[2025] EWHC 2480 (Ch)

The Defendants’ Case

I have dismissed all of the Direct, Indirect and TWPS claims on the merits and it is strictly unnecessary, therefore, for me to consider the Defendant’s contention that the Claimant were bound by an issue estoppel. However, because it was fully argued, I express my views on this issue as briefly as possible. FCIB pleaded its case in its Defence at paragraph 98A (and Mr Deuss pleaded a similar case):

“On 29 July 2024, the Court of First Instance of Curaçao handed down a judgment in proceedings in Curaçao, to which the Claimants in these proceedings are party. In that judgment, the Court of First Instance of Curaçao finally and conclusively determined on the merits that the Claimants have forfeited their right to assert claims against FCIB, by virtue of the rechtsverwerking principle. In the premises, the Claimants are unable to pursue their claims in these proceedings by virtue of the doctrine of issue estoppel.”

The Law

It was common ground that four conditions must be satisfied before a foreign judgment could give rise to an issue estoppel and that they are accurately set out in The Good Challenger [2003] EWCA Civ 1668, [2004] 1 Lloyd’s Rep 67 and cited in Hulley Enterprises Ltd v The Russian Federation [2025] EWCA Civ 108. In that case Males LJ referred to The Good Challenger and set out the principles at [36] to [38] and [41] to [42]:

“36.

The requirements for an issue estoppel to apply were summarised by Lord Justice Clarke in The Good Challenger [2003] EWCA Civ 1668, [2004] 1 Lloyd’s Rep 67:

‘50. The authorities show that in order to establish an issue estoppel four conditions must be satisfied, namely (1) that the judgment must be given by a foreign court of competent jurisdiction; (2) that the judgment must be final and conclusive and on the merits; (3) that there must be identity of parties; and (4) that there must be identity of subject matter, which means that the issue decided by the foreign court must be the same as that arising in the English proceedings: see, in particular Carl Zeiss Stiftung v Rayner C Keeler Ltd (No 2) [1967] 1 AC 853 (“the Carl Zeiss” case), The Sennar (No 2) [1985] 1 WLR 490, especially per Lord Brandon at p 499, and Desert Sun Loan Corporation v Hill [1996] 2 All ER 847.’

37.

Lord Justice Clarke continued, with particular reference to the position where, as in that case and in the present case, the issue estoppel is said to arise from the decision of a foreign court:

‘54. The authorities establish that there must be “a full contestation and a clear decision” on the issue in question. That is made clear in the speech of Lord Wilberforce in the Carl Zeiss case and (as the judge observed in paragraph 36) was echoed by Lord Brandon in The Sennar (No 2). The cases also underline four further important features of the approach of the courts to issue estoppel, which I will consider in turn. They are as follows:

i)

It is irrelevant that the English court may form the view that the decision of the foreign court was wrong either on the facts or as a matter of English law.

ii)

The courts must be cautious before concluding that the foreign court made a clear decision on the relevant issue because the procedures of the court may be different and it may not be easy to determine the precise identity of the issues being determined.

iii)

The decision of the court must be necessary for its decision.

iv)

The application of the principles of issue estoppel is subject to the overriding consideration that it must work justice and not injustice.’

38.

Although Lord Justice Clarke said that it was irrelevant that the English court may form the view that the decision of the foreign court was wrong, it is worth pointing out that the result of giving effect to an issue estoppel may be that the English court will never reach the stage of deciding what it would have decided on the issue in question in the absence of the foreign court’s decision. Issue estoppel, when it applies, renders this legally irrelevant. That will be the position in the present case if the plea of issue estoppel is upheld. One reason for ordering a preliminary issue in this case was that, if issue estoppel does apply, the delay and expense of a lengthy hearing to decide the no agreement issue will be avoided.”

41.

