Servicios de Salud del Instituto Mexicano del Seguro Social para el Bienestar v Viva Enterprises Limited & Anor [2026] EWHC 1380 (Ch)

[2026] EWHC 1380 (Ch)

Case No BL-2022-001854

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

BUSINESS LIST (ChD)

Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NL

Date 15/06/2026

Before

MR JUSTICE RICHARD SMITH

Between

SERVICIOS DE SALUD DEL INSTITUTO MEXICANO DEL SEGURO SOCIAL PARA EL BIENESTARClaimant

(1) VIVA ENTERPRISES LIMITEDDefendants

(2) ROBERT GEORGE DANGOORDefendant

Zoe O’Sullivan KC & Andrew Gurr (instructed by Peters & Peters Solicitors LLP) for Claimant

Richard Eschwege KC & Crawford Jamieson (instructed by Stewarts Law LLP) for Defendants

Hearing Hearing dates: 19-22, 26-30 January and 4 & 5 February 2026

Approved Judgment

This judgment was handed down remotely at 10.30am on Monday 15 June 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

.............................

MR JUSTICE RICHARD SMITH

[1]This judgment follows the trial of a claim originally brought by the Instituto de Salud para el Bienestar (INSABI), a public body within the Mexican Federal Government responsible for providing medical care and equipment to persons in Mexico without health insurance. INSABI was replaced as Claimant in these proceedings by Servicios de Salud del Instituto Mexicano del Seguro Social para el Bienestar (IMSS). IMSS says that it has taken over certain of INSABI’s rights and obligations, including with respect to INSABI’s claims in these proceedings. IMSS is itself an autonomous body within the Mexican Federal Government also involved in the provision of healthcare.

[2]The First Defendant, Viva Enterprises Limited (VEL), is an English registered company incorporated in 1986 with a business selling lighting, electrical and construction products to retail and wholesale consumers. VEL frequently imports such products from China. The Second Defendant, Robert Dangoor, is VEL’s Managing Director. His son, Dr Joseph Dangoor, is not a director of VEL but was centrally involved in the events giving rise to the present claim.

[3]That claim is for US$41.4m, representing the non-refunded balance of the sum of US$59.2m paid in April 2020 by INSABI to VEL for 1000 medical ventilator units of the VG70 model (VG70) manufactured by Beijing Aeonmed Co., Ltd (Aeonmed). These were to be used to treat the Mexican population during the COVID-19 pandemic. The essence of the claim is that VEL knowingly misstated its ability to meet the proposed delivery schedule and, save for 50 units delivered extra-contractually, failed to deliver within the agreed deadlines or at all. As a result, VEL is said to be liable in fraudulent misrepresentation, for repudiatory breach of contract and in unjust enrichment on the basis of a total failure of consideration.

[4]The Defendants, in turn, say that there was no misrepresentation, let alone fraudulent, and no breach of contract, let alone repudiatory. Moreover, after the parties agreed that VEL would refund 30% of the contract price and INSABI would take delivery from VEL of VG70s corresponding to the remaining 70%, VEL went on to do exactly that. In response to this, the Claimant says that the Defendants, in fact, engaged in a covert scheme with the Mexican distributor of VG70s under which they pretended that units supplied by that distributor to INSABI on its own account had been supplied on VEL’s behalf.

[5]These are the bare bones. There are many twists and turns. However, it is fair to say that these proceedings have been bitterly fought with serious allegations made on both sides, including of dishonesty, deliberate document destruction and the scheme already mentioned, itself said to involve forgery and backdating of documents. B. THE WITNESSES

[6]Mr Juan Antonio Ferrer Aguilar has worked for the Mexican Government since 1981. He was Director-General of INSABI from its creation in 2019 until 2023. Mr Ferrer’s memory of events was understandably limited as was his recall of the detail. On a few occasions, I had to ask him to focus on the question being asked. There were also a few occasions when it was not clear from the evidence (and its simultaneous interpretation) what question he was actually answering.

[7]Dr Alejandro Antonio Calderón Alipi is also a senior civil servant in the Mexican Government as well as being a medical doctor. At the relevant time, he served as Head of the National Coordination Unit for the Supply of Medicines and Medical Equipment at INSABI. In 2023, he became Director-General of IMSS. Dr Calderón was a careful and fair witness. Given the passage of time, there were limits to his memory but, given his role, he had a somewhat better recall of the detail.

[8]The Claimant also indicated prior to trial that it wished to rely as hearsay evidence on the witness statements of Mr Alberto Cesar Hernández Escorcia, INSABI’s former Legal Affairs Co-ordinator (now deceased) and his successor, Ms Ana Lucia Tlahuech Riveria. The Defendants questioned this on the basis that the statements contained untrue evidence of the Claimant’s compliance with its disclosure obligations. In the event, the resolution of this dispute does not turn on their evidence.

[9]Robert Dangoor too had limited recall of a number of relevant events. On occasion, he sought explicitly to anticipate the line of questioning rather than focusing on answering the specific question put to him.

[10]Joseph Dangoor was a careful and articulate witness. Unsurprisingly, he too had limited memory of many events. However, his answers to some of the questions on the documents put to him, including some of his own, were unimpressive or unforthcoming.

[11]When questioned about difficult areas of the case for VEL, both Dangoors tended to defer to the undocumented words and actions of others, particularly those of Mr Carlos Dávila Zepeda of VEL and Mr Javier Jileta Verduzco of the Mexican Ministry of Foreign Affairs (SRE), even though it was improbable that the Dangoors did not know more themselves and/ or the suggested words or actions relied on were themselves improbable. As I explain below, I also found both Dangoors to have been untruthful on one important aspect of the case. Given these matters, circumspection was appropriate in approaching contentious elements of their evidence not independently supported by the documentary record.

[12]The Defendants also relied as hearsay evidence on the witness statement of Mr Héctor Gabriel Garza Del Fierro of Encore Health S.A.P.I. DE C.V. (Encore) served in support of their strike-out notice, Mr Garza having apparently not responded to their attempts to contact him and being out of the jurisdiction.

[13]Mr René Irra de la Cruz has been a licensed attorney in Mexico since 2005. Since 2017, he has been a partner at Cuatrecasas in Mexico. Mr Irra was a fair, careful and balanced witness who appeared to understand his role as an expert witness, including taking care not to enter the factual arena. The Defendants criticised his suggested lack of familiarity with his own written evidence. That criticism was unfair.

[14]Mr Eduardo Lobatón Guzmán has been a licensed attorney in Mexico since 2017. He is a Senior Associate at Hogan Lovells BSTL, S.C. in Mexico City. Since 2018, he has also been Professor of the Law Degree at Instituto Tecnológico y de Estudios Superiores de Monterrey. Mr Lobatón was a careful and fair witness who appeared to understand his role as expert witness, albeit I found strained some of his opinions on certain aspects. C. DOCUMENTS ISSUES/ MISSING WITNESSES

[15]The complaints of disclosure shortcomings were a significant feature of this case. On the Claimant’s side, it was accepted that there had been serious breaches of its obligation to preserve documents, said to arise out of failures to countermand routine internal procedures for the deletion of emails and the wiping of rented laptops at the end of the rental period. In particular, INSABI admitted to having continued an IT policy of automatically deleting e-mails from its e-mail server after 15 days despite its disclosure obligations. The Claimant says that this was the result of incompetence and not deliberate destruction, compounded by the change of in-house lawyers responsible for the case, including the death in February 2024 of Mr Hernández, INSABI’s former Legal Affairs Co-ordinator, who had conduct of the case from the outset.

[16]On 26 November 2025, Mr Justice Fancourt made various orders on the Defendants’ specific disclosure application, including for the Claimant to search certain document repositories (comprising certain e-mail accounts, electronic devices and certain ‘Telmex’ back-up tapes), obtain Dr Calderón’s WhatsApp messages with Mr Jileta and provide related disclosure information, evidence and certificates. Disclosure issues were also canvassed before me at the pre-trial review in December 2025, including the ongoing review of the Telmex back-up tapes. Following the pre-trial review, the parties agreed that the Claimant’s efforts in its review of back-up materials should switch from the Telmex tapes to the recovery of back-ups produced by GTC. It is fair to say that the ongoing production of further materials by the Claimant (which ran into the thousands of documents) prior to and during trial itself was disruptive, with further materials even being produced after the close of the Claimant’s factual evidence. At my direction, those documents were placed in a separate part of the trial bundle. In the event, I did not consider it necessary or appropriate for me to refer to these. I have not done so.

[17]Mr Hernández was the responsible person within INSABI for the conduct of the proceedings from the outset. The Defendants say that his assurances that he understood, and INSABI was complying with, its disclosure obligations were false. They also say that he maintained his own repository of documents, cherry-picking INSABI’s documents for those which would assist its case, destroying others where their content was not supportive of its claims, INSABI also providing a misleading explanation for the disclosure problems. In this regard, those documents which were disclosed and the evidence of the witnesses at trial are said to have contradicted the information provided about INSABI’s document retention policies. Moreover, the disclosure which has been provided is said to indicate the existence of other important documents which have not been disclosed. Key documents not disclosed were said to include INSABI’s database which supposedly logged serial numbers for ventilator deliveries as well as those documents concerning INSABI’s decision to enter into its contract with VEL on 12 April 2020 (VSA), its investigations into the delivery of the 465 ventilators between May and July 2020 and the Strategic Plan relating to INSABI’s dissolution process. The Defendants’ submission was developed in some detail in Annex 1 to their written closings.

[18]Having considered all the related submissions, I am in no doubt that the Claimant’s disclosure process took a seriously wrong turn from the start such that documents which should have been preserved were not and that the assurances given as to compliance turned out to be misplaced. However, I am unable to extrapolate from this, and the other matters relied on by the Defendants, that there was a deliberate attempt to mislead the Court or to conceal unhelpful documents. As I understand it, Mr Hernández was a licensed Mexican Attorney. Although document disclosure processes may differ in Mexico, and even though he is not alive to be questioned, I am satisfied that he would have understood the seriousness of providing false information to this Court and that he would not knowingly have done so.

[19]Moreover, although Mr Ferrer and Dr Calderón may well have understood or believed that records had been maintained, it is evident from the extensive enquiries undertaken by the Claimant’s solicitors and those who took over responsibility from Mr Hernández that the significant problems uncovered did occur. This was not a question of the Claimant ‘cherry-picking’ rather than repositories of material no longer being available. The ineffectiveness of the suggested concealment is revealed by how readily the problems were detected during the disclosure process and the extensive and expensive steps subsequently taken by the Claimant to seek to fill the gaps left by their absence, including the restoration of two different sets of back-up materials. The results of those efforts do not suggest cherry-picking either. The Defendants also asserted that inconsistencies in the evidence and the documentary record undermined the Claimant’s explanations for its disclosure difficulties. However, the matters relied on in this context were not sufficiently concrete or unambiguous to warrant that conclusion. Accordingly, although the Claimant’s disclosure was beset with problems for which it has accepted responsibility, and as unsatisfactory as the position was, I am unable to draw the adverse inferences urged by the Defendants.

[20]The Claimant says that the Defendants have taken the approach they have to the Claimant’s disclosure to avoid problems on their side. Those problems are said to include the failure to disclose any materials from Mr Dávila, Mr Schlager and Encore. In addition, the Defendants say that the Dangoors deleted their Signal messages in mid-2021, after Encore had begun intimating legal proceedings against INSABI. The Defendants say that they understand that Mr Garza has, in fact, provided all relevant documents in his possession to them, Mr Dávila informed them that he has not retained any documents relevant to the proceedings, Mr Schlager did not respond to the Defendants’ document requests and the Signal messages, in fact, had an auto-delete function activated which meant that these were routinely deleted. The Dangoors did delete the related Signal application from their devices but that was before these proceedings. Although the Claimant is incredulous as to the lack of materials from the sources identified, it is not possible for me to go behind the explanations proffered, let alone to draw the adverse inferences suggested. However, it is appropriate to note here that the Dangoors relied extensively on their suggested discussions with Mr Dávila and Mr Jileta over Signal to explain the absence of documents in critical areas of the case. As I also come on to discuss later, given the extensive documentary record, including communications between the Dangoors, Mr Dávila and Mr Schlager by other electronic means, that explanation only takes the Defendants so far.

[21]Finally, there was also quite some criticism on both sides about the absence of certain witnesses of fact it was suggested should have been called to give evidence. Ms Tlahuech, the Claimant’s former litigation co-ordinator, for example, was not called to speak to the evidence in her first witness statement on disclosure issues. However, the Claimant explained that she is no longer an employee and that it had no ability to require her to testify. The Defendant also suggested that the absence of INSABI’s Operational Control Vice-Manager, Mr Pedro Serna Cortez, was notable (and worthy of adverse inferences being drawn) in circumstances in which he was said to be responsible for investigating the important issue of the 465 deliveries supposedly made by VEL to INSABI between May and July 2020. I disagree. As I come on to explain, the Dangoors say that they themselves did not know about these deliveries until July 2020. VEL did not purport to inform INSABI of what it had supposedly delivered until 1 September 2020. The Defendants themselves say that INSABI’s reliance on the shipping documents was an inappropriate method of tracking deliveries. In the circumstances, I am satisfied that Mr Serna’s evidence would have added little.

[22]In fact, the person who would have been able to shed meaningful light on whether VEL had delivered these units was Mr Dávila. VEL says that he was entrusted to help perform the VSA, including procuring the relevant supply contract with Aeonmed’s authorised Mexican distributor, Encore, to allow it to deliver the 465 units. He (and Mr Jileta) are also said to be the persons who told the Dangoors that the delivery of these units was in progress. However, the Defendants say they have had no business dealings with Mr Dávila since the VSA and they seem to know little about his whereabouts other than that he is believed to be overseas. Given his former role, I found his suggested distance from VEL surprising. Despite this, I cannot say that VEL would be in a position to call him as a witness. The same is true of Mr Garza of Encore even though VEL later appointed him as its attorney in Mexico to facilitate delivery of another tranche of (185) ventilators to INSABI. D.

(a) Procurement issues

[23]Mr Dávila is a Mexican businessman. In March 2020, he was apparently based in Spain. He had met the Dangoors previously. That month, he contacted Joseph Dangoor to discuss VEL becoming involved in the possible supply of COVID-19 products to the Mexican Government. Given the offers it had received from its Chinese contacts for the supply of PPE, VEL was interested. Mr Dávila later introduced to VEL his business partner, Mr Christian Schlager, who owned Schlager Holding Gmbh, an Austrian company. At the end of March, Mr Dávila began to receive requests from the Mexican Government for large supplies of PPE. VEL and Mr Schlager entered a profit-sharing arrangement on any supply contracts with the Mexican Government (Mr Dávila being separately remunerated by Mr Schlager). On 29 March, Mr Ferrer issued a letter on behalf of INSABI explaining that VEL was supporting the Mexican Government’s procurement efforts. VEL subsequently entered into a contract on 6 April 2020 with another Mexican public health body, Instituto Mexicano del Seguro Social, for the supply of face shield visors and safety masks (PPE Contract).

[24]Robert Dangoor explains how, in VEL’s dealings with the Mexican Government, instructions would come from the head of the COVID-19 Procurement Task Force within SRE, Mr Jileta. Mr Jileta described his role to VEL as the co-ordination of Mexico’s global sourcing. VEL also had some more limited contact with Ms Martha Delgado Peralta, a Deputy Minister who headed an SRE sub-secretariat. A flowchart prepared by SRE in March 2020 explains the procedures for the purchase by the Mexican Government of medical supplies and equipment in the context of the COVID-19 pandemic, namely:-(i) an expert group from the Ministry of Health (SSA) would determine the need for, and characteristics of, the required supplies and communicate these to INSABI;

(ii) INSABI would inform SRE of these requirements;

(iii) SRE would locate suppliers on the international market and ‘determine’ the purchase;

(iv) the SSA expert group would approve the technical characteristics of the supplies from the identified supplier;

(v) SRE would send INSABI the contract signed by the supplier and the invoice for payment; and

(vi) INSABI would sign the contract.

[25]The flowchart summarises the further arrangements for payment and receipt and distribution of supplies. In terms of ventilator supplies, the documents indicate that, although not entirely compliant with the technical specifications adopted by the Mexican Government, the VG70 was deemed acceptable for clinical use.

[26]On 21 March, INSABI signed a contract (reference 20MXXTO(CI)225) with Aeonmed directly for the supply ex works of 300 VG70s at a unit price of US$13,200, and a total contract price of US$3.96m, payable in advance, with 50 units to be delivered by 30 May and the remaining 250 by 30 June. This agreement was concluded prior to formal approval by the Mexican Government for the clinical use of the VG70 model. On 31 March, Aeonmed told SRE that it could not ‘guarantee’ these delivery times given the number of uncontrollable factors at play during the pandemic.

[27]On 1 April, Encore issued a quotation to INSABI for the supply ex works of 1000 VG70s at a total price of 465 million Mexican pesos (approximately US$18.75m in total and US$18,750 per unit) payable in advance (Encore/ INSABI Agreement). The delivery schedule was 100 in June, 450 in July and 450 in August. On the same day, Mr Carlos Liu of Aeonmed signed a letter addressed to INSABI, confirming its support for Encore’s proposal. Encore issued its invoice to INSABI the next day, including IVA or sales tax. The invoice was duly paid. No formal written contract was issued for this order. On 6 April, Mr Garza of Encore wrote to Aeonmed, confirming INSABI’s purchase and emphasising the importance of meeting the agreed delivery times. On 15 April, Aeonmed confirmed to SRE that the order had been placed on time (under contract number 20MEXT0(CI)475), the price paid in full and the order already in the production queue to be delivered as soon as possible for use in Mexico.

[28]The Mexican Government also sought assistance from VEL in procuring the supply of ventilators of different models, including the VG70. To that end, in early April, Mr Jileta signed various letters to be used to explain the Mexican Government’s ventilator needs and VEL’s support in its procurement efforts. This included a letter dated 9 April to VEL, referring to the Mexican Government’s intention to purchase ventilators from its “existing stock.” Another such letter from 10 April indicated that American Venture Entertainment & Sport (HK) Limited (American Venture) had also been appointed to assist in those efforts. Mr Jileta signed a similar letter in relation to Mr Schlager and his companies and another company with which they were co-operating, AZ-Naturemed GmbH (AZ-Naturemed), a licensed manufacturer of medical products. Other companies were also identified as supporting VEL’s efforts. It is apparent from the record that VEL itself was instrumental in the preparation of a number of these letters and that they were readily signed by SRE. VEL issued its own letters in similar terms, including to American Venture and its existing contact in the Chinese market, Mr Thomas Tang of Vanguard, even though he had earlier indicated that Vanguard could not source ventilators at that stage given the existing production lead times in Chinese factories.

[29]There was some discussion as to how American Venture came to be introduced to VEL. Robert Dangoor testified that Mr Dávila informed him on the evening of 10 April (Friday) about the company and how it was recommended by SRE and one of Mr Dávila’s contacts at the China Council for the Promotion of Internation Trade in Mexico. I agree that the picture presented between the documents, VEL’s pleading and the Dangoors’ evidence is not entirely consistent or clear on this aspect. However, whatever the source of the introduction, and the strength of any recommendation, the Dangoors had not worked with the company or its representative, Ms Lillian Sum, before. It is also clear from the documents that American Venture was a market intermediary which dealt with manufacturers and did not hold stock itself, the Chinese ventilator market was frenetic in these early days of the COVID-19 pandemic and there were rapid daily shifts in ventilator availability and pricing.

(b) Communications with American Venture: 11-12 April 2020

[30]In the early (UK) hours of 11 April (Saturday), Robert Dangoor began to communicate with Ms Sum by voice call, WeChat and WhatsApp. The electronic messages, and their sequence, are not easy to follow given the different times stated, their manner of extraction and, for some, Ms Sum’s English. In his early messages, Robert Dangoor explained that VEL needed 1000 VG70s and 600 Eternity SH300s (SH300) with possible delivery to Shanghai. The former were intended for INSABI. In apparent response to his question about whether she could supply 1600 units in two weeks, Ms Sum said “Yes. I am guarantee.” Ms Sum initially indicated a unit price of US$46,500 for the VG70s but explained that the price could not be held for long given the other orders manufacturers were receiving. There was further discussion about the price which Ms Sum was able to reduce slightly to US$46,000, with 100 units available immediately which could be checked in the factory the next day. Ms Sum offered two options, the first for 1000 units available immediately but at a slightly higher price or 100 units available immediately with the remaining 900 delivered within 14 days at the already quoted price. Ms Sum apparently sent an invoice. There then followed further exchanges about keeping the offer open for longer given the UK bank holiday, Robert Dangoor saying that he was awaiting the transfer of money from Mexico. Later that evening, he asked if VEL could have 200 ventilators delivered to Shanghai for Wednesday (15 April). He also indicated by e-mail that his colleagues would contact her directly with questions. At 1.03am (UK time) on 12 April (Easter Sunday), Ms Sum said she would check about the 200 VG70s. No further messages between the two are indicated until 9.40am (UK time) on 12 April.

[31]In the meantime, Joseph Dangoor had also started communicating with Ms Sum on WhatsApp late on 11 April, asking if 200 ventilators could be delivered on the day after payment. At 2.36am (UK time) on 12 April, Ms Sum confirmed that 200 VG70s would be available immediately, she would check about the SH300s and she would send updated information. Joseph Dangoor thanked her. No further such messages are indicated between them until 9.39am (UK time) on 12 April.

(c) VEL invoice

[32]Based on the metadata for the documents, Joseph Dangoor testified that he did not begin to prepare VEL’s invoice and contract for the supply of 1000 VG70s until shortly after 10pm (UK time) on 11 April. An initial draft invoice was prepared on a composite basis for both the VG70s and SH300s and addressed to the COVID-19 International Procurement Task Force. This indicated only 100 units available for immediately delivery, apparently based on Ms Sum’s exchanges with Robert Dangoor on the evening of 11 April.

[33]I accept that Joseph Dangoor spoke to Mr Jileta briefly about the main terms of the agreement, including the delivery schedule, before the final form of VSA and invoice no. M01979-A dated 11 April 2020 (now showing 200 units immediately available) (Invoice) were sent to Mr Dávila for onward transmission to the Mexican Embassy in China around 3:49am (UK time) on 12 April (Easter Sunday). Joseph Dangoor applied his father’s electronic signature to the Invoice but the contract was sent unsigned.

[34]The Invoice was addressed to Mr Ferrer at INSABI and stated on its front page (my emphasis in bold) that:- “We are able to supply the following to you DPU (Delivered at place unloaded) SHANGAI AIRPORT OR HANDLER”

[35]The Invoice identified a quantity of 1000 VG70s at a price of US$58,800 per unit plus an installation price of US$400 in certain specified cities. The Invoice identified a “lead time” of “200 immediately available for delivery, remainder to be delivered over 21 days or less” and a requirement for the Invoice to be paid by 10am CST on 13 April “to reserve products available”. The Invoice stated that “further quantities are available”.

[36]Over the page, the Invoice identified “Terms of Payment” as 100% payment on confirmation of the order with a “disclaimer” that the above pricing was valid until 13 April 2020 at 10am CST on 13 April, explaining that there were daily increases in raw materials prices, that the price was subject to daily variation and that confirmation of the order immediately upon approval was recommended.

[37]Further, “[i]n the unlikely event that there is a significant disruption to product availability, any items which we are unable to supply will have the cost refunded on a pro rata basis and the purchaser will be notified.”

[38]Given the urgency of the order, the Invoice stated that VEL might be required to use multiple quality assured manufacturers. (Given that the product was the Aeonmed VG70, the possibility of multiple manufacturers does not seem to make sense.)

[39]Minor variations in the specification of the product (without compromising quality) were also contemplated.

[40]If there was a delay in supplying the order, 36 hours’ notice would be given to the client to postpone collection and arrange an optimal collection time.

[41]Payment was for goods delivered to the local shipping handler unloaded (DPU).

[42]As for delivery, the Invoice stated that the first products would be delivered to the shipping handler once payment was received by VEL’s bank and the products ready for despatch.

[43]Confirmation of the order was by means of payment.

[44]All prices and delivery were subject to change depending on the timing of such confirmation. The delivery schedule (in Appendix 1) was susceptible to “minor variation”. That delivery schedule showed the number of ventilators to be delivered on the number of days after receipt and processing of the purchase price by VEL’s bank:-• Day 1 200 ventilators

• Day 4 100 ventilators

• Day 7 100 ventilators

• Day 10 100 ventilators

• Day 13 100 ventilators

• Day 15 100 ventilators

• Day 17 100 ventilators

• Day 19 100 ventilators

• Day 21 100 ventilators

[45]Accordingly, deliveries were meant to be completed by 4 May, albeit the delivery schedule was expressed to be subject to “minor change”. The Appendix also indicated that there was a “strong possibility” of product availability in a shorter period of time. If there was an option to shorten the delivery schedule, the client would be offered that opportunity.

[46]The box entitled “PURCHASER AGREEMENT” stated that the clients were “satisfied with the conditions of sale” and undertook to “engage in the purchase of all products outlined within this invoice” at a total cost of US$59.2m. The same box stated that the purchaser undertook to settle that balance immediately and without delay and understood that the process stated only applied until 13 April.

(d) VSA

[47]It appears that the draft VSA was largely based on the PPE Contract and shared some of its drafting infelicities. Joseph Dangoor said that this was based, in turn, on a Law Society standard contract form. Although prepared and signed later than the PPE Contract, the VSA bore the same 4 April 2020 date. VEL was identified on the front page as the seller, Mr Ferrer of INSABI as the purchaser, albeit there is no dispute that INSABI was the purchasing party and INSABI was named in the execution clause. The VSA stated (my emphasis in bold) that:-(i) (a) VEL was “willing and able” to source and deliver 1000 VG70s at US$58,800 per unit (b) the installation price was US$400 per unit, with 600 to be installed (the reference to 600 may be erroneously to the number of SH300s) and (c) the seller had the “capacity” and desire to sell the “Assets” (indicated as a defined term but without definition), subject to any exclusions in the VSA (background section A-C);

(ii) INSABI agreed to pay 100% of the sum in advance (as per the Invoice) and VEL agreed to sell, and INSABI agreed to purchase, the Assets subject to the terms and conditions of the VSA and in reliance on the representations, warranties and conditions set out therein (clause 1);

(iii) The purchase price was allocated among the Assets as per the Invoice, with a total amount of US$59.2m, subject to required adjustments agreed upon by the parties due to (a) frequent variation and likely increase to ventilator prices if confirmation took place after 10am CST on 13 April and (b) variation in the quantity of ventilators (clause 2);

(iv) Completion of the sale and purchase would take place at 10am CST on 13 April 2020 (clause 3);

(v) At completion, and upon INSABI paying the purchase price in full, VEL would deliver the Assets to INSABI’s collecting agent when ready for shipment (clause 4). (Given the delivery schedule, this provision did not seem to make sense.)

(vi) The VSA covered US$59.2m of products, allocated across different products from different manufacturers, with the possibility of several payments on account of the Invoice. (This did not make sense give the requirement for 100% payment and that Aeonmed was the manufacturer.) A full balance payment of the relevant amount would be payable by INSABI to confirm the order (clause 5);

(vii) That balance was payable in one lump sum payment to VEL by same day transfer, notice of VEL’s bank account details having been given in the Invoice (clause 6);

(viii) INSABI was responsible for payment of all taxes and duties payable pursuant to the transfer of Assets from VEL to INSABI (clause 7);

(ix) Installation charges of US$400 per unit were payable (that charge for certain specified cities) (clause 8);

(x) VEL gave warranties to INSABI in respect of various matters, including as to its authority, good standing, corporate powers, capacity and authority, freedom of the Assets from claims or outstanding agreements or contractual claims, absence of prejudice to pre-existing creditors, absence of claims to commission or brokerage, proper tax withholding and reporting, absence of employee claims, operation in accordance with laws, absence of intellectual property claims, availability of necessary software licences, due execution and the enforceability of the VSA (save as limited by bankruptcy laws, creditor rights and equitable remedies) (clause 9 headed “Seller’s Representations and Warranties” although clause 9 was only expressed in terms of warranties);

(xi) These warranties were the only warranties, with no other representation or warranty having been given, including as to the fitness for purpose or merchantability of the Assets (clause 9(u));

(xii) VEL warranted the accuracy of these warranties as at the Completion Date and acknowledged INSABI’s reliance thereon (clause 10), those warranties also expressed to survive the completion date of the VSA (clause 11), a warranty claim requiring written notice within a year (clause 12) and credit being given against warranty claims for any third party recoveries (clause 13);

(xiii) Although situated (erroneously) in the VSA, the VEL warranties section contained the following further obligations:- (a) VEL’s production of the Assets to industry standard and to good working order (clause 9(k)); (b) VEL’s delivery of the assets to the local handling company when ready, with prior notification to INSABI (clause 9(q)); (c) Refund of the cost on a pro rata basis and notification of INSABI in the “unlikely event” of a significant disruption (clause 9(r)); (d) Payment being for the goods and covering delivery to INSABI’s local handling agents, delivered at place unloaded (DPU) (clause 9(s)); and (e) INSABI’s responsibility for customs clearance and import duties to be paid on arrival at destination (clause 9(t)).

(xiv) INSABI gave more limited warranties, some corresponding to those given by VEL, with additional warranties as to the availability of INSABI’s funds and ability to perform the VSA (clause 14), the absence of knowledge of the inaccuracy or falsity of INSABI’s warranties (clause 14(f)) and, not entirely consistently, the accuracy of those warranties (clause 16), as well as an acknowledgement of VEL’s reliance thereon, with similar provisions with respect to their survival (clause 17), notification of related claims (clause 18) and credit for third party recoveries (clause 19);

(xv) INSABI’s warranties were the only warranties, with no other warranty (not, in contrast to clause 9(u), no other representation or warranty) having been given (clause 15); (xvi) INSABI had no liability for unpaid VAT owing on any sales or services provided through VEL (clause 20); (xvii) A person not a party to the VSA had no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce the terms thereof (clause 21); (xviii) INSABI was not liable for VEL’s debts arising out of its prior ownership or operation (clause 22) and VEL would indemnify INSABI for the same (clause 23); (xix) The parties would bear their own costs in connection with the VSA (clause 24); (xx) Information pertaining to the VSA was confidential (subject to certain exceptions) (clauses 25-27); (xxi) Important additional clauses provided that:- (a) The stated pricing was valid until 10am CST on 13 April 2020, the items being subject to daily price fluctuations and order confirmation recommended immediately on approval (clause 28); (b) Upon a significant price increase warranting a change, INSABI would be offered to meet the higher cost or receive a quantity equivalent to the current purchase value of the goods (clause 29); and (c) Delivery would be in accordance with the delivery schedule in Appendix 1 (which may be subject to minor variations). (xxii) The governing law was English law (clause 33) and the courts of England had jurisdiction with respect to disputes (clause 34); (xxiii) The VSA contained all the terms and conditions agreed to by the parties, with statements or representations made in negotiation and inconsistent with the final VSA being of no value to either party (clause 35); (xxiv) The VSA was only capable of modification by written instrument executed by all parties (clause 36); (xxv) The VSA could not be assigned in whole or part without the written agreement of the other party (clause 38); (xxvi) The VSA passed to the benefit of, and was binding upon, the parties’ heirs, executors, administrators, successors or permitted assigns (clause 39); (xxvii) The rights, remedies and benefits provided for by the VSA were cumulative and not exclusive of other such rights, remedies or benefits allowed by law or equity (clause 41); and (xxviii) Time was of the essence in the VSA (clause 42).

[48]Without intending any disrespect, despite adopting a contract template, some of the VSA provisions were somewhat repetitive (internally and with the Invoice), occasionally inconsistent and perhaps not properly understood by the draftsman.

(e) Events leading to the execution of the VSA

[49]On 11 April at approximately 10:53pm Mexico time (5:53am UK time on 12 April), Ms Delgado sent Dr Calderón an e-mail with the subject line “Contract and Quotation for the Purchase of VG70 Ventilators” (copied to Mr Jileta) in the following terms:- “Following up on our ongoing cooperation on the COVID-19 pandemic containment strategy, this Deputy Ministry reports that it has located 1,000 (one thousand) Aeonmed brand ventilators, model VG70. The model has been previously approved by the INSABI. The cost per unit is USD 58,800.00. Therefore, we will be submitting a signed quote and contract as attachments no later than 12 April at 10:00 a. m. Without further ado, I remain at your service.”

[50]In addition to the VSA and Invoice, the e-mail also attached a note dated 11 April from Mr Jileta to Dr Calderón confirming that SRE had located 1000 VG70s through VEL at a price of US$58,800. Negotiations had been held with VEL which had agreed to shorten delivery times with a maximum delivery schedule of three weeks and a reduced installation price. The offer would be maintained if payment was made by 8am on 13 April. To finalise the purchase, SRE required the signed Invoice and VSA by no later than 10am on 12 April.

[51]The WhatsApp exchanges between Ms Sum and (both) Dangoors resumed from around 9.40am on 12 April. Ms Sum indicated that she was still in discussion with the manufacturers. She informed Robert Dangoor that the 100 units indicated the day before as immediately available had now been bought by another buyer. However, she also sent updated contract and invoice information (showing a revised VG70 unit price of US$47,500), explaining that, if VEL signed the contract and paid US$150,000 to each manufacturer, 200 VG70s could be picked up on Wednesday (15 April), with a further 300 picked up within a week and the remaining 500 within two weeks.

[52]Joseph Dangoor also e-mailed Ms Sum at 6.04 am on 12 April, conveying “some urgent questions” from his “client” about(i) the possibility of collecting 200 units instead of 100 on Wednesday

(ii) the number of SH300s and of VG70s

(iii) a delivery calendar for the 1600 ventilators and delivery arrangements to the shipping handler near Shanghai airport and

(iv) installation assistance. There is a dispute as to whether the date stamp on the e-mail reflected the time shown in China or the UK. The significance on the Claimant’s case is that, if he was asking such questions of Ms Sum later in the morning (UK time) on 12 April, Joseph Dangoor could not have been satisfied by her indication in the early hours that she could obtain 200 VG700s by Wednesday. Having considered in conjunction with the related WhatsApp messages the date formatting of this and other e-mail exchanges between Ms Sum and the Dangoors, I consider it more likely than not the time shown was that in China and that the e-mail therefore does not bear the significance suggested by the Claimant.

[53]It appears to have taken some time for Ms Sum’s e-mail response to reach the Dangoors. In any event, this explained (similarly to the WhatsApp exchanges above) that the 100 ventilators previously under discussion had since been sold but that the manufacturer had confirmed availability on 15 April of 200 units at a slightly higher price. American Venture attached an updated invoice and contract. The price (US$46,374 per unit) and quantity were stated to be valid for 24 hours (from 4pm Hong Kong time on 12 April). There were further exchanges about the price which American Venture continued to negotiate with the manufacturer. The contract provided for payment of a US$300,000 deposit upon signing. This would lock the quantity and price of ventilators. The balance was payable within 36 hours of completion of inspection. The 200 sets of VG70s would then be delivered on 15 April, with 300 sets seven days after signing and the remaining 500 14 days after. In their further exchanges with Ms Sum, she enquired as to when they wanted an inspection of the goods.

[54]Robert Dangoor also exchanged WhatsApp messages with Mr Tang in the afternoon (UK time) of 12 April. Mr Tang did not have a high opinion of American Venture. As he said:- “They don't have the qualification to export the ventilator. They have just changed the scope of their business to increase sales of class ii medical devices. But not sales of class III medical devices which is requested for exporting ventilator.” And later:- “Obviously, this company is not good to work with. I don’t know what they claim that their company’s main business in front of client, but from the current point of view, they are not factories, and their main business does not have medical device products, nor the qualification to export ventilator. Unless they introduce the factory to client, let the client negotiate with the factory directly, and the factory must be qualified for ventilator export. At present, some ventilator factories in China are not qualified for export.” At present, some ventilator factories in China are not qualified for export.”

[55]Mr Tang also said that American Venture was an advertising company with a pending lawsuit against it and history of tax arrears. The Dangoors checked with Ms Sum directly on 12 April as to whether it had a class III export licence for medical equipment. She explained that American Venture had a trusted export company in China with such a licence.

[56]On 12 April, VEL also paid the US$300,000 deposit to American Venture, the transaction detail report showing a value date of 14 April. American Venture said it would pay the deposit to the manufacturer and help arrange a visit to the factory on 14 April, with a view to the delivery of 200 VG70s on 15 April. Joseph Dangoor returned the signed contract to Ms Sum with certain changes on account of the SH300 delivery schedule. He also indicated that his client was pressing for a factory visit the next day, 13 April. Ms Sum said that she would transfer the deposit in the meantime to arrive in the morning.

[57]The VSA and Invoice initialled by Mr Ferrer was returned by SRE to VEL shortly after 5pm (UK time) on 12 April. There is some controversy arising most pointedly on the Claimant’s misrepresentation claim as to whether he approved this at INSABI’s offices in the manner described by Mr Ferrer and Dr Calderón in their evidence or by some other means. On the same day, INSABI issued an information note concerning the purchase of ventilators. This explained the justification for VEL’s higher ventilator price compared to the earlier purchases from Aeonmed (300) and Encore (1000), the Chinese market having no immediately available stock. It also noted that the VSA lacked certain technical guarantees.

[58]On 13 April, VEL received nearly US$59.2m from the Mexican Government representing the VSA contract price. An official from the Mexican Embassy in Beijing was supposed to visit Aeonmed’s warehouse that day to inspect the ventilators. Although this was required by the Mexican Government, I do not accept the Defendants’ contention that Mr Jileta conditioned payment of further funds to American Venture on that inspection. VEL would itself have been anxious for the supply to be verified. According to Joseph Dangoor, the official did not show up due to issues on the Mexican Government’s side. A further visit was arranged for 14 April. The relevant official did attend but was unable to gain access then. This failed visit caused quite some consternation on VEL’s side. Robert Dangoor complained about the poor customer service received from American Venture and how Ms Sum had destroyed this large contract. Mr Dávila was more forthright, saying that the deal was over and that VEL had cancelled payment of the deposit. Joseph Dangoor removed Ms Sum from the relevant WhatsApp group, albeit resuming contact with her the next day as well as starting to contact possible alternative suppliers.

