“A. PURPOSE I/We have requested Investcorp Bank B.S.C. (‘Investcorp’) to establish a separately managed account (the ‘Investment Account’), which will invest in certain hedge funds or segregated accounts with any hedge fund managers selected by the Investment Manager (as defined below), including, but not limited to, any Investcorp hedge fund (whether an Investcorp Fund of Hedge Funds, an Investcorp Single Manager Fund or any other Investcorp hedge fund product (any of the foregoing, an ‘Investcorp Hedge Fund’) or a hedge fund or a segregated account with any other hedge fund manager; provided, however that any such other hedge fund manager is at the time of investment a manager with which an Investcorp Hedge Fund is invested. The Investment Account will be established as a special purpose vehicle, Shallot IAM Limited which will be incorporated under the laws of the Cayman Islands (the ‘Company’). All assets of the Company are hereafter referred to as the ‘Assets Under Management’ and each hedge fund or segregated account in which Assets Under Management are invested is hereafter referred to as an ‘Underlying Investment’. To the extent that Assets Under Management are invested in any Investcorp Fund of Hedge Funds, such investment will be made in non-fee bearing shares. B. SUBSCRIPTION: CURRENCY Subject to the acceptance hereof by Investcorp and subject to the terms and conditions set forth in this Share Purchase Agreement, I/we hereby agree to purchase, and Investcorp agrees to procure the Issuance and sale, for an aggregate purchase price equal to the Investment amount indicated on the signature page hereof (the “Investment Amount”), of a number of UAE Dirham denominated Participating Non-Voting Redeemable Preference Shares of the Company, par value equal to the UAE Dirham equivalent to US$0.01 per share (“Company Shares”), equal to (i) the Investment Amount, divided by (ii) UAE Dirham 1,000.00… C. INSTRUCTIONS FOR SUBSCRIPTION I/We understand that this Agreement must be completed,, dated and executed by me/us, and must be received by Investcorp at least seven calendar Days prior to the applicable Subscription Date, unless such requirement is waived. At least five calendar Days prior to the applicable Subscription Date, I/we shall transfer the total Investment Amount to the account indicated on the signature page of this Agreement in UAE Dirham net of all withholdings, cost of exchange and banking charges, and/or authorize Investcorp to debit my/our account with Investcorp for such amount. The Company Shares will be issued on the Subscription Date, and recorded in my/our name in registered, book entry format. I/We understand that no acceptance of this investment shall be final until (a) Investcorp receives payment of the Investment Amount, (b) the conditions set forth in Section D below have been satisfied, and (c) the Subscription Date has occurred. Prior to the Subscription Date, Investcorp may determine to return all or part of the Investment Amount to me/us in the event of an Inability to deploy subscription monies or for any other reason. I/We understand that my/our subscription cannot be revoked by me/us in whole or in part at any time after my/our delivery of this Agreement to Investcorp. Any amounts held by Investcorp prior to the Subscription Date will earn interest at a market rate, and accrued interest, plus any amount not accepted for investment, will be returned to me/us within a reasonable time after the Subscription Date (or, if earlier, within a reasonable time after Investcorp determines not to proceed with this subscription). D. ACTIONS TO BE TAKEN PRIOR TO ACCEPTANCE OF SUBSCRIPTION In contemplation of my/our investment, and as a condition precedent to the final acceptance thereof, I/we understand and agree that the following actions shall be taken: 1. The Company will enter into (a) an Investment Management Agreement (the "Management Agreement’), pursuant to which the Company will appoint Investcorp Investment Advisers Limited (“IIAL" or the "Investment Manager’) as its sole and exclusive manager in respect of its acquisition, holding and disposition of Its corporate assets. I/we understand that I/we may receive a copy of the Management Agreement upon written request to Investcorp. 2. The Initial shareholder of the Company has elected the directors of the Company, who will continue to serve as directors of the Company until their successors are duly elected. I/We understand that the Incumbent directors will have the power to fill any vacancies on the Company’s board of directors. I/We further understand that the Company’s board of directors will authorize or otherwise cause the Company to take any actions that the board believes are necessary or desirable In order to effectuate the purposes of this Investment or otherwise manage the affairs of the Company.”
