ACL Netherlands BV & Ors v Jeremy Vaughan Sandelson & Ors

In an unusual “dog-leg” claim, the principle that currency fluctuations between breach and judgment are generally disregarded applied to the indemnity claim arising from an admitted foreign-currency liability. The defendant therefore bore the burden of pleading and proving a separate factual basis for transferring subsequent currency risk to the claimant.

Settlement recoveries must be allocated between overlapping and separate claims within the framework of the rule against double recovery. Apportionment will generally be accepted unless obviously unsustainable, but deductions for costs require a broad-brush evidential assessment.

Compound interest in equity is confined to cases involving a specific fund obtained from the claimant and used for the defendant’s benefit. Statutory interest on damages and costs remains discretionary. In exceptional litigation, the court may truncate the interest period to reflect claimant-caused delay.

This was a consequential judgment following the court’s liability and quantum judgments in long-running proceedings arising from Hewlett-Packard’s acquisition of Autonomy. The claimants sought recovery from the First Defendant, representing Dr Michael Lynch’s estate, in respect of FSMA and misrepresentation losses, together with interest and costs.

The court determined: the allocation of foreign-exchange risk in the second limb of the claim; credits for settlements with Deloitte and Mr Hussain; the basis, rate and period of pre-judgment interest on losses and costs; consequential costs issues; and permission to appeal four grounds arising from the earlier judgments.

1. Currency. The claim by Bidco against Autonomy and the claim by Autonomy against the First Defendant had to be distinguished. Although Bidco’s liability was admitted before its amount was quantified, the second claim remained a claim for breach of duty requiring the First Defendant to cover Autonomy’s actual expense of satisfying the liability. The rule in The “Texaco Melbourne” [1994] 1 Lloyd’s Rep. 473 therefore applied. The First Defendant had to plead and prove an independent factual basis, such as a relevant act or omission by Autonomy, for reallocating post-admission currency risk. He had not done so.
2. Settlement credits. Recoveries from Deloitte and Mr Hussain had to be credited insofar as they overlapped with the claims against the First Defendant. The claimants’ proposed allocation was acceptable subject to broad-brush assessment. A deduction of £4.5 million was allowed for Deloitte-related costs and £1.1 million for costs attributable to the claims against Mr Hussain. The proposed tax deductions were not pursued.
3. Interest on losses. The misrepresentation claims were damages claims for a fraudulently induced bad bargain, not restitutionary claims concerning a specific fund. Compound equitable interest was therefore unavailable. Simple interest was awarded under section 35A of the Senior Courts Act 1981. For dollar-denominated losses the court selected a blended rate of the Federal Funds Rate plus 1%. The period was truncated to 1 May 2023 because the claim had been exceptionally exaggerated and over-complicated.
4. Costs and interest on costs. Costs were a discretionary contribution, not an indemnity. The court left most questions concerning Choate, PwC and other providers to detailed assessment, but disallowed currency-conversion costs on sterling fees at that stage. Pre-judgment interest on costs was confined to sterling-denominated costs, at the applicable sterling investment rate, running from payment until the later of three months after perfection of the consequential order or one month after service of the itemised bill.
5. Permission to appeal. Permission was refused on all four proposed grounds: the Bidco reliance issue, Autonomy’s counterfactual share price, the counterfactual negotiation and currency.

High Court (Chancery Division): liability was determined in [2022] EWHC 1178 (Ch), quantum in [2025] EWHC 1877 (Ch), and consequential matters were determined in the present judgment. Permission to appeal was refused, subject to any application to the Court of Appeal.