(f) Sourcing other potential ventilator suppliers

[59]Following those failed visits, VEL began to identify other sources of possible ventilator supply. The Defendants say that this search was conducted on behalf of the Mexican Government under the supervision of Mr Jileta and SRE and that VEL did not enter new supplier contracts or make related payments without Mr Jileta’s approval. I do not accept this. VEL’s search for ventilators was conducted on its own behalf so that, despite being let down by American Venture, and letting down INSABI, it could find an alternative way to perform its obligations under the VSA. SRE had already done its job of introducing VEL to INSABI. VEL may have kept Mr Jileta informed of progress but it was a matter for VEL (not SRE) to decide with whom it contracted.

[60]On or around 16 April, Semacare China Co., Ltd (Semacare) agreed to supply 200 VG70 ventilators at a total price of US$2.4m to be shipped before 31 May. The unit was US$12,000 but a further US$2.4m was apparently payable for additional services. The precise nature of the arrangements agreed by AZ-Naturemed are not entirely clear but, from VEL’s perspective, they appear to have involved it paying US$2.4m to Aeonmed, a further US$2.4m (including a deposit of US$100,000) to Semacare and a further commission of US$70,000 to Chen Yanru. With the failure of this contract, and despite assurances from Semacare that the monies would be repaid, the Dangoors wrote to Aeonmed on different occasions from 29 May to request a refund. It is not entirely clear but it appears that the Semacare payments were refunded around 27 April, with Aeonmed’s refund taking longer to come through (16 July).

[61]On 17 April, American Venture quoted for the supply of 1000 VG70s at a price of US$49,800 per unit, later reduced to US$48,300. The contract was signed and deposit (US$900,000) paid that day, with delivery of 300 sets by 18 or 19, 300 by 20 and 400 by 27 April. A further US$8.76m was paid to American Venture on 20 April. American Venture later refunded US$9,659,908.72 on 22 April when the promised units did not materialise.

[62]On 18 April, AZ-Naturemed entered a contract with Excel Action Limited (Excel) for the supply of 100 ventilators at a unit price of US$54,000. The price was payable within one working day of contract signature. The shipment date was stated to be the earliest possible date. The contract price (US$5.4m) was paid the same day. On 16 May, AZ-Naturemed indicated that it considered the contract void and requested a refund. Excel did not accept this and a dispute ensued.

[63]Delivery of 300 ventilators to INSABI should already have taken place by 18 April pursuant to the VSA when Robert Dangoor wrote to Mr Ferrer stating that the Chinese Government had been introducing increasing levels of regulations over the last few weeks, causing delays in VEL’s ventilator delivery. However, he said that VEL had confirmed and paid for 1000 verified ventilators to be sent to Shanghai from that coming week within the agreed 21 day delivery window.

[64]On 19 April, AZ-Naturemed entered a contract with HBK Department of Projects (UAE)/ AIDA (HBK) for the supply of 1000 VG70s at a unit price of US$46,000. VEL paid a 5% deposit on 6 May (US$2.85m) to obtain delivery of the first 50 ventilators. On 28 April, Mr Jileta signed a letter to HBK explaining the efforts of Mr Schlager, in conjunction with AZ-Naturemed, to assist Mexico’s procurement efforts. As explained below, HBK later delivered 50 units. The contract quantity of 1000 was subsequently reduced by agreement to 500. However, the parties then fell into dispute.

[65]On 21 April, AZ-Naturemed entered a contract with International Distributors for the supply of 350 VG70s at a unit price of US$51,151.24 (US$18,252,394 total) with a delivery time of 30 April. VEL paid US$10m to the seller on 22 April. It appears that this contract was terminated on 23 April for non-performance. The price was repaid in instalments between 26 May and 8 June.

[66]On 23 April, Dr Calderón e-mailed Ms Delgado, asking for the support of the Ministry to ensure that ventilator suppliers comply with their deliveries in accordance with the offers submitted. Particular reference was made to VEL, identified as already being behind schedule in its deliveries.

[67]On 25 April, Robert Dangoor wrote to Mr Ferrer (apparently through SRE), explaining that there had been unexpected delay sourcing the ventilators because Aeonmed was having major difficulties with its supply chain and VEL was accommodating new Chinese export regulations. Nevertheless, VEL would begin shipping within that week. VEL continued with its commitment to deliver ventilators within the specified time frame, with possible marginal overrun to the delivery window. VEL had placed orders with established distributors with strong connections to Aeonmed and the Chinese Government which would fully refund payments to INSABI if the goods were not provided. Other ventilator models had been secured as a contingency.

[68]The Defendants say that this letter (and subsequent updates to INSABI and SRE) were sent at Mr Jileta’s request. I do not accept this. VEL had received US$59.2m of the Mexican Government’s money. It was failing to deliver to its customer. It obviously had to tell INSABI what was going on. It did not need Mr Jileta to tell it that. One notable feature of this letter and much of the subsequent correspondence from VEL concerning its failure to perform was just how vague and uninformative it was about what VEL was doing to meet its commitments and how VEL’s internal documents reveal a rather less optimistic picture of contract fulfilment than was projected to INSABI. There was quite some debate at trial about the quality and level of information provided. I agree that there was a general lack of candour on VEL’s part as to the problems experienced with its suppliers, the delays experienced and what VEL could realistically achieve.

[69]On 26 April, Robert Dangoor also wrote to Mr Marcelo Ebrard (Chancellor at SRE), explaining unforeseen difficulties with Chinese export regulations and confirming that shipping would begin that week. It appears that Joseph Dangoor e-mailed this to Ms Delgado (copied to Mr Jileta) that day and that it was forwarded to INSABI on 28 April.

[70]On 27 April, Dr Calderón asked again for Ms Delgado’s support with respect to VEL, explaining that it had been considerably behind schedule to date, with 600 ventilators supposed to have been delivered already but none received at Mexico City airport. The next day (28 April), Ms Delgado responded (copied to Mr Ebrard) attaching for INSABI’s consideration the 25 April letter from Robert Dangoor to Mr Ferrer explaining VEL’s delay, VEL’s commitment to deliver the equipment, a proposal to replace it with other models or their willingness to provide a full refund. She also provided the supplier details to enable direct follow up about payment and delivery. Ms Delgado responded more substantively on 22 May in the following terms:- “The Undersecretariat for Multilateral Affairs and Human Rights does not decide on bids, does not determine technical specifications, it does not select suppliers, does not decide on procurement, nor can it instruct other agencies to purchase goods or services; it is only entrusted with serving as a link between the dependencies of the public administration to carry out actions abroad that facilitate the authorized units to import goods and services, or the identification of prospects from international suppliers in support of the health sector for COVID-19 care. INSABI is a unit empowered to analyze offers, acquire, and, where appropriate, import goods and services, as well as the goods that are necessary to attend to and combat the pandemic generated by the COVID19, as well as assume the terms and conditions of the contracts they have signed with any national or foreign company.”

[71]Also on 27 April, VEL entered into a contract with ACP Consultant Company Limited (ACP), a Chinese supplier affiliated in some way to Ms Sum, for the supply of 100 VG70s at a unit price of US$50,000, payable in full in advance. VEL paid US$5m to ACP that day. An inspection was arranged at Aeonmed’s factory for 30 April in respect of this contract but this proved abortive. VEL subsequently pressed ACP for a refund. On 15 June, ACP informed VEL that it has commenced legal proceedings in China to recover funds paid to it by VEL. I do not accept the Defendants’ contention that ACP was Mr Jileta’s recommendation.

[72]On 28 April, Aeonmed wrote to Encore stating in relating to the Encore/ INSABI Agreement for 1000 units that it could try to start with small quantities from June due to Aeonmed’s need to provide around 250 VG70s under Aeonmed’s own contract with INSABI (for 300 units).

[73]Having e-mailed Ms Delgado the day before, Joseph Dangoor e-mailed Mr Ferrer directly on 1 May with a letter dated 30 April from Robert Dangoor explaining that Aeonmed was running behind schedule due to the international ventilator shortage and proposing that INSABI accept for immediate delivery in Mexico City on 29 April of 13 refurbished Drager Oxylog 3000 ventilators at a unit price of US$45,400 USD against the VSA and proposing to arrange for 48 VENTILOGIC LD 0429 ventilators to be delivered to HENCO within 48 hours at a unit price of US$42,700 USD against the VSA contract.

[74]By early May, VEL should have delivered all the VG70s in accordance with the delivery schedule. VEL’s financial position under the related supplier contracts appeared in overview to be as summarised below. VEL had paid a US$2.85m deposit on the HBK contract but the total contract price for 1000 units was US$46m against US$59.2m under the VSA. Given the supplier delays, non-performance and VEL’s associated difficulties and delays in obtaining refunds, VEL was seriously constrained in its ability to supply ventilators and to meet INSABI’s later demands for a refund. Supplier Amount paid (US$) Refund American Venture (2) US$9.66m Yes - 22 April 2020 Aeonmed (Semacare) US$2.4m Yes - 16 July 2020 Semacare (inc deposit) US$2.4m Yes – c.27 April 2020 International Distributors US$10m Yes - 26 May - 8 June 2020 ACP US$5m No Excel US$5.4m No HBK US$2.85m No (50 units later supplied)

[75]This testing situation may explain why, on 6 May, Joseph Dangoor stated candidly in a WhatsApp exchange about VEL’s procurement efforts that it had been “3 weeks of hell so far”, “[t]he problem is that the risk we have taken is HUGE”, that “[w]e had a contract for 1000 …. And we are wayyy behind” and “[f]uck knows.

(g) INSABI’s refund request

[76]On 8 May, Robert Dangoor wrote to Mr Ferrer stating that the process of ventilator delivery from Aeonmed had been significantly slowed in recent weeks by complicated bureaucracy, but that VEL had established a procurement contract with HBK which would help VEL to procure 1000 ventilators for delivery (CIF) to Mexico in May. This appears to have been e-mailed to Ms Delgado on 9 May for onward transmission.

[77]On 12 May, Dr Calderón wrote to Mr Ebrard, explaining VEL’s failure to deliver on the agreed date and requesting his intervention so that VEL could proceed with the refund of US$59.2m, apparently attaching a draft letter dated 8 May to VEL to that end.

[78]On 13 May, VEL chased ACP for a refund.

[79]On 14 May, Joseph Dangoor e-mailed Mr Ferrer concerning an updated delivery schedule. In his accompanying letter dated 13 May, he explained that VEL continued to encounter unforeseen delays given the complexity of the process to release the ventilators from Aeonmed. The first delivery of 50 units was now expected between 18 and 20 May, with subsequent batches to follow without disruption. The e-mail appeared to suggest that the full 1000 units would be supplied by reference to the HBK contract. The following revised delivery schedule was attached:-• 20/05 50 ventilators

• 23/05 75 ventilators

• 25/05 100 ventilators

• 29/05 125 ventilators

• 01/06 125 ventilators

• 03/06 125 ventilators

• 07/06 200 ventilators

• 10/06 200 ventilators

[80]On 15 May, VEL informed AZ-Naturemed of “the impending cancellation of our contract with the Mexican Government due to our failure to provide VG70 Units.” VEL asked AZ-Naturemed to notify Excel to return the funds following their failure to deliver within the agreed time frame. AZ-Naturemed sought refunds from Excel and International Distributors. Excel responded on 18 May that the money had already been used to pay the supplier such that the contract could not be cancelled.

[81]On 16 May, Mr Dávila communicated frankly with Mr Tang and Joseph Dangoor to the effect that VEL was stopping the search for VG70s and was getting refunds. The purchase of ventilators would continue but not in China for now.

[82]On the same day (16 May), Mr Jileta and Dr Calderón exchanged WhatsApp messages concerning a letter for VEL to be translated, seemingly the 8 May draft letter seeking a refund. Mr Jileta said he was waiting to hear if Dr Calderón was going to translate it and to consult about an apparent agreement between Mr Ferrer, Mr Ebrard and the Mexican President about giving VEL until 10 June to deliver. Dr Calderón confirmed that he needed it translated urgently.

[83]On 19 May, Ms Delgado wrote to Mr Ferrer proposing a communication be sent to VEL accepting the amendment to the VSA and the new delivery schedule proposed by VEL and warning that, if the first group of VG70s was not received or proof of shipment not provided by 20 May, INSABI would formally express its intention to terminate the contract immediately, expecting a full refund as soon as possible. She attached a draft letter to that end.

[84]Ms Delgado e-mailed Joseph Dangoor the next day (20 May) stating that:- “I really need to know if the ventilators are arriving today as the schedule is proposed. … and I need to bring reliable information regarding this shipment in a few hours. Please tell Mr. Dangoor to call me as soon as possible, situation here is sensitive.”

[85]Robert Dangoor e-mailed Ms Delgado later that day (20 May) explaining that his son had asked him to give her an update on the ventilators’ delivery.

[86]Mr Jileta and Dr Calderón exchanged further WhatsApp messages on 19 and 20 May, including concerning the despatch of a letter to VEL demanding a refund. On 20 May, Dr Calderón asked for it to be translated, noting that Mr Ebrard had asked for it to be sent that day.

[87]On 21 May, Mr Ferrer sent an e-mail to Joseph Dangoor in the following terms:- “In regards to the agreement signed between this Institute and Viva Enterprises, for 1000 AEONMED VG70 ventilators acquisition, and due to the non compliance of the delivery dates, We enclose a letter that contains our [sic] demmand of the immediate refund of the payment and the financial interests that has been generated, since the date the transfer has been made. The non compliance of this refund and the financial interests, may result in a default claim against your Company.”

[88]The e-mail was originally sent to the wrong e-mail address. This was re-sent to the correct one but without the attached letter.

(h) VEL’s actions after the refund demand

[89]VEL wrote to AZ-Naturemed on the same day (21 May) to explain that INSABI had requested return of funds following the failure to deliver the required ventilators and asking AZ-Naturemed to notify the liable suppliers of the failed contracts that they must return the funds following their failure to deliver within the agreed time frame.

[90]On 25 May, VEL purportedly entered into a contract with Encore for the supply of 465 VG70s (Encore/ VEL Agreement), suggested to be the basis upon which VEL was able to, and did, eventually perform the VSA (as was later amended or replaced). The total price under that agreement was US$10.416m, comprising US$8,718,750 for the VG70s (unit price US$18,750), “consulting” of US$1,697,250 and installation charges of US$186,000. Delivery was “incoterms ex works factory” directly to Henco to take place in Shanghai between 1 and 17 July 2025. A single payment for the supply was due within five working days of proof of delivery to Henco. There is a significant dispute between the parties as to whether the Encore/ VEL Agreement was concluded then or whether it was, in fact, backdated as part of the scheme I have mentioned to make it appear falsely that VEL’s purchase of 465 units from Encore was already in place. The documents also include a letter dated 27 May from Aeonmed to Mr Garza of Encore concerning a suggested agreement to deliver 465 units on behalf of VEL and referring to VEL’s “deposit with us”. The authenticity of the 27 May Aeonmed letter is also disputed.

[91]In VEL’s draft response to INSABI’s 21 May letter discussed between Joseph Dangoor and Mr Schlager, it appears to have been contemplated that the HBK contract would be reduced to 500 (from 1000), albeit this had not yet been confirmed. After an initial acknowledgement of INSABI’s letter, Joseph Dangoor responded substantively on 27 May in the following terms:- “We will proceed in accordance with your wishes to terminate the contract on mutual agreement terms. This has been a very uncomfortable situation for our company and it is our interest to support Mexico and not to be a hindrance. To this effect we have started to recall the funds from all non-performing contracts and this process is underway so that we can return these funds to INSABI. Our only active contracts are now with ACP and with HBK Developments and Projects in Association with AIDA Global• ACP - 100 units for delivery by 5th June; where we had paid a premium for them to deliver early

• HBK - First 50 units have been awaiting customs clearance since last week; we are now working to curtail this contract size maximally in response to your email Given the considerable delays, we will be arranging a discount for INSABI on any delivered ventilators. We have been assured by the factory that it is impossible to procure VG70 ventilators any faster via any channel. All funds are fully accounted for. These funds have not been used for any purpose other than securing the purchase of your ventilators and have generated no interest whatsoever. We will remain fully cooperative with the refund process and look forward to being of assistance. You should expect partial refunds and regular updates starting on Monday.”

[92]On the same day (27 May), Joseph Dangoor told Ms Sum that “we have been asked to return all funds immediately to Mexico” and that INSABI “does not agree to wait for any more deliveries”. He asked for the return of the monies paid to ACP. To similar effect, he told Ms Sum the next day (28 May) that Mexico did not want ventilators but wanted its money returned, it was not willing to extend the supply contract and that VEL no longer had the option to provide ventilators.

[93]The first two disputed deliveries of 15 and 100 ventilators (respectively, Shipment #1 and #2) were uplifted by Henco from Aeonmed’s factory on 28 May.

[94]Mr Dávila communicated further with Mr Tang and Joseph Dangoor on 28 May, saying that VEL was not sourcing any ventilators because it was too complicated.

[95]On 29 May, VEL wrote to Aeonmed, seeking the return of the US$2.4m transferred on the 17 April towards the ventilators sourced through Semacare but which had still not been provided.

[96]In addition to struggling to obtain the refund from ACP, VEL remained in dispute with Excel, the correspondence showing exasperation on Mr Dávila’s part about a suggested lack of transparency as to Excel’s own dealings with its Chinese supplier.

[97]On 2 June, Joseph Dangoor explained in WhatsApp messages with Mr Tang that the Mexican Government no longer wanted to buy any ventilators through VEL, that Mexico had cancelled the contract and that VEL needed to return the money. In response to Mr Tang’s question as to whether the companies Mr Dávila had contacted had supplied any ventilators, Joseph Dangoor responded that “[w]e have failed.”

[98]On 4 June, Mr Dávila relayed to the Dangoors his and Mr Schlager’s conversation with HBK. HBK acknowledged the difficulties in shipping ventilators and agreed to seek to provide only 350 ventilators. The first delivery of 50 was three weeks overdue. Mr Dávila had said the order would be cancelled if these were not delivered by 7 June.

[99]On 6-7 June, Shipment #1 arrived in Mexico.

[100]On 8 June, Mr Joaquin Valente Paredes of INSABI spoke to and e-mailed with Mr Garza about outstanding matters relating to the Encore/ INSABI Agreement. The sales invoice would be changed to remove the IVA tax charge and a refund paid (this took place on 15 June). Mr Garza also agreed to reimburse INSABI for the storage expenses incurred on the 15 ventilators (the subject of Shipment #1) that had arrived the previous day (7 June). The note also records that 100 ventilators were scheduled for delivery in June, 450 in July, and 450 in August, with the potential for earlier delivery.

[101]Despite VEL’s own acknowledgement of its failure and apparent resignation to INSABI’s refund request, VEL’s tone had changed by 9 June, the tenor of communication with INSABI now less contrite and more legalistic. Joseph Dangoor wrote to Mr Ferrer that day in the following terms:- “Your email of 21 May refers to an attached letter but unhappily no letter was in fact attached to the same and as such I would be obliged if the same could now be sent to me. The above aside and given the terms of your email, it is to be anticipated that the terms of the letter may purport to terminate the contract (as subsequently varied) and thus terminate INSABI's obligations thereunder. If that is the intention of such letter, then I must inform you that Viva do not accept that as at 21 May or any time thereafter has it been in breach of its obligations under the contract (as subsequently varied) or, without prejudice to the generality of the foregoing, if it were or has been in breach that any such breach would serve to entitle INSABI to terminate such contract. As such Viva considers its and INSABI's obligations under the contract (as subsequently varied) to be continuing and Viva are taking steps and will continue to take steps, to discharge its obligations thereunder.”

[102]On the same day (9 June), Joseph Dangoor sent the following without prejudice communication:- “At this time, of the 1000 ventilators Viva has agreed to supply some 750 ventilators are available. Given the above Viva would suggest that the contract is further varied so as to reduce down the number of ventilators to be supplied from 1000 to 750 with Viva forthwith returning US$14,800,000 by way of refund for the monies that INSABI has paid for the 250 ventilators that Viva will not then be delivering. If the above is an acceptable basis from which to start conversations and negotiations, please would you kindly email me details of INSABI's bank account to where the monies to be refunded can be wired. We look forward to concluding this contract between Viva and INSABI as soon as possible.” We look forward to concluding this contract between Viva and INSABI as soon as possible.”

[103]VEL’s letter did not identify the source of the 750 ventilators indicated.

[104]On 9 June, SRE and INSABI representatives met to discuss the support provided by SRE for the purchase of medical supplies. The meeting noted that Juan Mercado Sánchez had now replaced Mr Jileta in his role. The steps taken (and to be taken) to obtain the refund from VEL were also discussed. On the same day, Dr Calderón wrote to Mr Mercado, informing him that INSABI had a clear instruction from the Mexican President “to no longer acquire ventilators in the month of June, and to receive only those brands approved by the experts according to the pre-established delivery schedule.” Dr Calderón requested SRE’s support to negotiate full reimbursement.

[105]On 12 June, Mr Ferrer rejected VEL’s 9 June offer in the following terms:- “Regarding your letter dated on June 9, 2020, as a response to our claim letter dated on May 21, 2020. The company that you represent, Viva Enterprises Ltd, is offering to supply only 750 ventilators, instead of the 1000 ventilators that we originally agreed, and reimburse the amount of USD $14,800,000.00 corresponding to 250 ventilators. This proposal has been deemed unacceptable by both the Mexican Government and [INSABI], as Viva Enterprises Ltd has seriously breached the original sales agreement, and as we stated in our May 21st. letter, we demand the immediate refund of the payment for the 1000 ventilators and the interests that have been generated since the date we made the transfer to your account.”

[106]It appears from the documents that Joseph Dangoor reached out to one of his contacts on 12 June, identifying VEL’s imperative as “to get as many VG70 ventilators as we possibly can to purchase”. The WhatsApp exchanges identify Aeonmed as having “a powerful distributor in Mexico.” Joseph Dangoor’s view at the time appears to have been that “[w]e need it to go through us, so we cannot go to the distributor in Mexico.”

[107]On 15 June, ACP notified VEL that it had commenced proceedings in China to recover funds paid to it by VEL. By this point, AZ-Naturemed had also instructed lawyers to seek to recover the monies paid to Excel.

(i) The June Agreement

[108]Joseph Dangoor responded to Mr Ferrer on 17 June on a without prejudice basis, stating that:- “ … Viva would like to present INSABI the following framework for finding a mutual solution to winding down of the contract: Such framework will serve to wind down the contract in a manner which will facilitate Viva withdrawing from the contracts that it has with its suppliers. The framework would take into account that Viva has managed to reduce the number of units under contracts with its suppliers to 700, such reduction will enable Viva to refund immediately pro rata the balance for the 300 units it would then no longer be suppling to INSABI. Viva would proceed to reduce the orders it has outstanding with its suppliers and where possible to cancel them either by mutual agreement [sic] of due to the suppliers failure to provide the units. Viva’s remaining orders with their suppliers comprise:• HBK (500 ventilators) o If freight documents for the 50 ventilators considered to have cleared customs are not received by 19 June 2020 we will proceed to cancel this order o Units that do not reach the forwarder by 3 July 2020 will be refunded pro rata o Viva will continue until then to negotiate a reduction in the contract size

• ACP (100 ventilators) & Excel Action (100 ventilators) o Viva are currently in the process of cancelling the contract and requesting return of funds paid to these suppliers. Such funds will be returned to INSABI immediately upon receipt Viva will be updating you regularly on the status of the returns and within the next two weeks we will have a very clear idea of the results of their efforts to accommodate your request. I hope you find the framework acceptable. Viva do not wish to engage in a legal dispute and like INSABI wish to see this matter resolved as swiftly and immediately as possible, with as little impact on all parties involved. I thank you for your patience and cooperation, and we look forward to a resolution.” o If freight documents for the 50 ventilators considered to have cleared customs are not received by 19 June 2020 we will proceed to cancel this order o Units that do not reach the forwarder by 3 July 2020 will be refunded pro rata o Viva will continue until then to negotiate a reduction in the contract size o Viva are currently in the process of cancelling the contract and requesting return of funds paid to these suppliers. Such funds will be returned to INSABI immediately upon receipt I thank you for your patience and cooperation, and we look forward to a resolution.”

[109]On 18 June, Mr Ferrer responded positively to VEL’s offer, stating that:- “In reference to the contract of 4 April 2020 with VIVA ENTERPRISES LIMITED, we are concerned about no- performance of its items, and with mutual interest, we would like to accept your suggestion as follows: - Refund the amount downpaid for 300 ventilators from our side to the below account until 18th June 2020 latest. [Account details omitted] - Continue to cancel the contracts with ACP and Excel Action as well as recover the amounts downpaid to them earliest possible. Upon your request we are ready to assist in this matter. - Deliver as many as possible but no more than 500 AEONMED VG70 ventilators regarding the contract with HBK Department of Projects until 3rd July 2020, where we accept the handover to the forwarder and presentation of accompanying verified documents as delivery. We appreciate your kind efforts to solve the issues [sic] nonwithstanding the present difficult circumstances. We consider the fulfilment of the contract achieved either by full refund of the amount paid to your company’s account or a combination of the partial delivery of ventilators and the refund of the remaining amount. Mutual understanding and cooperation are key. I appreciate your cooperation and look forward on your correspondence.” [Account details omitted] We appreciate your kind efforts to solve the issues [sic] nonwithstanding the present difficult circumstances. We consider the fulfilment of the contract achieved either by full refund of the amount paid to your company’s account or a combination of the partial delivery of ventilators and the refund of the remaining amount. Mutual understanding and cooperation are key. I appreciate your cooperation and look forward on your correspondence.”

[110]The parties disagree as to whether this exchange of correspondence led to a concluded contract and, if so, on what terms. I return to this later, merely noting here that, although Excel was now mentioned as an active supplier, VEL did not explain that it was in legal dispute with ACP or Excel.

[111]On 19 June, VEL refunded $17,760,000 to INSABI, stating in an e-mail from Joseph Dangoor to Mr Ferrer that day:- “Many thanks for your letter of yesterday (18 June 2020), for which Viva are obliged. Arrangements are being made to remit to account [omitted] US$17,760,000.00 and banking systems willing those funds should be in that account within the next few working days. Assuring you of Viva’s mutual cooperation at all times.” Assuring you of Viva’s mutual cooperation at all times.”

[112]On 19 June, HBK notified Mr Schlager and Mr Dávila that HBK had agreed to reduce the number of ventilators under the HBK contract with AZ-Naturemed to 500 and that the first 50 units would be with the freight forwarder by 30 June. HBK also asked for the balance of the contract price. Mr Dávila informed Joseph Dangoor of these matters that day. Joseph Dangoor also chased Aeonmed for the US$2.4m refund paid in respect of the Semacare contract.

[113]Between 17 and 22 June, Mr Ferrer prepared letters to the Mexican President concerning developments with the VSA, including the partial refund received. It appears from some of these letters that INSABI may have understood VEL to be offering models different from the VG70s, namely HBK, ACP and Excel Action ventilators, even though these were suppliers, not manufacturers. In any event, Mr Ferrer noted on 22 June 2020 that recovery of the balance of US$41.44 million (equivalent to 700 ventilators) was pending. VEL had to finalise the ventilator purchase by 3 July at the latest or cancel the contracts with its suppliers and refund the outstanding amount.

[114]On 26 June, Joseph Dangoor received certain documents relating to the export of the 50 HBK ventilators from Beijing to Mexico. The airway bill was issued on 27 June.

[115]On 29-30 June, Shipment #2 arrived in Mexico.

[116]On 1 July, AZ-Naturemed wrote to VEL seeking the balance of the price on the HBK contract. On the same day, Joseph Dangoor sent Mr Dávila a response to AZ-Naturemed explaining that the contract between VEL and INSABI (as varied) required VEL to deliver 500 VG70 units by 3 July or to return the funds paid in advance. Of these, only 50 were en route to INSABI, with no proof that the balance could be supplied or a revised timetable agreed. VEL was still awaiting instructions from Mexico. It is unclear whether this letter was, in fact, sent. AZ-Naturemed repeated its demand for the purchase price on 7 July.

[117]On 2 July, Joseph Dangoor e-mailed Mr Jileta asking for a call. On 3 July, Mr Ferrer reported to the President of Mexico that:- “ … yesterday the Ministry of Foreign Affairs presented INSABI with a new proposal that [Mr Jileta] is negotiating with [VEL] so that INSABI will wait a few more weeks for the ventilators to arrive in exchange for a discount of around 10% on the price paid. Given that Viva Enterprises failed to deliver the ventilators as scheduled in April and also failed to meet the rescheduled delivery dates in May and June, INSABI requested that the Ministry of Foreign Affairs inform the company that when the agreed date of 3 July for delivery of the ventilators arrives, it must refund the remaining USD 41,440,000.00 of the amount paid, corresponding to 700 ventilators.”

[118]The Defendants say that the 50 HBK ventilators arrived in Mexico on 3 July. The Claimant says that the goods did not arrive until 6 July and were not located in Mexico City Airport until the next day (7 July). However, they were accepted by INSABI and subsequently installed by Encore during July, with VEL reimbursing Encore for that installation.

(j) Post-3 July 2020 events/ VEL’s purported further deliveries

[119]On 4 July, following the expiry of the deadline for partial delivery the previous day, Joseph Dangoor shared with Mr Dávila a draft e-mail he had prepared for Mr Ferrer. This stated that the first box of 50 ventilators had arrived in Mexico on 3 July. The draft also referred to the partial refund reducing the VSA from 1000 to 700 and how the remaining 650 ventilators to be delivered had been delayed due to a full lockdown. These were said to be ready for collection and delivery but VEL wanted INSABI’s agreement on next steps before approving this. If INSABI was content to proceed, VEL would confirm arrangements with its partners, AZ-Naturemed, an apparent reference to the HBK contract.

[120]On 4 July, Mr Ferrer wrote to Joseph Dangoor to the effect that it had not received ventilator deliveries by the 3 July deadline and requesting the return of the price:- “First of all, we thank you [sic] the bank transfer for 17,760,000.00 USD made on the last June 19th. Regarding the agreements in our previous email of June 18th, 2020, as stated, the due date was yesterday. We expect that the contracts with ACP and Excel Action had been [sic] canceled and the amount downpaid successfully recovered. Likewise, at this time as we do not any longer require ventilators, we have already consulted with our mayors in the Mexican Government and it has been decided to ask you to transfer back the remaining funds provided in April 13th, 2020 for the delivery of those ventilators in April and May. We need you to refund the remaining money shortly, through bank account already provided: [Account details omitted] We thank you the efforts to solve the issues and we want to point out that once the remaining money is refunded, we consider the contract fulfilled and closed. Looking forward to receive news from you and the bank transfer in question.” We need you to refund the remaining money shortly, through bank account already provided: [Account details omitted] Looking forward to receive news from you and the bank transfer in question.”

[Account details omitted]

[121]On 5 July, Robert Dangoor sent a short e-mail to Mr Jileta.

[122]Joseph Dangoor responded to INSABI on 6 July stating that 50 ventilators had, in fact, arrived in Mexico over the weekend. As to the request for a refund, Mr Dangoor stated:- “We have dedicated significant efforts to cancel our supplier contracts following our recent mutual agreement to do so. Our suppliers have, however, promptly notified us that those ventilators (a total of 650 units) are to be supplied for onward delivery. Further to your communication of Saturday we have taken the decision to halt accepting any delivery of equipment until further notice. These units have been ready to be shipped immediately, as described in the attached Aeonmed letter, and their shipment has been halted. We remain grateful for your understanding so far, and in the interest of honouring our respectful and successful mutual cooperation, we await your response. In addition, since you have expressed that Mexico no longer requires ventilators, closing the possibility of delivering these to you, we find our company placed in a difficult bind and situation. As this communication is in stark contrast to what was previously discussed, and to continue moving forward with your refund wishes, we are working promptly to identify redirection options for these readily available ventilators. Pursuing the cancellations of existing contracts with our suppliers is a complicated and lengthy legal process. Our persistent efforts to secure cancellation with our suppliers to date have unfortunately not been as successful as we would hope, and instead they have accelerated their deliveries and unit availability. Moreover, we understand that time is of the essence and a mutually beneficial solution is desired amongst all parties. We would like to stress that delivering the remaining 650 units represents the fastest and most amicable resolution to closing this performing contract for all parties involved. We would be grateful for your cooperation and the opportunity to complete our deliveries to you. Bearing in mind that we have begun our successful ventilator deliveries, we would like to complete them as soon as possible. We attach a letter from Aeonmed regarding the additional 465 to begin shipment arrangements this week for your reference. With the remaining 185 units delivered throughout July.”

[123]The letter did not mention Encore or the Encore/ VEL Agreement. The attached Aeonmed letter referred to a German distributor as the source of the 465 units:- “We appreciate you are in contact with our distribution partner Dixion Vertrieb medizinischer Gerate GmbH who we are working with for 15 years now. We as Aeonmed, herewith confirm that in cooperation with our partner Dixion we are able to supply a 465 pcs. of Aeonmed VG7O ICU ventilators branded as Dixion Aeros 4600, starting deliveries immediately with units in stock at our German partners warehouse and continuing with readymade devices on which are being prepared and packed for delivery. A detailed delivery schedule will be provided, we will make sure the devices are available to ship as soon as possible.”

[124]Mr Ferrer responded on 7 July, repeating his request for a refund:- “The position of the Government of Mexico is reiterated in respect to requesting Viva Enterprises Ltd to refund the full amount paid by the remaining 700 ventilators, since Viva Enterprises failed to provide them in April, when the ventilators that were purchased were not delivered following the established schedule. Almost three months have passed since we [sic] transfered the total value of the invoice in dollars for USD $ 59,200,000.00 (Fifty-Nine Millions Two Hundred Thousand American Dollars) to you, and in Mexico we have not received a single unit. It is important to remind you that the Government of Mexico agreed to pay Viva Enterprises a high price for each ventilator as long as their delivery was immediate, during the months of April and May, following the agreed delivery schedule, due to the urgency to care for the sick by COVID19. Nowadays, July 6, the Government of Mexico has not received a single ventilator from you, not even the 50 of them that you mentioned in your previous letter would arrive on July 3. Therefore, I will be grateful if you refund the USD $ 41,440,000.00 to the following bank account: [Account details omitted] Looking forward for your prompt response and the requested bank transfer.” [Account details omitted] Looking forward for your prompt response and the requested bank transfer.”

[Account details omitted]

[125]On 10 July, Joseph Dangoor wrote again, repeating his offer to supply 465 ventilators throughout the next four weeks with an effective 33% discount, immediately returning US$10.952 million for the balance of 185 units that VEL would now not supply. Again, he did not mention the Encore/ VEL Agreement.

[126]On 10 July, VEL informed AZ-Naturemed that INSABI had told it (twice since 3 July) that it considered VEL’s contract with them to be at an end and had demanded a refund. On the same day (10 July), HBK wrote to VEL expressing its exasperation with VEL’s conduct.

[127]A document purportedly dated 15 July and addressed by Mr Garza to Joseph Dangoor also shows a list of serial numbers for the 465 ventilators supposedly already picked up to be shipped. The Claimant says that this appears to be the appendix of delivered units contemplated by clause 5(b) to the Encore/ VEL Agreement. However, it again denies the authenticity of this document.

[128]On 15 July, Joseph Dangoor repeated its offer to INSABI with a view to “conclude our performing contract within the next 16 days.” Again, he did not mention the Encore/ VEL Agreement.

[129]On 16 July, Mr Ferrer responded to VEL’s renewed offer, reiterating his request for a refund:- “We would like to emphasize how grateful we are. Although, we would like to negotiate, in mutually agreed terms, a scheme that will allow us to get a full reimbursement. Please, let us know what your proposal would be in terms of having a complete refund, so that we can work accordingly.”

[130]On 17 July, Joseph Dangoor forwarded the response to VEL’s solicitor, saying that guidance was awaited from Mr Jileta.

[131]On 17 July, the first 200 units of Shipment #3 were uplifted by Henco from Aeonmed. The Defendants say that 110 of the 216 total units were delivered by VEL.

[132]On 18 July, the remaining 16 units of Shipment #3 and the first 184 units of Shipment #4 were uplifted by Henco from Aeonmed. The Defendants say that 190 of the 216 total units of Shipment #4 were delivered by VEL.

[133]Relations with HBK became even more strained during July as HBK sought VEL’s performance of their contract. Matters came to a head on 20 July with Joseph Dangoor writing to AZ-Naturemed that:- “At this time, discussions with Mexico are ongoing notwithstanding Mexico having informed us that they no longer require ventilators. Given the unwelcomed tone of your email we feel we must make it clear to AZ that Viva do not agree that the contract between AZ and HBK remains a performing contract. As you know, HBK have failed to comply with the contract by failing to deliver 500 ventilators by 30th June 2020. Additionally, the 50 ventilators that HBK had purported to deliver with an almost two month delay were manufactured to an incorrect (European) specification. As you will also be aware, Viva transferred a payment to HBK on the promise of delivering 50 ventilators within days in early May, and these were only received in July. Given the above, AZ are required to take immediate steps to terminate its contract with HBK, insofar as such contract has not already been terminated.”

[134]On 22 July, Joseph Dangoor wrote to Mr Ferrer again stating it had delivered 200 ventilators to Henco with a further 200 having arrived that day. On 23 July, Mr Ferrer responded, reiterating his request for a refund:- “Although I appreciate your kind efforts in delivering these units to our freight forwarder, I would insist on focusing on the reimbursement of the resources. I would like to stress my desire to reach a mutual agreement so that we can move on these procedures. I would expect from your side a proposal on how to follow through.” I would expect from your side a proposal on how to follow through.”

[135]The record also contains a letter from Aeonmed to Encore dated 23 July stating that deliveries had been made for VEL to the extent of 465 units. The remainder of the units assigned for Mexico (presumably the balance of the Encore/ INSABI contract) were being finalised. The Claimant disputes the authenticity of this letter as well.