“This application is dismissed for the reasons which I will briefly summarize as follows. Firstly, it is not necessary to amend the Statement of Claim in order to do justice between the parties in the sense that the Plaintiff is not at any risk of losing his case in the absence of amendment. Secondly, I think that the intended amendments raise additional causes of action, which if they were to be pleaded at all, could and should have been raised at an earlier stage. And certainly no later than the 16th September. Thirdly, I agree that the intended amendments do tend to introduce new allegations of negligence, which the defendant cannot reasonably be expected to deal with properly in the limited time available before trial. Fourthly, I think that allowing these amendments is likely to disrupt the orderly preparation of this case for trial commenced on the 9th January, and for a variety of reasons, I’m satisfied that this case should not be adjourned. So for those reasons, I dismiss this application…”
“Why were the materials in our hands not submitted back in Sept? It was too late on 1 Dec.”
“…Action in Dubai - effect on Cayman / JCPC? Separately, as mentioned previously to Michael, we are preparing to issue a new claim against Investcorp in the Dubai Courts (we consider it is available and a more favourable prospect than going in Bahrain), for which timing at this point is primarily driven by need to protect time for various of the causes of action under UAE law. We may file at the end of this week … I have also alerted the client previously to the risk I see that upon being notified of the Dubai action (before the JCPC judgment, which is likely) Investcorp will seek to inform the JCPC or try something to anti-suit in Cayman which may damage the JCPC judgment prospects. Michael expressed the view when we discussed briefly that the risk of adverse impact was low, weighed against the risk of time bar in Dubai. And that we could justify the action to Cayman / JCPC if needed on grounds that we needed to file to protect time and the delay from CA has meant it coincides with this. Please can you give me your views on this issue now before we file. It seems to me more of a risk not to commence in Dubai because we’re waiting for JCPC and could lose any other rights to claim in Dubai (albeit I consider the correct application of prescription gives more time, the client fairly wants to take no chances on the possible shorter period)…”
“(1) This section applies to any action for damages for negligence, other than one to which section 11 of this Act applies, where the starting date for reckoning the period of limitation under subsection (4)(b) below falls after the date on which the cause of action accrued. (2) Section 2 of this Act shall not apply to an action to which this section applies. (3) An action to which this section applies shall not be brought after the expiration of the period applicable in accordance with subsection (4) below. (4) That period is either— (a) six years from the date on which the cause of action accrued; or (b) three years from the starting date as defined by subsection (5) below, if that period expires later than the period mentioned in paragraph (a) above. (5) For the purposes of this section, the starting date for reckoning the period of limitation under subsection (4)(b) above is the earliest date on which the plaintiff or any person in whom the cause of action was vested before him first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action. (6) In subsection (5) above “the knowledge required for bringing an action for damages in respect of the relevant damage” means knowledge both— (a) of the material facts about the damage in respect of which damages are claimed; and (b) of the other facts relevant to the current action mentioned in subsection (8) below. (7) For the purposes of subsection (6)(a) above, the material facts about the damage are such facts about the damage as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment. (8) The other facts referred to in subsection (6)(b) above are— (a) that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and (b) the identity of the defendant; and (c) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant. (9) Knowledge that any acts or omissions did or did not, as a matter of law, involve negligence is irrelevant for the purposes of subsection (5) above. (10) For the purposes of this section a person's knowledge includes knowledge which he might reasonably have been expected to acquire— (a) from facts observable or ascertainable by him; or (b) from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek; but a person shall not be taken by virtue of this subsection to have knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice.” (a) six years from the date on which the cause of action accrued; or (b) three years from the starting date as defined by subsection (5) below, if that period expires later than the period mentioned in paragraph (a) above. (a) of the material facts about the damage in respect of which damages are claimed; and (b) of the other facts relevant to the current action mentioned in subsection (8) below. (a) that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and (b) the identity of the defendant; and (c) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant. (a) from facts observable or ascertainable by him; or (b) from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek; but a person shall not be taken by virtue of this subsection to have knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice.”
