Tariq Hamoodi v Lombard Odier Asset Management (Europe) Ltd

JurisdictionEngland & Wales
JudgePearce
Judgment Date04 June 2024
Neutral Citation[2024] EWHC 1314 (Comm)
CourtKing's Bench Division (Commercial Court)
Docket NumberCase No: LM-2023-000203
Between:
Tariq Hamoodi
Claimant
and
Lombard Odier Asset Management (Europe) Ltd
Defendant

and

Nanoco Group Plc
Third Party

[2024] EWHC 1314 (Comm)

Before:

HIS HONOUR JUDGE Pearce

Case No: LM-2023-000203

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

KING'S BENCH DIVISION

LONDON CIRCUIT COMMERCIAL COURT

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Ben Jaffey KC (instructed by Seladore Legal Limited) for the Claimant

Elizabeth Jones KC and Oliver Jones (instructed by Mayer Brown International LLP) for the Defendant

Laurence Page (instructed by Reed Smith LLP) for the Third Party

Hearing dates: 19 March 2024

Approved Judgment

This judgment was handed down remotely at 10.00am on 4 June 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Pearce HIS HONOUR JUDGE

INTRODUCTION

1

This claim is brought by the Claimant, for losses allegedly suffered as a result of trading in the shares of Nanoco Ltd, the Third Party, which losses the Claimant contends were caused by the wrongdoing of servants or agents of the Defendant.

2

By application dated 4 October 2023, the Defendant sought summary judgment on the whole claim, alternately an order striking out the claim. By application dated 12 February 2024, the Claimant sought permission to amend the Particulars of Claim. Both applications were opposed. Given that it may be relevant in considering whether a claim should be struck out or summary judgment be entered against the Claimant that the claim might be salvaged by amendment, it is appropriate to consider the amendment application at the same time as the strike out/summary judgment application, even though it was made later.

3

The Claimant relies on statements from the following witnesses:

a. The Claimant himself, dated 11 December 2023 and 6 March 2024;

b. Mr Simon Bushell, solicitor for the Claimant, dated 6 March 2024.

4

The Defendant relies on statement from the following:

a. Mr Alistair Graham, the Defendant's solicitor, dated 4 October 2023 and 19 February 2024;

b. Mr Henry Turcan, an investment manager employed by the Defendant, dated 11 March 2024.

THE PARTIES

5

The Claimant is a private individual who invests in the financial services industry. At paragraph 7.1 of his witness statement, he refers to investing primarily in public companies that are engaged in or are facing litigation, for example in the field of patents.

6

The Defendant, a company incorporated in England and Wales, operates an investment and asset management business, as part of the Swiss banking group, Lombard Odier. It manages a number of funds under the brand name Volantis. Some of those funds have held substantial shareholdings in the Third Party. The team of people working under the brand Volantis (“the Volantis team”) included Mr Henry Turcan and Mr Rob Giles.

7

The Third Party is an English technology company, listed on the London Stock Exchange, that has developed and patented techniques for the manufacture of quantum dots, minute semiconductors the usages of which include flat-screen televisions. Its chief executive officer at the relevant time was Mr Brian Tenner. The Chair of the Board was Chris Richards. Mr Liam Gray was Company Secretary and, from November 2021, the Chief Financial Officer.

CHRONOLOGY

8

For the purpose of this application, the following chronology of events is either not in dispute or can be taken to be capable of proof by the Claimant and therefore to be assumed for the purpose of the application.

9

Since the Defendant has not filed a Defence, its case on certain matters is not known. However, at paragraph 37 of his first witness statement, Mr Graham states that the Defendant “ denies any wrongdoing whatsoever” in relation to the Claimant's complaints. The Claimant's case includes not only the inference of wrongdoing, but a specific allegation of wrongdoing in respect of events in January 2023 set out at paragraph 25 of this judgment. Putting aside for the moment the relevance of that allegation, I assume for the purpose of the application that the allegation that Mr Giles acted in the manner set out in that paragraph has a real prospect of success albeit that in fact it is denied by the Defendant.

10

In February 2020, the Third Party commenced proceedings for patent infringement against the Samsung Group in Texas (“the Samsung litigation”). It should be noted that the Claimant asserts and the Defendant has not denied that the value of that litigation was the Third Party's key asset.

11

In January 2021, the Claimant first acquired shares in the Third Party.

