SocGen battles Clifford Chance over fallout from unpaid gold bill

Receive free Societe Generale updates

We’ll send you a myFT Daily Digest email rounding up the latest Societe Generale news every morning.

Société Générale has told the High Court that a dispute between the bank and law firm Clifford Chance should be heard in the French courts rather than in London.

Clifford Chance has been accused of alleged professional negligence by SocGen after it was hired by the bank in 2008 to pursue legal action in the UK against a Turkish jewellery manufacturer over an allegedly unpaid $483mn bill for supplying 15.725 metric tonnes of gold. 

SocGen’s lawsuit against the Turkish firm was thrown out in 2017 after a High Court judge ruled that claim forms had not been served against the defendant and that SocGen’s claims were time barred.

In February 2022, SocGen sent a formal demand to Clifford Chance Europe alleging the firm had acted negligently and in breach of duty in its conduct of the litigation. Clifford Chance denies the allegations.

In response, Clifford Chance has filed a lawsuit against SocGen in the High Court in London. It has also asked a judge to make a declaration that Clifford Chance LLP, rather than Clifford Chance Europe, was the firm acting for SocGen in the litigation and that neither Clifford Chance LLP nor Clifford Chance Europe are liable to SocGen.

In Clifford Chance’s particulars of claim filed at the High Court, the law firm said that it acted “reasonably and professionally throughout” the litigation, including relying on SocGen’s Turkish lawyers. “The non-pursuit of the English proceedings was the result of SocGen’s deliberate, informed decision. The outcome was not affected by any negligent act or omission on the part of Clifford Chance,” the court document said.

On Wednesday, Graham Chapman KC, barrister acting for SocGen, asked the High Court for the lawsuit to be put on hold in London on the grounds that the French courts were the more suitable location for the allegations to be heard.

Chapman told a hearing: “We challenge the jurisdiction of this court to determine Clifford Chance’s claim. The French courts and not the English courts are the appropriate forum for this dispute.”

In written arguments submitted to the hearing, Chapman said SocGen alleged Clifford Chance was “negligent” in handling the Turkish dispute “such that SocGen lost the chance of recovering the value of the consigned gold bullion”.

He added that the allegations “centre principally around Clifford Chance’s failure to properly advise SocGen on the impact of failing to effect valid service of the claim forms.”

He said the High Court now had to decide whether the London courts were the place where the dispute should be heard. SocGen has launched parallel proceedings in France, with a first hearing listed for March 2024.

In its written arguments submitted to Wednesday’s hearing, Clifford Chance said the “allegation of negligence on the part of any Clifford Chance entity . . . is denied.”

The hearing continues.