Quantum Care Ltd v Lalit Modi
| Jurisdiction | England & Wales |
| Judge | Mr M H Rosen |
| Judgment Date | 30 March 2022 |
| Neutral Citation | [2022] EWHC 721 (Ch) |
| Docket Number | Claim No: BL-2020-001439 |
| Court | Chancery Division |
[2022] EWHC 721 (Ch)
Mr M H Rosen QC sitting as a Judge of the Chancery Division
Claim No: BL-2020-001439
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
JUDGMENT dated 30 March 2022
This is a judgment to which the Practice Direction supplementing CPR Part 40 applies and is deemed to be handed down remotely by email circulation to the parties' representatives and release to BAILII at 10.30 am on Wednesday 30 March 2022.
(1) Introduction
In 2007 the Defendant to these proceedings Mr Lalit Modi, who now lives in London, was the vice-president of the Board of Cricket Control of India and instrumental in the foundation of its financially successful ‘twenty20’ cricket tournament, called the Indian Premier League. Mr Modi regards himself as a business visionary, and by 2017 had set out to launch a new venture in the global provision of single-dose radiation treatments for cancer, called Ion Care.
The First Claimant (“Quantum”) is a company incorporated in the British Virgin Islands as one of the investment vehicles of the Second Claimant Mrs Maag, who with her husband Mr Daniel Maag, a Swiss banking professional, is based in Singapore.
In these proceedings Quantum seeks against Mr Modi the sum of $800,000 still outstanding in respect of its investment in a Swiss company, Ion Care AG, in November 2018, by way of contractual repayment or damages in deceit inducing that investment, together with consequential loss for the large profits which it claims it would have made on an alternative investment had it not been so induced. The deceit does not relate to the technical or commercial prospects for that business, but as to whether a large number of individuals (some of particular significance as explained below) were or had promised to become involved in various crucial capacities in Ion Care's proposed business.
The trial of liability and causation took place in person over 6 days between 22 February and 3 March 2022, the quantification of any consequential loss to be addressed if necessary at a separate and subsequent stage. Mrs Maag and her husband gave evidence and were cross-examined, as did and were Mr Modi, his son Ruchir Modi and their financial consultant, Munesh Khanna. A witness statement of another employee, Akshay Sahai, was also adduced for Mr Modi and not challenged.
Quantum was represented by Anna Dilnot QC instructed by Reynolds Porter Chamberlain, having assumed what was previously Mrs Maag's personal claim for damages by amendments in late 2021; and Mr Modi was represented by Jonathan Price of counsel, instructed by BlackLion Law. I am grateful to all for their assistance, although this was rather hampered in some respects by the form of electronic presentation of many thousands of pages of documents, some very lengthy and/or in message trails, many of which were inessential and even distracting.
Quantum's claim in deceit turns largely on what was said and presented by Mr Modi to Mr and Mrs Maag at and following a late-night meeting in his hotel suite in Dubai on 13/14 April 2018, nearly 4 years ago. One document on which they heavily rely, a so-called ‘Investor Pitch Deck’, was extracted by the Maags from Ion Care's online ‘Drop Box’ in early December 2018, and its use at the 13/14 April 2018 meeting is disputed. The other documents and circumstances are therefore critical in assessing whether they have proved the fraud by Mr Modi alleged.
In that regard, both sides made some extravagant claims, of varying significance as mentioned in my review below, and sorting the wheat from the chaff was not always made easy. I note at the outset however that both sides exhibited in their different ways some fluid meanings for terms such as ‘commitment’ and advanced various other incongruously naïve assertions.
(2) The dispute
Quantum was formed as a special purpose vehicle on 4 July 2018 and is wholly owned by another company incorporated in the BVI, Tamares Business Limited. Its sole director has at all material times been and remains Mrs Maag, who is also a director and sole shareholder of Tamares.
Mrs Maag is also an Indian national, a venture capitalist who has invested for the past decade or so through offshore SPVs in some 20 start-up and early-stage companies (including ‘ONE Championship’, which has apparently grown to prominence as a multibillion-dollar business). At the time of Quantum's investment into Ion Care in November 2018, Mrs Maag's portfolio included 6 investments in the combined amount of over $10 million.
Mr Modi set up Ion Care in early 2016, inspired by his wife's long-term struggle with cancer, to own and operate outpatient oncology treatment centres situated worldwide in order to provide advanced non-invasive image guided single-dose radiotherapy (‘SDRT’). This treatment had been developed by the Champalimaud Centre for the Unknown (‘CCU’) based in Lisbon, Portugal, and in particular by Dr Carlo Greco and Professor Zvi Fuks then of CCU.
