Security for Costs Case Study: Craft Development SCI v ACTIS LLP and Other Companies (2025) EWHC 1355 (KB)

A decision by the court about security for costs. Weighing up the rights of the defendant to security from a claimant with limited funds, against the claimant’s right to bring the case.

The Legal Battle Begins

In 2015, Craft and Actis discussed joining forces to buy land and build the Douala Mall in Cameroon.

Craft had already secured an option to buy the land, putting down a deposit of about $500,000, thanks to Mr. Tchumtchoua. But things didn’t go as planned. Instead of partnering with Craft, Actis teamed up with another company owned by a Mr. Kamdem. The land was bought, the mall was built, and Craft and Mr. Tchumtchoua, were left out in the cold.

To recover his losses, Mr. Tchumtchoua arranged for a court-appointed administrator to take charge of Craft and sue Actis. A claim against Actis was issued in the courts of England and Wales in March 2022, by Craft’s provisional administrator Mr. Hiob, alleging breach of contract, conspiracy and fraud.

The Money Problem

Actis made an application for security for costs, asking the court to make Craft pay a large sum up front to the court, to cover Actis’s legal bills if Craft lost the case. This is a common request when the company suing is low on funds and might not be able to pay if they lose.

Craft admitted it was broke. Mr. Tchumtchoua, who was funding the fight, said he was also out of money. He’d spent his savings, borrowed from friends, and was even in debt. He showed the court his bank statements, business records, and explained that his only real assets were some family properties (heavily mortgaged) and a struggling real estate venture in South Africa.

The Court’s Dilemma

The judge had to decide: Should Craft be forced to pay a huge sum up front, possibly ending the case before it really began? Or should the court let the case continue, risking that Actis might never recover its legal costs? On one hand, it was common ground that Craft, as a shell company with no assets, would be unable to pay Actis’s costs if ordered to do so. On the other hand, the court was acutely aware that ordering security in an amount that Craft could not possibly afford would effectively stifle the claim, potentially breaching the claimant’s right to a fair trial.

The judge looked at:

Craft’s finances: Clearly, they couldn’t pay the full amount Actis wanted (£1.6 million).

Mr. Tchumtchoua’s finances: He was in debt, with no hidden assets.

The fairness of the request: Was Actis being reasonable, or just trying to shut down the case?

For more information, read the full case on Craft Development SCI v ACTIS LLP and other companies.

The Decision

After carefully weighing the evidence and legal arguments, the judge decided on a middle ground. The judge based her decision on discretion and fairness and ordered a significantly reduced amount of security. The new amount of £300,000 was ordered to balance Actis’s legitimate interest in cost protection with Craft’s fundamental right to pursue its claim. 

The payment would be split into three parts, tied to key stages in the case, to give Craft a fighting chance to raise the money. If Craft is unable to gather the funds for the security for costs, the case would likely end there.

If you would like to learn more, please read this article on Security for Costs: What You Need To Know.

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