Decision

Decision on Citadel Trading Limited

Published 16 October 2020

Companies Act 2006

In the matter of application No. 1911 by KCG IP HOLDINGS LLC

For a change of the company name of registration No 6251289

Background, Claims and Defences

1. CITADEL TRADING LIMITED (hereafter ‘the respondent’) was incorporated on 17 May 2007.

2. On 27 December 2018, KCG IP Holdings LLC (hereafter ‘the applicant’) applied for an Order under section 69 of the Companies Act 2006 (‘the Act’) for the company name CITADEL TRADING LIMITED to be changed.

3. Section 69 of the Act states:

(1) A person (“the applicant”) may object to a company’s registered name on the ground-

(a) that it is the same as a name associated with the applicant in which he has goodwill, or

(b) that it is sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

(2) The objection must be made by application to a company names adjudicator (see section 70).

(3) The company concerned shall be the primary respondent to the application.

Any of its members or directors may be joined as respondents.

(4) If the ground specified in subsection (1)(a) or (b) is established, it is for the respondents to show-

(a) that the name was registered before the commencement of the activities on which the applicant relies to show goodwill; or

(b) that the company-

(i) is operating under the name, or

(ii) is proposing to do so and has incurred substantial start-up costs in preparation, or

(iii) was formerly operating under the name and is now dormant; or

(c) that the name was registered in the ordinary course of a company formation business and the company is available for sale to the applicant on the standard terms of that business; or

(d) that the name was adopted in good faith; or

(e) that the interests of the applicant are not adversely affected to any significant extent.

If none of these is shown, the objection shall be upheld.

(5) If the facts mentioned in subsection 4(a), (b) or (c) are established, the objection shall nevertheless be upheld if the applicant shows that the main purpose of the respondents (or any of them) in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name.

(6) If the objection is not upheld under subsection (4) or (5), it shall be dismissed.

(7) In this section ‘goodwill’ includes reputation of any description.

4. The applicant requested that two officers of the respondent company be joined to the proceedings under the provisions of section 69(3) of the Act. They are Mr Christopher Duru and Ms Catherine Duru. Both were given notice of this request and provided with an opportunity to comment or to object. No response was received from Mr and Ms Duru and they were joined to the proceedings as co-respondents on 29 March 2019. On 8 April, Mr Duru wrote to the tribunal to request that his sister, Ms Catherine Duru, be removed as co-respondent. On 24 July 2019, the tribunal wrote to the respondents and confirmed that as an officer of the company, Ms Duru could be named as a co-respondent and as no satisfactory reasons had been provided for her removal, she would remain joined to the proceedings.

5. The applicant claims that the name associated with it is CITADEL.

6. In its CNA1 it submits that the applicant was founded in 1990 and has been trading under the name CITADEL in relation to financial services since at least 1994.

7. The CITADEL business is a global financial institution, with its headquarters in Chicago. It employs in excess of 1,150 people globally and has offices in New York, Hong Kong, San Francisco, Boston, Dallas and London. Citadel is one of the largest hedge fund managers in the world, managing in excess of $20.5 billion.

8. Other companies in the CITADEL group include Citadel Securities (established in 2002), described as ‘one of the leading retail and listed equity options market makers’. It provides electronic trading platforms for retail and institutional clients, ‘with millions of investors benefitting from its services’. Citadel Technology (established in 2009) provides investment management technology to a wide range of firms and funds ‘including some of the world’s largest asset managers’.

9. The applicant submits that its “CITADEL name is therefore extremely well-known throughout the UK and in particular in the financial services industry…”.

10. At paragraphs 3 and 4 of the attachment to the application for a change of company name the applicant submits:

3. The Applicant first contacted CITADEL TRADING LIMITED in relation to this matter on 5 September 2018 via the postal address provided at Companies House…and via email address…

4…The letter established the Applicant’s rights, requested CITADEL TRADING LIMITED cease use of the term CITADEL, and advised of the Applicant’s intention to take further action if CITADEL TRADING LIMITED did not take the appropriate action to resolve the matter.