[136]On 24 July, Joseph Dangoor sent a without prejudice e-mail to Mr Ferrer stating:- “Thank you for your prompt reply, and for the continued dialogue. Like yourselves, we are very keen to bring this performing contract to a conclusion. This is the reason why and with your agreement, we have considerably reduced the size of the contract and have offered a large discount on the outstanding ventilators to below our purchase price, which we can prove is above $50,000. This experience has been as uncomfortable and difficult for us as it has been for you, and in order to demonstrate our honourability and that we have these items, we have shipped them to you. In order to complete this performing contract there is an outstanding delivery of 250 ventilators, or 65 ventilators if you prefer to have a partial refund (which would see a total refund of $36,710,000 or 60% of the contract value). We are also aware that there is a great spike in cases in Mexico which is unhappily expected to continue for some time, and that you require VG70 ventilators which are proven effective in the treatment of COVID infection. We look forward to concluding our contract with you as soon as possible.” We look forward to concluding our contract with you as soon as possible.”

[137]On 27 July, Mr Ferrer reiterated his request for a refund. The next day, Joseph Dangoor sent a WhatsApp message to Mr Ferrer stating:- “Thank you for your email for 23rd July, to which we sent a reply on 24th July - I have forwarded this for your attention below. Because we have already paid for your ventilators as we have previously mentioned, we are not able to refund the full amount. We have tried to maximise the amount we can realistically return to you so that we can terminate this contract amicably, rather than delivering you the remaining 650 units. The best we are able to do is to give you 500 ventilators at the price of 465 units, and to refund the full amount that we have available to return - $19,050,000. This effectively means a further discount to $39,060 per ventilator.”

[138]On 29 July, the remaining 32 units of Shipment #4 and the first 168 units of Shipment #5 were uplifted by Henco from Aeonmed. The Defendants say that 50 of the 216 total units in Shipment #5 were delivered by VEL. The next day (30 July), the remaining 48 units of Shipment #5 were uploaded by Henco from Aeonmed.

[139]On 2 August, Joseph Dangoor created a draft of the Encore/ VEL Agreement, with various modifications made during 3 August. The Claimant says that the different versions (and the last version on 4 August) show the creation by VEL and Encore of a backdated contract to make it seem like the contract had been agreed earlier.

[140]On 3 August, Aeonmed executed an ex works contract with Encore (20MEXTO(CI)929) for the sale of 465 ventilators at a price per unit of US$12,000 and a total contract price of US$5.58m, payable in advance. Aeonmed sent this to Encore by e-mail, together with a pro forma invoice (also dated 3 August), requesting Encore’s purchase order and payment confirmation.

[141]On 5 August, Encore issued its invoices against VEL for US$8,718,750.00 for 465 ventilators, US$1,697,250.00 for consultancy services and US$186,000.00 for installation services. On the same day Joseph Dangoor sent WhatsApp messages with photographs of the signed pages of the version of the Encore/ VEL Agreement bearing a date of 31 May (not 25 May as show in the ‘original’). VEL paid Encore on the same day.

[142]On 13 August, Joseph Dangoor sent Mr Ferrer an e-mail stating:- “From our previous communications and having had the same reply from your side, it is clear you rejected our terms for a solution. As of now, I must officially convey that we are no longer able to offer those terms. I stress that it is our interest to find a mutually satisfying solution. Moreover, we want to remind you we have delivered 515 units. Hoping to have a workable proposal from your side and wishing to continue engaging in a meaningful dialogue, …”

[143]On 26 August, Mr Garza wrote to Dr Calderón to say that Aeonmed had delivered 535 units to date, with a further 465 units remaining uncollected since 10 August.

[144]On 27 August, Joseph Dangoor wrote to Mr Ferrer stating:- “Further to our recent correspondence, we want to thank you for your decision to take delivery of our units and proceed accordingly in an amicable and practical solution for both parties. We of course understand your need for immediately available units given the severity of the COVID crisis in Mexico and the impending worsening thereof alongside the coming flu season. As our previously discounted offers were not accepted, the original agreement price of $59,200 per unit stands. There are 185 units further units awaiting collection from the Aeonmed factory at the same price of $59,200 USD including installation, which would conclude our contract with you.”

[145]Accordingly, despite INSABI having said that it did not want any more ventilators but wanted a full refund, VEL said that it had delivered 515 units and made available for collection the other 185 which it had only recently indicated that it would not deliver. Aeonmed submitted its purchase invoice and sales contract for the 185 units to VEL on 18 September.

(k) Subsequent investigations/ events

[146]On 1 September, Joseph Dangoor sent a list of serial numbers for the 515 ventilators which he said VEL had delivered (50 HBK and 465 Encore).

[147]On 4 September, Aeonmed sent a letter to Encore listing serial numbers of the 1000 ventilators said to relate to the Encore/ INSABI Agreement, including 465 units said to have been available for pick up from Aeonmed’s factory since 10 August.

[148]On 7 September, Joseph Dangoor wrote to Henco seeking clarification as to the collection of ventilators which VEL says it delivered to INSABI. Henco responded the next day.

[149]SRE visited the Aeonmed warehouse on 14 September and 13 October and confirmed to INSABI on 23 October the presence of the 185 units and the further 465 tendered by Encore under the Encore/ INSABI Agreement. SRE also noted the urgency of INSABI’s decision with respect to any legal action or collection. The Defendants say that, since the further 465 units had been available since 10 August, Encore was able timely to complete its own 1000 deliveries to INSABI within the windows contemplated by the original Encore quotation. The Claimant declined to collect these.

[150]On 18 September, Aeonmed submitted its invoice and sales contract to VEL for the purchase of 185 VG70s at unit price of US$12,000 and a total contract price of US$2.22m, payable in advance. On 5 November, Mr Dávila contacted Henco concerning arrangements for delivery of the 185 units. INSABI did not collect these. Aeonmed then shipped these to Mexico on 4 February 2021 but they were not collected by INSABI there either. They were subsequently seized by the Mexican Treasury.

[151]In early September, INSABI and SRE held a number of meetings. Their purpose is disputed. The Claimant says that these were held to obtain SRE’s assistance in gathering information to assist in instructing lawyers to recover INSABI’s funds from VEL. The Defendants say that these were held as part of an investigation by SRE. SRE asked for more information on 22 September. On 5 October, SRE’s Director of Legal Affairs reported the view that the chances of INSABI succeeding in litigation against VEL were very low. INSABI responded on 26 October explaining why it maintained otherwise and seeking support to bring legal proceedings against VEL.

[152]On 18 December 2020, Encore intimated a legal claim against INSABI for its refusal to take delivery of 465 VG70s from Encore under the Encore/ INSABI Agreement.

[153]On 21 April 2021, Mr Garza (on behalf of VEL) intimated a legal claim against INSABI for its refusal to take delivery of 185 VG70s.

[154]On 7 May 2021, Aeonmed sent a letter to Encore to confirm that it had introduced VEL to Encore after Semacare had been unable to deliver in time.

[155]In October 2021 and February 2022, the Mexican Superior Audit Office issued interim and final audit reports on INSABI’s procurement processes, including for the VSA, recording that “INSABI does not have a system in place to record, in a harmonised, defined and specific manner, the budgetary and accounting operations arising from the acquisition of the ventilators, which would facilitate the recording and control of inventories. Furthermore, it does not have an accounting record or inventory of the goods, nor was documentation provided to prove that the goods are insured.”

[156]On 17 December 2021, INSABI’s Co-ordinator of Legal Affairs submitted a report to the Mexican Public Prosecutor’s Office concerning the possible commission a criminal offence in relation to the VSA.

[157]This claim was later issued on 10 October 2022. E. THE ISSUES FOR DETERMINATION - OVERVIEW

[158]The issues for trial were numerous.

(a) Misrepresentation

[159]Did VEL (and Robert Dangoor in his personal capacity) make the representations alleged by the Claimant with respect to the delivery of VG70 ventilators and, if so,(a) were they were false

(b) knowingly so

(d) is INSABI precluded from relying on them by clause 35 of the VEL? (Issues 1-7) (b) Breach of contract

[160]When was VEL required to deliver VG70s under the VSA, was it a condition that VEL deliver in accordance with the schedule, did VEL breach the VSA by not delivering any units between 14 April and 4 May and was any such breach repudiatory? (Issues 8-9) (c) Rescission/ termination

[161]Assuming INSABI was entitled to rescind and/ or terminate the VSA, did INSABI’s 21 May letter amount to acceptance of VEL’s repudiatory breach and/ or rescission of the VSA.

(d) VSA variation/ refund

[162]Did the parties agree to vary the VSA or enter into a new ventilator supply agreement through their communications between 17 and 19 June and, if so,(a) on what terms and

(b) was that conditional on the delivery of ventilators on or before 3 July? Relatedly, was VEL’s refund of US$17,759, 977.38 to INSABI on 19 June made pursuant to the terms of the VSA? (Issues 12-13) (e) Ventilator supply

[163]Did VEL supply ventilators to INSABI, how many and in what circumstances? More specifically, of the ventilators supplied by Encore, how many were supplied on behalf of VEL and how many pursuant to Encore’s own contract with INSABI? Was INSABI obliged to accept delivery of the 185 ventilators from VEL after 5 September? (Issues 14-18) (f) Alleged cover-up scheme

[164]Related to (e) above, did Encore and VEL enter into a dishonest scheme to advance a claim that Encore supplied 465 ventilators on behalf of VEL, rather than on its own behalf? Is the Encore/ VEL Agreement a forgery dating to August or later? (Issues 19-20) (g) SRE’s knowledge/ approval of VEL’s conduct

[165]Pervading a number of the issues, was SRE authorised to act on INSABI’s behalf in relation to the sourcing of ventilators, what did SRE know regarding VEL’s arrangements for ventilator supply, should such knowledge should be attributed to INSABI and did SRE approve the Defendants’ acts on INSABI’s behalf? (Issues 21-23) (h) The transfer of INSABI’s rights and liabilities to the Claimant

[166]With specific regard to the ‘Acuerdo’ (discussed in Section K below), has there been a valid transfer of INSABI’s rights and liabilities to the Claimant? What is the proper construction and effect of Clauses 38-39 of the VSA? Specifically, is the Acuerdo an assignment by INSABI prohibited by Clause 38 or is the Claimant INSABI’s “heir”, “successor” or “permitted assign” within the meaning of Clause 39? (Issues 30-31) (i) Remedies

[167]Given the answers to the above, to what remedies, if any, are the parties entitled? (Issues 24-29) F.

(a) The Claimant’s arguments

[168]The Claimant claims rescission of the VSA for fraudulent misrepresentation, alternatively in equity for material misrepresentation (whether fraudulent or not), alternatively damages in deceit against VEL and Robert Dangoor, alternatively damages under s.2(1) of the Misrepresentation Act 1967 (Misrepresentation Claims). (There was some argument at trial as to whether the Claimant had properly pleaded a case in innocent misrepresentation although, given my findings below, nothing ultimately turns on the point.) The Claimant pleads certain express and implied representations by VEL (Representations), namely that:-(i) 200 ventilators were “IMMEDIATELY AVAILABLE FOR DELIVERY” (DPU, to Henco in Shanghai);

(ii) “the [first] products are ready for dispatch”, “first products” meaning at least the 200 ventilators which were to be dispatched and delivered on the day after payment of the VSA contract price;

(iii) “we are able to supply” all 1000 ventilators “over 21 days or less”, Robert Dangoor and/ or VEL thereby impliedly representing that they (a) honestly believed that they were able to supply all 1000 ventilators over 21 days or less (b) had reasonable grounds for believing that they would be able to do so and (c) knew of no substantial grounds for doubting this;

(iv) “there is a strong possibility that products will be available in a shorter period of time”, Robert Dangoor and/ or VEL thereby impliedly representing that they (a) honestly believed that there was a strong possibility that 1000 VG70s would be available for delivery in a shorter time than the offered contractual schedule and (b) had reasonable grounds for believing that there was such a strong possibility; and

(v) In view of the totality of the above representations, (a) the first 200 VG70s at least were in existence and in VEL’s possession or control to be ready for immediate dispatch and delivery and (b) as regards the remainder, VEL had in place sufficient arrangements to give rise to a reasonable belief that they would be in existence and in VEL’s possession or control imminently and in sufficient time to enable delivery in accordance with the offered contractual schedule or a shorter time.

[169]The Claimant says that it relies primarily on the Invoice as containing the relevant representations. In fact, all the representations asserted draw on the language of the Invoice which, according to the Claimant, was designed to inform the reader about VEL’s ability to supply VG70s. The overwhelming impression created was that VEL actually had VG70s ready for delivery. The phrases “200 IMMEDIATELY AVAILABLE FOR DELIVERY” or “a strong possibility that products will be available in a shorter period of time” cannot be understood otherwise. The Invoice’s other features, such as the explanation for the time limited pricing, seek to reinforce that the high offer price is warranted by certainty and speed of supply.

(b) Legal principles

[170]As to whether a representation has been made, Jacobs J in Vald, Nielsen Holding A/S v Baldorino

[2019] EWHC 1926 (Comm)

adopted (at [132]) the formulation of principle in Cassa di Risparmio della Repubblica di San Marino SpA v Barclays Bank Ltd

[2011] EWHC 484 (Comm)

to the effect that:- “A representation is a statement of fact made by the representor to the representee on which the representee is intended and entitled to rely as a positive assertion that the fact is true. Determining whether any and if so what representation was made by a statement requires(1) construing the statement in the context in which it was made, and

(2) interpreting the statement objectively according to the impact it might be expected to have on a reasonable representee in the position and with the known characteristics of the actual representee.”

[171]In IFE v Goldman Sachs

[2007] 1 Lloyd’s Rep 264

, Toulson J explained (at [50]) the difference between express and implied representations in this context:- “In determining whether there has been an express representation, and to what effect, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used. In determining what, if any, implied representation has been made, the court has to perform a similar task, except that it has to consider what a reasonable person would have inferred was being implicitly represented by the representor’s words and conduct in their context.”

[172]In the context of implied representations generally, Males LJ noted in The C Challenger [2022] 2 All ER (Comm) 784 (at [38]) that:- “To the extent that there is any doubt about this, I would heed the caution given by Rix J in Avon Insurance plc v Swire Fraser Ltd

[2000] EWHC 230 (Comm)

, [2000] 1 All ER (Comm) 573, [2000] Lloyd’s Rep IR 535 (at [200]), echoed by Christopher Clarke J in Raiffeisen at [85], that a misrepresentation should not be too easily found. The reason given for that caution was that, on the current state of the law, a misrepresentation which induces a contract leads to damages on the fraud basis (Royscot Trust Ltd v Rogerson

[1991] 3 All ER 294

[1991] 2 QB 297

, although the decision is controversial), to which I would add that a misrepresentation may result in the drastic consequence that the contract may be rescinded.”

[173]These authorities were also considered by Cockerill J (as she then was) in Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd

[2023] EWHC 2759 (Comm)

in which she made clear (at [301]-[306]) the need for clear words or conduct from which the relevant representation can be implied.

[174]To be actionable, a representation must be a statement of present or past fact, not a statement of what will happen or of what the statement maker will do in the future. The former is a prediction, the latter a promise. However, where a representee makes a statement of intent about the future, he represents that he has a present belief about those future events, and so may be liable in misrepresentation if he lacks that belief (Edgington v. Fitzmaurice

(1885) 29 Ch D 459

). As Ramsay J said in BskyB Ltd v HP Enterprise Services UK Ltd

[2010] EWHC 86 (TCC)

(at [131]):- “Where a statement relates to the representor’s own intended future action, the statement will often amount to a promise. Such promises are usually actionable by way of breach of contract. But again, a statement of fact might be implied from the promise to the effect that the representor held the particular intention or that the statement of intent was based on reasonable grounds. However, allegations based on such implied statements must be distinguished from allegations that the intention was not carried out. As Elias J said in Hagen v ICI Chemicals and Polymers Ltd

[2002] IRLR 31

at [131] dealing with representations relating to future intentions: ‘By definition, the claimant is always complaining in circumstances where the intention has not been carried into effect. It is only because of that fact that the claimant can allege that the representation made was false. The difficulty facing many, if not most, claimants, is that their real complaint is that the intention was not carried out. But absent some contractual undertaking to do so, there never was a representation that it would be. The point is succinctly made in Spencer Bower on Actionable Misrepresentation, 4th edn, para. 17: “What the representee is generally found to complain of is the failure to carry out the intention, which shows that what really induced him to alter his position was his belief that the intention would be carried out. In other words, he relied upon the statement as if it were a promise, not as a representation. His belief that the representor had a present intention to act according to his statement would not have influenced him unless he had also believed that the intention would be carried out.”” ‘By definition, the claimant is always complaining in circumstances where the intention has not been carried into effect. It is only because of that fact that the claimant can allege that the representation made was false. The difficulty facing many, if not most, claimants, is that their real complaint is that the intention was not carried out. But absent some contractual undertaking to do so, there never was a representation that it would be. The point is succinctly made in Spencer Bower on Actionable Misrepresentation, 4th edn, para. 17: “What the representee is generally found to complain of is the failure to carry out the intention, which shows that what really induced him to alter his position was his belief that the intention would be carried out. In other words, he relied upon the statement as if it were a promise, not as a representation. His belief that the representor had a present intention to act according to his statement would not have influenced him unless he had also believed that the intention would be carried out.””

[175]Moreover, a representation as to opinion can amount to a statement of fact to the extent that it is an assertion that the maker does, in fact, hold the opinion and may involve a further implied representation of fact that the person stating the opinion has reasonable grounds for his belief or knows of facts justifying his opinion. In each case, whether there is such an implied representation depends on the particular facts (BskyB at [309]-[310]).

[176]Finally in this context, in Raiffeisen Zentralbank Osterreich AG v Royal Bank of Scotland Plc

[2011] 1 Lloyd’s Rep 123

, Christopher Clarke J (as he then was) also noted (at [86]) that “[i]n some cases the statement in question may have been accompanied by other statements by way of qualiﬁcation or explanation which would indicate to a reasonable person that the putative representor was not assuming a responsibility for the accuracy or completeness of the statement or was saying that no reliance can be placed upon it.”

[177]A statement is made fraudulently if made(i) with knowledge of its falsity

(ii) without belief in its truth or (c) recklessly, not caring whether it is true or false (Derry v Peek (1889) 14 App. Cas. 337 at p. 374). Fraud is a serious charge that must be clearly and distinctly proved (The Kriti Palm [2007] 1 All ER (Comm) 667 at [259]).

[178]Whether a representation was false is to be assessed at the time the representee relied upon it to enter into the relevant contract. If a representation is “false when made but true when acted upon there is no misrepresentation” (Briess v Woolley

[1954] AC 333

at p.353). Moreover, a “representation may be true without being entirely correct, provided that it is substantially correct” (Avon Insurance v Swire Fraser [2000] 1 All ER (Comm) 573 at [17]).

[179]For liability in deceit, it is also necessary “to show that the representor intended his statement to be understood by the representee in the sense in which it was false” (Goose v Wilson Sandford & Co [2001] Lloyd’s Rep PN 189 (at [41]). The maker of the statement must therefore intend to deceive the representee. An intention to induce the specific action taken by the representee is not required, merely an intention that they should act upon the relevant representation (Vald, Nielsen at [151]).

[180]The fraudulent misrepresentation must have induced the representee to have entered into the relevant contract in the sense that it must play a real and substantial role in the representee’s decision to contract; it need not be the sole operative cause (Hayward v Zurich Insurance Co Plc

[2017] AC 142

at [33]). The representee need not be consciously aware of the misrepresentation but it must have had some impact on the representee’s mind such that they acted upon it (Credit Suisse v Ivanishvili

[2025] 3 WLR 789

at [161]-[169]). Where a representation is ambiguous, the representee must show that they understood the misrepresentation in the (false) sense that the maker of the statement intended it to be understood (Credit Suisse at [172]). There is an evidential presumption of fact that the representee was induced by a fraudulent misrepresentation intended to cause him to enter the contract (BV Nederlandse Industrie Van Eiprodukten v. Rembrandt Enterprises Inc,

[2020] QB 551

at [25]). Finally, the representee must have suffered some loss. In Versloot Dredging BV v HDI Gerling Industrie Versicherung AG

[2017] AC 1

, the Supreme Court stated at [29] that:- “In the law of deceit, it is fundamental that the representee must have acted on the misrepresentation. If he would have done the same thing even in the absence of the misrepresentation, a claim based on it will fail. The same applies in a claim to rescind a contract for misrepresentation, fraudulent or otherwise.”

[181]In a sense returning to where this section started, a specific issue arises concerning a representation which forms part of the contract it is said to have induced. In Kingscroft Insurance Co Ltd v Nissan Fire & Marine Ins Co Ltd [2000] 1 All ER (Comm) 272, Moore-Bick J (as he then was) considered (at p.272g-h) that, by offering to contract on certain terms, a person does not normally make any representation about their particular subject matter. He recognised, however, that the position would be different where the offer included terms intended to stand as representations in the contract ultimately concluded. Whether any particular term is a term of obligation or representation will be a matter of construction in each case.

[182]Both parties also relied in this context on the decision of Mr Andrew Baker QC (as he then was), sitting as a High Court Judge, in Idemitsu Kosan Co Ltd v Sumitomo Corp [2016] 2 CLC 297. In that case, the purchaser of the shares was out of time to bring claims for breach of warranty but sought to argue that, by putting forward the sale and purchase agreement for signature, the seller had made representations in terms of the matters of fact contained in the warranties, such representations repeated in the agreement itself. In rejecting the purchaser’s claim, the Judge held (at [14]) that:- “When a seller, by the terms of the contract under which he sells, ‘warrants’ something about the subject matter sold, he is making a contractual promise. Nothing less. But also I think (and all things being equal) nothing more. That is so just as much for a warranty as to some then present or past matter of fact as it is for a warranty as to the future. By contracting on terms by which he warrants something, the seller is not purporting to impart information; he is not making a statement to his buyer. He is making a promise, to which he will be held as a matter of contract in the sense that any breach of the warranty will be actionable as a breach of contract, subject to any other relevant terms of the contract and to general principles of the law of contract, for example as to remedies. In argument in the present case, I posed the simple case of a seller contracting to sell grain from a warehouse, ‘warranted at date of contract free from’ some identified impurity. It would I think be quite novel, and wrong, to suggest that this would amount to a statement of fact, made by the seller to the buyer, that the grain was then free from the impurity in question. In the absence of additional facts, I do not think there could be any question of claiming rescission for misrepresentation, or damages for misrepresentation under the 1967 Act, if in fact the grain contained the impurity (so that there was a breach of the warranty).”

[183]The Judge recognised (at [24]) the possibility that something said in the course of negotiations or in the draft contract might amount to an actionable representation under the Misrepresentation Act 1967 but said that this would depend on the particular facts of any given case. In reaching his decision, the Judge adopted the reasoning of Mann J in the not dissimilar case of Sycamore Bidco Ltd v Breslin

[2012] EWHC 3443 (Ch)

. In Sycamore, in considering whether the relevant warranties enjoyed the further quality of being representations, Mann J held (at [203(vi)] that:- “There is a conceptual problem in characterising provisions in the contract as being representations relied on in entering into the contract. The timing does not work. The normal case in misrepresentation involves the making of a representation, and as a result the entering into of the contract. That does not work where the only representation is said to be in the contract itself. Miss Newman expressly disclaimed the relevant representations being made at any earlier time. In some cases that problem is solved by an express provision making certain contractual statements representations. In such a case the parties have agreed as to their nature and how they should be treated. However, that is not the present case.”

[184]In The C Challenger (at [48]-[51]), the Court of Appeal(i) agreed with the Judge’s statement of principle in Idemitsu (at [14], cited above)

(ii) declined to endorse a general rule that merely by offering to contract, a party represents their ability and willingness to perform the contract, even with the qualification that the representation is limited to performance of the obligations which they understand themselves to be offering to undertake and

(iii) stated that, in the absence of words of representation, the mere offer of contractual terms will not amount to any representation and

(iv) indicated nonetheless that there were some circumstances in which an offer to contract on certain terms carried with it an implied representation as to the party’s honesty in relation to the proposed transaction (see, for example, Property Alliance Group Ltd v Royal Bank of Scotland plc

[2018] 1 WLR 3529

at [122]-[141]). (c) Discussion (i) Issue 1 - Was the alleged representation made in the offer/ contract?

[185]I start with the last issue discussed above since it is pointedly engaged here and, in my view, it is decisive of the Misrepresentation Claims. Although there was some dispute as to whether it was now seeking to depart from its pleaded case in this regard, the Claimant did not accept in submission that the Invoice and VSA together constituted INSABI’s contract with VEL. Rather, it said that only a limited aspect of the former (the delivery schedule at Appendix 1) had been incorporated by reference to clause 30 of the latter. The Invoice was a pre-contractual document in the nature of a ‘pitch’ or ‘prospectus’ containing potentially actionable representations. In any event, the fact that factual material is stated in draft contracts or offers does not preclude a finding on appropriate facts that representations have been made (Idemitsu at [24]; C Challenger at [51]).

[186]There is no dispute that the VSA had contractual effect. As to its interaction with the Invoice:-(i) VSA, clause 1 states that the purchaser agrees to pay 100% of the sum in advance as per the Invoice;

(ii) VSA, clause 2 states that the price will be allocated among the VG70s as per the Invoice in a total sum of US$59.2m, subject to adjustments;

(iii) VSA, clause 5 refers (seemingly erroneously) to “several payments on account of this invoice” by reason of multiple manufacturers;

(iv) VSA, clause 6 refers to payment being made to the bank account particulars of which have been given in the Invoice; and

(v) VSA, clause 30 refers to delivery being in accordance with the delivery schedule in Appendix 1 of the Invoice, subject to minor variations.

[187]I accept that these terms of the VSA indicate that the Invoice was an integral part of the parties’ contract (including for the purpose of the first sentence of clause 35 of the VSA). Indeed, it seems clear to me that such had been accepted on the Claimant’s own pleading (APoC at [10] and [14]). Moreover, on its own terms, the Invoice sought the purchaser’s acceptance in the form of the “purchaser agreement” by which “the clients”(a) undertook to engage in the purchase of the products outlined in the Invoice at a total cost of US$59.2m

(b) undertook to settle the Invoice

(d) confirmed their satisfaction with the conditions of sale and delivery. It is unclear whether the last refers simply to the “Terms of Payment” and “Terms of Delivery” in the Invoice itself or whether it extends to the terms of the accompanying VSA. Although the purchaser agreement in the Invoice was not signed in the version returned to VEL, Mr Ferrer did initial each page of the Invoice on behalf of INSABI indicating his acceptance. He also caused payment of the Invoice to be made. The result was INSABI’s confirmation of the order in the manner set out in the Invoice itself. The Invoice therefore did much more than merely set out VEL’s ‘stall’ or ‘pitch’ or identify the delivery schedule for incorporation into the VSA. It set out the terms of a proposed contract which were certain and capable of acceptance in their own right. Those terms were augmented, not supplanted, by the VSA concluded at the same time. The definitional language of the Claimant’s pleading is apt here: the Invoice was the “Key Terms Document” and the VSA the “Detailed Terms Document”.

[188]In this case, the Claimant does not rely on communications exchanged between the parties before the presentation of these terms which might contain pre-contractual representations of fact in the manner indicated in Idemitsu (at [17]). The Claimant relies on the Invoice itself. As already noted, an offer of contractual terms does not generally amount to a representation about their subject matter, let alone about the offeror’s ability and willingness to perform the contract. Despite this, I accept that statements in the Invoice could, in principle, be actionable if clear words of representation were used. I also accept that this case is not factually analogous to Idemitsu. The Claimant is not praying in aid here, for example, those express contractual warranties in clause 9 of the VSA to seek to frame them, additionally, as representations of fact. (ii) Issue 1 – was any representation made?

[189]The first two (express) Representations are focused on the first batch of 200 VG70s offered for supply, the Claimant saying that VEL represented the present fact that these 200 at least were in existence and in VEL’s possession or control so as to be ready for immediate dispatch and delivery. To that end, the first Representation relies on the statement in the Invoice “200 [VG70s] IMMEDIATELY AVAILABLE FOR DELIVERY”. Based on that phrase alone, the Claimant’s submission has a specious attraction. However, it falls to be read with the Invoice and VSA as a whole. The phrase is part of the explanation of the “Lead Time”, being the period between order confirmation and fulfilment of delivery. It is followed by the phrase “remainder to be delivered over 21 days or less”. It also falls to be considered in the context of the Terms of Delivery set out in the Invoice, including the delivery schedule. This shows the number of ventilators to be delivered on different days, including the 200 units on day one after VEL’s receipt of the price. Read in full, and in the context of the Invoice and VSA as a whole, the phrase is not a representation of present fact as to the existence of VG70s or their possession or control, rather than part of a condensed overview of its offer of future delivery of ventilators, developed in more detail in the Terms of Payment, Terms of Delivery and delivery schedule later in the Invoice.

[190]For the remaining 800 VG70s, the Claimant ascribes (in the fifth Representation) a somewhat different meaning, namely that “VEL had in place sufficient arrangements to give rise to a reasonable belief that they would be in existence and in VEL’s possession or control imminently and in sufficient time to enable delivery in accordance with the offered contractual schedule.” However, it is unclear why this would not apply to the 200 as well even if they were to be delivered earlier. The Claimant’s formulation is also convoluted and it returns to the (albeit now ‘imminent’) possession and control rubric. In my view, these formulations focus unduly on the relationship between VEL and the goods. As a keen potential purchaser of ventilators, INSABI’s concern was not whether VEL had its own stock on its shelves or a supply arrangement with the manufacturer or a third party supplier. INSABI’s concern was whether it could obtain ventilators and how long that might take. Interpreting the statement objectively according to the impact it might be expected to have on a reasonable person in INSABI’s position and with its known characteristics, the statement was conveying an offer from VEL to INSABI to supply 200 VG70s immediately, the remainder over 21 days. The Invoice being an offer of terms, including (following payment) delivery, and delivery being in accordance with the “Lead Time” (broken down in more detail in the delivery schedule), the statement here was VEL’s offer to perform by delivery in the future, not one of present fact.

[191]Finally, even if the statement could properly be considered a representation of fact, the Invoice (and VSA at clause 9(r)) expressly contemplate (albeit as an “unlikely event”) that there may be “significant disruption to product availability” and that there may be “items we are unable to supply”, in which case, a refund would be paid. Accordingly, any such representation could not have been to the effect that VEL’s own supply arrangements were such that delivery was assured. Rather, as envisaged in Raiffeisen (at [86]), these further qualifying statements in the contractual documents make clear that INSABI could not rely upon this first (express) Representation.

[192]The second (express) Representation is also problematical. The Claimant says that the statement that “the [first] products are ready for dispatch” in the Invoice’s “Terms of Delivery” refers to at least the 200 ventilators which were to be dispatched and delivered on the day after payment of the contract price. However, the full sentence in the Invoice is, in fact, “[t]he first products will be delivered to the shipping handler once payment is received by the seller’s bank, and the products are ready for dispatch.” This is, again, the language of a promise of future performance - delivery to Henco. That language does not convey that VG70s are presently ready for despatch rather than that they will be delivered in the future once they are ready. That is reinforced by clause 4 of the VSA which states that “the Seller will deliver the Assets to the Purchaser’s collecting agent up when they are ready for shipment.” Indeed, the reasonable person in INSABI’s position would have understood the Invoice (and VSA) to be saying that, subject to timely confirmation of the order, VEL would provide ventilators on the terms set out therein, including delivery in accordance with the schedule. There was again no representation of fact here but, even if there were, the same considerations would apply as for the first Representation with respect to the potential for significant supply disruption and potential inability to supply.

[193]As to third and fourth pleaded (implied) Representations, these are framed as representations as to the Defendants’ belief that VEL could deliver the ventilators within the timeframe indicated in the delivery schedule (or sooner) and the basis for such belief. The Claimant relies for the third (implied) Representation on the statement at the head of the Invoice that “[w]e are able to supply the following to you …” and, later on the same page, the reference to delivery taking place “over 21 days or less”. Based on these, the Claimant says that there was an implied representation to the effect that the Defendants(i) honestly believed that they could supply all 1000 ventilators in 21 days or less

(ii) had reasonable grounds for such belief and

(iii) knew of no substantial grounds to doubt it. As a preliminary matter, I found this deduction strained, itself based on the amalgamation of parts of VEL’s general offer for the supply of goods from the front page of the Invoice.

[194]The Claimant also relies for the fourth (implied) Representation on the statement in the Invoice as to the “ … strong possibility that products will be available in a shorter period of time.” Based on this, the Claimant says that representations can be implied to the effect that the Defendants honestly believed that there was a strong possibility that the 1000 VG70s would be available for delivery in a shorter period than the offered contractual schedule and had reasonable grounds for that belief. Although the Invoice does refer to a “strong possibility” of earlier availability, I agree that it is a rather imprecise statement of opinion which would not be actionable.

[195]Looking at the context more generally, INSABI knew that market conditions were such that demand and prices were high, stocks limited and supply chains stretched. INSABI also knew that delivery commitments could not be assured, INSABI’s (then) recent request for Aeonmed to guarantee delivery commitment for 300 ventilators having been declined due to “uncontrollable factors”. Moreover, without diminishing the obvious importance and urgency of the Mexican Government’s need for ventilators, this case is far removed from the facts of some of the authorities relied on by the Claimant concerning implied representations. In Property Alliance, for example, the bank had been engaged in lengthy discussions concerning the swap transactions proffered in potential fulfilment of its borrower’s obligations. In BskyB, the implied representations found were warranted by reference to detailed communications with respect to the provision of an IT services project. In this case, there was no communication between VEL and INSABI at all before the VSA was concluded.

[196]That is not to say that the Invoice and VSA were formulated in a vacuum. For example, there were discussions between VEL and SRE about the proposed terms of the VSA. That is evident from Mr Jileta’s note to Dr Calderón dated 11 April in which he highlighted the delivery timeframe and installation pricing as aspects that had been negotiated. I am also satisfied that Mr Jileta would have known from its discussions with VEL that it was proposing to use a third party to supply the VG70s and that this was American Venture. The fact that Mr Jileta referred in his note to ventilators having been “located” does not suggest otherwise. I am also satisfied, given the regular communication between them (at least before he moved roles in early June), that Mr Jileta conveyed to Dr Calderón the involvement of a third party supplier but I am doubtful that this reached Mr Ferrer. However, even if information transmitted through SRE did reach Mr Ferrer, that does not mean that it can be treated as a representation by VEL. Nor, in any event, did I understand INSABI to be relying for its misrepresentation case on statements made outside the Invoice. I should also add that I heard extensive oral evidence from the witnesses about what they understood from, or sought to convey by, the Invoice. However, this was ultimately of limited assistance compared to the words on the page and the context in which they were written.

[197]Standing back from the minutia of that evidence and the argument, the Claimant has drawn on certain fragments of the offer language in the Invoice to couch them as representations of fact or a basis for their implication. However, considering objectively the terms of the offer as a whole and in context, this was a contractual promise to supply and deliver ventilators within a certain timeframe. The Defendants were not making representations as to their ability, or confidence in their ability, to do so. That is reinforced by the reference in the Invoice and VSA to significant disruption to product availability, the risk of VEL being unable to supply and the price being refunded in that event. The Invoice also refers to the possibility of delay in supply (and related re-scheduling of delivery). The Invoice and VSA also contemplate changes, albeit minor, to the delivery schedule. Given all these matters, there is no basis for the reasonable person in INSABI’s position to have inferred from VEL’s words and conduct - in context - the third and fourth (implied) Representations.

[198]Given my findings above with respect to the first four pleaded Representations and since the final (pleaded) Representation is a composite of these, I find that no representation of fact was made in terms of the latter either. I should add that, in written closing, the Claimant sought to re-frame and expand the representations relied on. However, this did not advance the analysis, the re-formulation still in substance directed to the future performance of VEL’s obligations and suffering from the same difficulties highlighted above with respect to the other terms of the Invoice and VSA, including potential supply disruption. In oral closing, the Claimant also sought to rely on representations of fact said to be found in the recitals to the VSA. However, it was far too late to start advancing a new case in this way, the evidence having already closed.

[199]I therefore find that the Invoice and VSA did not contain the express or implied representations asserted by the Claimant. That is decisive of the Claimant’s Misrepresentation Claims. However, in case I am wrong, I go on to consider certain other aspects of these claims to the extent these can still be meaningfully addressed. (iii) Issue 2 - Representations by Robert Dangoor

[200]As noted, in addition to the misrepresentation claims against VEL, the Claimant also claims in deceit against Robert Dangoor based on the (same) Representations. If, contrary to my decision under Issue 1, it remained open to the Claimant to advance that claim, I now consider whether it is properly brought against him. The Defendants deny that Robert Dangoor made any statements in his personal capacity. They say that, at all material times, he acted in his capacity as a director of VEL and that, even if an actionable representation could be found, it was made by VEL (alone).

[201]As to Robert Dangoor’s role in the events which led to the conclusion of the VSA, he confirmed in his evidence that he(i) agreed with Joseph Dangoor and Mr Dávila that they should offer the ventilators to the Mexican Government

(ii) told Joseph Dangoor that he (Joseph) could make the offer

(iii) authorised Joseph Dangoor to prepare the draft Invoice and VSA

(iv) did not remember if this was addressed to INSABI

(v) knew that Joseph Dangoor would include the information that he (Robert) gave him, including the number of ventilators and delivery dates

(vi) did not proofread the VSA himself but, after discussing its terms with Joseph Dangoor, told him (Joseph) that he was happy for the VSA and Invoice to be sent to Mr Dávila on behalf of VEL

(vii) was content for his digital signature and personal mobile number to be inserted on the draft invoice

(viii) wanted to convey that the offer was made with his full authority and support as the managing director of VEL and

(ix) wanted INSABI to understand that VEL could get hold of the units readily. Joseph Dangoor confirmed in his evidence that Robert Dangoor did not tell him (Joseph) what price to include (a matter worked out with Mr Dávila). I accept this evidence.

[202]As a preliminary matter, I did not understand, and do not accept, the basis on which the Claimant asserts that Robert Dangoor made the Representations in a personal capacity even though he did not himself become a party to the VSA. It is quite clear that any statements emanating from Robert Dangoor in connection with the INSABI ventilator transaction were made on VEL’s behalf as VEL’s managing director. VEL was counterparty to the VSA and the Invoice was on VEL headed notepaper. The fact that Robert Dangoor was content for his personal mobile number and signature to be inserted does not alter this. He still allowed their inclusion in his capacity as VEL’s managing director (as also stated on the Invoice).

