleged debt as false, but this was overturned on appeal with the result that the BVI companies were ordered to pay Globe AED 585,652,815 (around £115m). Two further appeals brought in Sharjah were dismissed.

Against this unpromising background, CBD sought the assistance of the Commercial Court in London seeking findings that the documents evidencing the debt to Globe were false and the UAE judgment had been obtained by fraud. Calver J had no doubt the documents were false and that the judgment in favour of Globe had been obtained fraudulently.

However, there was a potential problem in that the issue of fraud had already been determined elsewhere and so it was necessary to consider what kind of judgments had been given. If they were judgments dealing only and finally with the issue of fraud, then the defendants could rely upon the rule in Spring Gardens to say that the UAE court’s judgment could not be impeached.

The route taken by Calver J was to find that the various petitions filed in the UAE were not in fact separate proceedings but applications for review or reconsideration. The English Court was not therefore precluded from relying on the first limb of the test in Spring Gardens and considering the issue of fraud afresh.

CBD’s attempts to enforce its judgments debts will therefore continue.

Simon Winter, Partner

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Is Dubai enhancing its investor protection for property investments?

Dubai’s recent Law No. 7 of 2025 aims to strengthen oversight by introducing new standards for contractors in the emirate's construction sector; it appears, at first blush, to have real mettle.

Its secondary objective, and hope for property investors, is that its measures will increase transparency, accountability, and project quality, leading to a more secure and predictable investment environment. This article looks at whether, by enhancing contractor standards and investor protection, the new law will influence private equity firms to invest more in real estate projects in Dubai.

The answer to that question lies in how the new law plans to help investors:

First: it establishes clear (‘higher entry’) standards for all contractors, favouring well-capitalized operators, in turn reducing the risk of inexperienced building firms. For investors, this provides greater assurance that projects will be completed by qualified professionals.

Second: it creates a new committee within the Dubai Municipality and a central digital registry to oversee contracting activities. This makes information on a contractor's capabilities more accessible to developers and financiers. Enhanced visibility helps investors conduct more effective due diligence, mitigating the risk of dealing with unqualified parties.

Third: the law introduces a graduated system of penalties for non-compliance, including fines, suspension, or license revocation. This raises the stakes for contractors who fail to meet standards, incentivizing quality workmanship, and adherence to timelines. Investors can therefore expect higher project reliability and reduced delays.

Fourth: the law requires approval from the Dubai Municipality for subcontracting activities. It also formalizes rules for contractors entering into consortiums for large-scale projects. This brings more structure and oversight to complex supply chains, reducing risks associated with project management and delivery.

But will it move the dial towards greater, more stable, investment opportunities? Our view is that it will, in time. It will do that by providing greater certainty and stability by shifting from a regime based on voluntary compliance to enforceable rules; and it will increase market transparency, making it easier for investors to vet potential partners.

But it will take time and there will be inevitable challenges along the way, in particular during the initial adaptation period. Contractors will be afforded a ‘grace period’ to comply with the new law, and during that time some will undoubtedly face difficulties in meeting the new standards, which could cause temporary disruptions or delays in certain projects – which could adversely impact the investment climate. There will also be cost increases in the immediate to short term. Enhanced regulations and stricter quality control measures often lead to increased operational costs for contractors. These costs could, in some cases, be passed on to investors, affecting project budgets, although this is balanced by the promise of higher-quality results.

However, the law is the right way to go. It is also part of Dubai's and the wider UAE's broader strategy to enhance its business ecosystem and attract foreign direct investment. Other recent pro-investment initiatives that complement this law include: (1) Executive Council Resolution No. (11) of 2025 which allows free zone entities easier access to the mainland market, boosting inter-emirate business growth and collaboration; (2) the UAE’s Expanded Golden Visa Program which lowered investment thresholds and expanded eligibility for long-term residency, making it more attractive for international talent and investors; and (3) improved real estate transparency with new anti-money laundering rules and enhanced protections for off-plan buyers increase long-term market integrity.

