Foreign Assistors Cannot Rely on the Babanaft Proviso to Escape Civil Liability: Unlawful Means Conspiracy for Aiding Breach of English Freezing Orders

Case: Lakatamia Shipping Co Ltd v Su & Ors [2025] EWCA Civ 1389 (Court of Appeal, Civil Division, 5 November 2025)

Introduction

This Court of Appeal decision arises from Lakatamia Shipping’s long-running efforts to enforce English judgment debts exceeding US $60 million against Mr Nobu Su and companies associated with him. The immediate dispute focused on the 2017 transfer of approximately €27 million (about US $26.7 million) in proceeds from the court-ordered sale of two Monaco villas owned by Cresta Overseas Ltd—beneficially owned by Mr Su—into the bank account of UP Shipping Corporation, a company owned and controlled by Mr Su’s mother, Madam Su. The transfer was executed by the Monegasque lawyer, Maître Arnaud Zabaldano, acting on instructions given by Mr Chang Tai-Chou, a long-time director across Mr Su’s corporate network, who in turn was directed by Mr Su.

Lakatamia sued the trio for unlawful means conspiracy and, in the alternative, the so‑called “Marex tort” (inducement of breach of rights under a judgment). At first instance, the Deputy High Court Judge dismissed the claims, principally on the factual finding that Mr Chang lacked knowledge of the judgment and freezing order, and on the legal conclusion that the “Babanaft proviso” insulated the foreign lawyer, Maître Zabaldano, from civil liability. He also treated Maître Zabaldano’s honest belief that he was obliged to transfer the funds as negating either the mental element or affording a justification defence to the Marex tort.

The Court of Appeal has allowed Lakatamia’s appeal. It holds that all three defendants are liable in unlawful means conspiracy; that the Deputy Judge’s factual conclusions on Mr Chang’s knowledge were plainly wrong; and that the Babanaft proviso, while relevant to contempt of court, is not a defence to a civil conspiracy claim—an issue governed by binding Supreme Court authority. The Court left unresolved the contested contours of the Marex tort for a future case.

Summary of the Judgment

The appeal is allowed. Judgment is entered for Lakatamia against each defendant for unlawful means conspiracy.
Mr Chang: The Court of Appeal overturns the Deputy Judge’s factual findings and holds it “beggars belief” that Mr Chang did not know of the worldwide freezing order (WFO) and the judgment debt. At minimum, he turned a blind eye—sufficient for the knowledge requirement.
Maître Zabaldano: The Babanaft proviso does not afford a defence to a civil conspiracy claim. Even if a foreign lawyer cannot be committed for contempt, they can be liable in tort for conspiring with a judgment debtor to breach a WFO. The Court also reaffirms that, under The Racing Partnership, a conspirator need only know the facts rendering the conduct unlawful, not the legal characterization of that unlawfulness.
Mr Su: Having found liability against Mr Chang and Maître Zabaldano, Mr Su is also liable as part of the conspiracy.
Marex tort: The Court declines to resolve contested questions (including intention and justification) and leaves them open for a case where they are determinative.
Comity issues, including a default judgment of the Monaco court and a letter from the Monaco Bar, do not affect the outcome. The English court’s jurisdiction was established and not appealed further by the foreign defendant; he could have, but did not, advance a defence based on Monegasque professional obligations.

