Danish Tax Authority Discontinues Claim

The Danish Tax Authority has today discontinued its claim against the Gerante of a Luxembourg company in which it sought damages from her representing sums paid out to the company in respect of Withholding Tax. The claim was part of litigation against more than 100 defendants seeking sums in excess of £1bn the trial of which is expected to last about 9 months.

The Tax Authority’s claim against the Gerante was unusually framed. It asserted that English Law governed any claims it might have against her, but made no claims under that Law. Rather, it pleaded an “alternative” claim under Danish Law, albeit denying that that Law applied. Not surprisingly, the Gerante admitted the applicability of English Law and denied that Danish law applied (as well as denying that any claim under Danish Law was made out).

The Tax Authority was repeatedly asked to explain how it intended to pursue a claim which it asserted it did not have, but it refused to do so. Accordingly, the Gerante issued an application to strike out the claim or for summary judgment in her favour. The Tax Authority sought an extension of time to file evidence in response but never did so. Neither did it offer any explanation as to why the application should not succeed.

Two working days before a hearing in front of the Judge with conduct of the overall litigation (Mr Justice Andrew Baker), and still without any explanation for its conduct, the Tax Authority served Notice of Discontinuance.

The Gerante was represented by William McCormick QC, assisted by Philipp Simon of both Ely Place Chambers and M&S Moyal-Simon in Luxembourg, instructed by Simon Miles Mason of ebl Miller Rosenfalck