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[2026] NSWCA 121
procedural. No order as to costs.
3 cited instruments linked from this judgment.
The respondents won the appeal about service, which ordinarily could have supported an order that the appellant pay their appeal costs. But the respondents had started Australian enforcement proceedings while the US judgment they relied on was under appeal, and that judgment was reversed before the NSW Court of Appeal delivered its main decision. The Court considered that the appellant had incurred costs answering an application to enforce a judgment that no longer stood. It therefore made no order as to costs, rather than awarding costs to either side or making them costs in the cause.
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1,867 words · generated 05/10/2026
This judgment deals only with the costs of an earlier appeal. It does not reconsider whether service of the initiating process was valid, nor does it determine whether the respondents can ultimately obtain recognition or enforcement in Australia of the US judgment.
The earlier appeal concerned service on the Argentine Republic of the initiating process in proceedings seeking recognition and enforcement of a judgment of the US District Court for the Southern District of New York (SDNY). On 22 May 2026, the NSW Court of Appeal published its principal judgment, granted leave to appeal and dismissed the appeal. It then directed the parties to provide written submissions about costs ([1]).
A significant event occurred between the appeal hearing and the delivery of the principal judgment. The US Court of Appeals for the Second Circuit reversed the SDNY judgment. The costs judgment refers to that event and directs readers to [9] of the principal judgment ([3]). The respondents indicated that they did not intend to discontinue the Australian enforcement proceedings, and referred to possible procedural avenues concerning the Second Circuit decision. Their petition for rehearing or rehearing en banc was unsuccessful; the judgment records that a petition to the US Supreme Court remained available ([4]).
The parties disagreed about the costs consequence. The Argentine Republic sought either costs in the cause or no order as to costs. It emphasised that the enforcement proceedings had begun while the SDNY judgment was under appeal, and that the reversal meant there was no foreign judgment the respondents were then able to enforce ([5]-[6]). The respondents argued that the ordinary rule applied because they had succeeded on the appeal’s service issue. They also distinguished that discrete appeal from the broader enforcement proceedings, whose eventual outcome remained unresolved ([8]-[10]).
The Court made no order as to costs ([13]). The outcome was not a determination that either party had succeeded on the underlying Australian enforcement claim. It resolved only who would bear the costs of the appeal.
The Court began with the statutory and procedural framework. Section 98(1) of the Civil Procedure Act 2005 (NSW) gives the Court a discretion concerning costs. UCPR r 42.1 states the general rule that costs follow the event unless the Court considers that another order should be made ([11]).
The judgment also states a constraint on the discretion: it “must be exercised judicially and in accordance with established principles and factors directly connected with the litigation”, citing Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [65] ([11]). The Court did not treat the ordinary rule as automatic. It considered the particular circumstances that had produced the costs issue.
The central circumstance was the timing of the respondents’ enforcement proceedings. They began those proceedings in March 2024 while the SDNY judgment was under appeal ([5]). The judgment was then reversed by the Second Circuit after the NSW appeal hearing and before the principal judgment was delivered ([3]). The Court accepted the appellant’s point that it had incurred costs responding to proceedings seeking to enforce a judgment that no longer stood, while noting the possibility that a US Supreme Court petition might succeed ([12]).
The respondents’ position had force on the discrete appeal event: the appeal concerned service, and the respondents had succeeded on that issue. They also argued that the appeal was distinct from the merits of the broader enforcement proceedings ([9]-[10]). The Court expressly acknowledged the discrete nature of the service issue and the respondents’ success on it ([13]). Its decision therefore does not rest on treating the respondents as unsuccessful on the appeal.
Instead, the Court considered the wider circumstances surrounding that discrete costs event. It concluded that those circumstances justified departing from the usual order. It did not choose the appellant’s alternative of costs in the cause. It made no order as to costs ([13]). The judgment does not give a broader formula for when a successful party in a discrete appeal should bear its own costs. Its reasoning is tied to the particular sequence here: enforcement proceedings began while the foreign judgment was under appeal, and that judgment was reversed before the NSW principal judgment.
