Commercial Disputes Weekly Issue 291 7 July 2026

MISREPRESENTATION – ISSUE ESTOPPEL

The Danish Tax Authority (“SKAT”) has been involved for several years in litigation in the English courts in relation to tax on dividends paid by Danish companies to non-Danish shareholders, some of whom were entitled to claim back withholding tax from SKAT. EDFM was a financial brokerage that issued tax vouchers to assist its clients in claiming back the tax. In earlier proceedings commenced in 2018 SKAT unsuccessfully claimed against EDFM (and others) for negligent misrepresentations that allegedly resulted in people receiving refunds of tax to which they were not entitled. The first instance judged held that the claims were inadmissible under the “Revenue Rule”. The decision was overturned on appeal, but on other grounds, so as against EDFM the first instance decision on the Revenue Rule was final. In a second set of proceedings claiming fraudulent misrepresentation in relation to the same and some new tax vouchers, EDFM argued that SKAT could not raise arguments on incorrect statements in the vouchers because of the first instance decision on the Revenue Rule. Bright J disagreed, but the Court of Appeal agreed. The Supreme Court allowed the appeal, holding that there was no issue estoppel because the allegations in the two claims were different as one related to misrepresentations made negligently and the other alleged fraudulent misrepresentation. The second claim should therefore not have been struck out.

Skatteforvaltningen (The Danish Customs and Tax Administration) v MCML Ltd (previously known as ED&F Man Capital Markets Ltd) [2026] UKSC 19, 1 July 2026

CONTRACT CONSTRUCTION – INSURANCE

In the context of claims by businesses under insurance policies for business interruption losses arising from the Covid-19 pandemic, the Commercial Court has considered a preliminary point of interpretation. The claimants asserted that on renewal of the policy in 2019, the parties agreed that the cover for 2019-2020 would be no less favourable that the 2018-2019 policy. This ‘conformity clause’ had not been included in the policy due to an error and so the policy should be rectified. The court held that although there had been some discussion about including a conformity clause, there was only an ‘in principle’ willingness to include such a clause, which was subject to specific wording being agreed. No such wording was agreed and so the rectification claim failed.

CP Holdings Ltd v Assicurazioni Generali SpA [2026] EWHC 1520 (Comm), 29 June 2026

FINANCE – LANDLORD AND TENANT

The Chancery Court has been asked to decide on the status of a mortgage lender in relation to defaulting borrowers and a leasehold property over which it holds a secured charge. The borrowers were in arrears and the lender sought possession of the property. However, it transpired that the property had been sub-let. The lender was deemed to be aware of this possibility as the funds were lent on a buy-to-let basis. The particular issue was whether when the lender became mortgagee in possession, did it also then become a landlord for the purposes of the Housing (Wales) Act 2014 and Renting Homes (Wales) Act 2016? The lender sought declarations that it was only a landlord for certain purposes and was not subject to the licensing and registration regime. The court held that where a dwelling was let under an occupation contract that binds the mortgagee, that mortgagee becomes a landlord for the purpose of both Acts when it becomes a mortgagee in possession. However, the claimant mortgagee was not yet a mortgagee in possession because it had not yet demanded that the occupiers pay rent directly to it rather than to the borrowers.

Kensington Mortgage Co Ltd v Price [2026] EWHC 1577 (Ch), 29 June 2026

FINANCE – DEFAULT INTEREST

The Court of Appeal has upheld the decision of the Chancery Court in relation to default interest charged on a loan facility secured over various properties. The court considered offers made by the borrowers in an attempt to settle the dispute and repay the loan. It considered that those offers fell far short of a tender of repayment. No other actions of the borrower were sufficient to stop interest from running. Further, there was no flaw in the judge’s conclusion that the default rate of interest was not a penalty. It was not out of proportion with the lender’s legitimate interest in ensuring successful refinancing. The default interest rate was therefore enforceable.

Houssein v London Credit Ltd [2026] EWCA Civ 830, 1 July 2026