A qualification must be added to the conditions identified in The Good Challenger, which is that issue estoppel will not apply if ‘special circumstances’ are established (Arnold v National Westminster Bank Plc [1991] AC 93), although this may be simply another way of saying that issue estoppel must work justice and not injustice, a point also made by Lord Upjohn in the Carl Zeiss case at p.947:

‘As my noble and learned friend, Lord Reid, has already pointed out there may be many reasons why a litigant in the earlier litigation has not pressed or may even for good reason have abandoned a particular issue. It may be most unjust to hold him precluded from raising that issue in subsequent litigation and see Lord Maugham’s observations in the New Brunswick case [New Brunswick Railway Co v British and French Trust Corporation Ltd [1939] AC 1, 21]. All estoppels are not odious but must be applied so as to work justice and not injustice and I think the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind.’

42.

As Mr Justice Foxton observed in Czech Republic v Diag Human SE [2024] EWHC 2102 (Comm) at [224], this exception has generally been invoked when new evidence not discoverable by due diligence becomes available, but is not limited to such circumstances. Indeed, Arnold was not such a case.”

There was an issue between the parties whether a foreign judgment which is subject to an appeal is final and conclusive for the purposes of issue estoppel. Mr Parker and his team accepted that an English judgment would be treated as final and conclusive until overturned on appeal. But they did not accept that a foreign judgment which was subject to appeal would also be treated as final and conclusive in the same way or, at least, not automatically. Mr Scott and his team submitted that a foreign judgment is just like an English judgment and binding until set aside on appeal.

There is surprisingly little recent authority on this point. In Nouvion v Freeman (1885) 15 App Cas 1 all of the members of House of Lords agreed that the decision of a Spanish Court on a claim under a form of summary enforcement procedure was not binding and conclusive because it could be challenged in a court of equivalent jurisdiction. However, Lord Herschell LC and other members of the panel all expressed the general principle in terms that a decision which is binding subject only to an appeal would be treated as conclusive and binding by an English Court. He stated this at 11:

“The principle upon which I think our enforcement of foreign judgments must proceed is this: that in a court of competent jurisdiction, where according to its established procedure the whole merits of the case were open, at all events, to the parties, however much they may have failed to take advantage of them, or may have waived any of their rights, a final adjudication has been given that a debt or obligation exists which cannot thereafter in that court be disputed, and can only be questioned in an appeal to a higher tribunal.”

The various formulations of the principle in Nouvion v Freeman were obiter dicta but in Colt Industries Inc. v Salie (No. 2) [1966] 1 WLR 1287 the Court of Appeal followed it and held that a decision of the Supreme Court of the State of New York was binding even though an appeal was pending. I regard that decision as binding authority on this issue. However, I note that Russell LJ also stated as follows at 1287:

“If there were a stay on the New York judgment it would not be possible, while that stay persisted, to sue on that judgment in this country, because present enforceability is relevant to the question of the finality and conclusiveness of a foreign judgment; but on the question whether a judgment lacks finality or conclusiveness for lack of enforceability, regard can only be had to the system of law applied by the court whose foreign judgment is in question, and not to other systems of law.”

Finally, both parties referred to The Sennar (No 2) [1985] 1 WLR 490 where Lord Diplock stated the principle in the same terms as the House of Lords in Nouvion v Freeman even though it was not in issue in that case because an appeal had already been determined by the Dutch Court. He stated this at 494A-B:

“It is often said that the final judgment of the foreign court must be "on the merits." The moral overtones which this expression tends to conjure up may make it misleading. What it means in the context of judgments delivered by courts of justice is that the court has held that it has jurisdiction to adjudicate upon an issue raised in the cause of action to which the particular set of facts give rise; and that its judgment on that cause of action is one that cannot be varied, re-opened or set aside by the court that delivered it or any other court of co-ordinate jurisdiction although it may be subject to appeal to a court of higher jurisdiction.”