Analysis

Precedents Cited and Their Influence

Babanaft International Co SA v Bassatne [1990] Ch 13: Established the standard “Babanaft proviso” in WFOs, stating they do not “affect or concern anyone outside the jurisdiction,” subject to enumerated exceptions. At first instance, this proviso was wrongly treated as immunizing a foreign assister from civil liability. The Court of Appeal corrects this by following the Supreme Court’s later analysis.
JSC BTA Bank v Ablyazov; JSC BTA Bank v Khrapunov [2018] UKSC 19; [2020] AC 727: Binding Supreme Court authority that a breach of a freezing order can constitute “unlawful means” for conspiracy, and that the Babanaft proviso does not shield a foreign co‑conspirator from civil liability for assisting the addressee of the order to breach it. The Court of Appeal holds the Deputy Judge’s distinction attempts untenable; this case is dispositive on the Babanaft point.
Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174: Clarifies that not all conspirators must themselves use unlawful means for unlawful means conspiracy; it is enough that at least one does and the concerted plan uses those means. This neutralizes the suggestion that a foreign lawyer acting “lawfully” under local law could not be caught if a co‑conspirator’s breach (here, contempt of a WFO) supplies the unlawful means.
The Racing Partnership Ltd v Done Bros (Cash Betting) Ltd [2021] Ch 233 (CA): Majority holds that for the tort of unlawful means conspiracy, a defendant must know the facts which render the means unlawful but need not appreciate that those facts amount in law to unlawfulness. Adopted below and applied on appeal to reject Maître Zabaldano’s argument that his honest belief in lawfulness negated liability once factual knowledge was proved.
Kuwait Oil Tanker Co SAK v Al Bader (No 3) [2000] 2 All ER (Comm) 271 and OBG Ltd v Allan [2008] 1 AC 1: Framework authorities on the elements of economic torts—intention, inference of intention from knowingly caused consequences, and the limits of equating foresight with intention. They inform the Court’s acceptance that intention to injure can be inferred where the conspirators knew and accepted that hindering enforcement would result.
Arcelormittal USA LLC v Ruia [2020] EWHC 3349 (Comm), Palmer Birch v Lloyd [2018] 4 WLR 164: Confirm dishonesty is not an element of unlawful means conspiracy, and that “justification” is not a defence to that tort. Adopted both below and by the Court of Appeal.
ED&F Man Capital Markets Ltd v Come Harvest Holdings Ltd [2022] EWHC 229 (Comm) and The Eurysthenes [1977] QB 49 (CA): Endorse blind-eye knowledge as sufficient and explain that intention to injure can be established where the defendant knows the claimant’s loss is an inescapable concomitant of the plan.
Volpi v Volpi [2022] EWCA Civ 464: Sets the high threshold for appellate intervention in factual findings: only if “plainly wrong.” The Court of Appeal nevertheless intervenes here, underscoring the exceptional nature of the evidential picture against Mr Chang.
CMOC Sales & Marketing Ltd v Persons Unknown [2018] EWHC 2230 (Comm); Braspetro Oil Services Co v FPSO Construction Inc [2007] EWHC 1359 (Comm): On the claimant’s duty of fair presentation where defendants do not participate. The Court makes clear this duty does not extend to advancing arguments foreclosed by binding Supreme Court authority.
Lakatamia v Su [2021] EWHC 1907 (Comm); Lakatamia v Su [2023] EWHC 1874 (Comm); Lakatamia v Tseng [2023] EWHC 3023 (Comm): Prior judgments within the same litigation stream provide the articulated elements of the Marex tort and jurisdictional rulings; they frame the issues left open by the Court of Appeal on inducement of breach of judgment.

Legal Reasoning

1) Unlawful means conspiracy: elements satisfied

Combination: Mr Su instructed Mr Chang; Mr Chang instructed Maître Zabaldano; the lawyer executed the transfer of funds. This was coordinated conduct in pursuit of a common objective of moving funds beyond the reach of the WFO and the English judgment creditor.
Unlawful means: Mr Su’s breach of the WFO (a contempt of court and a paradigm “unlawful means” per Total Network and Khrapunov). The Court reaffirms that the conspirators need not each personally commit unlawful acts; use of unlawful means as part of the concerted plan suffices.
Knowledge and intention: The conspirators knew the facts rendering the acts unlawful: the existence of the WFO, the extant judgment debt, Mr Su’s beneficial ownership, and that the transfer would place the funds beyond reach. Under The Racing Partnership, ignorance of the legal character of those facts (i.e., that they amounted in law to contempt) is immaterial. Intention to injure can be inferred from the deliberate use of means known to hinder enforcement, an inevitable and known concomitant of their plan (OBG).
Loss and causation: The judge found Lakatamia would have been able to enforce against the Monaco funds once the English liability judgments were recognized in Monaco in July 2017; the February 2017 transfer dissipated the proceeds, causing loss.

