A company owned by one of Britain’s richest men has won a landmark equality law appeal as the High Court has ruled a corporate entity is entitled to pursue a racial discrimination claim challenging the application of financial sanctions against Russia.
XTX Markets Technologies Ltd, owned by billionaire financial trader Dr Alexander Gerko, had a complaint under the Equal Status Act 2000 dismissed by the Workplace Relations Commission (WRC) in 2023 on the grounds that it had no standing under the legislation.
The company’s substantive allegation – that Aviva Investors Liquidity Funds plc discriminated against it by refusing to let it buy in due to its association with the Russian-born Dr Gerko – may now be referred back to the WRC for a decision.
In 2021 and 2022, XTX had engaged with the Aviva investment fund about the provision of investment services, the High Court noted.
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There was “concern” that the investment fund was barred from selling certain “euro-denominated transferable securities” – stocks and bonds – because of European Union sanctions targeting Russian nationals and companies following the invasion of Ukraine.
Dr Gerko obtained British citizenship in 2016 and gave up his Russian passport in 2022, but was still a joint citizen of both nations at the time of the alleged discrimination, the court noted.
Ultimately, the fund refused to do business with XTX, citing the sanctions regime.
WRC adjudicator Valerie Murtagh was persuaded by the argument that XTX did not have standing to bring such a claim as a private limited company and found she had no jurisdiction to investigate the matter.
She noted that she was following a line of decisions dating back to 2008, when the Gloria LGBT choir was found by the Equality Tribunal to have no standing to pursue a claim against the Cork International Choral Festival.
The decision was affirmed on appeal to the Circuit Court, and XTX then pursued a further appeal to the High Court.
The central issue in the case was the way that word “person” was used in the Equal Status Act.
XTX, represented by barristers Lorna Lynch SC and Owen Keany BL in the matter, took the position at the WRC that the word “person” ought to be interpreted as including to corporate entities.
Kate Egan BL, for the investment fund, argued that the legislation “appears to contemplate a corporate entity as a possible perpetrator of discrimination only”.
Potential victims of discrimination could only be natural persons, it was further submitted.
At appeal stage, XTX’s lawyers argued further that this “restrictive interpretation” was inconsistent with the European directive on racial equality, which “specifically envisaged that the protections provided at national level would include protections for corporate entities against such discrimination”.
In her ruling, Ms Justice Siobhán Phelan wrote that while all of the protected characteristics shielded by the Equal Status Act were “inherently human” – but that they were “clearly capable” of attaching themselves to others, whether they were natural persons, corporate entities, or other legal persons.
She noted the argument that a legal person, like a company, could be discriminated against “because it employs Muslims or gay and transgendered persons”.
Fear of such discrimination on the part of an employer could lead to discriminatory practices in hiring, she added.
If the respondent’s stance on the definition of corporate personhood held sway, the judge wrote, a hypothetical company which lost out on business because it employed a person with a protected characteristic “would have no recourse”.
“I am satisfied that a legal entity may have standing to bring a claim under the 2000 Acts,” Judge Phelan wrote.
“Far from suggesting a restricted field of application, however, the language, purpose and context of the legislation all support expansive provision for protection for discrimination and promotion of equality rather than the contrary,” the judge added.
She wrote that her provisional view was that the ruling of the Circuit Court should be set aside and the matter should be referred back to the WRC for a full hearing.
The judge added that she would hear submissions from the parties on her final order in the matter “if the same cannot be agreed”.
Ms Lynch and Mr Keany were instructed by Ledwith Solicitors LLP for XTX in the matter. Ms Egan, for the investment fund, was instructed by A & L Goodbody.