The Curaçao Judgment

FCIB issued two sets of proceedings in the Curaçao Court of First Instance. In the first action Defendants 1 to 4 were Mr Hunt, Mr Bramston, Ms Hall and TWPS, Defendant 25 was Star and Defendants 7 and 69 to 85 were companies in liquidation of which Mr Hunt, Mr Bramston and Ms Hall were the liquidators including ten MTIC Companies (385 North, ACEL, Kingswood, MML, MTL, Northdata, Eliyon, Gold Digit, Xicom and Wood Works). In the second action FCIB brought a separate claim against Mr Hunt alone and in his capacity as the liquidator of TWPS.

In the Curaçao Judgment the Judge began by setting out a number of definitions. They included the term the “English Claimants” by which he referred to Defendants 7 and 69 to 85 in the first action. In section 1 he set out the procedural history and in section 2 he set out the facts primarily focussing on the negotiations between the IPs and FCIB. In section 3 he set out the claims incorporating certain amendments which had been made (and which I reproduce below):

“3.2.

In the actions with numbers CUR201601573 and CUR201601574 (through which latter proceedings the failure to also involve Hunt in his capacity as liquidator of defendant number 4 TWPS in the first proceedings was rectified), FCIB, by provisionally enforceable judgment, still claims as follows:

I. principally (i) to rule that, under the so-called TWPS claim, to the extent based on an unlawful act with regard to facilitating or assisting in the MTIC fraud, nothing is owed by FCIB to TWPS, nor to Hunt as liquidator of TWPS, to the extent that this claim does not relate to the claim pursuant to section 213 Insolvency Act (in respect of which the court does not have jurisdiction) and

(ii)

to order TWPS and Hunt as liquidator of TWPS to confirm in writing to FCIB, within two days from the date of the judgment, that the letter referred to above in 2. r. above, to the extent based on an unlawful act, has been revoked and that they have no claim whatsoever against FCIB and/or "FCIB entities", to the extent based on an unlawful act, subject to a periodic penalty payment;

in the alternative to order the English Claimants, as well as Hunt, Brampton and Hall, both in their capacities as such and in person, to indemnify FCIB and hold that party harmless from and against the TWPS claim for any amount that FCIB may turn out to owe to TWPS;

II. to rule a) that the English Claimants, as well as Hunt, Bramston and Hall, both in their capacities as such and in person, have been in breach of their obligations towards FCIB and/or have acted unlawfully towards FCIB, and b) that they and Hunt, Bramston and Hall in person have acted unlawfully towards FCIB;

III. to order the defendants to comply with the settlement agreements and to refrain from any conduct towards FCIB and "FCIB entities" in breach of the provisions of article SECOND (1) of those agreements, subject to a periodic penalty payment.”

I will refer to the three claims above as “Claim I”, “Claim II” and “Claim III”. In section 4 the Judge set out his assessment of all three. In relation to Claim I he set out FCIB’s interest in obtaining a negative declaration that it owed nothing to TWPS in relation to the “so-called TWPS claim”. He then set out the basis of that claim:

“4.2.

According to FCIB, the liquidators, TWPS and the English Claimants have nothing to claim from it, both on substantive grounds and because they are bound by the settlement agreements, or in any case have forfeited their rights, if any, in the matter of the TWPS claim.

4.3.

FCIB argues in this regard, in summary, that the purpose of the settlement agreements, as also follows from the preceding correspondence with the liquidators and with the UK tax authorities HMRC, was that `total peace' would be achieved and that the entire dispute between FCIB, its account holders, the liquidators and HMRC would be permanently resolved. This concerned not only the account holders` balances, but also their liquidators' complaint against FCIB that FCIB had facilitated the MTIC fraud committed by the account holders, HMRC's claims, and FCIB's allegation that, by taking part in the fraud, the account holders had caused harm to FCIB. According to FCIB, the MTIC fraud had, in the view of HMRC, been settled as far as FCIB was concerned, through the settlement agreements and the payments received by HMRC as a result from these, meaning that HMRC no longer asserts any claims against FCIB or its account holders. According to FCIB, the liquidators had by means of a trick, prior to the settlement agreements, while not disclosing this to FCIB, revived FCIB's sister company TWPS, which had been liquidated years earlier, and, as liquidators of the English Claimants (who had no or hardly any balances with FCIB and whom they failed to name as account holders on whose behalf the settlement agreements were entered into) had constructed claims against TWPS in respect of HMRC debts on account of the involvement of TWPS in facilitating the MTIC fraud, which claims were subsequently indiscriminately accepted by Hunt as liquidator of TWPS and presented to FCIB by him (up to an amount of approximately GBP 182.5 or GBP 415 million), all this while, according to FCIB, HMRC no longer has any interest in the case and considers it closed as a result of the settlement agreements, including in respect of the English Claimants.

