YS GM Marfin II LLC & Ors v Lakhani & Ors (Rev1) [2020] EWHC 2629 (Comm) (05 October 2020)

YS GM Marfin II LLC & Ors v Lakhani & Ors (Rev1) [2020] EWHC 2629 (Comm) (05 October 2020)

The court held that the defence of undue influence had no real prospect of success. The relationship between Ali and Hasan Lakhani and the borrower companies was commercial, as they were beneficial owners and directors, and the guarantees were for their financial benefit. There was no evidence of overt acts of improper pressure or abuse of trust by their father sufficient to establish actual undue influence. The transaction did not call for explanation and the presumption of undue influence did not arise. The Claimants were not put on inquiry. Summary judgment was granted against all Defendants. The application to discharge the worldwide freezing order was refused as there was no material...

Citation
[2020] EWHC 2629 (Comm)
Parties
Claimant: YS GM Marfin II LLC; Claimant: YS GM MF VIII LLC; Claimant: YS GM MF VII LLC; Claimant: YS GM MF IX LLC; Claimant: YS GM MF X LLC; Defendant: Muhammad Ali Lakhani; Defendant: Muhammad Hasan Lakhani; Defendant: Muhammad Tahir Lakhani
Jurisdiction
England and Wales
Judgment Date
05 October 2020
Procedural Posture
Commercial Claim (summary Judgment and Freezing Order) / High Court (commercial Court) Summary Judgment and Discharge of Worldwide Freezing Order
Outcome
Summary judgment granted for Claimants; application to discharge worldwide freezing order refused.
Legal Topics
Summary Judgment, Personal Guarantees, Undue Influence, Freezing Orders, Directors' Duties
Commercial Law Banking and Finance Equity and Trusts Summary Judgment Personal Guarantees Undue Influence Freezing Orders Directors' Duties

Case Brief

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Parties

YS GM Marfin II LLC

Claimant

YS GM MF VIII LLC

Claimant

YS GM MF VII LLC

Claimant

YS GM MF IX LLC

Claimant

YS GM MF X LLC

Claimant

Muhammad Ali Lakhani

Defendant

Muhammad Hasan Lakhani

Defendant

Muhammad Tahir Lakhani

Defendant

Procedural Posture

Commercial Claim (summary Judgment and Freezing Order) / High Court (commercial Court) Summary Judgment and Discharge of Worldwide Freezing Order

Legal Issues

  1. 1 Whether summary judgment should be granted against Ali and Hasan Lakhani under personal guarantees
  2. 2 Whether the defence of undue influence has a real prospect of success
  3. 3 Whether the worldwide freezing order should be discharged for material non-disclosure or abuse of process

Ratio Decidendi

The court held that the defence of undue influence had no real prospect of success. The relationship between Ali and Hasan Lakhani and the borrower companies was commercial, as they were beneficial owners and directors, and the guarantees were for their financial benefit. There was no evidence of overt acts of improper pressure or abuse of trust by their father sufficient to establish actual undue influence. The transaction did not call for explanation and the presumption of undue influence did not arise. The Claimants were not put on inquiry. Summary judgment was granted against all Defendants. The application to discharge the worldwide freezing order was refused as there was no material...

Court Disposition

Summary judgment granted for Claimants; application to discharge worldwide freezing order refused.

Orders

  • Summary judgment entered against all Defendants for the amounts claimed under the guarantees.
  • Worldwide freezing order continued against all Defendants.