11. The applicant submits that the letter was returned with a handwritten note ‘return to sender’. The email did not bounce back as undeliverable.

12. The applicant filed evidence in the form of a witness statement by Hayley Morgan, a Chartered Trade Mark Attorney at the applicant’s representative, Brabners LLP. Her statement is dated 9 September 2019 and has six exhibits attached.

13. The respondents filed a counterstatement (form CNA2), which was completed by Mr Christopher Duru. Nine documents were attached to the counterstatement. It is well documented in decisions before this tribunal that, in accordance with Rule 9(1) of the Company Name Adjudicator Rules 2008, attachments, properly marked and attached to a form CNA2 (notice of defence) may be treated as evidence because the form includes a statement of truth and is signed by the respondent. ^{[footnote 1]} In this case the form is signed by, inter alia, Mr Christopher Duru, the documents are introduced with an index and they are headed CTL1-CTL7. Consequently, we accept that the documents attached to the respondents’ notice of defence are acceptable evidence for the purposes of these proceedings.

14. Section 3 of the form specifically asks the respondents to set out any defences upon which they wish to rely. The respondents indicated that ‘the name was adopted in good faith’ and that ‘the interests of the applicant are not adversely affected to any significant extent’. The respondents’ response, attached to the CNA2, has been completed by the respondents’ then legal representative, Hillary Cooper Law. ^{[footnote 2]} It is dated 21 February 2019 and has seven attachments labelled in the form of exhibits.

15. At paragraph 3 of the counterstatement the respondents submit that the address to which the applicant wrote on 5 September 2018 is that of their accountants who took a view that as the respondents do not have a website and the letter referred specifically to it, a mistake had been made. They returned the letter to the sender. The respondents further submit that the email address, clearing@citadel-trading.co.uk does not belong to any of the respondents and so the email referred to by the applicant was not received.

16. The respondents submit at paragraph 16:

…[the respondents were] not aware of the Applicant’s presence in the financial services industry when registering [their] company name in 2007. The company name ‘Citadel Trading Limited’ was adopted in good faith to exclusively run an IT Consultancy business and the [respondents] did not and still do not have the intention of taking opportunity of the Applicant’s Trade Mark or presence in the financial services industry sector.

17. The respondents further submit that the website www.citadel-trading.co.uk does not belong to them. They are aware that their company number and details have been used on the contested website and claim that they are the victims of identity fraud.

18. The respondents confirm that they have reported the matter to Action Fraud and the Financial Conduct Authority (FCA). Case numbers are provided.

19. The claim made by the respondents in their counterstatement relates to potential defences under sections 69(4)(d) and (e).

20. In addition to the applicant’s evidence filed on 9 September 2019 it filed written submissions on 1 June 2020. The respondents did not file evidence (within the period allowed for filing evidence) and did not file submissions. The respondents requested a hearing which was held on 2 September 2020 before the three adjudicators who have signed this decision. The applicant filed a skeleton argument and was represented by Ms Denise McFarland of Counsel, instructed by Brabners LLP. The respondents were represented by Mr Christopher Duru.

Preliminary issue

21. At the hearing Mr Duru requested an amendment to the respondents’ pleadings to add a defence that the respondents are trading under the contested company name. This is a defence under 69(4)(b)(i) of the Act. Following submissions from Ms McFarland for the applicant, the adjudicators directed that a decision would be made at the close of the hearing and the parties would be given formal directions by letter. ^{[footnote 3]} Ms McFarland indicated that she was content to continue with the hearing, provided the applicant be allowed the opportunity to file further evidence or submissions if Mr Duru’s request was allowed.

22. Directions were given by way of a letter dated 3 September 2020. Mr Duru’s request was allowed and the applicant was given a period of 21 days in which to file evidence and/or submissions. ^{[footnote 4]}

23. The applicant subsequently filed its official response, in the form of submissions, on 24 September 2020.

Applicant’s evidence

Witness statement of Hayley Morgan and six exhibits

24. Hayley Morgan is a Chartered Trade Mark Attorney at the applicant’s representative. Her statement is dated 9 September 2019.

