On appeal from: [2017] EWCA Civ 40.

This appeal considered whether it is permissible to maintain a claim for unlawful means conspiracy where the only unlawful means relied on are acts which are said to be unlawful only because they are breaches of court orders. It also considered whether, for the purposes of establishing jurisdiction under limb (b) of the Lugano Convention 2007, art 5(3), the place of the “event giving rise to [the damage]” is the place where the conspiratorial agreement was made, or the place where the lawful means was executed.

The Supreme Court unanimously dismisses the appeal. Lords Sumption and Lloyd-Jones give the lead judgments, with which Lords Mance, Hodge and Briggs agree.

The tort of conspiracy can be divided into “lawful means” conspiracy and “unlawful means” conspiracy, although that terminology is inexact. A person has a right to advance his own interests by lawful means, even if the foreseeable consequence is damage to the interests of others. Where he seeks to do so by unlawful means, he has no such right. The same is true where the means are lawful but the predominant intention of the defendant is to injure the claimant, rather than to further some legitimate interest of his own. In either case, there is no just cause or excuse for the “combination” with others. Conspiracy being a tort of primary liability, rather than simply a form of joint liability, the question what constitutes unlawful means cannot depend on whether their use would give rise to a different cause of action independent of conspiracy. The correct test is whether there is a just cause or excuse for the defendants combining with each other to use unlawful means. That depends on (i) the nature of the unlawfulness; and (ii) its relationship with the resultant damage to the claimant.

Unlike various other legal duties, compliance with the criminal law is a universal obligation. The unlawful means relied on in this case are contempt of court, which is a criminal offence. For that purpose, the defendant must have intended to damage the bank. The damage to the bank need not have been the predominant purpose, but it must be more than incidental.

The Court of Appeal, following Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akzo Nobel NV (C-352/13) [2015] QB 906, correctly identified the place where the conspiratorial agreement was made as the place of the event which gives rise to and is at the origin of the damage. In entering into the agreement, Mr Khrapunov would have encouraged and procured the commission of unlawful acts by agreeing to help Mr Ablyazov to carry the scheme into effect.  The making of the agreement should be regarded as the harmful event which set the tort in motion.

For judgment, please download: [2018] UKSC 19
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (24 Jan 2018 morning session) (25 Jan 2018 afternoon session) (25 Jan 2018 morning session)