UT (Tax & Chancery) UT-2022-0000150 - [2024] UKUT 00254 (TCC)

On 23 September 2022, the Authority issued a decision notice to Barclays plc, imposing a penalty of £40m for breaching the Listing Rules in relation to the June 2008 capital raising. On the same day, the Authority issued a decision notice to Barclays Bank plc imposing a related penalty of £10m. Both references were referred to the Tribunal (“the Barclays References”).

On 19 April 2023, the Authority contacted Saranac’s representative, CMS Cameron McKenna Nabarro Olswang LLP (“CMS”), inviting that firm to consider how the possible “overlap” between the two sets of proceedings should be managed, and suggesting that Saranac’s Reference might be decided “at the same time” as the Barclays References.

On 24 April 2023, CMS objected to Saranac’s Reference being joined to the Barclays References “or in any way determined at the same time”, for reasons which included the following:

In a later email dated 25 April 2023, CMS said that if the Authority wished to take this matter further, it should make a formal application to the Tribunal, which Saranac would oppose.

On 2 May 2023, the Authority wrote to the Tribunal, copying both Saranac and Barclays, setting out extracts from the Saranac Reference and the Barclays References, and then saying:

“Whilst significant parts of the two sets of proceedings do not overlap, it is clear that in both sets of proceedings what the FCA alleges was the primary/ substantial/true purpose of the June Agreement is not accepted by the respective Applicants. It is therefore likely that in due course the Tribunal will be called on to determine the nature and purpose of the June Agreement in the two separate sets of proceedings. The FCA considers it appropriate to flag this issue to the Tribunal now so that it can consider whether any particular steps should be taken to minimise the chance of inconsistent outcomes. In this regard the FCA has already written to Saranac to seek its views as to whether its reference should be determined at the same time as (but not joined with) the Barclays references. Saranac has indicated a strong preference that its reference is heard separately and before the Barclays references, as it considers its references would otherwise likely be unduly delayed.

The FCA is neutral on this issue and is not seeking any directions in relation to it. Nevertheless we consider it appropriate that both the Tribunal, and all the relevant Applicants, are made aware of the overlap.”

In May 2023, with the consent of the Authority, Barclays and Saranac exchanged redacted copies of the Statements of Case issued by the Authority, and redacted copies of their respective Replies.

On 14 June 2023, Barclays wrote to the Tribunal submitting that the Saranac Reference should not be “heard or resolved at the same time” as the Barclays References, for essentially similar reasons to those given by CMS on 24 April 2023.

Mr Stanley’s skeleton argument on behalf of the Authority was filed and served a week before this hearing. It included the following passage:

“…there are ongoing, related, proceedings between Barclays and the FCA (in relation to the June 2008 capital raising, but also an October 2008 capital raising) for which a three-week substantive hearing is due to take place starting 25 November 2025 [an error for 2024]. The Authority has ensured that Saranac and Barclays (as well as the Tribunal) are aware of this overlap and has provided appropriate cross-disclosure. Saranac’s position is that its reference should proceed and be determined separately from the references of Barclays {CB/270/4047}. The Authority does not object to this provided it is not necessary for the Tribunal to make findings in this case on matters that are directly in issue in the Barclays references, and which might therefore lead to inconsistent outcomes on critical points. The Authority considers that is likely to be possible because this reference focuses on whether the factual account that Mr Kalaris gave when interviewed was accurate and candid, not on whether the prospectus was properly compliant with the Listing Rules. However, depending on how the case develops it is a point that needs to be kept under review.”

In the light of that passage, we asked the parties to set out their understanding of the potential for an overlap between (a) findings of fact made in this judgment and (b) disputed matters about which findings may need to be made in the Barclays References. We drew attention to Mr Stanley’s suggestion that the possibility of overlap “needs to be kept under review” as the hearing progressed.

On behalf of Saranac, Mr Winter said:

Mr Stanley’s position was that “the issues touch” such that Mr Kalaris’s evidence might therefore be relevant to the Barclays References. He submitted that “it was never too late for the Tribunal to stay the proceedings”, but that if he considered the procedure during the hearing was unfair to the Authority, he would make an appropriate application.

We asked if any representative from Barclays was attending the hearing, but there was no response. Mr Stanley noted that Barclays were well represented, and observed that they might have connected to the hearing remotely.