Syed Rahman of financial crime specialists Rahman Ravelli considers the case's implications.
Danish tax officials had their £1.5 billion Cum-Ex lawsuit against trader Sanjay Shah thrown out by a UK court.
The High Court ruled that that the UK was not the proper place to bring a foreign tax claim. The Danish tax agency said it would appeal the decision.
The civil case is one of a number of routes Denmark is taking in an attempt to regain the huge tax rebates it said it paid to Shah and others who used Cum-Ex share trading to gain millions of euros in tax refunds. More than two dozen bankers, traders and lawyers have been charged in Denmark and Germany over Cum-Ex.
The High Court's decision is a blow for the Danish tax agency, which had spent more than $100 million on lawsuits in various countries related to Cum-Ex. The agency has admitted it is "very surprised'' by the ruling, which it "fundamentally disagrees'' with.
But despite Denmark's criticism of the decision, this case is set to have serious implications for any ongoing or future investigations into financial institutions and individuals who operated out of London and carried out dividend arbitrage schemes in European countries.
With capital markets being global and cross-border share trading taking place in a split second, it is a huge task for any one country to investigate what happened. Unless an appropriate framework is put in place to reflect this, there may be other civil or criminal Cum-Ex cases that prove to be unsuccessful.
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