4.4.

According to FCIB, all that the liquidators are now still out for is their own gain only, pointing out that - as has not been disputed by the defendants and, according to them, is nothing special in the English system - the liquidators receive 50% of what TWPS collects from FCIB by way of `remuneration', and subsequently another 50% of what the English Claimants receive from TWPS.”

The Judge then made it clear that he was not expressing a view on the merits of the TWPS claim: see paragraph 4.5. He went on next to rule in FCIB’s favour in relation to forfeiture of rights. Because his reasons were fairly short I set them out in full:

“4.6.

The court agrees with FCIB that rights have been forfeited and that the liquidators cannot, after the conclusion of the settlement agreements, approach FCIB after all and present it with a claim from the revived TWPS in respect of claims by the English Claimants.

4.7.

The reason for this is that it should have been evident to the liquidators and the other parties involved in the settlement agreements, as also appears from the correspondence, that the intention of those agreements was for a final resolution to be reached to the dispute and the emergency measure that had been dragging on for many years. The purpose of the settlement agreements was clear to all those concerned: after (at least) 10 years since the discovery of the MTIC fraud and eight years since the imposition of the emergency measure in respect of FCIB under the supervision of the Central Bank, a final settlement had to be reached. This is reflected in so many words in the waiver provision SECOND (1) of the settlement agreements. The words 'total peace' do not appear therein, but they do appear in the correspondence preceding it, and it was clear— it had to be clear – to all parties that 'total peace' was the objective. In line with this, it must have been clear to all the parties that the 'deal' was concluded on the assumption that everything known to the parties and interested parties at that time would be covered thereby. This is not consistent with the fact that the liquidators, who were also liquidators of TWPS and the English Claimants at the time, came up afterwards with alleged claims on behalf of TWPS and account holders not mentioned in the annexes to the settlement agreements. Account holders who, please note, had no significant balances, and, therefore, were not likely to have any relevance in terms of the envisaged amount of the settlement.

4.8.

The liquidators did not mention and involve the English Claimants in the settlement agreements, nor did they notify FCIB that they had revived TWPS. Meanwhile, however, in their capacity as liquidators of the English Claimants and TWPS, they did take note of the negotiations that they themselves, in their capacity as liquidators of the Settlement Companies, were conducting with FCIB. The liquidators negotiated with FCIB/the Central Bank in their capacity as liquidators of the Settlement Companies, but at the same time, in that same capacity, also acted in their capacity as liquidators of the English Claimants/TWPS. As such, (in part in their capacity as liquidators of the English Claimants) they also learned of the aim envisaged by FCIB (and by the Central Bank's) of bringing about 'total peace' between FCIB, its account holders and HMRC, which 'peace' would also benefit all FCIB-affiliated entities (such as TWPS, see below). The liquidators, TWPS and the English Claimants saw all this happening, so to speak, and allowed FCIB to believe that a final settlement was reached, only to subsequently present their TWPS claim, after the settlement amount had been paid. Even if, contrary to FCIB's contention, there was no preconceived plan and this was not done in bad faith, the liquidators, in their capacity as liquidators of the English Claimants, must nevertheless have realised that the negotiations would have looked very different if the claims of hundreds of millions alleged by the English Claimants/TWPS had been involved in those negotiations and that, in that case, these claims would have been expressly included in any settlement.

4.9.