[203]Despite this, a director can incur personal liability in deceit in relation to a false statement made on behalf of the company if they had a dishonest state of mind and directed, procured or authorised the making of the false statement (Standard Chartered Bank v Pakistan National Shipping Corp

[2003] 1 AC 959

; 4VVV Ltd v Spence

[2024] EWHC 2434 (Comm)

at [31]). In this case, Robert Dangoor did authorise his son to make the offer to INSABI, to prepare the Invoice (which contained the pleaded Representations relied on) and the VSA, and to apply his (Robert’s) signature to the Invoice. However, the evidence shows that he (Robert) did not tell the latter (Joseph) what to say in the Invoice (beyond the inclusion of unit numbers and delivery dates), let alone the matters now said to give rise to the Representations. I accept that evidence. The position here is very different from the director in Standard Chartered who agreed to the issue of a falsely dated bill of lading or the directors in 4VVV who approved (either specifically or generally) the brochures, prospectuses and marketing statements containing false representations. On the facts here, I am unable to find that Robert Dangoor directed, procured or authorised the making of the statements in the Invoice relied upon as false representations. For this reason too, the Claimant’s deceit claim against Robert Dangoor cannot succeed. (iv) Issue 3-4 - Were the misrepresentations false and/ or made fraudulently?

[204]The Claimant pleads that each of the Representations was false, both when they were made and the VSA concluded, and that those representations were made fraudulently in the sense indicated in Derry v Peek. Given my findings, neither question strictly arises for determination. It would also be somewhat artificial to address the falsity question based on representations that I have found were not made. That said, the related fraud allegations are serious, I heard much evidence about them and they were pressed firmly. I am therefore equipped to address the question of VEL’s beliefs when it made the statements in the Invoice relied on by the Claimant.

[205]By way of background to those allegations, the Claimant says that VEL’s search for ventilators had an inauspicious start, Mr Tang informing it in early April of the difficulties in their procurement. The evidence also indicates that Mr Dávila’s avenues of enquiry did not prove fruitful. VEL’s own market testing also indicated longer lead times and higher pricing than it ended up offering to INSABI. Although these matters are shown in the record, they did not seem to add much to the analysis. As Joseph Dangoor testified, there was a limited supply of everything during the COVID-19 pandemic, not limited to ventilators. Despite this, and its inexperience in that market, VEL was nevertheless still able to procure, apparently successfully, PPE on the Chinese market for supply to the Mexican Government. The ventilator market, no doubt, was more specialised and the prospect of supplying such a large consignment of VG70s more challenging still. However, VEL did manage to identify American Venture as a potential source of supply.

[206]In this regard, there was quite some criticism of the calibre of American Venture as a potential supplier, the reliance placed on it by VEL and the limited due diligence undertaken. Although I have accepted that Mr Jileta knew of American Venture’s proposed involvement, I also accept that VEL exaggerated the position when saying that SRE ‘recommended’ American Venture to VEL. In their first (interlocutory) witness statements from 2023, the Dangoors said that Mr Dávila was introduced to Ms Sum of American Ventures through an official at the China Council of Promotion for International Trade in Mexico (apparently a division of the Chinese Embassy in Mexico). In Joseph Dangoor’s second statement, he explained that Mr Dávila had sought SRE’s approval (through Mr Jileta) for the use of American Venture. However, Mr Jileta also came to be described as one of the persons ‘recommending’ American Venture, itself coming to be described Mexican Government ‘channel’. Although perhaps a small point overall, the development of the Dangoors’ case in this way was more than correcting an omission from earlier evidence and rather begged the question why SRE did not simply approach American Venture itself. More significantly, it was consistent with the tendency of the Dangoors, when faced with difficulties in their evidence, to defer to Mr Dávila or Mr Jileta and their undocumented actions or interactions to proffer a somewhat vague answer. Nevertheless, I accept that the Mexican Government was a source of introduction of American Venture and that VEL would have drawn some comfort from this.

[207]There was also some reliance placed in this context on the letters signed by SRE concerning procurement support for the Mexican Government, including in favour of VEL and American Venture. However, given the apparent ease with which such letters were issued, I agree that they carry little weight by way of endorsement. Nor did I consider significant the Claimant’s point that Mr Jileta referred to “your existing stock” in the 9 April letter addressed to VEL. It was clear from other such letters (including from the next day) that SRE knew that VEL was sourcing ventilators in conjunction with others indicated as assisting in the procurement. Moreover, the letter from 9 April reads as having been produced for VEL to show to other suppliers to inform them of the Mexican Government’s intention to buy ventilators, the need to inspect these and how payment for any transaction would work.

[208]The Claimant relied on various aspects of VEL’s dealings with American Venture to support its dishonesty claim. These included the fact that(i) Ms Sum did not originally offer VG70s

(ii) American Venture was a broker, not a stockist

(iii) Ms Sum came back to the Dangoors during the negotiation process to inform them that other purchasers had got in first

(iv) Robert Dangoor’s focus was on price, initially suggesting a low one compared to the market price

(v) Ms Sum’s English was broken and

(vi) VEL had only been in contact with her for 24 hours before it made the offer to INSABI. Although all supported by the documents, none of these matters seemed to undermine Joseph Dangoor’s evidence, which I accept, that VEL relied on Ms Sum’s confirmation that American Venture was able to supply. Indeed, although the proposal emerged in a short timeframe overall, the process was an iterative one, involving Ms Sum negotiating with the relevant manufacturers and relaying the position she had reached, sometimes changing. The Dangoors also spoke and messaged her extensively to discuss and test her proposals. Nor, as noted, did I accept the Claimant’s suggestion of doubt on Joseph Dangoor’s part as to Ms Sum’s initial confirmation in the early hours (UK time) of 12 April that 200 units could be delivered by 15 April.

[209]There was also quite some criticism of VEL’s structuring of the transaction with INSABI. For example, the Claimant suggested that the increase of the first tranche of 100 ventilators for immediate delivery was later doubled to 200 was to make VEL’s proposal look more attractive. Although the reason for the increase was unclear from the evidence, I agree with Joseph Dangoor that this would seem to make little difference in the scheme of the supply of 1000 ventilators over 21 days. The Claimant also relied on VEL only paying the US$300,000 deposit to American Venture (with a value date of 14 April) and the balance of the purchase price after it had received the entire funds from INSABI on 13 April. In this way, VEL is said to have sought to minimise its own exposure despite the significant profit to be earned on the deal. Again, I found this unpersuasive. VEL did arrange to pay the US$300,000 deposit from its own funds before INSABI signed the VSA. 12 April was Easter Sunday, 13 April Easter Monday, a bank holiday. It was not clear from the evidence that payment could have been made to reach American Venture sooner. Indeed, VEL’s evidence, which I accept, was that it was surprised to have received the funds from Mexico as early as 13 April. This also disposed of the Claimant’s point that VEL could not have believed that it would be able to comply with the next day (14 April) delivery of 200 units required by the VSA, Ms Sum having already identified the first delivery date as 15 April. Finally, although Mr Dávila did tell Lillian Sum after the factory inspection debacles that the deposit would be recalled, it was again unclear whether VEL could or did, in fact, do so.

[210]Nor did it seem surprising that VEL wanted INSABI’s contractual commitment and full payment promptly before paying the contract price to American Venture. This was a large order, VEL did not have sufficient funds of its own, the requirement for upfront payment did not appear inconsistent with the requirements of manufacturers, distributors and suppliers in this market at that time and full payment for the goods was required in short order to pay American Venture. However, in addition to arranging payment of the deposit from its own funds to lock down the goods pending receipt of funds from INSABI, VEL also concluded the contract with American Venture. VEL took these steps before INSABI signed the VSA. In this way, VEL was potentially exposed if INSABI decided not to proceed with the purchase. VEL would also be exposed if it had gone on to pay the price to American Venture only for it to fail to perform. As it turned out, American Venture’s (first) failure became apparent earlier but, even with the margin built into its pricing with INSABI, that risk was real in a market in which availability was limited and prices rising. I was therefore unable to accept the Claimant’s suggestion that this risk-free but fruitful ‘scheme’ motivated VEL to act dishonestly or that VEL could only ‘sell’ such a scheme to INSABI by means of (fraudulent) representation, VEL being in no better position to broker a deal than any other export and import company.

[211]As the Claimant said, VEL’s intention to supply ventilators is not in doubt. However, whether or not it was better placed than any other such company, by the time VEL came to make its offer to INSABI, and despite the need to iron out the details, American Venture had confirmed the availability of 1000 VG70s for delivery, including 200 on 15 April. By the time the VSA was signed by INSABI, VEL had also already signed a contract with American Venture providing for delivery of 1000 VG70s within 14 days, earlier than promised under the VSA, and VEL had arranged payment of the US$300,000 deposit. That is not to say that VEL did not envisage potential problems. I accept Joseph Dangoor’s evidence that his awareness of supply chain unpredictability led him to include language concerning “significant disruption to product availability” (which had also featured in the PPE Contract and related invoice) However, I also accept that, when he came to send the Invoice in the early hours of 12 April (UK time) and when the VSA was signed by INSABI in the morning of 12 April (Mexican time), VEL reasonably and honestly believed in light of its communications with American Venture that it would be able to supply 1000 VG70s within the timeframe indicated by the delivery schedule (or sooner). The matters relied on by the Claimant were not sufficiently substantive or impactful to undermine that, let alone to enable the Court to conclude that VEL had acted dishonestly when proposing the supply of VG70s and putting forward the related Invoice and draft VSA to INSABI.

(v) Issue 4(b) – Negligence

[212]The Claimant also advances a claim in damages under s.2(1) of the Misrepresentation Act 1967 on the basis that, even if the Representations were not made fraudulently, VEL cannot establish reasonable grounds for believing that they were true. Given my findings above with respect to the absence of an actionable representation, this claim must fail as well. Likewise, given my findings as to VEL’s reasonable and honest beliefs, this claim must also fail on that account, at least to the extent of the (implied) Representations concerning VEL’s beliefs. Moreover, s.2(1) applies “[w]here a person has entered into a contract after a misrepresentation …”. However, in Leofelis SA v. Lonsdale Sports Ltd [2008] ETMR 63 (at [141]), Lloyd LJ held that damages are not recoverable if the misrepresentation is contained in the contract, the contract not then following after the misrepresentation. Although Lloyd LJ’s holding was obiter, I agree that this is yet another obstacle to this statutory claim. (vi) Issues 5-7 - inducement/ reliance

[213]The question of INSABI’s reliance or inducement to enter into the VSA also occupied quite some time in the evidence. Again, given my findings above, this issue does not strictly arise for determination. It would also be somewhat artificial to address it in relation to representations of fact not found. Nevertheless, one aspect can more meaningfully be addressed which is dispositive of the issue. This concerns whether there was a meeting at INSABI’s offices on the morning of 12 April to sign the VSA and, if so, what occurred then. In this regard, the Claimant says that Mr Ferrer took the ultimate decision to cause INSABI to enter into the VSA. Dr Calderón too confirmed in his oral evidence that, at the relevant time, Mr Ferrer was the only person with authority to sign contracts on INSABI’s behalf. I accept that Mr Ferrer’s state of mind is decisive of the inducement question.

[214]As to this, Mr Ferrer’s written evidence was that he met at INSABI’s offices on Easter Sunday (12 April), the morning after Ms Delgado had sent her e-mail concerning the potential supply of VG70s by VEL with the attached Invoice and draft VSA. Dr Calderón, Mr Hernández, and Mr Victor Manuel Lamoyi Bocanegra, INSABI’s National Co-Ordinator for Administration and Finance, are also said to have been present. Mr Ferrer says that they discussed then VEL’s proposal and reviewed the VSA and Invoice. Dr Calderón’s English is very good and Mr Hernández reads and translates English quite well. They read the documents out to him and translated as they went, Mr Hernández reading each clause of the VSA to him, and Mr Ferrer initialling a paper copy, page by page as they read it over. He then signed the VSA without making amendments, Mr Ferrer recalling that, unusually, he signed and wrote his name at the end.

[215]Dr Calderón explained in his written evidence that his involvement in procurement was more on the technical than the commercial side, the latter being more for Mr Ferrer and Mr Lamoyi. After Ms Delgado had sent him the e-mail on the evening of 11 April, he caused this to be circulated internally, including to Mr Ferrer, Mr Lamoyi and Mr Hernández. Dr Calderón confirmed that there was a meeting with Mr Ferrer in his office on Sunday 12 April at which he helped Mr Ferrer understand the documents, particularly by translating and summarising them as they read them over. Mr Hernández had looked at the detail and he too helped to explain the documents.

[216]The Defendants dispute that there was a meeting at INSABI’s offices on the morning of 12 April at which the VSA was signed or initialled. That position was based principally on certain WhatsApp messages between Mr Jileta and Dr Calderón disclosed near to trial. These show that Dr Calderón was on his way to SRE’s offices at 9.15am (Mexico time) on 12 April even though the INSABI meeting was said by the Claimant to have taken place between 9.15 and 10.30am. The Defendants submitted that the VSA must have been signed by Mr Ferrer at the meeting at SRE’s offices or at some different time. However, both Mr Ferrer and Dr Calderón were clear in their oral evidence that the INSABI meeting described in their statements had taken place that morning. Dr Calderón said that he had not mentioned in his witness statement his meeting with Mr Jileta that morning because he did not remember it. I accept their evidence.

[217]In this regard, the Defendants’ point seemed to be a forensic one, based on the Claimant’s solicitors’ view expressed in a disclosure certificate as to the likely timing of the INSABI meeting based on the metadata for the signed VSA. According to Joseph Dangoor’s evidence, VEL’s solicitors have formed their own view about the time at which the VSA was signed based on the metadata. I was not addressed about the correctness of those views and I could not reconcile them. Whatever the precise timings, I am satisfied that the INSABI meeting took place that morning, Mr Ferrer did sign or initial the Invoice and VSA in the presence of his INSABI colleagues and that the SRE meeting took place later. The Defendants also challenged Mr Ferrer’s specific recollection of having signed the Invoice. Although the copy sent back to VEL was initialled, Mr Ferrer did sign the copy which ended up in tSRE’s hands and I am satisfied that he did so on 12 April, albeit him doing so was perhaps not as unusual as he had indicated.

[218]Where I do, however, have significant difficulty with the Claimant’s position is whether Mr Ferrer did in fact read, or have relayed to him, those parts of the Invoice now said to constitute, or form the basis of, the Representations. Mr Ferrer’s oral evidence, which I accept, was that he had the Invoice in front of him at the time but did not read it personally, relying on Mr Hernández and Dr Calderón to convey its contents. He said that Dr Calderón did not read out or translate the documents so much as provide his comments. That was consistent with Dr Calderón’s oral evidence that he did not read out the documents but spoke about the important points of the text, translating or passing on the general idea and main points from the VSA. Mr Ferrer again said that Mr Hernández had read verbatim each clause translated into Spanish. Dr Calderón’s evidence too was that it was the lawyer, Mr Hernández, who translated verbatim, albeit not an official translation. However, Dr Calderón did not indicate the extent of the matters translated at the meeting.

[219]As was apparent from their related evidence, their recollection of this meeting and the contents of the documents is not clear. This is unsurprising given that the events they describe took place six years ago at a time when both were working tirelessly to advance the Mexican Government’s response to the pandemic. However, I was unable to accept Mr Ferrer’s evidence that Mr Hernández read out to him the whole Invoice and VSA word for word. Given what Mr Ferrer says about the myriad pressures on their time during this period and the need to finalise the VSA (and related payment) quickly, it was not realistic that Mr Hernández read out each and every clause of the 11 page VSA or every paragraph of the four page Invoice, not least given that some of the information they contained was of an administrative nature, not commercially significant, ‘boilerplate’ or repetitive within or between the documents.

[220]I consider it much more likely that, having reviewed the documents before they met, Mr Hernández identified (some possibly verbatim) those provisions he considered of significance to Mr Ferrer, with Dr Calderón adding his comments as they went along. Like all good senior officials, they would not have wasted their superior’s time on unnecessary or repetitive aspects. Mr Hernández may well have done this in a manner which left Mr Ferrer with the impression indicated in his evidence. I certainly do not accept the Defendants’ submission that this was “a deliberate untruth crafted to bolster C’s case that Ds made representations in the contractual documents.” However, I cannot be satisfied that those parts of the Invoice the subject of the Representations were, in fact, brought to Mr Ferrer’s attention. As such, I am not satisfied that INSABI was induced to enter into the VSA by the relevant statements in the Invoice.

[221]Indeed, when being questioned more generally about the Invoice, it struck me that Mr Ferrer’s complaint was not that VEL made some statement about whether VEL held units in stock or had a firm supply contract, let alone a statement of present fact based on VEL’s expression of future intention to supply ventilators to INSABI. His real complaint (resonant with that canvassed in BskyB) was that VEL did not give effect to that expression. As Mr Ferrer said in his evidence:- “16 A. I -- what I put here is that INSABI fulfilled its part 17 of the agreement and the payment was made at the right 18 time. I never said that there was a misrepresentation. 19 I say in the end that the Dangoors didn't do -- the 20 Dangoor family, or the Dangoors, didn't do that.”

[222]That complaint is properly a question of VEL’s promise under the VSA and whether this was breached, not a matter of misrepresentation. I reject the Misrepresentation Claims. (vii) VSA, clause 35 – no reliance clause

[223]Finally in terms of ‘reliance’ - in fact, ‘no reliance’ - the Defendants argue that the second and third sentences of clause 35 of the VSA effectively exclude liability for non-fraudulent misrepresentation. Those sentences are engaged by statements or representations made in the negotiation stages of, and which are in some way inconsistent with, the VSA. The Claimant denies that this clause could be engaged in circumstances where it could be construed as an entire agreement clause but it is not an agreement that no representations have been made or cannot be relied on and does not exclude liability for negligence, misrepresentation or exclude the possibility of rescission. Clear words would be required for the clause to have any of these effects (AXA Sun Life Services Plc v Campbell Martin [2012] Bus LR 203 at [94]).

[224]Clause 35 is not the most clearly drafted. However, the first sentence operates as an entire agreement clause. The second and third sentences, by contrast, are solely concerned with pre-contractual statements or representations. As such, they do not suffer from the same difficulty as that indicated in Axa Sun (at [81]). The second sentence cannot be a statement that no representations have been made so as to set up a contractual estoppel. It expressly admits that such statements might have been made. However, it goes on in the third sentence to say that statements potentially inconsistent with the terms of the VSA are “of no value” to either party. Specific non-reliance language could have been used. However, it seems clear that this is the intended effect of those words. That is reinforced by the final sentence which talks of only the written terms of the Agreement binding the parties, making clear that a party’s sole recourse lies under the contract. In light of my findings that there could be no actionable (mis)representation in this case and that the Invoice formed part of the VSA, there is a certain artificiality to the application of clause 35. However, given the inconsistency of the Representations with those express terms of the VSA already identified which qualify VEL’s delivery commitments, I would have found, if relevant, that the clause operated to prevent reliance on non-fraudulent misrepresentation. G.

(a) Overview of the claim

[225]As to VEL’s promise to INSABI, the Claimant says that it was an express term of the VSA that the ventilators would be delivered in accordance with the delivery schedule. The Claimant also relies on clause 42 of the VSA to the effect that “[t]ime is of the essence in this Agreement” such that the delivery timetable had the status of a condition, late delivery entitling INSABI to terminate. The Claimant says that, by 4 May, VEL was in repudiatory breach of the VSA because all 1000 ventilators should have been delivered in accordance with the delivery schedule, but none had been. Finally, the Claimant says that INSABI communicated to VEL its acceptance of VEL’s repudiatory breach of the VSA through its 21 May e-mail, thereby bringing it to an end.

[226]The Defendants, in turn, deny that the parties agreed that all ventilators would be delivered in accordance with the delivery schedule, the VSA expressly providing that this might not be met. Moreover, the timetable for delivery was not a condition of the VSA such that any breach of the delivery schedule would not have entitled INSABI to terminate. They admit that VEL did not deliver any ventilators before 4 May but deny that this constituted a breach of the VSA, repudiatory or otherwise. Accordingly, the 21 May e-mail was not capable of terminating the VSA, there being no breach at the time and the e-mail failing to communicate the Claimant’s acceptance of VEL’s repudiatory breach in any event.

(b) Construction of the VSA - Issue 8

[227]The Claimant says that clause 42 concerning time being of the essence in the VSA obviously implicated VEL’s obligation to deliver the VG70s in accordance with clause 30 and the delivery schedule to which it refers. This was a contract in a competitive market for life-saving medical equipment. Although clause 30 admitted of minor variations to the delivery schedule, the failure to deliver a single unit in the delivery period was not minor. As such, there was a repudiatory breach by VEL entitling INSABI to terminate and to recover the purchase price on the grounds of total failure of consideration. In closing, the Claimant supplemented this to say that, if not a breach of condition, VEL’s breach was still a breach of innominate or intermediate term of sufficient seriousness to lead to the same result.

[228]Whether time is of the essence of a contract is a question of construction having regard to the express terms of the contract, its subject matter and surrounding circumstances. Clause 42 was not said to apply to a specific obligation rather than to the VSA at large (mirroring the corresponding provision of the PPE Contract). As the Court of Appeal held in British and Commonwealth Holdings Ltd v. Quadrex Holdings Ltd

[1989] QB 842

, “[t]here is [..] no general concept that time is of the essence of a contract as a whole: the question is whether time is of the essence of a particular term in question.”

[229]As to the subject matter of the VSA, these were not goods which would perish or deteriorate if not timely delivered. That said, both parties knew that the ventilators here were urgently required for medical treatment during the pandemic. However, as they also knew, that urgency meant that supply was limited, and delivery commitments could not be guaranteed. Indeed, the VSA itself envisages that there might be minor variations and, albeit said to be unlikely, possible significant disruption in supply. In principle, it seems possible for time to be of the essence where the delivery schedule admits of some minor variation. Given the timetable overall (21 days), minor here would probably be measured in days. However, it would not be a straightforward matter in those circumstances to work out when INSABI would be entitled to give notice of termination (and, therefore, avoid the risk of INSABI itself committing a repudiatory breach by terminating prematurely). Moreover, clause 9(r) envisages the continued subsistence of the VSA to permit delivery of those items unaffected by significant disruption and a pro rata refund for those items affected. However, were time the essence for delivery, INSABI would be entitled to terminate the whole contract, setting up a tension with clause 9(r).

[230]These specific provisions are tailored to VEL’s delivery obligations. By contrast, clause 42 is a standard term gleaned from a Law Society contract template and is not linked to any obligation in the VSA. Given the tension or difficulties between the two if clause 42 were also to apply in a delivery context, and the absence of such linkage, I am satisfied that this standard term yields to the specific delivery provisions (see The Starsin

[2004] 1 AC 715

at [183]-[184]). Notwithstanding the preservation of INSABI’s other rights and remedies at law by clause 41 of the VSA, I am reinforced in my view by the provision for a full or partial refund in the event of significant supply disruption.

[231]In all the circumstances, time was therefore not of the essence with respect to the delivery schedule. Nor does the Claimant’s late submission in closing about the delivery schedule being an innominate term assist in circumstances in which it would, in my view, be difficult to say, at least by 21 May when INSABI demanded a refund, that it had been deprived of substantially the whole benefit of the VSA. As discussed below INSABI went on to indicate its willingness to accept reduced number of deliveries if made by 3 July. As such, INSABI was not entitled to terminate the VSA for repudiatory breach.

(c) Breach of the VSA - Issue 9

[232]VEL pleads that it was not in breach of the VSA even though no ventilators were delivered by 4 May. This appeared again to be on the basis that the VSA expressly contemplated that the timetable for delivery might not be met. However, the Defendants’ related arguments seemed less ambitious in oral submission. As a preliminary matter, the Invoice did state that “[a]ll prices and delivery were subject to change” but this depended on the timing of order confirmation. There is no dispute that INSABI timely confirmed the order. VEL could therefore not change the delivery schedule on this account.

[233]The only other potential changes or variations to the delivery schedule were ‘minor’ ones. Accordingly, even if not a breach of condition (or innominate term), there would still be a breach of the VSA if delivery occurred beyond the minor delay envisaged by the delivery schedule. The fact that VEL also agreed in the delivery schedule to provide regular updates about progress does not alter that. That was a further obligation. In this case, not having delivered any units by 4 May, VEL was clearly in breach. Save perhaps for the some of the last scheduled deliveries, that delay was, by now, more than merely ‘minor’.

[234]The Defendants also relied to the same end on clause 9(r) as being irreconcilable with a term that ventilators had to be delivered in accordance with the delivery schedule. I do not accept this argument either. Clause 30 provides that “[d]elivery will be according to the delivery schedule in Appendix 1, which may be subject to minor variations. See Appendix 1 of invoice.” Compliance with the delivery schedule was clearly a term of the VSA. Clause 9(r) provides, additionally, for a pro rata refund where there is a significant disruption leading to VEL being unable to supply certain items. The fact that a refund may be payable where its impact on delivery is felt more keenly is not inconsistent with the parties agreeing a delivery schedule. To the contrary, that schedule helps inform when that refund may become payable. They are separate but related obligations.

[235]The Defendants also suggested in oral closing that INSABI’s remedy in respect of VEL’s breach of its delivery obligations would sound in damages for late delivery, not non-delivery, clause 9(r) already catering for the latter through its refund mechanism. I was unable to accept that argument. Clause 9(r) was not expressed as an exclusive remedy. Clause 41 provided that the parties’ rights and remedies under the VSA did not exclude others at law or in equity. It seems to me that it would be open in principle to INSABI to claim damages for non-delivery where, for example, the market was a rising one and its losses were not covered by any refund that might have been paid under clause 9(r).

[236]As to clause 9(r) itself, by at least the time INSABI came to demand the refund of the purchase price, there was already significant disruption and an inability on VEL’s part to supply such that it should have refunded the purchase price. It did not do so, itself a breach of the VSA, albeit not part of the Claimant’s pleaded case.

[237]Drawing on some of the above arguments, the Defendants also sought to suggest that VEL was not in breach of the VSA by reference to certain interactions with SRE and/ or INSABI. I do not accept this either. VEL’s proposal for a new delivery schedule sent with its 14 May e-mail could not avoid VEL’s breach. This proposed first delivery on 20 May and, even then, much reduced in number (50). That was more than five weeks after the original first delivery date and much more than a ‘minor’ variation contemplated by the delivery schedule. I agree that VEL’s attempt to vary the delivery schedule in this way without INSABI’s consent was impermissible and could only have been achieved by written agreement under clause 36 of the VSA.

[238]Nor, contrary to the Defendants’ claim, did Mr Ferrer acquiesce in VEL’s proposed change to the schedule by failing to respond to Joseph Dangoor’s 14 May e-mail. Although Mr Ferrer did not express objection to the schedule when he received it, he e-mailed VEL within a week (on 21 May) demanding a full refund. VEL failed in the meantime to make its first (proposed revised) delivery on 20 May. There was no acquiescence. Nor, for the reasons given under Issues 10-11 below, do I accept the Defendants’ contention that “SRE informed VEL that the amended Delivery Schedule was approved and the Court should infer that the SRE did so with C’s knowledge and consent.”

[239]Finally, although VEL was in breach of the VSA as at 4 May and that state of affairs was not made good by the revised delivery schedule, as I come on to explain, the resolution of the dispute in this case does not ultimately turn on Issues 8 or 9 above (or 10-11 below) rather than the later developments between the parties, particularly from mid-June.

(d) Rescission/ termination of the VSA - (Issues 10-11)

[240]Issues 10-11 concern whether INSABI properly rescinded for misrepresentation, or terminated for repudiatory breach, the VSA. Given my findings that there was no misrepresentation which induced the VSA and no repudiatory breach in its performance, these issues do not strictly arise. Nevertheless, I address the matters raised by the parties since they provide relevant context for those later events which are decisive of this claim.

[241]Being a matter of election between two inconsistent remedies, the legal principles applicable in determining whether a contract has been afﬁrmed are the same in for rescission for misrepresentation as for termination for repudiatory breach of contract, albeit their application may differ, particularly the practical consequences of delay. The test is objective: a party will be treated as having elected to afﬁrm and thereby lost the right to rescind if it speaks or acts in a way which would reasonably be understood as consistent only with that party having made an informed choice to treat the contract as valid (whatever its subjective intention) (The C Challenger

[2021] 2 Lloyd’s Rep 109

at [201]-[206]).

(e) Pre-21 May 2020 events

[242]The Defendants say that the Claimant lost the right to rescind or terminate the VSA by reason of the parties’ interactions prior to INSABI’s request for a refund made on 21 May. VEL relies on its communications from 28 April and 1 May which proposed provision of 13 (later, 61) units of an alternative model and invited INSABI’s response. However, INSABI’s non-response to this discrete proposal does not indicate one way or the other whether INSABI was treating the VSA as valid.

[243]The Defendants also placed store in this context on VEL’s presentation to INSABI on 14 May of the revised delivery schedule. This had already been trailed by VEL on 8 May with the suggestion that the HBK contract was the means of VSA fulfilment. The Defendants say that SRE informed VEL that this variation to the delivery schedule was ‘approved’ (apparently through Mr Jileta) and that the Court should infer that SRE did so with the Claimant’s knowledge and consent. INSABI’s silence in the face of VEL’s variation was also said to indicate its acceptance of ventilator deliveries on the new dates.

[244]I found these arguments and the Dangoors’ related evidence unpersuasive. The documentary record shows that INSABI had already taken positive steps by at least 23 April to obtain SRE’s assistance in connection with VEL’s non-performance, including Dr Calderón writing to Mr Ebrard on 12 May seeking SRE’s intervention to request a refund, apparently attaching a draft letter (dated 8 May) to that end. This matter came to be discussed at the highest levels. According to Mr Jileta’s WhatsApp exchanges with Dr Calderón on 16 May, the Mexican President, Mr Ebrard and Mr Ferrer had apparently agreed among themselves that VEL be allowed additional time to comply. However, any additional time afforded would not be without condition. On 19 May, Ms Delgado wrote to Mr Ferrer about VEL’s proposal. She indicated SRE’s recommendation that INSABI accept this but on terms. Those terms were the arrival of the first delivery or proof of shipment by the next day, 20 May, failing which, INSABI would notify its intention to terminate the VSA and its expectation of a full refund. She attached a draft letter to that end.

[245]Given the sensitivity of the situation and lack of reliable information, Ms Delgado contacted Joseph Dangoor directly on 20 May saying that “I really need to know if the ventilators are arriving today as the schedule is proposed.” Robert Dangoor e-mailed Ms Delgado later saying that “Joseph has asked me to call you directly, to give you an update on the ventilators delivery.” Robert Dangoor’s related evidence was implausible, saying that Ms Delgado told him on their 20 May call to continue sourcing ventilators and that they did not discuss whether VEL would be delivering that day. Joseph Dangoor explained his understanding of the conversation, but he was not on the call. However, Ms Delgado obviously spoke to Robert Dangoor to find out if VEL would be delivering that day. That was the purpose of the call. Moreover, VEL was not able to deliver on 20 May and Robert Dangoor told her this. VEL having failed at its own (new) first hurdle, the revised schedule was not accepted. Dr Calderón informed Mr Jileta on 20 May by WhatsApp that Mr Ebrard had asked him to send a draft letter that had been prepared demanding a refund. Mr Jileta then caused this to be translated. INSABI attempted to send this the next day (21 May).

[246]None of this indicates SRE’s approval to the revised schedule or INSABI’s knowledge of such approval rather than extensive consideration by, and discussion at, the highest levels as to how to respond to VEL’s ongoing failure to deliver, including of its new delivery proposal. Mr Jileta was in no position to “approve” revisions to the VSA and I find that he did not do so. Nor did Joseph Dangoor’s evidence appear to go quite that far in any event. Nor was there silence from INSABI in the face of the variation. Within a week, INSABI had demanded a refund. Had it been necessary for me to do so, I would therefore not have found the parties’ pre-21 May interactions to be affirmatory.

(f) INSABI’s 21 May 2020 e-mail and surrounding events

[247]As noted above, the (re-sent) version of INSABI’s 21 May e-mail did not contain the attached letter. The Defendants say that, since the VSA contained its own provision for a pro rata refund in respect of units not delivered, it was not clear from the e-mail whether INSABI was demanding this or exercising a right to rescind to bring the VSA to an end, the reference to INSABI bringing a “default claim” more consistent with the former. Moreover, the e-mail could not have been termination for breach of contract, the right in those circumstances being to claim damages, not a refund. Since the e-mail was not unequivocal in its terms, it could not have led to the rescission or termination of the VSA.

[248]In my view, although brief, the terms of the e-mail communicated INSABI’s unequivocal assertion of rights inconsistent with the continuation of the VSA. The fact that there was a contractual mechanism for refunds does not alter that. That mechanism was concerned with pro rata refunds payable by VEL (without demand). Mr Ferrer’s e-mail does not mention that mechanism. Mr Ferrer highlighted, more simply, VEL’s non-compliance with the delivery schedule as the basis for demanding an immediate refund of the payment it had made plus interest. It would have been understood from this that INSABI wanted a full refund of the purchase price, it did not want any ventilators delivered and, there being nothing left to perform, the parties’ relationship would end. If anything, this was rather reinforced by the reference to a “default claim” which would follow if INSABI did not get its money. Although a demand for a refund may have been inapposite in the context of a repudiatory breach of contract, the Court is concerned with what, considered objectively, the e-mail would have conveyed between these two parties, neither versed in English law.

[249]Although an objective test is to be applied when assessing whether INSABI rescinded or terminated (or affirmed) the VSA, I accept that an approach of looking at the e-mail in isolation would be unduly restrictive (Drake Insurance Plc v. Provident Insurance Plc

[2004] QB 601

at [100]-[103]). Although, to use Rix LJ’s words in Drake, some did not seem to “cross the line” between the parties, the matters relied on in this case rather underlined my view based on the language of the e-mail that INSABI was communicating to VEL that the VSA was over. Joseph Dangoor, for example, testified that he was aware before the e-mail that the Mexican Government was considering cancelling the VSA. Indeed, VEL informed AZ-Naturemed of its impending cancellation on 15 May. That is consistent with the internal deliberations referred to above in the context of VEL’s revised delivery schedule, culminating in Ms Delgado’s call with Robert Dangoor on 20 May and INSABI’s e-mail the next day.

[250]In this regard, the Defendants suggest that, having debated the matter internally, the Mexican Government stopped short of terminating but demanded a refund in accordance with the VSA instead, the e-mail not adopting the ‘intention to terminate’ language suggested by Ms Delgado. Likewise, they say that Mr Ferrer agreed in his evidence that the refund was sought under clause 9(r). I disagree. Considering the difficult question(s) put to Mr Ferrer (through an interpreter), it was not clear what he agreed to. However, having established that VEL could not deliver in accordance with its own revised schedule, the Mexican Government clearly decided that it did not want to give VEL any more time to perform, even on strict terms. It was agreed instead that INSABI should move straight to demanding back its money, so bringing an end to its relationship with VEL.

[251]That was also consistent with VEL’s own understanding revealed by its reaction to the 21 May e-mail. On 27 May, VEL responded substantively to INSABI, saying that “[w]e will proceed in accordance with your wishes to terminate the contract on mutual agreement terms. …. To this effect we have started to recall the funds from all non-performing contracts and this process is underway so that we can return these funds to INSABI.” The Defendants suggested that Mr Jileta requested this letter to be sent. I reject that. VEL obviously needed to respond substantively to INSABI’s 21 May communication.

[252]Although the Defendants rely on reference in the letter to a discount on any ventilators that might be delivered (and Mr Ferrer’s answer to another related question in his evidence), VEL clearly understood that INSABI was terminating. On 27 and 28 May, in seeking to recall funds paid to ACP, VEL told Ms Sum that the Mexican Government was not willing to extend the supply contract, did not want ventilators and wanted its money returned. VEL also said that it no longer had the option to provide ventilators. I do not accept the suggestion that these words were used to put pressure on ACP. They reflect VEL’s understanding of what INSABI had just told it. On 29 May, VEL wrote to Aeonmed saying that the Mexican Government was demanding the immediate return of the Semacare funds as the VSA had now expired. On 2 June, Joseph Dangoor told Mr Tang that the Mexican Government no longer wanted to buy any ventilators through VEL, it had cancelled the VSA and VEL needed to return the money.

[253]Given the equivocal terms of the 27 May response, I agree that it could not be considered as VEL’s acceptance of, or agreement to, INSABI’s rescission or termination (whether rightful or wrongful). However, the fact that, having received the 21 May e-mail, VEL might have contemplated difficulties cancelling its active supply contracts or tendering deliveries that it could not cancel, and communicated these matters to INSABI, or that it hoped for a mutually agreed outcome or that this may later have been attempted or achieved, does not detract from the clear message VEL had received and understood at the time. Likewise, the fact that Mr Ferrer did not respond to the 27 May letter is unsurprising. Despite canvassing issues with its active supply contracts, VEL concluded the letter by saying that it remained fully co-operative with the refund process and that INSABI would start receiving partial refunds and updates from Monday. The Defendants’ further suggestion that VEL’s letter to INSABI was an ‘offer’ to continue to make deliveries was not borne out by its contents. Nor, notably given how VEL says matters ultimately panned out, did the letter say that it had entered into the VEL/ Encore Agreement two days earlier on 25 May. Indeed, as I come on to explain, given the events I have described, culminating in INSABI’s demand for a full refund, the last thing VEL would have done at that point was to enter into another supply agreement.

[254]It was not until 9 June that VEL started to project an ambiguous position in saying that “it is to be anticipated that the terms of the letter may purport to terminate the contract”. That change in approach was stark, VEL’s tone now notably legalistic, albeit somewhat transparently so given VEL’s earlier natural expression of its understanding. The 9 June message was accompanied by a without prejudice proposal to reduce deliveries to 750 ventilators (from the original 1000). The Defendants say that this correspondence is consistent with VEL’s understanding that the VSA was continuing. I reject this. INSABI had just demanded a full refund. VEL acknowledged INSABI’s desire to terminate. The documents show that, by 9 June, the Mexican President had directed that late deliveries would not be accepted. On 12 June, INSABI rejected VEL’s proposal for partial deliveries. VEL changed its approach on 9 June, not because it had the impression that the VSA was continuing, but because it could not pay the full refund. VEL still had significant sums outstanding from some non-performing suppliers. It was also still on the hook to others. It therefore sought to introduce an element of legal doubt in its dealings with INSABI to secure for itself a different and more favourable outcome from that demanded by INSABI on 21 May. As I come on to explain, the same is true of the parties’ subsequent interactions also relied on by the Defendants in this context. However, none of those matters detract from what was, in my view, the clear position expressed by INSABI on 21 May.