“It can be seen that the effect of s. 14A is as follows: (1) It only applies to claims in negligence (and only to claims other than claims for personal injury): s. 14A(1). (2) The purpose of the section is to correct the injustice that could be caused by the ordinary 6 year time limit for a claim in tort. A cause of action in negligence accrues as soon as the claimant suffers loss as a result of the defendant’s negligence, and a claimant may suffer loss without being aware of it, particularly (although not only) in cases of economic loss. Under the law as it previously stood, a claimant who suffered such latent damage might therefore find that their action was barred before they even knew they had a claim. The effect of s. 14A(4) is to give a claimant in such a case a secondary period of 3 years from the “starting date”. (3) The starting date is usually the date when the claimant has the requisite knowledge. By s. 14A(5) the claimant must also have the right to bring an action for damages, but in most cases, including this one, this has no practical effect on the starting date. In practical terms the question is when the claimant first has the requisite knowledge. (4) The combined effect of s. 14A(6)-(8) is that there are four things that the claimant has to know. The first (by s. 14A(6)(a) and (7)) is that he has suffered sufficiently serious damage to make it worth suing. This relates solely to matters of quantum (Haward v Fawcetts[2006] UKHL 9 (“Haward”) at [107] per Lord Mance). Since the putative defendant is assumed not to dispute liability and to be able to satisfy a judgment, this is not a very high bar and only really serves to cut out the case where all the claimant knows is that he has suffered loss in some trivial amount, “so minor that no one would contemplate instituting proceedings” (Haward at [106]). (5) The second (by s. 14A(6)(b) and (8)(a)) is that the damage was “attributable to” the act or omission alleged to constitute negligence. This requirement is the one that has given rise to most difficulty in the authorities, and I will have to look at it in more detail below. In practice in the present case it means that for the vicarious liability claim what the Claimants needed to know is that the damage was attributable to the advice, or lack of it, given by Formation. (6) I can take the third and fourth together. The effect of s. 14A(6)(b) and (8)(b) and (c) is that the claimant needs to know the identity of the defendant, and, in a case of vicarious liability, the identity of the person whose act or omission is in question, and the facts making the principal liable… (8) By s. 14A(9) a claimant does not need to know that the relevant acts or omissions constituted negligence. This provision has given rise to a certain amount of difficulty in the reported cases, but it is not suggested that anything turns on it in the present case. (9) Finally, s. 14A(10) in effect extends a claimant’s knowledge from his actual knowledge to his constructive knowledge… 16. The section has now been in force in this form since 1986 and has unsurprisingly accumulated a fair amount of authority. As I have said there was little dispute as to the law, and I can summarise what I take from that cited to me in the present case as follows: (1) The leading case on s. 14A is Haward. This was in fact a case of actual knowledge not constructive knowledge, but much of what their Lordships said is relevant to both. For a convenient summary, Mr Pooles referred me to the judgment of Tomlinson LJ in Jacobs v Sesame Ltd[2014] EWCA Civ 1410 (“Jacobs”) at [26ff] where he cited the relevant passages from speeches of four of their Lordships. I do not think it necessary to set them all out, although I refer to certain points that emerge from them below. (2) The burden of proof under s. 14A is on the claimant to establish that he brought his claim in time. It is incumbent on the defendant, as with all limitation defences, to raise the issue by pleading it, but once it has been raised, it is for the claimant to prove that he first had the requisite knowledge 3 years or less before the proceedings were brought. There was no dispute about this, and it is supported by authority at the highest level (see eg Haward at [23]-[24] per Lord Nicholls and at [128] per Lord Mance; see also Jacobs at [4] per Tomlinson LJ), although at first blush it seems a little odd. Limitation is a defence, and normally one would have thought it was for a defendant to make out a defence. I can see that there may be pragmatic reasons why it is appropriate to require the claimant to establish when he first had actual knowledge of something, as this is something which (by definition) is peculiarly within the claimant’s own knowledge and about which the defendant will usually be in the dark; but is it not clear why the same should be the case where a defendant is relying not on actual knowledge but on constructive knowledge, which is an