Philip Henderson
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June 8, 2021
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News / Press Releases

Football Index - Judgment

Re BetIndex Limited [2021] EWHC 1542 (Ch)

Judgment has today been handed down in the above matter by Deputy Judge Robin Vos sitting as a Judge of the Chancery Division.  The judge has determined that the entitlements of customers are fixed by reference to their “Customer Funds” as at 26 March 2021 and that the trust funds should be distributed as soon as possible.  

The Court held that trust monies should be used first to pay each customer’s entitlement to “Customer Funds” as at 26 March 2021.  This includes dividends which had accrued up to that date (even if they have not been credited to the customer’s account by 26 March 2021).  The Court further held that any surplus should be paid to BetIndex and that customers with claims in respect of winnings accruing after 26 March 2021 will have a claim as unsecured creditors of the Company. 

In reaching his decision, Deputy Judge Vos noted: “The purpose of the trust is to safeguard funds which were owed to customers at the date of insolvency and not any funds which may become due after that date. 

This is in my view consistent with paragraph 11.3 of BetIndex’s terms of use which states that “once you have purchased Shares, the applicable value of your Shares have been “wagered” and are not stored in any account or otherwise protected as they are sums at risk.”.  In a similar way, possible winnings in respect of those shares which have not arisen at the time of the Insolvency Event are also at risk in that they have not yet become due and so are not covered by the protections conferred by the trust arrangements.

H&J had argued that the whole of the trust monies should be distributed to customers and that monies should not be paid to the Company in circumstances where further dividends have already accrued so that there is now no surplus but, in fact, a deficit between the amounts owed to customers and the amounts held in the trust.  Deputy Judge Vos expressed his sympathy for this position but found it is inconsistent with what he found to be the correct interpretation of the trust deed.  

While the judgment means that customers with dividends accruing after 26 March 2021 will not have recourse to the trust funds, we note the Judge’s observation that: “the overwhelming majority of creditors (both in number and in terms of the overall amount owed to creditors) are in fact the customers”. This means that customer claims should not be significantly diluted by the claims of other categories of creditors.

A copy of the full judgment is available at the link below.

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