Civil fraud and asset recovery

The Commercial Court handed down judgment in this case, which concerned a claim brought under s.423 Insolvency Act 1986, following a 4-week trial in July 2024. The Court determined that the Claimant (“the Bank”) had failed to prove its inferential case in respect of the various transactions that had taken place by which the First Defendant (“Ahmad”) had transferred valuable assets and interests to the other Defendants, who were his family members, companies under their control and the trustees of a discretionary trust of which they were beneficiaries (“Virtue Trustees”).

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The Commercial Court has rejected an application by the Claimants in the Magomedov litigation – a $14 billion claim concerning alleged unlawful means conspiracies and bribery – for a Norwich Pharmacal order against three financial services companies, following the hearing of jurisdiction challenges and of the Claimants’ substantive application for Norwich Pharmacal relief, at a two-day hearing before Jacobs J.

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Mr Justice Calver acceded to the Claimants’ application for a Norwich Pharmacal order where the defendant law firm had obtained from an unnamed business consultancy a report which was subsequently deployed in s.68 proceedings against the Claimants with a view to setting aside an arbitration award. The report was subsequently revealed to be a forgery. The judgment contains a very interesting analysis of the circumstances in which a law firm might become amenable to a Norwich Pharmacal order and the extent to which privilege might bar such relief.

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The Claimants had sought c. £12m in damages for deceit, alleging that a deliberate oral misrepresentation at a meeting in 2016 led to Wirecard Bank extending credit to Monarch Airlines (which subsequently became insolvent). Mrs Justice Cockerill DBE dismissed the case in its entirety. The Judge agreed with the Defendants that German law applied to the claim and considered and applied the German law of causation, concluding that even if the misrepresentations had been made, they had not been relied upon. Of particular interest is the Judge’s consideration of “Gestmin” and the matters raised by Popplewell LJ in his 2023 COMBAR lecture “Judging Truth from Memory”.

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The Claimant advanced fraud claims in deceit, the tort of causing loss by unlawful means and unlawful means conspiracy arising out of the failure of a share purchase agreement. The judgment addresses the Second Defendant’s challenge to jurisdiction on the basis that the claims did not satisfy the merits threshold that the Claimant had to show a real prospect of success on the claim. Having considered the contemporaneous documentation, the judge found that the Claimant had no real prospect of establishing the factual allegations that underlay her claims. Permission to serve out of the jurisdiction was therefore refused. The case shows that, in appropriate circumstances, a court will find that a claim has no real prospect of success even where allegations of fraud are made.

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Judgment handed down, following a 3-day hearing, in Cowan v Equis Special LP by Parker J sitting in the Financial Services Division of the Grand Court of the Cayman Islands. Some interesting observations about the meaning of ‘written agreement’ for the purpose of amendment of statements of case, the Cayman law of security for costs, and the identification of funders.

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The claimants brought an application seeking to commit the defendant for breach of an undertaking he had given to the court. At a trial in March 2023 HHJ Pelling KC, sitting in the Commercial Court, dismissed the application. The Court of Appeal dismissed the claimants’ appeal, emphasising the need to focus on the breach as actually alleged in the application notice and the importance of procedural fairness when a defendant is facing a committal application.

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The Defendant was sentenced to 22 months immediate imprisonment in respect of a vast array of contempts of court, including dealing and dissipating assets in breach of a worldwide freezing order, providing inaccurate ancillary asset disclosure inflating his true asset position, providing false affidavit evidence seeking to justify dissipation, and 59 breaches of the standard form weekly living allowance.

The underlying claim pertained to a property investment fraud perpetrated by the first defendant, and orchestrated through a group of companies (some, but not all of which, were defendants to the proceedings). The defendants were the subject of a wide ranging worldwide freezing order and other injunctions including a quia timet injunction with respect to directorships of certain SPVs.

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Successfully appeared at the trial of the contempt application against the well-known businessman, arising out of very high-profile litigation which has dominated the Commercial Court for many years.

