Alta Trading UK Ltd (formerly known as Arcadia Petroleum Ltd) v Peter Miles Bosworth
| Jurisdiction | England & Wales |
| Court | King's Bench Division (Commercial Court) |
| Judge | Mr Justice Henshaw |
| Judgment Date | 22 January 2025 |
| Neutral Citation | [2025] EWHC 91 (Comm) |
| Docket Number | Case No: CL-2015-000047 |
-name"> (10) The Cornhill Group Limited
THE HONOURABLE Mr Justice Henshaw
Case No: CL-2015-000047
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Alec Haydon KC, David Heaton, Emily Albou, Ali Al-Karim, Danielle Carrington and Amber Turner (instructed by Grosvenor Law LLP) for the Claimants
Richard Eschwege KC (instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) for the First and Second Defendants
Tom Sprange KC and Freddie Popplewell (instructed by King & Spalding International LLP) for the Fifth and Ninth Defendants
The Seventh and Eighth Defendants did not appear and were not represented
Hearing dates: 7–10, 13–17 and 20–23 May, 4–5, 10–11, 17–21 and 24–28 June, 1–5, 22–23, 25–26 and 28 July 2024
Draft judgment circulated to parties: 16 December 2024
Approved Judgment
| (A) INTRODUCTION | 6 |
| (B) OVERVIEW OF PARTIES AND CLAIMS | 7 |
| (C) WITNESSES OF FACT | 10 |
| (D) EXPERT EVIDENCE | 16 |
| (E) DOCUMENTS | 17 |
| (F) WEST AFRICAN OIL TRADING | 20 |
| (1) Risks, use of contract holders and sleeving | 20 |
| (2) Obtaining term contracts, sponsors and service providers | 24 |
| (3) Service providers' ongoing role | 27 |
| (4) Remuneration of intermediaries and service providers | 29 |
| (5) Special purpose companies | 35 |
| (G) PRE-2005 ACTIVITIES OF ARCADIA, ATTOCK AND MR KELBRICK | 35 |
| (1) Origins and development of the Arcadia Group and Attock Mauritius | 35 |
| (2) Physical and paper trading | 37 |
| (3) Service providers | 43 |
| (4) Pang Ling | 47 |
| (5) Tristar, Mr Decker and Arcadia Mauritius | 48 |
| (6) The Sao Tome Contract | 50 |
| (7) Mr Kelbrick leaves Arcadia | 52 |
| (H) FARAHEAD'S ACQUISITION OF ARCADIA AND SURROUNDING EVENTS | 58 |
| (1) Principal Search briefing paper | 58 |
| (2) Frontline's objectives | 63 |
| (3) Frontline comparison document and April 2005 meeting | 64 |
| (4) Service providers, risks and Beirut office proposal | 65 |
| (5) Alleged Bosworth continuing control of Arcadia Mauritius | 72 |
| (6) Sleeving arrangements | 76 |
| (7) Summer 2005 discussions of bonuses | 78 |
| (8) Linklaters due diligence and Pang Ling | 79 |
| (9) Discussions and events in autumn 2005 | 80 |
| (10) Business with Attock Mauritius | 86 |
| (11) The Zafiro Contract and Sonergy | 87 |
| (12) Completion of Farahead's purchase of Arcadia | 99 |
| (13) Memorandum of Understanding with Concerto | 99 |
| (I) SUBSEQUENT EVENTS | 100 |
| (1) Establishment of Arcadia Lebanon | 100 |
| (a) The parties' cases | 100 |
| (b) Witness statements | 102 |
| (c) Documents | 113 |
| (d) Defendants' oral evidence | 118 |
| (e) Claimants' oral evidence | 123 |
| (f) Conclusions | 134 |
| (2) Arcadia Lebanon becomes operational | 135 |
| (3) Mr Kelbrick's role as service provider to Arcadia | 136 |
| (4) Audit enquiries | 143 |
| (5) Examples of transaction chains involving Arcadia Lebanon | 145 |
| (a) Pricing under the Term Contracts | 145 |
| (b) EY Deal 6 | 148 |
| (c) EY Deal 19 | 150 |
| (6) Senegal Contract | 151 |
| (7) Arcadia Lebanon payments to GEPVTN | 158 |
| (8) Autumn 2007 | 163 |
| (9) Arcadia's products business: MRS and the African Horizon | 165 |
| (10) Events in 2008 | 168 |
| (a) Review of Farahead governance | 168 |
| (b) Indarama project and Concerto | 170 |
