Privy Council appeal Vizcaya v Picard
The Board considered that the appeal raised an issue that was not only of general public importance but also of international importance in other common law countries. The issue was whether, by a customer agreement entered into by an offshore fund, which had invested US$327 million with Madoff’s company in New York and been repaid US 180 million before Madoff’s fraud became public, the customer had agreed impliedly to submit to the jurisdiction of the New York Bankruptcy Court in respect of an avoidance application by Madoff’s Trustee in Bankruptcy, which had resulted in a default judgment against the customer in New York for $180 million. After a full review of what it described as conflicting decisions and dicta, together with a definitive re-statement of the applicable common law principles, the Board held that the customer agreement did not give rise to an implied submission to the jurisdiction of the New York Bankruptcy Court so as to make the judgment enforceable in Gibraltar, and ordered that Picard’s claim to enforce it in Gibraltar should be summarily dismissed.
The full judgment can be read on the Privy Council website: click here.