objective question (see below). One might have thought that if a defendant wished to allege that the claimant had constructive knowledge, it would be for him to establish what a reasonable person would have known. But the authorities are clearly to the contrary, and it was common ground that the burden was on the claimant, and I will therefore proceed on this basis. (3) There is a substantial body of authority on what “knowledge” requires. It is summarised by Lord Nicholls in Haward at [8]-[10]. It does not require knowing with certainty, but it requires more than suspicion: “It means knowing with sufficient confidence to justify embarking on the preliminaries to the issue of a writ, such as submitting a claim to the proposed defendant, taking advice, and collecting evidence”
“even though he may not yet have the knowledge sufficient to enable him or his legal advisers to draft a fully and comprehensively particularised statement of claim.” (5) Other statements to similar effect can be found collected in the speech of Lord Nicholls in Haward at [10], such as that a claimant needed to know “in general terms” that her complaint was capable of being attributed to an operation, or that a claimant needed to know the “essence” of the relevant act or omission, or have “in broad terms” knowledge of the facts on which the complaint is based; see also at [66] per Lord Walker referring to the “essence” or “essential thrust of the case” or facts which “distil what [the complainant] is complaining about”. (6) So far as the question of attributability under s. 14A(8)(a) is concerned, “attributable” means “capable of being attributed to” (rather than “caused by”): Haward at [122] per Lord Mance, approving a line of cases to this effect. What is required for a claimant to have knowledge of attributability is therefore knowledge in broad terms of: (a) the facts on which the claimant’s complaint is based; (b) the defendant’s acts or omissions; and (c) that there was a real possibility that those acts or omissions had been a cause of the damage. (7) For the purposes of constructive knowledge, the test is an objective one, based on what a reasonable person with the general characteristics of the claimant would have done: see Gravgaard v Aldridge & Brownlee[2004] EWCA Civ 1529 at [22] per Arden LJ: “Section 14A(10) does not state that a person's knowledge includes knowledge “which a reasonable person might be expected to acquire” but rather that a person's knowledge includes knowledge “which he [she] might reasonably be expected to acquire” (contrast s.14A(7)). In my judgment, this choice of wording is significant. It means, in my view, that in general the court must have regard to the characteristics of a person in the position of the claimant, but not to characteristics peculiar to the claimant and made irrelevant by the objective test imposed by subs.(10).”
“Finally it is important to remember where the onus of proof lies. If the writ is not issued within three years of the date when the cause of action arose (section 11(4)(a)), the onus is on the plaintiff to plead and prove a date within the three years preceding the date of the issue of the writ (section 11(4)(b)). If the defendant wishes to rely on a date prior to the three year period immediately preceding the issue of the writ, the onus is on the defendant to prove that the plaintiff had or ought to have had knowledge by that date.”
“Section 14A(10) does not state that a person’s knowledge includes knowledge “which a reasonable person might be expected to acquire” but rather that a person’s knowledge includes knowledge “which he [she] might reasonably be expected to acquire” (contrast s.14A(7)). In my judgment, this choice of wording is significant. It means, in my view, that in general the court must have regard to the characteristics of a person in the position of the claimant, but not to characteristics peculiar to the claimant and made irrelevant by the objective test imposed by subs.(10)…”
“First, the claimant had no reason to seek a second opinion (or indeed a third, given that he was being advised by both solicitors and counsel). He was being advised by apparently competent and experienced solicitors and counsel whose advice he was entitled to trust. They were not suggesting that a further opinion be obtained. Second, to require a claimant to seek a second or third opinion in those circumstances would involve placing what Lord Woolf CJ described in Oakes v Hopcroft [2000] Lloyds Med Rep at [34] as “an excessive burden” upon a claimant to expect him to question the advice of his lawyers. Third, to require a litigant who has received advice from competent and experienced solicitors and counsel to incur the expense, delay and disruption of a second/third opinion in case the opinions of both solicitor and counsel (which he has no reason to doubt) were flawed would seriously undermine the effective running of personal injury litigation.”