25. The first exhibit attached to Ms Morgan’s statement is a print from the applicant’s website and a print from Wikipedia. The first of these, lists a number of key dates which include:

• 1994 – The business was renamed Citadel.
• 1999 – Citadel launched its London office.
• 2001 – Citadel launched its equities business.
• 2002 – Citadel launched its commodities business.
• 2004 – Citadel launched its foreign exchange business and crossed $10 billion threshold in investment capital.
• 2007 - Citadel receives Euromoney’s best global hedge fund award.

26. The website also lists awards won by the applicant which include the following:

• 2014 – Multistrategy Hedge Fund Manager of the Year award from Institutional Investor Magazine. Citadel’s Global Fixed Income business wins Best Global Macro Fund of the Year from Absolute Return.

• 2015 – Citadel exceeds $25 billion in investment capital. Named Hedge Fund of the Year by Institutional Investor Magazine.

• 2016 – Citadel is named Hedge Fund of the Year by Risk magazine. Firm is named one of the 50 best workplaces for recent graduates, by ‘Great Place to Work’. Citadel launches an equities trading business based in Greenwich.

• 2017 – Citadel awarded In-House system of the year award. Citadel reaches $30 billion in investment capital.

• 2018 – Citadel listed in Linkedin’s Top Companies for 2018, investment capital is $31 billion as of 1 October 2018.

27. The Wikipedia pages support the information provided by the CNA1 in respect of the founding date of the applicant (1990) and the value of its financial business, globally.

28. Exhibits 3 and 4 relate to the contested website www.citadel-trading.co.uk and confirm that it shows the respondents’ company number as the operator of the site.

29. The remaining exhibits are copies of the applicant’s trade mark registrations, a copy of the cease and desist letter sent to the respondents and a print of the respondents’ company details from Companies House register.

The respondents’ evidence

30. The respondents provide a sample of invoices as follows ^{[footnote 5]}:

Date:	Client:	Service:	Value:
27.09.2008	BT	Citrix support	£1175.00
21.11.2008	BT	Citrix support	£1468.75
23.01.2009	BT	Citrix support On call service	£1884.56
01.05.09	BT	Citrix support	£1437.50
22.05.09	BT	Citrix support	£1437.50
28.02.2010	Fujitsu	Integration engineer	£8225.00
28.03.2010	Fujitsu	Integration engineer	£7813.75
30.04.2010	Fujitsu	Integration engineer	£8636.25
21.06.2011	HP	Solutions consultant	£2100.00
26.06.2011	HP	Solutions consultant	£2100.00
12.09.2011	HP	Solutions consultant	£2100.00
10.02.2013	Fujitsu	Integration engineer	£2160.00
29.12.2017	LA International Computer Consultants	Infrastructure architect	£2640.00
04.05.18	LA International Computer Consultants	Infrastructure architect	£2640.00
03.10.18	Alexander Mann	Technical architect	£3000.00
22.02.19	Experis recruitment	Solution architect	£2400.00

31. The invoice address in each case is Citadel Trading Ltd.

32. The respondents provided copies of contracts between themselves and IT recruitment agencies and clients. These are as follows: ^{[footnote 6]}

Agency:	Client:	Contract period:	Daily rate:
IS IT Recruitment	ATOS IT Services UK	12 Mar 2012 - 24 Sept 2012	£475
CGI - Damia Group	-	6 Feb 2014 - 4 Apr 2014	£400
LA International Computer Consultants Ltd	ATOS IT Services UK	12 Sept 2015 - 11 Dec 2015	£449.80
LA International Computer Consultants Ltd	Hewlett Packard Ltd	15 Aug 2016 - 31 Dec 2016	£450
Alexander Mann	-	20 Aug 2018 - 20 Nov 2018	£500
Experis	QinetiQ	12 Feb 2019 - 28 Mar 2019	£500

33. The respondents have provided the first three pages of their company accounts for the years 2011-2015, all of which show the name of the company to be Citadel Trading Ltd and each shows the principal activity of the company to be ‘software consultancy’.

