Power Projects v Star Assurance: Part 36 consequences, indemnity costs and jurisdiction after judgement

In this consequentials judgement, Christopher Hancock KC determined the costs and interest consequences following his principal judgement of 19 September 2025, in which Power Projects Sanayi Insaat Ticaret Limited Sirketi (PPR) succeeded in its claim against Star Assurance Company Limited (Star) under a Performance Bond. Star neither appeared nor filed submissions in the consequentials proceedings.

Enhanced interest under Part 36

PPR had made a Part 36 offer of $8,052,276.57, with the relevant period expiring on 8 May 2025. The court found that PPR comfortably beat that offer: assessed as at that date, the principal sum plus contractual interest amounted to $8,081,640.43, satisfying the r. 36.17(2) threshold of being "better in money terms by any amount, however small."

A jurisdictional question arose as to whether the court retained power to award additional interest under r. 36.17(4)(a), having already addressed contractual interest in the principal judgement. Hancock KC resolved this in PPR's favour on three grounds: the Part 36 entitlement is a distinct statutory jurisdiction that had not merged in the earlier judgement; the adjournment of consequential matters in the Order for Judgement preserved the court's jurisdiction; and the CPR itself requires that Part 36 consequences can only be assessed after the substantive claim is determined, since the offer must remain confidential from the trial judge until that point.

On the merits, the court awarded interest at the maximum rate of 10% above base rate (14%) from 9 May 2025 until the date of the principal judgement. Star's pursuit of parallel proceedings in Ghana was identified as a substantial cause of post-hearing delay that had kept PPR out of its money.

Additional amount under r. 36.17(4)(d)

The court awarded the additional amount under r. 36.17(4)(d), capped at £75,000. Applied to a principal of $6,297,000 converted to sterling, the prescribed percentage calculation readily exceeded the cap.

Indemnity costs

PPR was awarded its costs on the indemnity basis throughout, save for those already dealt with by Richard Millett KC. Hancock KC held that Star's conduct had gone well beyond the ordinary and reasonable conduct of proceedings, applying the Excelsior formulation. Several features were identified as taking the case outside the norm.

Star had persisted in defending the claim after Richard Millett KC had found its fraud defence wholly unarguable, and then elected to file no evidence at the substantive hearing. It insisted on a one-day listing despite adducing no evidence, failed to cooperate in preparing pre-hearing documents in breach of the Commercial Court Guide, and delayed serving notice of its change of representation until after PPR had filed its skeleton argument.

Most significantly, Star commenced proceedings in Ghana on 8 May 2025 — four days before the hearing — but withheld this from PPR until the morning of the hearing itself, causing maximum disruption and necessitating further rounds of post-hearing written submissions. Those Ghanaian proceedings constituted a breach of the exclusive jurisdiction clause in the Performance Bond. Following established Commercial Court practice confirmed in Manta Penyez Shipping v Zuhoor Alsaeed Foodstuff [2025] EWHC 353 (Comm), breach of a jurisdiction agreement ordinarily attracts indemnity costs.

Costs were summarily assessed with a single reduction of £20,000, reflecting the instruction of two counsel at a hearing conducted entirely by junior counsel. PPR's total costs were assessed at £321,212.06 on an indemnity basis, with interest on those costs from 9 May 2025 at 14% per annum.

The judgement provides useful confirmation that the court is not functus officio in respect of Part 36 interest and costs consequences merely because contractual interest was addressed in the principal order. The sequencing required by r. 36.16 — keeping the offer confidential until the case is decided — means such entitlements can only ever be determined subsequently. The award also underscores the serious costs risks attendant on pursuing foreign proceedings in breach of an exclusive jurisdiction clause, and on conduct that needlessly prolongs litigation after a defendant's position has been judicially assessed as unarguable.

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