Denmark's dividend tax lawsuit heads for UK Supreme Court

The Danish tax authority's attempt to pursue almost 80 defendants in London over alleged tax fraud, including Dubai-based hedge fund manager Sanjay Shah's Solo Capital Partners, is heading for the UK Supreme Court, lawyers said on Monday. The Danish Customs and Tax Authority, Skatteforvaltningen (SKAT), alleges Shah and others duped them between 2012 and 2015 into refunding dividend taxes that should never have been paid in the so-called "cum-ex" scandal.

The Danish tax authority's attempt to pursue almost 80 defendants in London over alleged tax fraud, including Dubai-based hedge fund manager Sanjay Shah's Solo Capital Partners, is heading for the UK Supreme Court, lawyers said on Monday.

The Danish Customs and Tax Authority, Skatteforvaltningen (SKAT), alleges Shah and others duped them between 2012 and 2015 into refunding dividend taxes that should never have been paid in the so-called "cum-ex" scandal. Shah denies wrongdoing. In one of the biggest civil litigation claims to be heard in England, SKAT was seeking 1.44 billion pounds ($1.7 billion) in damages from 114 British defendants. The number of defendants has been whittled down to 79, lawyers for SKAT told a London case management hearing on Monday.

London's High Court last year derailed the case, ruling that the Danish state could not use English courts to enforce its tax laws. But the Court of Appeal decided the case turned on fraud - and reversed the decision. Chris Waters, a managing partner at law firm Meaby & Co Solicitors, who is representing Shah and his companies, said it was a "significant step" that the UK Supreme Court would now also hear the case.

"The Sanjay Shah defendants have a real prospect of successfully reinstating (the High Court's) Mr Justice Andrew Baker's decision to dismiss the entire case ... because Denmark is trying to enforce a tax case in the UK," he said. A High Court judge will decide next week whether the complex case, or parts of it, will be delayed ahead of a Supreme Court ruling, lawyers said on the sidelines of the London hearing.

Shah, a Briton, has also been charged by Danish prosecutors. A United Arab Emirates judge rejected a Danish extradition request in September - but that decision could be appealed. The cum-ex scheme, which flourished in the aftermath of the 2008 financial crisis, involved trading shares rapidly around a syndicate of banks, investors and hedge funds to exploit the tax system of countries such as Denmark, Germany and Belgium.

Two British bankers were handed suspended jail terms and one a 14 million euro penalty in the first criminal convictions in Germany in 2020. Two other bankers have since been jailed. ($1 = 0.8471 pounds)

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