Craig Wright wins landmark case in English Court of Appeal; defamation claim vs Hodlonaut to proceed in England

Dr. Craig Wright won a landmark ruling against Magnus Granath (Twitter user Hodlonaut) in his ongoing defamation lawsuit, meaning the action can proceed in England.

The ruling concerns an appeal by Dr. Wright to overturn an earlier decision in which a High Court judge declined jurisdiction to hear his defamation case against Norway-based Twitter user Magnus Granath. Granath tweeted several accusations that Dr. Wright fraudulently claimed to be Satoshi Nakamoto, eventually leading Wright to launch defamation proceedings in England.

Wright’s lawsuit against Granath was initially dismissed in the English High Court under article 27 of the Lugano Convention, which is designed to avoid irreconcilable judgments between two jurisdictions concerning the same cause of action and between the same parties. Granath, after being put on notice that Wright was going to sue him in England unless offered a retraction and apology, had preemptively issued proceedings in the Oslo District Court in Norway, seeking a negative declaration of liability for the defamatory publications.

Granath then successfully convinced the English High Court to decline jurisdiction over the claim. The Court found that the Norwegian and English cases had the causes of action pursuant to Article 27(1) of the Convention and, because the Oslo court was the ‘court first seized’ it had accepted jurisdiction, and, in-turn, the English Court must decline jurisdiction. Dr. Wright appealed the High Court decision to the Court of Appeal.

On Friday 15 January 2021, the English Court of Appeal overturned the High Court ruling, saying that the finding of the High Court Judge—that application of the Article 27 rests on whether there is potential for irreconcilable judgments—was incorrect. According to the Court of Appeal, the standard that must be applied is whether the proceedings in each jurisdiction ‘mirror each other such that they are legally irreconcilable.’ Because the cause of action in Norway requires one legal element—that of negligence—which is not present in the English cause of action the proceedings cannot be said to mirror each other.

Simon Cohen, a Senior Associate at ONTIER LLP, which represented Dr. Wright in the case, told CoinGeek that the ruling could change how the Lugano Convention is applied in similar claims in different jurisdictions: “Following its departure from the EU, the UK has applied to accede to the Lugano Convention in its own right.  If permission to accede is granted, the Court of Appeal’s ruling will redefine how the English—and also perhaps the European—courts interpret and apply Article 27 going forward.”

The standard used by the English Court of Appeal is high, requiring that the causes of action in both jurisdictions mirror one another rather than having a ‘substantial degree of commonality or overlap’.

However, in absence of the U.K. obtaining permission to accede to the Lugano Convention, the end of the Brexit transition period means that the Lugano Convention will no longer apply to proceedings in the U.K.—except for those proceedings launched before the end of the transition period.

The decision is a win for Wright, whose case can now proceed in England irrespective of Granath’s action in Norway. If the conduct of the case of Wright v McCormack is anything to go by, Granath is unlikely to successfully defend the claim.

This is a developing story. CoinGeek will update this article as soon as we have the official amount that Granath has to pay Dr. Wright in legal fees—which is estimated to be north of £250,000.

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