The Court also declined to decide the dispute about the appellant’s solicitor’s affidavit. The affidavit annexed a transcript of a Burford Capital earnings call, but the Court considered it unnecessary to resolve the objection because the appellant’s central point did not depend on that material ([7], [12]). The decision therefore does not determine the admissibility or significance of that transcript.
The judgment does not announce a change to the general law of costs. It restates the existing framework: costs are discretionary under s 98(1), the general rule is that costs follow the event under UCPR r 42.1, and the discretion is to be exercised judicially with regard to established principles and litigation-connected factors ([11]).
The decision applies that framework to an unusual procedural sequence. A successful result on the appeal’s discrete service issue did not compel an order for the respondents’ costs. The Court considered the respondents’ decision to pursue enforcement while the foreign judgment was under appeal and the subsequent reversal of that judgment ([12]-[13]). Its order shows that the event relevant to costs may be considered in the context of circumstances connected with the litigation, rather than in isolation.
The judgment does not state that commencing enforcement proceedings while a foreign judgment is under appeal is prohibited, nor does it decide whether those proceedings were maintainable in Australia. The appellant expressly noted that no court had been asked to decide the maintainability issue ([6]). The respondents’ eventual ability to obtain the relief sought was left open; the judgment records that they were pursuing, or could pursue, further avenues in the United States ([4], [9]).
Accordingly, the “after” position expressed by this decision is limited: in this particular costs determination, the ordinary event-based order was displaced and no order was made. The legal rules quoted at [11] remained the governing framework.
Paragraph 11: The Court says costs are discretionary and that costs usually follow the event, unless another order is appropriate. It also says the discretion must be exercised judicially and by reference to established principles and factors directly connected with the litigation.
Plain-English translation: A party’s success is important, but the Court can consider other relevant circumstances when deciding costs. That discretion is not unlimited or arbitrary.
Paragraph 12: The Court says the appellant had incurred costs responding to an application to enforce a judgment that no longer stood. It adds that the affidavit dispute did not need to be resolved because the appellant’s central point did not depend on the affidavit.
Plain-English translation: The Court focused on the timing and subsequent reversal of the foreign judgment, not on the disputed earnings-call evidence.
Paragraph 13: The Court accepts that the appeal concerned a separate service issue on which the respondents succeeded. It nevertheless decides that no order as to costs is appropriate, rather than making costs in the cause.
Plain-English translation: The respondents’ success on the appeal did not result in an award of their appeal costs. Each side was left to bear its own costs of the appeal under the order made.
The judgment is most directly relevant to costs arguments where a party succeeds on a discrete interlocutory or procedural issue, but events connected with the underlying litigation make the usual costs order appear inappropriate. Here, the specific sequence was that the respondents commenced Australian enforcement proceedings while the foreign judgment was under appeal, the appellant incurred costs responding to enforcement, and the foreign judgment was reversed before the NSW Court of Appeal delivered its principal judgment ([3], [5], [12]).
The decision may be relevant where the costs question arises after a material change in the status of the underlying judgment or claim. But it does not establish that reversal of a foreign judgment automatically removes a successful party’s entitlement to costs on a separate issue. The Court expressly recognised that the respondents had succeeded on the service issue and then exercised its discretion in light of all the circumstances ([13]).
It is also relevant to situations where a party seeks costs in the cause because the broader proceeding remains unresolved. The appellant sought that order, but the Court chose no order as to costs instead ([2], [6], [13]). The judgment does not state a general rule favouring one of those orders.
The affidavit issue provides a narrower procedural point: the Court need not resolve an evidentiary objection where the material is unnecessary to determine the costs issue. The Court made that choice here because the central timing point was available without the affidavit ([12]).
The supplied judgment contains no information about how later courts have treated this decision. It is dated 30 June 2026 and cites the Court’s earlier principal judgment in the same matter, Argentine Republic v Petersen Energía Inversora, S.A.U. [2026] NSWCA 96 ([1]). That earlier judgment is not a later treatment of this costs decision.
The only separate costs authority identified in the judgment is Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, cited for the principle that the costs discretion must be exercised judicially and consistently with established principles and factors directly connected with the litigation ([11]). The text does not identify any later judicial application, distinction or reconsideration of the present decision. No conclusion about subsequent treatment can be drawn from this judgment alone.
