Manek and Others v 360 One Wam Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Simon Rainey |
| Judgment Date | 30 March 2023 |
| Neutral Citation | [2023] EWHC 710 (Comm) |
| Docket Number | Case No: CL-2022-000075 |
| Court | Queen's Bench Division (Commercial Court) |
[2023] EWHC 710 (Comm)
Simon Rainey K.C. (sitting as a Judge of the High Court)
Case No: CL-2022-000075
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
Rajesh Pillai K.C., William Day and Rishab Gupta (instructed by Howard Kennedy) for the Applicants / Defendants
Anna Dilnot K.C. and Joshua Crow (instructed by Cleary Gottlieb) for the Respondents / Claimants
Hearing dates: 17 th March 2023
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Simon Rainey K.C. SITTING AS A JUDGE OF THE HIGH COURT
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Thursday 30 March 2023 at 10:30am.
Simon Rainey KC:
This is an application by the Defendants, 360 One Wam Limited (formerly IIFL Wealth Management Limited), 360 One Asset Management Limited (formerly IIFL Asset Management (Mauritius) Limited) and 360 One Capital Pte Limited (formerly IIFL Capital Pte Limited) to set aside the order of Foxton J dated 7 June 2022 granting ex parte permission to the Claimants to serve these proceedings (“the New Proceedings”) on the Defendants out of the jurisdiction. I shall refer to the Defendants individually, as they were referred to in argument before me, as IIFL Wealth, IIFL Mauritius and IIFL Singapore respectively. Collectively they are referred to in this Judgment as the Defendants or the IIFL Defendants.
The background to the application: the 2017 and 2022 proceedings
The New Proceedings are concerned with an alleged fraudulent scheme that resulted in the Claimants selling their shares (amounting to a 6% shareholding) in an Indian company, Hermes i-Tickets Pte Ltd (“Hermes”) at a significant undervalue.
The underlying factual allegations made in the New Proceedings effectively mirror those made by the Claimants in another set of proceedings issued on 6 October 2017 (“the Existing Proceedings”) against Mr Ramu and Mr Palani Ramasamy (“the Ramasamys”), IIFL Wealth (UK) Ltd (“IIFL UK”) and Mr Amit Shah (“the Original Defendants”) which are currently pending before the Commercial Court. Essentially the facts alleged and which are relied upon as giving causes of action against the Original Defendants and now the IIFL Defendants are these.
The Ramasamys were the majority shareholders in Hermes. The Claimants sold their shares by sale and purchase agreements (“the SPAs”) executed in September 2015 to a company controlled and owned by the Ramasamys, Great Indian Retail Pte Ltd (“GIR”). The Claimants had been told, by the Original Defendants, that a Mauritius entity, Emerging Markets Investment Fund 1A (“EMIF”) was the third party ultimate purchaser of Hermes. They were also told that the price EMIF was paying (c.USD 42 million for 100% of Hermes) was a good price, that Hermes' performance had been deteriorating, and that the Ramasamys would not retain any economic interest in Hermes after the sale to EMIF. Six weeks after the SPAs, on 27 October 2015, Wirecard announced that it had acquired Hermes from GIR for a consideration in excess of EUR 200 million (and in excess of EUR 300 million when earn-out payments are included). It is alleged that the true ultimate buyer, the true value of Hermes and the true profits made on the transactions were all fraudulently concealed from the Claimants.
The Claimants' case in the Existing Proceedings is that the representations which had been made to them by the Original Defendants were all false (and dishonestly so) in that they had been involved with the negotiations and due diligence for Wirecard's purchase of Hermes, which had been in prospect since at least 2014. Therefore, they knew that EMIF was not the ultimate purchaser, that the price paid to the Claimants was not a good one, that Hermes' performance had in fact been improving, and that those involved stood to make substantial sums because Hermes was being sold to Wirecard for a hugely increased consideration. It is also alleged that Mr Amit Shah made threats to use unlawful means to strip Hermes of its assets in the event the Claimants refused to sell their shares to GIR. The Claimants additionally allege that the Original Defendants formed a conspiracy to use unlawful means to cause damage to the Claimants. The Claimants claim damages representing the difference between the true value of the shares and the value they received.