On 7 June 2017, Ion Care entered into binding heads of terms with CCU for an exclusive licence to use the SDRT treatment, in return for substantial sums of money. The Ion Care business was constituted by a number of different companies in a number of different jurisdictions, including Ion Care Pte Limited, incorporated in Singapore on 29 April 2017, and its subsequent parent company Ion Care AG, registered in Switzerland on 30 July 2018, which acquired 100% of the shares in Ion Care Singapore on 15 November 2018.
On 13 April 2018, now nearly 4 years ago, Mr and Mrs Maag having just arrived from Singapore, encountered Mr Modi at the Four Seasons Hotel in Dubai, where they were all staying. Mrs Maag seems to have known Mr Modi well and they referred to each other warmly as friends. Mr Modi invited the Maags to meet with him in his hotel suite after dinner that evening. At that meeting, lasting into the small hours, the Maags say that Mr Modi gave them a presentation in order to introduce the business of Ion Care and invite an investment of $2 million in a first ‘friends and family round’ of fundraising, to which in principle they agreed.
Quantum's case is that the documents presented and oral statements made by Mr Modi at that meeting and reinforced subsequently were to the effect that many celebrated, wealthy and influential individuals whom he identified had agreed to act in due course variously as ‘patrons’, ‘leaders’ (whether board members or otherwise), and ‘brand ambassadors’ of Ion Care, some of whom had also made substantial commitments to the business by way of assigning land for treatment centres in the UAE and/or Antigua, and investing funds amounting to $260 million, as part of a ‘rolling close’ to follow the first ‘friends and family’ round – and were knowingly false.
Quantum alleges that many of the numerous individuals allegedly identified by Mr Modi as supportive in their different ways during the meeting – whom it is unnecessary to list comprehensively in this judgment — had not in fact agreed to be patrons of Ion Care, nor (save for Dr Greco and Professor Fuks as Quantum now concedes) to participate in its management or leadership, nor to become brand ambassadors, nor had any ‘committed’ to any future funding,
After considering an Information Memorandum sent by Mr Khanna to the Maags a few days later on 16 April 2018, and other exchanges and other steps often in writing, Unum in Infinitum Inc (an Anguillan company owned by Mrs Maag) eventually acquired shares in the Swiss parent company Ion Care AG and entered into a share agreement with Minalani, Ruchir and his sister Aliya Modi, and Dr Greco; and the first half of Quantum's investment, $1 million, was paid to Ion Care AG on 13 November 2018. For that purpose, Mrs Maag had caused Quantum to be incorporated on 4 July 2018 and on or around 29 July 2018 its parent company Tamares borrowed $2 million for the investment from Dunbridge Investments Ltd, another BVI company, owned by an (unidentified) uncle of hers.
Ion Care sought to find a number of sites for locating treatment centres, all requiring substantial funding and connected to Mr Modi's alleged supportive individuals, in particular at:
(a) the Medanta hospital in Mumbai on which Ruchir Modi and other Indian participants were working;
(b) Abu Dhabi, introduced by the office of Sheikh Nahyan bin Mubarak Al Nahyan, the Minister of Culture and Knowledge Development of the UAE;
(c) Thailand, whose former Prime Minister Dr Thaksin Shinawatra was also extensively referred to; and
(d) Antigua, at a proposed resort on a former naval base introduced by the office of the Prime Minister Gaston Browne (allegedly Mr Modi's ‘dear friend, like a brother’) and the subject of a memorandum of understanding dated 25 May 2018.
According to the Maags, but without documentary corroboration, Mr Modi had told them at the 13/14 April 2018 meeting that Sheikh Nahyan had committed to fund $100 million, Dr Shinawatra $60 million, and others in total $100 million in a subsequent investment round or rounds.
Quantum says that the remaining $1 million from Dunbridge's loan was set aside until May 2019 and so the $2 million could and was not used for the purpose of any other investment opportunities of Mrs Maag, for which it did not have other funds available and which have emerged as highly successful businesses — in particular a company called Livspace, to which she was introduced in September 2018, or alternatively a company called B1T (in which another Singaporean company owned by Mrs Maag, Illume Holding Pte Ltd, made an investment of only $50,000 on 6 October 2018).
While Mr Modi says that he does not have a clear recollection of the 13/14 April 2018 Meeting, he denies making...
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Mr. Serg Bell (formerly known as Serguei Beloussov) v Ms. Ratna Singh
...made out, it is well-established that there is a rebuttable presumption as to the representor's intention; Quantum Care Ltd. v. Modi [2022] EWHC 721 (Ch), [35] and Goose v. Wilson Sanford & Co. [2001] Ll. Rep. PN 189. Likewise where the claimant has made out the other elements of the tort ......