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Sucden Financial Ltd v TMT Metals AG & Ors
Factual and Procedural Background
Company A, an English derivatives and commodities broker, contracted in 2010 with Company B under an English-law trading facility, and Company B submitted to the jurisdiction of the English courts. [Para 37][Para 38] In March 2022, after Company A made unpaid margin calls, Company A says Defendant and Company B represented that a bill of lading covered nickel cathodes, which led Company A first to forbear from enforcement under a letter agreement and later to enter a Memorandum of Deposit governed by English law. [Para 39][Para 43][Para 47][Para 48] When Company B defaulted and the containers were inspected, Company A says they contained only low-value metal composite and that it had been fraudulently induced to delay enforcement of the debt. [Para 49]
Company A issued proceedings in August 2023 alleging debt, deceit, fraudulent misrepresentation, and unlawful means conspiracy, and permission was granted to serve Defendant out of the jurisdiction. [Para 53][Para 54][Para 55][Para 56][Para 58] Defendant applied to set aside that service-out order, but the appeal concerns only the jurisdictional gateway challenge because the other challenges were not pursued on appeal. [Para 64][Para 65]
Legal Issues Presented
- Whether Company A’s claim against Defendant fell within the Tort Damage Gateway because damage was sustained within the jurisdiction. [Para 31][Para 35]
- Whether Company A should be allowed to rely on the Tortious Act Gateway on appeal, and if so whether the June 2022 London meeting involved substantial and efficacious acts within the jurisdiction. [Para 35][Para 130][Para 144]
- Whether the Necessary or Proper Party Gateway applied, although the court ultimately did not determine that issue. [Para 32][Para 34][Para 156]
Arguments of the Parties
Defendant's Arguments
- For the Tort Damage Gateway, Defendant argued that delay or forbearance in enforcing a debt was not damage, but at most a risk of damage, relying on Eurasia Sports Ltd v Aguad. [Para 80][Para 81]
- He also argued that any loss was suffered in Switzerland, because Company B was based there and the debt’s situs was there, not in England where payment was due. [Para 81][Para 119]
- On the alternative gateway, Defendant argued that Company A should not be allowed to raise the Tortious Act Gateway for the first time on appeal because it would require further evidence and would prejudice him. [Para 133][Para 136]
- He further said the London meeting did not materially affect matters because Company A had already agreed to forbear under the earlier letter agreement. [Para 148][Para 150]
Claimant's Arguments
- Company A said the fraud caused actual loss because the debt was recoverable when it was induced to forbear, but had become irrecoverable by the time the deception came to light. [Para 114][Para 116]
- It contended that the place of damage was England because the debt was payable there and the harm was the non-receipt of money where it should have been received. [Para 120][Para 121]
- In the alternative, Company A relied on the London meeting as a fraudulent misrepresentation that was a substantial and efficacious cause of the loss, and said the appellate court should permit reliance on the Tortious Act Gateway. [Para 130][Para 142][Para 144][Para 152][Para 154]
- Company A’s respondent’s notice also advanced the Necessary or Proper Party Gateway and the Tort Applicable Law Gateway as alternatives. [Para 32][Para 34][Para 35]
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Trafigura Pte Ltd v Gupta and others [2026] EWHC 159 (Comm) | Related proceedings concerning similar fraudulent arrangements and a substantial deceit judgment. | Cited only as background context for the wider factual setting. [Para 51] |
| Eurasia Sports Ltd v Aguad [2018] EWCA Civ 1742, [2018] 1 WLR 6089 | Allowing credit or forbearance is merely prefatory and does not itself constitute damage; damage is suffered when the obligation actually fails. | The court distinguished this authority and held that Company A alleged actual, irreversible loss rather than a mere exposure to risk. [Para 87][Para 89][Para 116] |
| Kwok and others v UBS AG [2023] EWCA Civ 222, [2023] 1 WLR 1984 | Tests for where financial damage occurs are highly fact-sensitive and should not be over-generalised. | Used as a caution against formulating a broad rule for all financial-loss cases. [Para 85][Para 86] |
| Universal Music International Holding BV v Schilling [2016] QB 967 | Supports the idea that damage location in financial-loss cases is influenced by irreversibility. | Referenced through secondary commentary as part of the irreversibility analysis. [Para 94][Para 96] |