“The notion that a professional person owes a continuing duty to review the quality of the performance of his retainer or engagement is not a straightforward one unless it is intended simply as a transparent mechanism for delaying artificially the commencement of some period of limitation. In the ordinary conduct of human affairs a task which is considered to have been completed satisfactorily is put behind one as the next task is embraced. To expect someone in real life continuously to review what he or she is doing is to expect them to be paralysed into substantial inactivity by anxious traversing of old ground until eternity …”
“I would add, as was conceded by Mr Neil Lawson, that in such a case it is not enough for the plaintiff to say: ‘Though I had no claim in law, still, I had a nuisance value which I could have so utilised as to extract something from the other side and they would have had to pay something to me in order to persuade me to go away.’”
“In contemplation of my/our investment, and as a condition precedent to the final acceptance thereof, I/we understand and agree that the following actions shall be taken: 1. The Company will enter into (a) an Investment Management Agreement (the "Management Agreement’)…”
“as a condition precedent to the final acceptance thereof, I/we understand and agree that the following actions shall be taken”
“…Where the terms of a contract include a provision which has been inserted solely for the benefit of one party, he may, without the assent of the other party, waive compliance with that provision and enforce the contract as if the provision had been omitted. He will not be permitted to do so where the provision has been inserted for the benefit of both parties…”
“An estoppel by convention is an estoppel from denying a proposition established not by representation or promise by B to A, but by mutual, express or implicit assent. The estoppel is not founded on A believing a representation by B, but on a common assumption of facts or law as a basis of their relationship, to which B has so assented as to make B responsible for A’s reliance on it. Where the parties have so acted in their relationship upon that shared assumption that it would be unfair on A for B to resile from it, than A will be entitled to relief against B.”
“If a beneficiary … concurs in a breach of trust, he is forever estopped from proceeding against the trustee for the consequences of that act, whether or not he knew that the act constituted a breach of trust, and whether or not he derived benefit from that breach.”
“During the following six months Messrs. Al Khatib and Kironde communicated with Mr. Al Sadik on a number of occasions and the call notes reflect that he expressed disappointment with the poor results and said nothing about having a guarantee. There was a meeting with Mr. Al Khatib on 8th September. He did not make a contemporaneous call note as such, but he did describe what happened at the meeting in a subsequent e-mail transmitted to Messrs. Gharghour and Kironde on 15th September. It records that Mr. Al Sadik was "extremely unhappy or angry rather" with Investcorp's performance which was compared unfavourably with that of Citigroup and HSBC, but he refused to meet with the hedge fund specialists or any more senior representatives of Investcorp. Importantly, the e-mail records that "He wants to see results otherwise he probably will redeem by year end".”
“If and in the event that the SPA did not come into force and effect until 1st March, 2009 or at all then Investcorp Bank and/or Investcorp Advisers and/or Shallot and/or Blossom did not have authority to exercise the discretionary power of investment and to the extent they purported to do so the power was exercised in breach of trust and in the knowledge that the exercise was in breach of trust.”
