UK Finance Act on limitation period for tax recovery infringes EU law

Author: JHA - 09 Jan 2015

The CJEU gave judgment without an Opinion from the Advocate General. Its decision, unsurprisingly, follows that of the Supreme Court in FII and the CJEU’s own judgment in Case C-362/12 FII (3rd reference). The CJEU found that section 107 FA 2007 breached the EU law principles of effectiveness and protection of legitimate expectations. The UK had failed to uphold its obligation under Article 4(3) TEU to guarantee tax payers the right to a refund of unlawfully levied taxes. Although the UK government had argued that an amendment of section 107 FA 2007 was contemplated, the CJEU rejected this as irrelevant to the situation existing in the UK at the time.

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Iran sanctions: disclosure of information under ECHR

Author: JHA - 08 Jan 2015

A bank challenging financial restrictions affecting it was entitled to disclosure of sufficient information about the allegations against it to enable it to give effective instructions to special advocates in a closed hearing.

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Conflict of laws: jurisdiction over foreign company derivative claims

Author: JHA - 08 Jan 2015

The common law jurisdiction of the English courts over foreign company derivative claims has not been revoked by the Companies Act 2006. The Claimant owned 50% of the Third Defendant, a company incorporated in the BVI. It commenced English proceedings, both in its own right and in a derivative action on behalf of the Third Defendant. The claims were brought against the First Defendant, the owner of the other 50% of the Third Defendant, for breaches of, amongst other things, a shareholders’ agreement, and against the First Defendant’s representative director on the board of the BVI company, the Second Defendant, for breaches of fiduciary duty. The First and Second Defendant applied to the English court for, inter alia, an order setting aside permission to serve the English proceedings out of the jurisdiction.

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Fiduciary duty in the UKSC: bribe held on trust by agent for principal

Author: JHA - 08 Jan 2015

The Respondents purchased the issued share capital of a Monegasque company which owned a leasehold interest in a Monte Carlo hotel. The Appellant acted as the Respondents’ agent in negotiating the purchase. The Appellant had also entered into an agreement with the vendor which provided for the payment to the Appellant of a €10 million fee following successful conclusion of the sale. The Respondents issued proceedings seeking recovery of the sum of €10 million.

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Disclosure of insurance: injunction as a remedy

Author: JHA - 07 Jan 2015

Whether a claimant can enforce an eventual judgment may depend on the defendant having insurance. Finding out about insurance can be relevant to whether to pursue proceedings. However, the case law shows that it can be difficult to obtain disclosure about whether the defendant has effective insurance cover.

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EU sanctions on Russia: France and Germany warn

Author: JHA - 07 Jan 2015

The French president, François Hollande, has suggested lifting the EU sanctions on Russia ahead of a multinational summit on the situation in Ukraine, which is due to take place on 15 January. The German Vice-Chancellor, Sigmar Gabriel has also spoken against imposing further sanctions against Russia.

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Court of Appeal applies Mitchell and Denton to appeal notice extensions

Author: JHA - 07 Jan 2015

The Applicants had each failed to file a notice of appeal within the time prescribed by CPR r 52.4(2) and sought extensions of time. The Applicants argued that since applications for extensions of time were neither applications for relief from sanctions under CPR r 3.9 nor sufficiently analogous, the court’s jurisdiction was untrammelled by the Mitchell/Denton principles and the court should make whatever order it considered just. Whilst the Court of Appeal accepted that the applications were not formally applications for relief from sanctions under r 3.9, it held that applications for extensions of time for filing a notice of appeal should be approached in the same manner because the implied sanction of the loss of the right to pursue the appeal meant they were analogous. Therefore the Mitchell/Denton principles apply to such applications (paragraph 36).

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Stay of winding-up petition under s 9 Arbitration Act: Court of Appeal rules

Author: JHA - 07 Jan 2015

The Appellant petitioned to wind up the Respondent. The Appellant and the Respondent were the lessor and lessee respectively under a lease of commercial property. The Appellant claimed that the Respondent owed sums due to it under the lease. The lease contained an arbitration agreement. The Respondent objected to the petition on the grounds that the debt due was disputed and the dispute had to be referred to arbitration. (It was not in issue that the disputed debt fell within the arbitration agreement.) On the application of the Respondent, the court ordered that the petition be stayed under section 9 of the Arbitration Act. The Appellant appealed.

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FII GLO (Dividend Tax and ACT): quantification judgment favours taxpayers

Author: JHA - 30 Dec 2014

On 18 December 2014 the High Court (Henderson J) gave judgment on the quantification issues arising in the FII group litigation following a hearing in May and June of this year. The Judge also gave provisional views on two situations which did not arise on the test cases: first, where EU-source income was taxed in an intermediate company on its way to the UK, the relevant nominal rate was that of the intermediate company (if higher than that of the ultimate source country); secondly, while in principle a nominal rate credit was not required for income originating in a third country (even where it was paid to the UK via an EU mixer company), where the income was taxed in the EU on its way to the UK the income would attract a nominal rate credit at the rate of the intermediate company.

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Court of Appeal rejects UK attempt to re-open FII litigation arguments

Author: JHA - 16 Sep 2014

The Court of Appeal in London has decided the UK tax authorities should not be allowed to change their defence in the Franked Investment Income Group Litigation on the issue of liability as that aspect of the case has already been finalised. Originally printed in International Tax Review, 16 September 2014

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