| Dolphin Maritime Services v The Swedish Club [2009] EWHC 716 (Comm), [2009] 1 CLC 460 | Where a claimant complains of not receiving money it should have received, the harm lies where that money ought to have been received. | The court treated this as a central analogue and relied on it to locate damage in England. [Para 98][Para 100][Para 102][Para 104] |
| AMT Futures v Marzillier [2014] EWHC 1085 (Comm), [2015] 2 WLR 187 | Distinguishes between losing money/goods and failing to receive money/goods that should have been received; direct and consequential damage must be distinguished. | Cited to support the proposition that the place of non-receipt is usually the place of damage. [Para 106][Para 107] |
| Pan Ocean Chartering Inc v UNIPEC UK Co Ltd [2016] EWHC 2774 (Comm), [2017] 2 All ER (Comm) 196 | Where the complaint is non-receipt of money, the harm occurs where the money should have been received. | Cited as consistent authority reinforcing the non-receipt analysis. [Para 108] |
| Lakatamia Shipping Company v Su [2021] EWHC 1907 (Comm) | Loss is suffered where a judgment debt should have been paid and payment is impaired. | Used as another analogy for locating damage in England. [Para 111][Para 112] |
| Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391 | For the Tortious Act Gateway, damage must result from substantial and efficacious acts committed within the jurisdiction; some significant damage in the jurisdiction is enough for related claims. | Applied to permit reliance on the Tortious Act Gateway and to show that the expenses claim did not defeat jurisdiction. [Para 126][Para 130] |
| Hardy Exploration & Production (India) Inc v Government of India [2018] EWHC 1916 (Comm), [2019] QB 544 | For debt-related purposes, the situs of a debt is generally the debtor’s domicile unless an exclusive jurisdiction clause points elsewhere. | Relied on by Defendant but distinguished because the issue was the place of damage, not discharge of the debt. [Para 119][Para 120][Para 121] |
| Surzur Overseas Ltd v Koros [1999] 2 Lloyd's Rep 611 | Illustrates difficulties with a mechanics-based distinction in fraudulent-inducement cases involving asset dissipation. | Cited to show the weakness of Defendant’s proposed distinction between different methods of interfering with debt recovery. [Para 122][Para 123] |
| Singh v Dass [2019] EWCA Civ 360 | Appellate courts are cautious about new points; they should not usually be allowed if they require new evidence or would prejudice the other party. | Used to decide whether Company A could rely on the Tortious Act Gateway for the first time on appeal. [Para 133][Para 134][Para 135] |
Court's Reasoning and Analysis
The court rejected the suggestion that Company A’s loss was merely a reversible exposure to risk. It held that Company A alleged actual loss because the debt was recoverable when Company A was induced not to enforce it, but later became irrecoverable during the period of delay. [Para 114][Para 116]
The court then held that the relevant place of damage was England. The debt was payable there, and the essential harm was the non-recovery of money that should have been paid in England, not the debtor’s Swiss domicile or the technical situs of the debt. [Para 120][Para 121][Para 125]
In reaching that conclusion, the court drew on the line of authorities treating non-receipt of money where it should have been received as direct damage, and distinguished cases concerned only with the place of credit exposure or with debt situs for other purposes. [Para 86][Para 89][Para 100][Para 107][Para 112][Para 119][Para 122]
The court therefore upheld the Tort Damage Gateway and, by the same reasoning under Rome II Article 4(1), the Tort Applicable Law Gateway; because some significant damage was suffered in England, the expenses claim did not undermine jurisdiction. [Para 125][Para 126]
On the alternative Tortious Act Gateway, the court allowed Company A to raise the point on appeal because Defendant was already on notice of the London meeting evidence and could not show prejudice. It then held that the June 2022 meeting was capable of amounting to a fraudulent misrepresentation that substantially and efficaciously caused Company A to continue its non-enforcement and later suffer loss. [Para 139][Para 144][Para 149][Para 154]
The Necessary or Proper Party Gateway was not decided because the other gateways were sufficient to dispose of the appeal. [Para 156]
Holding and Implications
Appeal dismissed. The service-out order remained in place because Company A satisfied the Tort Damage Gateway and, alternatively, had an arguable case under the Tortious Act Gateway. [Para 125][Para 144][Para 156]
The direct effect was that the claim against Defendant could proceed in England; the court did not decide the Necessary or Proper Party Gateway, so no separate ruling was made on that issue. [Para 125][Para 156]
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