“and in the knowledge that the exercise was in breach of trust”
“It is not in dispute that, in the period between the receipt of the Investment Amount and the execution of the SPA, Investcorp Bank held the Investment Amount upon trust “for Mr. Al Sadik for the purpose of investing it on the terms of an agreement in writing to be negotiated”
“Clause D.1 provides that Shallot will enter into an Investment Management Agreement (referred to as the "IMA") with an Investcorp group company called Investcorp Investment Advisers Limited. This was not done and the reasons for this omission were not explored by the parties in evidence. Both parties appear to have completely overlooked this provision”
“It is a term to be implied into the SPA that Shallot and Investcorp Bank each owed a duty to exercise the discretionary power of investment in good faith and with a degree of prudence, diligence, care and skill which a prudent person rendering services as an investment manager would exercise”. 289.2. paragraph 120 of Part B (which was new): “The asset allocation decisions to invest in Blossom and to arrange First Layer Leverage and engage in First Layer Leverage (that is to say, each and every decision taken to make an investment using First Layer Leverage) throughout the currency of the SPA were taken in breach of the fiduciary duties owed to Mr. Al Sadik under the trust that arose on 28th February, 2008 and the terms of the SPA in relation to the discretionary power and in particular the implied term set out in this Part B at paragraph 50A, that is to say that the decisions were taken in bad faith and without the degree of prudence, diligence, care and skill which a prudent person rendering services as an investment manager would exercise. The decisions were taken recklessly, that it to say, without any or any proper regard to the best interests of Mr. Al Sadik and predominantly for the benefit of Investcorp Bank”. 289.3. paragraph 26E of Part C, of which subparagraph (2A) was new: “(k) Eleventh Claim: Breach of Contract (Duty to Act Fairly) 26E (1) It is a term to be implied in the SPA that Shallot and Investcorp Bank each owed a duty to Mr Al Sadik to exercise the discretionary power of investment in good faith (“the Duty of Good Faith”) and prudently. The duty is pleadedmore specifically in Part B at paragraphs 50A to 50C. (2) Upon entering into the IMA Investcorp Advisers and Blossom each became subject to the Duty of Good Faith which was also included in the IMA (Clause 5). Investcorp Bank and/or Investcorp Advisers and/or Blossom breached the duty by using and continuing to use leverage when they knew it was much more likely than not that the shares in the hedge funds in which Blossom invested would decline and had no prospects of rising, and this was a continuing breach until there was no more leverage. (2A) Further and in any event, having regard in particular to the facts and matters pleaded in Part B at paragraphs 119 to 125, each and every asset allocation decision taken by Investcorp Bank including the decision to arrange First Layer Leverage (on the terms of the MNPAs) and to use First Layer Leverage was taken in the Interests of Investcorp Bank and recklessly and without proper regard to the interests of Mr. Al Sadik and in breach of the implied term identified in Part B at paragraph 50A and in breach of the fiduciary duties of loyalty more specifically pleaded in this Part C at paragraph 23. (3) Investcorp Bank and/or Shallot and/or Investcorp Advisors and/or Blossom breached the Duty of Good Faith and the Trust Duties by acting in the best interests of Investcorp Bank reckless as to the interests of Mr Al Sadik and/or Shallot. The motives of these Investcorp parties are more particularly described in Part A and paragraph 13C and in Part B at paragraphs 50A to C and 119 to 125.” (2) Upon entering into the IMA Investcorp Advisers and Blossom each became subject to the Duty of Good Faith which was also included in the IMA (Clause 5). Investcorp Bank and/or Investcorp Advisers and/or Blossom breached the duty by using and continuing to use leverage when they knew it was much more likely than not that the shares in the hedge funds in which Blossom invested would decline and had no prospects of rising, and this was a continuing breach until there was no more leverage. (2A) Further and in any event, having regard in particular to the facts and matters pleaded in Part B at paragraphs 119 to 125, each and every asset allocation decision taken by Investcorp Bank including the decision to arrange First Layer Leverage (on the terms of the MNPAs) and to use First Layer Leverage was taken in the Interests of Investcorp Bank and recklessly and without proper regard to the interests of Mr. Al Sadik and in breach of the implied term identified in Part B at paragraph 50A and in breach of the fiduciary duties of loyalty more specifically pleaded in this Part C at paragraph 23. (3) Investcorp Bank and/or Shallot and/or Investcorp Advisors and/or Blossom breached the Duty of Good Faith and the Trust Duties by acting in the best interests of Investcorp Bank reckless as to the interests of Mr Al Sadik and/or Shallot. The motives of these Investcorp parties are more particularly described in Part A and paragraph 13C and in Part B at paragraphs 50A to C and 119 to 125.”
