Lakatamia Shipping v Nobu Su: Court of Appeal confirms conspiracy liability despite Babanaft proviso

The Court of Appeal has overturned a High Court decision, holding that three defendants were liable for unlawful means conspiracy after funds subject to a freezing order were dissipated to a company owned by the first defendant's mother.

Lakatamia Shipping obtained judgements totalling over US$47.6 million against Nobu Su and his companies following a 2008 derivative instruments dispute. A worldwide freezing order had been in place since August 2011. When two Monaco villas owned by Cresta Overseas (beneficially owned by Mr Su) were sold for €65.1 million in October 2015, approximately €27 million in proceeds ultimately reached Maître Zabaldano, Cresta's Monaco lawyer, in February 2017.

On Mr Su's instruction, Mr Chang Tai-Chou (a director of multiple Su-controlled companies) instructed Maître Zabaldano to transfer these funds to UP Shipping, another Su-controlled entity. Maître Zabaldano complied on 23 February 2017, transferring US$26.7 million. The Monaco courts recognised the English judgements in July 2017, but by then the funds had vanished.

The Deputy Judge's decision

At first instance, Simon Colton KC found that Maître Zabaldano knew of the freezing order, the judgement debt, and Mr Su's beneficial ownership of Cresta Overseas. He also found Maître Zabaldano knew the transfer would breach the freezing order. Despite these findings, the Deputy Judge dismissed the conspiracy claim against Maître Zabaldano, concluding that the Babanaft proviso—which states freezing orders "do not affect or concern anyone outside the jurisdiction of this Court"—provided a defence.

The claim against Mr Chang failed because the judge was not satisfied Mr Chang knew of either the freezing order or the outstanding judgement debt. With both co-conspirators absolved, Mr Su could not be liable for conspiracy alone.

Court of Appeal's analysis

Lord Justice Males, giving the leading judgement with which Lady Justice Falk and Sir Julian Flaux agreed, found the Deputy Judge's factual conclusions regarding Mr Chang's knowledge were "plainly wrong". Given Mr Chang's directorship of multiple companies subject to the freezing order, his involvement in swearing affidavits of assets, and the disruption the order would have caused, it "beggars belief" that he lacked knowledge of either the order or judgement debt.

On the Babanaft proviso, the Court held that the Deputy Judge was bound by Supreme Court authority in JSC BTA Bank v Ablyazov [2018] UKSC 19. That case established that whilst the proviso may protect foreign parties from contempt proceedings, it does not immunise them from civil liability for conspiracy. The proviso's irrelevance to conspiracy claims stems from the fact that the claim alleges conspiracy with the respondent to breach his obligations—and the respondent (here Mr Su) is by definition subject to the court's jurisdiction.

The Court emphasised that whilst not all conspirators need personally use unlawful means, Mr Su's breach of the freezing order constituted unlawful means, which Maître Zabaldano assisted in achieving.

Outcome and observations

The appeal was allowed and judgement entered against all three defendants. The Court declined to resolve certain questions about the emerging "Marex tort" (inducement of breach of judgement rights), noting these should await a case with full argument where they prove determinative.

The decision reinforces that offshore professionals who knowingly assist in breaching English court orders face potential civil liability, regardless of territorial location or professional obligations under foreign law.

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