By the New Proceedings, the Claimants expand the circle of Defendants in respect of these allegations to include the IIFL Defendants, alleging that the actions of Mr Shah are to be attributed to the IIFL Defendants, or that they are vicariously liable for them. Therefore, the IIFL Defendants are liable in deceit, intimidation and conspiracy. Additionally, the Claimants allege that the IIFL Defendants also became party to the conspiracy, and also furthered the common design to commit torts against the Claimants, through at least two other IIFL Group employees: Mr Maharoof Parokot and Mr Sarju Vakil.
The Claimants therefore advance four causes of action against each of the Defendants: deceit, intimidation, conspiracy and joint tortfeasance.
The IIFL Defendants' application to set aside service
The Defendants' application is made upon two grounds.
First, the Defendants contend that the claims made against each of them by the Claimants have no realistic prospect of success because each claim is time barred.
Secondly, it is contended by them that the Claimants were in breach of their duty of full and frank disclosure in various respects which warrant the setting aside of the permission granted.
Ground (1): No realistic prospect of success
Relevant principles
There was no issue between the parties as to the approach to be taken by the Court. In order to justify the grant of permission to serve out of the jurisdiction, the Claimants must establish, with the burden of proof upon them, that they have a realistic prospect of success in respect of each claim against each of the Defendants.
Once that is challenged by the Defendants, the position reverts effectively to a summary judgment application. As it was put by the Supreme Court in Lungowe v Vedanta Resources plc [2019] UKSC 20 at [42] (and cited by the Defendants):
“The single task of the judge under this heading was to decide whether the claim against Vedanta could be disposed of, and rejected, summarily, without the need for a trial. This is because, although Vedanta made no reverse summary judgment application of its own, the assertion by a foreign defendant seeking to set aside permission to serve outside the jurisdiction […] that the claim […] discloses no real issue to be tried involves, as is now agreed, a summary judgment test: see Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804, per Lord Collins of Mapesbury at para 82.”
The Defendants' case on time bar
The Defendants' case is that, (i), the Claimants' claims are governed by Indian law and are time-barred as a matter of Indian law; alternatively, (ii), if the claims are governed by English law (as the Claimants contend that they are), then they are similarly time-barred.
For present purposes, the only relevant difference between Indian and English law in relation to limitation is that, rather than the six year limitation period which would apply for torts under section 2 of the English Limitation Act 1980, under the relevant Indian statute, the Limitation Act 1963, the applicable time bar is three years from the date of the accrual of the cause of action (Article 113).
It is common ground that the causes of action in respect of each of the four claims arose on or about 9 September 2015 when the Claimants signed the SPAs with GIR under which they sold their minority shareholding in Hermes as a result of the alleged deceit, intimidation, conspiracy and joint tortfeasance of the Defendants. The New Proceedings were commenced by a claim form issued on 16 February 2022, therefore prima facie out of time.
The Claimants however contend that they did not and could not have discovered the relevant facts to enable them to make their claims against the IIFL Defendants until much later, that the relevant starting date for the limitation period is accordingly postponed and that in consequence the New Proceedings were commenced in time.
Both the English and Indian limitation statutes provide for the postponement of the running of the limitation period in the cases of fraud, concealment or mistake in very similar terms.
Section 32 of the English Limitation Act 1980 provides:
“where in the case of any action for which a period of limitation is prescribed by this Act, either—
(a) the action is based upon the fraud of the defendant; or
(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or
(c) the action is for relief from the consequences of a mistake;
the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.”
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Prashant Hasmukh Manek v 360 One Wam Ltd (formerly known as IIFL Wealth Management Ltd)
...28 th April 2023 Simon Rainey KC: 1 This judgment addresses consequential matters arising out of my Judgment dated 30 th March 2023, [2023] EWHC 710 (Comm), by which I dismissed the Defendants' application to set aside the order of Foxton J dated 7 June 2022 granting ex parte permission to......