On 24 March 2023, the Commercial Court handed down judgment following the second preliminary issues trial in the SKAT litigation. At the hand-down hearing, Andrew Baker J observed that SKAT had won “handsomely and by a clear margin” on the issues in dispute at the trial.
The four-week preliminary trial concerned the requirements for a refund of withheld dividend tax from the Danish tax and customs administration (“SKAT”). The judgment of Andrew Baker J provides a careful and comprehensive exposition of the relevant principles of Danish tax and securities law, and market practice relating to the trading of intermediated Danish securities.
This is the second preliminary trial in proceedings brought by SKAT seeking the recovery of around £1.44 billion that it says it was induced to part with by a sophisticated fraud between 2012 and 2015. SKAT alleges that it paid out these sums in response to false representations by foreign entities that they were shareholders in Danish companies, which had withheld tax in respect of dividends paid to them, and of which they sought a “refund” from SKAT.
In February 2022, the Court of Appeal had held (overturning the Commercial Court’s decision on the first preliminary trial) that SKAT’s claims were not barred by the common law rule against the enforcement of foreign revenue law. An appeal from that decision is due to be heard by the Supreme Court in July this year.
The second preliminary trial judgment is available here.
Charles Graham KC, Jamie Goldsmith KC, Sam O’Leary, Gideon Cohen, Maximilian Schlote and KV Krishnaprasad acted for SKAT in the second preliminary trial (with Jonathan Schwarz of Temple Tax Chambers), instructed by Pinsent Masons LLP.