Commercial Court Finds Renowned Michelin Star Chef Liable For Fraud

• Published date: 15 December 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Criminal Law, M&A/Private Equity, Corporate and Company Law, Contracts and Commercial Law, Trials & Appeals & Compensation, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Quadrant Chambers
• Author: Mr Stewart Chirnside and Robert Ward

OVERVIEW

MAD Atelier International B.V. v Axel Manes [2021] EWHC 3335 (Comm)

On 9 December 2021, Sir Michael Burton GBE gave judgment awarding damages of '11,383,359 to MAD Atelier International B.V. ("MAD International") on its claim for fraud and breach of contract against Axel Manes ("Mr Manes").

MAD International is ultimately, majority owned by the Dogus Group, a Turkish group of companies with interests in the hotel and restaurant industries. Mr Manes is a renowned French chef, one of the youngest chefs to obtain a Michelin star, and is and was the executive chef at the "L'Atelier de Joel Robuchon" restaurant in Paris ("Paris Restaurant").

In 2015, MAD International and Mr Manes (and others) entered into a joint venture to develop an international franchise of restaurants under the "L'Atelier de Joel Robuchon" brand. As part of the joint venture, the shares of MAD Atelier S.A.S. ("Paris Restaurant Shares"), the company which owned the Paris Restaurant, were transferred to MAD International. On 3 August 2016, one of MAD International's directors, Mr Padberg, signed share transfer documents at a meeting with Mr Manes at the Paris Restaurant by which MAD International sold the Paris Restaurant Shares to MA Developpement S.A.S., which was owned by Mr Manes, for '3,086,698. This sale of the Paris Restaurant Shares terminated the joint venture.

MAD International claimed damages for fraud and breaches of the joint venture agreement primarily on the ground that Mr Padberg did not know he was executing a share transfer and his signature on the share transfer documents was induced by Mr Manes' deceit. MAD International also claimed damages for loss of profits as a result of unlawful and premature termination of the joint venture as a result of the sale of the Paris Restaurant Shares.

MAD International submitted that the share transfer was the result of Mr Manes' fraud, and was not agreed by it, for essentially four reasons. First, there was no indication that the parties' relationship had broken down, nor was there any reason for MAD International to agree to terminate the joint venture or allow Mr Manes to buy back the Paris Restaurant Shares. The joint venture had only been going for just over a year and, so far as MAD International was concerned, was a success. Secondly, in circumstances where MAD International retained a large team of professionals to negotiate and agree the terms of the initial acquisition of the Paris Restaurant and that acquisition was...