It is often said that the ‘proof is in the pudding’. In this instance, it may be ‘in the pilings’.

Amir Ghaffari, Partner

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Freeholders Sue to Block the Leasehold and Freehold Reform Act 2024

Property investors will be watching closely the progress of a judicial review claim brought by a group of property owners against the Secretary of State for Housing, Communities and Local Government, which is (in effect) a challenge to the Leasehold and Freehold Reform Act 2024 (the “Act”) and which was heard from 15-18 July 2025. Judgment is not expected before October 2025.

The case arises from the long-awaited reform of leasehold law as it is now enshrined in the Act. Much of the public interest in this area concerns what might be called the “consumer” interest in the selling of new homes on long leases where the developer retains the freehold interest and where there has been disquiet about the quality of advice given, often by solicitors paid by the developer, to purchasers who were apparently ignorant of the effect of onerous ground rent clauses. However, there are aspects to the legislation and the judicial review claim which have much broader relevance to investors in property.

While significant parts of the legislation have yet to be brought into force, the principal points of concern to investors, and which are in contention in the claim, are that the Act:-

(a) prohibits the grant or assignment of certain long residential leases of houses (thus addressing the main point of public concern noted above);

(b) makes significant changes to a variety of aspects of the leasehold enfranchisement and lease extension regimes (including the price payable); and

(c) provides a right for long leaseholders to replace their contractual ground rent with a peppercorn rent (on payment of a premium).

The combined effect of these changes will likely be to devalue (perhaps considerably) a number of freehold interests subject to long leasehold interests. Accordingly, the great London estates and a charity who comprise the most well-known claimants in the claim seek (in short) to establish that enforcing the provisions of the Act would constitute a breach of Article 1 of Protocol 1 to the European Convention of Human Rights, which guarantees to “Every natural or legal person … the peaceful enjoyment of his possessions.” It is also clearly established law that, where any person is deprived of property, compensation must be paid. The claimants argue that they are being deprived of their existing proprietary rights and that the Act does not offer them fair compensation for their loss.

No doubt there will be little sympathy at large for claimants such as the Duke of Westminster and Earl Cadogan. The less well-known claimants in the claim, however, are pension funds, which requires some explanation.

Ground rents are – or were – very reliable investments. While the amounts payable are not substantial (and bear little or no relation to commercial rents), leaseholders know they must pay their ground rent or risk losing their homes. Better still from the freehold owner’s perspective, the mortgage providers for long residential leases will step in and pay the ground rent if the leaseholder does not in order to protect their security. In short, this is a very safe income stream which is always attractive to a certain kind of long-term investor who requires reliable income.

Accordingly, a number of pension funds – who are precisely long-term investors who value reliable income streams – have bought freeholds with long residential leasehold interests, have loaned considerable sums to freeholders on what appeared to be very strong security or have even simply purchased the right to collect ground rents from freeholders.

Better still from their perspective, long leaseholders who wish to extend the terms of their leases or “enfranchise” them and thus buy out the freehold interest altogether must pay to do so according to highly technical but well-known statutory formulas on which expert advice is readily available and which reflect (to a certain extent) commercial and market realities.

All of this will be changed by the Act. A number of pension industry bodies have suggested their losses will be measured in billions of pounds.

The outcome of the claim and any subsequent legislation will give a clear indication to property investors of the direction of travel in this market.

Simon Winter, Partner

Postscript

Since this article was written and first published, judgment has been given. Holgate LJ and Foxton J set out – in an exemplary judgement of over 160 pages [2025] EWHC 2751 (Admin) – the legislative history of leasehold enfranchisement and the effect of Article 1 Protocol 1 of the European Convention. The Secretary of State was successful. At the time of writing this postscript, it is unclear whether the unsuccessful claimants will appeal or take matters further in Strasbourg.

Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

When Can a Parent Company Become Liable for Its Subsidiary? And How Might This Affect PE Sponsors?

Investors operating in England and Wales, including PE sponsors, operate on the assumption that losses suffered by one company cannot affect the liabilities of another. The principle of the corporate veil, a cornerstone of company law, recognises that each company is a separate legal entity. As such, a parent is not responsible for the debts, liabilities or conduct of its subsidiaries.

However, a series of recent decisions have made clear that courts are increasingly willing to entertain claims that parent companies, potentially including PE sponsors given the test which is apparently applied, may owe a duty of care to those affected by the actions of their subsidiaries.

In Chandler v Cape plc [2012] EWCA Civ 525, the Court of Appeal held that a parent company could owe a direct duty of care to an employee of its subsidiary. Mr Chandler, who had worked for a subsidiary of Cape plc in the 1950s and 60s, developed asbestosis decades later. The subsidiary had since been dissolved and had no assets, so Mr Chandler brought his claim against the parent. The Court of Appeal’s decision turned not on the parent’s ownership of the subsidiary, but on the control and knowledge exercised by the parent. Cape plc had taken an active role in health and safety matters across its group of companies, including the provision of advice to subsidiaries on how to manage asbestos risks. Cape plc had both the knowledge of the risk and the means to prevent the harm yet failed to do so. The court found this gave rise to a relationship of proximity sufficient to impose a duty.

This case marked the first significant recognition that corporate group structures do not immunise parent companies from liability where they actively engage in the management of operational risks and that, by doing so, they can assume a duty of care to those affected by their decisions.

The Supreme Court later reaffirmed and extended these principles in Vedanta Resources plc v Lungowe [2019] UKSC 20 and Okpabi v Royal Dutch Shell plc [2021] UKSC 3. Both involved claims by foreign claimants against UK-based parent companies for alleged environmental and human rights abuses by overseas subsidiaries. The claimants in these kinds of cases often seek to bring their claims before the English Courts because they perceive (and the English Courts will accept) that they will obtain a fairer and more effective determination of their claims than if they were tried “at home”. To defeat the inevitable jurisdiction challenge from the Defendants, they need to establish only that there is at least an arguable case that the English-based parent owed the relevant claimants a duty of care.

In Vedanta, nearly 2,000 Zambian villagers brought a claim against Vedanta, a UK-listed parent company, alleging that toxic discharges from a copper mine operated by its Zambian subsidiary, Konkola Copper Mines (KCM), had caused widespread environmental damage. Vedanta argued it was not responsible, as it did not operate the mine.

In Okpabi, a group of Nigerian residents brought a claim in the English courts against Royal Dutch Shell (RDS) and its Nigerian subsidiary, Shell Petroleum Development Company (SPDC), for oil pollution in the Niger Delta. RDS argued that it was a holding company with no operational role, and that all decisions were made locally by SPDC.

In both cases, the claimants relied on prima facie evidence, such as public statements, internal reports and group-wide policies to show that the parent had in fact exercised extensive control over the subsidiary’s operations. The Supreme Court found in both cases that the claimants had an arguable case, on the basis that the existence of formal policies, group-wide reporting structures, and parent-level enforcement mechanisms could demonstrate that a parent had effectively assumed responsibility.

Critically, neither case required evidence of de jure control. Rather, they focused on de facto responsibility and the extent of operational oversight. For PE funds, which often impose governance, reporting, and ESG frameworks on portfolio companies, this raises a question: could such oversight inadvertently give rise to liability by amounting to a degree of control?

At first glance, these cases may seem to be examples of piercing the corporate veil. However, the Courts have drawn a sharp distinction between these cases and cases of piercing the corporate veil. The latter involves disregarding the legal separateness of companies and is generally reserved for cases of sham, façade, or impropriety. In Prest v Petrodel [2013] UKSC 34, the Supreme Court reaffirmed that piercing the vale is a remedy of last resort.

