Case Analysis: Lakatamia fails in latest unlawful means conspiracy claim (Lakatamia Shipping Company Ltd v Su and others)

Lakatamia Shipping Company Ltd v Su and others [2024] EWHC 1749 (Comm)

Dispute Resolution analysis: A long-standing judgment creditor has failed in largely undefended claims for unlawful means conspiracy and the Marex tort in a judgment which shines significant light on the approach of the Court to claims which are not actively defended.

What are the practical implications of this case?

This is a judgment which traverses a number of significant issues of procedure, as well as economic torts and freezing injunctions. It emphasises the prohibition on the use of judgments in claims to which Defendants were not parties in evidence and cautions against giving too much weight to interim judgments in proceedings. It highlights also the extent to which defences open to Defendants should be considered at trial even where substantial defences have not been pleaded on the part of those Defendants. It analyses the relatively new Marex tort in which parties are alleged to have frustrated attempts to enforce judgments of the Court. Finally, it summarises the principles applicable to allegations of unlawful means conspiracy in the context of efforts to breach the terms of a freezing injunction. It highlights further the challenges which Claimants can still face in claims against unrepresented and disengaged Defendants who seek to pursue the matter to trial.

What was the background?

In late 2014 and early 2015, the Claimant (“Lakatamia”) obtained judgment against Mr Su for breach of contract. That judgment remains largely unsatisfied and the sums owed (including interest) amount to approximately $60 million. Lakatamia obtained a freezing injunction prior to judgment aimed at preventing the dissipation of his assets. Mr Su was sentenced to 21 months’ imprisonment for breach of that freezing injunction. In other proceedings, several Defendants were held to have unlawfully conspired with each other to breach the freezing injunction by concealing the existence of proceeds of the sale of certain properties in Monaco from Lakatamia (the “Principal Conspiracy”). Lakatamia then issued proceedings against Mr Su and two other Defendants, “Mr Chang” and “Maitre Zabaldano” alleging unlawful means conspiracy and (against the latter two only) the so-called Marex tort. This is a relatively new tort which involves (1) entry of a judgment in the Claimant’s favour; (2) breach of the rights existing under that judgment; (3) the procurement or inducement of that breach by the Defendant; (4) knowledge of the judgment on the part of the Defendant; and (5) realisation on the part of the Defendant that the conduct being induced or procured was a breach of the rights under the judgment. To a significant extent, the claims were undefended. Maitre Zabaldano was a lawyer who had effected the transfer of the proceeds at the instruction of Mr Chang.

What did the court decide?

The Court considered various authorities on the question of whether the contents of Particulars of Claim are admissible at trial. It concluded that if no order is otherwise made, a statement of case, even if verified by a statement of case will not be evidence at trial. The Court here ordered, however, that the contents of the trial bundle shall form part of the evidence. That provides an exception to that general rule, along with the agreement of the parties, the adoption of a statement of case by a witness in evidence, permission of the Court and (in a Part 8 claim) where CPR r. 8.5(7) applies. The Court was critical of the extent to which the Claimant sought to rely upon findings in earlier judgments. Such judgments were inadmissible where they concerned different parties and undue weight should not be given to an earlier judgment in a jurisdiction challenge brought on the basis of there being no serious issue to be tried. The claims against Mr Chang failed on the basis that the Court was not satisfied Mr Chang knew of the freezing order, the judgments in favour of the Claimant or the relevant judgment debt. Maitre Zabaldano was held to have met all the requirements for a finding of unlawful means conspiracy, notwithstanding the Court finding that he honestly believed he was entitled to do what he did. However, he was held not to be liable for this tort, due to the Babanaft proviso in the freezing injunction which specified that “the terms of this Order do not affect or concern anyone outside the jurisdiction of this Court”. The Marex tort claim against Maitre Zabaldano also failed, the Court finding that he lacked the requisite intention and that he would, in any event, have been entitled to rely on the (unpleaded) defence of justification.

Case details

• Court: Commercial Court
• Judge: Simon Colton KC (sitting as a Deputy High Court Judge)
• Date of judgment: 12 July 2024

Article by Phillip Patterson, originally published by LexisNexis.