The Kingdom of Sweden v Max Emil Serwin (formerly known as Emil Amir Ingmanson)

Hearing date: 9. 11 and 13 June 2025

Approved Judgment

This judgmet was handed down remotely at 10.30am on 08/07/25 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

HH Judge Pelling KC:

Introduction

This was to have been the trial over a period of 4 weeks of a claim by the claimant for damages in respect of an alleged fraud which is alleged to have resulted in the misappropriation by the defendants of sums in excess of €115m from the pension saving accounts of some 46,222 Swedish pension savers, on whose behalf the claimant seeks to recover the allegedly misappropriated sums.

By the start of the trial however, the claim had been settled or discontinued as against the 4 ^th, 5 ^th, 8 ^th, 11 ^th and 14 ^th defendants. On the eve of the trial, the claim was also settled as against the 3 ^rd defendant, leaving outstanding the claim as against the 2 ^nd defendant (“Mr Bishop”) and the 1 ^st, 6 ^th, 7 ^th 9 ^th, 10 ^th, 12 ^th and 13 ^th defendants. On 9 June 2025, the claimant and Mr Bishop asked me to delay the start of the trial to allow them to negotiate and on 11 June 2025, I was asked to approve a consent order resolving the claim as against Mr Bishop. In the result these proceedings have been resolved by agreement against all the actively participating defendants. By the time the hearing resumed on 13 ^th June, the claim against the 7 ^th defendant had also been settled. That leaves only the claims against the 1 ^st, 6 ^th, 9 ^th, 10 ^th, 12 ^th and 13 ^th defendants (collectively “remaining defendants”).

Mr Casey KC indicated to me on 11 June 2025 that the claimant wished to receive a reasoned judgment on the merits against each of the remaining defendants. I enquired whether it would not be more convenient to enter judgment in default of either Acknowledgment of Service or Defence as applicable. Mr Casey indicated that his client did not want to adopt that course because it was thought that at least the 1 ^st defendant (“Mr Serwin”) and the 6 ^th defendant (“Mr Ökten”) had assets located in jurisdictions other than England and Wales and it was anticipated that enforcing a default judgment in those jurisdictions may prove problematic. Accordingly, Mr Casey invited me to further adjourn the trial until 13 June 2025, to dispense with the attendance of any of the witnesses (since none of the remaining defendants were participating in the trial) and to hear his oral submissions in support of a judgment on the merits against the remaining defendants over one day on 13 June 2025. I accepted Mr Casey's invitation. My reasons for adopting that course were as follows.

I dispensed with the attendances of the witnesses applying the principles identified by Vos LJ in Clarke v. Lighting & Lamps UK Ltd [2016] EWCA (Civ) 5 at [41]–[42] and applied by Foxton J in Lakatamia Shipping Company Ltd v Tseng & Anor [2023] EWHC 3023 (Comm).

I accepted the submission that the trial should be a trial followed by a reasoned judgment on the merits because I accept that the claimant is entitled as of right to a reasoned judgment on the merits against a defendant who has been served with the proceedings and had notice of, but who had not appeared or been represented at the trial, rather than being required to accept a judgment in default.

To the extent any judicial discretion is involved, I would have exercised it by directing the trial to proceed in the manner contended for by the claimant for the following reasons. Firstly, entering judgment in default of service of either an Acknowledgement of Service or Defence would not result in any material savings of time or costs – the costs have been incurred and even if I had entered judgment, I could have done so only for damages to be assessed, which would have to be proved just as is the case if the trial proceeds as the claimant wished it to. Secondly, I accept the potential difficulty concerning the enforcement of a default judgment outside England and Wales as being an entirely legitimate reason for seeking a reasoned judgment on the merits, applying by analogy the authorities to similar effect concerning applications for permission to apply for summary judgment where no Acknowledgement of Service has been filed by a defendant. Finally, I would have considered the wishes of the claimant to be of themselves a powerful reason for acceding to the request.

. In consequence of the directions I have given it follows that the claimant must (a) prove its case (i) to the civil standard (ii) both on liability and quantum (iii) against each of the remaining defendants; and in doing so (b) draw to my attention “ points, factual or legal, that might be to the benefit of” the unrepresented defendant, as Foxton J emphasised in Lakatamia Shipping (ibid).

Background

The general background to the claim was summarised by Foxton J in these proceedings at [2020] EWHC 486 (Comm) at [6] to [9]:

“6. By way of brief background, each Swedish saver makes payments into a compulsory Premium Pension Pot or PPM. Those PPMs are administered by the [Swedish] Pensions Agency and the government is the sole owner of the funds under management. Those PPM funds can then be invested in a range of investments identified on the PPM electronic platform. Those investments have to meet the requirements of the Undertakings for Collective Investment in Transferable Securities Directive 2009/65/EU.

7. The Swedish government alleges that the first three defendants acted in combination to defraud the government by using moneys in PPM accounts to buy assets at inflated prices from entities which, unknown to the claimant, were themselves owned or connected with the defendants, or in which the first three defendants had some form of interest.

8. The case of the Swedish government is that this fraud was perpetrated in two phases, the first concerning the Optimus fund and which the government has referred to as the Optimus phase, the second concerning the Falcon fund and which has been referred to as the Falcon phase. What is alleged is that the Optimus fund used PPM money to buy mortgage backed securities at inflated prices from companies owned by some or more of the first three defendants, which (with two exceptions) were later sold at substantial losses. It is also said that moneys from other PPM funds were transferred into the Optimus fund in order to increase the size of that fund, so as to raise the 10% limit on the proportion of the funds' assets which could be invested in mortgage backed securities. When attention began to be focused within Sweden on the transfer of moneys from the other PPM funds to the Optimus funds, the Claimant alleges that the first three defendants then took steps to establish the Falcon fund in Malta, where PPM moneys were used to buy exchanged traded instruments or ETIs and other securities in circumstances in which the proceeds of those investments inured to the benefit of companies in which the first three defendants were interested.

9. The figures for estimated losses that I have been given is of losses of the order of Euros 30 million during the Optimus phase; some Euros 60 million or so during the Falcon phase in relation to ETI and bond investments, and a further Euros 30 million or so in respect of losses on further investments. The fraud is alleged to also involve the fourth, fifth and sixth defendants, each of whom is alleged to have held a position in one or other of the relevant investment management companies, or otherwise to have assisted in the fraud and wrongdoing, and a number of corporate defendants who are said to be companies controlled by the first to third defendants and to have received moneys from PPM accounts. These include some English companies who (I am told) are currently dissolved but will be subject to an application to restore them to the register, the effect of which on current authority would be retrospectively to validate proceedings commenced before that stage against those entities.”

The Swedish Pensions Agency (the “SPA”) is an agency of the Swedish government which administers the Swedish pension system. Under Swedish law it does not have a separate legal identity from that of the claimant, which is why these proceedings were commenced in the name of the claimant. The “PPM” referred to by Foxton J is a compulsory pension premium (“PPM”) whereby a certain percentage of a pension saver's earnings was put into a discrete account which is then invested in one or more of the investment funds selected by the pension saver from an online platform maintained by the SPA. Each Swedish pension saver has a PPM account. However, under Swedish law, the SPA has title to the funds in the PPM system and to any units/shares in investment funds that are purchased for PPM accounts.

The claimant alleges that the first iteration of the fraudulent scheme described above (“Optimus Phase”) was carried into effect...