Musst Holdings Ltd v Astra Asset Management UK Ltd Astra Asset Management LLP
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 17 December 2021 |
| Neutral Citation | [2021] EWHC 3432 (Ch) |
| Docket Number | Case No: BL-2018-002369 |
| Court | Chancery Division |
[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
Mr Justice Freedman
Case No: BL-2018-002369
Claim No. BL-2019-001483
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 |
I Introduction
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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Musst Holdings Ltd v Astra Asset Management UK Ltd
...said he had taken, and which was now lost: the note was said to have corroborated his evidence. The judgment neutral citation number [2021] EWHC 3432 (Ch) was critical both of Mr Murray's evidence and of Mr Mathur in this regard, finding at [567] that the story of the disappearance of the ......