Dynamo Recoveries Ltd & Anor v Nix [2024] EWHC 3116 (Comm)

Stephen Hackett (instructed by Griffin Law) for Dynamo Recoveries Limited & Emerdata Limited

Dame Clare Moulder DBE :

Introduction

• This is the judgment on two claims, one brought by Dynamo Recoveries Limited (“DRL”) and Emerdata Limited (“Emerdata”) against Mr Alexander Nix (“Mr Nix”) and the other brought by Mr Nix against Emerdata. Both claims arise out of the collapse of Cambridge Analytica, a business which operated through a number of companies in England and in the USA. Mr Nix was Cambridge Analytica’s CEO, and a director of each of the companies.

• As explained below, at the material time the major investor behind the business of Cambridge Analytica was Mr Robert Mercer. His daughter Rebekah Mercer (“Ms Mercer”) who was involved in managing and overseeing the Mercer family’s political projects and charitable interests was also involved and became a director of Emerdata in March 2018. The majority shareholders in Emerdata are the Mercer family and associated trusts.

• For convenience, reference in this judgment to the “Claimants” are to DRL and Emerdata.

Background

Formation of the Business

• In 2005, Mr Nix established Strategic Communications Laboratories Ltd (which later changed its name to SCL Group Ltd) (“SCL Group”) with Mr Nigel Oakes. In his evidence Mr Nix described the business of SCL Group at this time as undertaking “behavioural research and strategic communications programmes and PSYOP (Psychological Operations) training for a broad range of governments and their militaries” and in parallel “applying a similar methodology for analysing, understanding and influencing human behaviour but in an election context (rather than a military one)“.

• In 2012, the business was split and Mr Nix took the elections business. Mr Nix remained a shareholder of SCL Group (about 8.5%).

• Following the agreement to split, Mr Nix incorporated SCL Elections Ltd in October 2012 (“SCL Elections”). Mr Nix explained in his oral evidence that the focus of the company was on politics and government work, not defence work but government contracts in health, development and social and thereafter he established a commercial division to look at providing similar advertising and marketing services to big brands and corporates.

• He subsequently established SCL Social Ltd (“SCL Social”) and SCL Commercial Ltd (“SCL Commercial”). SCL Social had political and social contracts, initially in the Caribbean, and then across Africa and countries in Latin America and Asia. SCL Commercial was to deal with non-US commercial contracts.

• In 2015, Mr Nix incorporated a new investment holding company, SCL Analytics Ltd which acquired all his shares in SCL Elections, SCL Social and SCL Commercial. Mr Nix was the CEO of the SCL companies and was a shareholder in SCL Analytics. SCL Group acquired 30% of SCL Analytics.

Continue reading this Judgment here.