Musst Holdings Ltd v Astra Asset Management UK Ltd Astra Asset Management LLP

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Freedman
Judgment Date17 December 2021
Neutral Citation[2021] EWHC 3432 (Ch)
Docket NumberCase No: BL-2018-002369

[2021] EWHC 3432 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

BUSINESS LIST (LONDON)

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Freedman

Case No: BL-2018-002369

Claim No. BL-2019-001483

Between:
Musst Holdings Limited
Claimant
and
(1) Astra Asset Management UK Limited Astra Asset Management LLP
Defendant
(1) Astra Asset Management UK Limited
(2) Astra Asset Management LLP
Claimants
and
(1) Musst Investments LLP
(2) Musst Holdings Limited
(3) Mr Saleem Anwar Siddiqi
Defendants

Peter Knox QC and Kirsten Sjovoll (instructed by Collyer Bristow LLP) for the Claimant

Christopher Boardman QC, Tom Beasley and David Glen (instructed by Payne Hicks Beach) for the Defendants

Hearing dates: 27, 28, 29, 30 April, 4, 5, 6, 7, 10, 11, 12, 20 and 21 May 2021.

Further documents submitted including: 10, 11 June, 23 August, 13 October 2021.

Draft judgment handed down on 26 October 2021.

Approved Judgment

SECTION NUMBER

SUBJECT

PARAGRAPH NUMBER

Contents

I

Introduction

1

II

The background

2

III

The Counterclaim in the Contract Claim

18–23

IV

Summary of issues in the Contract Claim

24

V

The Defamation Claim

25–33

VI

The procedural history

34–35

VII

Observations about the witnesses

(a) Case law on contemporary documents and overall probabilities

36–42

(b) The witnesses of fact

43–55

VIII

The Contract Claim: the background

(a) The early period in 2011 and the parties

56–61

(b) Musst

62

(c) January 2012 to late October 2012

63–71

(i) The initial approaches to The Observatory and LGT

72–76

(ii) Mr Mathur leaves Deutsche Bank

77–78

(iii) The setting up of Astra Capital and Astra LLP

79–81

(d) Points in dispute in the period between January and October 2012

82–92

(e) Events from late October to 21 November 2012

93–108

(f) Events after 21 November 2012 to the end of 2013

(i) The negotiation of the Octave Contract

109–113

(ii) The Effective Date provision

114–115

(iii) The broker/dealer issue

116–123

(g) The nature of the Octave Contract (h) The investments

123–125

(i) The initial investments in ASSCFL and ASCIL

126–128

(ii) The investment made by The Observatory

129–132

(iii) The investment made by LGT

133–136

(iv) The fees paid by Octave to Musst from 2B and Crown

137

(i) The length of time for which marketing continued

138–142

(j) The position as between Musst, Mr Reeves and Mr Mathur after 21 November 2012

143–147

(k) Mr Reeves' discussions with Mr Siddiqi and Ms Galligan about fees for LGBR

148–150

(l) Communications between Mr Mathur and Mr Reeves

151

IX

The background to the alleged novation claim

(a) The transfer from Octave to Astra LLP

152–154

(b) The alleged novation to Astra LLP in relation to the Crown contract

155–159

(c) The alleged novation to Astra LLP in relation to the 2B contract

160–161

(d) The draft contract providing for a change to Astra LLP and Astra Capital

162–168

(e) The transfer to Astra UK

169–173

X

The discussions between Mr Mathur, Mr Siddiqi and Ms Galligan on 14 June, 27 June and 13 July 2016

174–178

XI

Astra's written proposal in late July 2016

179–183

XII

Pre-action protocol correspondence

184–185

XIII

The first issue: the November Arrangement Issue

(a) Introduction

186–189

(b) Astra's case

190–194

(c) Musst's case

195–197

(d) Discussion

198–211

XIV

Alleged without prejudice discussions

212–233

XV

The second issue: did Musst introduce 2B and Crown to Octave?

234–237

(a) Musst's submissions

238–240

(b) Astra's submissions

241–243

(c) The relevant terms of the Octave Contract

244–249

(d) The law regarding construction of contracts

250–255

(i) Rainy Sky

256

(ii) Arnold v Britton

257

(iii) Wood v Capita Insurance Services Limited

258–259

(e) The facts relating to the introduction of 2B

260–267

(f) Was the investment of 2B introduced by Musst under the Octave Contract?

