![The UK Supreme Court in P&ID v Nigeria [2025] UKSC 36 upheld a sterling costs award, confirming costs may be ordered in sterling or the currency of incurred fees.](https://cdn.prod.website-files.com/68fe05883695bcf9806793b7/6936888d18820fc925d6b85b_2025-11-article-01--image.jpg)
In <span class="news-text_italic-underline">Process & Industrial Developments Ltd v The Federal Republic of Nigeria [2025] UKSC 36</span>, the UK Supreme Court dismissed an appeal concerning the appropriate currency for a costs award arising from Nigeria’s successful application to set aside arbitration awards obtained by Process & Industrial Developments Ltd (“<span class="news-text_medium">P&ID</span>”). Both the Commercial Court and the Court of Appeal had ordered the costs to be paid in sterling. P&ID argued that costs should instead be awarded in naira, the national currency of Nigeria, on the basis that payment in sterling would give Nigeria a significant “windfall” due to exchange rate differences. The Supreme Court unanimously rejected that argument.
The Court explained that an order for costs does not operate in the same way as an award of damages, whether in contract or tort. Damages aim to compensate for an actual loss and, once calculated, give rise to an entitlement as of right. By contrast, costs awards are discretionary and represent a court-authorised contribution towards the costs of litigation. The court does not and should not investigate how a party has funded its legal fees; doing so would risk unnecessary factual disputes and could lead to disproportionate satellite litigation.
The Court stressed that nothing in the statutory framework or procedural rules restricts costs awards to sterling. It endorsed the approach taken in <span class="news-text_italic-underline">Cathay Pacific v Lufthansa Technik [2019] EWHC 715 (Ch)</span>, where costs were awarded in euros because the receiving party had been invoiced and had paid its legal fees in euros. However, it rejected any suggestion that courts should conduct detailed inquiries into the currency that best reflects a litigant’s financial position.
The Supreme Court concluded that, for reasons of legal certainty and the proper exercise of the court’s costs jurisdiction, there should be a general rule that costs awards are expressed either in sterling or in the currency in which the receiving party has been billed and has paid—or is liable to pay—its legal fees. This approach avoids unnecessary disputes about how parties have funded litigation while still allowing flexibility where a different order may be appropriate in exceptional circumstances.
