Kingdom of Sweden v Serwin & Ors  EWHC 2706 (Comm) concerns an attempt by Sweden to gain compensation of a number of defendants whom it alleges were parties to a substantial fraud. The fraud resulted in the misappropriation of in excess of €115m from the pension saving accounts of some 46,222 Swedish pension savers.
I may have to think one or two things through however I wanted to collect my initial thoughts at any rate.
Of note is that the application was one for summary judgment and that quite a few of the respondents did not file an acknowledgment of service or a defence. However, Sweden obtained permission from the court to obtain summary judgment on the merits even against them, rather than entering judgment in default (ia because that makes enforcement more straightforward). Other defendants are serving prison sentences in Sweden and they did enter a defence.
I do not want to turn this post into a banking and finance one however some background is required:  ff
The Swedish pension system has various types of pension provision, including a compulsory premium pension (PPM), in which a percentage of a pension saver’s earnings is put into an account, which is invested in investment funds selected by the pension saver from an online platform that the Swedish Pension Authority (SPA) maintains. Each pension saver has a PPM account. Among the investments which might be made were investments in so-called UCITS funds where these had been approved by the Swedish Financial Supervisory Authority (SFSA). UCITS funds are those meeting the requirements of the Undertakings for Collective Investment in Transferable Securities Directive 209/65/EC.
A company that wished to participate in the PPM was required to
enter into a cooperation agreement with the SPA. This case arises from two UCITS funds which were listed on the PPM online platform:
i) the Optimus High Yield Fund (Optimus), managed by Optimus Fonder which entered into a co-operation agreement with the SPA on 26 March 2012; and
ii) the Falcon Funds SICA V plc (Falcon) which entered into a co-operation agreement with the SPA in relation to three funders under its management.
The events concerning these two separate funds have been described in the evidence as the Optimus phase and the Falcon phase..
There was consensus () that the law applicable to the Swedish claims so far as they concerned the Optimus phase was Swedish law, whether by virtue of Article 4(1) or (3) Rome II. That Sweden’s claims relating to the Optimus phase were barred by the doctrine of res judicata, merger, cause of action estoppel or the allied doctrine in Henderson v Henderson, was dismissed by Foxton J .
Falcon then was incorporated and authorised by the Maltese Financial Services Authority as a UCITS fund on 22 November 2013. Sweden’s summary judgment claim in relation to the Falcon phase argued that its claims in delict and for breach of fiduciary duty relating to that phase are governed by Maltese law and not Swedish law.
As far as the delict issue is concerned (misappropriation), application of A4(2) to some of the defendants was clear, and Sweden argued application of A4(1) for the remainder, seemingly arguing (judgment is a bit unclear on this point) that the damage was suffered in Malta when funds held in Falcon were applied to the various classes of loss-making investments. Reference was made by counsel and judge to Dicey 16th ed. 35-027: “in misappropriation cases … it seems appropriate to locate damage at the place where an asset … is taken from the control of the claimant or another person with whom the claimant has a relationship” – the judge held that it is strongly arguable that this happened when Sweden’s funds became subject to the control of Falcon and the powers of its directors or those operating behind the scenes; the judge seems to locate this in Sweden, not Malta, and to some degree it does not matter for with reference ia to Avonwick and reasons listed  it is held that A4(3) arguably is engaged to make the lex causae Swedish law.
 reference is again made to Dicey for the applicable law issue as far as breach of fiduciary duties is concerned: Dicey, Morris & Collins [36-069]-[36-070]:
i) If equitable obligations of a fiduciary character arise in the context of a contractual relationship, there is a strong argument that the law applicable to the parties’ contractual relationship under Rome I determines whether a fiduciary relationship exists and the nature and content of the duties imposed.
ii) If, however, the equitable obligations are characterised as incidents of a company law relationship rather than as “contractual”, common law principles determine the applicable law ( company law matters are excluded from Rome I and Rome II).
iii) If a fiduciary duty arises where the parties were not in a prior relationship, such as in the case of a recipient of trust property, then the “better view” is that the obligation is non- contractual in nature and falls within the ambit of Rome II.
Unlike Sweden, the judge holds there are strong arguments that Swedish law applies, by reference it seems to Dicey, above, i) and with the ‘anchor’ agreement being the one by which Falcon becomes eligible to received PPM funds. Rule ii) seems to be moved aside by the judge here, and at any rate the extent of that rule is not clear-cut (see the CJEU itself recently). It is clear and it was correct to hold that the discussion is not one for summary judgment material.
An interesting final, obiter point comes  ff re the ‘reflective loss’ rule (a shareholder (and some others) cannot claim for a fall in the value of their holdings due to loss suffered by the company, if and when the company has a cause of action against the same wrongdoer) under Maltese law. Falcon itself is currently asserting claims against some of the alleged wrongdoers in relation to those same misappropriations, however Sweden argues an exception to that rule on the basis of Maltese expert evidence that was not considered to be robust enough for the summary judgment stage.
I wonder though whether the suggested relevance of the reflective loss rule, does not serve as ammunition for the suggestion that Rome I and II’s corporate carve-out is engaged viz the breach of fiduciary duties claim. For is the DNA of the rule not one of clear lex incorporationis?
To be further pondered.