268–288

(g) The facts relating to the introduction of Crown

289–303

XVI

Rectification and estoppel by convention

304

(a) Facts relevant to estoppel and rectification

305–306

(b) Estoppel by convention

(i) The law

307–310

(c) Application to the facts – estoppel by convention

311–313

(d) The law on rectification

314–320

XVII

The third issue: novations to Astra LLP and then to Astra UK

(a) Introduction

321–323

(b) The law

324–332

(c) Musst's submissions

333–345

(d) The onward novation to Astra UK

346–351

(e) Astra's arguments on novation

352–368

(f) Discussion

369–401

XVIII

The fourth issue: what if there was no novation to Astra UK?

402

XIX

The fifth issue: the Current Strategy defence

(a) Introduction

403–404

(b) Relevant contractual provisions

405

(c) Definitions

405

(d) Musst's case

406–409

(e) Astra's case

410–415

(f) Discussion

(i) The key question of construction

416

(ii) Textual approach

417–425

(iii) Contextual approach and iterative approach

426–435

(iv) Further argument regarding the date of the making of the investments

436

(g) Estoppel by convention

437–444

(h) The expert evidence

445–446

(i) Conclusion

447

XX

The sixth issue: is Musst's claim in relation to fees received from 2B barred because it acted illegally in introducing it?

(a) Introduction

448–457

(b) The facts relevant to the sixth issue

458–460

(c) US Law – relevant terms of the Octave Contract

461–462

(d) US Law

(i) The pleadings

463–464

(e) Musst's submissions

465–477

(f) Astra's submissions

478–491

(g) Additional matter raised in Mr Thel's report: application of 1934 US Act

492

(h) Discussion

493–497

(1) The 2B Contract as an investment contract

498–505

(2) Equitable defences

506–512

(3) Risk of aiding and abetting not sufficient to give rise to a defence

513–515

(4) Payment as a knowing or reckless breach

516–517

(5) Estoppel

518–519

(i) Conclusion

520

XXI

The Defamation Claim

521

(1) The facts

(a) Introduction

522–523

(b) Background to conversation of 23 June 2016

524–531

(c) The June 2016 Goldman Sachs Hedge Fund Conference in Rome

532–539

(d) The evidence in support of the Statements

540

(e) Statements on other occasions

541

(f) Conversation with Mr Rigter

542–549

(g) The Chander Statement

550–553

(h) The dinner with Mr Septon

554

(i) Another unnamed investor

555–558

(j) Subsequent events

559–560

(k) Conversations on 7 July 2016 and Mr Murray's note

561–585

(l) The Absence of Mr Plotke

586–591

(m) The evidence of Mr Siddiqi and Ms Galligan

592–596

(2) Proof required about the words used

597–609

(3) Conclusions

610–612

(4) The law on proof of damage

613–621

(5) Proof of damage

622–633

(6) Malicious falsehood

634–641

XXII

The Seventh Issue: Contractual claim relating to disparaging statements.

642–659

XXIII

The Eighth Issue: remedies

(a) Areas to consider

660

(1) The extent of relief in respect of Crown I and 2B

661–666

(2) The extent of relief in respect of Crown II and Crown III

667–673

(3) The extent of relief for “any other entity” or customer

674

(4) The indemnity claim

675

(5) Any other relief

676

XXIV

Conclusion

677

Mr Justice Freedman

I Introduction

1

This judgment arises out of two claims heard together, one referred to as the “Contract Claim” and the other as the “Defamation Claim”. In the Contract Claim (which is Claim No BL-2018-002369), Musst Holdings Limited sues Astra Asset Management UK Limited (“Astra UK”) and Astra Asset Management LLP (“Astra LLP”) for fees for effecting two introductions, and for access to their books and records to assess all the fees that are properly due to them or an account. The term “Musst” is used for Musst Holdings Limited. Where it is intended to refer to the Musst group of companies, the term “MUSST” is used. The term “Astra” is used collectively for the Defendants in the Contract Claim. In the Defamation Claim (which is Claim No BL-2019-001483), Astra UK and Astra Capital International Limited (“Astra Capital”) sue Mr Siddiqi and Musst Investments LLP (“Musst LLP”) on the basis that Mr Siddiqi, while acting on behalf of Musst LLP, made defamatory oral statements about them in Rome in June 2016. The term Astra is also used collectively in context to...

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