2) The Babanaft proviso is not a civil liability shield

The standard WFO proviso stating the order “does not affect or concern anyone outside the jurisdiction” may protect foreign non-parties from penal consequences of contempt. But binding Supreme Court authority (Khrapunov) makes clear it does not prevent civil claims in unlawful means conspiracy against a foreign assister who knowingly helps the addressee of a WFO to breach it. The Deputy Judge’s attempts to distinguish Khrapunov—by focusing on the location of the combination or the supposed focus on the contemnor rather than the assister—were rejected as misconceived. The Court emphasizes that the Supreme Court’s reasoning is directly on point: the foreign assister can be liable in tort even though they cannot be committed for contempt.

3) Appellate correction of “plainly wrong” factual findings

Despite the deference commanded by Volpi, the Court was prepared to overturn the findings that Mr Chang lacked knowledge of the freezing order and judgment debt. Given Mr Chang’s role as director across companies bound by the WFO and subject to the liability judgments, his affidavit of assets in related proceedings, the context of enforcement actions, and the dynamics around the villa sale and UP Shipping transfer, the conclusion that he was unaware “beggars belief.” At minimum, deliberate blindness amounts to knowledge sufficient for conspiracy and inducement-type torts.

4) Mental element and “justification” in conspiracy

The Court endorses the propositions that dishonesty is not an element of unlawful means conspiracy and that “justification” is no defence to that tort. Importantly, under The Racing Partnership, it is enough that a conspirator knows the facts that render the acts unlawful. An honest belief that one is entitled to act as instructed is no answer where the conspirator knows those operative facts.

5) The Marex tort: issues left open

The Court deliberately declines to resolve two questions:

What intention suffices for liability for inducement of breach of rights under a judgment (the “Marex tort”)—is it enough that the defendant intended to procure conduct that they knew would violate judgment rights, or must they intend the legal breach as such?
Is “justification” available as a defence to the Marex tort (as it can be for inducing breach of contract), or not? Earlier first‑instance obiter has questioned whether justification has any place in the Marex tort.

Those questions await a case in which they are dispositive and fully argued on both sides. The Court hints that, even if a justification defence could in principle apply, a foreign lawyer who could have sought directions from the English court might struggle to make it out.

6) Comity and the Monaco proceedings

A default judgment of the Monaco court (after the English trial) and a letter from the Monaco Bar do not affect the English appeal. The English court’s jurisdiction over the civil claim was established; the foreign lawyer chose not to defend on the merits in England. Respect for comity does not require the English court to cede its established jurisdiction or to treat the Babanaft proviso as barring civil liability.

Impact and Significance

Foreign assistors, including lawyers, banks, and corporate service providers: Participation in moving assets covered by an English WFO can attract civil liability in unlawful means conspiracy, even if you are outside the jurisdiction and even if you could not be punished for contempt. The safe course is to seek directions from the English court when confronted with a WFO touching the assets or instructions you are asked to carry out.
Drafting and operation of WFOs: The standard Babanaft proviso remains orthodoxy and does not need rewriting. Its function is to limit penal reach, not to provide a substantive civil defence for tortfeasors who assist breaches.
Knowledge threshold lowered (factually, not legally): The reaffirmed Racing Partnership principle means claimants need prove only knowledge of the operative facts, not appreciation of their unlawfulness. Blind-eye knowledge will suffice. This facilitates civil liability against facilitators where the factual matrix is clear.
Corporate officers/directors: Long‑standing involvement with entities subject to WFOs and judgments will make it very difficult to deny knowledge. The “beggars belief” standard illustrates that appellate courts can, in exceptional cases, overturn primary fact findings where the evidential context compels a different conclusion.
Enforcement strategy: Where assets are dissipated ahead of foreign recognition of English judgments, claimants may still recover via civil conspiracy claims against assistors who participated in the dissipation. Proof that enforcement would have been feasible but for the conspiracy is critical for causation and loss.
Marex tort development: The Court flags but leaves open the mental element and any justification defence. Future cases should expect fuller appellate scrutiny; for now, unlawful means conspiracy offers a surer route where a WFO breach is in play.
Comity and professional obligations abroad: Compliance with local professional or banking obligations is not a blanket shield from English civil liability where you knowingly assist a breach of an English court order. Engage proactively with the English court for guidance.