By contrast, these cases of parent liability turn on the finding of a direct duty. The parent remains a separate legal person but may incur liability based on its own conduct in controlling the affairs of the subsidiary. This distinction is potentially enormously significant: it suggests that, even in the complete absence of fraud or misconduct, PE sponsors might find themselves be liable for the acts of their subsidiaries if they go beyond passive investment into active involvement in their affairs. A fund’s well-intentioned ESG or risk oversight programme could become the foundation of a negligence claim, particularly if such policies are found to be inadequately implemented or enforced.

How can PE sponsors ensure responsible oversight without opening the door to tortious liability? Here are three practical steps PE sponsors could take:-

1. Clarify Roles and Responsibilities

Clearly delineate between the strategic oversight expected of a parent or fund and the operational decision-making delegated to portfolio companies, ensuring that operational decisions are always made by the company on the ground.

2. Careful Framing of Group Policies

When implementing group-wide policies which might become the subject of claims, avoid language that suggests that the sponsor has somehow assumed direct responsibility for the portfolio company’s operations. Ensure policies are framed as guidance or frameworks for subsidiaries, but that it is clear that it is the subsidiary that is enacting any policy.

3. Document Decision-Making Lines

Keep a clear paper trail showing that operational decisions are taken by portfolio company boards, not the fund or its general partners. Board minutes and reporting structures should reflect this distinction.

One important case to watch is Município de Mariana v BHP Group (UK) Ltd, which is currently proceeding through the English courts. The claim, on behalf of over 200,000 Brazilian claimants for over £5 billion, arises from the catastrophic collapse of the Fundão dam in Brazil, which caused extensive loss of life, displacement of whole communities and extensive environmental damage. Although the dam was operated by a joint venture involving BHP’s Brazilian subsidiary, the claimants are seeking to hold the UK-based parent company liable.

The Court of Appeal has declined to impose a stay on the proceedings, allowing the claims to proceed here. Notably, BHP did not seek a stay on the basis that the parent had no responsibility for the acts of its subsidiary. Instead, it characterised the litigation as an abuse of process, arguing that similar claims had already been brought and dismissed in Brazil. The Court of Appeal disagreed, finding that there was a realistic prospect that justice would not be obtainable for the claimants in Brazil, and that the English courts were therefore the appropriate forum. Whether the English parent will be found liable for the acts of a joint venture involving its subsidiary is therefore still an open question for the High Court hearing.

This area of the law is developing quickly and investors need to take prudent steps now to protect their positions.

Harry Prebensen, Associate

Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

Recovering the Costs of Funding Litigation: A Modest Proposal

“Money often costs too much …”

Ralph Waldo Emerson, Wealth (1841)

A party who has had to rely on third party funding to pursue a claim will agree with the Sage of Concord. Commercial funders of litigation typically require a multiple of their outlay in return for their funding. It is very expensive money.

To make matters worse, in the kind of case where it is most often required, defendants with very deep pockets can drag out proceedings and so put great pressure on claimants who know that not only will each further step in the proceedings cost them money – like any other litigation – but that the cost of each such step will be deducted from their eventual damages at least twice over.

Prior to the Jackson reforms of 1 April 2013, parties to litigation in England and Wales could recover some costs associated with funding their claims. They could recover success fees payable to their lawyers and the premiums payable to their after-the-event (“ATE”) insurers for covering their exposure to adverse costs.

They were unable to recover the costs of third-party funding because English law had long considered that the cost of funding litigation was not money paid to solicitors for the ultimate benefit of the client and was therefore not a cost the client could recover from another party. The Court of Appeal confirmed that was still the case in Motto v. Trafigura Limited [2011] EWCA Civ 1150.

As matters stand now, however, they can recover none of these things. By contrast, parties to arbitration can recover funding costs. This firm has recovered solicitors’ success fees and funding costs in an ICC arbitration award, which was upheld by the Commercial Court in Tenke Fungurume Mining SA. v. Katanga Contracting Services SAS [2021] EWHC 3301 (Comm).

