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RBS’ Shetland Action to Prevent Winding-up Petition

July 05 2012

There is no doubt that Shetland is legally part of UK, a judge has ruled while rejecting a claim for £23 million of damages from the Royal Bank of Scotland.

In February 2010, Mr Hill served a demand for payment on RBS, stating his belief that he was due a total sum of £23,583,434.55 in damages, interest and costs relating to a credit card debt.

Mr Hill, who represented himself in the case, claimed that Shetland is not legally part of the UK. Lord Pentland dismissed Mr Hill’s claim that, because he was a Shetland resident, the courts had no authority over him.

The judgement rejected Mr Hill’s arguments – outlined in an “analysis” of more than 70 pages – by pointing to two legal precedents setting out that after 1468 the right of sovereignty over the islands belonged to the monarchs of Scotland and later the monarchs of the United Kingdom.

“As to the historical background, it seems to me that it must now be regarded as settled in law that Shetland forms part of the United Kingdom and lies within the territorial jurisdiction of the Court of Session,” Lord Pentland wrote.

Mr Hill had threatened to serve a winding-up petition on RBS if it did not deal with his demands, as a creditor, within three weeks. Once his demand expired, Mr Hill took no action to wind up the bank, but nor did he agree to take no further action – leading RBS to raise a legal action to quash his demand.

The bank was concerned that a winding-up petition would “damage their reputation and would be likely to undermine confidence in their solvency”, resulting in “unfavourable media comment and customer concern”, Lord Pentland’s ruling stated.

But Lord Pentland’s judgement stated: “The only basis set out in the demand attempting to justify why the defender is entitled to restitution from the pursuers is that this is calculated as the profits made by the pursuers with the allegedly fraudulent use of the defender’s money. No information or detail is provided by the defender in relation to any such alleged fraud.”

He continued: “The defender has, in my opinion, completely failed to set out any basis on which he can properly claim to be a creditor of the pursuers [RBS]. What he has done is to issue to the pursuers a number of demands, in the form of various documents, in which he has asserted that the pursuers are due to pay him substantial sums. But he has never been able to identify any underlying basis for his alleged entitlement to be paid these sums of money.”

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