Complex Concepts Simplified

Worldwide Freezing Order (WFO): An English court injunction restraining a defendant from dealing with assets up to a specified value, wherever located. It does not create proprietary rights but polices dissipation risk to protect enforcement. Breach is contempt of court.
Babanaft proviso: A standard clause in WFOs stating that, save for defined categories, the order does not “affect or concern anyone” outside England and Wales. Its main function is to limit exposure to contempt for foreigners. It does not provide a defence to civil claims (like conspiracy) for assisting the addressee to breach the order.
Unlawful means conspiracy: A civil wrong where two or more persons combine to use unlawful means with the intention of injuring the claimant, causing loss. Not all conspirators must personally commit the unlawful act; intention can be inferred; dishonesty is not required; “justification” is not a defence.
Blind‑eye knowledge: Deliberately shutting one’s eyes to obvious facts or avoiding inquiry. Treated as equivalent to actual knowledge for economic torts, including conspiracy and inducement‑type claims.
Marex tort (inducing breach of judgment): An emerging tort, analogous to inducing breach of contract but protecting rights under a court judgment. The elements include knowing procurement of conduct that breaches judgment‑based rights. The availability of a “justification” defence and the precise intention standard remain unsettled at appellate level.
Contempt vs civil liability: Contempt is a penal sanction for disobeying a court order. Civil liability (e.g., conspiracy) compensates for loss caused by unlawful conduct. A foreign non‑party may be outside contempt jurisdiction but still liable in tort for assisting a breach by the addressee of the order.
Ultimate Beneficial Owner (UBO): The person who ultimately owns or controls an asset or company, even if not the legal title holder. WFOs typically bind assets beneficially owned by the defendant.

Practical Guidance

On receiving notice of an English WFO touching assets or clients, foreign lawyers and service providers should:
- Cease any transfers that might defeat the order.
- Seek instructions about disclosure obligations under the WFO.
- Apply to the English court for directions if in doubt; do not rely on the Babanaft proviso as a substantive defence.
- Document inquiries made to avoid allegations of blind‑eye knowledge.
Claimants should gather objective indicators of knowledge (directorships of bound companies, prior affidavits, notices, correspondence, abrupt resignations, and enforcement steps) to meet the Racing Partnership knowledge test and to defeat claims of ignorance.
When drafting or deploying WFOs, keep the standard Babanaft wording; accompany with prompt service and robust notice to likely assistors to fix knowledge and deter transfers.

Conclusion

Lakatamia v Su cements a critical principle in judgment enforcement and the economic torts: foreign assistors cannot shelter behind the Babanaft proviso to avoid civil liability for unlawful means conspiracy when they knowingly help a defendant breach an English freezing order. The Court of Appeal’s strong correction on factual findings underscores that appellate courts will intervene where conclusions on knowledge are unsustainable in light of the evidential matrix and the practical realities of corporate governance. The decision also consolidates the modern approach to the mental element in conspiracy—knowledge of the operative facts is enough—and confirms that “justification” has no place as a defence to that tort.

For cross‑border enforcement, the judgment is a potent reminder that English courts will use civil liability to police compliance with WFOs beyond contempt. For foreign lawyers and intermediaries, the safe path is engagement with the English court, not execution of instructions that neutralize injunctions. The Court leaves the architecture of the Marex tort for another day, but its message for unlawful means conspiracy is unambiguous: assisting a contemnor to defeat judgment enforcement carries real civil consequences, wherever you are.