French banking giant Societe Generale has accused Clifford Chance of having “committed errors” and being “negligent” in historical advice related to gold transactions.
The dispute, which relates to advice the firm provided to the bank between 2008 and 2017, is the latest part of a long-running legal battle about the bank’s attempt to receive payment for gold bullion.
In response, Clifford Chance LLP and Clifford Chance Europe LLP have filed a judicial claim before the English courts for the firm to be found “not liable”.
Clifford Chance had acted for Societe Generale in a claim brought by the bank against Goldaş —a Turkish jewellery company, according to court documents.
In 2008, Societe Generale claimed the company had failed to pay for 15.725 metric tonnes of gold bullion supplied by the bank, with a value of about $483 million. That same year, the bank obtained worldwide freezing orders (WFOs) against Goldaş after an application to the Commercial Court.
In April 2017, Societe Generale made a claim to the Commercial Court in an effort to uphold the validity of two claim forms served by the bank against Goldaş in Turkey and Dubai. In this action, Societe Generale was still represented by Clifford Chance.
Goldaş had issued applications the previous year arguing that the claim forms in question had not been served, and that not only had the time for doing so expired, but “the failure to progress the claims amount[ed] to an abuse of process”.
In London’s High Court, Justice Andrew Popplewell ruled against Societe Generale, struck out the bank’s claims, and discharged the WFOs made by the bank against Goldaş in 2008.
When the banking giant unsuccessfully appealed this decision in the Court of Appeal in 2018, court documents show that Clifford Chance had been dropped as legal advisors in favour of Mayer Brown.
In a letter from Societe Generale to Clifford Chance Europe LLP dated February 23 2022, headed “Formal Demand”, the bank claimed that the law firm “clearly breached its duty to provide advice and its duty of care”. The bank asserted that as a result, it suffered losses for which “CC Europe” must compensate it.
A central complaint made by Societe Generale is that Clifford Chance “let the statute of limitation applicable to the claim against Goldaş expire”, despite the bank drawing the firm’s “attention to this issue”.
In response, Clifford Chance said it “denies the allegations made by SocGen and any liability to SocGen”.
The firm argued that “CC LLP’ and “not CC Europe” conducted the Goldaş litigation, contrary to Societe Generale’s assertions. Clifford Chance has claimed that neither LLP “is liable to SocGen on the grounds alleged in the Formal Demand”.
Reed Smith is advising Clifford Chance and Clifford Chance Europe. Signature Litigation is advising Societe Generale.
Clifford Chance and Societe Generale declined to comment.