[255]Finally, the Defendants also suggested in evidence that Mr Jileta clarified to VEL that INSABI did not wish to terminate the VSA and that VEL should offer a partial refund for which INSABI would be grateful. I reject this for essentially the reasons already set out. The Mexican Government had clearly decided at the most senior levels to terminate the VSA. Mr Jileta knew this and would not have told VEL the opposite. Moreover, that VEL appreciated this is apparent from its correspondence with third parties, INSABI itself and even its later communications in which it sought to muddy the legal waters. Accordingly, had it been necessary for me to do so, I would have found INSABI’s 21 May e-mail effective to rescind and/ or terminate the VSA. H.

(a) Background

[256]Despite INSABI rejecting on 12 June VEL’s offer of 9 June to supply 750 ventilators at a reduced price, and reiterating its request for a full refund, VEL tried again on 17 June. This time, Joseph Dangoor’s without prejudice proposal was for the reduction of the VSA contract size from 1000 to 700 units, an immediate refund corresponding to the 300 difference and provision for the 700 by reference to the VEL’s relevant supplier contracts. On 18 June, Mr Ferrer responded positively to the proposal. On 19 June, VEL refunded $17,760,000, representing the price of the 300 units.

[257]Although irrelevant in light of my findings to this point, the Defendants appear to regard this exchange as part of an ongoing interaction between the parties by which they understood that deliveries under the VSA would continue. Even though I have found that INSABI was not entitled to rescind or terminate the VSA, as I have also already explained, INSABI communicated clearly from at least 21 May that it wanted to end its relationship with VEL. I accept that INSABI’s position changed following receipt of VEL’s 17 June letter and, likely reflecting the ongoing need for ventilators, INSABI said that it would be willing after all to accept a partial refund and partial delivery. However, I reject the Defendants’ contention at trial that INSABI “therefore decided to keep the VSA on foot in an effort to obtain as many ventilators as possible” which was said to be consistent with VEL’s “offer to supply 700 ventilators”. Notwithstanding Mr Ferrer’s evidence about INSABI keeping ‘options open’ or ‘hedging its bets’, as I come on to explain, the parties’ mid-June exchange was more narrowly circumscribed than the Defendants’ open-ended reading suggests.

(b) The Claimant’s case

[258]As to the meaning and effect of that exchange, there is no dispute that it falls to be resolved as a matter of English law. Presumably recognising that any further agreement between the parties at this point would disturb its claim that the VSA had been rescinded or terminated, the Claimant’s primary case is that there was no agreement between VEL and INSABI by this exchange of correspondence. INSABI’s letter of 18 June was a counter-offer to VEL’s 17 June proposal, not its acceptance. The terms of the 18 June letter were materially different because INSABI unilaterally imposed a deadline for all further deliveries (to a maximum of 500) of 3 July and did not accept that the 50 ventilators “considered to have cleared customs” should be treated any differently. Nor did it accept as a matter of principle that VEL could wait until it got refunds from its suppliers before paying INSABI.

[259]If, however, there was an agreement, the Claimant says that this was a settlement which compromised INSABI’s existing claims against VEL. It was not a fresh supply agreement or a variation to the existing supply agreement, there being no support for that case in the express language of the documents or in the without prejudice context. On its proper construction, it was an agreement to release its claims against VEL on condition, and to the extent that, ventilators reached Henco by 3 July with the necessary documents for export. If they did not reach Henco by that date, INSABI’s original rights arising from rescission/ termination were preserved.

[260]Alternatively, the whole agreement was said to be subject to a condition subsequent that ventilators reached Henco by 3 July. This alternative case leads to the same practical consequence that the agreement ceased to have effect when the Defendants failed to comply with that condition.

[261]If the Court finds such an agreement, it must then determine whether VEL performed it in accordance with its terms by delivering the units supplied by HBK to the forwarder by 3 July.

(c) The Defendants’ case

[262]The Defendants’ primary case is that the partial refund was made pursuant to the terms of the VSA. The Invoice provided that, for any ventilators VEL was unable to deliver, VEL would provide a pro rata refund to INSABI. Accordingly, by providing the refund in respect of the 300 ventilators, and offering to deliver 700 ventilators rather than 1,000, VEL was acting in accordance with the terms of the VSA. No variation to the VSA was required.

[263]Alternatively, the Defendants say that the parties agreed on 18 June to vary the VSA to reduce the number of ventilators VEL was due to deliver by 300.

[264]In the further alternative, the Defendants say that the parties entered into a fresh agreement by which VEL agreed to deliver 700 ventilators to the Claimant.

[265]Finally, to the extent that INSABI’s letter of 18 June did not amount to acceptance of VEL’s offer in its 17 June letter rather than a counter-offer, VEL nevertheless accepted that counter-offer in its own 19 June letter and/ or by payment on 19 June of the 30% refund of the purchase price in the sum of US$17.76m.

(d) The exchange of correspondence – 17-19 June 2020

[266]Before considering how the parties’ exchanges are properly analysed, it is necessary to understand their context and proposed effect. As to the former, VEL had failed to deliver any ventilators to INSABI by the times stated in the delivery schedule or at all. Despite earlier canvassing the HBK contract as the answer to the delivery problems, INSABI had demanded a full refund on 21 May on the basis of VEL’s non-compliance. VEL initially indicated on 27 May that it would co-operate in the refund process, also identifying ACP and HBK as its only two active contracts. However, VEL then went on to deny on 9 June that the VSA had been terminated. It also proposed on a without prejudice basis the variation of the VSA to reduce the number of units for delivery to 750 and a partial refund for the 250. INSABI rejected this on 12 June. In its 17 June without prejudice letter, VEL stated that:-(i) It disagreed that the VSA had been “voided” due to VEL’s alleged non-performance;

(ii) VEL had three contracts in place to meet its obligations to INSABI, was disappointed that these units had not been supplied and was continuing to take steps to ensure that they were;

(iii) It was in VEL’s and INSABI’s mutual interest to find a viable solution that avoided conflict between them and VEL and its suppliers;

(iv) It was presenting a framework for a mutual solution to the winding-down of the VSA;

(v) Such framework would facilitate VEL withdrawing from the contracts with its suppliers;

(vi) VEL had managed to reduce the number of units under contracts with suppliers to 700, enabling the immediate pro rata refund for the balance of 300 units it would no longer be supplying to INSABI;

(vii) VEL would reduce the outstanding orders with its suppliers and, where possible, cancel them by mutual agreement or due to the suppliers’ failure to supply;

(viii) VEL’s remaining orders comprised HBK (500), ACP (100) and Excel (100);

(ix) For HBK (a) if freight documents for the 50 (customs cleared) ventilators had not been received by 19 June, VEL would cancel the order (b) units not reaching the forwarder by 3 July would be refunded pro rata and (c) VEL would continue in the meantime to negotiate a reduction in the contract size;

(x) For ACP and Excel, VEL was in the process of cancelling the contracts and requesting return of refunds which would be returned to INSABI upon receipt;

(xi) VEL would update INSABI regularly on progress on the status of returns and would have a clear idea within the next fortnight of the results of its efforts; and

(xii) VEL did not wish to engage in a legal dispute and wished to see the matter resolved swiftly.

[267]In INSABI’s briefer response dated 18 June, it stated that it was concerned about VEL’s non-performance but accepted VEL’s proposal on the following basis:-(i) VEL would refund the amount down paid by INSABI for 300 ventilators by 18 June;

(ii) VEL would continue to cancel the ACP and Excel contracts and recover the amount down paid to them as early as possible;

(iii) VEL would deliver as many as possible, but no more than 500, VG70s in respect of the HBK contract by 3 July, delivery to be accepted by handover to the freight forwarder and presentation of the accompanying verified documents; and

(iv) The VSA would be fully performed by payment of a full refund of the contract price or a combination of partial delivery of ventilators and refund of the remaining amount.

[268]On 19 June, VEL responded, thanking INSABI for its letter the previous day for which it was obliged, explaining that arrangements were in hand to remit US$17.76m (corresponding to the refund on 300 units). (e) Was there a concluded agreement?

[269]In its 18 June response, INSABI did not endorse VEL’s suggested treatment of the 50 (apparently already customs cleared) HBK units but specified more simply that it would accept delivery by 3 July of up to 500 HBK units. Although VEL proposed a pro rata refund of any of the 500 HBK units not delivered by July 3, it was more equivocal when it came to the 200 units represented by the ACP and Excel contracts, VEL indicating that the related refunds would be paid to INSABI upon return of the funds from those suppliers. INSABI was unequivocal in this regard. VEL would continue to cancel the contracts and collect the refunds pending the July 3 deadline for HBK deliveries. However, the totality of performance required for fulfilment of the VSA was a full refund of the contract price or partial delivery and partial refund. Neither the full nor the partial refund required VEL’s own receipt of funds. Accordingly, although Mr Ferrer did say in his 18 June letter that “we would like to accept your suggestion as follows”, the ‘follows’ in INSABI’s response was sufficiently materially different from VEL’s original proposal as to amount to a counter-offer for contract formation purposes. However, nothing ultimately turns on this. As the Defendants say, VEL’s further communication the next day and the payment of the 30% refund make clear that it accepted INSABI’s counter-offer on its (revised) terms and that a binding contract therefore ensued (June Agreement).

(f) The nature of the June Agreement

[270]As for the Claimant’s argument, VEL’s proposal was made in without prejudice correspondence and in the context of INSABI asserting non-performance and demanding a full refund. VEL, in turn, denied that the VSA had been terminated and had raised the spectre of a legal dispute. However, the suggested ‘settlement agreement’ rubric adds nothing substantive. Consistent with the description of their proposals, the parties were setting out steps for how the VSA would be ‘wound down’ or, perhaps more precisely, discharged by (different) performance. Although the agreement did not contain an express release, such discharge encompassed VEL’s past (including secondary) obligations under the VSA. However, the June Agreement does not express itself or its performance as conditional on any deliveries being made. Clear language would be required for that. The June Agreement in fact points the other way, expressly contemplating that HBK deliveries might not reach INSABI by 3 July at all, the agreed performance in those circumstances being a full refund.

[271]Given my findings that it was not open to INSABI to rescind or terminate the VSA, whether the June Agreement is properly characterised in one of the ways indicated by the Defendants is probably less important. However, I would not accede to their primary argument that, by refunding US$17.76m and offering to deliver 700 ventilators instead of the 1000, VEL was acting in accordance with clause 9(r) of the VSA. VEL experienced significant disruption and was unable to deliver from the start. Had VEL been acting in accordance with the VSA, it would already have refunded the full purchase price by this point. Nor was this an agreement for VEL to deliver 700 units. As I explain further below, the starting point of the June Agreement was the reduction of the contract size from 1000 to 700. That was why the refund for the 300 was paid, not because of the ongoing significant disruption within the meaning of clause 9(r). Moreover, the June Agreement went further than the VSA in specifying by reference to VEL’s then outstanding supply contracts precisely how the remaining 700 was to be addressed, including the potential for partial delivery of HBK units within a time limited window and, subject to that, a full or partial refund.

[272]Since the purpose of the June Agreement was to wind down the VSA through the performance of different obligations, the appropriate characterisation is that the latter was varied by written agreement, not replaced by a new supply agreement. Such an amendment was permitted by the VSA, the parties’ related exchanges of correspondence complying with the formalities in clause 36. However, if (contrary to my findings), there had been an actionable misrepresentation or repudiatory breach such that INSABI did rescind or terminate the VSA by its 21 May letter, the June Agreement could obviously not operate to vary a contract no longer on foot. Rather, their agreement would operate to reinstate the pre-rescission or termination position, albeit on the new (varied basis).

(g) The terms of the June Agreement

[273]One notable aspect of the parties’ approach to this case was their failure to grapple with the precise meaning and effect of the June Agreement. As noted, the Defendants argued (incorrectly) that the agreement was for VEL to deliver 700 units instead of 1000. They stopped short of the detail of the June Agreement. This was presumably to clear the way for VEL’s argument later that it was entitled to perform the June Agreement by supplying INSABI with ventilators said to have been procured under the Encore/ VEL Agreement. The Claimant did not consider the detail either, its hesitation appearing to be the product of its (incorrect) argument as to the conditionality of the June Agreement.

[274]Nevertheless, I explored with the parties in closing submissions the proper construction of the June Agreement. The Defendants maintained that VEL’s 17 June letter was a proposal to do its best to supply 700 units. They explained that the reference in the proposal concerning the three suppliers was to the framework to wind down the VSA. That was in the context of the original agreement to supply 1000 units in total, VEL now offering to refund 300. The final words of Mr Ferrer’s letter of 18 June made clear that he either wanted a full refund or partial delivery and partial refund. That must have been reference to a full refund in respect of the 1000 units or a combination of partial delivery and refund of the remaining amount. Although I do not disagree with that explanation as far as it went, it still did not address the detail of the agreed framework which specified how the winding down was to be achieved. This was part and parcel of the terms of the June Agreement. Mr Ferrer’s final words in his 18 June letter are properly read in that light, not at large. Although the Defendants sought to characterise INSABI as keeping alive the option to get as many ventilators as possible, the June Agreement set out (at VEL’s own instigation) defined parameters for performance with only 500 deliveries (maximum) contemplated. It did not afford licence to VEL to attempt to perform outside that framework. When I asked the Claimant, setting aside potential issues of conditionality, as to the effect of the June Agreement, it said that it would be necessary to look to see if there had been performance in terms of supply of ventilators. Apart from the 50 HBK units in early July, there had not been. However, the Claimant’s position as to what then might follow remained unexplained.

[275]Despite the parties’ reluctance to engage with the terms of the June Agreement, these are readily discernible. Mr Ferrer’s letter of 18 June reorganised VEL’s proposal into a cogent and chronologically structured framework (with his changes) for the winding down of the VSA. The contract size now limited to 700 ventilators, the sum equivalent to the price of the 300 units would be refunded immediately. The balance of 700 ventilators was identified (exhaustively) by reference to the three suppliers under its remaining orders, ACP (100), Excel (100) and HBK (500). VEL would carry on cancelling the ACP and Excel contracts and obtaining refunds. Given that those contracts were to be cancelled, there was no question of any delivery by VEL in respect of the 200 units they represented. Delivery was only contemplated under the HBK contract, limited to up to 500 units if handed over to the forwarder by 3 July. As such, it was not open to VEL to make deliveries from a supplier other than HBK and/ or exceeding 500 units and/ or after 3 July. The last step contemplated by the June Agreement was either the payment of the full refund of the contract price by VEL to INSABI or partial delivery (up to 500 HBK units) and partial refund (pro rata to the quantity not delivered). Whichever refund was payable, this would obviously be paid following the 3 July partial delivery deadline and, as noted, did not depend on VEL’s own receipts of funds. It is also clear from the parties’ language that the refund did not need to be demanded. No period for payment was stated but the refund would have been due within a reasonable period after 3 July. I.

(a) The 50 HBK units

[276]As to the 50 HBK ventilators, in light of the Claimant’s ‘conditionality argument’, there was quite some dispute as to the factual detail of their delivery and whether this complied with the June Agreement. The Claimant accepts that it took possession and that they were subsequently installed in Mexican hospitals. It also accepts that some credit should be given for them against its claims. However, it says that these were shipped directly rather than through INSABI’s forwarder, Henco, and that they did not arrive in Mexico until after 3 July. The importance of this point is said to be that delivery made in this way did not satisfy the requirements of the June Agreement. As such, the release never came into effect and INSABI’s claims for misrepresentation and/ or repudiatory breach of the VSA were therefore unaffected.

[277]Given my findings that INSABI did not have such claims, that the June Agreement did not contain such an (express) release and that it did not operate conditionally, these points are also of less significance. However, as to the compliance question, the June Agreement does not identify a particular forwarder. The Claimant suggested in submission that, as far as INSABI was concerned, the deliveries of HBK units were to be made DPU to Henco in Shanghai as originally agreed in the VSA. However, VEL’s letter of 8 May to Mr Ferrer first identified VEL’s contract with HBK and stated that delivery would be CIF Mexico City, so reducing INSABI’s shipment costs. Although CIF may be inappropriate terminology for carriage of goods by air, it was clear before the June Agreement (and part of the relevant factual matrix) that Henco would not be involved in the delivery of HBK units and that, since VEL was organising shipment, it would have its own forwarder. I therefore agree that handover of the 50 units and documents to Air France in Beijing constituted their delivery. That must have taken place on or before 28 June when the Air France flight left Beijing. Even if I am wrong about the parties’ agreement as to the delivery mechanics, the 50 HBK units reached Mexico on 3 July. Whatever the different date stamps on the airway bills may mean, that is apparent from the flight schedule. Delivery must therefore have occurred by 3 July at the latest. Finally, even if there had been late delivery, once it found out about their arrival, INSABI accepted these 50 units. Joseph Dangoor informed Mr Ferrer on 6 July of their arrival (providing the airway bill and Air France shipment details) and Mr Ferrer caused INSABI to take receipt of the goods for importation. As such, VEL complied with this aspect of the June Agreement for the 50 units or compliance was not an issue.

[278]The 3 July deadline for partial delivery of HBK units therefore passed with 50 out of the potentially (up to) 500 HBK units delivered. The June Agreement did not contemplate deliveries with respect to the ACP and Excel contracts. INSABI was therefore not required to take any more units from VEL. VEL was now required to make a partial refund for the 650 units it had not delivered out of a reduced contract size of 700. INSABI requested a refund from 4 July onwards. Despite this, as I come on to explain, VEL began again to re-open the possibility of further supply to INSABI, even going on later to state in the face of INSABI’s repeated refund requests that it had, in fact, already delivered, albeit not disclosing for some time thereafter that the supposed supplier was Encore.

(b) Alleged ‘cover-up scheme’ - rationale/ motive

[279]VEL says that it did, in fact, deliver (or attempt to deliver) a further 650 ventilators to INSABI, comprising 465 procured under the Encore/ VEL Agreement concluded on 25 May and a further 185 units procured under a separate contract with Aeonmed subsidiary, Irene, concluded on 18 September. The Claimant says that the Encore/ VEL Agreement was not concluded in May but was a product of a ‘covert scheme’ ‘cooked up’ much later between VEL and Encore to make it look as if units in fact supplied under the Encore/ INSABI Agreement had been supplied by VEL. To that end, the Claimant says that the version of the Encore/ VEL Agreement relied on by the Defendants was a forgery, created long after the date it bears.

[280]The Defendants say that the alleged scheme is incoherent and circular. The 1,700 VG70s have all been tendered to INSABI. These break down as to 700 tendered by VEL pursuant to INSABI’s agreement to accept 700 ventilators in the June Agreement, the remaining 1000 tendered by Encore in discharge of their obligations under the Encore/ INSABI Agreement. Having purchased 1,700 units, and those units having been tendered, INSABI has received (or has had the opportunity to receive) everything it asked (and paid) for. There is no question, as had been suggested by INSABI, that the same ventilators were appropriated to multiple contracts and/ or that INSABI was defrauded of 465 units. As such, INSABI had no basis for refusing to accept the last 465 tendered by Encore to complete delivery under the Encore/ INSABI Agreement or the last 185 tendered by VEL to complete deliveries under the VSA. It is a mystery why INSABI persists in alleging a covert scheme

[281]I accept, as I understood to be common ground, that 1,700 units were tendered. I also have no difficulty, in principle, with the idea that Encore performed VEL’s obligations on VEL’s behalf. However, reliance on these matters again rather assumes that VEL had any obligation to perform, at least by way of delivery. On the basis that the Claimant was entitled to, and did, bring the VSA to an end on 21 May, there would have been no such obligation. Although I have not found that claim to be made out, in deciding the issue of the terms governing the June Agreement, I have found that the VSA was amended (and then performed) in such a way as to preclude VEL’s further performance by delivery beyond 3 July. This also informs VEL’s potential motive for participating in the alleged scheme. By July, VEL was again in a complete bind. It had received US$59.2m from the Mexican Government to provide 1000 VG70s within 21 days. Despite its efforts to procure these, it had failed. In the course of those efforts, it disbursed approximately US$34-35m to potential suppliers (excluding the HBK downpayment). It recouped the majority of that money, albeit Aeonmed did not refund the outstanding US$2.4m with respect to the Semacare contract until the middle of July, VEL was in dispute with Excel about the return of US$5.4m and the US$5m paid to ACP appears to have been the subject of fraud. The HBK downpayment of US$2.85m had also been made in early May.

[282]As such, when INSABI first came to demand its money back on 21 May, VEL was still out of pocket to the tune of nearly US$15-16m and in no position to pay the full refund demanded by INSABI. Nor, given the HBK unit price (US$46,000), could VEL have sensibly supplied the 1000 HBK units even if that supply had been reliable. However, it managed through the June Agreement to agree to reduce the VSA contract size to 700, pay a partial refund (US$17.76m), deliver a maximum of 500 HBK units by 3 July and buy itself time to continue to seek refunds for the ACP and Excel contracts (200). It then managed to agree to reduce the HBK contract size to 500 which it appears VEL had enough headroom to pay for. However, it still required the outstanding supplier refunds to enable it to make INSABI whole for the remaining 200. As it turns out, VEL was only able to deliver 50 HBK units by 3 July. Although it received the Aeonmed refund on 16 July (US$2.4m), without the ACP and Excel refunds, it could not refund the price corresponding to the 650 units which it had been unable to supply and for which INSABI consistently demanded a refund from 4 July onwards.

[283]In considering the parties’ motives, the human element is obviously also relevant. It is quite clear, by early May at least, that the Dangoors came to appreciate that they were out of their depth in their efforts to perform a US$59.2m contract for the supply of urgently required medical equipment. Joseph Dangoor candidly explained that he was “[v]ery stressed by this ventilator shit” and “[j]ust want[ed] to get out of it”. As the Defendants emphasised, and I accept, this is not a case of someone simply ‘running off’ with INSABI’s money. Nor would this involve, also egregiously, the appropriation of the same units to different contracts. A scheme along the lines canvassed by the Claimant would see INSABI actually getting, albeit months late, the number of units it had originally ordered. Depending on the state of the ongoing health crisis, INSABI might not object to receiving these if it could finally see physical units arriving in Mexico rather than the paltry 50 delivered thus far. This would avoid VEL having to pay the refund demanded which was not possible with the cash they had at hand.

[284]Assuming that Encore bought into such a scheme and had the means to perform it, there would therefore have been a powerful incentive for VEL to pretend that it was the source of units in fact supplied to INSABI under the Encore/ INSABI Agreement, not least at the relatively modest cost to itself of US$18,750 per unit, a refund of the INSABI unit price being three times more. VEL might also make some profit on what, to this point, had been a seriously fraught venture. The potential incentive for Encore is not difficult to discern, namely the potential profit on its additional contract with Aeonmed for 465 units as well as the consultancy fee of US$1,697,250.00 agreed by VEL. These matters said, the presence of such strong incentives does not, of course, mean that VEL or Encore yielded to them.

(c) The emergence of the alleged scheme

[285]The events of July are instructive. On 1 July, with 50 HBK units en route to Mexico, Joseph Dangoor e-mailed Mr Dávila noting efforts to mediate between HBK, VEL, AZ-Naturemed and Mexico which apparently followed from HBK’s demand for the balance of the HBK contract price. In his attached proposed draft letter to AZ-Naturemed, Joseph Dangoor noted that the June Agreement required VEL to supply 500 units on or before 3 July or to return the funds. Although perhaps a somewhat obvious point given the terms of the June Agreement, VEL did not acknowledge this in such terms to INSABI or, indeed, to this court. To the contrary, even though VEL had only managed to deliver 50 HBK units by July 3, it communicated thereafter with INSABI as if it remained entitled to supply. The point is significant in my view because an important premise of the Defendants’ position, both contemporaneously and at trial, was that VEL was entitled to deliver 700 units. VEL was not so entitled and INSABI made this repeatedly clear by demanding a refund. However, VEL sought to push INSABI in this fashion (just as it had done prior to conclusion of the June Agreement) to buy itself yet more time to find an alternative to paying that refund which it hoped it could sell to INSABI.

[286]To that end, Robert Dangoor attempted to speak to Mr Jileta the next day (2 July). Based on Mr Ferrer’s report to the President on 3 July, it appears that VEL had discussed with Mr Jileta a proposal to give VEL more time to deliver the ventilators in exchange for a 10% discount. (At the time, INSABI appears to have been unaware of the 50 HBK units arriving in Mexico.) The Defendants rely on that discussion to suggest that VEL understood INSABI wanted it to continue to deliver ventilators. This is nonsense. INSABI had already told SRE to inform VEL that it expected a refund for the 700 units. The next day (4 July), Mr Ferrer wrote to VEL, confirming that INSABI no longer required ventilators, requesting a refund and considering the VSA fulfilled and closed once received. That was entirely consistent with the terms of the June Agreement. VEL’s reliance to the same end on certain internal INSABI spreadsheets indicating ventilators as due from, or to be delivered by, VEL was also somewhat desperate.

[287]Joseph Dangoor’s related written evidence too had a serious air of unreality at this point, suggesting that he had been surprised at INSABI’s response given its agreement to accept delivery of 700 units. As he well knew, there was no such agreement. At VEL’s instigation, communicated by Joseph Dangoor himself on 17 June, INSABI’s agreement to accept delivery was number, time and supplier limited. That time had passed. That was why he was proposing to tell AZ-Naturemed that VEL had to refund the money to INSABI and why his father was trying to speak to Mr Jileta so that VEL could buy more time to avoid that outcome.

[288]In his draft e-mail to INSABI shared with Mr Dávila on 4 July, Joseph Dangoor proposed that INSABI approve the supply of “the remaining units” at a discounted price yet to be confirmed. However, the effect of the June Agreement was that there were no “remaining units” to deliver. Joseph Dangoor’s draft also indicates extreme difficulties getting VG70s but, as I come on to consider, the delivery window indicated by the Encore/ VEL Agreement was now open. If there had been such an arrangement and Encore was about to make its supply available to VEL in July, VEL would obviously have indicated this in the draft, in fact much earlier. As I also come on to explain, the Dangoors’ evidence that they did not know about the timing of these deliveries was implausible.

[289]Robert Dangoor appears to have reached out again to Mr Jileta on 5 July, in all likelihood to discuss INSABI’s refund demand. That was followed by a letter of 6 July in which VEL indicated that its suppliers had promptly notified it that the 650 units were to be supplied for onward delivery. However, ACP would not have said this, VEL remained in dispute with Excel and matters were already firmly heading the same way with HBK. VEL also attached a letter dated 5 July from Aeonmed confirming its ability to supply 465 ventilators through its German distributor, Dixion. Robert Dangoor mentioned Dixion in his first statement as a potential supplier. Joseph Dangoor also testified that Mr Dávila and Mr Schlager had apparently been negotiating for a contract with Dixion but none was concluded in the end.

[290]Pausing there, if there had already been a contract in place with Encore and deliveries due imminently, it seems unlikely that VEL would be exploring other supplier options at this stage with the risk of yet further potential exposure. The Dixion proposal was for 465 units, coinciding with the number Encore had apparently agreed in May to supply. The letter also indicated that shipment arrangements for 465 units would begin that week. Although VEL says in these proceedings that it supplied 465 ventilators in late May and from mid-July through the Encore/ VEL Agreement, Encore is not mentioned in this letter as a source. Nor, despite saying that deliveries of the remaining 185 would take place throughout July, did Aeonmed send VEL its invoice and sales contract for the 185 units until later (18 September).

[291]There are also various references in the letter to the opportunity for VEL to complete its deliveries to INSABI even though that had just expired with the 3 July deadline and only 50 HBK deliveries. The June Agreement did not contemplate more. VEL also suggested that the VSA was still “performing” even though the only outstanding performance now required was VEL’s refund of the balance of 650 units. Although VEL did mention the refund request, VEL suggested that this was in “stark contrast to what was previously discussed”. However, that bore the same air of unreality as Joseph Dangoor’s related testimony. The June Agreement (instigated by VEL) spoke for itself in terms of what came next. VEL also said that it was halting deliveries and exploring “redirection options” for the units readily available. However, based on its existing contracts, VEL did not appear to have anything to halt or re-direct. Nor had it concluded an agreement with Aeonmed or Dixion. This letter sought to ‘steamroller’ INSABI into accepting alternative performance of the June Agreement. INSABI held firm, repeating on 7 July its request for a refund in the following terms:- “The position of the Government of Mexico is reiterated in respect to requesting Viva Enterprises Ltd to refund the full amount paid by the remaining 700 ventilators, since Viva Enterprises failed to provide them in April, when the ventilators that were purchased were not delivered following the established schedule. Almost three months have passed since we [sic] transfered the total value of the invoice in dollars for USD $ 59,200,000.00 (Fifty-Nine Millions Two Hundred Thousand American Dollars) to you, and in Mexico we have not received a single unit. It is important to remind you that the Government of Mexico agreed to pay Viva Enterprises a high price for each ventilator as long as their delivery was immediate, during the months of April and May, following the agreed delivery schedule, due to the urgency to care for the sick by COVID19. Nowadays, July 6, the Government of Mexico has not received a single ventilator from you, not even the 50 of them that you mentioned in your previous letter would arrive on July 3. Therefore, I will be grateful if you refund the USD $ 41,440,000.00 to the following bank account … .”

[292]At this point, Mr Ferrer at least was still not aware of the delivery of the 50 HBK units but INSABI’s requirement for adherence to the June Agreement could not be clearer.

[293]In the meantime, exchanges between Joseph Dangoor and Mr Schlager on 6 July noted that Excel were refusing to give a refund and insisted on VEL taking the ventilators. Mr Schlager proposed putting together a settlement proposal.

[294]On 10 July, VEL wrote to HBK noting that INSABI had twice requested the return of its funds, indicating that it was awaiting further news from Mexico. The tension between the parties involved in the HBK contract was palpable, HBK stating in its related correspondence that:- “We are preparing for a complete report on this project from the time we were engaged and the events that has led us to where we are today between HBK and all the concerned with all the supporting facts to be duly addressed to the President of Mexico for his attention so that our position in this transaction is clarified as we shall not allow HBK to be vilified or termed as the scapegoats in a transaction that has been filled with intrigues enough to qualify a Mexican soap.” And:- “I would therefore appreciate if sanity can prevail and the issues be dealt with in a very calm manner so that your losses can be minimized based on the contract supply of US$ 58,000 that Viva has today against what [sic] Dixon is offering today lest the consequences that the parties are likely to have will be far more dire and extremely damaging both from a financial and political aspect.”

[295]It therefore appears that HBK was aware of Dixion being in the frame at the time and possibly as a threat to the HBK contract. On the same day, Joseph Dangoor also sought updates from ACP, solicitors having apparently been instructed by this stage. He also exchanged messages with Mr Tang concerning assistance with ACP, stating that “Mexico need the money back and we are stuck”, reflecting VEL’s impossible position already described, now crystallised again with INSABI’s renewed refund requests.

[296]Despite those requests, VEL persisted in steamrollering, asking on 10 July for the opportunity to deliver the “ready 465 VG70 ventilators” over the next four weeks at a discount, with the immediate return of the balance representing 185 units (nearly US$11m). This was further reference to the Dixion offer canvassed on 6 July with no mention of Encore. On 15 July, VEL repeated that offer, again silent as to Encore’s supposed involvement. VEL’s coyness in this regard would be palpable and highly improbable if Encore had been an intended supplier. Indeed, the documents also contain an appendix dated 15 July apparently prepared by Encore with the serial numbers for the 465 units which it says it supplied to VEL in accordance with the Encore/ VEL Agreement. The Claimant disputes the authenticity of this document. I address this below and merely say here that, had these units been delivered, VEL would have been vocal about this to twist INSABI’s arm to take up its offer. INSABI declined that offer on 16 July, repeating its request for a full refund.

[297]On the same day (16 July), Aeonmed finally refunded US$2.4m in relation to the Semacare contract.

[298]By 20 July, relations between VEL and HBK had broken down, HBK threatening legal action and VEL purporting to terminate the HBK contract.

[299]VEL wrote to INSABI on 22 July. This letter indicated a marked change of approach by VEL. Whereas the prior letters had sought Mr Ferrer’s agreement to VEL’s proposal for further deliveries, Joseph Dangoor now suggested that VEL had in fact already “ … delivered 200 ventilators to your freight forwarder with a further 200 ventilators arrived today, which they will be able to confirm”, albeit still failing to identify the supplier or mention Encore. Joseph Dangoor concluded by saying that he looked forward to Mr Ferrer’s further communication and said he was “hopeful we can conclude this performing contract so we can proceed to return the outstanding funds to INSABI without delay.” VEL was, of course, not entitled to make any further deliveries, it knew that INSABI did not want any and INSABI was not required to take any. VEL’s approach had therefore turned from steamrollering INSABI into presenting it with a fait accompli, albeit devoid of any meaningful explanation.

[300]INSABI responded the next day (23 July), insisting that VEL focus on the refund. The Defendants appear to rely on the phrasing of this further refund request to suggest that Mr Ferrer was acknowledging deliveries being made in accordance with the parties’ agreement. That was an ambitious reading of the letter, not least when VEL had provided no details of those supposed deliveries. Mr Ferrer certainly had no basis for thinking that deliveries by Encore were being made purportedly on VEL’s behalf. This was yet another polite “thanks, but no thanks” from him. The June Agreement provided for a refund. Mr Ferrer was asking for this again. VEL’s reliance on the documents from early July 2020 concerning customs clearance of the 50 HBK ventilators was similarly unpersuasive. The fact that INSABI’s Operational Control Vice-Manager, Mr Serna, sent Captain Rodolo Torres Chávez, Customs Officer at Mexico City Airport, the VSA and customs declaration referring to pending arrival of 950 VG70s shows little more than his lack of appreciation of the June Agreement.

[301]On 23 July, Aeonmed purportedly wrote to Encore, stating that deliveries had been made for VEL to the extent of 465 units. It also demanded immediate payment. The Claimant says that this letter too is forged. I consider this further below, again merely noting here that this too was not shared with INSABI.

[302]On 24 July, VEL wrote to INSABI stating that there was an outstanding delivery of 250 units (including 65 of the 465). However, as VEL was well aware, there was nothing “outstanding”. There was no scope for further delivery by VEL after the 3 July deadline had passed. Despite this, VEL proposed supplying these or, if INSABI preferred only 65, a partial refund representing the 185 which would not be delivered. Again, VEL did not identify Encore as supplier. INSABI was entitled to a refund for the whole 650 and asked for this again on 27 July. The next day, VEL responded saying that, as INSABI knew, it had already paid for INSABI’s ventilators. However, VEL had not paid any money to Encore for the units supposedly supplied that week. VEL had only paid for the 50 HBK units. VEL said that the best it could do was to provide 500 units at the cost of 465.

[303]On 13 August, VEL wrote to INSABI saying that it had delivered 515 units. The 50 HBK units were obviously now known about but no detail was provided about the source or delivery of the others. Later still, on 27 August, VEL told INSABI that, since its prior discounted offers were not accepted, the original price stood. INSABI was, of course, under no obligation to accept the discounted offers because it had no obligation to accept any more ventilators. The same is true of the further 185 units said to be awaiting collection from the Aeonmed factory. Again, Encore (or the source of the 185 units) was not identified in either communication.

[304]Taking stock here, VEL’s behaviour was dreadful and lacking in candour. VEL attempted to steamroller INSABI into accepting deliveries even though VEL knew that it had already exhausted its opportunity to deliver more units. In doing so, it made various statements as to its own supply position for apparent effect but with little substance or detail. When INSABI would not budge, VEL moved within a matter of days from asking to be allowed to deliver to telling INSABI that it had done so and would continue. In taking these steps, it even suggested that it was making matters more attractive by offering a discount or reduced quantity, only to withdraw these supposed ‘concessions’ when the suggested deliveries had been made. Whatever strategy had been devised by VEL to get itself out of the serious quandary it found itself in, this was a concerted effort to bamboozle its former customer by saying that it was performing even though that opportunity had lapsed, and withholding information from it about such performance including, vitally, the identity of the purported supplier, supposedly Encore, and the details of the actual supply. In this way, VEL knew that INSABI had no idea what VEL was talking about or any means to check until after that strategy had been consummated and deliveries already made which INSABI (and Henco) would have understood came from Encore on its own account under the Encore/ INSABI Agreement.

(d) The conclusion of the Encore/ VEL Agreement

[305]Such a strategy would be entirely consistent with the alleged covert scheme. As to whether there was such a scheme, I turn first to the suggested inception of the Encore/ VEL Agreement itself. Robert Dangoor says in his second witness statement that he never spoke to anyone at Encore, all the May negotiations with Encore for the supply of ventilators to VEL taking place through Mr Dávila, with VEL then entering into the Encore/ VEL Agreement for the supply of 465 VG70 ventilators on 25 May 2025. He recalls being pleased with the price which, in an unpredictable market, was on the lower end of what VEL had seen. He was also pleased by the fact that Encore only wanted to be paid on delivery because, by that point, he did not want to pay any more money to suppliers who might not deliver. Given the market conditions at the time the Encore/ VEL Agreement was said to have been concluded, these terms seemed improbable. INSABI itself had been asked by Encore for the full downpayment of the purchase price under the Encore/ INSABI Agreement. Moreover, despite the scarcity of supply and the prices commanded by VG70s in the market, the unit price charged by Encore to VEL (US$18,750) was the same. However, this would be consistent with the alleged ‘covert scheme’, Henco and INSABI having no reason to question the source of units (or related documents) delivered by the same supplier at the same price as those already expected under the Encore/ INSABI Agreement, affording VEL the opportunity to pass them off as its own.

[306]Robert Dangoor also says that he did not hear any more about Encore until July when Mr Jileta told him and his son that Encore had already delivered ventilators to Mexico and that Encore needed to be paid. He was pleased that VEL was finally progressing with the deliveries to INSABI, having only supplied 50 units through HBK. He also recalled Aeonmed’s confirmation during the summer that 465 ventilators had been collected from them on behalf of VEL and that Joseph Dangoor told him that these had been delivered before September, with another 185 units delivered to Mexico through an Aeonmed subsidiary, Irene, bringing the total to 700 (50 from HBK, 465 from Encore and 185 from Irene). As such, VEL delivered all 700 units promised to INSABI. Joseph Dangoor’s related evidence in his second witness statement was to a similar end, also making the point that Mr Dávila told him that the Encore/ VEL Agreement was a ‘back-up’ contract in case HBK failed to deliver by July.

