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High Court Judgment Template Neutral Citation Number: [2020] EWHC 740 (Comm) Case No: CL-2019-000674 IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES QUEEN'S BENCH DIVISION COMMERCIAL COURT Royal Courts of Justice Strand, London, WC2A 2LL Date: 30/03/2020 Before : THE HONOURABLE MR JUSTICE HENSHAW - - - - - - - - - - - - - - - - - - - - - Between : ARCELORMITTAL USA LLC Claimant - and – (1) MR RAVI RUIA Defendants/ (2) MR PRASHANT RUIA Respondents (8) ESSAR GLOBAL FUND LIMITED (3) MR SUSHIL BAID (4) MR ANDREW WRIGHT (5) MR JOSEPH SEIFERT (6) MR UDAY KUMAR GUJADHUR (7) MR NIGEL BELL (9) ESSAR CAPITAL LIMITED (10) ESSAR CAPITAL SERVICES (UK) LIMITED Defendants – and – VTB BANK PJSC Interested Party - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Anthony Peto QC, Peter Head, Andrew Scott, Isabel Buchanan and Timothy Lau (instructed by Mischon de Reya LLP) for the Claimant Paul McGrath QC and Ruth Den Besten (instructed by Stephenson Harwood) for the First and Second Defendants Paul Stanley QC and David Peters (instructed by Quinn Emmanuel Urquhart & Sullivan UK LLP) for the Eighth Defendant Adrian Beltrami QC and Ian Higgins (instructed by Dechert LLP) for the Interested Party Hearing dates: 3 and 4 March 2020 Draft Judgment circulated on 19 March 2020 Approved Judgment I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic. ............................. Covid-19 Protocol: This judgment was handed down by the judge remotely by circulation to the parties’ representatives by email and release to Bailii. The date and time for hand-down is deemed to be 30 March 2020 at 2:00 pm. MR JUSTICE HENSHAW ArcelorMittal v Ruia and others Approved Judgment Mr Justice Henshaw: (A) INTRODUCTION ............................................................................................................... 4 (B) THE RELEVANT PARTIES .............................................................................................. 5 (C) AMUSA’S CONSPIRACY CASE ...................................................................................... 6 (D) THE PELLET SALE AGREEMENT AND THE ARBITRATION ................................... 8 (E) SUBSEQUENT PROCEDURAL HISTORY ..................................................................... 9 (1) Minnesota ......................................................................................................................... 9 (2) Mauritius .......................................................................................................................... 9 (3) Cayman Islands .............................................................................................................. 10 (4) Delaware......................................................................................................................... 10 (5) England and Wales ......................................................................................................... 11 (F) TRANSACTIONS RELATING TO ESSAR STEEL INDIA ........................................... 11 (1) AMUSA’s case ............................................................................................................... 11 (2) Origins of and Essar Steel’s decision to enter into the Restructuring ............................ 13 (3) Stage 1: June 2012 sale of Essar Steel shares in Essar Steel India ................................ 17 (4) Stage 2: March 2013 assignments of US$1.38 billion promissory note ........................ 18 (5) Stages 3 and 4: August and November 2013 sale and assignment ................................ 22 (6) Stage 5: 2016 change in accounting treatment ............................................................... 22 (7) Stage 6: VTB subordination deed .................................................................................. 31 (8) Essar Steel’s failure to seek to recover the ‘debt’ from EGFL ...................................... 35 (9) Marex ............................................................................................................................. 36 (G) ESSAR STEEL UAE ........................................................................................................ 36 (H) ALGOMA ......................................................................................................................... 38 (I) ENTRY INTO AMENDED PSA ....................................................................................... 46 (J) RELEVANT EVENTS IN RELATED PROCEEDINGS .................................................. 47 (1) The ICC Arbitration ....................................................................................................... 47 (2) Cayman proceedings ...................................................................................................... 51 (3) Mauritius proceedings .................................................................................................... 52 (4) Proceedings in India ....................................................................................................... 53 (5) Proceedings in England and Wales ................................................................................ 57 (K) GOOD ARGUABLE CASE ............................................................................................. 60 (L) RISK OF DISSIPATION................................................................................................... 62 (M) JUST AND CONVENIENT TEST .................................................................................. 68 (1) Likely impact of a worldwide freezing order on the respondents .................................. 69 (a) Impact on the Essar group .......................................................................................... 69 (b) Impact on the Ruias .................................................................................................... 71 3 MR JUSTICE HENSHAW ArcelorMittal v Ruia and others Approved Judgment (2) Likely impact of a worldwide freezing order on VTB ................................................... 71 (3) Delay .............................................................................................................................. 78 (4) The overall balance ........................................................................................................ 80 (N) CONCLUSION ................................................................................................................. 81 (A) INTRODUCTION 1. The Claimant (“AMUSA”) applies on notice for a worldwide freezing injunction and ancillary disclosure orders against the First Defendant (“Ravi Ruia”), the Second Defendant (“Prashant Ruia”), and the Eighth Defendant (“EGFL”). 2. The freezing order is sought in support of AMUSA’s claim for damages in excess of US$1.5 billion in respect of loss alleged to have been caused by an unlawful means conspiracy between the Defendants to frustrate enforcement of liabilities under a 10- year iron ore supply contract (the “PSA”) entered into between AMUSA and three companies in the Essar group, which AMUSA terminated in May 2016, and an ICC arbitral award (“the ICC Award”) in AMUSA’s favour against Essar Steel Limited (“Essar Steel”) in respect of those liabilities. 3. Essar Steel went into administration in March 2019, and an application to wind it up was filed in December 2019, without it having made any payment pursuant to the Award. AMUSA says Essar Steel’s inability to pay resulted from the alleged unlawful means conspiracy. In addition to EGFL, which is Essar Steel’s parent company and the group’s main holding company, AMUSA alleges that Ravi Ruia and Prashant Ruia are key individuals at the Essar group who were at the heart of the alleged wrongdoing. 4. AMUSA applied without notice on 4 November 2019 for permission to serve these proceedings out of the jurisdiction, which was granted by Jacobs J on 8 November 2019. On 21 November 2019 AMUSA applied without notice for directions for alternative service of their present application, which Jacobs J gave on 3 December 2019. AMUSA did not serve the application until 30 December 2019, apparently for reasons connected with difficulties in obtaining a date for the hearing of the application. Thereafter, a hearing listed for 16 January 2020 was adjourned by consent, against certain undertakings given by the respondents, to the hearing before me on 3 and 4 March 2020. At that hearing AMUSA, EGFL, Ravi Ruia and Prashant Ruia (jointly) were represented by leading and junior counsel, as was the Interested Party VTB Bank PJSC (“VTB”) which is the Essar group’s main lender. 5. The hearing before me lasted for two days and included detailed submissions on the underlying transactions which are the subject of AMUSA’s claims, as well as other matters said to evidence risk of dissipation. This was unsurprising in light of the size of the claim, the nature and amount of the worldwide freezing order sought, the complexity of the matter, and the fact that the freezing order is sought in respect of an actively trading group with very large numbers of operating businesses and employees. Moreover, the alleged dissipations which are the subject of AMUSA’s substantive claim were also prominent among the factors on which AMUSA relied to establish a risk of dissipation, with the result that it was and is necessary to consider those alleged 4 MR JUSTICE HENSHAW ArcelorMittal
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