The High Court has ordered Aventis Solutions Limited to provide €325,000 as security for Credebt Exchange Limited’s costs while the company’s claim over a 2020 trade finance arrangement proceeds. Further prosecution of the case is stayed until the security is provided.
In a judgment delivered on 9 October 2024, Ms Justice Siobhán Phelan ruled on Credebt’s application for security for costs. She found that Credebt had a prima facie defence and that there was reason to believe Aventis would be unable to meet an adverse costs order. The ruling addresses this interim application only; it does not determine the underlying dispute or whether the settlement agreement is enforceable.
Aventis, an English-registered medical goods supplier, claims Credebt wrongly deducted a £528,000 fee and miscalculated a currency exchange balance when transferring £3,004,283.30 in July 2020. It says Credebt still owes £611,579.49. Credebt denies the claims and relies, among other things, on a written settlement signed on 29 July 2020, which it says resolved all issues and left no further funds owing. Aventis disputes the settlement’s effect, alleging economic duress and misrepresentation. Those issues remain for trial.
The judge said the settlement document provided objective evidence capable of supporting a defence to the full claim at this stage. She also referred to the parties’ other finance documents as further evidence of a real defence, while stressing that she was not deciding which side should ultimately win.
On ability to pay, the judge relied on evidence including unaudited accounts, the absence of evidence of cash reserves or continuing profitable trade, and Aventis’s failure to explain an intangible asset recorded in its accounts. She concluded there was a real risk the company could not meet a significant adverse costs order. She also found no sufficient evidence that the alleged wrongdoing caused Aventis’s financial position.
Aventis relied on a criminal complaint that it said was under investigation and argued that this and other circumstances should weigh against security. The judge said the existence of an investigation did not establish that the complaint was well-founded, and that the costs order would not obstruct the criminal process. She found no sufficient basis to refuse security or evidence that the order would stifle the civil claim.
The parties’ costs estimates differed substantially. The judge set security below Credebt’s estimate of €402,500, ordering €325,000. She said Aventis’s lower estimate was undermined by its assumption that discovery would not be required, despite a discovery motion having been issued. The court left the form of the final order and costs of the application for further consideration, and directed that the matter be listed for mention 14 days after judgment.