[307]Although he did not give evidence at trial, and although the Dangoors said they never spoke to Encore at the time, Mr Garza of Encore did give written evidence in support of VEL’s summary judgment and strike-out applications in which he describes being introduced to Mr Dávila in late April followed by weeks of informal discussions with VEL pending the conclusion of the Encore/ VEL Agreement by which Encore agreed to deliver 465 units between 1 and 17 July.

[308]Setting aside the fact that no further deliveries were permitted under the June Agreement, and what the Claimant says about the backdating of the Encore/ VEL Agreement, I found this evidence implausible for a number of reasons. First, it simply makes no sense that the Dangoors knew little more than that the Encore/ VEL Agreement had been concluded at the end of May, only for them to find out later in July - informed by Mr Jileta no less - that VEL was delivering ventilators. Throughout the entire period from April to June when the June Agreement was concluded, and with all the problems experienced in sourcing ventilators, in the performance of the related supply contracts and in managing the relationship with INSABI, the documents show that the Dangoors, particularly Joseph Dangoor, were consumed with the vexed issue of how VEL could fulfil its obligations and were in constant communication with their suppliers, Mr Dávila and Mr Schlager. If the Encore/ VEL Agreement had featured in VEL’s supply arrangements, the Dangoors would have known, because they needed to know, the detail. Even as a ‘back-up’, and even with proposed July deliveries, the Encore/ VEL Agreement would have formed part of VEL’s own co-ordination and planning of its supplies, deliveries and finances. This was, in my view, one of the worst and most implausible examples of the Dangoors seeking to push responsibility and knowledge onto Mr Dávila (and even Mr Jileta) to their own exclusion.

[309]Likewise, if it had been a prospect in April or May that Encore could help perform those obligations, even as a so-called ‘back-up’, it would have featured in the documents. Although the Dangoors say that Mr Dávila did the running on the Encore/ VEL Agreement, and that their communications were largely conducted by Signal messages now no longer accessible to them, it is clear from VEL’s available records that Mr Dávila did communicate regularly with the Dangoors on WhatsApp and e-mail about VEL’s ventilator supply efforts. If not complete, that record is extensive. Beyond the Encore/ VEL Agreement itself (and three documents supposedly created by Aeonmed and Encore, the authenticity of which is disputed), there is no indication in the documents until well after its supposed consummation that Encore was a supplier to VEL.

[310]There are other improbabilities to the suggested conclusion of the Encore/ VEL Agreement on 25 May. VEL had itself apprehended by 15 May that INSABI would wish to cancel the VSA for non-performance. VEL was in the process then of seeking refunds from its own suppliers. Mr Dávila said on 16 May that the search for VG70s had stopped. Consistent with VEL’s expectation, INSABI informed VEL on 21 May that it wanted a refund (not deliveries in July). On 28 May, Mr Dávila told Mr Tang that VEL was not sourcing any ventilators, just taking deliveries from payments already made, the former being too complicated. This state of affairs was inconsistent with the conclusion of the Encore/ VEL Agreement only three days earlier. As Joseph Dangoor acknowledged to Mr Tang on 2 June, VEL had failed. More generally, VEL was seriously financially exposed because of the unrecovered downpayments it had made. It is unlikely that VEL would have entered into yet another supply contract and increased its exposure even at the comparatively modest unit price of US$18,750, even as a ‘back-up’. Indeed, if HBK and Encore both managed to perform, VEL would end up with a surfeit of units. Although VEL was hoping to reduce the HBK contract to 500 units, this had not been confirmed when the Encore/ VEL Agreement was allegedly concluded.

[311]Moreover, given the severe difficulties that VEL had encountered with suppliers and the stream of bad news conveyed to INSABI, if there had been such a ‘back-up’, VEL would again have said so in its dealings with INSABI. However, there is no hint of the Encore/ VEL Agreement in VEL’s 27 May response to INSABI’s 21 May letter even though 115 units were supposedly about to be delivered by VEL the following day (28 May). VEL only identified ACP and HBK, it confirmed that it was seeking to ‘rein in’ the HBK contract and it indicated that it would work to return INSABI’s funds. The conclusion of the Encore/ VEL Agreement only two days earlier was inconsistent with the message conveyed by VEL in this letter and, more generally, its increasingly strained relationship with INSABI.

[312]Nor did VEL mention the Encore/ VEL Agreement or the 115 deliveries already made in its (more legalistic) communications with INSABI from 9 June in which it now suggested that the VSA was performing despite its earlier acknowledgment of INSABI’s intention to terminate.

[313]Nor did VEL mention these matters in its 17 June letter to INSABI which led to the conclusion of the June Agreement. Although Excel was now additionally identified as an active contract, Encore was still not. Moreover, the only further deliveries contemplated were from HBK and, only then, up to 500 if they reached the forwarder by 3 July. If deliveries from Encore had been contemplated for the first half of July, VEL would have mentioned it in the letter as a possible ‘back-up’ supplier to HBK and proposed a longer delivery window than up to 3 July. Given the much lower unit price for Encore (US$18,750) compared to HBK (US$46,000), this would also have made commercial sense if (as would have seemed an entirely likely prospect) HBK were to stumble.

[314]Joseph Dangoor’s efforts to explain the position in his oral evidence were unsatisfactory. The fact that imminent delivery or recall of funds were not contemplated from Encore as at 17 June does not change the fact that, on the Defendants’ case, the Encore/ VEL Agreement was one of VEL’s “remaining orders with their suppliers”. If that case is correct, it would have been disclosed in the letter. Instead, VEL apparently structured its own proposal to preclude itself from having recourse to the Encore/ VEL Agreement to supply INSABI while remaining on the hook to take delivery of, and pay for, 465 units from Encore. This made no sense and was an inauspicious basis for a suggested contract said to have been concluded by Encore and VEL on 25 May.

(e) Purported deliveries to INSABI

[315]As to how the Defendants say the shipments fell to be divided under the Encore/ INSABI and the Encore/ VEL Agreements, I understand the position indicated in the table below to have been common ground (at least with respect to the first five shipments said to include deliveries by VEL):- #VEL #Encore Total Shipment Delivery (Henco) Arrival (Mexico) 15 0 15 Shipment #1 28 May 6/7 June 100 0 100 Shipment #2 28 May 29/30 June 110 106 216 Shipment #3 17/20 July 28 August 190 36 216 Shipment #4 20/29 July 4 September 50 166 216 Shipment #5 29/30 July 25 September 0 129 129 Shipment #6 c.22 August 22 December 0 108 108 Shipment #7 c.5 September 2 October 465 515 1000

[316]As a preliminary matter, I found problematical VEL’s case that it made 115 deliveries to INSABI on 28 May. As I have found, if units were to be or had been delivered to INSABI under the Encore/ VEL Agreement, even as a ‘back-up’, the Dangoors would have needed to know, and would have known, about it for VEL’s own planning. I have also already identified the improbabilities of the Encore/ VEL Agreement having come into existence on 25 May given the content of some of the Dangoors’ and Mr Dávila’s communications from the time. Those difficulties are magnified if VEL’s deliveries started to be made only three days later, the premise of VEL’s communications with INSABI between May and July being that VEL had made none, VEL also expressing internally its despair with that state of affairs. Even if, improbably, delivery information had been kept from the Dangoors, and Mr Dávila was doing all the running without telling his colleagues, Mr Dávila would himself have seen the important communications, including VEL’s 17 June letter which led to the June Agreement. Again, that letter is premised on no prior deliveries having made by VEL. Finally, these May deliveries also undermine somewhat the idea that the Encore/ VEL Agreement was a ‘back-up’ contract. On VEL’s case, Encore was delivering immediately, but the documents show that VEL was still discussing in June the reduction of HBK contract to 500 units and pressing for the timely delivery to INSABI of the balance of 450.

[317]There is a further specific difficulty in this regard. Although VEL claims that it supplied INSABI with 15 units in May, a related discussion between Mr Garza of Encore and Mr Joaquín Valenté Paredes of INSABI on 8 June indicates firmly otherwise. That call is memorialised in a note prepared by Mr Valenté recording the agreements they had reached on the telephone about various issues about the Encore/ INSABI Agreement. Under one of the items, the note records that INSABI had paid handling and revalidation fees of nearly US$5,000 for these 15 units. Mr Garza said he would refund them. It is also notable in this context that, in preparing the customs declaration for 15 units, Mr Valenté spotted that the incorrect price had been inserted on the final commercial invoice. In WhatsApp exchanges on 9 June, Mr Valenté asked for the assistance of Mr Garza who facilitated provision of the correct invoice. These are minor administrative matters, but they show, compellingly in my view and contemporaneously, their common view that this delivery of 15 units was part of the 1000 units supplied under the Encore/ INSABI Agreement. Mr Garza also re-affirmed the delivery schedule (June to August) for the 1000 units indicated in Encore’s original quotation to INSABI. There was no mention of VEL or the splitting of those deliveries.

[318]None of the Defendants’ related points in this context was impactful. Although it appears that Encore had not yet provided serial numbers for these 15 units, it is clear from the stated arrival date of the 15 units in Mexico (7 June) that they were discussing Shipment #1. That shipment included 70 units delivered under the Aeonmed/ INSABI contract and a further 15 which the Defendants say were all from VEL. However, the latter was not Mr Garza’s view at the time. The Defendants also cast doubt on the accuracy of the note given the absence of a record showing that the related handling costs had been paid. I do not accept this argument. Mr Valenté invited Mr Garza’s comment on the note. None was apparently indicated. Finally, the fact that Captain Torres may have thought that the units were delivered by Aeonmed (presumably based on the accompanying invoices) does not diminish the clear understanding of Mr Garza and Mr Valenté that these had been delivered by Encore.

[319]Looking forward to later in the timeline, there is another difficulty. The Encore/ VEL Agreement is said to have been concluded on 25 May with delivery of 465 units made in May and July. However, the additional contract between Aeonmed and Encore (20MEXTO(CI)929) for 465 units was not concluded (or related invoice issued) until 3 August. These indicated Aeonmed’s payment terms as 100% in advance but Aeonmed did not ask for payment until August either. Aeonmed even had to ask for Encore’s purchase order at the same time. Even if VEL had been relying on scheduled deliveries under the Encore/ INSABI contract to fulfil deliveries under the alleged Encore/ VEL Agreement, it still makes no sense for Aeonmed and Encore to leave matters so late in the day to agree the resulting supply shortfall. In this regard, the Defendants rely on a 27 May letter from Aeonmed to Encore indicating that Aeonmed had agreed to deliver 465 units on behalf of VEL as soon as possible. The Claimant also says that this is forged. I address this below.

(f) SRE investigation

[320]The Defendants’ factual rebuttal to the alleged scheme includes what they describe as the “investigation” undertaken by SRE in late 2020, including meetings and analysis of the contemporaneous record. This culminated in the letter dated 5 October from SRE’s Director-General for Legal Affairs in which he concluded that the probability of successful litigation between INSABI and VEL was very low. In reaching that conclusion, he noted that, of the 515 units reported by VEL (by serial number) as being in INSABI’s possession, 465 were confirmed by Henco and 50 by Air France, with another 185 pending collection. SRE’s enquiry was, no doubt, carefully undertaken, including verifying the correspondence of serial numbers, but its scope and depth was rather different from that pursued before me.

[321]What I found incisive and authentic in this context was INSABI’s response to VEL’s provision on 1 September of the serial numbers of units said to have been delivered. In his e-mail of the same day to Mr Juan Carlos Mercado Sanchez, Dr Calderón stated:- “With regard to the email sent today by Viva Enterprises representative Mr J. Dangoor (attached), in which he submits a list of 515 serial numbers corresponding to VG70 ventilators, I would like to inform you of the following: 1. 465 serial numbers correspond to 465 ventilators out of 1,000 that were purchased from the company ENCORE, according to the invoices that we have already submitted to the Foreign Office, as well as the information sent by the logistics company that you selected (Henco). Invoices are attached. 2. Only 50 serial numbers correspond to 50 ventilators out of 1,000 that were purchased from Viva Enterprises. Given that the relationship with Viva Enterprises since the beginning of the international purchase has been handled by the Foreign Office’s Deputy Minister for Multilateral Affairs, I would be very grateful if you could clarify with this supplier that the ventilators it claims to have sent correspond to those purchased from a different company (ENCORE), and request the return of the outstanding amount to be reimbursed, equivalent to USD 38,480,000.00, of the total USD 59,200,000.00 that the Government of Mexico, through INSABI, paid in advance to Viva Enterprises pursuant to the instructions of Deputy Minister Martha Delgado.”

[322]Further enquiries ensued, internally and externally, including SRE’s legal opinion, but INSABI persisted in its stance, including Mr Hernández’s response to SRE’s Director-General for Legal Affairs in which he stated that:- “ … in an email dated 22 July 2020 addressed to [Mr Ferrer], [VEL] states that, as of that date, this institute already had 400 ventilators delivered and, by the same means, on 1 September of this year, it sent a list with the serial numbers of 515 ventilators that the company had allegedly already delivered, it is pertinent to specify that, according to the documentary evidence held by [INSABI], only 50 of the aforementioned ventilators correspond to [VEL].”

[323]I am satisfied that INSABI’s response was genuine and that the suggestions that INSABI took the stance it did to deflect blame or out of embarrassment or fear of scrutiny or audit or even because it might have authorised a false tax return were wide of the mark. INSABI took the stance it did because, after 3 July, there was nothing more for VEL to deliver, it had repeatedly asked for its money back and, having tried and failed to twist INSABI’s arm to permit it to deliver, VEL was now making out that it had done so. INSABI’s reaction was entirely natural and understandable.

(g) The alleged ‘backdating’ of the Encore/ VEL Agreement

[324]Finally, the Claimant places significant store by the Encore/ VEL Agreement which it says was forged, the amendments made in August to draft versions of the agreement indicating false backdating to 31 May, further false backdating to 25 May and false notarisation on 26 May. I have already explained Dangoors’ earlier written evidence concerning the negotiation of the Encore/ VEL Agreement by Mr Dávila. As for the execution of the Encore/ VEL Agreement, the document relied on by VEL as the ‘original’ (dated 25 May) was signed by Mr Garza and Joseph Dangoor. The metadata for this PDF document indicates its creation on 25 May. Joseph Dangoor’s evidence about the signing of the VSA was vague. He noted the application of his digital signature which he did not remember adding himself. He believes he must have received a signed copy from Mr Dávila by Signal. He also had no knowledge of how the further signed copy of the document came to be notarised purportedly on 26 May, a process arranged by Encore.

(h) The Claimant’s explanation for the alleged ‘backdating’

[325]Despite the lack of evidence as to the origin of the signed version, VEL has disclosed four draft versions of the Encore/ VEL Agreement indicating substantive changes made or proposed in early August after the delivery by VEL to INSABI had purportedly already taken place. Taking each in turn, the Claimant says that the following occurred:-(i) According to the metadata, draft 1 of the document (in text format) was saved by Joseph Dangoor on his computer on 2 August (under the name “ENCORE CONTRACT.docx”), with 42 minutes editing time shown. This is differently formatted from the other drafts (and the photographed execution copy). At 10.40am on 3 August, he sent the materially identical document by WhatsApp to his sister to show his father. The Claimant relies on the presence of certain antiquated language, including the Spanish word “Maquila” (manufacture) and “maneuvers” (in the context of loading and unloading of the goods, reflecting the likely use of “maniobras” in the Spanish) to deduce that the document was originally drafted in Spanish and machine translated into English. The Claimant also says that the original Spanish version has been destroyed because it would show that the English documents did not exist in May. The draft shows delivery dates of 400 by 22 July and 65 by 29 July and refers to the installation of 515 units, apparently to include, additionally, the 50 HBK units already delivered in July and which Encore was to install. The draft bore the date 31 May.

(ii) According to the metadata, Joseph Dangoor spent 87 minutes editing draft 2 (in text format) which he sent to his sister at 11.33am on 3 August. This contains material amendments to draft 1 which survive in the further drafts, as well as the formatting changes. The document was now headed “SALES CONTRACT” which the Claimant suggested was required before Aeonmed could release goods. Joseph Dangoor said he did not know this and did not believe he added the heading. The Spanish word “maquila” was removed from this draft, an English governing law clause added and the figure of 515 units for installation reduced to 465, reflecting the fact, as was also now recorded, that 50 HBK units had been installed and (on 27 July) paid for. The delivery schedule was amended to indicate that “465 delivered during the week of 13th July, i.e. by the 17th July.” The draft continued to bear the date 31 May.

(iii) Joseph Dangoor sent draft 3 to his sister at 10.31 and 10.33pm (in PDF format with the document name “ENCORE_CONTRACT_31.05.2020.pdf”). This included some of the amendments introduced into draft 2 and (with individual metadata dated 3 August) amendments proposed by Mr Garza. Although this draft adopted changes made in draft 2, the metadata for the document indicates that it was created on 31 May (amended on 3 August). Mr Garza’s proposed amendments included changing the governing law to Mexican law. He also asked in relation to the delivery schedule in clause 10 “[d]o those dates fit well?” He also asked to change the proposed payment date from 10 to 5 days from proof of delivery to the forwarder. The draft also contained an amendment to clause 5(b) (in the place where Joseph Dangoor had inserted an incomplete phrase in draft 2). This provided for the provision of a contract annex identifying the serial numbers handed over to Henco to allow the units purchased by VEL to be tracked. The draft continued to bear the date 31 May.

(iv) Joseph Dangoor does not appear to have sent draft 4 to his sister. This incorporates Mr Garza’s proposed changes save for the governing law. The metadata for the document indicates that it was created on 31 May (amended on 4 August). Joseph Dangoor’s digital signature was applied. The draft continued to bear the date 31 May.

(v) On 5 August, Joseph Dangoor ‘wet-signed’ a version of the contract in the form of draft 4 (also counter-signed by Mr Garza). He then took screenshots of each page of the signed document and sent them to his sister. The document still bore the date 31 May. Joseph Dangoor testified that he had mislaid or thrown away the original.

[326]Despite Joseph Dangoor executing the document in the form of draft 4 on 4 and 5 August, the ‘original’ version relied on by the Defendants bears the date 25 (not 31) May. However, that version otherwise tracks the amendments introduced by draft 4. The Claimant says that, as such, the ‘original’ could only have been created in August. In his oral evidence, Joseph Dangoor appeared to accept the logic of this proposition. He indicated limited memory of the drafts or the drafting changes but accepted that he had made such changes. He also said that he assumed that Mr Dávila had sent him the first word document on or around 2 August and that he reviewed this in the usual way prior to paying suppliers, here Encore. Given that the ‘original’ version reflected (most of) Mr Garza’s comments from 3 August, Joseph Dangoor appeared to accept that the creation date of 25 May indicated by its metadata did not make sense. However, he denied that he had changed that metadata and repeated his belief that the Encore/ VEL Agreement was, in fact, concluded in May.

[327]The Claimant says that the explanation for the change of date (and metadata) to 25 May in the ‘original’ version is obvious, Encore and VEL realising by 8 September (when it received information from Henco as to the breakdown of deliveries for Shipments #1-5) that 31 May post-dated the first delivery of 115 units under the purported Encore/ VEL Agreement. According to the Claimant, this was part of the fraudulent scheme conceived by the Defendants and Encore to pretend, after the event, that 465 of the ventilators delivered under the Encore/ INSABI Agreement had been delivered on behalf of VEL and that a further 185 had already been ordered. That scheme was first advanced outwardly by VEL to INSABI on 1 September after Encore had provided VEL with a list of serial numbers of the ventilators it had already delivered to enable VEL to make that false claim. The purpose of the scheme was to enable VEL to avoid having to return the balance of the purchase price and it involved attempting to foist on INSABI, without its knowledge or consent, 465 units for which VEL had paid US$18,750 per unit, pretending that these were some of the ventilators for which INSABI had agreed to pay VEL US$58,800.

(i) The Defendants’ explanation for the alleged ‘backdating’

[328]The Defendants submitted an alternative explanation for these drafts. They say that Mr Dávila applied Joseph Dangoor’s electronic signature to the 25 May original (which has metadata showing a creation date of 25 May) on 25 May. Mr Garza had his version of the original notarised but that was never shown to INSABI such that there could not have been an intention to deceive. From VEL’s perspective, the Encore/ VEL Agreement was never intended to convey an impression but to protect VEL in the event of a dispute with Encore. Joseph Dangoor later signed in wet ink a version of the contract dated 31 May, the hard copy subsequently misplaced or thrown away.

[329]They also say that, by early August, VEL had paid Encore the installation costs for the 50 HBK units and considered amending the agreement on that account. As he also testified, he would need to be happy with the agreement before making such a big payment. Rather than sending the final draft of the VEL/ Encore Agreement as signed, it appears that Mr Dávila sent Joseph Dangoor an earlier draft amended to reflect the installation costs for 515 ventilators, including the 50 HBK ventilators (draft 1). Joseph Dangoor made various edits. He did not conceal the fact that the drafting occurred after the HBK ventilators were received in July with the addition of his language to protect VEL’s position to reflect the installation of, and payment for, the 50 HBK units (draft 2). He stopped editing the draft, his words unfinished. This was not sent to Mr Garza or Mr Dávila, Joseph Dangoor perhaps realising that the version provided to him did not reflect the version executed on 25/ 31 May. Mr Garza sent his comments in a near final version of the contract from May (the metadata showing a creation date of 31 May) (draft 3), albeit with the notarised version to hand. Mr Garza asked whether the delivery dates were correct, reflecting the fact that the deliveries of the 465 units had already occurred and, perhaps, that the revised version should contain the correct dates. On 4 August, Joseph Dangoor re-opened the word version he had been sent on 31 May (the metadata showing its creation on 31 May and last edit on 4 August) (draft 4). On 5 August Joseph Dangoor photographed the version of the document he had signed on 31 May, sending this to his sister.

(j) Alleged ‘backdating’ - discussion

[330]I found the Defendants’ explanation wholly implausible. First, it was improbable that Joseph Dangoor had no recollection of the execution of the Encore/ VEL Agreement and yet, if only in his fourth witness statement, he did have a distinct recollection that Mr Dávila told him that he would have to countersign the document. Even then, he does not recall doing so. Although this afforded a potential explanation for the existence of photographs of the agreement signed on 31 May, it does not explain why Mr Dávila required further countersignature in circumstances in which Mr Dangoor’s electronic signature had apparently already been applied to the 25 May execution copy, nor why he was unable to ‘wet sign’ at the outset. Finally, Joseph Dangoor’s memory was again improbably hazy when it came to the process of reviewing and editing these draft agreements in August. It was clearly an involved process, with Joseph Dangoor himself undertaking drafting. He would have remembered more than he volunteered in evidence. I also found the explanation offered by the Defendants to be highly convoluted. If anything, this rather reinforced what the documents do more plainly show in terms of the progression of a draft agreement, reviewed and amended by Joseph Dangoor in conjunction with his father, commented on by Mr Garza and culminating in its execution on 5 August, albeit bearing a 31 May date.

[331]For example, the idea that Mr Dávila would send Joseph Dangoor an earlier draft from his May negotiations with Encore (draft 1) makes no sense. If Mr Dávila dealt exclusively with those negotiations, he would have had available to him the final execution draft and would have sent this to Joseph Dangoor. He would not have sent an earlier unformatted version without its heading. In fact, he did not need to send this. According to the Defendants, Joseph Dangoor already had to hand both a hard and soft copy of the 31 May execution copy. In the same vein, there was no point sending an earlier draft to his sister to pass on to his father before authorising the payment to Encore. He would simply have sent the 31 May version as he later did in photographic form. The Dangoors would not have obtained assurance to pay Encore on the basis of this unsigned draft. Finally, it is not explained why this earlier draft would bear the 31 May date even if there had been further execution on that date. The only date change would have been to the execution version, not prior drafts.

[332]Likewise, Joseph Dangoor would not have wasted his time re-drafting a document when he already had a more recent version, let alone re-formatting it. Indeed, if amendments were to be proposed to the 25 May execution version, editing an old version of the document would risk confusion, both in terms of re-visiting points previously put to bed and by including old language since excised. Even though his drafting in clause 5(b) was incomplete, it is also implausible in my view that Joseph Dangoor attempted new drafting before stopping, only realising at that point that draft 1 did not reflect the parties’ agreement executed on 25 or 31 May. First, that drafting was more substantive than simply adding reference to the installation of the 50 HBK ventilators. No explanation was offered for why Joseph Dangoor might have been proposing such amendments to a contract in which he says he had no prior involvement. Second, if he had stopped drafting realising that he was using an earlier draft, it begs the question how his newly drafted governing law clause was in the identical (and somewhat unusual) language of the execution version which he now realised he was not working from and in the same unusual location (in the clause concerned with the contract price). Third, there is a further highly unlikely coincidence, namely Joseph Dangoor’s inclusion of language for the period within which payment of the goods is to be made (10 days). This was again expressed in identical language as the 25 May execution version save for the number of days (5). Fourth, it is again inconceivable that Joseph Dangoor would be so canny as to pick up the smaller drafting points or infelicities in this earlier draft in his corrections which also happen already to have made their (supposedly separate) way into the execution version, including replacement of(i) the Mexican word “maquila” with “manufacture” (Declarations, 1(b)) and, more notably perhaps

(ii) the heading “Clauses” with “C L A U S E S” in the operative part and

(iii) the “purchaser” with the “supplier and installer” in clause 9 concerned with the inspection of the goods, the only use of the word “installer” in that entire document (also in the same form and place in the execution versions).

[333]Fifth, in addition to the improbability of Joseph Dangoor himself working from an earlier draft, Mr Garza’s comments are said to have been input on a near final version of the 31 May draft. This too is a (compounding) improbability. Encore had its own signed execution version from 25 May (and, apparently, 31 May). No reason is given for why it would not have this in soft copy. Sixth, the suggestion that Mr Garza input comments into a not quite final soft copy version while simultaneously reading from the hard copy notarised version has much more than air of unreality about it. The close proximity of Mr Garza’s drafting comments can easily be explained otherwise. Seventh, that soft copy too contained Joseph Dangoor’s smaller corrections identified above. Eighth, it would be another remarkable coincidence that Joseph Dangoor having recently marked up the draft of his document with a view to subjecting it to English law, Mr Garza should then provide comments on his (different) draft to suggest changing the governing law to Mexican law, not least when Mr Garza would, on the Defendants’ explanation, know that it had already been agreed that English law would apply. Mr Garza was obviously commenting (for the first time) on Joseph Dangoor’s governing law and payment date proposals, seeking to change the former and reduce the latter from 10 to 5 days.

[334]I therefore have no hesitation in rejecting the Defendants’ explanation which did not withstand scrutiny. I am quite satisfied that draft 1 was the likely (English language) origin of the Encore/ VEL Agreement, itself translated from Spanish, likely machine translated given the awkward and stilted English it produced. Joseph Dangoor re-formatted the document and input his own comments on it. Most (not all) of those comments were shared with Mr Garza. Mr Garza also provided his own responsive comments. The surviving agreed comments reached draft 4 to which Joseph Dangoor applied his digital signature. He wet signed this document on 5 August, the photographs also indicating that he had by then received a version with Mr Garza’s signature. That document bore the date 31 May.

[335]Finally, it is appropriate to note the reference to 515 units in draft 1. This reflected the 50 HBK units delivered in July. Notably, Joseph Dangoor changed this to 465 in draft 2 and the language he added about the prior installation of, and payment, for 50 units was not retained. That is consistent with VEL wanting this document to give the impression that it was in existence in May. Reference to HBK units delivered in July would undermine that. Mr Garza’s comment “[d]o those dates fit well?” is also consistent with such reverse engineering. Contrary to the Defendants’ suggestion, this was not proposing that the correct delivery dates be inserted; it was suggesting that the dates inserted should ‘fit’ something. I am satisfied that this ‘something’ was the impression sought to be conveyed by the document that VEL had already bought ventilators (since delivered) from Encore. Indeed, various date ranges were suggested across the different drafts to that apparent end. Mr Garza’s drafting concerning the serial numbers being annexed to the contract once the units were delivered to Henco was also adopted. As I come on to explain, I am satisfied that this was intended to lend credibility to the appendix of serial numbers dated 15 July purportedly prepared by Encore, that date falling towards the end of the delivery window alighted upon for the final execution version. Related to these points, I am also satisfied that VEL later came to appreciate that some of the deliveries of the 465 units which they wished to ascribe to VEL had in fact been delivered to Henco on 28 May. If the VEL/ Encore Agreement continued to bear a 31 May execution date, this would give rise to the obvious problem of the supply pre-dating the agreement to supply. VEL therefore later changed the agreement date to 25 May and re-executed the document, Joseph Dangoor’s digital signature being applied.

[336]I make clear that, in reaching this view, I have taken into account the Defendants’ argument that anyone participating in such a scheme would have settled on a single date and not created two documents. I agree that this would ordinarily be the case but the record indicates that Joseph Dangoor was not himself certain as at 4 September as to when Henco had received the 465 units implicated by the alleged scheme. The Defendants also say that there is inconsistency in the alleged changes to metadata, some of the drafts containing May creation dates but August edit dates. Although I see the Defendants’ point, I did not find it compelling. The parties would not have been anticipating then an English litigation process. If questioned or challenged about the source of the 465 units, the key document to back up VEL’s and Encore’s story would be the signed execution copy dated 31 May. However, this would no longer be important once the document was re-executed. The 31 May execution copy signed by both parties has not been disclosed in native form and Joseph Dangoor says that he threw away or mislaid the hard copy. VEL’s executed soft copy dated 25 May has been disclosed. Its metadata shows creation and edit dates of 25 May, consistent with the reverse engineering described. Finally, the Defendants say that it would not be necessary to exchange drafts if the Encore/ VEL Agreement was a sham. I again see the point but an important focus of the drafting was on Encore’s payment for their arrangement which had not yet taken place and which Encore would still have been keen to secure. Another was honing the drafting to ensure authenticity, including with respect the supposed future delivery and installation of ventilators in which both parties would have been interested. I also make clear that in approaching the backdating question, I have not taken at face value the supposed ‘logic’ of either side’s argument as the Defendants cautioned against. The difficulty for the Defendants, however, is that the supposed ‘logic’ of their related arguments is readily undermined.

(k) Notarisation

[337]There was also some debate as to whether the notarisation of Encore’s copy of the 25 May signed execution copy had been falsified, the Claimant relying on the backdating I have found, together with prior public reports from Mexico in 2018 to the effect that the marks of the particular notary here had been falsely applied in a different matter. The notarisation in this case was in the nature of certification of copies. A copy of a backdated document can, of course, be certified as true without that certification itself being false. Here, however, the notarisation is indicated as having taken place on 26 May. Since I have found that the Encore/ VEL Agreement (bearing the 31 May date) was not created before 4 or 5 August and the 25 May version was created later still, I agree that the notarisation must have been false. In this regard, although I do not dispute the proposition that notarisation of legal documents, such as contracts, is common in Mexico, I am satisfied that Encore undertook this step to seek to reinforce the appearance of the VEL/ Encore Agreement being authentic. The Defendants say that Encore’s document was not shared with INSABI prior to these proceedings. However, even if that were the case, I am satisfied that the parties created this false paper trail, both in the backdated agreements and Encore’s notarisation, with a view to backing up their story in the event of enquiry or challenge.

(l) Other ‘contemporaneous’ matters relied on

[338]In reaching my finding that the VEL/ Encore Agreement was forged, I have also taken account of those contemporaneous documents created after 25 May and relied on by the Defendants to contend otherwise. As I come on to explain, given their nature and content, these documents do not support the Defendants’ position. In its trial skeleton, the Claimant contended that some of these documents were ‘suspect’ and, more pointedly at trial itself, had been forged. Since the Claimant had not pleaded this, the Defendants said that the argument was not open to it. Having regard to the principles indicated in Kang v Freshacre Properties Ltd

[2025] EWHC 487 (Ch)

(at [21]), Lemos v Church Bay Trust Company Ltd [2023] 2384 (Ch) (at [32]-[50]) and Ndungu v SPG Ltd

[2025] EWHC 3039 (Ch)

(at [293]), as applied to the circumstances of this case, I am satisfied that it was open to the Claimant to assert that these documents are forged. Those circumstances include here that(i) the central dispute as to the forgery of the Encore/ VEL Agreement is squarely in issue on the pleadings

(ii) the Defendants positively rely on the relevant materials to support its case otherwise

(iii) the Claimant did give timely notice that it did not accept the authenticity of these documents and put the Defendants to proof thereof

(iv) these documents post-date the asserted execution date of the VEL/ Encore Agreement and, despite the Defendants’ view to the contrary, I am not persuaded that they are a necessary part of the Claimant’s pleaded case and

(v) the Defendants did not suggest that they would have conducted the trial differently if the alleged forgery of these other documents had been pleaded. To the contrary, given their limited evidence addressed to the central forgery question, I am satisfied that they would not have done.

(m) Encore/ VEL Agreement – May deliveries

[339]Turning to those further materials, the Defendants say that, although the Encore/ VEL Agreement was signed on 25 May, not having heard from Encore in June, VEL assumed that Encore had not made any deliveries. I have already explained that it makes no sense for the Dangoors to have known so little about the supposed Encore deliveries to VEL until after these had apparently been made. Given its dire predicament from its inability to supply, VEL would have been closely tracking any actual or prospective deliveries, including those from Encore, including in May. Encore would have told them about deliveries to be made then. Encore did not do so in May because the idea of an Encore/ VEL Agreement was not conceived until much later.

(n) 27 May 2020 Aeonmed letter to Encore

[340]On 27 May, Mr Liu of Aeonmed purportedly wrote to Mr Garza to confirm Aeonmed’s agreement to provide Encore with 465 units on behalf of VEL as soon as possible, with payment to be made after delivery. Since VEL had already concluded its order and agreement with Aeonmed for the 1000 units destined for INSABI and these had been paid for, the agreement referred to must reflect a new agreement to supply the ‘shortfall’ against the Encore/ INSABI Agreement as a result of the purported deliveries by Encore of 465 units on VEL’s behalf. The Defendants say that this letter reflects the fact that the VEL/ Encore Agreement existed before 27 May. I disagree. Even if (in my view improbably) payment under this agreement was to be delayed until delivery, it makes no sense (as the letter states) that the related contract with Aeonmed would follow after delivery to Encore as well. In fact, the record shows that Encore did not even send its purchase order until after delivery is said to have occurred and that Aeonmed had to request this. However, if payment was to be deferred as suggested, Aeonmed would have been keener (even with its own Mexican distributor) to make sure that the purchase order and contract were already in place to back up the order. Encore would also have been keen given its outstanding commitments to INSABI and new commitment supposedly made on 25 May to supply 465 units to VEL.

[341]Moreover, there is no evidence as to how this letter came about or was sent to Encore. It is a standalone document. It is also surprising, in my view, that such a supposedly anodyne letter from the manufacturer would be notarised and notable that Encore used the same notary said to be responsible for certifying Encore’s signed copy of the Encore/ VEL Agreement. As I have found, that certification was forged. I agree that this letter too bears the hallmarks of forgery, the content reflecting a stilted but rather obvious attempt to overcome the chronological difficulty arising from Encore not having much earlier than 3 August a contract with Aeonmed to plug the shortfall supposedly created by the Encore/ VEL Agreement. Rather than write a letter saying that the contract needed to follow on delivery to reconcile its accounting, Aeonmed would already have put this in place.

[342]Finally, the reason suggested in the letter for deferred payment was VEL’s deposit with Aeonmed. Although VEL did have a US$2.4m downpayment with Aeonmed on account of the Semacare contract, the documents indicate that VEL had already been told three times by Semacare that Aeonmed had this in hand. Aeonmed would therefore have been aware of the refund request by the time of its 27 May letter. Moreover, VEL formally demanded the refund from Aeonmed only two days later, also explaining that the VSA had expired. There is no hint in VEL’s related correspondence with Aeonmed (including with Mr Liu) that these funds might have been used to secure the Encore/ VEL Agreement. Nor did Aeonmed appear to express concern that it was supplying ventilators to support a contract that had already expired. I am satisfied that Aeonmed’s letter of 27 May to Encore was further reverse engineering and that it was forged.

(o) Encore’s 15 July delivery schedule

[343]The Defendants also rely on the purported list of serial numbers for units (headed “Appendix 1”) said to have been delivered on behalf of VEL and which Mr Garza is said to have provided to Joseph Dangoor. Again, the Claimant says that this was forged. Taking the list of serial numbers first, it appears that it was Mr Garza who introduced into draft 3 of the Encore/ VEL Agreement (at clause 5(b)) the following requirement:- “Upon handover to Henco, “the Supplier” Encore will notify via contract annex the serial numbers of the ventilators handed over to the forwarder to enable tracking of these ventilators which have been purchased by “the Purchaser” Viva Enterprises.”

[344]The appendix of serial numbers was purportedly provided to satisfy clause 5(b). However, that requirement was only introduced into the Encore/ VEL Agreement with his comments provided on 3 August, after all deliveries had taken place. No appendix appears to have been provided by Encore at the time of the May deliveries. Moreover, although the dating of the document to 15 July fitted the delivery window finally alighted upon in the execution copy of the Encore/ VEL Agreement, the relevant units delivered in July were not, in fact, handed over to Henco until later in the month. As such, Encore’s statement in the appendix that “ … 465 ventilators acquired by your company, have been picked up to be shipped, the ventilators serial numbers are described below: …” is incorrect and, like the later discovery of the May deliveries necessitating the further backdating of the Encore/ VEL Agreement, Encore and VEL appear to have been wrongfooted here as well. The suggestion that Aeonmed had perhaps notified Encore of the serial numbers in advance even though the deliveries had not yet been made does not meet the point. If that had been the case, the statement in the appendix would have said so. Likewise, given that the Dangoors say that they did not know about the delivery timetable or have any contact with Encore (rather than Mr Dávila), it would be surprising in my view for Encore to address this schedule to Joseph Dangoor at all. There is no related documentation showing how this came to have reached VEL. Again, it was a standalone document. Nor did VEL provide a list of serial numbers to INSABI until six or so weeks later on 1 September. Nor was the appendix addressed in the evidence by Joseph Dangoor until his fourth witness statement. Despite the metadata for the appendix showing a creation date of 15 July, I am satisfied that this document too was the product of reverse engineering and further forgery.

