Harrington & Charles Trading Company Ltd ((in Liquidation)) v Jatin Rajnikant Mehta

Hearing dates: 10, 11, 12 June 2024

Approved Judgment

This judgment was handed down remotely at 10.30am on 25 October 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Master Kaye SITTING AS A DEPUTY HIGH COURT JUDGE

Master Kayesitting as a Deputy High Court Judge:

These proceedings concern a complex high value multi-layered multi-jurisdictional Alleged Fraud. The claimants put its value at about US$1bn.

The background can be found in the judgments of Edwin Johnson J and Miles J 1. The parties are familiar with the background, descriptions, terms, and definitions used in those judgments. Where appropriate I shall use those terms and definitions without further explanation.

The First to Sixth Claimants are all Layer 2 companies and the Ninth Claimant is the Layer 3 company forming part of the Transactional Services Unit within the Amicorp Group structure (“ the claimant companies”). Following the events which gave rise to this claim, the claimant companies were dissolved: the Layer 3 company in 2016 and the Layer 2 companies between 2019 and 2020. All of them were subsequently restored to the register between 2021 and 2022 and are now in liquidation. The Seventh and Eight Claimants are the Joint Liquidators of the claimant companies (“ the JLs”) (together “ the claimants”).

The First to Fourth Defendants, Jatin and Sonia Mehta and their sons Vishal and Suraj are referred to as the Family Defendants. When referring to them individually I will refer to them by their given names to avoid confusion. No disrespect is intended.

The Fifth Defendant, Mr Obidah, together with the Family Defendants are described as the Alleged Principal Conspirators in the Consolidated Amended Particulars of Claim dated 30 May 2023 (“ the CAPOC”).

Although prior to the issue of this claim, English lawyers had made enquiries in respect of the restoration of the claimant companies on behalf of Mr Obidah, he is not an active participant in these proceedings. He is believed to be based in the UAE. In September 2022 (following service of the claim on Mr Obidah) UAE lawyers filed a statement together with numerous documents on his behalf. Those documents related to litigation in the UAE concerning Layer 1 companies. Apart from those filings he has not otherwise engaged with these proceedings.

The claim was commenced by the First to Eighth Claimants against the Alleged Principal Conspirators on 31 May 2022. They had already obtained a Worldwide Freezing Order (“ WFO”) against the Family Defendants on 27 May 2022. The WFO included an extended definition of assets. A second claim in similar terms was issued by the Ninth Claimant against the Alleged Principal Conspirators on 24 June 2022.Corresponding Insolvency Act applications were issued in the Insolvency proceedings by which the claimant companies had been restored.

A third claim was issued by the claimants against the Sixth to Eighth Defendants on 23 September 2022. The Sixth and Seventh Defendants, IIA Technologies PTE Limited (“ IIA”) and Polishing Technologies PTE Limited (“ Polishing”) are Singaporean

I shall refer to the Family Defendants and IIA together as the active defendants when context allows.

The claimants say that the Eighth Defendant, Mr Kothari introduced some or all the Alleged Principal Conspirators to Amicorp and subsequently provided instructions on their behalf. In August 2023, his Indian lawyers sent the claimants' solicitors Hogan Lovells International LLP (“ HL”) an acknowledgment of service indicating an intention to challenge jurisdiction and defend, together with a substantive defence asking them to upload it to the court file, which they did. Mr Kothari has not since participated in the proceedings.

On 21 April 2023, the three claims and the corresponding Insolvency Act applications were conjoined and consolidated.

Given the nature of the current applications and the history and complexity of the claim and the previous applications it is helpful to understand who represented the parties and when and in broad terms what the previous substantive applications were and the current procedural position.

The claimants have been represented by HL since September 2022. Prior to that they were represented by Eversheds Sutherland (International) LLP, who obtained the WFO. There has been in large measure of consistency in their counsel team. Mr Wilson KC, Mr Hinks, and Mr McWilliams, who appeared for the claimants at this hearing, were also the counsel who obtained the WFO. Some or all of them have participated in each hearing since then.

The same cannot be said for the Family Defendants. Jatin, Sonia, and Suraj were initially represented by Jones Day from about May 2022, then from about November 2022, they were represented by Withers. Since October 2023 Gardner Leader LLP (“ GL”) have represented the Family Defendants. For Jatin, Sonia, and Suraj each change of solicitors coincided with a complete change of counsel team. Each change of representation largely coincided with the conclusion of a substantive application.

Vishal was separately represented by Howard Kennedy and his own counsel team from June 2022 until May 2023 when he also instructed Withers. He retained one of his junior counsel team in May 2023 who joined the Family Defendants' counsel team. Since October 2023 he has had the same solicitor and counsel representation as the rest of the Family Defendants.

This is not a criticism of the Family Defendants; these are choices for the Family Defendants to make and fresh eyes can be helpful. However, whilst fresh eyes can be helpful it also risks a lack of continuity of approach and a risk that there would be a loss of knowledge and understanding in relation to some of the issues raised in the applications to which this judgment relates. It is a factor that did not assist the active defendants. It bears on whether the review by those fresh eyes should entitle the Family Defendants to revisit matters which had previously been determined in a particular way (whether by judgment, order, consent order or agreement) and whether such a course of action would be consistent with the overriding objective or good case management.

IIA were joined to the claim in April 2023 and were subsequently served in June 2023. GL have represented them since at least July 2023. The counsel team who were assisting IIA prior to October 2023 appear to have become the active defendants' counsel team in about October 2023.

This claim has been under sustained attack by the Family Defendants since it was issued. They have brought applications to discharge the WFO on the basis there was not a good arguable case amongst other grounds. They have challenged the jurisdiction. These applications were heard in October and December 2022 but were unsuccessful as set out in Edwin Johnson J's judgments in November 2022 and February 2023. During the course of the joinder and consolidation hearing in April 2023, the Family Defendants advanced a number of complaints about the substance of the claim, how it was pleaded and objected to the then proposed amendments. This is summarised at [1] to [9] of [2023] EWHC 4220 (Ch). The Family Defendants' applications to strike out and for summary judgment in which they again sought to challenge the basis and merits of the claim were dismissed in October 2023 by Miles J and I following a hearing in July 2023. The Family Defendants have not been successful in disposing of the WFO or the claim in whole or part.

I heard the First CMC and the applications identified below over three days between 10 and 12 June 2024. The date for the CMC had been fixed in October 2023 to enable the parties to fully prepare for it given the complexities of the issues involved in this claim. Although the Family Defendants had actively opposed the claim since its inception in...