34. The remaining documents filed by the respondents relate to the contested website www.citadel-trading.co.uk.

Decision

35. This application has been defended and so the applicant must establish that it has goodwill or reputation in relation to a name that is the same, or sufficiently similar, to that of the respondent’s company name suggesting a connection between the company and the applicant. Only if this burden is fulfilled is it then necessary to consider if the respondents can rely upon defences under section 69(4) of the Act. The relevant date is the date of incorporation of the contested company which, in this case, is 17 May 2007. The applicant must show that it had a relevant goodwill or reputation at this date.

Goodwill

36. Section 69(7) of the Act defines goodwill as a ‘reputation of any description’. Consequently, in terms of the Act, it is not limited to Lord Macnaghten’s classic definition in IRC v Muller & Co’s Margarine Ltd. ^{[footnote 7]}

What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.

37. The evidence in support of the applicant’s case is provided in the applicant’s statement of case and in the witness statement of Hayley Morgan. It has not been challenged by the respondents.

38. It is clear from the evidence provided that the applicant is a large, international financial business. It operates primarily in the investment and trading sectors and has done, under the name CITADEL, since 1994. The value of the business has grown significantly over the years of its trading but had already crossed the $10 billion threshold in investment capital by 2004, three years before the relevant date. By 2004 the applicant had already established significant business in equities, commodities and foreign exchange. In 2007 the applicant won Euromoney’s best global hedge fund award.

39. It is clear from the evidence that the applicant’s business is well-known in the financial sector and has a global presence. Its headquarters are located in Chicago and there are other offices around the world, including in London, which opened in 1999, i.e. eight years before the relevant date.

40. The evidence is sufficient to establish that the applicant had goodwill in the UK at the relevant date in relation to financial services. Goodwill rests in the name ‘CITADEL’.

Does the respondents’ company name suggest a connection between it and the applicant?

41. The respondents’ name is CITADEL TRADING LTD. The name associated with the applicant is ‘CITADEL’. Consequently, the difference between the names is the absence/presence of ‘TRADING’ and ‘LIMITED’.

42. The presence of the word ‘TRADING’ in the contested name is one which would generally be considered a description of a business buying and selling goods and services, in accordance with the plain dictionary meaning of the word. At the hearing Ms McFarland for the applicant submitted that in the context of the applicant’s business, ‘TRADING’ would be seen as a reference to financial trading, which brings the two company names even closer together.

43. ‘LIMITED’ simply indicates the corporate status of the company, something which is necessary in most company names. We consider that this difference is to be ignored for the purpose of the comparison (see, for example, MB Inspection Ltd v Hi-Rope Ltd ^{[footnote 8]} at paragraph 48).

44. Taking these factors into account, we find that the respondents’ name is sufficiently similar to ‘CITADEL’ such that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

45. Given our findings in respect of goodwill and the connection likely to be made between the respective company names, the applicant has cleared the first two burdens placed upon it. That is the end of the matter unless the respondents avail themselves of one or more of the defences. This is a matter to which we now turn.

Defences

46. The first defence relied upon by the respondents is that the primary respondent is operating under the name CITADEL TRADING LTD, pursuant to section 69(4)(b)(i) of the Act.

47. We note that the wording of the legislation is not clear as to the relevant date for the assessment of the operating defence. The purpose of the provisions of the Act under which this application is brought is to prevent “squatting” i.e. to prevent the registration of a company name by an entity whose main purpose in registering the name is to obtain money (or other consideration) from another party with a reputation under the name, or to prevent that party from registering the name. In particular, the powers set out in sections 69 to 73 of the Act were not intended to provide an alternative remedy to the law of trademarks or the tort of passing off.

48. Following the policy of the Act through to its logical conclusion would suggest that provided a respondent can show that it has traded under the name (even if that amounted to passing off), that should be sufficient to make out the defence under section 69(4). That remains the case even if the primary respondent started trading after the application in issue was made, provided that trading had commenced, or substantial start-up costs had been incurred, by the time that the primary respondent came to file its Notice of defence. In any event, we will consider the position both at this date (21 February 2019) and at the earlier date of the application in issue (27 December 2018).

49. The documents attached to the respondents’ defence include invoices for IT consultancy and architect/engineer services carried out by the primary respondent between 27 September 2008 and 22 February 2019.