| (c) Alleged statement about closure of Arcadia Mauritius | 171 |
| (d) Proposed restructuring | 173 |
| (e) Discussions about ownership of Arcadia Lebanon | 175 |
| (f) Other events of mid 2008 | 182 |
| (g) Discussion of Arcadia Lebanon dividend | 183 |
| (h) Alleged deceitful misrepresentation that Arcadia Lebanon dormant | 185 |
| (i) Further discussion of Arcadia Lebanon dividend | 189 |
| (11) Events in 2009 | 192 |
| (a) The Attock/GEPetrol Contract | 192 |
| (b) Arcadia Lebanon profits and dividend | 193 |
| (c) Withdrawal from Concerto joint venture | 197 |
| (d) Projector payments | 199 |
| (e) Further events/discussions concerning Arcadia Lebanon | 199 |
| (f) Alleged cessation misrepresentation | 203 |
| (g) The Arcadia Mauritius/NNPC Contract | 207 |
| (h) Mr Kelbrick's acquisition of Attock Mauritius, Arcadia Mauritius and Attock Lebanon | 210 |
| (i) Continued West African Updates | 214 |
| (12) Events in 2010 | 215 |
| (a) Arcadia bonus scheme | 215 |
| (b) The Crudex/NNPC Contract | 215 |
| (c) The Attock Mauritius/NNPC Contract | 220 |
| (d) The Cathay/NNPC Contract | 221 |
| (e) Other events in 2010 | 225 |
| (13) Events of 2011 | 230 |
| (a) The Azenith Nigeria/NNPC Contract | 230 |
| (b) Further compliance training | 235 |
| (c) Business plan | 235 |
| (d) Planned engagement of EY | 237 |
| (e) Bosworth retention bonus payment | 237 |
| (f) Equinox | 238 |
| (g) Atlantic Nigeria | 241 |
| (h) Capital Oil & Gas | 255 |
| (14) Events in 2012 | 262 |
| (a) Summary of investment status | 262 |
| (b) Cakasa | 262 |
| (c) The Arcadia website in 2012 | 265 |
| (15) Events of 2013 | 265 |
| (a) Attock Dubai | 265 |
| (b) Mr Bosworth's resignation | 266 |
| (c) Arcadia restructuring plan and investigations | 266 |
| (d) Enquiries into Arcadia Lebanon dividend | 267 |
| (e) Creation of the Hannas Note | 270 |
| (f) August and September 2013; departure of Mr Hurley | 272 |
| (g) 2013 Attock Dubai transaction | 275 |
| (h) Pass-through payments | 281 |
| (16) 2014 and 2015 | 282 |
| (J) THE CLAIMANTS' CLAIMS | 282 |
| (1) The pleaded case | 282 |
| (2) The diversion case in overview | 299 |
| (3) The case in relation to the Arcadia Lebanon transactions | 300 |
| (4) The case in relation to the Attock Transactions | 309 |
| (5) The dishonesty case | 316 |
| (a) Roles and collusion | 316 |
| (b) Dishonesty alleged against Mr Bosworth | 317 |
| (c) Dishonesty alleged against Mr Hurley | 319 |
| (d) Dishonesty alleged against Mr Kelbrick | 320 |
| (K) APPLICABLE PRINCIPLES | 322 |
| (1) Causes of action | 322 |
| (2) English law | 323 |
| (a) Dishonesty | 323 |
| (b) Unlawful means conspiracy | 325 |
| (c) Breach of fiduciary duty | 326 |
| (d) Dishonest Assistance | 341 |
| (e) Knowing Receipt | 342 |
| (3) Swiss law | 343 |
| (a) Article 717 SCO | 344 |
| (b) Article 754 SCO | 349 |
| (c) Article 423 SCO | 349 |
| (d) Article 41 SCO and Article 158 SPC | 350 |
| (e) Article 43 SCO | 351 |
| (f) Accessory liability | 351 |
| (L) EVALUATION OF THE CLAIMANTS' CLAIMS | 352 |
| (1) General matters | 352 |
| (2) The Arcadia Lebanon Transactions | 354 |
| (3) The Attock Transactions | 370 |
| (4) Dishonesty | 376 |
| (a) Roles and collusion | 376 |
| (b) Dishonesty alleged against Mr Bosworth | 380 |
| (c) Dishonesty alleged against Mr Hurley | 382 |
| (d) Dishonesty alleged against Mr Kelbrick | 383 |
| (e) Conclusion as to alleged dishonesty | 384 |
| (5) Conclusion on the Claimant's essential case | 384 |
| (M) THE COUNTERCLAIMS | 386 |
| (1) Bosworth investment in Cushing storage project | 386 |
| (2) Bosworth retention bonus | 393 |
| (3) Bosworth unpaid annual bonuses | 402 |
