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Marex Financial Limited v Carlos Sevilleja Garcia

In a judgment handed down on 25 April 2017, Mr Justice Knowles dismissed Mr Sevilleja’s challenge to the jurisdiction of the English Court.

In 2013, Marex obtained judgment against Creative Finance Limited and Cosmorex Limited (together the “Companies”), the principal foreign exchange trading vehicles used by Mr Sevilleja [judgment here]. Marex alleges that between the draft judgment having been released and judgment having been handed down by Mr Justice Field a few days later, Mr Sevilleja dishonestly asset-stripped the Companies in order that they would be unable to pay Marex. The Companies are now in liquidation in the British Virgin Islands. Having first pursued other avenues, Marex then sued Mr Sevilleja on the basis of unlawful means conspiracy and for knowingly inducing and procuring the Companies to act in wrongful violation of Marex’s legal rights under the judgment for the sum of the judgment debt and various costs.

Mr Sevilleja challenged the jurisdiction of the English Court. On behalf of Mr Sevilleja it was argued that (i) the law does not recognise a claim of violation of legal rights under a judgment; (ii) the unlawful means relied upon by Marex are not unlawful means for the purposes of the tort as they did not interfere with the Companies’ freedom to deal with Marex; and (iii) the rule against reflective loss applies to creditors and bars Marex’ claim. Therefore, Marex cannot show a completed cause of action for the purposes of the relevant jurisdictional gateway under Practice Direction 6A para 3.1(9) for torts. Mr Sevilleja also contended that the proper place for Marex to bring its claim was in the BVI where all issues arising in the liquidation could be dealt with.

Mr Justice Knowles dismissed Mr Sevilleja’s jurisdiction challenge. He found that Marex had established completed causes of action in tort to the standard of a good arguable case since it had the better argument on all points of law at issue. He noted that the points of law that arose were important and would benefit from final decision on the basis of actual and not hypothetical facts. Although they were not suitable for a final decision at a hearing on jurisdiction, he said that they were strongly in favour of Marex. He also held that England and Wales was the proper place for Marex to bring its claim and that Marex had not submitted to the jurisdiction of the BVI Courts by having submitted proof of claims in the Companies’ liquidation. Marex’s claims are directed at Mr Sevilleja and his assets and not the Companies’ assets.

Marex had also argued that for the specific jurisdictional gateway it was sufficient to show that the cause of action was tortious in nature (as opposed to showing a completed cause of action in tort) and that it was sufficient to establish a tort to the standard of a serious issue to be tried (which is a lower standard than the test of good arguable case). In light of his findings, Mr Justice Knowles declined to debate the difference between “claim … made in tort” and “claims founded on a tort” and whether it was sufficient to establish a tort to the lesser test of serious question to be tried. 

 

Alain Choo Choy QC and Sophie Weber (instructed by Memery Crystal LLP) acted for Marex.

 

The Judgment can be found here.