Alpha S Communications Ltd v Caz Distribution Services Ltd & Ors [2014] EWHC 207 (Ch) (26 February 2014)

Alpha S Communications Ltd v Caz Distribution Services Ltd & Ors [2014] EWHC 207 (Ch) (26 February 2014)

Defendants Fern Associates UK Limited and Javeed Akhtar Sakhi dishonestly assisted breaches of fiduciary duty by directors of Alpha Sim Communications Limited and U. A. Distribution Limited in MTIC fraud transactions, and are liable to compensate for losses equal to unpaid VAT. Iftakar Iqbal, as alter ego of Diginett, knowingly participated and is similarly liable. Dishonest assistance established by evidence of orchestrated trading, pre-set margins, and knowledge of fraudulent scheme. Relief granted under dishonest assistance and section 213 Insolvency Act 1986.

Citation
[2014] EWHC 207 (Ch)
Parties
Claimant: Alpha Sim Communications Limited; Claimant: U. A. Distribution Limited; Claimant: Revapoint Marketing Limited; Claimant: Kevin John Hellard (Liquidator of Alpha Sim Communications Limited); Claimant: Kevin John Hellard (Liquidator of U. A. Distribution Limited); Claimant: Kevin John Hellard (Liquidator of Revapoint Marketing Limited); Defendant: Caz Distribution Services Limited; Defendant: Iftakar Iqbal; Defendant: Fern Associates UK Limited; Defendant: Amal Munir; Defendant: Javeed Akhtar Sakhi (aka Javed Akhtar); Defendant: Girona Trade Center and Business Affairs SL; Defendant: Mark Allen
Jurisdiction
England and Wales
Judgment Date
26 February 2014
Procedural Posture
Civil Fraud / Insolvency / Final Judgment
Outcome
Defendants Fern Associates UK Limited, Javeed Akhtar Sakhi, and Iftakar Iqbal found liable for dishonest assistance and participation in fraudulent trading; judgment for claimants.
Legal Topics
MTIC Fraud, Dishonest Assistance, Breach of Fiduciary Duty, Conspiracy, Civil Liability for VAT Fraud, Third Party Payments, Accessory Liability
Insolvency Fraud Company Law VAT Law MTIC Fraud Dishonest Assistance Breach of Fiduciary Duty Conspiracy +3 more

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Parties

Alpha Sim Communications Limited

Claimant

U. A. Distribution Limited

Claimant

Revapoint Marketing Limited

Claimant

Kevin John Hellard (Liquidator of Alpha Sim Communications Limited)

Claimant

Kevin John Hellard (Liquidator of U. A. Distribution Limited)

Claimant

Kevin John Hellard (Liquidator of Revapoint Marketing Limited)

Claimant

Caz Distribution Services Limited

Defendant

Iftakar Iqbal

Defendant

Fern Associates UK Limited

Defendant

Amal Munir

Defendant

Javeed Akhtar Sakhi (aka Javed Akhtar)

Defendant

Girona Trade Center and Business Affairs SL

Defendant

Mark Allen

Defendant

Procedural Posture

Civil Fraud / Insolvency / Final Judgment

Legal Issues

  1. 1 Whether defendants dishonestly assisted breaches of fiduciary duty by directors of claimant companies in MTIC fraud schemes
  2. 2 Whether defendants participated in carrying on business with intent to defraud creditors under section 213 Insolvency Act 1986
  3. 3 Whether defendants are liable for losses caused by fraudulent VAT schemes

Ratio Decidendi

Defendants Fern Associates UK Limited and Javeed Akhtar Sakhi dishonestly assisted breaches of fiduciary duty by directors of Alpha Sim Communications Limited and U. A. Distribution Limited in MTIC fraud transactions, and are liable to compensate for losses equal to unpaid VAT. Iftakar Iqbal, as alter ego of Diginett, knowingly participated and is similarly liable. Dishonest assistance established by evidence of orchestrated trading, pre-set margins, and knowledge of fraudulent scheme. Relief granted under dishonest assistance and section 213 Insolvency Act 1986.

Court Disposition

Defendants Fern Associates UK Limited, Javeed Akhtar Sakhi, and Iftakar Iqbal found liable for dishonest assistance and participation in fraudulent trading; judgment for claimants.

Orders

  • Defendants to compensate Alpha Sim Communications Limited and U. A. Distribution Limited for losses equal to unpaid VAT on relevant transactions.
  • Default judgments against Amal Munir and Caz Distribution Services Limited for specified sums.