By failing to disclose their capacity as liquidators of the English Claimants/TWPS in the negotiations and when entering into the settlement agreements, they have, in view of, in particular, the circumstances outlined in the two preceding paragraphs, forfeited their right to nevertheless hold FCIB liable for wrongful conduct in the matter of facilitating, or assisting in, the MTIC fraud. Holding FCIB liable for the TWPS claim, as happened with the letter quoted under 2.r. above, is unacceptable by the standards of reasonableness and fairness as referred to in article 2 of Book 6 of the Curacao Civil Code, due to its being incompatible with their attitude during the negotiations and when concluding the settlement agreements. FCIB was entitled to be confident that the liquidators would not afterwards come forward with claims in their previously undisclosed capacity. Moreover, FCIB is unreasonably disadvantaged by this. It was entitled to consider the dispute with HMRC and its account holders in connection with the MTIC fraud as settled after the execution of the settlement agreements. A further claim relating to the same dispute defeats the completion envisaged by the settlement agreements and hinders the winding down of the emergency measure.

4.10.

The foregoing entails that the declaratory decision claimed by FCIB under (i) is admissible.”

Claim II is the only other claim which is relevant for present purposes and, in particular, Claim II(a) which involved the argument that the English Claimants were parties to the IPSAs. The Judge rejected this argument for the following reasons:

“4.14.

The court does not concur with FCIB in its view that the English Claimants should be deemed to be parties to the settlement agreements. The English Claimants are not named as parties to those agreements and the agreements were not co-signed on their behalf. Nor were these English Claimants named as parties, or intended parties, in the preliminary stage. There is no provision in the agreements that these are also entered into on behalf of all other, unidentified, account holders whose liquidators were the liquidators. The fact that FCIB assumed that the liquidators had listed all their companies is not, in the court's view, sufficient to consider the unlisted companies as contracting parties as well.

4.15.

Therefore, the English Claimants were under no obligation to perform the settlement agreements, which implies that it cannot be ruled that they have failed in the performance of these. However, all this does not affect the possibility, as also held above in respect of TWPS, that the settlement agreements and the acts and omissions of the English Claimants and their liquidators preclude claims by the English Claimants against FCIB.”

Having dealt with Claim II(b) and III (which are not relevant for present purposes) the Judge then set out his decision in both sets of proceedings in section 5. I have set out his ruling at [40] but for ease of reference I repeat it here:

“The Court 5.1. rules that nothing is owed by FCIB to either TWPS or Hunt as liquidator of TWPS by virtue of the so-called TWPS claim, insofar as it is based on an unlawful act in respect of facilitating or assisting in the MTIC fraud, to the extent that this claim does not relate to the claim under section 213 Insolvency Act - in respect of which the court does not have jurisdiction…5.3. dismisses all other applications; 5.4. sets off the costs between the parties in such a way that each party will pay its own costs.”

Expert evidence

The Claimants called Mr Bart van der Weiel, who is a partner at Houthoff and head of the Supreme Court Litigation team, and was a Deputy Judge of the Arnhem Court of Appeal between 2011 and 2021. He made an expert report on 15 October 2024 (“ van der Weiel 1”) and on 14 February 2025 added an addendum to it (“van der Weiel 2”). FCIB called Professor Jan Biemans, Professor of Law at Utrecht University and a substitute Justice at the Court of Appeal of Arnhem-Leeuwarden. Professor Biemans made an expert report dated 16 October 2024 (“Biemans 1”) and a second expert report dated 13 February 2025 (“Biemans 2”). Mr Deuss called Professor Riemert Tjittes, a partner in the law firm BarentsKrans Coöperatief UA and a deputy Justice of the Netherlands Commercial Court. He made an expert report dated 16 October 2024 (“Tjittes 1”).

Mr van der Weiel and Professor Biemans dealt with the question whether the Curaçao Judgment was final and conclusive in their second reports. There was an issue between them about the doctrine of res judicata and whether a judgment was binding. Professor Biemans stated as follows in Biemans 2:

“17.

