Lakatamia Shipping Company Ltd v Nobu SU (aka Hsin Chi Su Aka Nobu Morimoto
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 21 July 2023 |
| Neutral Citation | [2023] EWHC 1874 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2022-000351 |
[2023] EWHC 1874 (Comm)
THE HON. Mr Justice Bryan
Case No: CL-2022-000351
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Rolls Building
7 Rolls Building Fetter Lane
London EC4 1NL
S.J. Philips K.C. and James Goudkamp (instructed by Hill Dickinson LLP) for the Claimant
Edward Ho (instructed by Mishcon de Reya LLP) for the Third Defendant
Hearing date: 12 July 2023
A. INTRODUCTION
The parties appear before the Court on the hearing of the application of the Third Defendant, Maître Zabaldano, to set aside service of the Claim Form against him on the basis that this Court does not enjoy jurisdiction over him in relation to the three claims advanced against him, namely that together with the First Defendant (“Mr Su”) and the Second Defendant (“Mr Chang”) he committed the torts of (i) unlawful means conspiracy (the “Subsidiary Conspiracy”), (ii) intentionally causing damage by unlawful means and (iii) intentionally and knowingly inducing a violation of rights in judgment (also known as the Marex tort) as a result of aiding Mr Su to dissipate assets (part of the proceeds of sale of two villas in Monaco) in breach of an English worldwide freezing order (the “Blair Freezing Order”) in the context of substantial judgments of the Commercial Court against Mr Su (the “Cooke Judgments”).
This is not virgin territory. Mr Su's mother Madam Su (as well as the companies involved, namely Cresta Overseas Limited (“Cresta”), Portview Holdings Limited (“Portview”) and UP Shipping Corporation (“UP Shipping”)) have already been found by me to have conspired together to injure Lakatamia by unlawful means, namely by (amongst other matters), dissipating the net sales proceeds (the “Monaco Proceeds”) of the two villas in Monaco (the “Principal Conspiracy”) and to have committed the Marex tort – see Lakatamia Shipping Corporation v Nobu Su & Others [2021] EWHC 1907 (the “Bryan Judgment”).
Whilst Mr Su (the First Defendant) and Mr Chang (the Second Defendant) are not before the Court on this hearing (this being the jurisdictional challenge of the Third Defendant Maître Zabaldano, the Monégasque lawyer who actioned the transfer of the sale proceeds from Cresta Oversea to UP Shipping), no one is suggesting that the case against Mr Su and Mr Chang is anything other than a strong one. The undisputable evidence is that both those individuals knew full well of the Blair Freezing Injunction and Cooke Judgments and were involved in the transfer of the Monaco Sale proceeds. The merits of the underlying conspiracy claim (at least against alleged co-conspirators) is accordingly strong. This is not a case where the very existence of an underlying conspiracy can be seriously in dispute. The issue on the merits at this jurisdictional stage is whether there is a serious issue to be tried as to whether Maître Zabaldano was party to the Subsidiary Conspiracy giving rise to the alleged causes of action against Maître Zabaldano. The serious issue to be tried threshold, as those acting on behalf of Maître Zabaldano rightly, and candidly, accept, “is not a high one”.
Furthermore, the evidence served on behalf of Lakatamia is that regardless of the outcome of Maître Zabaldano's jurisdictional challenge, these proceedings will continue to trial against Mr Su and Mr Chang, evidence I accept as Lakatamia has every incentive to do so as (1) in the case of Mr Su it will re-set the limitation clock for enforcement proceedings (and to date recoveries have been limited so this is a very real potential benefit to Lakatamia) and (2) Lakatamia does not yet have a judgment against Mr Chang (who is himself a businessman and, as such, he may well have assets).
These are not mere points of background (though they are important in that context too). Not only do they underline the strength of the case against the other conspirators in what is said to be a conspiracy that involves Maître Zabaldano, but the consequence is that there will inevitably be proceedings to trial in this Court involving Mr Su and Mr Chang, with the result (in the context of the forum issues that arise) that on the basis of Maître Zabaldano's jurisdictional challenge, if it were to succeed, the consequence would be that two courts (the Commercial Court and the Monaco court) would be adjudicating on the very same issues, and there could, of course, be the risk of inconsistent findings in that scenario. This is a point that will need to be considered at the forum stage as addressed in due course below.
Unlike many conspiracy cases, this case is not one that was commenced (often for understandable reasons) without engagement with the potential Defendant. Maître Zabaldano is a leading Monégasque lawyer. He is the managing partner and founder of one of Monaco's pre-eminent law firms, Zabaldano Avocats, one of the three largest firms in Monaco. In such circumstances, and as one would expect, Lakatamia provided a detailed pre-action protocol letter from their solicitors Hill Dickinson to Maître Zabaldano dated 12 January 2022. This produced an equally detailed response from Mishcon de Reya dated 28 February 2022 (collectively the “Pre-Action Letters”). Many of the issues were accordingly well aired between the parties in the Pre-Action Letters before the Particulars of Claim dated 6 July 2022 were drafted, and the application to serve out was made by Lakatamia (as supported by the first witness statement of Russell Gardner of 13 July 2022 and Lakatamia's accompanying skeleton argument). The Pre-Action Letters were themselves before Cockerill J when she granted Lakatamia permission to serve Maître Zabaldano (and Mr Chang) out of the jurisdiction on 15 July 2022.
In such circumstances, it is perhaps unsurprising that Maître Zabaldano does not make any allegation of any failure to give full and frank disclosure on the without notice application for permission to serve out, which very much narrows the scope of the issues arising on this application in contra-distinction to many jurisdictional challenges.
In this regard Maître Zabaldano challenges the Court's jurisdiction on three grounds (re-ordering them into the correct and logical order for consideration):-
(1) There is no good arguable case that any of the three jurisdictional gateways which Lakatamia relied on to obtain permission to serve out (the “tort” gateway, the “property” gateway and the “necessary or proper party” gateway) were satisfied.
(2) Lakatamia's claims do not give rise to a serious issue to be tried on the merits. It is said that all three claims depend on Lakatamia establishing that Maître Zabaldano intended to harm Lakatamia, and it is said that there is no serious issue to be tried that he did.
(3) Monaco is clearly and distinctly a more appropriate forum than England for the trial of Lakatamia's claims, and Lakatamia can obtain justice there.
In contrast Lakatamia submits that:-
(1) Lakatamia has a good arguable case in relation to each of the three gateways relied upon, whilst pointing out (rightly) that it need only show that at least one of its three claims against Maître Zabaldano passes through at least one of the three gateways on which it relies (this is because it is not, or cannot be, disputed that all of Lakatamia's claims against Maître Zabaldano “arise out of the same or closely connected facts” with the result that if any one of its claims passes through any one of the gateways, the others will pass though gateway 4A(c) – see also, in this regard, what was stated in Tulip Trading v Bitcoin Association for BSV [2023] 4 WLR 16 at [41] as to the approach of the Court in such cases).
(2) Lakatamia's claims each give rise to a serious issue to be tried (i.e. that it has a real as opposed to fanciful prospect of success on each such claim).
(3) England is clearly and distinctly the most appropriate forum to try the claims (including those against Maître Zabaldano as an alleged co-conspirator), all such claims ultimately being founded on the Blair Freezing Order and Cooke Judgments.
B. BACKGROUND
In 2008, Lakatamia and Mr Su entered into a contract by which Mr Su's major positions in derivative instruments priced by reference to the forward freight markets were taken over by Lakatamia. Under the contract in question, Mr Su was supposed to repurchase those positions a month later but in breach of contract failed to do so.
In 2010, Cresta received loans totalling approximately €33 million from Barclays Bank (“Barclays”) for the purchase and redevelopment of two substantial properties in Monaco (“the Monaco Villas”). Lakatamia says that at all material times Mr Su was the UBO of Cresta.
On 24 March 2011, Lakatamia issued proceedings against Mr Su in the Commercial Court (“the 2011 Proceedings”). Shortly thereafter, on 19 August 2011, Mr Justice Blair granted Lakatamia a worldwide freezing order against Mr Su freezing all his assets up to the sum of approximately US$48.8 million (the “Blair Freezing Order”).
Following a trial, on 5 November 2014 and 16 January 2015, Mr Justice Cooke entered judgments against Mr Su in the combined principal sum of almost US$50 million (the “Cooke Judgments”/ “the Judgment Debts”) — see Lakatamia Shipping Co Ltd v. Su [2014] EWHC 3611 (Comm); [2015] 1 Lloyd's Rep. 216. Mr Su failed to make any voluntary payment in respect of the sum due. The present value of the Cooke Judgments exceeds US$60 million (when account is taken of interest that has accrued, unsatisfied costs orders and the limited recoveries that have been made).
By 2015 Cresta had defaulted on its loans from Barclays, so Barclays brought proceedings in Monaco to force the sale by auction...
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