The Supreme Court’s decision in R. (PACCAR) v. Competition Appeal Tribunal [2023] UKSC 28, which caused dismay amongst litigation funders, appears to have triggered calls for reform of this area of the law. One of the results of that decision was that the Lord Chancellor asked the Civil Justice Council (“CJC”) to consider the whole area of litigation funding.

On 2 June 2025, the CJC published its Review of Litigation Funding (the “Review”). Of greatest interest to those involved with litigation funding will be recommendation 41, which is:-

“Recoverability of litigation funding costs should be permitted in exceptional circumstances. The CPR and CAT Rules [i.e. the procedural rules of the Courts and the Competition Appeal Tribunal] should be amended to provide such a discretion.”

The authors of the Review note that “the majority of respondents [to the CJC’s consultation exercise] were in favour of extending the definition of costs to enable funding costs to be recovered in exceptional circumstances to meet the justice of the case.” Their argument was that it was “necessary to secure effective access to justice” and that “litigation funding enables claimants who lack the means to pursue meritorious claims to access justice.”

There was less consensus, however, about how that aim would be achieved. “It was submitted, for instance, that Bates v. The Post Office was a paradigmatic example of the type of case where recoverability should be allowed.” The reasons given were that the claimants lacked funds because of the defendant’s own prior conduct and that the way in which the defendant conducted the following litigation was unreasonable and increased the claimants’ costs and funding costs unnecessarily.

The authors of the Review did not consider going back on the Jackson reforms and permitting recovery of lawyers’ success fees or ATE premiums.

In Appendix A to the Review, the authors of the Review suggest some legislation in the form of a putative Litigation Funding, Courts and Redress Act 2025 and some new Court rules. Those proposed rules are:-

“CPR X.3

Recovery of Funding Costs as costs (s.8 of the Act)

(1) In this Part, “funding costs” has the meaning given in s.8(7) of the Litigation Funding, Courts and Redress Act 2025. [This is defined in a footnote to the draft legislation as “the funder’s return” and explicitly excluding success fees or ATE premiums]

(2) In any proceedings to which this Part applies, the court may order a party to recover all or part of any funding costs by way of costs but only where the court is satisfied that there are exceptional circumstances which justify such an order being made.

(3) In deciding whether the circumstances are sufficiently exceptional to make the order within the meaning of rule X(2) the court will have regard to the following factors:

(a) the conduct of the parties, and in particular the conduct of the paying party, whether before or during or after the proceedings, and

(b) the conduct of the funder, whether before or during the proceedings, and

(c) the extent to which the funding costs were incurred by reason of the conduct of the paying party, and

(d) the amount of the funding costs and whether the funding costs were reasonably incurred, and

(e) whether the proceedings could have been pursued by the receiving party without incurring the funding costs, and

(f) the financial consequences of making the order from the perspective of both the receiving party and the paying party, and

(g) notwithstanding the exceptional nature of the order, it is in the interests of justice to make the order.

(4) Any order made under rule X(2) for the payment of any funding costs, shall be subject to detailed assessment.

…”

The use of the phrase “exceptional circumstances” is often a recipe for arguments. Any lawyer will say his or her client’s case is unusual and deserves special treatment. However, the proposed drafting gives an implicit definition to what that phrase means here.

First, there are references to the conduct of both the paying party and the funder (in proposed sub-sections (a) and (b)), so we can expect the importation of arguments about indemnity costs and whether a paying party has behaved in a way that is “out of the norm” such that they should pay costs on a different basis than most parties.

Second, there appears in proposed considerations (c) and (e) to be an element of causation to the test. If a party could have brought a claim without the need for funding but the paying party’s conduct forced them to seek funding, that appears to be in favour of making an order. This is likely to place a burden on claimants with regard to financial evidence and what attempts (if any) they made to finance the case without recourse to funding. They may need to consider disclosing privileged exchanges with lawyers.