50. In its further submissions filed on 24 September 2020, the applicant makes the following observation with regard to the invoices filed by the respondents (referred to as CLT1 in the earlier summary):

2.4. …We submit that … the Respondents here should fail as they have not overcome the hurdle and burden of proof which is upon them. Although we accept that there are invoices which have been submitted as part of the case papers relied on by the respondents (a) there is no documentary material or other acceptable evidential material to support the new claim of “operating under the name at the relevant (fixed) date” and (b) there is no witness statement to support this claim either. Accordingly, there is no probative and/or persuasive relevant evidential material before the Tribunal at all that bears the relevant date or focusses on the relevant contemporaneous material time frame.

…

2.6. …the invoices list various staffing and recruitment companies, including P.S. Resourcing & Recruiting Solutions…, LA International Computer Consultants Ltd…, Alexander Mann Recruitment Services …, and Experis Recruitment… Notably, invoices 1-12 state “professional services in respect of Christopher Duru,” and not services for Citadel Trading Limited. Invoices 13-16 list the recruitment agency as the “Bill To” address not Citadel Trading Limited. These suggest that the services are for Mr. Duru personally via the respective recruitment and staffing agencies and not Citadel Trading Limited. And as noted above, this seems entirely consistent with the statements already made by and on behalf of the Respondents in their oral and written submissions to the Tribunal.

2.7. Moreover, and we say notably, none of the invoices display anywhere the registered number of the Company and /or its registered office address. Also, where VAT Invoices are concerned (which these purport to be since VAT is charged and recorded on them) there are further requirements under the Value Added Tax Regulations 1995, which a company needs to comply with in order to produce a valid VAT Invoice. These include displaying the supplier’s name, address and VAT registration number among other things. Of the 16 invoices produced, it would seem that more than half of them are invalid VAT invoices. Invoices 1 – 5 seem to have the incorrect VAT number so are arguably invalid, and whilst numbers 6 – 12 do have a valid VAT number, the later ones, i.e.: Invoices 13 – 16 seem to lack a VAT number altogether. These are issues which we say undermine the legitimacy of these documents in any event insofar as they are to be relied on by the Respondents to show legitimate evidence of “operation” (at any time) of the corporate entity.

51. Attached to the CNA2 at CLT2 are copies of contracts between the respondents and a number of IT recruitment agencies. These are dated between 12 March 2012 and 28 March 2019. Each is for the provision of IT services, carried out by Mr Christopher Duru on behalf of Citadel Trading Limited. The contracts are between two parties, one being the relevant recruitment company and the other being Citadel Trading Limited. In each case the company number for Citadel Trading Limited is given. For example, pages 20, 46 and 90 of the material attached to the CNA2 show copies of contracts between Damia Group and Citadel Trading Limited, Experis and Citadel Trading Limited and Ifftner Solutions Limited and Citadel Trading Limited.

52. What is also clear from the contracts is that payment methods for the services provided by the respondents, under the name Citadel Trading Limited, differ in a number of instances. For example, the first Damia contract requires (at ‘Special Condition’ 4) that the supplier (Citadel Trading Limited) shall invoice the company at the end of each calendar month. Each invoice shall state the supplier’s registered name, show the date of the invoice and the invoice number, state the supplier’s VAT number and be addressed to the company. By contrast, the contract with Alexander Mann requires the supplier’s consultant to fill in a time sheet for work carried out. This is then signed off by an authorised person from the client company, verifying the hours worked. Payment is then made to the Consulting Company (Citadel Trading Limited).

