Rosenblatt has successfully acted for ED&F Man Capital Markets Limited (“ED&F Man”), resisting a high profile appeal (one of The Lawyer’s Top 10 appeals of 2022), brought by the Danish Customs and Tax Administration (“SKAT”). ED&F Man was the only defendant (among over 100) to defeat SKAT’s appeal. SKAT’s claim against ED&F Man was worth approximately £70m.
SKAT’s appeal followed last year’s Commercial Court Preliminary Issues Trial, in which SKAT’s claims for circa £1.5 billion of damages (lost in 2012 to 2015 to dividend tax reclaims which SKAT alleged it was not liable to pay) were dismissed by Andrew Baker J. The Court dismissed the claims on the basis that they contravened “Dicey Rule 3”, a rule which disallows the English Court from entertaining claims for the enforcement, directly or indirectly, of the penal, revenue and public laws of foreign states – otherwise known as the “Revenue Rule” as it applies to tax.
SKAT’s appeal was based on two grounds. The first was that its claims were not inadmissible by virtue of the Revenue Rule. The second was that its claims should be permitted, given that they were a “civil and commercial matter” and not a “revenue matter” for the purposes of Article 1(1) of the Brussels Recast Regulation – and thus the English Court could not dismiss the claims under the Revenue Rule for defendants domiciled in jurisdictions covered by Brussels-Lugano regime.
Only the second of the two grounds of appeal were pursued against ED&F Man, SKAT having conceded that its claims against ED&F Man were inadmissible by virtue of Revenue Rule. Due to this concession, the Court of Appeal reasoned that SKAT’s appeal failed against ED&F Man owing to the fact that the claims were a revenue matter, and thus the Brussels Recast Regulation did not apply to them. The Court of Appeal did however uphold the appeal against all of the other respondents, on the basis that the claims were not claims for unpaid tax or a claim to recover tax, but rather they were claims to recover monies which had been abstracted from SKAT’s general funds by fraud (allegedly).
The Rosenblatt team was led by Partner, Justin Nimmo, Administration Director & Partner, Anthony Field, including Senior Associates Luther Kisanga and Tom Spiller, and Associate Charlotte Woodward. Rosenblatt instructed Ali Malek QC and George McPherson of 3 Verulam Buildings to appear for ED&F Man at the three day hearing before the Court of Appeal (Sir Julian Flaux C, Phillips LJ and Stuart-Smith LJ).
