Lonestar successful in first ever “cyber-attack” claim in the Commercial Court

03/04/23

Lonestar Communications Corporation LLC v (1) Daniel Kaye, (2) Avishai Marziano, (3) Cellcom Telecommunications Ltd, (4) Ran Polani, and (5) Orange Liberia, Inc.

Mr Justice Foxton has delivered judgment in the first civil claim in England and Wales arising out of a “cyber-attack”: Lonestar Communications Corporation v Kaye & Ors [2023] EWHC 421 (Comm) and [2023] EWHC 732 (Comm). The litigation was one of The Lawyer’s “Top 20 cases” of 2022.

Between October 2015 and February 2017, Lonestar, a leading provider of telecommunications services in Liberia, was the victim of a campaign of cyber-attacks which disrupted its network and the data and voice services which it provided to its customers. 

It subsequently emerged through criminal proceedings in Germany and the UK that the “Distributed Denial of Service” or “DDOS” attacks had been carried out by the First Defendant, Daniel Kaye, a UK-based “hacker-for-hire”. It also emerged that the attacks on Lonestar had been orchestrated, funded, and directed by the Second Defendant, Mr Avishai Marziano, with the assistance and technical support of the Fourth Defendant, Mr Ran Polani.

Mr Marziano was, at the relevant time, the CEO of “Cellcom Liberia”, Lonestar’s main competitor in Liberia. Mr Polani was also employed by Cellcom Liberia.  Cellcom Liberia was owned by the Third Defendant, Cellcom Telecommunications Ltd (“Cellcom BVI”).  However, in April 2016, Cellcom BVI sold Cellcom Liberia to the Orange Group, and Cellcom BVI was then rebranded as “Orange Liberia”, the Fifth Defendant.

Following a Commercial Court trial in December 2022 and January 2023, Foxton J found for Lonestar on its claims against all five of the Defendants.  In particular, Foxton J found that:

1. Mr Kaye, Mr Marziano and Mr Polani were each liable to Lonestar in the Liberian law cause of action known as “damages for wrong”.
2. Orange Liberia and Cellcom BVI were both vicariously liable for the wrongdoing of Mr Marziano and Mr Polani.
3. Lonestar was entitled to substantial damages in respect of both (i) the loss of profit which it had suffered as a result of the cyber-attacks; and (ii) the expenditure which it had been forced to incur in order to investigate and respond to the attacks.
4. In addition, Lonestar was entitled to exemplary damages as against Mr Marziano.

In the consequentials judgment, delivered on 29 March 2023, Foxton J also gave important guidance on the “conventional rate” for pre-judgment interest on US dollar judgments in the Commercial Court, a point which had been the subject of conflicting previous authority.

The trial judgment is here.