By Daniel Harrison

Recent UK Supreme Court decision could have far-reaching consequences for appeals

In a split decision, the Supreme Court recently considered whether an order requiring an appellant to pay money (that the appellant does not have) into court to continue an appeal “stifles” the appeal and whether the order should be overturned. The Supreme Court stated that such an order may be justified when the appellant company has established (on the balance of probabilities) that no such funds would (not could) be made available to the company, whether by the appellant’s owner or by some other closely associated person, as would enable the appellant to satisfy the requested condition.

Goldtrail Travel Ltd (in liquidation) v Onur Air Tasimacilik: the Case and Judgment

The Turkish airline appellant Onur was granted permission to appeal to the Court of Appeal on the condition that Onur pay into court £3.64 million that the High Court judge had awarded the respondent Goldrail by way of damages. Onur subsequently applied to the Court of Appeal for an order that the condition for payment into court be discharged on the ground that Onur could not comply with the condition, and that the effect of dismissing Onur’s appeal by reference to the condition would be to stifle its appeal.

The English courts have found that stifling means the wrongful imposition of a condition with which the appellant cannot comply, and which therefore has the effect of preventing an appellant from bringing or continuing its appeal. Article 6 of the European Convention on Human Rights also protects this principle by requiring that Member States must ensure that litigants in a court of appeal enjoy its fundamental guarantees.

The appellant must establish, on the balance of probabilities, that the proposed condition would stifle the continuation of the appeal, given that the underlying issue is the appellant’s financial situation. Even when an appellant appears to have no assets of its own with which to satisfy a condition for payment, that condition will not stifle the appeal if the appellant can raise the required sum via other means. In this context, the English courts have considered difficult cases surrounding the ability of a corporate appellant to raise money from its controlling shareholder (or some other person closely associated with the appellant).

The Court of Appeal (Patten LJ) dismissed Onur’s application to discharge the condition for payment by reference to the principle the Court of Appeal had previously stated.[i] The principle was that an order for an appellant, without apparent assets of its own, to make a payment into court, could be justified if another person probably could advance the necessary funds to the appellant, irrespective of whether the person probably would do so.[ii]

Onur appealed to the Supreme Court, and Lord Wilson for the majority found that the principle previously stated by the Court of Appeal was misconceived. The correct test was whether the appellant has established (on the balance of probabilities) that no funds would be made available to it, whether by the appellant’s owner or by some other closely associated person, as would enable the appellant to satisfy the requested condition. The majority remitted the application back to Patten LJ to determine Onur’s application by reference to this correct test.

Lord Wilson also noted that in cases such as this, in which the respondent argues (in favour of the condition for payment) that the appellant’ s owner would make the necessary funds available, the court can expect both the appellant and the owner emphatically to refute the suggestion. Lord Wilson stated that the court should not take the refutation at face value, but should instead judge the probable availability of the funds by reference to:

  • The underlying realities of the appellant’s financial position
  • All aspects of the appellant’s relationship with its owner, including the extent to which the owner is directing (and has directed) the appellant’s affairs and is supporting (and has supported) the appellant in financial terms

Lord Clarke and Lord Carnwath dissented. Their opinion noted that if an appellant does not have resources of its own, the question is whether the appellant would (not could) have had access to other resources. On the basis that the only resources available to Onur were through its owner, the question was whether (on the balance of probabilities) the owner would have provided the funds. In the present case, they found that there was no evidence that the owner was unwilling to provide the funds to Onur.


The Supreme Court has clarified that an appellant must demonstrate that funds would not be (not could not be) made available to it to comply with a condition for payment. This standard will require persuasive evidence. Notably in this case, Lord Wilson described the fact that the owner did not provide a witness statement as “odd”, and said that second-hand evidence (which the appellant’s CFO provided) “called for careful scrutiny” by the court.

[i] Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2011] EWCA Civ 2065 and Societe Generale SA v Saad Trading, Contracting and Financial Services Co and Al-Sanea [2012] EWCA Civ 695.

[ii] Ibid at para 25.

This post was prepared with the assistance of Avinash Balendran in the London office of Latham & Watkins.