| (4) Hurley unpaid bonus | 404 |
| (5) Set-off against Mr Bosworth entitlements | 409 |
| (6) Interest | 410 |
| (N) CONCLUSIONS | 410 |
| ANNEX – THE APPLICATION TO AMEND | 411 |
(A) INTRODUCTION
This case relates to a course of events which the Claimants, members of the Arcadia Group, allege amounted to “a substantial and sustained fraud”. The events involved 144 crude oil purchase and sale transactions between April 2007 and May 2013 relating to oil originating in West Africa.
In simple terms, the Claimants allege that fraudulent transactions were carried out in this way. In the course of trading transactions in which an entity within the (legitimate) Arcadia Group was buying and/or selling crude oil, fraudulent entities which were not part of the Arcadia Group, but rather were beneficially owned and/or controlled by some or all of the individual Defendants, were ‘inserted’ into the chain of transactions between the legitimate Arcadia Group entity and its buyer and/or seller. The
‘inserted’ entities extracted profit that would otherwise have accrued to the legitimate Arcadia Group. On other occasions, trading transactions into which an entity within the legitimate Arcadia Group would or could have entered were diverted to fraudulent entities which were not part of the Arcadia Group, but rather were beneficially owned by and/or controlled by some or all of the individual Defendants. In addition, entities within the legitimate Arcadia Group were caused to enter into loss-making transactions for the sole or dominant purpose of ensuring that profits accrued to and/or losses were avoided by entities beneficially owned by and/or controlled by individual DefendantsThe Claimants allege that the First and Second Defendants, Mr Bosworth and Mr Hurley, “were centrally involved in the conception and operation of the fraud perpetrated on them and are likely to have been the primary architects of and beneficiaries from the fraud”. The Claimants allege that the Fifth Defendant, Mr Kelbrick, “played an active and essential role in the fraud perpetrated on them”, was closely associated with the relevant trading activities as well as with Mr Bosworth and Mr Hurley, “played an important and active role in the operations of the fraudulent companies” – including the Ninth Defendant Attock Oil International Limited, Mauritius (“ Attock Mauritius”) – and was beneficially interested in “entities who appear to have profited from the fraud”.
Mr Bosworth and Mr Hurley counterclaim for certain bonuses and similar sums which they allege remained unpaid when they departed from the Arcadia Group in 2013.
The case was tried before me over a period of approximately 10 weeks, during which I heard evidence from, among others, the ultimate owners of the Arcadia Group, the individual Defendants (Messrs Bosworth,...
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Arcadia (Alta) v Bosworth (amendment)
...2007 and May 2013 relating to oil originating in West Africa ( Alta Trading UK (formerly known as Arcadia Petroleum Limited) v Bosworth [2025] EWHC 91 (Comm) (“ the 22 January judgment”)). In the same judgment I upheld certain counterclaims made by the First Defendant (“ D1”) and the Second......
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Alta Trading UK Limited & Ors v Peter Miles Bosworth & Ors
...arguable as a matter of substance, has been brought after the expiry of the limitation period and cannot be permitted pursuant to CPR[2025] EWHC 91 (Comm) Case No: CL-2015-000047 IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES KING'S BENCH DIVISION COMMERCIAL ......