53. By providing IT services via contracts with recruitment agencies, Citadel Trading Limited was trading under the name and providing IT services under the same. The fact that Mr Duru is the only named individual carrying out the work, does not alter the fact that the contracts were made, in each case, by the company, Citadel Trading Limited, and a named IT recruitment agency. In four of the contracts the details of the end client is provided, as is the duration of the contract. In our view, the contracts support the submissions made by Mr Duru at the hearing which were that he is a sole trader providing IT solutions and services under the company name Citadel Trading Limited. The invoices also support the nature of the contracted work carried out by the respondents. In some instances fully particularised invoices are required in order to be paid for work carried out. In other instances the agency provides its own documentation for completion and sign off. This may go some way to explaining the differences in invoice presentation depending on whether each was necessary for payment or whether it was simply generated for the respondents’ own records. However, even if we were to disregard all of the invoices with which the applicant takes issue, we are still satisfied that the evidence in its totality is sufficient to show that by the date of application the respondents were trading under the name Citadel Trading Limited, in the field of IT services.

54. This defence can, of course, be overcome if the applicant could demonstrate that the main purpose of the registration of the name was to obtain money (or other consideration) from the applicant or to prevent the applicant from registering the name.

55. The applicant’s submission in this regard is focused on the contested website www.citadel-trading.co.uk, which has offered financial services and appears to be ‘piggy-backing’ on the applicant’s reputation in the financial services sector. At the hearing, Mr Duru reiterated that the website is not operated by the respondents and confirmed that the respondents’ business is gained by word of mouth and it has no need for a website. He confirmed that since the business was started in 2007, the primary respondent has not operated a website. He also submitted that as a result of the Action Fraud case raised by the respondents, the contested website was subsequently taken down.

56. Ms McFarland accepted Mr Duru’s submission at the hearing.

57. Consequently, there is no evidence that the respondents have sought to obtain money or other consideration from the applicant and, particularly as the respondents have in fact been trading under the name, there is nothing to suggest that their main purpose in registering the name was to obstruct the applicant’s registration of it.

58. As we have found in favour of the respondents in relation to their operating defence, we do not consider it necessary to go on to assess their other pleaded defences based upon sections 69(4)(d) and 69(4)(e) of the Act.

Outcome

59. The application to change the company name has failed because the respondents have a defence that they have been operating under the name in issue. It is worth noting that the purpose of s.69 of the Act is to prevent the opportunistic registration of company names. It is not intended to provide exclusive rights to a company or trading name (as with trade marks).

Costs

60. The Tribunal awards costs from the published scale at paragraph 10 of the Tribunal’s Practice Direction. This is intended to provide a contribution not compensation to the successful party. The primary respondent has been successful in these proceedings and is entitled to a contribution towards its costs. As it was only represented professionally at the outset of the proceedings, we will reduce the award by 50% in relation to the work done whilst the primary respondent was unrepresented (statutory fees are awarded in full). With that in mind, we award the costs on the following basis:

Considering the CNA1 and preparing the CNA2 (including the nine documents attached to the defence): £450

Fee for filing the CNA2: £150

Considering the applicant’s evidence: £150

Preparation for and attendance at a hearing: £200

Total: £950

61. We therefore order KCG IP HOLDINGS LLC to pay CITADEL TRADING LIMITED (registration no. 06251289) the sum of £950 within 21 days of the expiry of the appeal period or, if there is an appeal, within 21 days of the final determination of this case if any appeal against this decision is unsuccessful.

62. Under section 74(1) of the Act, an appeal can only be made in relation to the decision to dismiss the application; there is no right of appeal in relation to costs. Any notice of appeal must be given within two months of the date of this decision. Appeal is to the High Court in England and Wales and Northern Ireland and to the Court of Session in Scotland. The Tribunal must be advised if an appeal is lodged.

Date 12th October 2020

Al Skilton
Company Names Adjuticator

S Wilson
Company Names Adjuticator

Teresa Perks
Company Names Adjuticator

1. See, for example, O/499/14. ↩

2. The respondent’s representative wrote to the tribunal on 4 March 2019, confirming that it was no longer the respondent’s representative in this matter. ↩

3. Current social distancing measures prevented a short adjournment for the adjudicators to arrive at a decision on the respondents’ amendment request. This is because the three adjudicators were not present in the same location. ↩

4. See Annex 1 to this decision. ↩

5. See CTL/1 attached to the CNA2 ↩

6. See CTL/2 and CTL/3 attached to the respondents’ CNA2 ↩

7. [1901] AC 217 (HOL) ↩

8. [2010] RPC 18 ↩