12

On 1 September 2021, Mr Turcan was appointed a non-executive director of the Third Party. As a result of that appointment, he and the rest of the Volantis team became subject to the Defendant's policy in relation to inside information to the effect that, if any member of the team has inside information, all are treated as having inside information. The Claimant also avers that Mr Turcan also became a member of the Third Party's litigation sub committee dealing with the Samsung Litigation. This is not denied by the Defendant and I take it to be capable of proof.

13

In early 2022, the Claimant exchanged emails with Mr Tenner, in which the Claimant provided information and his views in relation to the Samsung litigation.

14

On 23 March 2022, Mr Turcan contacted the Claimant by email stating:

I hope you don't mind me contacting you direct but I sit on the board of Nanoco and have seen your correspondence with Brian (sc. Tenner) and Liam (sc. Gray). I am incredibly impressed and encouraged with the due diligence that you are doing on the (sc. Samsung) litigation case. Your knowledge is far greater than ours and we have been invested in the stock for 20 years.”

15

The Claimant subsequently corresponded and met with Mr Turcan and Mr Giles on 25 March 2022.

16

On 12 April 2022 Nanoco released an RNS 1 publishing its interim results. In relation to the Samsung litigation, the Board stated:

While it is not possible at this point to predict the amount of any award or settlement due to the number of variables in play, the lawsuit does have the potential to generate substantial upside for shareholders.”

17

The Claimant also refers to a presentation in April 2020 of the interim results by the then Chief Executive of the Third Party, Dr Edelman, which presentation is allegedly available as a webcast, during which he stated that Nanoco's own internal damages models for the Samsung Litigation ranged from around US$140m and US$280m, ‘and upwards of that number’. 2

18

The Claimant, Mr Giles and Mr Turcan met again on 28 April 2022 3. It is the Claimant's case at [14] in the Particulars of Claim that, at that meeting, Mr Turcan solicited Mr Hamoodi's views on the upcoming inter partes review decisions in the Samsung Litigation.”

19

On 6 June 2022 the Third Party announced that it was raising £2.25m by issuing new ordinary shares and that six of its directors had participated, purchasing shares at the issue price of 37p per share. The Claimant also participated in this equity raise.

20

On 11 July 2022, one of the funds managed by the Volantis Team sold 5 million shares at the market price of 34.2p per share to a broker representing Mr Hamoodi (the “July 2022 Sale”). Mr Hamoodi still retains those shares, and it is that sale which forms the subject of his claim against the Defendant.

21

Before the sale of shares was executed in July 2022, Mr Turcan sought confirmation from Mr Tenner and Mr Richards that the former was not in possession of inside information and that he was free to deal in Nanoco shares; both individuals confirmed that the Defendant was free to deal and Mr Tenner confirmed that he was not aware of any inside information held by Nanoco or the board.

22

The Claimant purchased further shares in the Third Party in September 2022.

23

On 12 September 2022, Mr Turcan resigned from the Board of the Third Party.

24

On the morning of 6 January 2023, the Third Party announced to the market that it had agreed terms with Samsung for the settlement of the litigation and that the parties had jointly requested a stay of the trial which was due to commence that day. The shares rose sharply following this announcement, closing at 55.80p.

25

On the same day, the Claimant's case is that he contacted Mr Giles to enquire whether the Defendant was still seeking to sell shares in the third party. Mr Giles responded that he had participated in a call with the Third Party's senior management the previous night, that the Third Party's advisers had encouraged settlement of the Samsung Litigation, that the board was concerned about achieving only a low settlement in light of the outcome

in another recently decided patent infringement case, and that, as a result, the Claimant should temper his settlement expectations
26

On 9 January 2023, Nanoco made a further market announcement which stated that the settlement value should be expected towards the lower end of the range of expectations…as previously guided by the Company.”

27

The Nanoco share price closed down at 42.20p on 9 January 2023.

28

On 3 February 2023, Nanoco announced the final terms agreed with Samsung, which involved a $150m cash settlement of which Nanoco stated that it expected to retain over $90m after litigation costs. Following this announcement the Nanoco share price fell again such that the shares closed on that day at 27p.

THE CLAIMANT'S CASE

29

In summary, the Claimant's case is as follows:

a. As a result of his appointment to the board of the Third Party, Mr Turcan had access to inside (i.e. material and non-public) information about the litigation. Before the sale of shares to the Claimant, he knew that:

i. Samsung had made offers to settle that were considered...

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