Lakatamia Shipping Co Limited v Nobu Su (aka Su Hsin Chi; aka Nobu Morimoto) & Ors.

An unlawful means conspiracy may be proved by inference from the cumulative facts. It does not require direct evidence or a formal agreement. A conspirator may participate actively or passively, but must be sufficiently aware of the circumstances and share the common object.

Knowingly assisting the dissipation of assets in breach of a worldwide freezing order is unlawful means. A person protected from contempt by a Babanaft proviso may nevertheless incur civil liability for deliberately defeating the order. The Marex tort protects judgment rights against knowing procurement or facilitation of their violation.

On the facts, persons who knowingly transferred a judgment debtor’s sale proceeds through opaque corporate vehicles to defeat enforcement were liable in conspiracy and for the intentional violation of the judgment creditor’s rights.

The claimant had obtained English judgments against the first defendant arising from a forward freight agreement, together with a worldwide freezing order. It alleged that the first defendant, his mother and corporate defendants combined to move the proceeds of a private jet and two Monaco villas beyond the claimant’s reach.

The claim alleged unlawful means conspiracy and the tort recognised in Marex Financial Ltd v Sevilleja [2017] EWHC 918 (Comm). The principal issues were whether the second defendant knew of the freezing order and judgment debt, controlled the relevant corporate vehicles, and participated in the dissipation of the sale proceeds.

The action against the first defendant was stayed because of his bankruptcy. The remaining defendants were tried, several corporate defendants having been debarred from defending.

1. Judgment was entered for the claimant against the second to sixth defendants. The action against the first defendant remained stayed.
2. The court found that the second defendant was not a witness of truth. Her denials of knowledge of the Monaco villas, receipt of sale proceeds, and knowledge of the freezing order and judgment debt were false. Documentary evidence showed that she controlled UP Shipping and Sparkle Wood, that her nominee director followed her instructions, and that she received proceeds from both asset sales.
3. The transfers of the aeroplane and Monaco sale proceeds to UP Shipping, followed by opaque onward transfers, were made pursuant to combinations between the first defendant, the second defendant and the relevant corporate defendants. Their common object was to conceal the proceeds from the claimant and to make enforcement of the judgment debt more difficult.
4. The defendants knew of the Blair freezing order and the judgment debt. Deliberately transferring the first defendant’s assets in breach of that order was unlawful means. The resulting loss to the claimant was an intended and inevitable consequence of the arrangements. Both the Aeroplane Conspiracy and the Monaco Conspiracy were therefore established.
5. The defendants also knowingly procured or facilitated the first defendant’s failure to honour the judgment debt. The requirements of the Marex tort were satisfied. English law applied to the aeroplane claim because no foreign law had been pleaded or proved. English law also governed the Monaco claim under the Rome II Regulation, although the conduct was independently actionable under Articles 1229 and 1022 of the Monaco Civil Code.
6. Compensatory damages were awarded for US$857,329.73 in respect of the aeroplane proceeds and €27,127,855.01 in respect of the Monaco proceeds. The claimed enforcement costs were not caused by the conspiracies. Exemplary damages were refused because the substantial compensatory award was adequate.

This was a first-instance trial.

• High Court (Commercial Court): In related proceedings, Cooke J entered judgment against the first defendant, reported at [2015] 1 Lloyd’s Rep. 216. His proposed appeal did not proceed after he failed to provide ordered security.
• Court of Appeal: In interlocutory proceedings in the present litigation, the court restored a freezing order against the second defendant: [2019] EWCA Civ 2203.