SBM Bank (Mauritius) Ltd v (1) Renish Petrochem FZE (2) Mr Hiteshkumar Chinubhai Mehta [2021] DIFC CFI 054 (29 December 2021)

SBM Bank (Mauritius) Ltd v (1) Renish Petrochem FZE (2) Mr Hiteshkumar Chinubhai Mehta [2021] DIFC CFI 054 (29 December 2021)

The court found that the Facility Agreement Representations were not proved fraudulent, but the Payment Representations for the third, fourth, fifth, and sixth payments were fraudulent as funds were dissipated to Renish and related entities without legitimate commercial purpose, establishing fraud and joint and several liability for the sum advanced.

Citation
[2021] DIFC CFI 054
Parties
Claimant: SBM Bank (Mauritius) Ltd; First Defendant: Renish Petrochem FZE; Second Defendant: Mr Hiteshkumar Chinubhai Mehta
Jurisdiction
United Arab Emirates
Judgment Date
29 December 2021
Procedural Posture
Commercial Fraud Claim / Final Judgment After Trial
Outcome
Claim in fraud succeeds in part; judgment for claimant against both defendants jointly and severally.
Legal Topics
Facility Agreement, Personal Guarantee, Fraudulent Misrepresentation, Contractual Liability, Worldwide Freezing Order
Commercial Law Banking Law Fraud Facility Agreement Personal Guarantee Fraudulent Misrepresentation Contractual Liability Worldwide Freezing Order

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Parties

SBM Bank (Mauritius) Ltd

Claimant

Renish Petrochem FZE

First Defendant

Mr Hiteshkumar Chinubhai Mehta

Second Defendant

Procedural Posture

Commercial Fraud Claim / Final Judgment After Trial

Legal Issues

  1. 1 Whether Renish and Mr Mehta committed fraud against SBM Bank by inducing payments under a facility agreement through false representations
  2. 2 Whether the Facility Agreement Representations and Payment Representations were fraudulent
  3. 3 Whether the defendants are jointly and severally liable for the sums advanced

Ratio Decidendi

The court found that the Facility Agreement Representations were not proved fraudulent, but the Payment Representations for the third, fourth, fifth, and sixth payments were fraudulent as funds were dissipated to Renish and related entities without legitimate commercial purpose, establishing fraud and joint and several liability for the sum advanced.

Court Disposition

Claim in fraud succeeds in part; judgment for claimant against both defendants jointly and severally.

Orders

  • Defendants to pay US$ 21,890,819.50 to claimant, inclusive of interest to date of judgment.
  • Defendants to pay one half of claimant's costs, to be assessed by Registrar on standard basis if not agreed.