Court of Appeal confirms claims in tort for nickel fraud satisfy jurisdictional gateways

Sucden Financial Ltd v TMT Metals AG & Ors [2026] EWCA Civ 986 (31 July 2026)

We previously reported on the Commercial Court decision in this case: Nickel Fraud Case: English Jurisdiction | Hill Dickinson. That article explained why the Court dismissed a challenge to its jurisdiction over claims in tort for deceit, fraudulent misrepresentation and conspiracy arising out of a nickel fraud. The Court decided that, on the facts of the case, the damage forming the basis of the claim had been sustained within the jurisdiction. Therefore, proceedings were validly served on the defendant out of the jurisdiction.

The Court of Appeal has now dismissed an appeal from that decision. In doing so, it has provided valuable appellate guidance on determining issues of jurisdiction in the context of determining jurisdictional issues where a claim is made in tort.

Tort jurisdictional gateways

Section IV of CPR 6 and Practice Direction (PD) 6B deal with service of proceedings out of the jurisdiction. Para. 3.1 of PD 6B deals with service of proceedings out of the jurisdiction where the Court’s permission is required. Para. 3.1(9) deals with claims in tort and states at para 3.1(9)(a) that a claim is made in tort where damage was sustained, or will be sustained, within the jurisdiction (Tort Damage Gateway). Para. 3.1(9)(c) is the jurisdictional gateway when arguing that English law governs the tort in question (Tort Applicable Law Gateway).

The background facts

In February 2010, Sucden Financial Ltd (Sucden), a derivatives and commodities broker incorporated in England and Wales, entered into a futures and options trading facility (Facility) with TMT Metals AG (TMT), a metal trader incorporated in Switzerland. Mr Gupta, a Dubai resident, described himself as an indirect shareholder in and sole director of TMT. The Facility was governed by English Law and subject to the jurisdiction of the English courts, with Sucden having the right to bring proceedings in other courts.

In essence, Sucden made margin calls on TMT in respect of the Facility which TMT did not pay. However, Sucden subsequently alleged that Mr Gupta and TMT had offered to provide security for TMT’s debt in the form of a bill of lading in respect of nine containers ‘said to contain’ 144 bundles of plate nickel cathodes. Sucden maintained that TMT and Mr Gupta had at various times represented that the cargo was indeed nickel cathodes when they knew that it was not.

As a result of these representations, Sucden entered into a Memorandum of Deposit (MoD) with TMT in August 2022 whereby it forebore to enforce the debt in return for a pledge of the bill of lading as collateral. The MoD was subject to an event of default regime, however. It also provided that any non-contractual obligations arising out of or in connection with the MoD were governed by English law. TMT agreed to the exclusive jurisdiction of the English courts, with Sucden having the right to commence proceedings elsewhere.

Ultimately, TMT failed to discharge its debt to Sucden within the time agreed, Sucden declared an Event of Default under the MoD and took steps to exercise its rights as pledgee in relation to the containers in question. It then discovered that they contained only a low-value metal composite.

Sucden commenced English court proceedings against both TMT and Mr Gupta, as well as the shipper in question. Sucden commenced a claim in contract against TMT under the Facility as well as the MoD. It also brought claims in tort for deceit, fraudulent misrepresentation and conspiracy against the defendants.

The fraudulent representations and deceit relied on by Sucden were said to have taken place during various telephone conversations but also at meetings, including a meeting in London. The loss and damage claimed was loss of the ability to recover the debt due from TMT (which it was alleged would have been recovered but for the forbearance fraudulently induced) together with expenses incurred in taking possession of and inspecting the containers.

TMT was validly served within the jurisdiction, having appointed an agent for service pursuant to the MoD. The Court gave leave to serve proceedings out of the jurisdiction on Mr Gupta and the shipper. Sucden subsequently obtained summary judgment against TMT for its debt claim. Leave to appeal that decision was refused.

Mr Gupta challenged the validity of service of proceedings on him. He contended that so far as the Tort Damage Gateway was concerned, the loss had occurred where the misrepresentations were made and/or that the forbearance in not pursuing the claim against TMT did not constitute damage for the purpose of the Tort Damage Gateway, being merely ‘prefatory’ to the sustaining of damage. For this reason also, Mr Gupta argued that the Tort Applicable Law Gateway did not apply either.

The Commercial Court found that there was a good arguable case that the claims against Mr Gupta fell within the Tort Damage Gateway. Among other things, the meeting alleged to have taken place in London was sufficient to show damage sustained within the jurisdiction in the form of delaying any attempts by Sucden to take action against TMT. The representations made at that meeting caused Sucden to continue to wait rather than to enforce the debt.

Mr Gupta appealed.

The Court of Appeal decision

The appeal was dismissed.

On the authorities, where a defendant fails to meet its monetary obligations by providing security, the damage is felt where the money was to be received. That is the place where the loss is suffered. A key question is what would have happened if the tort had not been committed, albeit that it may not always be easy to identify the place where economic loss has occurred. In this case, but for the tortious conduct complained of, the debt would have been paid to Sucden where it was due, in London.

On the facts of this case, Sucden argued that it could and would have recovered the debt due from TMT at the time that Mr Gupta had made false representations intended to induce Sucden to refrain from enforcing the debt, but that the debt had likely ceased to be recoverable by the time the falsity of those representations became apparent. That was its loss.

Sucden had a good arguable case that a fraudulent misrepresentation was made by Mr Gupta at the London meeting, which was a substantial and efficacious cause of the non-enforcement of the debt from that point onwards, and hence of the loss Sucden claimed.

Consequently, the Court of Appeal decided that both the Tort Damage Gateway and the Tort Applicable Law Gateway were satisfied in this case.

Comment

It would appear Mr Gupta is considering appealing to the Supreme Court: see Sucden Financial Ltd v TMT Metals AG & Ors [2026] EWCA Civ 1080 (10 August 2026). The Court of Appeal has, however, declined to suspend the progress of the proceeding pending the determination of any application by Mr Gupta to challenge the Court of Appeal’s decision on jurisdiction.

In the meantime, this decision highlights that those seeking to serve proceedings out of the jurisdiction should be careful to rely on all available jurisdictional gateways. In this case, Sucden also relied on the Necessary or Property Party Gateway but the Court did not need to consider it in detail as it had already accepted that the Tort Gateways applied.

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