(p) 15 and 22 July correspondence to INSABI

[345]The Defendants also rely on Joseph Dangoor’s e-mails to Mr Ferrer on 15 and 22 July informing INSABI that VEL had 465 ventilators for delivery and that they were in the process of being shipped. They say that Joseph Dangoor would not have sent those e-mails unless he knew that VEL was making deliveries via Encore. Again, I did not consider that these communications assisted the Defendants. In the first e-mail, VEL was still asking INSABI for the opportunity to deliver, again seeking to press INSABI to agree to accept further ventilators, consistent with VEL’s awareness that INSABI had persisted from the beginning of the month in its request for a refund. As noted above, the second e-mail dated 22 July represented a different and markedly disingenuous approach, now presenting INSABI with the fait accompli that it had, in fact, delivered 200 and was about to deliver another 200. However, despite the Encore appendix (above) having supposedly been prepared over a week earlier, this was not provided. In fact, as noted, VEL did not provide INSABI with the serial numbers until 1 September. Taken together with the other matters discussed above, these e-mails are entirely consistent with VEL having hoped that INSABI might not insist on a refund and would agree to take deliveries which VEL could pretend were its own. That strategy having failed, VEL foisted the position on INSABI instead, keeping it in the dark as to what was going on until VEL and Encore could reverse engineer the documents to make it appear that these were VEL’s units and deliveries all along.

(q) Aeonmed’s 23 July 2020 letter to Encore

[346]VEL also prays in aid the 23 July letter from Aeonmed to Encore to the effect that Aeonmed had made deliveries, requesting immediate payment for 465 units. One difficulty with this document is that it was again sent at a time when, as is common ground, the deliveries of the 465 units had not been completed. The Defendants say that Aeonmed merely refers to deliveries, not all of them but the letter is clearly conveying that those deliveries were complete. Non-completion of their delivery apart, it does not seem to make sense that Aeonmed was asking here for immediate payment for 465 units. Aeonmed did not send the further Aeonmed/ Encore contract and invoice to Encore for the 465 further units until 3 August. When it did so, it asked for payment in somewhat more unassuming terms. Notably, there is again no indication as to how the 23 July letter reached Encore (contrasted with the correspondence from 3 August which is the subject of e-mail correspondence). The 23 July letter is therefore another standalone document. It was not shared with INSABI at the time. It is also notarised by the same notary as Encore’s signature copy of the Encore/ VEL Agreement. I am satisfied that this too is another forgery exposed, in part, by the actual delivery dates for the remaining units under the Encore/ INSABI Agreement again wrongfooting Encore and VEL.

(r) VEL’s knowledge of the Encore/ INSABI Agreement

[347]The Defendants also sought to rebut the Claimant’s contention that VEL had probably not been introduced to Encore before 15 July. Ultimately, nothing seemed to turn on this. Joseph Dangoor says, albeit again only in his fourth statement, that VEL was introduced to Encore by Aeonmed in April following the failure of the Semacare contract. Mr Garza even produced a letter from Aeonmed to that end on 21 May 2021. I need not comment on the authenticity of that letter. I accept that VEL must have known of Encore by at least July in light of its installation of the 50 HBK units. However, even though their written evidence was not tested, I do not accept the Defendants’ contention that VEL knew nothing of the Encore/ INSABI Agreement until September. It is evident that VEL approached myriad potential suppliers to assist in fulfilling the VSA. Aeonmed’s own Mexican distributor was an obvious potential source. Although the documents appear to indicate that VEL was averse in mid-June to arranging ventilator supply through Encore, it did end up working with that company in the installation of the HBK units and was likely told then. Likewise, although I do not accept VEL’s far-reaching claims about SRE’s involvement in the performance of the VSA, I consider it likely that Mr Jileta shared with VEL information about INSABI’s other ventilator supply contracts. Regardless of the alleged ‘covert scheme’, VEL would have known about the Encore/ INSABI Agreement.

(s) Aeonmed’s involvement

[348]The Claimant does not seek to suggest that Aeonmed was party to the alleged covert scheme. The Defendants say that this presents a problem for the Claimant given the contemporaneous record. They rely, for example, on the 27 May and 23 July letters from Aeonmed to Encore. However, I have already found that these were forged. They also rely on a report from 8 September to INSABI of what Henco was told by Aeonmed, namely that “Encore Health sold 515 ventilators to [VEL]”. However, on the Defendants’ case that Encore sold 465 (and HBK 50) units to VEL, this was obviously wrong. What this rather shows is Henco recounting what Aeonmed appears to have been told by others. Aeonmed would not know whether that was the correct position. Indeed, Henco did not accept the information at face value, being an “informal and unofficial consultation”, recommending INSABI make further enquiries. Aeonmed did go on to sell Encore a further 465 units but the relevant paperwork was concluded more than two months after the Encore/ VEL Agreement was supposedly entered into. Finally, the Defendants rely on the letter from Aeonmed to Encore dated 16 September in which Aeonmed set out the serial numbers for the “465 units VG70 ventilators bought by [VEL] to be delivered through [Encore] ..”. The Claimant has not disputed the authenticity of this document so I do comment on its provenance. However, I do not find it supportive of the Defendants’ position. It is again a document prepared on the basis of what Aeonmed has been told. The repetition of what Encore said to Aeonmed does not make it true. I agree that Aeonmed having no axe to grind and that its position indicated by the evidence gives serious pause for thought. However, the matters relied on by the Defendants are inconclusive and do not alter the view I have expressed to this point.

(t) The Dangoors’ oral evidence

[349]The Defendants also pray in aid the Dangoors’ oral evidence including, for example, Joseph Dangoor’s denial of backdating and his testimony as to the existence of the Encore// VEL Agreement in May. However, I have already noted that much of their related evidence was unsatisfactory, improbable and contradicted by the documentary record. Indeed, I am satisfied that both witnesses were deliberately untruthful on this aspect.

(u) Shipping documents

[350]In support of their position, the Claimant also relies upon the shipping documentation corresponding to the 465 ventilators as evidence that there was no Encore/ VEL Agreement. In particular, it relies on the different ‘threads’ set up by Henco for each shipment, including the itinerary, final commercial invoice, packing list, inspection documents, list of serial numbers and freight documents. The Claimant says that none of these documents mentions VEL, they state the price under the Encore/ INSABI Agreement (not the VSA), they show that price as ex works (unlike the VSA), the related e-mail threads refer to Encore (not VEL) in their title line and the commercial invoices all refer to the contract number for the Aeonmed/ Encore Agreement for the 1000 units.

[351]The Defendants say that none of this supports the covert scheme. The documents, including a related audit of INSABI, indicate that it did not maintain sufficiently rigorous accounting, budgetary or inventory controls or records. The Defendants also suggested that the inventory database referred to in Mr Ferrer’s evidence was not disclosed, likely destroyed. Had it been produced, it would have revealed that the deliveries were, in fact, made by VEL. They also say that the Claimant’s reliance on invoices received by Henco as supposedly showing the actual supplier was misplaced. These documents were not prepared to track ventilators but for shipment purposes, they are printed on Aeonmed letterhead, there is no evidence that Aeonmed knew the terms of the Encore/ VEL Agreement or the VSA and it is likely that Henco provided the unit price. However, Henco did not know that VEL was making deliveries until 4 September. The invoices do not offer support for the units being shipped by VEL or Encore. The Defendants also draw upon other documents to explain why reliance cannot be placed on the shipping documentation.

[352]Although none of the shipping documents points to VEL, I agree that they are ultimately inconclusive as to the identity of the supplier of the implicated shipments. That said, I reject VEL’s assertion that the genesis of the cover-up scheme lies in INSABI’s ‘misunderstanding’ and INSABI’s own failure to keep records of ventilator deliveries. It is quite clear from the shipping documentation collated by Henco for each shipment and the discussions between Mr Valenté and Mr Garza in June that INSABI had inventory information. I also accept Dr Calderón’s evidence to the same end and that INSABI would not, as VEL asserted, have destroyed the database. Notwithstanding the audit findings, and the absence of an inventory control ‘system’, I am satisfied that INSABI kept appropriate records.

[353]Moreover, the idea that such records would say anything meaningful about VEL being a supplier is also somewhat of a nonsense without VEL telling INSABI that it was a supplier. Notably in this regard, if VEL had delivered the 465 units, it would have been required to provide much more than the cursory and vague information in its July and August correspondence. Clause 9(q) of the VSA, for example, required prior notification to INSABI of any deliveries. However, VEL wanted to keep INSABI in the dark so that INSABI could not discover what it was up to when it was saying that it was making deliveries. The Defendants’ suggestion of confusion on INSABI’s part is somewhat disingenuous. That was the position VEL wanted to create. However, once the serial numbers were belatedly provided on 1 September, INSABI quickly put two and two together with the help of the information it held and received from Henco. As I have found, INSABI’s rejection of VEL’s claim to have delivered was genuine and warranted.

(v) Encore’s consultancy and success fees

[354]The Encore/ VEL Agreement provided that VEL pay Encore US$8,718,750.00 for the 465 ventilators, and a further US$1,697,250.00 as a ‘consultancy fee’. The Defendants say that the consultancy fee reflected Encore’s additional work in identifying and securing ventilators in an extremely challenging market and the fact that Encore assumed additional risk by accepting payment on delivery. I disagree. It was evident from VEL’s own communications from early July that there were 465 units available through Aeonmed’s German distributor, Dixion, exactly the same number as VEL said it supplied to INSABI. I am satisfied that, by July, ventilator availability was much improved. Moreover, there was no risk here. This was part and parcel of a pre-wired scheme. That is why Encore departed from its usual terms and was relaxed about payment on delivery.

[355]More than that, however, nine months later in May 2021, VEL paid Encore a ‘success fee’ of US$1,121,100, said to have been suggested by Mr Dávila as an additional payment to reflect its successful performance of the Encore/ VEL Agreement. According to the Dangoors, VEL initially refused to pay this but, after discussing the matter with Mr Jileta, agreed to pay this 50/50 with Mr Schlager from their respective shares of the profits from the VSA. It did so to maintain VEL’s business relationship with Mr Jileta and Mr Dávila. I have already explained that I consider improbable Mr Jileta’s involvement in the Encore/ VEL Agreement. Mr Jileta would not have held a casting vote over VEL’s distribution of its profits under the VSA. Whether or not, as the Claimant says, this is appropriately described as a “substantial bribe”, US$2.8m paid on top of a contract price of US$8.7m on which it was already making a profit of US$3.1m is, on any view, excessive. However, that sum was minor in the scheme of VEL’s exposure to INSABI which these payments were intended to help avoid.

(w) Conclusion on the Encore/ VEL Agreement and 465 units

[356]I have already found that, by reason of the operation of the June Agreement, INSABI was not obliged to accept further deliveries from VEL under the VSA (as amended) and VEL was not entitled to supply any to INSABI. VEL says it delivered 465 units notwithstanding. In relation to those, I conclude that VEL agreed with Encore at some point on or around its letter to INSABI of 22 July to engage in a scheme by which they would pretend that 465 of the 1000 deliveries already made, and yet to be made, by Encore under the Encore/ INSABI Agreement had, in fact, been made under the VSA. Drawing the threads together:-(i) The Defendants rebut the ‘covert scheme’ based, in part, on INSABI’s suggested agreement to accept 700 ventilators. That premise is fallacious. The June Agreement precluded VEL from making further deliveries after 3 July;

(ii) The absence of any such agreement, in fact, explains the scheme. VEL having delivered only 50 HBK ventilators under the June Agreement and refunded 30% of the contract price, INSABI was now entitled to a further refund equivalent to the price of 650 units. INSABI demanded a refund but VEL was unable to pay;

(iii) Since INSABI refused in early July to be steamrollered by VEL into taking further deliveries, VEL had significant motive to pretend that it was ‘completing’ performance of the VSA by making such deliveries;

(iv) By early July, the ventilator market appears to have eased, with 465 ventilators available through Aeonmed/ Dixion. VEL had access to that supply but INSABI declined VEL’s related offer to supply;

(v) Having delivered 115 units in late May, Encore was about to embark on further deliveries to INSABI under the Encore/ INSABI Agreement;

(vi) Although Henco and INSABI would not accept deliveries from VEL or a different supplier on its behalf, they would accept without demur deliveries from Encore under the Encore/ INSABI Agreement;

(vii) VEL was in contact with Encore in July concerning the installation of 50 HBK units;

(viii) They agreed that the Encore/ INSABI Agreement afforded the means to pretend that 465 units delivered or to be delivered to INSABI thereunder had in fact been delivered by Encore on VEL’s behalf;

(ix) Encore could readily make up the supposed ‘shortfall’ on the Encore/ INSABI Agreement by buying the 465 available units or a corresponding number from Aeonmed, the related cost to VEL being small compared to its exposure under the VSA;

(x) Having Encore ‘front’ the scheme in this way, with no indication of VEL’s involvement, enabled Encore and VEL to keep Henco and INSABI in the dark until such time as VEL could announce Encore’s deliveries as its own and claim corresponding credit against the VSA contract price;

(xi) To that end, although VEL told INSABI from late July that it had made deliveries, it provided no meaningful information so as to prevent INSABI working out what was going on;

(xii) It was not until early August that Encore and VEL sought to give false substance to their scheme through the creation of the Encore/ VEL Agreement;

(xiii) Encore supplemented that (false) paper trail with other (false) documents to seek to plug obvious holes in the chronology;

(xiv) Mr Dávila did not testify and no related communications with him have been disclosed (even in e-mail or WhatsApp form) concerning the so-called Encore/ VEL Agreement;

(xv) Mr Garza did not testify either despite originally supporting the Defendants’ strike-out application; (xvi) The Dangoors’ evidence on this aspect of the case was improbably vague and, as I have found, deliberately untruthful; (xvii) The Defendants’ story about the Encore/ VEL Agreement, such as it was, falls apart given the clear evidence that it was created, executed and backdated after delivery of the relevant units; (xviii) That reverse engineering was itself wrongfooted by the actual delivery schedule for the 465 ventilators which necessitated the further backdating of the Encore/ VEL Agreement, also exposing cracks in other parts of the paper trail; (xix) The Defendants’ efforts to explain these matters away, although concerted, were contrived and implausible; (xx) The Defendants’ falsification of events was reinforced by:- (a) the non-standard market terms of the Encore/ VEL Agreement; (b) the improbability of that agreement existing in May given what the contemporaneous events and record do (and do not) show about VEL’s actions and motivations; (c) the absence of any further agreement between Aeonmed and Encore until early August; and (d) the excessive rewards paid to Encore. (xxi) To cement VEL’s fait accompli, it did not provide meaningful information about its purported delivery of the 465 ventilators until 1 September; (xxii) When it did so, INSABI quickly worked out that VEL had tried to pass off as its own Encore’s deliveries under the Encore/ INSABI Agreement; (xxiii) INSABI consistently and credibly maintained thereafter that it has been defrauded; and (xxiv) To that end, INSABI refused to take delivery of the further 465 units tendered by Encore and the further 185 units tendered by VEL.

[357]The Defendants say that, even if the allegations of backdating were made out (as they have been), that would be legally irrelevant. It would not follow that VEL and Encore had no agreement or even that their agreement was entered into in August, merely that VEL’s written contract with Encore was drawn up in August. I reject this. This was not a bona fide supply arrangement. It was a scheme designed to deceive INSABI. For that scheme to work, VEL did not need to buy, take delivery of, own, deliver (or have delivered on its behalf), or pass title to, the 465 units. It did not do any of these things. Nor could it. VEL had no entitlement to deliver any units to INSABI. Encore had also already delivered a number of these 465 units to INSABI before the scheme was conceived. VEL merely needed to pretend it had done these things. VEL telling INSABI in the deliberately vaguest of terms from 22 July onwards that it was delivering units did not make that a reality. VEL did not provide any detail of the purported deliveries until much later on 1 September. That is why the main ‘prop’ for the scheme, the Encore/ VEL Agreement, did not need to be, and was not, executed until after all 465 deliveries had occurred. That is also why it had to be backdated (twice). Encore did not deliver those 465 units to INSABI on VEL’s behalf but VEL and Encore went on to pretend otherwise.

[358]The Defendants also argue in this context that the tender of 1,700 ventilators to INSABI shows that there was an agreement between VEL and Encore to supply ventilators to INSABI on VEL’s behalf. I reject this too. Such tender shows that Encore and VEL tried to get away with foisting on INSABI 650 more units than it was required to take so that VEL could try and avoid its financial exposure under the VSA. That was the essence of the scheme. The fact that 1,700 units can physically be accounted for does not make the scheme any less egregious. VEL was required to account to the Mexican Government for its money, not ventilators. VEL persistently refused to pay the refund. VEL also spent more of Mexico’s money promulgating the very scheme it hoped would allow it to hold on to the large remaining sum, even compensating Encore for its ‘success’ in that regard.

[359]The Defendants also suggest that, even if the Encore/ VEL Agreement had been concluded in August, it follows that the 465 ventilators which Encore bought from Aeonmed to make up the supposed ‘shortfall’ on the Encore/ INSABI Agreement were tendered on VEL’s behalf. This does not follow. As noted, VEL merely needed to pretend that it had bought 465 units from Encore. These had to be 465 of the units interspersed among the (first) 1000 that Henco and INSABI were expecting so that they would accept them without any suspicion being aroused. That is why the serial numbers later notified by VEL in September were chosen. With the provision of those serial numbers, INSABI’s suspicions were justifiably aroused and Encore’s effort to tender the further 465 ‘shortfall’ units was rightly declined, the Encore/ INSABI Agreement by then having been fully performed. VEL’s only involvement with those additional 465 units was to cover the cost of the further contract between Aeonmed and Encore concluded on 3 August. It did that by paying Encore the sums it did on 5 August.

[360]Nor, of course, was VEL entitled to deliver any units to INSABI after 3 July. That is why INSABI properly also rejected VEL’s tender of the 185 units which VEL later purchased directly from Aeonmed’s subsidiary. The fact that VEL tried to foist these on INSABI by sending them to Mexico after INSABI declined to collect them from China does not alter the position. That these units apparently ended up being seized by the Mexican Treasury confirms that INSABI refused to accept them. The Defendants say that such conduct was inexplicable when INSABI wanted the units to treat Covid-19 patients. In fact, INSABI needed the refund to use to treat patients. It was VEL’s actions which denied that. J. SRE’s ROLE (ISSUES 21-23)

[361]The Defendants say that there were extensive discussions with Mr Jileta from shortly before the inception of the VSA during which he instructed VEL to take, or approved, certain steps in its performance. They also say that his related knowledge and actions should be attributed to INSABI. I have addressed in my analysis above some of the specific matters relied on. I therefore draw together here briefly the threads bearing on my findings as to the true nature of SRE’s role and, in particular, VEL’s interactions with Mr Jileta.

[362]As to SRE’s legal power and authority and its ability to bind INSABI, it was common ground that, under Mexican law, state entities may only act to the extent expressly permitted by law. SRE’s powers and responsibilities are set out in Article 28 of the Federal Public Administration Organic Act, with SRE responsible for “conducting foreign policy”, including “ensuring the coordination of actions abroad by the agencies and entities of the Federal Public Administration”. In this context, I accept that SRE’s role in sourcing medical equipment overseas to assist the local response of Mexican state agencies fell within SRE’s powers. Where the debate came to the fore was the extent to which Mr Jileta was involved in the ‘management’ of the VSA and what knowledge he acquired or directions he gave in that context. As the parties appeared to agree, the essential question was what SRE knew and did was a matter of fact.

[363]As a starting point, I consider insightful Ms Delgado’s description of the respective roles of INSABI and SRE provided after the former had asked the latter in April for assistance with the non-performing VEL and VSA. On 22 May, Ms Delgado wrote to INSABI noting that SRE did not decide on bids, technical specifications, supplier selection or procurement and could not instruct other agencies to buy goods or services. Rather, it acted as a link between state agencies to carry out actions abroad facilitating them to import goods and services and to identify international supplier prospects to the health sector for the care of COVID-19 care. By contrast, INSABI was an entity empowered to analyse offers, acquire and import goods and assume the terms and conditions of contracts it has signed with any domestic or foreign companies. Mr Jileta was Ms Delgado’s subordinate at the time. I have no reason to consider that he would have acted otherwise than within the scope indicated for SRE.

[364]Moreover, although the Dangoors say that Mr Jileta was VEL’s ‘point person’, the performance of the VSA was clearly a matter which occupied the attention of others within SRE and more broadly within the Mexican Government, including Ms Delgado and even the Chancellor and President. It is quite clear, for example, that despite some internal debate in May as to whether to give VEL the opportunity to perform within the proposed extended timetable, the Chancellor agreed that INSABI should send the 21 May letter demanding its money back under the VSA. Likewise, the documents indicate that the President was of the view in early June that VEL should not be allowed to deliver ventilators. Although a senior official, Mr Jileta was clearly their subordinate and would not have acted inconsistently with their views.

[365]SRE was clearly involved with VEL in discussing the terms of the VSA, SRE acted as the conduit for the dissemination of the draft contract and related Invoice, and SRE imparted its views on those terms. However, INSABI made the decision to sign. When it came to communicating to INSABI the difficulties experienced with suppliers, VEL initially did so through Ms Delgado and Mr Ebrard but the direct line with Mr Ferrer was quickly established. Although it had a good relationship with Mr Jileta, VEL would have understood from the outset that INSABI made the decisions in relation to the conduct of the VSA and that SRE could only take matters so far. So, for example, although SRE was involved in further discussions with VEL at the expiry of the 3 July deadline under the June Agreement, that negotiation was reported to INSABI which decided then not to grant further indulgence. INSABI asked SRE to convey this to VEL and communicated the same message to VEL itself. There was, of course, internal discussion and debate within the Mexican Government about what to do. That is entirely unsurprising given the urgent health needs of the Mexican population and the amount of Government funds expended. However, as Ms Delgado herself set out, SRE could not and did not cut across INSABI’s decision-making.

[366]Although the Defendants say that SRE approved or instructed various matters, this is not reflected in VEL’s communications with INSABI. Nor does the tension which would be set up by some of SRE’s suggested communication inconsistently with INSABI’s messaging feature either. Rather, the tenor of VEL’s correspondence with INSABI was one of VEL on the backfoot, acknowledging that it was not performing and repeatedly seeking to persuade INSABI to deviate from the VSA. There is no sense that SRE had already given VEL a ‘green light’ for that purpose. Moreover, VEL taking instructions as to which suppliers to use or payments to make would be in marked contrast to VEL’s approach with INSABI. There would be no reason for VEL to deal with INSABI and SRE so differently. I do not accept that it did so.

[367]Although there are a number of indications in the record of communications between Mr Jileta and VEL, none is documented save for those formally reported on the Mexican side. The suggested reason is the deletion of VEL’s Signal messages. Again, this was unpersuasive. There are ample communications within VEL and with Mr Schlager recorded by other electronic means but no hint of the matters attributed to SRE. Moreover, despite their very limited recollection generally, the Dangoors indicated improbable recall of what and when they say Mr Jileta conveyed. Given my findings with respect to the Dangoors’ untruthful evidence concerning the covert scheme, and the inherent improbability already discussed of some of the words and actions attributed to Mr Jileta, I am unable to accept their related evidence. As became apparent in oral evidence, the presentation of their interactions with Mr Jileta and Mr Dávila became a ‘safe harbour’ in which they took refuge to avoid answering difficult questions about their own conduct. At best, their related evidence was significantly exaggerated; at worst, it was untruthful. For example, the evidence that VEL obtained Mr Jileta’s agreement in May to supply ventilators to INSABI through Encore is nonsense. Not only was there no agreement between VEL and Encore then, let alone the Encore/ VEL Agreement, Mr Jileta was well aware in May that his ultimate boss, the Chancellor, had just approved INSABI’s cancellation of the VSA. Another absurdity was the suggestion that the Dangoors were themselves oblivious to VEL making deliveries through Encore until Mr Jileta, who had already moved roles a month earlier, told them so in July.

[368]Despite this untruthful evidence, based on what the record indicates, I do accept that the Dangoors had a good relationship with Mr Jileta and frequent informal contact with him. He appears to have been their first port of call within the Mexican Government when something went wrong or VEL was ‘feeling the heat’ from INSABI. I find it probable that VEL was more forthcoming with Mr Jileta than with Mr Ferrer and that it shared with him its supplier difficulties and proposed workarounds. VEL also found him a useful ‘sounding board’ to help pitch its proposals and gauge INSABI’s likely reaction. VEL likely perceived Mr Jileta to have a more commercial or pragmatic outlook and to be an ally in the difficult situation it found itself in. However, I reject the Dangoors’ evidence to the effect that Mr Jileta signed off on almost everything that VEL suggested or Mr Jileta instructed VEL to take certain steps or that VEL would not do so without his prior approval. INSABI appointed VEL as a supplier to supply. It was no part of the Mexican Government’s role to tell it how to supply. In terms of what can be attributed to INSABI, the good relationship VEL enjoyed with Mr Jileta meant that, except for proposals VEL asked to be put forward to INSABI, it could confide in him without the risk of what they shared informally getting back to INSABI. Accordingly, save to the extent indicated above, I reject the Defendants’ case on SRE’s role or INSABI’s related knowledge. K.

(a) Introduction

[369]The Defendants seek to invoke clause 38 of the VSA to say that the Claimant lacks title to sue in this case. Clauses 38 and 39 provide that:- “38. This Agreement will not be assigned either in whole or in part by any Party without the written consent of the other Party. 39. This Agreement will pass to the benefit of and be binding upon the Parties’ respective heirs, executors, administrators, successors, and permitted assigns.”

[370]In very broad outline, the Defendants say that their consent to the assignment to IMSS of INSABI’s rights and liabilities with respect to this claim was never sought (or given) such that the purported transfer thereof was ineffective under Clause 38 of the VSA. The Claimant says that INSABI’s relevant rights and liabilities were not assigned to IMSS but were transferred by operation of an administrative act under Mexican law such that IMSS became the successor thereto within the meaning of Clause 39 and there is no question of the engagement of Clause 38.

[371]Although the dispute falls to be decided under a contract governed by English law, the Mexican law position informs how matters are properly characterised for the purposes of Articles 38 and 39 of the VSA. Some background is therefore required. On 29 November 2019, the Official Gazette published a Presidential decree which modified Article 77 bis 2 of Mexico’s General Health Law (GHL). This had the effect of creating INSABI with the statutory purpose of aiding the SSA to provide free healthcare to individuals without social security benefits.

[372]On 31 August 2022, the Official Gazette published a Presidential decree which created IMSS with the statutory purpose of providing individuals not affiliated with social security institutions with free comprehensive medical care.

(b) Amendment Decree

[373]On 29 May 2023, the Official Gazette published a further Presidential decree which amended various provisions of the GHL (Amendment Decree).

[374]The Fourth Transitional Provision (¶1) of the Amendment Decree required the SSA to issue ‘provisions’ regulating the transfer of INSABI’s rights and obligations to IMSS within 180 days (ie: by 25 November 2023) in the following terms:- “Within a period not exceeding 180 calendar days from the entry into force of this Decree, [SSA] shall issue the provisions that, among other aspects, establish the terms, conditions, and deadlines for carrying out the transfer of human, budgetary, financial, and material resources, as well as the real estate, rights, and obligations of [INSABI] to [IMSS] or [SSA], as appropriate.”

[375]The Fourth Transitional Provision (¶3) also required SSA to take all necessary steps to carry out INSABI’s dissolution.

[376]The Fifth Transitional Provision provided that any reference made to INSABI in any act, provision, or legal instrument was to be understood to refer to IMSS.

[377]There was also some discussion between the experts concerning certain constitutional challenges to the Amendment Decree presently before the Mexican courts. These have not been determined and, in the absence of a successful challenge, I agree that these do not affect the matters falling for my determination.

(c) Transfer Conditions (or Transfer Bases)

[378]On 1 June 2023, the provisions contemplated by the Fourth Transitional Provision were published in the Official Gazette. These took the form of a resolution by which the terms and conditions for the transfer of resources and dissolution of INSABI were issued (Transfer Conditions).

[379]The first Transfer Condition identifies “[t]he purpose of these Terms and Conditions” as the establishment of:- “ … the manner and terms under which the transfer of human, budgetary, financial and material resources, as well as the real estate, rights and obligations assigned to [INSABI] shall be carried out in favour of [IMSS] or the [SSA], as appropriate, as well as the process for [INSABI’s] disincorporation due to termination, ensuring adequate protection of the public interest.”

[380]The second Transfer Condition (¶1) identified the sector co-ordinating agency, SSA, as responsible (through its Administrative and Finance Unit (AFU)) for the process of INSABI’s disincorporation and the transfer of human, budgetary, financial, and material resources, as well as the real estate, rights and obligations assigned to INSABI, in accordance with applicable regulations.

[381]The second Transfer Condition (¶2) required SSA’s AFU “to notify the individuals and legal entities with whom [INSABI] has contracted rights and obligations, in order to inform them of the legal situation in which the agency finds itself.” This was a mandatory provision.

[382]The second Transfer Condition (¶3) provides that the heads of the AFUs of the SSA, INSABI and IMSS were to enter into ‘acuerdos’ for “the transfer of human, budgetary, financial, and material resources, as well as the corresponding real estate, rights, and obligations” (defined in the third Transfer Condition as the “Transfer”). (Although acuerdos can mean ‘agreements’ in Spanish, the experts agree that it could also refer to an administrative act. Mr Irra uses the term ‘determination’.) There was some discussion with Mr Irra as to whether this was a mandatory provision. I accept his evidence that it was.

[383]The fifth Transfer Condition (¶5) provides that “[t]he rights and obligations of INSABI that have not been fulfilled as of the issuance of these Terms and Conditions shall remain enforceable and under their terms.”

[384]The fifth Transfer Condition (¶1) provided that INSABI would retain its legal personality until the disincorporation process was completed solely for the purpose of its “corresponding termination”. In that regard, INSABI was responsible for closing all programmes and actions in progress, including obligations arising from lawsuits and administrative proceedings and initiated contractual instruments as well as “attention and follow-up” of any jurisdictional or administrative matter pending final resolution.

[385]The fifth Transfer Condition (¶2) also provided (in non-mandatory terms) that:- “Notwithstanding the foregoing, INSABI may enter into agreements (convenios, not acuerdos) relating to the transfer of litigious rights or the handover of administrative proceedings, so that the legal department or the department with the authority to do so, of the Ministry, or, where appropriate, of [IMSS], as applicable, may deal with them.”

[386]The sixth Transfer Condition provides that, in addition to the functions assigned “in accordance with applicable provisions”, the SSA’s AFU was required, with INSABI support as appropriate, amongst other things, to:-(i) Prepare a report on matters currently in progress and formulate the “Strategic Plan”. The sixth Transfer Condition explains that the Strategic Plan would set out precisely its objectives, actions and deadlines for SSA approval (sub-section I);

(ii) Establish the basis for each stage of the process of disincorporation due to termination, as well as its supervision (sub-section II); and

(iii) Carry out the necessary processes for the transfer of human, material, and financial resources, as well as the property, rights, and obligations of INSABI to SSA or IMSS, as appropriate, for which it shall verify that the reconciliations and inventory of the assets belonging to INSABI are carried out by personnel designated for that purpose (sub-section IV).

[387]The tenth Transfer Condition provides that, once the process of disincorporation due to the dissolution of INSABI has been completed, SSA shall inform the Ministry of Finance and Public Credit and the Commission for the purposes of the respective records referred to in Sections 12, 25 and 27 of the Federal Law on Parastatal Entities and Sections 3 and 13 of the Regulations of the Federal Law on Parastatal Entities.

(d) Acuerdo de Transferencia

[388]Although there is now an issue as to when INSABI, IMSS and SSA entered into the Acuerdo de Transferencia (Acuerdo), there is no dispute that this was made based on the powers conferred by the Transfer Conditions in the Amendment Decree, albeit the experts differ as to the particular condition concerned.

[389]INSABI, IMSS and SSA agreed in the Acuerdo that the signing of that legal instrument and its annexes resulted in INSABI’s transfer to IMSS of the pending legal proceedings identified therein, including specified labour proceedings, administrative proceedings, amparo trials (largely concerning medical care or treatment), an amparo trial in which INSABI was the ‘promoter’, criminal proceedings, an oral mercantile trial, complaints before the National Human Rights Commission, certain consensual instruments, an informative note with respect to certain real estate and this claim, the last described as:- “A file corresponding to the lawsuit filed by “INSABI” against the company named Viva Enterprises Limited and Joseph Dangoor is transferred, filed before the High Court of Justice, Business and Property Courts of England and Wales, under file number BL-2022-001854.”

[390]The reference to Joseph Dangoor is erroneous. It should refer to Robert Dangoor but no point is taken in this regard. I agree that the Acuerdo clearly identifies these proceedings.

[391]Clause 2(A)(VIII) of the Acuerdo provided that the transfer of those contentious matters would either take effect on 1 August or (as for this claim) 24 November 2023.

[392]Clause 4 of the Acuerdo stated that it took effect from the date of its signature and remained valid until the date on which the material delivery of the documents, archives and other records the subject matter thereof was concluded.

(e) The debate about these provisions

[393]The essential debate is whether the Acuerdo was an assignment agreement between INSABI and IMSS, as the Defendants allege, or an administrative act, as the Claimant alleges. In this regard, Mr Lobatón opines that the Strategic Plan is the means by which INSABI must be extinguished under the third Transfer Condition (sub-section VII). Until the Strategic Plan is formulated, published and fulfilled and INSABI’s extinction complete, it will continue to enjoy legal personality pursuant to the fifth condition (¶1). Until then, it may continue to participate in legal proceedings albeit, as envisaged by the fifth Transfer Condition (¶2), it can also enter assignment agreements for the transfer of litigation rights (as may be permitted by Mexican private law). Although such litigation rights (and related obligations) are also capable of transfer to a “successor” entity by way of administrative act, that could only have been achieved here by compliance with the Strategic Plan and Transfer Conditions, the former being the instrument setting out the stages, actions, terms and timeframes for INSABI’s disincorporation process.

[394]In this case, Dr Calderón confirmed in his evidence that he was aware of the existence of the Strategic Plan, it had been worked on by the SSA, it set out the terms of the extinction process, he was not aware why it had not been disclosed in these proceedings and INSABI no longer existed, it having been extinguished by June 2024. The Defendants say that, consistent with the position advanced by Mr Lobatón, it is evident from Dr Calderón’s testimony that the Strategic Plan exists and that this is the document regulating INSABI’s extinction process. The Defendants say that the Claimant has chosen not to disclose this because it would show that INSABI has not yet been extinguished.

(f) Timing effects of the Amendment Decree

[395]There was some discussion as to the timing effects of the relevant Transitional Provisions of the Amendment Decree. As to these, I accept that the Fifth Transitional Provision had the immediate effect of changing references to INSABI in any legal instrument so as to be understood as a reference to IMSS instead. However, the Amendment Decree did not extinguish INSABI with immediate effect. That would only be achieved at some future point after SSA had taken “all necessary steps” to that end as envisaged by the Fourth Transitional Provision (¶3). As Mr Irra said, the Amendment Decree was the starting point. Dissolution was not an “overnight” occurrence but INSABI would be wound down over time. The Fourth Transitional Provision (¶1) required SSA to issue provisions for the transfer of resources, real estate and rights and obligations from INSABI to IMSS within 180 days of the Amendment Decree entering into force.

(g) The Strategic Plan/ INSABI’s dissolution

[396]The Strategic Plan is not mentioned in the Transitional Provisions of the Amending Decree. It first features in the third Transfer Condition (sub-section VII) where it is defined as the strategic plan for divestiture by extinction containing the stages, actions, deadlines and terms of the INSABI extinction process. There was some discussion as to the scope or meaning of “terms” in this context. Mr Irra summarised these as the “actions that the administrative body … will follow within their own administrative units to complete or to take those legal actions to finish the complete disincorporation.” He did not accept, without qualification at least, that the ‘terms and conditions’ for the dissolution had to be set out in the Strategic Plan. As he noted, the first Transfer Condition identified the objective of the “Terms and Conditions” (comprising the Transfer Conditions as a whole) as establishing the manner and terms of the transfer of INSABI’s resources, real estate and rights and obligations. The other stated objective was the establishment of the process for INSABI’s disincorporation due to termination.

[397]I accept that the preparation of the Strategic Plan with its specified content and uses were elements of the framework of the terms and conditions comprising the Transfer Conditions by which that process was established. So, sub-section I of the sixth Transfer Condition required the formulation of the Strategic Plan setting out with precision its objectives, actions and deadlines. (Its “terms” were not mentioned here.) Sub-section VIII required SSA’s monitoring of the follow-up of legal proceedings and trials in which INSABI was a party to be undertaken in accordance with, amongst other things, the strategy in the Strategic Plan and the Transfer Conditions. Moreover, in submitting for auditor review the financial statements for INSABI’s dissolution, sub-section IX required SSA to take account of the specifications contained in the Strategic Plan. Mr Lobatón also testified as to the use of strategic plans by the Mexican Federal Government more broadly in similar contexts.

[398]Despite these matters, Dr Calderón’s related testimony and the obvious importance of the Strategic Plan for INSABI’s dissolution process, I was not persuaded by Mr Lobatón’s opinion that the Strategic Plan was the instrument ‘regulating’ the dissolution process or that compliance therewith was ‘the means’ by which INSABI had to be dissolved. The Transfer Conditions do not say this. Rather, the formulation and use of the Strategic Plan was, in the words of the Amendment Decree, one of a number of “necessary steps” identified in the sixth Transfer Condition for the establishment of the dissolution process. These included, substantively, but distinctly from the formulation of the Strategic Plan, the requirement for SSA to establish the basis for each stage of the process of disincorporation and its supervision (sub-section II). The Defendants suggest that it is not enough to say that the Transfer Conditions regulate the terms of INSABI’s extinction because they do not explain when it would be extinguished. However, I agree that a planning document such as the Strategic Plan (even with its stated objectives, actions and deadlines) could not do this either. That would depend upon the progress and status of the dissolution process generally, itself subject to requirements as to supervision and reporting (sixth Transfer Condition, sub-sections II and X). Indeed, sixth Transfer Condition, sub-section X talks simply of the process of disincorporation due to the completion of INSABI’s dissolution, not the fulfilment or implementation of the Strategic Plan. I preferred Mr Irra’s evidence that the Strategic Plan serves principally as a means for measuring progress in the dissolution process.