Third, there is the usual test in costs cases at proposed consideration (d) of whether it was reasonable to incur the cost or not. This may lead to arguments about industry norms – and may even help to promote them over time – but we can expect significant disputes over what such industry norms are if this becomes law.

Finally (in proposed considerations (f) and (g)), there are considerations of fairness as between the parties, in particular the financial consequences for both sides of making the order.

None of this is actual legislation yet – but it is a very good indication of the likely direction of travel in the near future. For example, on 4 July 2025, the Court of Appeal handed down judgment in Sony Interactive Entertainment Europe Limited v. Alex Neill Class Representative Limited (and a number of conjoined appeals) [2025] EWCA Civ 841. All those cases concerned the enforceability of litigation funding agreements which had been amended in response to the Supreme Court’s decision in R. (PACCAR) v. Competition Appeal Tribunal. The Court of Appeal upheld them all.

It remains to be seen what legislation or changes to the relevant rules will in fact be made. The CJC has put forward its views and the Lord Chancellor will consider them.

In this firm’s view, the CJC could have gone further in looking to maintain a balance between claimants and defendants. In a case where it is apparent to the Court that a defendant has deliberately sought to exhaust a claimant’s resources with a view to defeating the claim or coercing the claimant into accepting a poor settlement, the Court should have the power to go further and make an award which includes any relevant success fees and ATE premiums. By making that power “exceptional”, the balance of power between claimants and defendants in this kind of case will be struck fairly.

Simon Winter, Partner

Postscript

Since this article was written and first published, the Sony case has continued through the Competition Appeal Tribunal and is listed for trial in March 2026. It was also hoped that the Ministry of Justice might have published proposals in response to the CJC’s Review. But, at the time of writing this postscript, nothing has been announced.

Ellie Nugent 18/12/2025 Ellie Nugent 18/12/2025

The EU Seeks to Bring Harmony to Insolvency

On 12 June 2025, the EU Council agreed its position on a directive harmonising certain aspects of insolvency law and published a draft directive.

The stated aim of that directive is to bring national insolvency regimes closer to each other so that barriers to the internal market which reduce the attractiveness of cross-border investments will be removed and the EU will become more attractive for foreign and cross-border investors who (it is said) will no longer have to concern themselves too much with differences in local insolvency regimes. However, as the proposal itself makes clear, it is a “compromise” text which it has taken a long period of time to reach and which (as we shall see) contains options because no fundamental agreement could be reached in certain respects.

The proposal endorsed by the Council runs to 137 pages of text but the two main points of interest to investors are as follows.

Harmonised Pre-Pack Mechanism

Title IV (entitled “Pre-pack Mechanism”) will require all member states to ensure that debtor companies are able to access a regime which is similar to the well-known pre-pack administration regime in England and Wales.

In very short summary, the debtor will be supervised by a “monitor” who is an insolvency practitioner. All enforcement actions will be stayed during the process and the relevant business will be sold on the recommendation of the monitor. Once sold, the business will be free of all previous liabilities.

Unlike the regime in England and Wales, however, creditors appear to have a greater potential influence on events (if that is what member states legislate). Creditors in England and Wales often complain – and with good reason – that their ability to influence events is non-existent. Under the proposed directive, however, EU creditors may have the right to challenge the sale proposed by the monitor on the basis it is not in the best interests of creditors and to force a public auction rather than a private sale. There is also uncertainty in the text about member states’ obligations to legislate in connection with the transfer of contractual obligations.

Harmonised Creditors’ Committees

The second main change is contained in Title VII (entitled “Creditors’ Committee”) which requires creditors’ committees to be established in corporate insolvencies if the creditors request it.

Such committees must represent the varying classes of creditor fairly and ensure that crossborder creditors can participate. They will have the power to require information from insolvency practitioners and to be consulted on major decisions.

