Summary

1. On 15 June 2026, the respondents to the appeal in these proceedings, Hulley Enterprises Limited, Yukos Universal Limited and Veteran Petroleum Limited ("the Respondents"), applied for the imposition of conditions on the pursuit of the appeal and for security for the costs of the appeal. The appellant is the Russian Federation ("the Appellant").

2. Proceedings were started by the Respondents in the Commercial Court as long ago as 2015 for recognition and enforcement in England and Wales of three arbitration awards, whose seat was The Netherlands. The tribunal had determined that the Appellant was liable to pay the Respondents in the region of US$50 billion in aggregate in compensation, plus interest.

3. Following protracted proceedings in The Netherlands relating to the validity of the awards, a preliminary issue relating to state immunity was heard by Cockerill J in the Commercial Court in 2023, and on appeal in the Court of Appeal. Following determination in favour of the Respondents, Dias J directed the hearing of various further preliminary issues. These were tried by Bright J in January 2026. Judgment in favour of the Respondents was handed down at the end on 2 March 2026.

4. The Judge made an order on 2 March 2026 that the Appellant pay the Respondents' costs of the trial, and ordered an interim payment of £2.5 million by 4pm on 1 June 2026 ("the interim costs"). Notably, that was a period of 3 months, far longer than would normally be granted to a paying party in a commercial case. This was doubtless in response to the Appellant's argument (repeated in this court) that it would need substantial time to authorise and effect payment.

5. The Judge granted permission to appeal on one ground only. He declined to make permission conditional on the payment of outstanding costs orders (in substantial amounts) previously made in the proceedings ("the outstanding costs"), which the Appellant had not paid, or conditional on the payment of the interim costs. The Judge refused permission for the other grounds of appeal.

6. On a renewed application to the Court of Appeal for permission to appeal, Males LJ granted permission on 22 May 2026 on two further grounds (grounds 7 and 8), and granted permission to appeal "provisionally" on the remaining grounds (grounds 2-6). The provisional grant of permission reserved to the Respondents the right to apply for conditions to be imposed by the Court relating to the outstanding costs, the interim costs and the costs of the proposed appeal.

7. In those circumstances, when the 3 months expired with the outstanding costs and interim costs remaining unpaid, the Respondents issued their application. It seeks the imposition of conditions on all grounds of appeal except ground 1, for which Bright J granted permission, and, separately, an order that the Appellant provide security for costs of the appeal. The conditions sought to be imposed were payment of: the outstanding costs and the interim costs, with interest, and security for costs of the appeal. There followed an exchange of evidence and submissions in accordance with the directions given by Males LJ, which process ended on 9 July 2026.

8. Cutting out a lot of irrelevant detail, the evidence establishes the following, which are material:

...