UK Supreme Court upholds jurisdictional authority in $12.6m betting on credit case

The UK Supreme Court has upheld an earlier court decision in a credit betting case involving Alderney-registered betting agency Eurasia Sports limited and a Peruvian casino owner.

Eurasia alleged that Omar Mahchi Aguad, the owner of the Atlantic City casino in Lima, along with ten other men all resident in Peru at the time, conspired to defraud it by placing bets on credit that they had no intention of repaying. It launched legal proceedings against the men on this basis, which were later supported by a UK court judgment which confirmed the men were liable.

Mahchi Aguad, who owes Eurasia $2m, launched an appeal against the jurisdictional authority of the court to launch legal proceedings against him, claiming that he was not a party to any such conspiracy. Two other appeals on the same basis made by two of the other defendants were previously dismissed by a judge in 2016.

The decision to grant the men access to UK accounts and extend credit facilities was made by a third-party business owned by Eurasia Sports called Xanadu, which is incorporated in Ireland but provides consultancy services based in England. A UK-based consultant opened betting accounts with online sportsbook operator Matcbook, extending lines of credit to the men, who promptly lost around $12.6m in total.

Eurasia has pursued individual claims against each of the 11 men for the respective amounts owed by them and is also pursuing some of the defendants for misrepresentation and unlawful means conspiracy.

The misrepresentation charges centre around a $10m security payment for the extended credit facilities paid via cheque into Eurasia’s bank account in Malta, which was later rejected due to insufficient funds in the bank account.

Three Supreme Court justices considered the appeal based on four distinct jurisdictional ‘gateways’, under which a case against individuals not currently resident in the UK can be pursued.

The ‘gateways’ include if the case is a reasonable one, whether a second claim is made against the defendant that “arises out of the same or closely connected facts”, where a contract was made within the jurisdiction and lastly where damage was sustained within that jurisdiction.

In his ruling, Lord Justice Floyd stated that the claim against Aguad “raised a serious question to be tried” and that the court was the appropriate forum to do so, satisfying the first gateway, while he also confirmed that the case met the connection criteria due to the separate conspiracy charges against the other defendants, which were linked with Aguad.

However, Floyd stated that the third gateway concerning the contract could not be satisfied as the contract was not made in the UK. Floyd was also satisfied that the claim could be heard because the damage was sustained in London. In the light of these facts, the appeal made against the Eurasia claim by Omar Mahchi Aguad was dismissed.