4 New Square has two cases listed in The Lawyer’s Top 20 Cases of 2021.
Skatteforvaltningen (the Danish Customs and Tax Administration) v Solo Capital Partners LLP (in Special Administration) and ors
It was no exaggeration in June 2020 when Mr Justice Baker described this case as “litigation on a massive scale”, with almost 100 defendants listed alongside more than 20 separate legal teams. The claim concerns an alleged £1.5bn fraud, relating to applications to claim refunds of dividend withholding tax.
The Kingdom of Denmark is the driving force behind the claim, which has been brought against a wide range of defendant groups, some of whom are alleged to have participated in the fraud, whilst others are accused of negligence or unjust receipt of the proceeds.
As the High Court attempts to manage what could be one of the largest trials ever heard, 2021 will see the hearing of two significant preliminary issue trials. The first, listed for six days in March, involves the rule that the English courts cannot collect the taxes of foreign states for the benefit of foreign sovereigns. The defendants argue that the claim is barred by this rule and should be dismissed. The second trial concerns the ingredients of a valid dividend arbitrage claim, and will help sculpt the full trial should it proceed over the next few years. These two hearings will be the first true tests of this ever-growing claim.
For the defendant, Goal Taxback Limited
4 New Square’s Jonathan Hough KC and Marie-Claire O’Kane, instructed by Kingsley Napley partner Fiona Simpson.
Stanford International Bank v HSBC Plc
A dispute over a $7bn Ponzi scheme sees Stewarts take on Eversheds Sutherland this year, as the liquidators of Stanford International Bank (SIB) allege HSBC breached its duty and failed to check money was being properly paid out from its accounts. The liquidators at Grant Thornton believe SIB suffered a loss of £118m when it emerged funds had been paid to existing investors out of subscriptions received from new ones. They argue HSBC should have identified issues with SIB’s accounts by 2008 and frozen them. SIB is now understood to be insolvent by around $5bn, while its owner Robert Allen Stanford was convicted of fraud in 2012 and handed a 110-year sentence.
There has already been some court action in this case, as HSBC last year applied to strike out, or obtain summary judgment, on two aspect of the claims. While striking out SIB’s accusation of dishonest assistance, HSBC failed on the breach of duty (Quincecare) point, meaning the case can proceed. Both parties will appeal aspects of the decision in March, while the main trial is scheduled for October.
The case is expected to provide clarification for banks on the scope of their duty, as HSBC argues that SIB suffered no loss given its insolvent status. Another key focal point is SIB’s claim of collective dishonest assistance against HSBC, due to a lack of evidence towards one individual. Though it was struck out at first instance, the issue is likely to be reconsidered this year.
For the claimant, Stanford International Bank
4 New Square’s Justin Fenwick KC, and 4 Stone Buildings’ Andrew de Mestre QC and James Knott, instructed by Stewarts partners Elaina Bailes and Laura Jenkins, alongside associate Harry Spendlove.