[399]There was also some debate in this context as to whether the publication of the Strategic Plan was required. Mr Lobatón acknowledged that the sixth Transfer Condition did not require the publication of the Strategic Plan. This contrasted with the express requirement (at ¶3) to publish INSABI’s final financial statements. Nevertheless, he said that “it is reasonable to interpret that the Strategic Plan had to be published in the Federal Official Gazette”, including on account of its effects on third parties. Article 3(II) of the Law on Official Gazette of the Federation and Governmental Gazettes requires decrees, regulations, agreements and orders of the Federal Executive of general interest to be published in the Official Gazette. As a preliminary matter, it was not explained why a planning document such as a strategic plan might qualify as such a decree or similar. Moreover, although one could see how INSABI’s dissolution might well affect the interests of third parties to warrant official publication (as this was notified publicly in the published Amendment Decree and Transfer Conditions), it was far less clear why the same could be said of the information in the Strategic Plan concerning the objectives, actions and deadlines of the dissolution process.

[400]The Defendants appeared to rely by way of analogy on the published guidelines, decrees and orders in connection with the Mexican Maya Train Project as were referred to in Mr Lobatón’s evidence. However, looking at those instruments, none of them appeared to bear analogy with what was contemplated by the contents of the Strategic Plan in terms of the objectives, actions and deadlines of the dissolution process. Rather, they were of a higher level of abstraction, more akin to the Transfer Conditions (which were published). I agree that the liquidation plan for Luz y Fuerza del Centro appeared more closely analogous. The related case referred to by Mr Irra concerned the Federal Law on Transparency and Access to Public Government Information. A redacted version of the liquidation plan was made publicly available. However, the decision did not suggest a requirement for routine publication of such planning documents in the Official Gazette and the focus on the third party interests implicated there seemed to be on directed to the potential harms of publication. I preferred Mr Irra’s evidence on the publication aspect.

[401]Finally in this context, the Defendants suggested that there was no conclusive evidence of INSABI’s extinction and that there was, in fact, positive evidence that it continued to enjoy legal personality, as demonstrated by its continued participation in certain proceedings in the Mexican 20th Collegiate Court for Administrative Matters of the First Circuit, which held in its decision reached on 6 June 2024 (published on 9 May 2025) that INSABI must comply with amparo judgments until IMSS fully assumes INSABI’s functions. The relevant decision states that:- “Legal criterion: This Collegiate Circuit Court determines that INSABI is obliged to cooperate in complying with the amparo granted to guarantee the complainants’ right to health until the authority that replaces it as a result of the reform that extinguished it and integrated it into IMSS-BIENESTAR assumes its functions. Justification: Article 14, paragraph one, of the Political Constitution of the United Mexican States allows the law to be applied retroactively for the benefit of individuals. The aforementioned decree that regulated the Health System for Well-being and abolished INSABI does not prevent the amparo judge from binding the authorities of that institute to comply with the protective ruling, because at the time the lawsuit was filed, it did exist and had the power to guarantee the complainants’ right to health. Even though it ceased to exist materially as a result of the transition to IMSS-BIENESTAR, the court has the power to determine which authorities should assume the necessary responsibilities to comply with the ruling and guarantee the complainants' right to health.”

[402]The Defendants say that this decision (which has persuasive effect) is clear evidence that INSABI had not been extinguished as at 6 June 2024 or 9 May 2025. As Mr Irra accepted, the issue on the appeal was whether INSABI was obliged to comply with the first instance amparo ruling pending IMSS assuming its functions. The Defendants suggested that, as far as the Mexican court was concerned, INSABI continued to exist as at the date of the decision. Mr Irra explained that this was not the case, the Court deciding matters by reference to the appeal filings from August 2023. He said that the following from the appeal judgment was significant:- “From the quoted background, it is clear that, as of the date the amparo action was filed, INSABI’s authorities had jurisdiction over the matter to act as the responsible authorities in the amparo proceeding. Accordingly, the District Judge’s decision to bind them to compliance with the protective judgment was correct. Moreover, the (Amendment Decree) was published on May 29 and entered into force on May 30, 2023. Although it is true that, by virtue of that (Amendment) Decree, INSABI is dissolved and its functions are integrated into IMSS‑Bienestar, the fact is that - even assuming without conceding that the complete transition from one system to the other has already occurred - this is not a factor to be weighed to deem the challenged judgment unlawful. Rather, at the appropriate procedural moment, it is for the District Judge to determine which authorities must replace the originally responsible ones in order to secure compliance with the amparo judgment.”

[403]Having considered the evidence, I was unable to discern that the appeal court had found that INSABI remained in existence at the time of the decision or its later publication. Rather, the decision indicated that, INSABI being the responsible authority at the time of filing of the amparo, the issue did not arise for the purpose of determining the lawfulness of the decision under appeal. The Defendants’ further points that it would have been open to the parties following the filing of the appeal to inform the Court that INSABI had been extinguished and the suggested significance of the fact of publication of the decision did not seem to advance the analysis. I preferred Mr Irra’s evidence on this aspect too.

[404]Of greater significance in my view was the letter dated 17 April 2024 from Mr Marco Vinicio Gallardo Enriquez, the Head of SSA’s AFU. This letter was entitled “End of the process of disincorporation due to the dissolution of INSABI for registration in REPODE” and states that:- “In compliance with the provisions of Clause Ten of the “Agreement issuing the terms and conditions for the transfer of resources and disincorporation due to the dissolution of the decentralised public body known as Instituto de Salud para el Bienestar” (AGREEMENT), which states the following:

“TEN.- Once the process of disincorporation due to the extinction of INSABI has been completed, the Ministry shall inform the Ministry of Finance and Public Credit and the Commission, for the purposes of the respective records referred to in Section 12, 25 and 27 of the Federal Law on Parastatal Entities, as well as Articles 3 and 13 of the Regulations of the Federal Law on Parastatal Entities.”

As the person responsible for the process of transferring resources and winding up [INSABI], I would like to inform you of the following: • On 25 November 2023, the transfer of the material, human and financial resources corresponding to the medical care functions of [INSABI] to [IMSS] or to the [SSA] was completed. The above is in compliance with Transitional Section Four, paragraph four, of the Decree reforming, adding, and repealing various provisions of the [GHA], to regulate Sistema de Salud para el Bienestar, published in the Official Gazette of the Federation (DOF) on 29 May 2023. On 31 December 2023, when the 2023 budget year ended and once the transfer of administrative matters had been completed, work began on settling accounts, reimbursements and closing pending matters, compiling final reports and financial statements, cancelling users and closing INSABI files, and presenting the 2023 Public Account, which was ratified in the System for the integration of the 2023 Public Account on 26 March 2024. In view of the above, I hereby request the cancellation of INSABI's registration in the Public Registry of Decentralised Bodies (REPODE) in accordance with the provisions of Sections 12, 25 and 27 of the Federal Law on Parastatal Entities, and Sections 3 and 13 of the Regulations of the Federal Law on Parastatal Entities.” “TEN.- Once the process of disincorporation due to the extinction of INSABI has been completed, the Ministry shall inform the Ministry of Finance and Public Credit and the Commission, for the purposes of the respective records referred to in Section 12, 25 and 27 of the Federal Law on Parastatal Entities, as well as Articles 3 and 13 of the Regulations of the Federal Law on Parastatal Entities.”

[405]Mr Irra fairly accepted that, being a request for cancellation of INSABI’s relevant registration, not a certificate of dissolution as such, and an entity capable of enjoying legal personality even if not registered, this letter was not conclusive evidence that INSABI had ceased to exist as of that date. Mr Lobatón opined to the same end. Despite this, I consider that the letter is compelling evidence of INSABI’s dissolution. Mr Gallardo was the head of the unit of the co-ordinating authority responsible for the process of INSABI’s dissolution who signed the Acuerdo for SSA. He would know when the dissolution process was complete and would have been highly unlikely to write to his colleagues in the Mexican Government pursuant to the tenth Transfer Condition (sub-section X) if the process of disincorporation due to the extinction of INSABI had not been completed. I am reinforced in that view by the evidence of Dr Calderón to the same end.

(h) The Strategic Plan and the transfer of resources

[406]I also found problematical the Defendants’ related argument that the transfer of INSABI’s rights and obligations to IMSS would have been valid as an administrative act if concluded in accordance with the Strategic Plan and the Transfer Conditions. To that end, Mr Lobatón suggested that such transfer and INSABI’s dissolution were “two sides of the same coin”. The gravamen of his opinion was that INSABI could not just be disincorporated without its assets being transferred to IMSS. However, that point was already addressed by the Transfer Conditions and their distinct provisions establishing the “manner and terms” of transfer of INSABI’s resources, real estate, rights and obligations to IMSS or SSA. These included in the second Transfer Condition (¶3), the obligation to enter into acuerdos to that end and, in the sixth Transfer Condition (sub-section IV), for SSA to carry out the necessary processes for such transfer. The acuerdos and related transfer processes, their subject matter and timing may well have been indicated as part of the objectives, actions or deadlines in the Strategic Plan. However, the Transfer Conditions clearly mandate (without reference to the Strategic Plan) the transfer of resources, real estate, rights and obligations, and the method by which this was to occur. It was common ground that provisions of Mexican law generally fell to be interpreted in accordance with the words used, with other interpretative methods being used where the words were unclear. In this case, I saw no basis in their language for Mr Lobatón’s repeated assertion to the effect that “[p]ursuant to the Transfer Conditions, the transfer to [IMSS] would occur following the Strategic Plan.” He also suggested that, if the second Transfer Condition (¶3) alone was sufficient to transfer INSABI rights and obligations, it would have been unnecessary for the Transfer Conditions to have referred to the Strategic Plan at all. However, this did not follow. The second Transfer Condition (¶3) and the Sixth Transfer Condition, sub-section I (and related other sub-sections) were addressing the different objectives identified in the First Transfer Condition. There was no superfluity.

(i) The fifth Transfer Condition

[407]The Defendants also placed some emphasis in this context on the fifth Transfer Condition which provided that(i) INSABI’s rights and obligations which remain unfulfilled as at the date of the issue of the Transfer Conditions remained enforceable under their terms (¶5)

(ii) INSABI would continue to enjoy legal personality until completion of the disincorporation process solely for “the corresponding termination” (¶1) and

(iii) INSABI was responsible for closing all “programmes and actions that are in progress”, including obligations arising from lawsuits or administrative proceedings and contractual instruments already initiated (¶1). The Defendants also relied on the fifth Transfer Condition (¶2) which explained that INSABI may agree to transfer litigious rights so that SSA or IMSS, as appropriate, can deal with them. I did not understand there to be any dispute that INSABI continued to enjoy legal personality pending disincorporation for the limited purposes stated and that, in principle at least, it would have been open to INSABI to enter into a voluntary assignment of its litigation rights, including in respect of these proceedings.

[408]The Defendants also contrast the position under the fifth Transfer Condition (¶2) concerning litigious rights with that under the second Transfer Condition (¶3). Although the latter concerns the transfer of (amongst other things) INSABI’s rights, it did not distinguish litigious from non-litigious rights. Given that Mexican law would apply a special rule rather than a general one, any transfer of the (litigious) rights with respect to these proceedings must have taken place under fifth Transfer Condition (¶2). As to this, although the issue of the transfer of litigation rights could potentially arise under both paragraphs, as Mr Irra explained, this would occur in different ways. INSABI had the ability, but was not obliged, to conclude convenios relating to the transfer of litigation rights under the fifth Transfer Condition (¶2). The second Transfer Condition (¶3), by contrast, was mandatory such that INSABI had no choice but to enter acuerdos as required with respect to the transfer of its resources, real estate and rights and obligations (whether or not of the relevant rights were of a litigious nature). The two Transfer Conditions operate differently such that the application of the lex specialis principle is inapt.

[409]The Defendants also say that, other than under the fifth Transfer Condition (¶2), the only route by which such a transfer of INSABI’s litigation rights could take place was by means of the Strategic Plan. I have already addressed why the Transfer Conditions do not require the transfer of INSABI’s resources, real estate, rights and obligations to take place by means of the Strategic Plan. Here, however, the operation of the lex specialis principle did seem apt, reinforcing my view as to the prevalence of the second Transfer Condition (¶3) with respect to that resources transfer.

(j) The Acuerdo

[410]There are other reasons why the suggested engagement here of the fifth Transfer Condition (¶2) and the Acuerdo’s operation as a private law assignment (as both were suggested by the Defendants) were inapt. First, the Acuerdo specified in its operative provisions its objective as complying with, amongst other things, the Fourth Transitional Provision of the Amendment Decree, the Second Transfer Condition (¶3), the fifth Transfer Condition (¶1) and the sixth Transfer Condition (sub-section IV). The fifth Transfer Condition (¶2) was only mentioned in the background section.

[411]Moreover, the fifth Transfer Condition (¶2) does not encompass litigious obligations. A transfer of litigation rights alone would not seem meaningful for many of the proceedings the subject of the Acuerdo, including the counterclaims herein. Moreover, given the nature of many of the underlying actions to which INSABI was party, including criminal and administrative proceedings, it is not explained how, short of the mandatory transfer contemplated by the second Transfer Condition (¶3), IMSS could properly be substituted therein for INSABI. The Acuerdo also provided for the transfer of certain non-litigious matters. These could not form the subject matter of an agreement under fifth Transfer Condition (¶2) but would be encompassed by a transfer envisaged by second Transfer Condition (¶3).

[412]Finally, the Defendants relied on reference to the fifth Transfer Condition in INSABI’s letter of 6 June 2023. However, that letter concerned the appointment of INSABI personnel to liaise to facilitate both the resource transfer and disincorporation. The reference to the fifth Transfer Condition (¶1, not ¶2) in that context seemed appropriate, relating to INSABI’s continuing legal personality for the limited purposes stated, including closing all programmes and actions in progress. There was no incompatibility with a transfer of resources envisaged by the second Transfer Condition (¶3).

(k) The effect of the Acuerdo

[413]Having concluded that the Acuerdo was entered into pursuant to second Transfer Condition (¶3), I now consider its effect. It was common ground that(i) administrative acts under Mexican law are acts issued by an organ of the State or an administrative body, in the exercise of its administrative function and with direct legal effects and

(ii) a contract cannot be an administrative act. The fundamental difference between the experts on this point is that Mr Lobatón says that the Acuerdo is an assignment agreement between IMSS and INSABI, it has the legal nature of a contract and it is not an administrative act. Mr Irra says the opposite.

[414]As Mr Irra and Mr Lobatón explained in their reports by reference to various commentators on Mexican legal doctrine and Mexican judicial decisions, administrative acts are, by their nature, unilateral declarations or manifestations of will. After analysing the nature of administrative acts and assignment agreements under Mexican law, Mr Lobatón concluded in his report that the Acuerdo is in the nature of the latter for a number of reasons, namely that it was(i) bilateral, not unilateral

(ii) not “dictated” by INSABI or IMSS but was agreed by both of them, establishing a bilateral relationship and

(iii) not issued in the exercise of INSABI’s or IMSS’ administrative functions but was a voluntary agreement that formed a bilateral relationship between two state entities. In this regard, I found instructive Prof Jorge Olivera Toro’s commentary that:- “ … the classification of unilateral administrative acts [...] may cause confusion with the unilateral character of the act itself, the latter being the exclusive expression of public authority. In this context, its unilateral character (as opposed to consensual) does not pertain to the number of its authors but rather to its embodiment of public will.”

[415]Although there was an issue at trial locating this citation in the exhibits, Mr Lobatón referred to this in his report as well. Mr Irra also referred to the classification of administrative acts by Professor Andrés Serra Rojas, who explained that:- “The complex [administrative] act, which can be bi- or multilateral, is the one that results from or is formed by the concurrence of two or more wills, public or private, various bodies and persons, which unite in a single will [...] If the wills belong to different public entities, there will be external complexity; in this case the complex act is also called an acuerdo.” (Emphasis added by Mr Irra)

[416]Although Mr Lobatón relies on the references in the Acuerdo to the word (or derivatives of the word) “agreement”, as is common ground, and as Professor Serra explained in his commentary, the word acuerdo can encompass an administrative act as well. That the parties to the Acuerdo expressed “their will to execute this legal instrument” did not seem inconsistent with Professor Serra’s exposition. Nor did the expression of such execution as having been in “good faith” undermine that even if that language might feature in a contractual setting too. Nor, again, was it explained in this context how the Acuerdo could be an (effective) assignment agreement at all given the nature of the some of the proceedings and underlying liabilities transferred. Finally, SSA participated in the issue of the Acuerdo but it did not transfer or receive any resources, real estate or rights or liabilities thereunder.

[417]The Defendants placed some emphasis on Professor Serra’s reference to André de Laubadère’s explanation that complex acts involve successive phases in which different administrative authorities participate, distinguishing these from contracts in which the wills converge at the same time to form a consensus. It was evident from Mr Irra’s evidence that he did not consider significant the sequencing of the relevant acts. I agree that the method of consummation of a complex legal act would depend upon the circumstances of the particular case. The important point for Mr Irra was that the administrative act resulted from the unity of will of the relevant authorities, whether expressed at the same time or successively. The distinction sought to be drawn also rather lost sight of the unilateral character of an administrative act described by Professor Olivera (and the further commentary relied on by Mr Lobatón), being the exclusive expression of public authority.

[418]In this regard, Mr Lobatón accepts that, if the transfer of INSABI’s rights and obligations to IMSS had been fully concluded in accordance with the Strategic Plan and the Transfer Conditions, such transfer would be valid and effective and made in compliance with valid administrative acts. I have already explained why I do not accept the Defendants’ arguments that the only route by which such a transfer of INSABI’s litigation rights could take place was by means of the Strategic Plan. The second Transfer Condition (¶3) required acuerdos to be entered into by SSA, INSABI and IMSS. The Acuerdo was concluded pursuant thereto. I therefore agree with Mr Irra that the execution of the Acuerdo was an expression of the administrative power to transfer certain assets, rights and obligations so that the new health model in Mexico could be realised.

[419]In my view, that provides a complete answer to the suggested ‘consensual nature’ of the Acuerdo or any mutuality of obligation. I do not accept Mr Lobatón’s evidence that the Acuerdo was an assignment agreement entered into voluntarily and bilaterally by, and as between, INSABI and IMSS. This was not akin to a purchase agreement between parties in “opposing positions that supplement each other”, INSABI wanting to assign, IMSS wanting to receive the assignment. The Acuerdo was concluded by SSA, INSABI and IMSS as required by the second Transfer Condition (¶3), a mandatory provision of Mexican law. It took effect as an administrative act.

[420]As to the validity of that administrative act, the Defendants referred to the Federal Law on Administrative Procedure (Chapter 1, Article 3) which requires such an act to be “determined or determinable”, “precise as to the circumstances of time and place, provided for by law” and to be “issued expressly deciding all the points proposed by the parties or established by law”. The Defendants suggested that the Acuerdo was “incomplete” and, therefore, invalid, because it contained (at [6]) a dispute resolution clause admitting of possible disagreements as to its interpretation. I was unable to accept this argument either. The second Transfer Condition (¶3) required SSA, INSABI and IMSS to enter into acuerdos for the transfer of human, budgetary, financial, and material resources, as well as the corresponding real estate, rights and obligations. The Acuerdo was specifically concerned with the transfer of identified pending proceedings, documentation and archives. On its face, it appears to achieve the transfer of the related material resources, rights and liabilities. The Defendants did not point out relevant shortcomings in that regard. It is difficult to see how the inclusion of clause 6 creates any.

(l) Date of Acuerdo signing

[421]The Defendants also said that the Acuerdo was invalid because its date of execution was “uncertain”. There was quite some debate as to whether it was, in fact, open to the Defendants to raise this issue at all given the position on the pleadings. As to that, Amended Particulars of Claim were filed on 10 May 2024 (APoC) following permission for IMMS to be substituted for INSABI in these proceedings. IMSS explained in relation the status of INSABI that (APoC [1A]-[1B]):- “1A. By a decree amending the General Health Law dated 29 May 2023 (the “Amendment Decree”), the Mexican government approved the dissolution of INSABI and the transfer of all of its rights and liabilities to the Claimant. So far as relevant to these proceedings, all of INSABI’s rights and liabilities, including all claims against the Defendants, were transferred to the Claimant on 24 November 2023 by an Acuerdo de Transferencia executed by the Mexican government’s Ministry of Health, INSABI and the Claimant. The Acuerdo de Transferencia was made pursuant to Bases for the transfer of INSABI’s rights, obligations, litigation rights and other matters related to administrative or judicial proceedings published by the Mexican government’s Ministry of Health on 1 June 2023 (the “Transfer Bases”), which was in turn made pursuant to the Fourth Transitory Provision of the Amendment Decree. 1B. INSABI was initially due to be dissolved pursuant to the Amendment Decree on 25 November 2023. The deadline for its dissolution has subsequently been extended by the Mexican government’s Ministry of Health, and INSABI is expected to be finally dissolved in August 2024.”

[422]In the Amended Defence and Counterclaim filed on 14 June 2024 (re-produced in the re-amended version filed on 4 February 2025) (RADCC), the Defendants plead (at [2.2.1]) that:- “2.2.1. As far as the Defendants are aware, and subject to paragraph 2.2.4 below, the description of INSABI set out in paragraph 1 of the Amended Particulars of Claim is not admitted. In particular, at all material times, INSABI’s governing legislation was not merely the alleged governing legislation set out in paragraph 1 of the Amended Particulars of Claim but also the Amendment Decree set out in paragraph 1A of the Amended Particulars of Claim. The date of 24 November 2023, the date of execution of a Acuerdo de Transferencia arose at/during a “material time” for the purposes of these proceedings.”

[423]In relation to the Acuerdo, the Defendants admit (RADCC [2.2.1.6]) that INSABI alleges that all claims against them were transferred to IMSS on 24 November 2023 by the Acuerdo. However, they deny (RADCC [2.2.1.8]) that the Acuerdo was a transfer of rights pursuant to those Transfer Conditions which, they say, had to be fulfilled for a transfer of all of INSABI’s rights and liabilities to IMSS or SSA as contemplated by the Amendment Decree (apparently referring to the second Transfer Condition (¶3)). They go on to say (RADCC [2.2.1.9]) that, to the extent the said Acuerdo purported to transfer any rights from INSABI to IMSS, it did so by means of an agreement. Given the prohibition on assignment of the VSA without VEL’s consent, the Defendants therefore deny any transfer or assignment of all INSABI’s rights and liabilities, including the claims against the Defendants, took place on 24 November 2023 or at all.

[424]The Defendants further counterclaim for breach of clauses 38 and 39 of the VSA including if, contrary to their primary case, INSABI did assign the benefit of the VSA to IMSS by execution of the Acuerdo. The Defendants’ losses are said to be referable to the legal costs associated with their Defence and steps taken by them after the Acuerdo was entered into on 24 November 2023 (RADCC [26.4.5]).

[425]Finally, the Defendants’ Re-Amended Rejoinder in its current and prior iterations pleaded (at [10]) in relation to the application to substitute IMSS as Claimant that Adam Johnson J “did not deal with the Defendants’ arguments on the denuding of INSABI of its causes of action by its execution of the [Acuerdo] on [sic] 23 November 2023, whilst proceedings were ongoing, such that it was a Claimant without a claim.”

[426]The agreed case summary for trial refers (at [7]) to the Acuerdo having been executed in November 2023.

[427]Likewise, the agreed list of expert issues included the following (addressed by each expert):- “What is the correct characterisation of the Acuerdo de Transferencia dated 24 November 2023 as a matter of Mexican law? In particular, is the Acuerdo de Transferencia:(a) an administrative act of IMSS Bienestar, INSABI and/or the Ministry of Health;

(b) an agreement between IMSS Bienestar, INSABI and/or the Ministry of Health; or

[428]In their written opening submissions, the Defendants said that the Acuerdo was entered into on 1 August 2023. However, in closing, the Defendants submitted for the first time that there was no positive evidence as to when the Acuerdo was signed apart from that of Mr Tickner of the Claimant’s solicitors in his fourth witness statement dated 11 December 2023 in which he stated on instruction (at [9(1)]) that the Acuerdo had been effected on 24 November 2023 and that, although not yet signed, this did not change its status or effect. In light of Mr Irra’s evidence at trial that the Acuerdo would need to be signed by its effective date of 24 November 2023 for any transfer of this claim to be valid, whether by way of assignment or an administrative act, it follows that the Acuerdo is invalid such that IMSS has no legal title to sue.

[429]Although I permitted (in the face of the Claimant’s objection) Mr Irra to be cross-examined as to the legal effect of the Acuerdo on the hypothesis that it was not signed before 24 November 2023, I said I would hear further submissions about that. Having considered the parties’ related closing submissions and re-visited the pleadings and evidence in detail, I have no hesitation in saying that this argument is not open to the Defendants. Although it is clear from the pleadings that the Defendants were contending that any purported assignment of transfer of rights and/ or liabilities by INSABI was invalid, it is also clear that they had positively accepted that the Acuerdo had been executed on 24 November 2023. The Defendants’ effort in closing to suggest otherwise by reference to the framing of certain parts of their pleadings was unpersuasive and did not have regard to the entirety of their pleaded case, the agreed case documents or their own prior submissions in the case.

[430]I also did not understand the Defendants’ argument that the date of the Acuerdo was merely a matter of evidence which went to their legal plea denying any transfer of INSABI’s legal rights and liabilities such that it was unnecessary for them positively to allege that the Acuerdo was not executed on 24 November 2023. The parties have pleaded in some detail the basis for, and effect of, the Acuerdo. Advancing the argument for the first time in closing submission that this was ineffective for the further reason that it was executed later than 24 November 2023 runs counter to CPR, Part 16.5 and the requirement for the Defendants to put forward in their statement of defence all, not just some, of their reasons for denying the transfer of rights and liabilities pursuant to the Acuerdo. When the Defendants came to amend their pleadings after the substitution application, they were already aware of Mr Tickner’s earlier evidence filed for that purpose. If they had wished to run a case that the Acuerdo had been executed after 24 November 2023 (and as to the suggested effect thereof), it was perfectly open to them to do so at a much earlier stage.

[431]That they did not do so may be explained by their pleaded reliance on the argument alluded to above (in the context of the Re-Amended Rejoinder). That argument was to the effect that, on INSABI’s case, it must already have divested itself of all claims by 24 November 2023 such that, by the time IMSS applied the following month to substitute itself, INSABI no longer possessed any interest in the action (RADCC [2.2.1.13]-[2.2.1.16]). That prior argument was not pressed at trial, perhaps explained (conversely) by the advancement of the Defendants’ new point. In any event, whatever the reason for only raising that new point at the eleventh hour, and despite the Defendants’ apparently unanswered correspondence from January 2026 about the date of the Acuerdo, the Claimant came into the trial on the understanding that the execution date was accepted to be 24 November 2023. The unfairness to the Claimant in allowing this point to be relied on now would be palpable, including not having had the opportunity to obtain(i) further factual evidence on the execution of the Acuerdo

(ii) clarification of Mr Tinkler’s instructions from the Claimant and

(iii) properly considered expert evidence on the point and the issues to which it may give rise. I have therefore concluded that this new argument is not open to the Defendants.

(m) Notice of transfer of these proceedings

[432]Finally, the Defendants also rely on lack of formal notice of the transfer of these proceedings, a mandatory requirement of second Transfer Condition (¶2), as further evidence that the Acuerdo was not made under second Transfer Condition (¶3). In my view, that conclusion does not follow. For the many reasons given above, I am satisfied that the Acuerdo was executed as an administrative act in furtherance thereof.

(n) Clauses 38/ 39

[433]With that long exposition of the position under Mexican law, I now return more briefly to where, in a sense, the above analysis started. The Acuerdo was an administrative act under Mexican law which caused certain rights and liabilities of INSABI, including with respect to these proceedings, to be transferred to IMSS. Although INSABI is a signatory, the Acuerdo is itself mandated by the Amendment Decree and the second Transfer Condition (¶3)). The transfer to which it gave effect therefore came about by operation of the law. As such, I am satisfied that, as a matter of construction of Clause 38 of the VSA, it was not an assignment “by any Party”. Although concerned with a different assignment provision and context in which it was agreed, the analogy with Dassault Aviation SA v. Mitsui Sumitomo Insurance Co Ltd

[2024] KB 421

is relevant and useful here.

[434]The Defendants persisted nonetheless in asserting INSABI’s suggested ability to choose between different ways of INSABI transferring rights, whether under the second Transfer Condition (¶3) or fifth Transfer Condition (¶2). They drew on Mr Irra’s suggested evidence to that end. However, considering Mr Irra’s evidence as a whole, he seemed to be saying little more than that the Transfer Conditions envisaged these two ways in which a transfer of litigation rights could occur, the former mandatory, the latter voluntary. I accept that evidence which reflects a plain reading of the Transfer Conditions. The existence of the power to transfer litigation rights voluntarily and its non-exercise prior to the engagement of the mandatory provision and process do not make the latter voluntary after all. Nor, as I have already noted, are the two Transfer Conditions co-extensive. The Acuerdo is concerned with the transfer of INSABI’s rights and obligations, not merely its litigation rights.

[435]Finally, the Defendants say that it is not open to the Claimant to invoke Clause 39 because, on its case, INSABI continues to exist or, on the Claimant’s case, it existed until April 2024. Either way, IMSS cannot have been INSABI’s “successor”. As a preliminary matter, it occurred to me that, by application of conflicts of laws principles, this Court might give effect to the transfer contemplated by the Acuerdo regardless of the operation of any inurement provision. However, neither party addressed me on that basis, focusing instead on the meaning of Clause 39. As to this, I was unable to accept the Defendants’ construction. “Successor” in the context of Clause 39 clearly contemplates the person or entity succeeding to INSABI’s position under the VSA. The fact that INSABI and IMSS may have co-existed after the transfer of INSABI’s relevant rights and liabilities pursuant to the Acuerdo does not detract from that. The Claimant is properly regarded as INSABI’s successor for these purposes.

[436]Given the above matters, I am satisfied that there has been a valid transfer of INSABI’s rights and liabilities under the VSA (as amended) to the Claimant and that IMSS is the proper successor thereto within the meaning of Clause 39 of the VSA. L. REMEDIES/ RELIEF (ISSUES 24-29)

[437]The list of issues asks “[t]o what remedies, if any, is the Claimant entitled?” before going on to identify the particular issues directed to the remedies sought on the pleadings. My conclusions based on the above analysis are set out below.

(a) Rescission/ termination

[438]The Claimant’s Misrepresentation Claims having failed, and there having been no repudiatory breach (or breach of an innominate term), no question of rescission or termination of the VSA arises. Even if it had arisen, the June Agreement would have operated effectively to negative any prior rescission or termination.

(b) Unjust enrichment

[439]Since the VSA was not terminated for repudiatory breach (or breach of an innominate term), no claim can lie in unjust enrichment on account of a total failure of consideration. Even if (contrary to my findings), there had been a repudiatory breach such that INSABI did terminate the VSA by its 21 May 2020 letter, I would still have found that that no claim would lie in unjust enrichment. Clause 9(r) of the VSA already set out a specific regime for VEL’s payment of a refund to INSABI in the event of significant disruption to supply resulting in a failure to deliver. To the same end, the parties later agreed in the June Agreement a different regime for the winding down or contractual discharge of the VSA. Given those contractual provisions, there is no scope for a restitutionary claim here (see Winros Partnership v Global Energy Horizons Corporation

[2026] EWCA 654

and the discussion at [56]-[72] for the most recent exposition of the principle). (c) Damages (i) Deceit/ s.2(1) Misrepresentation Act 1967

[440]Given my finding as to the absence of an actionable representation, the claims for damages in deceit and under s.2(1) of the Misrepresentation Act 1967 do not arise. The former could not arise in any event given the absence of relevant dishonesty. Likewise, in the case of the implied representations asserted, VEL’s honest and reasonable belief as to their truth would preclude a claim under s.2(1). Nor could a claim be made under s.2(1) in any event given that the alleged Representations were not pre-contractual but were contained in the Invoice, itself part of the VSA. (ii) Breach of contract

[441]As noted, I have found that the absence of a repudiatory breach or breach of an innominate term (and the operation of clause 9(r) of the VSA) would not have prevented INSABI from bringing a damages claim for non-delivery. However, the effect of the June Agreement was to vary the VSA to provide for an alternative method of its discharge (including with respect to secondary obligations that may already have arisen), namely a full refund of the VSA contract price or partial delivery and partial refund. As such, a damages claim for non-delivery does not arise. (iii) VSA, clause 9(r)

[442]As noted, it would also have been open to INSABI before the June Agreement to claim a refund of the VSA contract price under clause 9(r) of the VSA. However, given its effect described above, that remedy was no longer available following the June Agreement. (iv) General and/ or aggravated and/ or exemplary damages

[443]The APoC also contain a plea for general, aggravated and/ or exemplary damages on account of the use of INSABI’s limited budget to pay the VSA contract price on the basis of the rapid delivery promised. This is said to have prevented INSABI from placing orders with other suppliers. This claim was not pressed at trial. Given the absence of meaningful evidence to support its premise, such damages cannot be awarded.

(d) Other relief

[444]Based on my findings on the agreed issues for trial, INSABI’s (and, therefore, the Claimant’s) entitlement under the VSA (as amended by the June Agreement) was (and is) much more straightforwardly to a liquidated sum representing a pro rata refund of the VSA contract price corresponding to 650 units (reflecting the reduced VSA contract size of 700, less the 50 HBK units delivered by VEL).

(e) The Defendants’ counterclaims

[445]The Defendants have advanced a counterclaim on the basis (contrary to their primary position) that the VSA was rescinded or otherwise terminated by INSABI in circumstances in which property in the ventilators remained with, or was returned to, VEL. In those circumstances, the Defendants say that the ventilators were nevertheless delivered by VEL and accepted by INSABI and were held by INSABI on trust for VEL or as bailee for VEL’s benefit. Given my findings with respect to rescission and termination of the VSA, the counterclaim does not arise on its terms.

[446]Nor could it arise on its other terms. As I have also found, VEL had no entitlement to deliver any ventilators to INSABI. VEL never had property in the 465 ventilators. Encore did. VEL did not deliver them. VEL pretended that they had been delivered on its behalf. Their delivery by Encore reduced the number outstanding under the Encore/ INSABI Agreement ([357] above). I did not understand the counterclaim to be advanced in respect of the 465 ‘shortfall’ units tendered by Encore. However, if it had been, it could not have arisen either. Again, Encore, not VEL, had property in those ventilators. VEL did not deliver them. Encore tendered them but INSABI declined to accept them, the Encore/ INSABI Agreement having by then already been performed by delivery of 1000 units ([359] above). Although VEL did have property in the 185 units it bought from Irene, INSABI did not accept these either. INSABI was entitled to, and did, decline their tender in China. Nor did it accept these when VEL shipped them to Mexico ([360] above). INSABI therefore did not become VEL’s trustee or bailee in respect of any of these categories of units. Nor has INSABI been unjustly enriched thereby. As such, INSABI is not liable to VEL on this counterclaim.

[447]Finally, the Defendants also counterclaim for breach of Clauses 38 and 39 of the VSA. This counterclaim does not arise either. For the reasons given in Section K above, the transfer of rights and liabilities effected by the Acuerdo was not an assignment. VEL’s consent to that transfer was not required. M. DISPOSAL

[448]There shall be a consequentials hearing at which the final form of relief shall be settled.

[449]Following circulation of the draft judgment, but prior to handing down, I received a letter from the Defendants’ solicitors dated 10 June 2026 in which they quite properly declined to comment on the draft judgment but referred me to Advanced Multi-Technology for Medical Industry (trading as HITEX) v. Uniserve Ltd

[2025] EWCA Civ 1212

in respect of a first instance court deciding a case on an unpleaded basis. In particular, I was invited to read paragraphs 48-52 of the judgment in which Males LJ stated (at [51]) that:- “Where a judge makes a basic error, such as deciding a case without prior warning on a basis which has not been argued or is contrary to common ground on the pleadings, counsel should bring this to the judge’s attention before the judgment is handed down in order to give the judge an opportunity to reconsider and thereby avoid unnecessary appeals”.

[450]The Defendants went on to point out that the draft judgment construed the June Agreement in a manner that was neither party’s case and was not argued by them and that the Claimant’s pleaded case denied any June Agreement. I was well aware during the trial that neither party engaged meaningfully with the actual language of the correspondence constituting the June Agreement despite the meaning of its terms being an agreed issue for trial. That is why I explored the parties’ related arguments with them in closing submission ([273]-[274] above). In the case of the Defendants, I explained that I read the text more narrowly than they did and that they needed to persuade me that I was wrong to do so. Despite their related submissions, I remained of the view that the June Agreement bore the meaning more simply indicated by its language. Given the situation this presented, when preparing my draft judgment and prior to circulating it in draft, I had well in mind the authorities cited in Advanced Multi-Technology, including Medenni v Mars UK Ltd

[2005] EWCA Civ 1041

, in addition to those cited more recently in The New Lottery Company Limited and another v Allwyn Entertainment Limited

[2026] EWHC 891 (TCC)

(at [110]-[117]). Considering the principles indicated by those authorities in the context of this agreed issue for trial and the case a whole, I was satisfied that it was just and appropriate to take the course I have.

[451]I stated in the draft judgment that, conscious of the Claimant’s different framing of its relief, I would hear from the parties as to any impediment to its grant based on the entitlement I have found or otherwise as to its proper formulation. Given the parties’ reaction, including now a proposed amendment from the Claimant, this has clearly caused confusion, for which I apologise. I make clear that I was not leaving open for further discussion my findings as to the Claimant’s entitlement under the June Agreement. I raised the point in case there was an issue affecting the final form of relief which should be ventilated before judgment is formally entered. Any such matter can appropriately be discussed at the consequentials hearing. As I have already noted, that hearing should take place this term. The parties should make arrangements in the usual way for its listing. Other consequential matters arising will be dealt with at the same time.