Neutral Citation Number: [2025] EWHC 1157 (Comm)
Claim No: CL-2023-000687
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING’S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 14/05/2025
Before :
MR JUSTICE FOXTON
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Between :
(1) VIRGO MARINE
(2) NIXIE MARINE INC. Claimants
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REED SMITH LLP
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BARCLAYS BANK PLC
Defendant
Third Party
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Jacob Turner and (instructed by Zaiwalla & Co Limited) for the Claimants
Jawdat Khurshid KC and Anna Gotts (instructed by Clyde & Co LLP) for the Defendant
Hearing date: 1 May 2025
Draft judgment to the parties: 7 May 2025
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Approved Judgment
This judgment was handed down remotely at 10.00am on 14 May 2025 by circulation to the
parties or their representatives by e-mail and by release to the National Archives.
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MR JUSTICE FOXTON
Approved Judgment
Virgo Marine v Reed Smith LLP
Mr Justice Foxton:
1. This is the Defendant’s (“RSUK”’s) application for security for costs, heard at the first
CMC in these proceedings, which were commenced on 5 October 2023. Although
applications of that kind are routinely resolved by an ex tempore judgment at the CMC,
this application raised a number of complex issues, with the result that judgment was
reserved. The complexity of those issues has defied my attempts at an introductory
summary, and I have decided that the attempt is best returned to once I have
summarised the factual background.
A The background
The MOA
2. On 14 July 2022, the First Claimant (“ Virgo”), a company registered in Dubai, entered
into a Memorandum of Agreement (“MOA”) with a Marshall Islands company called
Kibaz Shipping LP (“Kibaz”) to purchase an oil tanker, the MT KIBAZ (“the Vessel”).
That contract was on “SALEFORM 2012” terms.
3. RSUK, a well-known law firm and UK registered partnership, was retained as Kibaz’s
legal representative in the sale transaction.
The Escrow Agreement
4. On 19 July 2022, RS, Virgo and Kibaz entered into an escrow agreement governed by
English law (“the Escrow Agreement”). This provided for a deposit in the amount of
15% of the purchase price for the Vessel, USD 1,965,000 (“ the Deposit”) and the
balance of the purchase price of USD 11,350,000 (“the Balance”) to be paid into
RSUK’s client account, a USD account RSUK held with the Third Party (“Barclays”).
I will refer to that bank account as “ the RSUK USD Client Account”. RSUK had the
option to transfer those amounts from the RSUK USD Client Account to “a separate
designated account” established by RSUK. It was suggested at the hearing that the
funds had been transferred into such an account (with Barclays) at some point, but then
returned.
5. Clause 2 of the Escrow Agreement provided that the duties, responsibilities and
obligations of RSUK would “be limited to those expressly set out in this Escrow
Agreement, each of which is administrative in nature, and no duties, responsibilities or
obligations shall be inferred or implied.” Clause 3 stated:
“The Escrow Holder may, following establishment of a designated escrow
account, transfer the Escrow Funds from the above client account to such
designated escrow account. The Deposit shall be held by the Escrow Holder for
the benefit of the Sellers and the Buyers and the Balance Payment shall be held
by the Escrow Holder to the order of the Buyers and in each case subject to the
terms set out herein.”
6. Clause 5 set out the circumstances in which the amounts paid by way of escrow – the
Escrow Funds – were to be distributed. This provided for the release of the Deposit on
the joint instructions of the parties to the MOA, of the Balance pursuant to an
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