Leading Counsel for D1 (the main defendant) and D17 in this US$1Bn claim for damages under Thai law and relief under s.423 Insolvency Act 1986 arising from an alleged fraud and asset-stripping in connection with dealings in the shares of a Thai Wind Farm Company. The trial of the Claim lasted 20 weeks before Calver J in the Commercial Court between October 2022 and March 2023.

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In a judgment handed down on 20 September 2023 following the trial of preliminary issues, the Deputy Judge of the Commercial Court held that it is not a rule of private international law that a final and binding foreign judgment on the merits must be enforceable in the foreign jurisdiction before it could be the subject of an application to ‘enforce’ the foreign judgment in this jurisdiction by a claim at common law, and dismissed the sixth defendant’s application to set aside a default judgment the claimant had obtained against the first defendant, as (i) there was accordingly no arguable defence, and (ii) the sixth defendant had not satisfied the Denton criteria.

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A US$1 Billion damages claim, which arose out of the collapse of NMC PLC, a former FTSE 100 company, and its operating subsidiaries in the UAE, all of which are now in administration in England and Wales and the UAE. The claimant is an Abu Dhabi-based bank, and the first to third defendants are the former private shareholders in NMC PLC. The Bank alleged that the defendants are responsible, with others, for a serious fraud that appears to have taken place within the NMC Group of companies. The defendants all deny involvement in the fraud.

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A multi-million euro, multi-faceted fraud claim in the Cayman Islands that made new law on the Cayman Fraudulent Dispositions Law.

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South Africa’s largest ever private sector accounting fraud scandal. Alleged payments totalling approximately €95 million are said to have been made fraudulently. The case raises issues of German, Austrian, Swiss and BVI law.

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The latest chapter in the long running and high-profile litigation instigated by the LIA seeking to recoup funds invested during the Gaddafi dictatorship in Libya. Successfully defended fraud and corruption claims to the value of £200m.

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Proceedings across multiple jurisdictions and involve inter alia efforts to enforce against a yacht formerly owned by Mr Abramovich which is currently under arrest in Dubai. Case also involved alleged transactions in defraud of creditors contrary to section 423 of the Insolvency Act. After successfully representing Mrs Akhmedova in this case, Alan Gourgey KC was named Times Lawyer of the Week.

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A case involving the first statutory free-standing worldwide freezing order in Cayman. The first common law case in which a freezing injunction was granted over claims for American treble damages under RICO. Fraud resulted in losses of $5bn, with the lead claim being for $60m.

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A complex multi-jurisdictional case involving one of Greece’s largest shipping families and their ownership of shares in two Liberian Corporations, which raises multiple conflicts of law issues and matters relating to fraudulent misappropriation of shares.

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Gerald Metals, a trading company which brought a claim in deceit and in unlawful means conspiracy (based on s.423 Insolvency Act 1986) against a large number of trustees and individuals. The dispute was very significant and worth around £100 million.

Supreme Court case establishing that a person who applies to set aside an earlier judgment on the basis of fraud does not have to demonstrate that the evidence of this fraud could not have been obtained with reasonable diligence before the earlier trial.

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Acted for one of the successful defendants in his jurisdiction challenge – a Libyan businessman against whom a claim had been brought by the Libyan Investment Authority alleging fraud and corruption in relation to transactions that it had entered into with Bear Stearns bank in 2007.

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Supreme Court case establishing that a person who applies to set aside an earlier judgment on the basis of fraud does not have to demonstrate that the evidence of this fraud could not have been obtained with reasonable diligence before the earlier trial.

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US$1billion claim for dishonest breach of duty against the shareholder directors arising from the collapse of Russia’s 16th largest bank.

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A claim made by a Russian Bank against a “banana oligarch” for damages for deceit and unlawful means conspiracy in respect of a loan made to a Russian group of companies. The judgment is of note by identifying principles for inferring fraud.

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