Alliance Petrochemical Investment (Singapore) PTE Ltd v Francesco Mazzagatti & Ors [2025] EWHC 2973 (Comm)

[2025] EWHC 2973 (Comm)

Case No CL-2024-000463

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

KING'S BENCH DIVISION

COMMERCIAL COURT

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

Date 03/12/2025

Before

MR JUSTICE ANDREW BAKER

Between

ALLIANCE PETROCHEMICAL INVESTMENT (SINGAPORE) PTE LTDClaimant

(1) FRANCESCO MAZZAGATTIDefendants

(2) FRANCESCO DIXIT DOMINUSDefendant

Hodge Malek KC and James Potts (instructed by Devonshires Solicitors LLP) for Claimant and for the Second to Fourth Third Parties

Jonathan Nash KC and Samuel Cathro (instructed by Grosvenor Law Ltd) for Defendants

Lord Wolfson KC and Henry Hoskins (instructed by Skadden, Arps, Slate, Meagher & Flom (UK) LLP) for First Third Party

Hearing Hearing dates: 3, 4 November 2025

Approved Judgment

This is a reserved judgment to which CPR PD 40E has applied.

Copies of this version as handed down may be treated as authentic.

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

MR JUSTICE ANDREW BAKER

Introduction

[1]By an Order dated 12 May 2025, Robin Knowles J gave permission for service out of the jurisdiction on the Third Parties, as Part 20 Defendants, of a Part 20 Claim issued by the defendants. Following service of the Part 20 Claim on them, the Second to Fourth Third Parties (‘the Directors’) applied by Application Notice dated 30 July 2025 for the Order of Robin Knowles J, and service pursuant to it, to be set aside, on the grounds that permission to serve out should not have been granted and/or that the defendants’ application for permission to serve out involved a material failure to make full and frank disclosure.

[2]In the case of the First Third Party (‘Mr Jahanpour’), by an Order dated 22 September 2025, I granted permission for service under the Order of Robin Knowles J to be effected by alternative means. Following service of the Part 20 Claim on him by those alternative means, Mr Jahanpour applied by Application Notice dated 10 October 2025 for both Orders, and service pursuant to them, to be set aside, on the same grounds. No separate point arises in relation to the order for service by alternative means, which took the permission to serve out granted by Robin Knowles J as a given and dealt only with practical difficulties that had emerged over serving proceedings on Mr Jahanpour. The permission for service by alternative means stands or falls with the permission to serve out.

[3]Stated very broadly for the purpose of introduction, the claimant (‘API’) makes claims against the defendants for remedies in respect of what it says was misappropriation from it of more than €140m, by several methods, over a period of three years from February 2019 to February 2022. By the Part 20 Claim, the defendants seek to pursue claims against Mr Jahanpour and the Directors for an indemnity or contribution under the Civil Liability (Contribution) Act 1978.

[4]If there is a serious issue to be tried as to whether(i) Mr Jahanpour, respectively any of the Directors, is liable to API in respect of the same damage within s.1(1) of the 1978 Act, i.e. the damage in respect of which the defendants are alleged by API to be liable, and

(ii) Mr Jahanpour, respectively that Director, might be ordered to make a contribution should the defendants be held liable at trial, then: (1) the applicable gateway allowing service of the Part 20 Claim out of the jurisdiction is CPR PD6B para 3.1(4), permitting such service for “an additional claim under Part 20 [where] the person to be served is a necessary or proper party to the … additional claim”; and (2) this court is plainly the appropriate forum for the pursuit of the Part 20 Claim.

[5]The applications challenging the grant of permission to serve out concern exclusively, therefore, the arguable merit, or lack of merit, in the Part 20 Claim. Mr Jahanpour and each of the Directors says there is no serious issue to be tried as to whether he might have a liability to contribute under the 1978 Act, if API succeeds against the defendants at trial. The complaint about full and frank disclosure is that difficulties in the way of there being such a liability were inadequately disclosed in the application for permission to serve out.

Approach

[6]It was common ground that the requirement for there to be a serious issue to be tried on the merits, before it might be a proper exercise of discretion to permit service out of the jurisdiction, was materially the same test on the merits as that required to avoid a summary dismissal of a claim under CPR Part 24. Thus, there must be a realistic prospect, as opposed to a fanciful prospect, of the Part 20 Claim succeeding. Where, as in this case in the form of a draft Amended “Defendants’ Additional Claim”, a party has pleaded out the claims it wishes to pursue under any permission to serve out, the primary focus in testing whether there is any realistic prospect of success “should be on the particulars of claim and whether, on the basis that the facts alleged are true, the cause of action asserted has a real prospect of success. Any particulars of claim or witness statement setting out details of the claim will be supported by a statement of truth. Save in cases where allegations of fact are demonstrably untrue or unsupportable, it is generally not appropriate for a defendant to dispute the facts alleged through evidence of its own. Doing so may well just show that there is a triable issue.” (Okpabi v Royal Dutch Shell

[2021] UKSC 3

[2021] 1 WLR 1294

, at [22]).

[7]The requirement to assume the pleaded facts for the analysis unless they are “demonstrably untrue or unsupportable” must be applied in the procedural context of a provisional examination of the merits at an early interim stage that must not be turned into a ‘mini-trial’. That “does not mean that the court has to accept without analysis everything said by a party in his statements before the court” (ED&F Man Liquid Products v Patel

[2003] EWCA Civ 472

, at [10]). The court is entitled to ask, if the factual sustainability of a plea is challenged as part of an objection to jurisdiction, whether it is clear, even allowing for the early interim stage at which the point has been taken, that “there is no real substance in factual assertions made, particularly if contradicted by contemporary documents” (ibid).

[8]The adequacy of the particularisation of the essential pleaded allegations is also properly considered, if challenged, as it would be on an application to strike out a pleading for want of proper particulars, as part of examining whether the pleaded claim has any real prospect of success. That may be of heightened importance where fraud or dishonest conduct is alleged, as a necessary element of an asserted cause of action, given the well-known rule that “the more serious the allegation of misconduct, the greater is the need for particulars to be given which explain the basis for the allegation. This is especially so where the allegation being made is of bad faith or dishonesty. The point is well established … in the case of fraud.” (Three Rivers District Council v Bank of England (No.3)

[2003] 2 AC 1

at 248H, [51]). This does not mean that it is some separate ground of challenge to jurisdiction to say that pleaded claims are not well particularised. The single test is whether a serious issue to be tried has been raised. If complaint of lack of proper particulars is made, an evaluation of that complaint will be part of the assessment of whether that test is satisfied, rather than an end in itself, to determine the jurisdiction application in question.

[9]In the present case, API has pleaded a large number of causes of action against the defendants, both in that it has alleged many individual acts of wrongdoing, and in that for any given alleged act of wrongdoing it has pleaded a number of different bases of claim. The Part 20 Claim seeks to advance a correspondingly large number of causes of action against Mr Jahanpour and each of the Directors, although in the case of the Fourth Third Party, Mr Ripepi, there are fewer claims as he is only alleged to have liability in respect of events after 14 September 2020, the date on which he became a director of API, replacing the First Defendant, Mr Mazzagatti.

[10]Mr Nash KC submitted that if any one pleaded cause of action against Mr Jahanpour or a given Director offered the defendants a real prospect of success, then the application by Mr Jahanpour, respectively that Director, to set aside the Part 20 Claim against him should be dismissed, leaving him to pursue separately a fresh application, if so advised, to strike out causes of action that did not offer such a prospect. I prefer the submissions of Lord Wolfson KC and Mr Malek KC that upon a conclusion that one or more, but not all, of the causes of action pleaded by the Part 20 Claim have no real prospect of success, it is open to the court to grant the present applications in part, so as to set aside the Part 20 proceedings so far as they would pursue the unviable causes of action, and that (other things being equal) such an outcome is likely to be the proper one, rather than leaving the relevant Third Party facing fanciful claims just because he has to face at least one non-fanciful claim.

[11]Therefore, there is no bypassing the need to scrutinise – even if it is only in the summary fashion described in paragraphs 6 to 8 above – each cause of action pleaded by API, together with each basis upon which, on the case pleaded by the defendants, they say that if they are liable on that cause of action, then Mr Jahanpour, or any given Director, is liable to be ordered to contribute by reason of being liable to API in respect of the same damage. For that purpose, the pertinent pleadings are API’s Amended Particulars of Claim, the defendants’ Amended Defence, and the defendants’ draft Amended Defendants’ Additional Claim, which is a detailed document plainly intended to stand as the defendants’ full Part 20 Particulars of Claim (“the Pt.20 P/C”). There is no objection, by Mr Jahanpour or by the Directors, to the amendments proposed by the defendants, except for the contention that the amended pleading would not disclose a serious issue to be tried on the merits. Sensibly, therefore, counsel on all sides treated the Pt.20 P/C as the appropriate statement of the case the defendants wish to pursue under Part 20, for the purpose of the argument over jurisdiction.

Background Circumstances

[12]API is a company incorporated in Singapore. At all material times until a date in April 2025, it owned 60% of the shares in Mehr Petrochemical Company (‘MHPC’), a company incorporated in Iran. The other 40% of MHPC is owned by NPC International Ltd (‘NPCI’), an English company. At all material times, MHPC has owned and operated the Mehr petrochemicals plant in Bushehr Province, Iran. API has been a distributor of high-density polyethylene (‘HDPE’) produced by MHPC under an agreement dated 30 September 2005 the terms of which entitled API to take HDPE manufactured at the Mehr plant through an assigned distributor appointed by it, and to re-sell that product.

[13]Napag IT Ltd (‘Napag IT’) is a company incorporated in the Ras Al Khaimah Free Trade Zone in the UAE. API alleges that, acting by Mr Mazzagatti, it appointed Napag IT in September 2018 to be its assigned distributor, an appointment said to have been approved by MHPC in December 2018, on terms obliging Napag IT to pay MHPC directly for product supplied and to account to API for all profit made from sales of that product.

[14]API was acquired in June 2018 by Napag Petrolchemicals Industries Ltd, a company incorporated in Hong Kong and owned by Mr Mazzagatti which was renamed Petrochemical Industries Ltd (‘PIL’) in September 2019. In October 2020, PIL transferred 50% of the shares in API to Alliance Petrochemical Ltd (‘APL’), a company incorporated in Hong Kong and owned by Mr Jahanpour’s mother. The defendants allege that her ownership of APL is nominal, on behalf of Mr Jahanpour, who (they say) is APL’s true beneficial owner and controller.

[15]Alliance Petrochemicals Trading LLC (‘APT’) was a 100% subsidiary of API, incorporated in Sharjah Media City, UAE, in December 2018, and dissolved in April 2022. API alleges that APT replaced Napag IT as its assigned distributor under the arrangements with MHPC from about December 2019. It is said that as part of that substitution, API and/or APT took over, and Napag IT was discharged from, an outstanding debt owed to MHPC of c.€41m. API alleges that there was “no legitimate basis” for that debt transfer in circumstances where (so API claims) “Napag IT had failed to pay MHPC for the product it received and/or failed to account to API for its profits on its sales to customers …”. I do not understand that to be said to amount to, or to give rise to, any cause of action against either of the defendants.

[16]Mr Mazzagatti is an Italian national resident in Dubai and/or London. He was a director of API, and (API alleges) its de facto CEO, from 31 July 2018 to 14 September 2020. He was the sole director of APT for its period of existence and (API alleges) its sole manager throughout that period also. API alleges that Mr Mazzagatti continued to act as its de facto CEO so as to be a shadow director of API from 14 September 2020 until “at least mid to late 2022”. On that basis, API alleges that Mr Mazzagatti owed the fiduciary duties of a director at all times material to its various claims. Those are said to be duties governed by the law of Singapore, which API alleges to be generally similar to English law but with one important difference, namely that (API says) as a director or shadow director entrusted with stewardship of API’s property, Mr Mazzagatti was a trustee of all assets beneficially owned by API.

[17]The Second Defendant, Mr Dixit, is an Italian national resident in London and/or Italy, with a professional background as an accountant. He was never an appointed director or manager of API, but API alleges that he acted under Mr Mazzagatti’s direction as de facto CFO of API, from 31 July 2018 until mid-2022, and as financial manager of APT for the period of its existence.

[18]The Directors are the current directors of API:(1) Mr Zacchigna is an Italian national resident in Italy. He has been a director of API since 31 July 2018.

(2) Mr Ngoo is a Singaporean national resident in Singapore. He has also been a director of API since 31 July 2018.

(3) Mr Ripepi, like Mr Zacchigna an Italian national resident in Italy, was appointed a director of API on 14 September 2020, when Mr Mazzagatti resigned from the board of API, as noted in paragraph 9 above. Anything I say in this judgment about what was done, or is alleged to have been done, by or to the Directors, should be understood as including Mr Ripepi only if and to the extent it concerns events after his appointment.

[19]Mr Jahanpour is not and has never been an appointed director of API. The defendants’ pleaded case, however, is that from about 10 September 2018, Mr Jahanpour has had and has exercised sole effective control of API, the Directors (say the defendants) having been accustomed to act in accordance with his instructions. The defendants also plead that Mr Jahanpour had and exercised, from the same time, responsibility for managing operations at MHPC, attending board meetings and appointing directors, and managing commercial trading and transactions. The defendants allege that Mr Jahanpour appointed Dr Sayed Ali Hosseini, the managing director of MHPC, on 13 January 2019, and that Dr Hosseini has been accustomed to act in accordance with Mr Jahanpour’s instructions.

[20]The defendants allege that Mr Jahanpour, as shadow director, and each of the Directors as appointed directors, owed API at all material times like fiduciary duties to those alleged by API against Mr Mazzagatti, including (if API is correct about this aspect of Singapore law) duties as trustees of API’s assets of any kind.

API’s Claims

[21]The identification of the causes of action asserted by API against the defendants is not as straightforward as it should be. API’s pleading is not as concise as it could be, does not deal with the case on a point by point basis (pleading each separate cause of action separately, as would have been possible), is not limited to the factual allegations necessary to establish each cause of action advanced, includes elements of general factual narrative, and fails to distinguish properly between primary allegations and particulars. The important guidance in Section C.1.1 of the Commercial Court Guide (11th Edition, 2023 Update), which in my view does no more than set out how any competent practitioner should know to go about pleading a claim, appears to have been ignored.

[22]After the first day of the argument, Mr Malek KC and Mr Potts prepared a summary table identifying by type the causes of action they said were included in API’s Amended Particulars of Claim. The table listed, for each type of cause of action, collections of paragraphs in the pleading within which, it was said, the necessary elements of individual causes of action of that type could be found. That table has been of real assistance and I am grateful for the extra work at short notice required to produce it. With that assistance, I consider that the following is an accurate and sufficient way, for present purposes, of describing the claims pursued by API.

[23]API alleges, firstly, that Mr Mazzagatti is liable to it for breach of trust or breach of fiduciary duty for having misappropriated money away from API in three ways, identified at paragraph 16B of the Amended Particulars of Claim, that is to say by:(1) payment diversions (paragraph 16B(1)), viz. instructing Mr Dixit to instruct buyers of MHPC product to pay PIL, although it had no entitlement to be paid, instead of API or its assigned distributor (Napag IT or APT);

(2) direct takings (paragraph 16B(2)), viz. making or procuring bank payments from API’s EUR account at United Overseas Bank (‘UOB’) and APT’s EUR and AED accounts at Al Masraf Bank (‘Al Masraf’) to entities controlled by him and Mr Dixit, to Mr Dixit personally, to other associates of Mr Mazzagatti, or otherwise for his own and Mr Dixit’s benefit. I shall refer to those bank accounts as the ‘UOB A/C’, the ‘Al Masraf EUR A/C’ and the ‘Al Masraf AED A/C’, respectively, and as the ‘Bank A/Cs’, collectively;

(3) profit diversion (paragraph 16B(3)), viz. directing or procuring Napag IT not to account to API for its profits from sales of MHPC products, but instead to divert such profits to benefit the defendants (directly or indirectly).

[24]None of those allegations seeks to fix Mr Mazzagatti with liability for the actions of anyone else, in particular for the actions of Mr Jahanpour if he made or directed payments from the Bank A/Cs or effected or instructed the diversion of earnings or profits away from API. API’s only case is that Mr Mazzagatti himself directed Mr Dixit to direct the diversion of customer payments away from API, operated the bank accounts so as to effect the direct takings, and directed the diversion of Napag IT’s profits away from API.

[25]API alleges, not as a separate cause of action or set of causes of action, but as a tracing chain to justify proprietary remedies, that a “substantial portion” of the sums misappropriated from API, as alleged, found its way to Mr Mazzagatti personally, in accounts of his at the Commercial Bank of Dubai.API then says, as part of that tracing claim, that at least c.£41.2m, c.€19.8m, c.US$6.4m and AED5m (that is, in aggregate, an amount equivalent to at least c.€74.4m), in Mr Mazzagatti’s hands, thus derived, was used by him to fund the acquisition of RockRose Energy Ltd (‘RockRose’), a North Sea oil and gas company, through his vehicle Viaro Investment Ltd.

[26]API alleges, secondly, that Mr Dixit dishonestly assisted Mr Mazzagatti’s misappropriations (as alleged), by instructing buyers to pay PIL (either giving those instructions himself or directing Mr Nikunj Kumar Donda to do so, Mr Donda being said by API to be employed, by Mr Mazzagatti’s company Napag Management & Brokerage DMCC, to act as API’s accountant), and by making false statements to the Directors and participating in the creation of false documents, to conceal what Mr Mazzagatti had done whereby to ensure that his misappropriations could continue. In keeping with paragraph 24 above, the only liability alleged against Mr Dixit is in respect of assisting Mr Mazzagatti in the actions alleged by API to give rise to liability on his (Mr Mazzagatti’s) part. In particular, Mr Dixit is not alleged to have a liability for dishonest assistance (or on any other basis) in respect of misappropriations, if there were any, by Mr Jahanpour.

[27]It is alleged by API that by way of payment diversions, PIL received payments to which it had no entitlement, between 13 February 2019 and 5 July 2021, totalling €22,735,745.60. Direct takings are alleged by API to have occurred between 6 February 2020 and 28 February 2022 in aggregate amounts of €28,553,801.52 and AED180,517,613.40 (equivalent to c.€43.3m). Finally, as to the parameters of the basic misappropriation claims, API alleges, at this stage on the basis of inference, that at least €143,808,798.66 was misappropriated from API in total, and that, again by way of inference, the difference between that total and the totals said to have been misappropriated by payment diversions and direct takings (say, c.€49.2m) is to be explained by profit diversions.

[28]API claims as loss said to have been caused by the misappropriations it alleges:(1) the amount of each payment to PIL by way of payment diversion, the amount of each direct taking from API or APT’s bank account, and the amount of Napag IT profit diverted away from API, all as alleged by API, and thus, in aggregate if all claims were to succeed, at least €143.8m; and

(2) the loss of its shareholding in MHPC.

[29]The additional loss, as alleged, of API’s shareholding in MHPC requires further explanation. The complex chain of causation pleaded is that, so API alleges:(1) the misappropriations caused MHPC to go unpaid for product delivered to API’s assigned distributor, resulting in criminal proceedings in Iran initiated by NPCI against inter alia API in which, by a judgment dated 31 May 2023, the Iranian court prohibited further delivery of product by MHPC to API and held that API owed MHPC c.US$170m;

(2) that judgment put API’s shareholding in MHPC at risk of forfeiture, to avoid which API concluded a settlement agreement with NPCI in August 2023 under which the Iranian criminal proceedings were terminated and API acknowledged a debt to MHPC of €143,808,798.66 and promised to pay MHPC €50m within 14 days and the balance in subsequent instalments;

(3) because of the misappropriations, API could not afford that settlement agreement and therefore, a few days later, it agreed terms to borrow from Selenium Resources Ltd (‘Selenium’), at the time its assigned distributor of MHPC product, which terms were later perfected in a written loan agreement and share purchase agreement dated 6 September 2023, under which: (a) Selenium agreed to lend €50m on 5 September 2023, repayable within 30 days, and thereafter to lend as follows: Amount Loan Date Repayment Date €15,634,799.78

2 November 2023

17 November 2023

€15,634,799.78

17 December 2023

1 January 2024

€15,634,799.78

31 January 2024

15 February 2024

€15,634,799.78

16 March 2024

31 March 2024

€15,634,799.77

30 March 2024

15 April 2024

€15,634,799.77

16 June 2024

29 June 2024 (b) API was obliged to use any amount lent by Selenium exclusively to discharge its obligations under the settlement agreement with NPCI to make payments to MHPC; and (c) as security for API’s performance of its obligations as borrower, API was obliged to conclude, and concluded, the share purchase agreement, by which it agreed to sell its shareholding in MHPC to Selenium in exchange for the entering into of the loan agreement, with completion to occur if API failed to repay any loan advanced under the loan agreement or otherwise failed to perform any obligation under it;

(4) the initial lending of €50m was drawn down by API but, because of the misappropriations, API could not repay it, as a result of which Selenium sought and obtained judgment in Iran, pursuant to the share purchase agreement, for transfer to it of API’s shares in MHPC, which transfer was eventually completed in April 2025, an outcome that API alleges it sought to avoid by asking, but without success, for US$60m from its shareholders, requesting either US$60m from PIL or US$30m each from PIL and APL (without prejudice to any rights they might have inter se), to enable it to make good its default to Selenium.

[30]Thirdly, API alleges that Mr Dixit is liable to account to API on the basis of knowing receipt, or is liable on the basis of unjust enrichment, for 19 of the bank transfers by way of alleged wrongful direct takings, totalling €159,940.34, said to have been transfers to Mr Dixit between 11 November 2020 and 3 February 2022.

[31]Fourthly, API alleges that Mr Mazzagatti is liable on the basis of unjust enrichment(i) for the €22,735,745.60 it says was received by PIL as payment diversions,

(ii) for 8 of the EUR payments by way of alleged wrongful direct takings, totalling €27,468,786.16, said to have been transfers to PIL between 6 February 2020 and 28 February 2022, and

(iii) for 5 of the AED payments by way of alleged wrongful direct takings, totalling AED93,889,288, said to have been transfers to PIL between 3 September 2020 and 24 May 2021.

[32]Fifthly, API alleges that both defendants are liable in conversion on the basis of their respective involvements, as alleged, in the misappropriations. API claims damages for conversion for both categories of alleged loss noted in paragraph 28 above.

[33]Sixthly, API alleges that the defendants are jointly and severally liable to pay damages, again in respect of both categories of alleged loss, for conspiring with each other to injure API by the use of unlawful means. The unlawful means alleged are the alleged misappropriations, the alleged deception of the Directors as to what had been done (paragraph 26 above, but for this purpose relying on allegations against both defendants, not just Mr Dixit), the payments to Mr Dixit in circumstances rendering him liable for knowing receipt (paragraph 30 above), and the alleged conversion of API’s property (paragraph 32 above).

The Part 20 Claims

[34]The Pt.20 P/C opens by making clear that the defendants pursue claims against Mr Jahanpour and the Directors(i) strictly without prejudice to their primary case in the proceedings that they have no liability to API, and

(ii) in each case only “in the event that, contrary to their Amended Defence, [the defendants] (or either of them) are found to be liable [to API]” (ibid at [2.3]). The submission in support of the jurisdiction applications was that: (1) the logic of that premise is not carried through coherently or consistently by the defendants, so that in respect of many of their claims, they do not plead facts upon which, if established, Mr Jahanpour or one or more of the Directors could be liable to API along with at least one of the defendants, as opposed to being liable to API (if at all) rather than the defendants; (2) for many of the defendants’ claims, their pleading does not disclose any arguable case that Mr Jahanpour or one or more of the Directors is liable to API because a necessary element of the asserted cause of action is either not pleaded at all or evidently has no arguable prospect of being true, as pleaded and taking account of any purported particulars pleaded in support; (3) for some of the defendants’ claims, it is not arguable that the court would order contribution against Mr Jahanpour or any of the Directors even if they did have a liability to API in respect of the relevant loss; (4) in some cases, a fact necessary to the asserted cause of action, though adequately pleaded, is demonstrably untrue or unsupportable in the sense referred to in paragraph 7 above; (5) at least one of those fatal criticisms applies to every cause of action put forward in the Pt.20 P/C and the jurisdiction applications should therefore be upheld in full, or in the alternative that was true for at least some of those causes of action and the jurisdiction applications should be upheld to an extent matching that conclusion.

[35]The Pt.20 P/C at [3] sets out what the defendants say is the “background to the claims in the [Amended Particulars of Claim]”. They allege that:(1) “Mr Jahanpour … has instigated a vexatious campaign against Mr Mazzagatti with the aim of allowing Mr Jahanpour to obtain the full 100% ownership of API …” (ibid at [3.1]);

(2) this alleged ‘vexatious campaign’ “has included the bringing of proceedings in a number of jurisdictions in a manner that [the defendants] believe has been calculated to damage their interest without any justification (and as to which all rights are reserved). The modus operandi of Mr Jahanpour has been to deploy these proceedings to ventilate misleading allegations, known to be false by Mr Jahanpour, of misconduct against [Mr Mazzagatti] in order to benefit Mr Jahanpour’s interests. Whilst all these proceedings have been brought in the name of API, they are in fact brought at the behest of Mr Jahanpour on the basis that he runs and controls API. Mr Jahanpour has sought to conceal his ongoing interest and control of API because, as a US national, his participation in the operation of API gives rise to breaches of US-Iran sanctions and because it is Mr Jahanpour who is responsible for any misappropriation of monies from API (together with the other Part 20 Defendants …)” (ibid at [3.2]);

(3) the legal proceedings to which the defendants refer, in Singapore and Sharjah, UAE, “have been brought notwithstanding that Mr Mazzagatti has never been in control of API; and it is Mr Jahanpour who has exercised control over API (and MHPC …)” (ibid at [3.3]).

[36]I can see no proper reason for including any of that in the Pt.20 P/C, the purpose of which is to plead the contribution claims the defendants say they have against Mr Jahanpour and/or the Directors, if they are liable, as alleged by API. The ‘vexatious campaign’ allegation forms no part of any such claim. Indeed, it is inconsistent with the existence of any such claim. Its only material consequence, in the context of this litigation, would be that the defendants have no liability to API capable of founding a contribution claim. Paragraph 3 of the Pt.20 P/C is, I think, apt to be struck out come what may.

[37]After pleading that the Directors, and (on the defendants’ case) Mr Jahanpour as shadow director, owed directors’ duties to API, the Pt.20 P/C sets out at some length, at [13] to [32], the defendants’ factual case that Mr Jahanpour has been in effective sole control of API at all times since 10 September 2018. The true length of that part of the pleading is far greater than 20 paragraphs, since it opens by incorporating, so as to repeat, paragraphs 2 to 45, 67, 68 and 72 of the Amended Defence.

[38]None of that, in my view, is a proper way to plead the defendants’ contribution claims. All of it is apt to be struck out come what may. What needs to appear in the Pt.20 P/C, but is not provided by any of [13] to [32], is a concise pleading, conforming to Section C.1.1 of the Commercial Court Guide, of the causes of action that it is said API has against Mr Jahanpour and/or the Directors if, contrary to all of that repeated case, the defendants are liable, as alleged by API. If parts of that long section of factual points include or particularise one or more of the elements of some such cause of action, they can and should appear in proper place as part of the pleading of that claim, not as a long general narrative.

[39]The Pt.20 P/C next, at [33] to [40B], sets out various allegations concerning the ways in which, so the defendants say, the Directors were involved in the management of API. These are largely untethered to any of the allegations by API against the defendants, making it difficult to identify whether they form part of any coherent contribution claim against the Directors. They do include some allegations that if the defendants took some action, as alleged by API, then one or more of the Directors is or are also “responsible” for it, but not so as to allege the elements, or indeed any element, of what might be a cause of action by API against the Director(s) in question. For example:(1) It is said at [36] that if, as API alleges, the defendants procured Mr Zacchigna to sign certain letters, being letters from API to MHPC said by API to contain misrepresentations, and if, as API thus alleges, those letters were misleading, then “Mr Zacchigna, who was signatory to them, is (also) responsible for their contents”. That does not amount to, or even begin to identify let alone plead out the elements of, any cause of action by API against Mr Zacchigna.

(2) It is said at [37A] that if as API alleges the defendants procured the writing off of Napag IT’s debt to MHPC as part of APT taking over as assigned distributor, then “API had Mr Zacchigna and Mr Ripepi on the board of MHPC, and those [Directors] would have (also) been responsible for the decision to write off and transfer the debt”. I noted in paragraph 15 above that API’s allegation about that Napag IT debt does not seem to be, or to give rise to, an alleged cause of action against either defendant. The point for present purposes is that, as in (1) above, on no view does the plea that because Mr Zacchigna and Mr Ripepi were on the board of MHPC, they were “(also) … responsible” for the decision to transfer the debt, constitute the pleading of a cause of action by API against either of them. That plea in the Pt.20 P/C refers to and repeats paragraph 91A of the Amended Defence. However, as is stated in the making of that cross-reference, that is the paragraph by which the defendants give their reasons for denying that they procured the writing off of any debt owed to MHPC. It adds nothing to the plea in the Pt.20 P/C itself by way of identifiable, arguable basis for a liability to API on the part of Mr Zacchigna or Mr Ripepi.

(3) It is said at [40A] and [40B] that API acted by the Directors, not by the defendants or either of them, in concluding the settlement agreement and the Selenium transaction referred to in paragraphs 29(2) to 29(4) above, and therefore to the extent that API suffered loss as a result of those transactions, the Directors are “(also) responsible”. API does not suggest that it acted by the defendants in concluding those transactions. They are elements of the pleaded chain of causation supporting API’s claim for the loss of its shareholding in MHPC as a consequential loss said to have resulted from the defendants’ alleged wrongdoing. The plea that the Directors are ‘responsible’, because in the relevant respect API acted by them, discloses no arguable cause of action by API against them. As Mr Nash KC accepted, the fact that a transaction entered into by a company, acting by a director, results in loss, does not found liability on the part of the director, yet that is all that is pleaded in the Pt.20 P/C at [40A] or [40B]. Those pleas led to some very provisional exploration in argument of how exactly the Selenium transaction worked, taking its terms at face value (and implicitly assuming that it would mean the same and operate in the same way as it would if governed by English law although it was in fact governed by Iranian law), and whether there is some room at least to wonder whether it might have been a slightly odd deal. That does not change the fact that no arguable basis is pleaded for a liability on the part of the Directors to API for having concluded it on behalf of the company.

[40]Therefore, in my judgment that further section of the Pt.20 P/C, [33] to [40B], is also apt to be struck out come what may. To complete the justification for that conclusion, I should mention the allegation at [40], in relation to API’s basic claim that it came to owe at least €143.8m or so to MHPC, that Mr Zacchigna “was … aware of (or should have been aware of) the true reasons [for that shortfall] on the basis that he assumed responsibility for corresponding with the investigating authorities and MHPC in relation to it and must have had knowledge of the relevant matters in order to do so.” If that were an allegation that Mr Zacchigna knew, or should have known, that Mr Mazzagatti, assisted by Mr Dixit, was misappropriating money from API, as alleged by API, it might be at least an element of a possible cause of action on the part of API against Mr Zacchigna.

[41]However, the “true reasons” said to be known to Mr Zacchigna, or of which it is said he should have known, are those pleaded “at paragraph 23 and following of the Amended Defence”. The defendants by paragraphs 23 to 28 of the Amended Defence plead their case that payments to PIL of “various sums generated by API’s business” were properly made. So the allegation in the Pt.20 P/C at [40] is in fact an allegation that Mr Zacchigna knew or should have known that various sums generated by API’s business were being paid, properly, to PIL. That is an allegation that is consistent with neither liability on the part of the defendants to API, as alleged by API, nor liability on the part of Mr Zacchigna in respect of that liability. It therefore, as with the rest of this section of the Pt.20 P/C, has no proper place in a statement of case that is supposed to be pleading ‘if we are liable, as alleged by API, then so are you’ causes of action.

[42]At [41], the Pt.20 P/C make an allegation that is important for an understanding of what the defendants have sought to plead. It is there alleged that “Mr Jahanpour directed or procured a significant number of the payments which are the subject of [API’s misappropriation allegations], to entities Mr Jahanpour owns or controls …”.

[43]The defendants therefore distinguish between payments “made for the benefit of PIL or Mr Dixit”, which they call, and I shall also call, ‘FM/FD Payments’, and payments they say were made by Mr Jahanpour (into bank accounts held by entities called Black Diamond and Black Gold, or by APT, and onwards from there for the ultimate benefit of Mr Jahanpour), which they call ‘Jahanpour Payments’. Lord Wolfson KC objected that the latter was a tendentious label. So as not to be side-tracked by that, I shall refer instead to ‘Non-D Payments’. As a collective term for FM/FD Payments and (as I shall call them) Non-D Payments, the defendants use the term ‘Challenged Payments’, which I shall adopt.

[44]It is important to understand not just the nature of the distinction thus drawn by the defendants, but the fact that it is contentious between the defendants and API. Using the terminology I am now using, API effectively pleads that all of the Challenged Payments were FM/FD Payments. The defendants’ correctly pleaded premise for contribution claims in relation to FM/FD Payments is that API is correct to allege, contrary to the defendants’ case, that they are liable in respect of FM/FD Payments as misappropriations from API. Since on API’s case all of the Challenged Payments were FM/FD Payments, that premise encompasses not only the contingent proposition that Mr Mazzagatti and Mr Dixit are liable (for breach of trust or fiduciary duty and for dishonest assistance therein, respectively) in respect of admitted FM/FD Payments, but also the contingent proposition that the remaining Challenged Payments, said by the defendants to have been Non-D Payments, were in fact also FM/FD Payments in respect of which the defendants have such liability.

[45]Mr Nash KC and Mr Cathro also provided during the hearing a summary table, to supplement their argument concerning the Pt.20 P/C. In that table, an analysis was attempted of the basis upon which any liability of Mr Jahanpour and/or the Directors, to API, has been pleaded, in respect of five aspects of the facts alleged by API:(i) the making of FM/FD Payments;

(ii) the making of Non-D Payments;

(iii) loss suffered by API as a result of the Selenium transaction;

(iv) allegedly misleading letters signed by Mr Zacchigna (the procuring of Mr Zacchigna to sign which is one aspect, as alleged, of the claim by API that the defendants practised deception upon the Directors to conceal their misappropriations); and

(v) the writing off and transfer to API/APT of Napag IT’s debt.

FM/FD Payments – Pleading Analysis

[46]The basis upon which, Mr Nash KC and Mr Cathro thus submitted, liability on the part of Mr Jahanpour and/or the Directors is pleaded in respect of the making of FM/FD Payments, is that they “allowed the challenged payments to be made”, in circumstances where they “knew the payments were being made or were reckless as to whether they were being made and failed to take steps to prevent them” (citing Pt.20 P/C at [53]). Mr Nash KC confirmed specifically that indeed the defendants’ case was (intended to be) limited in that way. As thus clarified in oral argument, the plea by the defendants as regards FM/FD Payments that “they were responsible for or otherwise received the benefit of” those payments (Pt.20 P/C at [43]), is intended to convey (also) that they, and not Mr Jahanpour or any of the Directors, effected those payments or caused them to be effected. One consequence of that, to which I return below, is that it is neither API’s case nor the defendants’ case that there were Non-D Payments, i.e. payments alleged to be misappropriations from API not made by or at the direction of the defendants, that were nonetheless made to the defendants or for their direct or indirect benefit.

[47]The Pt.20 P/C at [43] cross-refers inter alia to paragraph 74 of the Amended Defence for a “summary of the Defendants’ case on the Challenged Payments (to the extent they were in fact made)”. That summary says that the Challenged Payments were variously made either: properly (on the basis of the pleaded case referred to at paragraph 41 above); in the ordinary course of API’s business, to its assigned distributors; by Mr Jahanpour without any involvement on the defendants’ part; or in circumstances unknown to the defendants but where (again) they had no involvement. None of that discloses any basis for a claim against Mr Jahanpour or the Directors for contribution. Any such claim must be founded on the premise then stated in the Pt.20 P/C at [44] that, contrary to the defendants’ case as thus summarised, they are found liable in respect of the Challenged Payments.

[48]Continuing, then, my consideration of FM/FD Payments, the Pt.20 P/C at [45] unnecessarily repeats the defendants’ averment that they were legitimate, giving rise therefore to no liability on their part, before pleading that if, contrary to that case, they are found to have been illegitimate, then Mr Jahanpour and the Directors “are also liable for them in the circumstances pleaded below at paragraph 53”. That paragraph is therefore critical. It is in these terms:

“53. … the Part 20 Defendants were directors (including shadow directors) at the time of all the Challenged Payments, which are alleged … to have been made between February 2019 and February 2022 (save for Mr Ripepi, who … has been a director of API from 14 September 2020 to date …). Accordingly, if … [the defendants] are liable to API in respect of those payments, the Part 20 Defendants are also liable on the basis that they instructed or delegated responsibility for instructing those payments. Further or alternatively, they are liable on the basis that they knew the payments were being made or were reckless as to whether they were being made and failed to take steps to prevent them. It is to be inferred that they did so in circumstances where: 53.1 The Part 20 Defendants have been responsible for the affairs of API at the material times. 53.2 Mr Jahanpour took over the running of API from 10 September 2018, and from that date onwards the [Directors] were accustomed to act in accordance with his instructions. 53.3 APT was set up and controlled by Mr Jahanpour at all times since its incorporation. 53.4 Mr Jahanpour opened and controlled the [Bank A/Cs].”

[49]Since FM/FD Payments are payments either admitted by the defendants to have been, or for present purposes assumed as alleged by API to have been, payments effected or directed by the defendants, and not by Mr Jahanpour or any of the Directors (see paragraphs 44 to 46 above), I agree with Mr Malek KC that that plea discloses no arguable case against the Directors as regards such payments. I do not agree with the equivalent submission by Lord Wolfson KC in respect of Mr Jahanpour. My reasons for those conclusions follow (paragraphs 50 to 56 below).

[50]The primary plea is that it follows from the fact that Mr Jahanpour (as alleged by the defendants) and the Directors were, respectively, a shadow director and the de jure directors of API, that they instructed the making of FM/FD Payments, or delegated responsibility for instructing them to be made. That is not an arguable proposition. Nor do the defendants plead any actual instruction (or delegation) to them, by Mr Jahanpour or by any of the Directors, to make any FM/FD Payments constituting misappropriations from API (such that there might be a liability on the part of the defendants for which they might wish to seek contribution).

[51]The further or alternative case pleaded is that Mr Jahanpour and the Directors knew of FM/FD Payments, or were reckless as to whether they were being made, and did nothing to prevent them from being made. Some arguable basis for an allegation of that kind has to be pleaded, and the plea here is that the knowledge or recklessness alleged stands to be inferred from the matters alleged at [53.1] to [53.4].

[52]The first of those matters is a bare assertion that Mr Jahanpour (as shadow director) and the Directors (as directors) “have been responsible for the affairs of API at the material times”. The fact of that responsibility, as an incident of being a shadow director or a director, is no arguable foundation for a plea of awareness of, or recklessness as to, misappropriations effected by, or on the instructions of, the defendants without factual involvement on the part of the shadow director or director, respectively.

[53]The remaining matters relied on, viz. (as alleged) that Mr Jahanpour ran API from 10 September 2018, set up and controlled APT, and opened and controlled the Bank A/Cs, provide no arguable foundation for the allegation that the Directors knew that the defendants were misappropriating API’s funds (either by direct takings from the Bank A/Cs or by diverting earnings or profits away from API), without their (the Directors’) or Mr Jahanpour’s involvement, or were reckless as to whether that might be occurring. As regards Mr Jahanpour, however, the position is different. If it be correct that, as alleged by the defendants, Mr Jahanpour was running API from September 2018, set up and controlled APT, and opened and controlled the Bank A/Cs, I consider it sensibly arguable that, at trial, the inference might be drawn that he must have realised that the Bank A/Cs were being raided by the defendants (that being, put bluntly, the nature of the misappropriation claim alleging direct takings). I also consider it realistically arguable, upon the same foundations, that the inference might be drawn that Mr Jahanpour must have realised, or at least suspected, that API/APT was not seeing the sales proceeds or profits that should have been coming in and that only Mr Mazzagatti was in a position to be causing that.

[54]Lord Wolfson KC made a particular submission that the Pt.20 P/C at [53] does not state, in terms, that Mr Jahanpour knew that, or was reckless as to whether, FM/FD Payments were not legitimate. I do not regard that as a valid, or realistic, criticism of the Pt.20 P/C, given the nature of API’s allegations, the accuracy of which must be assumed for present purposes. It is a characteristic of FM/FD Payments, if they were the misappropriations that API alleges them to have been, such that the defendants have a liability in respect of them, that they were: payments from the Bank A/Cs for the direct or indirect benefit of the defendants that they had no basis to be receiving (as regards the direct takings); diversions to parties not entitled of sales receipts or profits that should only ever have gone to API.

[55]The fact, emphasised by Lord Wolfson KC in that particular submission, that the defendants pursue a vigorous defence against API, claiming to have done nothing wrong, does not render fanciful the idea that, if API is vindicated in the face of that defence, then the individual running API/APT’s business would have known at the time that funds were indeed being misappropriated from API, not paid to it or diverted away from it on some proper ground. I do not consider that it needed spelling out, in so many words, that putting the assumed establishment of API’s factual case against the defendants together with their case as to Mr Jahanpour’s involvement with API/APT involved the proposition that it would have been as obvious to him as API says it was to the defendants that they had no business taking from the Bank A/Cs, or diverting revenue or profits away from API. Nor do I accept the submission that it is incoherent to put those two cases together, as the defendants seek to do by their contribution claim against Mr Jahanpour. There is no necessary inconsistency between API’s proposition that FM/FD Payments were made that amounted to misappropriations and the defendants’ proposition that Mr Jahanpour was de facto in charge of API and, in general terms, running its business. Some of the particular factual allegations made by the defendants in the latter regard may be inconsistent with API’s case that all Challenged Payments were FM/FD Payments. However, it is coherent to propose, and not fanciful to suppose, that those factual allegations might not be made good at trial without the defendants’ case overall that Mr Jahanpour was in charge being destroyed.

[56]As regards FM/FD Payments, therefore, the first and second limbs of the submission in support of the jurisdiction challenge (paragraph 34(1)-(2) above) do not substantiate that challenge for Mr Jahanpour. That means, in turn, that the primary focus upon the pleaded case that is called for upon a jurisdiction challenge justifies the exercise of jurisdiction over Mr Jahanpour, pursuant to CPR PD6B para 3.1(4), for the pursuit by the defendants of their contribution claims against him in respect of all of the Challenged Payments, that is to say in respect of all three categories of misappropriation alleged by API, to their full alleged extent. That follows because of the point about the extent of FM/FD Payments, on the case pursued by API, explained in paragraph 44 above.

FM/FD Payments – Dubai Aluminium

[57]The third limb of the submission (paragraph 34(3) above) therefore needs to be considered in respect of Mr Jahanpour. In the skeleton argument from Lord Wolfson KC and Mr Hoskins, there was said to be a principle, “… affirmed by the House of Lords and repeatedly applied by the Court of Appeal, … that a party who has benefitted from money paid in breach of trust cannot claim a contribution from a third party in respect of that money”. The authorities relied on were Dubai Aluminium v Salaam

[2002] UKHL 48

[2003] 2 AC 366

, Charter plc v City Index Ltd

[2007] EWCA Civ 1382

[2008] Ch 313

, Niru Battery Manufacturing Co et al. v Milestone Trading Ltd et al. (No.2)

[2004] EWCA Civ 487

, [2004] 2 All ER (Comm) 289; Dawson v Bell

[2016] EWCA Civ 96

. The underlying principle was said to be nearly a hundred years older than the 1978 Act (see Bahin v Hughes

(1886) 31 Ch D 390

, cited in Charter v City Index at [34]).

[58]In the skeleton argument for the Directors, citing Dubai Aluminium, Charter v City Index and Dawson v Bell:(1) Initially, the principle was said to be that “contribution will not be ordered as between two wrongdoers where only one of them has received and retained the benefit of that wrongdoing” (emphasis added). The intention, no doubt, was to submit, rather, that contribution will not be ordered at the suit of a wrongdoer who received and retained the benefit of the wrongdoing against another wrongdoer who did not. There is obviously no difficulty of principle over ordering contribution against a wrongdoer who received and retained the benefit of wrongdoing, in favour of a party who did not but who is nonetheless liable in respect of the same damage.

(2) Later, the principle was said to be that “no contribution will be ordered in favour of parties who benefitted from misappropriated funds against parties who did not benefit”. That made the correction just noted to the initial formulation, but it also widened the suggested principle, omitting any requirement that the contribution claimant should have retained the benefit received by them in order to be deprived of the possibility of contribution. It was clear from Mr Potts’ submissions, in reply, that the law was indeed put on the broader footing, meaning that the submission of principle was the same as the submission made for Mr Jahanpour.

[59]For the defendants, the established principle was said to be narrower. In the skeleton argument on their behalf, it was submitted that the authorities “(merely) show that the loss must first be met out of any retained profits, before the remainder is apportioned between those legally responsible”, citing Charter v City Index at [36] (although that is not the correct paragraph to cite, as it is merely (part of) a summary of the argument).

[60]Lord Wolfson KC did not develop this ‘Dubai Aluminium point’ at the hearing, because he and Mr Malek KC had agreed, so as to avoid duplication, that oral argument on the point would be left to Mr Malek KC and Mr Potts, whose submissions Lord Wolfson KC might adopt (as, in the event, he did). In opening, Mr Malek KC relied on Dubai Aluminium itself, at [53] per Lord Nicholls (with whom Lords Slynn and Hutton agreed) and at [76]-[77] per Lord Hobhouse, and on Dawson v Bell at [51]-[52], per Tomlinson LJ (with whom Longmore LJ and Sales LJ, as he was then, agreed). Mr Nash KC relied in response on the same passages from Dubai Aluminium, and on Charter v City Index at [34]-[37] and [58]-[59] per Carnwath LJ (as he was then), with whom on this aspect both Arden LJ (as she was then) and Mummery LJ agreed. In reply, Mr Potts repeated the Directors’ reliance on Dawson v Bell at [51]-[52].

[61]In Dubai Aluminium at [53], Lord Nicholls said that, “… a contribution order will not properly reflect the parties’ relative responsibilities if, for instance, two parties are equally responsible and are ordered to contribute equally, but the proceeds have all ended up in the hands of one of them so that he is left with a large undisgorged balance whereas the other is out of pocket.” Lord Hobhouse noted that the contribution claim in that case, concerning a fraud that involved “stealing money from Dubal”, was a claim by a partnership that received none of the stolen money for contribution from Mr Salaam and Mr Al Tajir who “receive[d] large sums and … succeeded in retaining a substantial part of them” (ibid at [76]). There was also a cross-claim for contribution by Mr Salaam and Mr Al Tajir against another, Mr Amhurst, who like the partnership had received none of the stolen money (ibid at [77]). It was therefore right, Lord Hobhouse said, for the judge to hold that Mr Salaam and Mr Al Tajir should bring into the assessment of what was just and equitable under the 1978 Act “the sums which they had retained”, that “the partnership should be entitled to claim a 100% contribution from them, pro rata”, and that “[since] neither Mr Salaam nor Mr Al Tajir will, even after a 100% contribution to the partnership, be out of pocket … they can have no basis for claiming a contribution from Mr Amhurst.”

[62]The endorsement by the House of Lords of the contribution result in that case does not mean it is authority for the broader statement of the applicable principle put forward on behalf of Mr Jahanpour and the Directors in the present case. In Charter v City Index, which concerned an alleged ‘knowing receipt’ liability of the defendant in respect of the claimant’s funds wrongfully transferred to the defendant by the claimant’s treasury manager to fund spread-betting activities, the Court of Appeal allowed an appeal against the summary dismissal of a contribution claim under the 1978 Act by the defendant against directors and auditors of the claimant. The appeal was allowed on the ground “that there is no general principle that a defendant who paid money away in bad faith because he had the relevant knowledge was to be treated in the same way as one who received it with that knowledge and retained it”, so that Sir Andrew Morritt C, as he was then, had been wrong to conclude at first instance that the contribution claim could not succeed. That claim required a trial and should not have been dismissed summarily.

[63]In the previous paragraph, I quoted from the headnote of the report of Charter v City Index, at

[2008] Ch 314

B-C. In my view, that accurately states the ground of decision in the Court of Appeal. The defendant received £9m wrongfully transferred to it, made a profit of £3m on the improperly funded spread-betting activities, and settled the claimant’s claim for £5.5m. The first issue before the Court of Appeal was whether the defendant’s liability, as alleged against it and in respect of which it had settled with the claimant, was a liability in respect of the same damage (for the purpose of s.1(1) of the 1978 Act) as the directors’ or auditors’ liability to the claimant, as alleged by the defendant for the purpose of its contribution claim. Carnwath LJ concluded at [32] that the defendant’s liability, as alleged, “[did] not depend solely on receipt of money paid in breach of trust, but on their retaining it or paying it away in circumstances where it was unconscionable to do so. Although the directors’ legal responsibility arose at an earlier stage, it was only when [the defendant] failed to return the money that [the claimant] suffered any loss. In ordinary language (adopting a wide view of the 1978 Act) [the defendant’s] liability to make good that loss can properly be referred to as a liability to “compensate” [the claimant].”

[64]The second issue was whether there was a real prospect of contribution being ordered. Sir Andrew Morritt C concluded not, because in his view there was “[no] reason of justice or equity why, in the general run of cases, negligent directors and auditors should contribute to the liability of the knowing recipient who has either retained the money so received or paid it away for his own purposes, use and benefit” (quoted by Carnwath LJ, with that added emphasis, at [35]). It was accepted on behalf of the defendant that to the extent it had retained money received from the misfeasant treasurer, and thus to the tune of its £3m profit on his spread betting, it would have had to repay the claimant before any question of apportionment with the directors or auditors might arise (ibid at [36]).

[65]However, it was argued that the same reasoning did not apply to the £2.5m balance paid to settle the claimant’s claim. In that argument, the defendant “challenged Sir Andrew Morritt C’s view that it makes no difference that the money has been paid away. There is no principle of “deemed retention”. The circumstances in which it was paid away are relevant, but only as factors to be taken into account in attributing responsibility under section 2 [of the 1978 Act]” (per Carnwath LJ at [37]). It was said that if Niru Battery Manufacturing (No.2) decided otherwise, it was not binding and should not be followed (ibid). Carnwath LJ concluded as follows:(1) Dubai Aluminium is not authority for the proposition that there can be no claim for contribution in respect of a knowing receipt liability relating to monies no longer in the hands of the contribution claimant, because “the House of Lords proceeded on the basis that the property transferred was still available in the hands of the “knowing recipient”” (ibid at [38]). The same was true (ibid at [39]) of Cressman v Coys of Kensington (Sales) Ltd (McDonald, Part 20 defendant)

[2004] EWCA Civ 47

[2004] 1 WLR 2775

, where a mistakenly transferred right to a vehicle registration number was “not just realisable, but easily returnable” (per Mance LJ, as he was then, at [31] in that case).

(2) In Cressman at [37], Mance LJ seemed to have thought that a transfer away by the defendant, alleged by him in a change of position defence, would have made no difference, but that was obiter because the change of position defence failed on the facts (per Carnwath LJ at [39]).

(3) The conclusion in Niru Battery Manufacturing (No.2) that SGS (which had a negligence liability) should be fully indemnified by CAI (the party receiving funds paid by mistake) was reached on the facts of that case and not so as to establish any principle of law (per Carnwath LJ at [57], after a thorough review of the decision in that case at [40]-[56]).

(4) Sir Andrew Morritt C had treated Niru Battery Manufacturing (No.2) as binding authority for the proposition that a defendant who paid money away despite having the knowledge required for a ‘knowing receipt’ liability was to be treated in the same way as one who had received money with that knowledge and retained it, but (given (3) above) that was an error (per Carnwath LJ at [59]).

(5) The true principle (ibid) was that, “if the money has been retained by the knowing recipient, he must return it. That is not because of some wider principle of law, but simply as a matter of “obvious” equity. If on the other hand he has parted with the money, then the two potential defendants are in similar positions. They will both be out of pocket if the liability is enforced against them. There is no automatic presumption that one form of liability attracts a larger share than another (even in a case where one party has been fraudulent: Downs v Chappell

[1997] 1 WLR 426

). …”

[66]Mummery LJ agreed with Carnwath LJ’s judgment. Arden LJ, having agreed with all that Carnwath LJ said on this point, added that the ‘severe’ basis, as it has been described, of the trustee or other fiduciary’s liability to account, is adopted as a deterrent, however (ibid at [75]), “[it] is … no part of the deterrent purpose of remedies for breach of trust or fiduciary duty to prevent a person, who is liable to disgorge profits, from claiming indemnification or contribution from a third party.” Since it was “not fanciful to suppose that [the] discretion [under s.2 of the 1978 Act] could be exercised in some circumstances and to some extent in [the defendant’s] favour”, the contribution claim should not have been disposed of summarily but had to go to trial.

[67]Dawson v Bell concerned the unravelling of the parties’ personal and business relationship. One of the claimant’s claims was for contribution from the defendant under the 1978 Act in respect of his liability to what had been their jointly owned company, for misappropriations by him of company funds. The contribution claim failed at trial, on grounds that the Court of Appeal rejected (ibid at [49]-[50]). The claimant’s appeal was dismissed nonetheless, “for the simple reason that it is not just and equitable having regard to the extent of the Defendant’s responsibility for the damage in question that she should pay a share of what the Claimant owes the company” (ibid at [51]). For the claimant, it was said to be inequitable “that one director [the claimant] should bear the entire brunt of the liability to the company, particularly where the one surviving director [the defendant] has directed the company to sue the former director” (ibid), the assumed basis for the defendant’s liability to the company being that she had known of the practice of unlawful use of the company’s funds and, in breach of duty to the company, failed to put a stop to it. Then (ibid at [52]):

“If the amounts misappropriated had been used for the joint benefit of the Claimant and the Defendant those submissions might have real force. However they were not. The payments were for the exclusive benefit of the Claimant. … Even on the assumption that the Defendant might bear some responsibility for permitting some of the misappropriation to go unchecked, I do not regard it as seriously arguable that justice and equity require her to contribute to the Claimant’s liability to reimburse the company in respect of amounts misappropriated for his exclusive benefit.”

[68]The judgment in Dawson v Bell is short, sharp and factual. It does not purport to establish any principle of law that might dictate the outcome in the present case. Dubai Aluminium and Charter v City Index were not cited, let alone considered. The applicable principle binding on me is that established by the Court of Appeal in the latter authority, as summarised in paragraph 65 above.

[69]In the pleaded circumstances of Charter v City Index, the just and equitable apportionment between the defendant and the directors or auditors, if the latter’s liability to the claimant was established, “all depend[ed] on the facts, which can only be assessed at [a] trial” (per Carnwath LJ at [59]). That was not a decision that as a matter of law it will always be impossible to say there is no arguable case on the facts in support of a contribution claim (which is why I stopped before that final sentence when quoting Carnwath LJ in paragraph 65(5) above). It is, however, to say that there is no such principle of law as was contended for in the present case, by the third limb of the challenge to jurisdiction. That limb proposed that it was necessarily sufficient, to defeat any possibility of a contribution claim, that FM/FD Payments were made for the direct or indirect benefit of the defendants. However, it is not, as was submitted on behalf of Mr Jahanpour, “well-established that a party who has benefitted from money paid in breach of trust cannot claim a contribution from a third party in respect of that money” (emphasis added). Dubai Aluminium at [53] was said to be authority for that proposition, but the ratio of Charter v City Index is that(i) Dubai Aluminium at [53] is no such thing, and

(ii) it is not the law that a party who has benefitted cannot claim contribution.

[70]It was submitted that the defendants have admitted or averred that they received FM/FD Payments, and that they “do not suggestthey have paid these away such that they have ceased to benefit from them”. However, hardly any of the allegedly misappropriated sums are in truth said by anyone to have been received by Mr Mazzagatti or Mr Dixit personally; and it is a significant part of the case against them, to be assumed as true when now assessing the arguable viability of their contribution claims, that at least a substantial proportion of the allegedly misappropriated funds were later transferred from original recipients to others. It cannot be said now, simply from the pleadings, or on the evidence filed for this jurisdiction challenge, that there is no serious question requiring a trial whether the defendants now hold assets, derived directly or indirectly from the making of FM/FD Payments, with a value at least equal to the aggregate amount of all such payments, such that it might be said to be obvious as a matter of simple equity that the defendants should not be awarded any contribution from Mr Jahanpour.

[71]In conclusion, therefore, as to the third limb of the jurisdiction challenge, as regards API’s misappropriation claims, I see force in the submission that surely neither of the defendants will be awarded contribution except in respect of any liability in excess of any amount he is in a position to disgorge to API as retained benefits, if API’s claims succeed. However, it cannot be said to be obvious or capable of summary determination against either of the defendants that in his case there will be no such excess liability.

FM/FD Payments – Arguability in Fact

[72]Lord Wolfson KC did not advance any argument, in writing or orally, under the fourth limb of the submission on the jurisdiction challenge (paragraph 34(4) above). That is to say, for the present analysis, he did not argue that some necessary averment, sufficiently pleaded as part of a case that Mr Jahanpour is liable to API for failing to prevent FM/FD Payments from being made, was demonstrably untrue or unsupportable. He did though say he adopted Mr Malek KC’s arguments of that kind, if and to the extent that they related to allegations made against Mr Jahanpour.

[73]Those arguments were outlined in paragraphs 5 to 21 of the skeleton argument for the Directors. That section of the skeleton argument was headed “B. Factual Background”, as if it might contain a neutral introduction to non-contentious matters of fact. Its contents were nothing of that sort, however. Paragraphs 5 to 21, likewise much of Mr Malek KC’s oral argument, in fact consisted of a highly partisan presentation of disputed facts, as if it were closing argument at the end of a trial rather than a jurisdiction challenge probing whether a serious issue to be tried had been raised. I was not persuaded that the submissions achieved anything more than confirmation of the existence of serious factual issues to be tried. I illustrate that in paragraphs 0 to 83 below with some examples relevant to FM/FD Payments claims, but will not lengthen this judgment by dealing with every individual point mentioned.

Purported Board Resolution (APT)

[74]In connection with the establishment of APT as a subsidiary of API, a document exists that purports to be a Board Resolution of API dated 6 December 2018 signed by Mr Mazzagatti, Mr Ngoo and Mr Zacchigna, then the directors of API. The skeleton argument for the Directors claimed that Mr Mazzagatti’s “wet ink signature appears on [that] purported Board Resolution”. The evidence in support of that claim was said to be paragraph 17 of Mr Zacchigna’s statement, and what appears to be a scanned copy of the purported Board Resolution exhibited to that statement. Mr Zacchigna there disclaims any knowledge of the document prior to being told about it during the preparation of his statement (which is dated 25 July 2025). He says that there was no API Board meeting on 6 December 2018, that the signature above his name on the document is not his signature, and that Mr Ngoo has told him that the signature above his name on the document is not his signature either.

[75]However, Mr Zacchigna does not say that, or make any claim to be able to say whether, the signature above Mr Mazzagatti’s name is his signature. Nor does he say that the document he was shown, and which he exhibits, contains any ‘wet ink’ handwriting. The purported signature that the exhibited document suggests may appear above Mr Mazzagatti’s name in the original does not look anything like acknowledged instances of his signature, such as those on the defendants’ statements of case in these proceedings.

[76]Thus, the claim that the purported Board Resolution carries Mr Mazzagatti’s ‘wet ink’ signature was advanced without, at this stage, any evidence that might support it. The skeleton argument for the Directors sought to make something of the fact that the Defence pleaded that the purported signature of Mr Mazzagatti is a forgery, put on the document by Mr Jahanpour, whereas the Amended Defence pleads that it “was applied by Mr Jahanpour (and Mr Mazzagatti allowed him to do so)”. That revised plea is, I think, ambiguous as to whether Mr Mazzagatti claims specifically to have authorised the application by Mr Jahanpour of something other than Mr Mazzagatti’s normal signature, to the purported Board Resolution, or is claiming, more generally as part of his case that Mr Jahanpour was in control of and managing API, that he had given Mr Jahanpour permission to sign API documents on his behalf, from which he is saying it is to be inferred that that is what Mr Jahanpour did with this document. However that may all play out at trial, both Defence and Amended Defence plead in terms that Mr Mazzagatti did not sign the purported Board Resolution, and I have no doubt but that a serious issue is raised that will indeed require a trial to resolve whether Mr Mazzagatti signed it.

UOB A/C Token

[77]The operation of the UOB A/C required, it seems, a physical security token. It is common ground on the pleadings between API and the defendants that the account opening materials were sent by UOB by post to Advocatus Law LLP in Singapore, API’s company secretary. The defendants’ pleaded case is that the security token provided by UOB was given to Mr Jahanpour, such that he had the token, and access to operate the UOB A/C, at all material times. In the skeleton argument for the Directors, that was said to be “at odds” with email correspondence that the Directors say shows the defendants to have asked for the UOB A/C materials, as received by Advocatus, to be sent to Mr Mazzagatti at his residential address in Dubai, and then to have arranged for them to be collected instead from Advocatus, by someone called Mohammed Kasem. However, there is no necessary inconsistency between the pleaded case that the security token was handed to and kept by Mr Jahanpour and the fact (if it be fact) that the defendants, rather than Mr Jahanpour, liaised with Advocatus over getting the token from them. On no view could it be said that there is no serious issue to be tried over API’s claim that Mr Mazzagatti was the one operating the UOB A/C, using the security token to do so as required.

Cash Withdrawals

[78]Finally for this set of illustrative examples, API’s allegations of direct takings by Mr Mazzagatti from the Al Masraf AED A/C include allegations that on 5 July 2020 he made two cash withdrawals of AED1m and that on 15 December 2020 he requested that a cheque be issued for AED6.6m in favour of Saeed Mohamed Saif Alowaid Almheiri. API alleges that Mr Almheiri was at the time a senior adviser to the Fujairah Government and that the AED6.6m payment to him was a reward of some kind in relation to a transaction entered into on that date (15 December 2020) by which RockRose sold a Delaware subsidiary, RockRose UKCS8 LLC, to Fujairah International Oil & Gas Corporation, for US$1, the company sold then being renamed Fujairah Oil and Gas UK LLC.

[79]As regards the cash withdrawals, the defendants initially pleaded ignorance of whether they were made. After API obtained documents that appear to show Mr Mazzagatti signing documents for a cash withdrawal of AED1m on the relevant date, the defendants amended to admit that withdrawal but to plead a positive case that it was at the request and for the benefit of Mr Jahanpour, who attended the bank with Mr Mazzagatti on the day. I envisage that a submission may be made at trial that it is improbable that the amended plea might be true and yet Mr Mazzagatti believed when the original Defence was settled that he knew nothing about that cash withdrawal. It may perhaps be said, in that connection, that a cash withdrawal of this magnitude (AED1m ≈ c.€250,000) would be quite memorable. These are, however, indeed matters for trial. It cannot be said that the defendants’ case as now pleaded is demonstrably untrue or unsupportable on the basis of those potential arguments of implausibility.

[80]Nor was that submission made on behalf of the Directors. The defendants’ case was said to be incapable of being true, however, because(i) “a central plank of [their] defence is that [Mr Mazzagatti] fell out with Mr Jahanpour shortly after 10.9.2018 …” (original emphasis) and

(ii) the cash withdrawal occurred at the same time as “the creation of fabricated documents … which were used to support [the] successful takeover … of … RockRose …” referred to in paragraph 25 above. However, as Mr Nash KC submitted in response, (i) the defendants do not plead that the rift between Mr Mazzagatti and Mr Jahanpour occurred shortly after 10 September 2018 (although they do plead that it had its origins then), and (ii) the allegation that fake financing documents were created to support the RockRose bid is hotly disputed, nothing like established at this early juncture, and not remotely suited to being decided otherwise than at a trial.

[81]As regards the cheque payable to Mr Almheiri, again the defendants initially pleaded ignorance, which it may be said at trial seems surprising at all events for Mr Mazzagatti if the amended case now pleaded is the truth, that case being that he obtained the cheque at the request of Mr Jahanpour, gave it to him, and has no knowledge of what Mr Jahanpour did with it. The defendants admit that after the sale of the RockRose subsidiary, Mr Almheiri was for a time listed as a director, but plead that they had no involvement in his appointment and have no knowledge of the circumstances of it. Mr Malek KC waxed somewhat lyrical in his submissions about Mr Almheiri, “the guy from Fujairah Corp”, arguing that there is an “inevitable inference … that the cheque was given by Mr Mazzagatti to his new best friend, Mr Almheiri, who organised the Fujairah Corporation to buy UKC8 [sic.] for $1, and then it goes into liquidation. That [is] what it’s all about.”

[82]Mr Malek KC’s focus, of course, was on the absence of any sensible case against his clients, the Directors. For that purpose, it was sufficient for him to submit, as he did also, that whatever the rights or wrongs of the defendants’ case about the AED6.6m cheque, there is no serious issue to be tried to the effect that the Directors knew anything about it. I agree with that submission. However, to the extent that he took his submissions further, inviting me to hold that there is no serious issue to be tried at all, because the defendants’ factual case about the cheque cannot be true, in my judgment that was a step too far. That factual case is supported by the Statements of Truth of both defendants on the pleading. It is not blown away by contemporaneous documents or inherent probabilities so as to be demonstrably untrue or unsupportable. Mr Malek KC made a particular submission, unsupported by evidence, that Mr Jahanpour “obviously doesn’t know the guy [Mr Almheiri] at all”. I do not mean by that to suggest that there is, at this stage, positive evidence of a connection, or other dealings, between Mr Jahanpour and Mr Almheiri. That will need to be explored at trial, for which the starting point will be what Mr Jahanpour pleads so as further to define the issues. The point on this application is that Mr Malek KC’s submissions, as adopted by Lord Wolfson KC, do not justify the conclusion that the defendants’ pleaded factual case, supported by their Statements of Truth, is insufficient to raise a serious issue to be tried over whether the AED6.6m cheque was drawn at Mr Jahanpour’s ultimate request, for his purposes, not Mr Mazzagatti’s.

[83]Given the defendants’ factual case on the AED1m cash withdrawals and the AED6.6m cheque, those alleged misuses of the Al Masraf AED A/C do not involve payments admitted to be FM/FD Payments. I have dealt with them nonetheless at this point in my analysis because they represented high points of the argument by Mr Malek KC that the defendants’ case of Mr Jahanpour being in charge of API is incapable of belief, and that case is relevant to the contribution claims pleaded in respect of FM/FD Payments.

FM/FD Payments – Conclusions

[84]My conclusions, then, as regards API’s misappropriation claims in respect of FM/FD Payments, and therefore as regards all of the Challenged Payments, are that the Pt. 20 P/C:(1) discloses no arguable claim for contribution against the Directors, or any of them, but

(2) does disclose an arguable claim for contribution against Mr Jahanpour, which cannot be said to be demonstrably untrue or unsupportable on the facts, therefore

(3) so far as concerns the defendants’ contribution claims in respect of those misappropriation claims, the jurisdiction challenge by the Directors succeeds and the jurisdiction challenge by Mr Jahanpour fails, unless it is justified by the non-disclosure complaint which I deal with separately below.

[85]In expressing those conclusions, I have not overlooked the need to consider the legal basis or bases, as alleged by the defendants, upon which they say that Mr Jahanpour or the Directors has a relevant liability to API. Mirroring API’s case as pleaded against the defendants – and, I rather fear, for no reason other than to be seen to be mirroring that case – the defendants assert by the Pt.20 P/C that Mr Jahanpour, respectively the Directors, are liable to API in respect of the misappropriations from it, as it alleges, on the basis of:(1) breach of a director’s duties (in the case of Mr Jahanpour, as alleged, a shadow director’s duties) to the company, said to extend to duties as a trustee of assets beneficially owned by the company (if, as API alleges, Singapore law takes a director’s duties that far);

(2) dishonest assistance in the breaches of trust or fiduciary duty alleged by API against Mr Mazzagatti, or in each other’s breaches of trust or fiduciary duty alleged by the defendants under (1) above;

(3) knowing receipt, in the case of Mr Jahanpour only, as regards Non-D Payments;

(4) unjust enrichment “for such of the Misappropriated Funds or their Proceeds as were beneficially received by them”, including (in the case of Mr Jahanpour) the monies misappropriated by way of Non-D Payments;

(5) conversion, on the supposed basis that if the defendants misappropriated funds from API, then those misappropriated funds were converted by Mr Jahanpour and/or the Directors to their possession or use;

(6) conspiracy, on the basis that if the defendants conspired together, as alleged by API, then Mr Jahanpour and/or the Directors “must also have been involved in any combination or understanding with an intention to cause financial loss to API by [unlawful means, as alleged by API]”.

[86]The serious issue to be tried that I have concluded is raised by the Pt.20 P/C at [53] against Mr Jahanpour, and the serious issue to be tried that would have been raised by that plea against the Directors if there had been an arguable basis for the allegation that they knew of or were reckless as to the defendants’ alleged wrongdoing by way of misappropriations, is an issue whether Mr Jahanpour is (respectively the Directors might have been) liable for breach of a (shadow) director’s duties to the company. As to the other supposed bases of liability:(1) The arguable case against Mr Jahanpour is one of failing to put a stop to what the defendants were doing, having become aware of or reckless as to what they were doing, in breach of a duty to put a stop to it owed to API in that circumstance, as part of his (shadow) director’s duties. In my view, that does not disclose an arguable case that he dishonestly helped Mr Mazzagatti to breach his fiduciary duties or duties as trustee owed to API.

(2) Likewise, I would have held there to be no arguable case of dishonest assistance against the Directors. I have considered, for completeness, whether there is anything in the paragraphs of the Pt.20 P/C asserting dishonest assistance, [61]-[63], that adds materially to the factual case against the Directors alleged at [53]. There is not. In the later paragraphs the defendants make a bare assertion of knowledge or recklessness as to their alleged misappropriations. As indicated by the summary table prepared by Mr Nash KC and Mr Cathro during the argument, the case for a contribution claim stands or falls on the plea at [53].

(3) The allegation that Mr Jahanpour has a liability to API for knowing receipt of Non-D Payments obviously cannot found a contribution claim in relation to FM/FD Payments (whether as currently admitted by the defendants or as may be established by API at trial). It also cannot found a contribution claim in relation to Non-D Payments, because the defendants are not alleged by API to have any liability in respect of those misappropriations (if there were any): see paragraphs 87 and 88 below.

(4) The unjust enrichment plea against the Directors is wholly vexatious and embarrassing and should never have been included. The defendants do not allege that any of the Directors received, directly or indirectly, beneficially or otherwise, any part of any of the misappropriations alleged by API. Nor does API make any such allegation that in principle the defendants might have been entitled to adopt on a contingent basis, if some coherent contribution claim might result from doing so. As regards Mr Jahanpour, the unjust enrichment plea, like the knowing receipt plea, faces the insuperable difficulty that the only allegation of enrichment is the defendants’ allegation that Mr Jahanpour was enriched by Non-D Payments, in respect of which, if there were any, API makes no claim against the defendants.

(5) The supposed basis for a claim in conversion depends on an evident non sequitur indicated by the italicised emphasis in paragraph 85(5) above.

(6) Finally, in my judgment it is not arguable that if the defendants conspired together, as alleged by API, then Mr Jahanpour and/or the Directors must have been conspiring with them.

Non-D Payments

[87]That brings me, for completeness, to Non-D Payments. The defendants’ pleaded case for contribution in relation to those alleged misappropriations, if as they say, contrary to API’s case, there were any, is premised on their allegation that they were payments not made or directed by the defendants or either of them, but made or directed by Mr Jahanpour (Pt.20 P/C at [46]-[52]). However, that is straightforwardly inconsistent with the premise of any contribution claim, namely that the defendants are liable to API, as alleged by API and contrary to the defendants’ denial of liability. As I noted in paragraphs 24 and 26 above, API seeks to hold Mr Mazzagatti or Mr Dixit liable only for misappropriations by or at the direction of Mr Mazzagatti. It is not a possible outcome at trial, on the case pleaded by API, that Mr Mazzagatti or Mr Dixit is liable for Non-D Payments (if there were any). The defendants’ claim, whether or not properly pleaded and arguable on the facts, that if there were Non-D Payments, as they say they were, Mr Jahanpour and/or the Directors are liable to API in respect of them, is not a claim that Mr Jahanpour or any of the Directors is liable with the defendants in respect of the same damage. It does not give rise to any arguable contribution claim under the 1978 Act.

[88]As regards API’s misappropriation claims in respect of what the defendants say were Non-D Payments, therefore, the Pt.20 P/C discloses no arguable cause of action for contribution against either Mr Jahanpour or the Directors (or any of them). Accordingly, both jurisdiction challenges succeed so far as concerns contribution claims of that kind. That does not narrow the factual scope of the contribution claims against Mr Jahanpour over which there is properly founded jurisdiction (subject to the non-disclosure argument considered below), because of the point (again) that, in the terminology I am using, the entire universe of Challenged Payments in respect of which contribution claims are made might be held to have been FM/FD Payments. However, to reflect the extent to which the jurisdiction challenges will be upheld, and to respond to my criticisms of the Pt.20 P/C, I shall be minded to order that the Part 20 Claim be re-pleaded, promptly following the handing down of this judgment, with proposed revised Part 20 Particulars of Claim to be subject to the approval of the court, to ensure that it is limited to proper content that pleads as concisely as possible the claims that I have decided do raise a serious issue on the merits.

Other Possible Claims

[89]I turn now to consider the other parts of API’s pleaded case against the defendants that were said by Mr Nash KC to give rise to adequately pleaded and viable contribution claims against Mr Jahanpour and/or the Directors, that is to say (see paragraph 45 above) API’s claims:(1) to have suffered the loss of its shareholding in MHPC as a result of the Selenium transaction;

(2) that Mr Zacchigna was deceived by Mr Mazzagatti into signing letters misrepresenting aspects of API’s business with MHPC; and

(3) that there was no proper reason for Napag IT’s debt to MHPC to be written off and transferred to API/APT.

The Selenium Transaction

[90]I explained in paragraph 29 above how the Selenium transaction fits into API’s pleaded claims against the defendants. In short, it is said by API to have been the immediate or direct cause of the loss of its shareholding in MHPC, but still a knock-on consequence of the misappropriations for which API claims that the defendants are liable such that (so API claims) they will be liable to compensate API for that loss. The summary table to which I referred in paragraph 45 above said that the asserted basis of liability to API, on the part of Mr Jahanpour and/or the Directors, for that same loss, was that they “are also responsible for committing API to a damaging and uncommercial transaction”.

[91]The submission challenging that, for the present purpose of jurisdiction, was taken, I think, as far as an argument that as a matter of principle there could not be a director’s (or shadow director’s) liability of that type without there being a break in the chain of causation such that the defendants would have no liability to found a contribution claim. I do not agree with that. It is a coherent possibility, in principle, to posit that the defendants, if liable at all as alleged by API, may be liable to compensate it for the loss of the shareholding in MHPC even if API could also sue Mr Jahanpour or the Directors on the basis that the Selenium transaction was one that as shadow director (if he was), respectively directors, they should not have approved or concluded. The question whether a subsequent actionable wrong by a third party that aggravates the harmful consequences of an initial wrong by a defendant defeats, on causation grounds, the claimant’s claim against the defendant for the full aggravated loss is one of fact and degree unlikely to be suitable to summary determination.

[92]The challenge to jurisdiction as regards the Selenium transaction claim was also put, however, on the narrower, and surer, footing that the Pt.20 P/C does not disclose any reasonable grounds for saying that Mr Jahanpour or any of the Directors committed any actionable wrong against API. The only plea said to contain a viable claim is the plea at [40B], which is one of the amendments proposed by the defendants about which I have already expressed my view (paragraph 39(3) above).

[93]I add, for completeness as regards Mr Jahanpour, that he does not feature at all in that proposed plea. The summary table suggested that it was sufficient, for the Pt.20 P/C to have disclosed reasonable grounds for a contribution claim against Mr Jahanpour, if it disclosed such grounds as against the Directors, that paragraph 4.7 of the Amended Defence pleads that the Directors have been accustomed to act in accordance with Mr Jahanpour’s instructions, and not Mr Mazzagatti’s, since 10 September 2018. I disagree. That does not amount to even the beginnings of an attempt to identify and plead the necessary ingredients of any identifiable cause of action against Mr Jahanpour. It is therefore of no consequence that, as it happens, paragraph 4.7 of the Amended Defence is one of the paragraphs of that pleading ‘repeated’ and then ‘specifically … repeated’ in the Pt.20 P/C, at [13] and [14] respectively.

[94]Therefore, both jurisdiction challenges are well-founded as regards the claim, proposed to be made by amendment, that the defendants might be entitled to contribution on the basis of some liability to API in respect of its having entered into the Selenium transaction, acting by the Directors.

The Zacchigna Letters

[95]Mr Zacchigna’s letters, said by API to have been procured from him by fraud on the part of the defendants, were letters from API to MHPC, signed by Mr Zacchigna as a director of API, in May, June (two letters), August and October 2020, all claiming, API says contrary to the facts, that API had set aside a dedicated account for MHPC on which it was holding a large balance for the benefit of MHPC. That balance was said in the letters to be €22m (May 2020), then €26m rising to €50m (June 2020), still €50m (August 2020), and finally, in effect, €73m (October 2020, in that the last of the letters, further to all the previous letters, said API had “deposited in your dedicated account additional 23 mil euro, solely for MHPC usage …”).

[96]The summary table to which I referred in paragraph 45 above set out for the purpose of the jurisdiction argument the bases upon which it was said that any liability of Mr Jahanpour and/or any of the Directors, to API, had been pleaded that might found a contribution claim by the defendants. For Mr Zacchigna’s letters, it said the pleaded case was that because Mr Zacchigna signed the letters, he was “also responsible for their contents”, citing the Pt.20 P/C at [36]. If that amounts to an attempt to found a contribution claim, it could only be a claim against Mr Zacchigna. That does not mean that Mr Jahanpour or the other Directors have a valid challenge to jurisdiction in respect of it. It means that they face no relevant claim, so that the only challenge to jurisdiction that arises here is Mr Zacchigna’s. That challenge is however plainly well founded. As I said in paragraph 39(1) above, the Pt.20 P/C at [36] does not amount to, or even begin to identify let alone plead out the elements of, any cause of action.

The Debt Transfer

[97]Finally, and similarly, there is no serious issue to be tried that Mr Jahanpour or any of the Directors has a liability to API that might found a contribution claim by the defendants in respect of the transferring of debt from one assigned distributor to its successor (Napag IT to APT). The summary table confirms that the only supposed pleading of a claim by API against Mr Jahanpour or any of the Directors is in the Pt.20 P/C at [37A], a proposed amendment. The table says, as (in effect) does that plea, “And see Amended Defence at ¶91A”, but I dealt with that at paragraph 39(2) above. For the reason given there, and in any event for the reason given in paragraph 15 above, that plea in the Pt.20 P/C does not disclose any reasonable grounds for a contribution claim. By parity of reasoning with paragraph 96 above, dealing with Mr Zacchigna’s letters, the correct analysis, strictly, is that:(a) Mr Jahanpour and Mr Ngoo face no claim at all, so have no challenge to jurisdiction to make in respect of this part of the case;

(b) the jurisdiction challenge that therefore arises, that of Mr Zacchigna and Mr Ripepi, is plainly well founded.

Result

[98]The result, subject to the further complaint raised by the Directors, and adopted by Mr Jahanpour (but not made or developed independently by him), that there was a material failure of full and frank disclosure when the defendants obtained permission to serve the Part 20 Claim out of the jurisdiction, is that:(1) the Directors’ challenge to the jurisdiction is well founded in its entirety;

(2) Mr Jahanpour’s challenge to the jurisdiction is well founded except to the extent the Part 20 Claim makes claims against him for contribution on the basis of (a) the defendants’ liability to API, as alleged by API, for FM/FD Payments (extending to payments currently admitted by the defendants to have been such payments and other payments that API may establish to have been such payments, contrary to the defendants’ case) and (b) Mr Jahanpour’s liability to API, as alleged by the defendants, for failing, in breach of his (alleged) shadow director’s duties owed to API, to stop FM/FD Payments from being made, on the basis currently pleaded by the Pt.20 P/C at [53], so far as it is pleaded against him rather than against the Directors;

(3) that would leave only a pleaded basis of arguable liability to contribute on the part of Mr Jahanpour that is narrowly focused in principle, but is one, as I noted above, that may still be apt to extend across the full set of Challenged Payments impugned by API as misappropriations; and

(4) as well as appropriate orders setting aside the Part 20 Claim in its entirety as against the Directors and each of them, there should be orders setting it aside as against Mr Jahanpour except to the extent of that narrow basis of arguable contribution liability, which I am minded to say should bring with them an order requiring the defendants to re-plead, promptly, with proposed revised Part 20 Particulars of Claim to be subject to approval by the court.

Full and Frank Disclosure

[99]The material non-disclosure complaint, raised and pursued by the Directors (who did not need it), but adopted by Mr Jahanpour (who does, if he is to avoid the court confirming and exercising merits jurisdiction in respect of him in these proceedings), was that:(1) A letter of 7 February 2025 from Robert Wang & Woo LLP (‘RWW’) to Grosvenor Law Ltd (‘Grosvenor’) was not exhibited and drawn to the attention of the court (that is to say, in the event, Robin Knowles J) as part of the application for permission to serve out.

(2) The then draft Amended Particulars of Claim, though exhibited to and mentioned specifically in the witness statement for the application, was insufficiently highlighted and not fairly or adequately summarised.

[100]Grosvenor were and are the defendants’ solicitors in these proceedings. RWW are solicitors in Singapore. Their letter of 7 February 2025 replied to a letter from Grosvenor enclosing the original Pt.20 P/C in draft. That letter in turn followed previous correspondence from Grosvenor intimating the possibility of proceedings against the Directors. RWW were instructed to respond, and by their letter did respond, on behalf of the Directors only (not Mr Jahanpour). RWW’s letter was only two pages long. It asserted that the Directors had only ever acted, in good faith, as directors of API, that they had not received any sums misappropriated from API or APT, and that, so far as RWW were aware, it had not been alleged that the Directors ever received any such sums. It went on to state that:(1) RWW considered that the defendants’ proposed Part 20 Claim had no real prospect of success against the Directors because: (a) if, as API pleaded, the defendants misappropriated the sums claimed, there was no basis on which they could claim contribution from anyone, let alone the Directors, and (b) to the extent, if at all, that Mr Jahanpour diverted money from API/APT to himself, the defendants would have a defence, and RWW did not understand how, if they were wrong about that, i.e. if Mr Jahanpour misappropriated money but the defendants were liable anyway, that would be “compatible with a contribution / indemnity claim … against the … Directors”;

(2) RWW expected Grosvenor to address that contention by way of full and frank disclosure if the defendants sought to pursue the Directors by an application for permission to serve out.

[101]As a matter of sensible practice, RWW’s letter obviously should have been exhibited to, and mentioned in, the witness statement for the application for permission to serve out. Mr Morrison of Grosvenor, who gave that statement, accepted as much in his evidence in response to the jurisdiction challenge. He said he overlooked it because he was corresponding generally with Devonshires Solicitors LLP, the solicitors in the proceedings for API then and now, who are also now the solicitors for the Directors but who were not instructed by them at the time. That is somewhat surprising, as one might have thought it less likely that RWW’s letter would be overlooked in putting the application together given that it was the only solicitors’ correspondence sent on behalf of the Directors and given that it put Mr Morrison on specific notice that RWW expected him to deal with it in any application for permission to serve out. Surprising things sometimes happen, however, and I accept Mr Morrison’s evidence, which was not challenged, as to what happened here.

[102]The fact that any competent solicitor, aware of RWW’s letter when putting a service out application together, would exhibit it and mention it in their witness statement, does not mean, however, that failure to do so was or gave rise to a material failure of full and frank disclosure. In the event, after full inter partes argument, I have concluded that indeed the defendants have not pleaded an arguable claim against the Directors. That vindicates RWW’s conclusion, but not their argument, which was (I think) wrong in both points taken: it is not the case that if the defendants themselves effected misappropriations, a contribution claim by them is precluded (RWW’s first point); the flaw in relation to Non-D Payments (as I have called them) is not that if the defendants are liable in respect of them, the Directors could not be also (RWW’s second point), it is, rather, that if there were Non-D Payments as alleged by the defendants, then API does not make a claim against the defendants, and so no question of seeking contribution will arise.

[103]Although he did not exhibit or mention RWW’s letter, Mr Morrison(i) said in terms that the Directors were “likely to seek to argue that the Additional Claim is fundamentally flawed, such that it does not give rise to a serious issue to be tried, or have reasonable prospects of success …”,

(ii) expressed the reasonable view that the Directors’ position as to the facts would surely be the same as API’s, since they were the current directors who had signed the Statements of Truth on API’s pleadings, and

(iii) drew particular attention to the rather stark dichotomy between API’s (and presumptively, therefore, the Directors’) general factual case, that the defendants did everything, and the defendants’ case that the only possible culprit, if there were misappropriations, is Mr Jahanpour.

[104]In my judgment, there is no material difference between that presentation of the matter, and a presentation that added, “Indeed, the Directors by their Singapore solicitors have said in terms that that is their clients’ position: see their letter dated 7 February 2025, exhibited at [ ]”. If that, or something like it, had been done, I consider it inconceivable that any suggestion that there had been a failure to make full and frank disclosure would ever have been made.

[105]The RWW letter and Mr Morrison’s mistake in failing to exhibit and mention it in any event did not relate to the contribution claims against Mr Jahanpour.

[106]As regards the draft Amended Particulars of Claim, Mr Morrison drew specific attention to it in his witness statement for the service out application, stating that it provided further particulars of allegations made in the original pleading, “including in relation to(a) bank accounts allegedly opened by Mr Mazzagatti;

(b) board resolutions which were allegedly forged by Mr Mazzagatti;

(d) actions allegedly taken by the Defendants to conceal the alleged fraud; and

(e) losses allegedly suffered by API.” The material failure of full and frank disclosure asserted was that: (1) the additional allegations and particulars that API sought to introduce by its proposed amendments reinforced, so it was said, the binary nature of the case such that the proposed contribution claims against the Directors were bound to fail because either the defendants would establish their defence or, if they were liable to API, there was no pleaded basis on which it might be concluded that the Directors were also liable; and (2) that should have been explained by Mr Morrison.

[107]I consider that to be an unrealistic assessment of the nature and extent of the defendants’ duty of full and frank disclosure when seeking permission to serve out. Nor is it correct anyway to say that the case is entirely binary in the way suggested by that argument, albeit that, now a detailed analysis has been done as prompted by a full inter partes argument, some of the attempted contribution claims do fail upon that kind of logic.

[108]On any view, in my judgment Mr Morrison’s assessment at the time was a reasonable one (and there was no challenge to his evidence that this was his contemporaneous thinking), namely that the new allegations in the amendments proposed by API did not materially advance or alter the position of the Directors as possible contribution claim defendants and were unlikely to have any impact on the Directors’ position in respect of the Part 20 Claim. There was no failure of full and frank disclosure in and about what Mr Morrison did with, and said about, the draft Amended Particulars of Claim, in his witness statement seeking permission to serve the Part 20 Claim out of the jurisdiction.

[109]There was and is no merit in the non-disclosure complaint here. The final result upon these jurisdiction applications is, therefore, the result identified in paragraph 98 above.