Summary

On 27 February 2026, the Commercial Court clarified who qualifies as a “defendant” for the purposes of seeking security for costs under CPR 25.26(1). In Soprim Construction Sarl v The Republic of Djibouti [2026] EWHC 418 (Comm), the Court emphasised that whether a party is a defendant turns on substance rather than form and depends on the applicant’s real role in the proceedings, not the procedural label attached to them.

Background

The parties, Soprim Construction Sarl’s (“Soprim”) and DP World Djibouti Fzco (“DPW”), were involved in the construction then operation of a major new container terminal at the port of Doraleh in Djibouti. Both parties claim to be financial victims of the conduct of the Republic of Djibouti and, in 2017, Soprim obtained a worldwide freezing order against Djibouti to the value of US$39 million (the “WFO”).

In 2018, Soprim obtained LCIA awards (“the Awards”), which today are valued at approximately US$135 million, including interest and costs. The Security for Costs application arose in the context of Soprim’s efforts to enforce the Awards against Djibouti.

Soprim sought to enforce the Awards against funds held in London bank accounts in the name of Doraleh Container Terminal S.A. (“DCT”), contending that the monies were beneficially owned or controlled by Djibouti. An Interim Charging Order was granted over the funds, and proceedings for a Final Charging Order (“FCO”) are due to be tried in June 2026.

DPW is a minority shareholder in DCT with extensive contractual rights under a joint venture agreement and was joined to the FCO proceedings as both an objecting party and additional respondent.

Security for Costs

DPW applied for security for costs against Soprim, arguing that it was a “defendant” for the purposes of CPR 25.26(1). Soprim resisted the application, contending that DPW did not meet the definition of a defendant in substance.

Mr Justice Waksman held that in determining the “defendant” question, the Court must examine the purpose of the proceedings, the relief sought, and the applicant’s role within them. At paragraph 82, the Judge derived the following principles from the leading authorities which apply when the Court is asked whether the applicant is a “defendant”:

1. The analysis must look at substance, rather than form; therefore, the formal label given to any particular party within the proceedings is not determinative;
2. There is no general rule that a party which joins the proceedings and applies for security for costs can never be a “defendant”; equally, there is no general rule that such a party must always be so considered; in particular, the fact that the applicant satisfies any particular test for being joined (for example because it has interests which are or may be affected by the proceedings) does not entail without more that it is a “defendant”;
3. The exercise to be undertaken is highly contextual and fact-sensitive, and will include a consideration of the following matters (which are not exhaustive):
   • the nature and purpose of the “claim” brought by the respondent to the application for security;
   • who or what is the “target” of the claim;
   • the existence and nature of the parties to the proceedings other than the applicant for security and the respondent;
   • the nature of the applicant, and how it became joined to the proceedings;
   • the purpose for which it was joined;
   • its role in the proceedings, including any relief sought by or against it.
4. To ask whether the applicant was compelled to join the proceedings or whether it did so “voluntarily” may be of limited assistance; a more useful question might be whether the joinder was objectively necessary, so that one looks beyond the applicant’s subjective point of view; in this case, the nature and purpose of the joinder and the role played by the other parties in the proceedings was of particular relevance;
5. Finally, in a “defendant” case, it is generally more productive to concentrate on the position of the applicant, rather than to ask whether the respondent should itself be characterised as a “defendant” on the basis that if it should be, that itself is an indication that the applicant is not a defendant.

The key question is whether the applicant is truly defending a claim brought against it.

Conclusion

On the facts, the Court concluded that DPW was not a defendant, as no substantive relief was sought against it. The target of Soprim’s enforcement claim was Djibouti, not DPW, and the charging order sought did not attack assets belonging to DPW. Although DPW’s interests could be adversely affected if the FCO were made, particularly because the funds represented the only realistic source of dividend payments to it, its role was essentially defensive and ancillary. The Court noted that if the funds belonged to DCT, it would have been more appropriate for DCT, as the account holder and joined party, to apply for security for costs. The fact that DPW was funding the litigation was not sufficient to confer defendant status.

As DPW was not a “defendant” within CPR 25.26(1), the Court lacked jurisdiction to order security for costs, and DPW’s application failed. The Court added that even if DPW had qualified as a defendant, it would not have exercised its discretion to order security for costs. DPW had practical means to protect its position, including the ability to seek variation of the WFO and procure payment of dividends. The Court also observed that DPW had benefited from the WFO obtained and maintained by Soprim at its own expense and had only intervened once Soprim’s enforcement efforts had advanced. Permission to appeal was refused by the Judge on 3 March 2026.

The decision provides important guidance for parties joined to enforcement or ancillary proceedings. It confirms that exposure to adverse effects or participation in proceedings does not, without more, entitle a party to security for costs; the applicant must be a defendant in substance, not merely in form.