This quarterly civil fraud update provides a summary of reported decisions handed down in the courts of England and Wales in the period of April – June 2025.
Bribery
The Claimant in the behemoth case that is Public Institution for Social Security v Al-Wazzan was refused permission to amend its case mid-trial against the 15th to 19th Defendants. This is because such an amendment would have required further expert evidence on complex issues of Swiss law, the amendment was made late, and the 15th to 19th Defendants would be prejudiced by the late amendment. The Claimant was given permission to amend as against the 41st Defendant because the amendment was only minor and the 41st Defendant could easily understand the case against it. The Court also imposed certain restrictions on the cross examination of one of the 15th to 19th Defendants’ witnesses based on the way the case had been pleaded, limiting questioning about the dishonesty of various parties and the falsity of certain documents.
Contempt
An arrest warrant was issued for the contemnor in Al Jaber v Al Ibrahim after he had failed not only to give asset disclosure as ordered, but also to attend for cross examination. Medical evidence submitted by him to support an application to adjourn cross examination was insufficient. The contemnor had breached the suspended committal order in two ways and it was right that an arrest warrant be granted.
The Court of Appeal in Aslani v Sobierajska confirmed that the relevant issues for the Court to consider on a contempt application were (a) whether the order had been served and (b) whether the alleged contemnor had subsequently done something prohibited by the order.
In Isbilen v Turk (which also featured in my Civil Fraud Updates of Q1 2024 and Q2 2024) the Court considered the recoverability of Legal Aid costs incurred in civil committal proceedings. A Recovery of Defence Costs Order was made, but suspended until after determination of various proprietary claims, and the removal of a freezing injunction.
The Court of Appeal in Turner v Coates considered the interaction of civil and criminal contempt proceedings. The appeal was against an order made in the civil contempt proceedings committing the appellant to prison for 448 days for contempt of Court. There was no general principle that it would be unjust for there to be parallel proceedings for civil and criminal contempt. Any potential injustice could be dealt with at sentencing by ensuring that the second Court was fully appraised of the first sentence.
The Court of Appeal also considered issues of contempt in Yaxley-Lennon v Solicitor General. In this case the appellant appealed against an 18-month custodial sentence on the basis that the prison conditions were substantially worse than had been anticipated by the judge who imposed the sentence. The appeal was dismissed.
Fraudulent trading
In Bilta (UK) Ltd (in liquidation) v Tradition Financial Services Ltd the Supreme Court upheld the decision that third parties (i.e. parties who had not been involved in managing the defendant company) who had participated in, facilitated or assisted fraudulent transactions by a company when they knew that the business was being carried on for fraudulent purposes could be found liable for fraudulent trading under s.213 Insolvency Act 1986.
Freezing injunctions
The Court in Segulah Medical Acceleration AB v Tripathi found that an injunction granted by the Court in the British Virgin Islands was not similar to an order enforcing a freezing injunction, did not amount to enforcement of a worldwide freezing injunction and therefore did not breach a non-enforcement undertaking.
Proprietary injunctions
The Defendant in Axion Marketing Ltd v Harmouhan Lal applied to discharge a proprietary injunction over various crypto wallets. The Court refused to grant the application: there was a serious issue to be tried, which the Court could not resolve at that hearing, service was found to have been effective and the Defendant’s complaints about a failure of full and frank disclosure were not upheld.
Tax
The Court of Appeal considered a question of issue estoppel in Skatteforvaltningen v MCML Ltd (formerly ED&F Man Capital Markets Ltd). The Appellant (MCML) appealed against a refusal to strike out the claim on the basis that it was brought in breach of the revenue rule (that the English court will not entertain a claim by a foreign state to collect its own tax). The Respondent was precluded from asserting that the revenue rule did not apply to its claims against the Appellant in so far as those claims were based on tax vouchers. However, in so far as the Respondent was pleading fraud, it was not an abuse of process, and there was a public interest in bringing fraud to light.
Unjust enrichment
The Claimant in Rasmala Trade Finance Fund v Trafigura Pte Ltd failed in its claim for restitution of mistaken payments made to the Defendant pursuant to forged documents. The Defendant had been enriched by the payments, but as a result of receipt of those payments had changed its position and acted to its own detriment in good faith.
About the author
Mary Young is a Partner in the Dispute Resolution team. Her practice covers a wide range of areas but Mary’s particular interests and expertise lie in civil fraud and asset tracing as well as claims against professionals in negligence, breach of fiduciary duty and breach of trust.
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