As noted above, the proposed text is a compromise and it is clear that certain issues were obviously not capable of agreement. For example, whether members of the creditors’ committees have personal liability or not is left to the member states. Further, member states can limit the right to establish a creditors’ committee depending on the size of the debtor business and if the nature and scope of the debtors’ business means that the costs involved would outweigh any benefits. There could be considerable national variation in such rules.

None of this is law yet. Further, since the EU has chosen the directive mechanism rather than the more direct regulation mechanism (which worked well, for example, in the question of jurisdiction in civil and family claims), it will be up to member states to legislate if it becomes law. It is clear that there is considerable scope for variation within member states’ implementation of the directive, for the reasons given above, and so the ultimate effect of this particular round of single market harmonisation may be more limited in effect than it appears.

Contrary to the stated aim of the directive, this is likely to remain a barrier to intra-EU investment because investors will still need local law advice for the foreseeable future.

Simon Winter, Partner

Ellie Nugent 19/09/2025 Ellie Nugent 19/09/2025

Third Time Lucky? A Recent Case on Re-opening Judgments

“If at first, you don’t succeed, try, try again.”

Simply stated, that rule is twofold:-

“whether it would be in the interests of justice and public policy to allow the issue of fraud to be litigated again in this court, it having been tried and determined by Egan J. in Ireland. In my judgment it would not; indeed, I think it would be a travesty of justice.”

It is difficult to disagree with the outcome. But what if the rule developed in that decision worked in another case to produce a quite different outcome? This was the issue faced by the Commercial Court in Commercial Bank of Dubai PSC v. Mr Abdalla Juma Majid Al Sari & Others [2025] EWHC 1810 (Comm).

CBD’s attempts to enforce its judgments debts will therefore continue.

Ellie Nugent 14/07/2025 Ellie Nugent 14/07/2025

Recovering Funding Costs in Litigation: A Modest Proposal

Money often costs too much …

Ralph Waldo Emerson, Wealth (1841)

They were unable to recover the costs of third party funding because English law had long considered that the cost of funding litigation was not money paid to solicitors for the ultimate benefit of the client and was therefore not a cost the client could recover from another party. The Court of Appeal confirmed that was still the case in Motto v. Trafigura Limited [2011] EWCA Civ 1150.

As matters stand now, however, they can recover none of these things. By contrast, parties to arbitration can recover funding costs. This firm has recovered solicitors’ success fees and funding costs in an ICC arbitration award, which was upheld by the Commercial Court in Tenke Fungurume Mining SA. v. Katanga Contracting Services SAS [2021] EWHC 3301 (Comm).

On 2 June 2025, the CJC published its Review of Litigation Funding (the “Review”). Of greatest interest to those involved with litigation funding will be recommendation 41, which is:-

The authors of the Review note that “the majority of respondents [to the CJC’s consultation exercise] were in favour of extending the definition of costs to enable funding costs to be recovered in exceptional circumstances to meet the justice of the case.” Their argument was that it was “necessary to secure effective access to justice” and that “litigation funding enables claimants who lack the means to pursue meritorious claims to access justice.”

There was less consensus, however, about how that aim would be achieved. “It was submitted, for instance, that Bates v. The Post Office was a paradigmatic example of the type of case where recoverability should be allowed.” The reasons given were that the claimants lacked funds because of the defendant’s own prior conduct and that the way in which the defendant conducted the following litigation was unreasonable and increased the claimants’ costs and funding costs unnecessarily.

The authors of the Review did not consider going back on the Jackson reforms and permitting recovery of lawyers’ success fees or ATE premiums.

“CPR X.3

Recovery of Funding Costs as costs (s.8 of the Act)

(1) In this Part, “funding costs” has the meaning given in s.8(7) of the Litigation Funding, Courts and Redress Act 2025. [This is defined in a footnote to the draft legislation as “the funder’s return” and explicitly excluding success fees or ATE premiums]