ED & F Man Capital Markets Ltd v Come Harvest Holdings Ltd & Ors [2022] EWHC 229 (Comm) (16 February 2022 )

ED & F Man Capital Markets Ltd v Come Harvest Holdings Ltd & Ors [2022] EWHC 229 (Comm) (16 February 2022 )

The court found that the claimant was the victim of a large-scale fraud perpetrated by the first to fourth defendants, who knowingly provided forged warehouse receipts to obtain finance. Straits (tenth defendant) was found to have actual knowledge of the fraud and to have participated in an unlawful means conspiracy with Mr Kao and others. The claimant was entitled to rescind the contracts, recover its losses, and equitable proprietary and knowing receipt claims succeeded against relevant defendants. The court rejected the defences of lack of knowledge and good faith.

Citation
[2022] EWHC 229 (Comm)
Parties
Claimant: E D & F Man Capital Markets Limited; First Defendant: Come Harvest Holdings Limited; Second Defendant: Mega Wealth International Trading Limited; Third Defendant: Mr Steven Kai Shing Kao; Fourth Defendant: Genesis Resources Inc.; Fifth Defendant: Genesis Properties Holding LLC; Sixth Defendant: Genesis Kinghwa LLC; Seventh Defendant: Transcendent Global Finance Inc.; Eighth Defendant: Transcendent (SG) Pte Ltd; Ninth Defendant: Sampo International Ltd; Tenth Defendant: Straits (Singapore) Pte Ltd; Third Party: Mr Wai Kwok Wong
Jurisdiction
England and Wales
Procedural Posture
Commercial Court Claim (fraud, Contract, Equity) / Final Judgment After Trial
Outcome
Claim allowed in substantial part
Legal Topics
Fraud, Deceit, Unlawful Means Conspiracy, Knowing Receipt, Equitable Proprietary Claims, Unjust Enrichment, Breach of Contract, Procuring Breach of Contract
Commercial Law Tort Law Equity Contract Law Fraud Deceit Unlawful Means Conspiracy Knowing Receipt +4 more

Case Brief

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Parties

E D & F Man Capital Markets Limited

Claimant

Come Harvest Holdings Limited

First Defendant

Mega Wealth International Trading Limited

Second Defendant

Mr Steven Kai Shing Kao

Third Defendant

Genesis Resources Inc.

Fourth Defendant

Genesis Properties Holding LLC

Fifth Defendant

Genesis Kinghwa LLC

Sixth Defendant

Transcendent Global Finance Inc.

Seventh Defendant

Transcendent (SG) Pte Ltd

Eighth Defendant

Sampo International Ltd

Ninth Defendant

Straits (Singapore) Pte Ltd

Tenth Defendant

Mr Wai Kwok Wong

Third Party

Procedural Posture

Commercial Court Claim (fraud, Contract, Equity) / Final Judgment After Trial

Legal Issues

  1. 1 Whether the defendants perpetrated a fraud on the claimant via forged warehouse receipts in nickel repo transactions
  2. 2 Whether Straits (Singapore) Pte Ltd was party to an unlawful means conspiracy
  3. 3 Whether defendants are liable for knowing receipt and/or hold funds on constructive trust

Ratio Decidendi

The court found that the claimant was the victim of a large-scale fraud perpetrated by the first to fourth defendants, who knowingly provided forged warehouse receipts to obtain finance. Straits (tenth defendant) was found to have actual knowledge of the fraud and to have participated in an unlawful means conspiracy with Mr Kao and others. The claimant was entitled to rescind the contracts, recover its losses, and equitable proprietary and knowing receipt claims succeeded against relevant defendants. The court rejected the defences of lack of knowledge and good faith.

Court Disposition

Claim allowed in substantial part

Orders

  • Declaration that claimant validly rescinded contracts with Come Harvest and Mega Wealth
  • Monetary judgment for USD 284,536,139.23 against Come Harvest and Mega Wealth