The decision leaves several matters unresolved. First, it does not determine whether the Australian recognition and enforcement proceedings could continue after the Second Circuit reversed the SDNY judgment. The appellant said no court had been asked to rule on maintainability ([6]). The Court decided only the costs of the appeal.
Second, the judgment does not determine the ultimate effect of any US Supreme Court review. It records that the respondents could petition for review, after their rehearing avenue had failed ([4]). The costs decision is based on the circumstances as they stood when the Court decided costs, while acknowledging that further developments were possible ([12]).
Third, it does not decide what costs order would apply to the broader Australian proceedings if the respondents ultimately failed to obtain enforcement relief. The respondents accepted that the appellant might then be entitled to some costs of the proceedings below not covered by the costs order on the notice of motion ([9]). That possibility was not resolved here.
Finally, the judgment does not decide the dispute about the affidavit or make findings about the respondents’ funding arrangements or alleged strategy. The Court expressly said it was unnecessary to resolve the affidavit dispute ([12]). Its costs reasoning rests on the commencement of enforcement proceedings while the foreign judgment was under appeal and the subsequent reversal, not on findings about the Burford transcript.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on, relying on or using this analysis, have it checked by a qualified Australian lawyer.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Argentine Republic v Petersen Energía Inversora, S.A.U. (No 2) [2026] NSWCA 121
Hearing dates: On the papers
Date of orders: 30 June 2026
Decision date: 30 June 2026
Before: Ward P; Payne JA; Mitchelmore JA
Decision: No order as to costs.
Catchwords: COSTS — enforcement and recognition of foreign judgment — where appellant unsuccessfully sought declaration that service not validly effected — where enforcement proceedings commenced while appeal from foreign judgment on foot — where foreign judgment reversed on appeal — whether costs should follow the event — whether costs should be costs in the cause — no order as to costs
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98(1)
Uniform Civil Procedure Rules 2005 (NSW), r 42.1
Cases Cited: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11.
Texts Cited: Nil
Category: Costs
Parties: Argentine Republic (appellant)
Petersen Energía Inversora, S.A.U. (first respondent)
Petersen Energía, S.A.U. (second respondent)
Eton Park Capital Management, L.P. (third respondent)
Eton Park Master Fund, Ltd. (fourth respondent)
Eton Park Fund, L.P. (fifth respondent)
Representation: Counsel:
F Roughley SC / B Yin (appellant)
J Hogan-Doran SC (respondents)
Solicitors:
DLA Piper (appellant)
Gilbert + Tobin (respondents)
File Number(s): 2025/00378881
Publication restriction: Nil
THE COURT: On 22 May 2026, the Court published its principal judgment in this matter, granting leave to appeal and dismissing the appeal: Argentine Republic v Petersen Energía Inversora, S.A.U. [2026] NSWCA 96 (principal judgment). The Court also made orders directing the parties to file and serve written submissions on costs with a view to determining that issue on the papers.
The appellant submits that the appropriate order is that the costs of the appeal be costs in the cause or, alternatively, that there be no order as to costs. The respondents submit that the ordinary rule that costs follow the event should apply: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1.
The difference in the parties’ positions arises from the circumstances in which the appeal came to be decided. The subject of the appeal was service on the appellant of the initiating process in proceedings to enforce a judgment of the US District Court for the Southern District of New York (SDNY). After the hearing and before the Court delivered judgment, the United States Court of Appeals for the Second Circuit reversed the underlying judgment: see [9] of the principal judgment.
As Mitchelmore JA noted in the principal judgment, the respondents indicated that they did not intend to discontinue the enforcement proceedings, referring to a number of procedural avenues available to them in relation to the Second Circuit’s decision: at [13]. The first of those avenues, petitioning the Second Circuit for rehearing, or rehearing en banc, has been unsuccessful. It remains for the respondents to petition the United States Supreme Court for review of the Second Circuit’s decision.
