Successful Defence Of USD 40.5 Million Fraud Claim In Dubai International Finance Centre Courts

• Published date: 08 October 2021
• Subject Matter: International Law, Litigation, Mediation & Arbitration, International Courts & Tribunals, Trials & Appeals & Compensation
• Law Firm: Gatehouse Chambers
• Author: Mr Laurence Page

Prime Energy FZE has been successful in defeating a USD 40.5 million deceit, unlawful conspiracy and unjust enrichment claim in the Dubai International Finance Centre Courts. Prime Energy FZE's legal team included Laurence Page of Gatehouse Chambers, led by Thomas Plewman QC of Brick Court Chambers instructed by Shalagh Massingham of Eversheds Sutherland.

In SBM Bank (Mauritius) Ltd v (1) Renish Petrochem FZE (2) Hiteshkumar Mehta (3) Prime Energy FZE (CFI-054-2018) the Claimant bank alleged that the defendants had dishonestly induced it to enter into a substantial trade finance facility using sham documentation pursuant to which it paid out USD 88.5 million over a 10 month period.

The claim was listed for a two-week trial commencing 3 October 2021 but was dismissed by consent on the morning of the first day of the trial against Prime Energy. The worldwide freezing injunction granted ex-parte in August 2018 was also set aside. In an earlier interlocutory hearing Justice Lord Glennie had commented that there were "real problems with [the Claimant's] line of reasoning." (CFI-054-2018 (31 May 2021) at [51])

Unresolved legal questions of unlawful conspiracy and unjust enrichment

The dispute had been a major opportunity by the DIFC Court to consider the tort of unlawful conspiracy (Article 36 DIFC Law of Obligations) and the DIFC's unjust enrichment law (Articles 48 and 49 DIFC Law of Damages and Remedies). The DIFC's unlawful conspiracy is as follows:

"(1) Where two or more persons conspire to do an unlawful act with the intention to cause loss to the claimant, and loss is caused to the claimant by the performance by at least one of them of the unlawful act, they are jointly liable to the claimant.

(2) The act is only unlawful if the claimant would have a right of action as a result of any one person performing it."

This tort arguably imposes a different and stricter test than that which has evolved in English law and most recently considered by the UK Supreme Court in JSC BTA Bank v Khrapunov [2018] UKSC 19.

By reason of the collapse of the Claimant's case against Prime, it therefore remains an open question whether, in the DIFC, a claimant must prove each of the following elements to make out its claim: (i) the fact and nature of the agreement reached between each of the...