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Transworld Payment Solutions UK Ltd (In Liquidation) v First Curacao International Bank NV [2022] EWHC 2742 (Ch)

Griffins successful in a leading case on jurisdiction

 

Mr Justice Freedman dismissed challenges by the Defendants to the jurisdiction of the court and/or seeking a stay of the proceedings on forum non-conveniens grounds.

 

The Claimant (“TWPS”) was a company that provided marketing and related services for First Curacao International Bank (“FCIB”) a bank registered in Curacao which was heavily implicated in ‘missing trader’ fraud or ‘MTIC fraud’ in the early 2000s by which HMRC was defrauded of very substantial sums in unpaid VAT.

 

TWPS and its liquidator brought claims against FCIB and Mr Deuss, the owner and at least de facto controller of TWPS and FCIB at the relevant times, on the basis that TWPS, FCIB and Mr Deuss dishonestly assisted in MTIC fraud and knowingly participated in the fraudulent trading of companies registered in England and Wales that perpetrated that fraud on HMRC. The claims are in the region of £280m.

 

In 2016, in response to service of a letter before action by TWPS, FCIB commenced proceedings in Curacao seeking negative declaratory relief and alleging, among other things, that the claims threatened against it had been settled by a series of agreements between office holders of companies involved in MTIC fraud and FCIB.

 

FCIB sought to set aside service of most of TWPS’ claims against it on the basis that the Court had no jurisdiction over it: England was not clearly and appropriately the most appropriate forum, or to stay any claims over which the Court did have jurisdiction on the grounds of forum non conveniens relying primarily on the prior existence of proceedings in Curacao. Mr Deuss brought a parallel application to stay all the claims against him on forum non conveniens grounds, pending determination of the proceedings in Curacao.

 

The Judge dismissed both Defendants’ applications, save in one minor respect:

 

The preponderance of factors showed that overall, England and Wales was clearly or distinctly the appropriate or proper place for the Claimants to bring the claims. The claims related to frauds on HMRC carried out by English companies, operating largely in England;

 

The proceedings in Curacao were artificial. The settlement argument could be determined by the English Court, and England was the only forum where all claims could be determined and al parties were involved in the proceedings.

 

The same factors militated against granting a stay. Staying the English claims pending the conclusion of the Curacao proceedings was unattractive, particularly as it was uncertain the extent to which the issues in the English claims would be determined in Curacao.

 

On one of the Claimants’ claims, the Judge found that there was no serious issue to be tried as the assignment to TWPS of claims under s.213 of the Insolvency Act by companies engaged in MTIC fraud were not subject to s.246ZA of the Act; the relevant liquidations had commenced before 1 October 2015.

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