Primafacio Ltd v Tres Canopia Ltd & Anor [2023] EWHC 430 – 2 March 2022 (Teare J)

The Claimant claimed an unpaid amount under a share purchase agreement, against the purchaser (D1, a Cypriot company) and guarantor (D2, a BVI company). The Defendants counterclaimed that they were entitled to set-off the equivalent amount.  In ordering that the Defendants secure the Claimants’ costs of defending the counterclaim (by way of a first-Class London bank guarantee), the Court found there was reason to believe (and not just suspect) that D1 would be unable to pay those costs. Nor was it willing to accept that an undertaking by D2 to pay D1’s costs was sufficient: despite contentions that D2 and its subsidiaries had net assets over USD67m and cash over USD10m, the evidence was unconvincing and D2 was a BVI corporation, not obliged to file audited accounts.