The appellant submitted that in circumstances where the respondents are taking time to explore avenues to restore the foreign judgment, in order to maintain the substantive recognition and enforcement proceedings, the appropriate order is that the costs of leave to appeal and the appeal on the issue of service be costs in the cause. It submitted that in commencing the proceedings below in March 2024, at a time when the judgment they sought to have recognised and enforced was under appeal, the respondents visited on the appellant the costs of responding to the claim concurrently with the appeal proceedings in the United States, in circumstances where:
the respondents knew that the proceedings would give rise to interlocutory issues of State significance, including foreign State immunity; and
the respondents served the initiating process by a method that raised questions of statutory construction and treaty interpretation that were significant and more than reasonably arguable, as found in the principal judgment at [95].
There being no foreign judgment that the respondents are presently able to enforce, and with no court having been asked to rule on the maintainability of enforcement proceedings in Australia, the appellant submitted that costs of the litigation should ultimately follow the costs of the cause. Alternatively, the appellant submitted that there should be no order as to costs.
In support of its submissions, the appellant sought leave to read an affidavit of its solicitor on the record, Gitanjali Bajaj, sworn 28 May 2026. Ms Bajaj annexed to her affidavit a transcript of an “earnings” call of Burford Capital Limited (Burford) on 7 November 2024, in which the Chief Executive Officer discussed the enforcement proceedings against the appellant, which Burford had a role in funding on behalf of the respondents. The discussion on the call included, relevantly, the justification for commencing proceedings around the world for recognition and enforcement of the SDNY judgment which was then under appeal. The respondents objected to the affidavit.
The respondents submitted that, as was the case before the primary judge, the appellant had been wholly unsuccessful and the ordinary rule as to costs should apply. They submitted that the ordinary rule applies to discrete events even if an appeal is ultimately rendered nugatory, and it should apply in the present case.
In relation to the appellant’s arguments for a different result, the respondents emphasised the distinction between the broader enforcement proceedings, in which the respondents’ position is adversely affected by the Second Circuit’s decision, and the appellant’s notice of motion determined in the respondents’ favour by the Chief Justice at first instance and by this Court on appeal. They submitted that the notice of motion involved issues that were distinct from the merits of the summons for recognition and enforcement of the SDNY judgment. They accepted that the outcome of the appeal proceedings in the United States has disfavoured them and may ultimately affect their ability to obtain the relief sought in the initiating process, in which event the appellant may be entitled to part of its costs of the proceedings below not covered by the costs order on the notice of motion.
Nonetheless, the respondents submitted that they had not acted pre-emptively in commencing the proceedings, given that they had a judgment in their favour at that time. Accepting that they may take a risk on costs if they lose on issues affecting the substantive merits of their claim, the respondents submitted that a defending party must also take a risk on any discrete and extraneous issues that it raises. The respondents also submitted that there was no evidence that they were aware that the appellant would raise issues concerning service, and in any event they would have viewed any such objection as wrong, pointing out that this Court had upheld the correctness of that view.
Costs are in the discretion of the Court: Civil Procedure Act 2005 (NSW), s 98(1). The general rule is that costs follow the event unless it appears to the court that some other order should be made: UCPR, r 42.1. In determining whether any other order should be made, the discretion as to costs “must be exercised judicially and in accordance with established principles and factors directly connected with the litigation”: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [65].
It is not necessary for the Court to resolve the dispute between the parties about the affidavit of Ms Bajaj. As the appellant submitted in reply, it did not need the affidavit to make the central point that the respondents commenced the proceedings seeking to enforce a judgment at a time when that judgment was under appeal. Whatever strategy lay behind that approach, the respondents accepted that in so doing they took a risk of the adverse outcome that has eventuated (subject to a successful petition for review in the United States Supreme Court). As a result of that decision, the appellant has incurred costs associated with responding to an application to enforce a judgment that no longer stands. As the appellant submitted, there was no little irony in the respondents’ submission that the appellant could instead have sought a stay pending the outcome of the appeal proceeding in the United States, without suggesting that they would have consented to such an application.
Having regard to the circumstances which have led to this point, the Court considers that it is appropriate in the present case to make an order other than the usual order. Accepting, as the respondent submitted, that the present appeal concerned a discrete issue as to service on which they have been successful, rather than make an order that costs be in the cause, the Court will make no order as to costs.
**********
Argentine Republic
Petersen Energía Inversora, S.A.U. (No 2)
[1998] HCA 11
[2026] NSWCA 96
(1998) 193 CLR 72
No order as to costs.