A recent case confirms that where a third party seeks to put assets beyond the reach of a judgment creditor, or assists a judgment debtor in doing so, the judgment creditor has a cause of action under the ‘Marex tort’ against the third party. This is an important addition to the rights of judgment creditors, providing an additional opportunity to recover loss.

In Lakatamia Shipping Co Ltd v Nobu Su [2021] EWHC 1907 (Comm), Lakatamia had obtained a Commercial Court judgment against Nobu Su, the former billionaire shipping magnate. Upon enforcement, it discovered that Mr Su, with the assistance of his mother (known as ‘Madam Su’), had dissipated his assets, including a private jet and two Monegasque villas. Lakatamia took action against Madam Su.

The court found that she had conspired with her son to place the proceeds of sale for the private jet and villas beyond the reach of Lakatamia, frustrating Lakatamia’s attempts to enforce its judgment and in breach of a freezing order. She was accordingly liable for damages.

The ‘Marex tort’ had been established in a Supreme Court decision last year in Sevilleja –v- Marex Financial Ltd [2020] UKSC 31. There, Marex had obtained judgment for approximately $5.5m against two companies owned by Mr Sevilleja but in the days that followed handing down of the draft judgment, Mr Sevilleja stripped those companies of their assets and put them into liquidation, denying Marex any chance of recovery.

Marex consequently pursued Mr Sevilleja for the torts of:

  • knowingly inducing and procuring the Sevilleja Companies to act in “wrongful violation” of Marex’s rights under the earlier judgment; and
  • intentionally causing loss to Marex by unlawful means, i.e. by violating the fiduciary duties owed to the Sevilleja Companies through misappropriation of funds that the Sevilleja Companies needed to meet obligations to creditors.

The Court of Appeal had denied Marex any direct recourse against Mr Sevilleja, Overturning that decision however, the Supreme Court recognised for the first time that wrongfully violating judgment rights by putting assets beyond the reach of creditors was in fact a tortious cause of action.

Without the right of recourse against Mr Sevilleja personally, Marex would have only been able to pursue the companies and rely on liquidators to seek to recoup the assets from Mr Sevilleja. That process can be time consuming and costly and assets recovered belong to the company. The right of direct recourse against the third party, Mr Sevilleja, offered the possibility of a speedier and fuller recovery.

The Marex tort finds a close, and I consider compelling, analogy with the tort of inducing a breach of contract. There would seem to be no compelling reason why, in circumstances where the law protects against intentional interference by third parties with contractual rights it should not equally protect against intentional interference with rights established by judgments.