Before I deal with res judicata and the general principles of civil procedure, I would like to stress that under Curaçao law, while a judgment decided at first instance which is the subject of an appeal does not carry res judicata effect, it nonetheless qualifies as a final judgment at first instance where the entire claim is the subject of the proceedings decided upon by the Curaçao court and the proceedings in first instance have come to a final end.

18.

A judgment in which a court (either the Curaçao First Court of Instance or the Joint Court of Appeal) terminates the proceedings with regard to any part of the claim by an explicit operative part, qualifies as a final judgment (eindbeslissing). Because of such final judgment, the proceedings in that instance (either first instance or appeal) come to a final end. No additional procedures are necessary, and in principle the court cannot alter its reasoning and decision(s) in that judgment anymore (except for third party opposition and revocation).

19.

Although the term ‘conclusive’ does not have a distinct or independent legal meaning under Curaçao law, given that a final judgment is a judgment that represents a final determination of all the matters raised during the proceedings in that instance and determines the rights and obligations of the parties to these proceedings, on these grounds a final judgment can also be considered to be a conclusive judgment.

20.

Whereas a final judgment does not have to be irreversible, in the sense that the parties cannot affect it anymore by taking recourse to a legal remedy through the appeals process (as explained below with respect to res judicata), such judgment is still final and conclusive in the sense that it is not subject to additional proceedings before the same court that rendered the judgment. It should be noted that a final judgment of the Curaçao Court of First Instance consisting of a negative declaration, for example that one party owes nothing to the other party (as is the case in the Curaçao proceedings), and which has been appealed (as is also the case as between FCIB, Mr Hunt and TWPS), will remain in force during the appeal, and this would only change if (and only if) the Joint Court of Appeal would set aside such final judgment on appeal. The appeal does in particular not suspend the decision with the negative declaration in the operative part of the final judgment (as it would, if it would have been a condemnatory order). Also, should the final judgment be set aside on appeal, the final judgment will always have been in force between the parties from the date of the final judgment of the Curaçao Court of First Instance until the date of the judgment of the Joint Court of Appeal in which it would have been set aside.”

Mr Scott cross-examined Mr van der Weiel at length about this passage and subject to some differences in terminology he accepted it. In particular, he accepted that the decision of the Court of First Instance had legal force as soon as it was handed down in the sense that it concluded the proceedings at that level and that it could only be challenged on appeal. He also accepted that although in theory it was permissible to re-litigate the same issue by starting new proceedings, it would be an abuse of process and he had never seen it done in 20 years of practice.

Findings

I find that the Court of First Instance was a court of competent jurisdiction. The Claimants submitted to the jurisdiction of the Curaçao court and they have appealed against the decision. Mr Parker and his team did not argue that it was not competent to hear the dispute. But in case there is any doubt, I am satisfied that it was.

I accept Professor Bieman’s evidence that the Curaçao Judgment was final and conclusive subject to the appeal and cross-appeal. Mr van der Weiel did not really disagree with Biemans 2, paragraphs 17 to 20 (above) other than in very minor respects and it became clear that the only issue between them was whether the decision prevented the Claimants from bringing a new action to re-litigate the same issues as a matter of substantive law or whether it would be struck out as an abuse of process. Either way, I am satisfied that the decision is final and conclusive.

I find that there was identity between the parties to the Curaçao Judgment and the parties to the present action. TWPS and Mr Hunt and were parties to both actions in Curaçao and Mr Hunt was a party in his capacity as liquidator of TWPS (and in his capacity as liquidator of a number of other companies). TWPS and Mr Hunt in his capacity as liquidator of TWPS are the Claimants in the present action.

However, I am not satisfied that there is an identity of subject matter or a sufficient identity of subject matter to give rise to an issue estoppel. I have reached that conclusion for the following reasons:

Special Circumstances

Finally, whatever the correct analysis, I am satisfied that there are special circumstances in the present case which make it inappropriate to give effect to an issue estoppel and I decline to do so. In my judgment, the following factors or circumstances bring the present case within the exception: