Lakatamia Shipping. On (in)direct damage, applicable law (A4(3) Rome II) and conspiracy.

Lakatamia Shipping Co Ltd v Su & Ors [2021] EWHC 1907 (Comm)  discusses i.a. [840 ff; this is a lengthy judgment] the applicable law in the case of conspiracy. Lakatamia advance two claims against the Defendants, the first re dissipation of two assets (net sale proceeds of two Monegasque villas – the Monaco conspiracy and a private jet – the Aeroplane conspiracy)  in breach of a World Wide Freezing Order (“WFO”)  and secondly re intentional violation of rights in a judgment debt.

Lakatamia’s case as claimants is that English law applies to the claims regarding both conspiracies, whilst Madam Su’s case is that Monaco law applies to the claim regarding the Monaco Sale Proceeds and that an unspecified law (but not English law) applies to the Aeroplane Conspiracy.

None of the specific categories of torts in the Rome II Regulation are said to apply, bringing the focus therefore on the general rule of Article 4(1), with firstly its insistence that only direct damage determines lex causae, not indirect damage.

At 843 Bryan J, like claimants, focuses on the judgment:

the focus being on the freezing order and judgment, with the damage to Lakatamia being suffered in England as that is the situs of the Judgment Debt arising out of the Underlying Proceeding in England, policed by the… Freezing Order, and that is where the Judgment Debt stands to be paid, and where Lakatamia suffers damage if it is not paid or the ability for it to be paid is impaired – put another way England is the country where the Judgment Debt should have been paid, and the damage has accordingly occurred here.

To support the point, at 845 ff English and CJEU authority (much of it also reviewed on this blog) under A7(2)BIa is discussed albeit the judge correctly cautions ‘Authorities on the Brussels Regulation are “likely to be useful” but are not of direct application’. Core reference is Pan Oceanic,

(6)  There is a difference between a case in which the claimant complains that he has lost his money or goods (as in the Marinari case [1996] QB 217 or the Domicrest case [1999] QB 548 ) and a case in which the claimant complains that he has not received money or goods which he should have received. In the former case the harm may be regarded as occurring in the place where the money or goods were lost, although the loss may be said to have been consequentially felt in the claimant’s domicile. In the latter case the harm lies in the non-receipt of the money or goods at the place where they ought to have been received, and the damage to him is likely to have occurred in the place where he should have received them: the Dolphin case [2010] 1 All ER (Comm) 473 , para 60 and the Réunion Européenne case [2000] QB 690 , paras 35-36. (emphasis in the original).

I am not entirely convinced. While it is true that the conspiracy clearly impacts on the receipts, this is the consequence of actual behaviour by defendants elsewhere, with actual impact of that behaviour in that same place abroad. I do not think it is inconceivable to qualify the damage in England as ricochet hence indirect damage. The discussion here leads to CJEU Lazar which, it would seem, was not discussed in the proceedings.

At 860 at any rate, the judge lists his reasons for picking English law as the ‘proper law of the tort’ per A4(3) Rome II. This may be a more solid decision than the A4(1) decision.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.30, para 4.39 ff.

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