“30. … Mr Al Sadik suffered loss as follows – 30.1 Unauthorised leveraging conducted by Blossom commenced in about April 2008 and ended in about August 2009 (“the Leverage Period”); 30.2 The use of leverage by Blossom during the Leverage Period reduced the Aggregate NAV by more than it would have been reduced if unauthorised leveraging had not been used (“the Leverage Loss”); 30.3 Mr. Al Sadik will be adducing expert evidence as to the quantum of the Leverage Loss and its effect on the Aggregate NAV after the Leverage Period had ended until the date of the date of payment of the Redemption Amount (if any);…” 30.1 Unauthorised leveraging conducted by Blossom commenced in about April 2008 and ended in about August 2009 (“the Leverage Period”); 30.2 The use of leverage by Blossom during the Leverage Period reduced the Aggregate NAV by more than it would have been reduced if unauthorised leveraging had not been used (“the Leverage Loss”); 30.3 Mr. Al Sadik will be adducing expert evidence as to the quantum of the Leverage Loss and its effect on the Aggregate NAV after the Leverage Period had ended until the date of the date of payment of the Redemption Amount (if any);…”
“… The measure of damages for the purposes of the Fourth and Ninth pleaded breach of contract claims is the sum required to put the plaintiff in the position he would have been in had the contract been performed in accordance with its terms. The asset allocation contained in the Investment Proposal was not implemented because the proposed investment in opportunistic/theme funds was ruled out by the liquidity provisions subsequently incorporated in the SPA, which in turn [led] to the decision to make a 3x leveraged investment in the single funds rather than an investment in SMF Co. The burden of proof rests on the plaintiff, but Mr. Black did not cross-examine Messrs. Franklin or Gurnani about how they would have constructed the portfolio, if the use of First Layer Leverage had not been open to them. Nor did he attempt to ascertain how they could have applied leverage incrementally, if the use of First Layer Leverage was not open to them. In my judgment the most reasonable inference to draw from the evidence is that they would have allocated 50% to LDSF (x3) and 50% to SMF Co in March 2008. Had they done so, Mr. Opp's evidence leads to the conclusion that Mr. Al Sadik's loss would have been greater than that which he actually suffered. In conclusion, if Mr. Al Sadik had established that Investcorp was in breach of contract, as alleged in the Fourth and Ninth Claims, he would have failed to prove that the breaches caused any loss and damage.”
“Action in Dubai - effect on Cayman / JCPC? Separately, as mentioned previously to Michael, we are preparing to issue a new claim against Investcorp in the Dubai Courts (we consider it is available and a more favourable prospect than going in Bahrain), for which timing at this point is primarily driven by need to protect time for various of the causes of action under UAE law. We may file at the end of this week … I have also alerted the client previously to the risk I see that upon being notified of the Dubai action (before the JCPC judgment, which is likely) Investcorp will seek to inform the JCPC or try something to anti-suit in Cayman which may damage the JCPC judgment prospects. Michael expressed the view when we discussed briefly that the risk of adverse impact was low, weighed against the risk of time bar in Dubai. And that we could justify the action to Cayman / JCPC if needed on grounds that we needed to file to protect time and the delay from CA has meant it coincides with this. Please can you give me your views on this issue now before we file. It seems to me more of a risk not to commence in Dubai because we’re waiting for JCPC and could lose any other rights to claim in Dubai (albeit I consider the correct application of prescription gives more time, the client fairly wants to take no chances on the possible shorter period)…”