(1) Amira C Foods International DMCC (2) A K Global Business FZE vs IDBI Bank Limited and Karan A Chanana [2018] DIFC CFI 027 (07 October 2019)

Claim No. CFI-027-2018




In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler

of Dubai















Third Party


Hearing:29, 30 and 31 July 2019

Counsel: TomMontagu-Smith QCinstructed by Taylor Wessing (Middle East) LLP for the Claimants.

Yacine Francisinstructed by Allen & Overy LLP for the Defendant.

Judgment:29 September 2019


UPON hearing the Claimants’ legal representatives at the hearing held on 29, 30 and 31 July 2019

AND UPON hearing the Defendant’s legal representatives at the hearing held on 29, 30 and 31 July 2019

AND UPON reviewing all relevant materials in the case file


1.The Judgment for Amira against the Bank for USD 12,603,791 together with the sum agreed in accordance with order 5 and interest to be

2. The Bank’s counterclaim against Amira be dismissed.

3. The Bank’s counterclaim against Mr Chanana be dismissed.

4. Mr Chanana’s counterclaim against the Bank be dismissed.

5. The parties are to agree on the interest referable to the amount of the 26 February buyers credits, the agreed sum to be added to the judgment sum in order 1.

6. Questions of the cheques, interest and costs be reserved for further

7. The parties are to provide the Registry

within 21 days agreed directions for determination of the questions of the cheques, interest and


Issued by:

Nour Hineidi

Deputy Registrar

Deputy Registrar

Date of Issue: 7 October 2019

At: 12pm


Introduction and result

1.The First Claimant

, Amira C Foods International DMCC (“Amira”) was established in Dubai in November 2009. It became a major international producer of packaged food and supplier of Indian basmati rice (“rice”) in the region. It used credit facilities provided by the Defendant, IDBI Bank Ltd (the “Bank”), a global bank with headquarters in India and a branch in

2. Amira’s main clients for the sale of rice in the region were Kuwait Supply Co and Kuwait Flour Mills & Bakeries Co (together, “Kuwait Flour”), entities under the control of the Government of Kuwait. The rice supplied to Kuwait Flour was generally obtained from the Second Claimant, AK Global Business FZE (“AK Global”), a dealer in commodities including

3. On 11 February 2018 the Bank provided to Amira a letter in which it irrevocably undertook that, upon receipt of remittance instructions and underlying documents, it would remit funds to AK Global upon receiving the funds from Kuwait Flour (the “Irrevocable Letter”).

4. On 14 February 2018 the Bank received USD 4,194,000 from Kuwait Flour, as payment for six shipments of rice at USD 699,000 Amira provided remittance instructions and appropriate documents to the Bank, requiring it to pay USD 4,134,000 to AK Global in accordance with the terms of the irrevocable letter. The Bank did not do so.

5. In reasons issued on 16 May 2018, Justice Sir Jeremy Cooke (the “ Judge

”) held that the Bank was contractually obliged under the irrevocable letter to pay the USD 4,134,000 to AK Global, and ordered that it do so. The Judge also ordered, on an interlocutory basis, that certain cheques provided by Amira to the Bank as security for the credit facilities be held by the Bank’s lawyers to the direction of the

6. There remained for determination any damages payable by the Bank to Amira for breach of its obligations under or in consequence of the irrevocable letter (the “Obligations”), including the effect of the breach on the indebtedness claimed by the Bank under the credit facilities and, consequentially, the fate of the cheques. The Bank filed a counter-claim against Amira, claiming USD 6,421,224 plus interest as the alleged indebtedness, and filed a third party claim against Mr Karan Chanana, the Chairman of Amira’s ultimate parent company, Amira Nature Foods Ltd (“ANFL”), as guarantor of that indebtedness. Mr Chanana in turn counter-claimed against the Bank, claiming damages for loss suffered as a result of its breach of the

7. The Bank paid AK Global on 20 May 2018. AK Global no longer had an interest as Second

8. For the reasons which follow:

(a) Amira is entitled to damages of USD 12,603,791, plus a sum to be agreed and interest to be assessed; and

(b) all other claims are

The credit facilities

9. By a sanction letter dated 27 May 2014, the Bank offered Amira credit facilities of USD 8 million by way of overdraft and bill discounting up to USD 3 million, and letter of credit/buyers credit up to USD 5 million. Repayment was due on 20 May 2015, but the overdraft was repayable on demand and the buyers credits were to be for a maximum of 90

10. The arrangement in the Sanction Letter was formalised in a Facilities Agreement dated 11 August 2014 (the “Facilities Agreement”). It similarly provided for an overdraft and for the opening of buyers credits with a validity of not more than 90 days. The effective term of the Facilities Agreement, through its “Final Maturity Date”, was twelve months or the maturity date of the last letter of credit or buyers credit.

11. By a provision in the Facilities Agreement, and also by a separate guarantee dated 11 August 2014, Mr Chanana guaranteed repayment by Amira under the Facilities Agreement. It is not necessary to further describe the guarantee, or to trace it through the extensions of the credit facilities later described. Mr Chanana accepted that, subject to set off of the damages claimed in his counter-claim, he was liable as guarantor of whatever indebtedness of Amira was established in the

12. The credit facilities appear to have been continued without formality after 11 August 2015. Some formality returned with a second Sanction Letter dated 8 March 2016, headed “Renewal-Cum-Enhancement of Working Capital Limit”, offering the same overdraft facility up to USD 8 million and a “LC/LOU against BC” facility increased from USD 5 million to USD 7 million. As before, buyers credits were to be for a maximum of 90 days, and the effective term of the credit facilities was up to 28 February

13. The second sanction letter included that the grant of the credit facilities was “subject to the normal terms and conditions contained in the Facility Agreement / general terms and conditions set out in Appendix 1 hereto”, but the evidence did not include Appendix 1. The letter also included that there was no binding obligation on the part of the Bank unless Amira confirmed that its terms and conditions were acceptable and “the Facility Agreement and other documents relating to the financial assistance” were executed. Amira accepted the terms and conditions, but the Bank pleaded that it did not otherwise comply with this requirement, so that the increase in the credit facilities did not

14. So far as appears it seems correct that another Facility Agreement was not executed. However, in fact the Bank provided buyers credits in excess of USD 5 million, and the extension of the term of the credit facilities next mentioned appears to have accepted the extended facility limits. If it mattered, I would conclude that, by its conduct without requiring the execution of another Facility Agreement, the Bank agreed to the higher limit for buyers credits. I do not think it matters, because the Bank did not invite a finding that Amira exceeded a buyers credits limit of USD 5 million at any particular time, or submit that some consequence flowed because the limit was

15. Again, the credit facilities appear to have been continued without formality after 28 February 2017. The next attention to them was itself not formal. In an email dated 26 October 2017, on the subject of extending certain buyers credits beyond the 90 day tenure, the Bank stated baldly, “[w]e further advise that we have extended the validity of WC [working credit] limits sanctioned to the company from July 29, 2017 till December 31, 2017”, and that it had debited a fee for doing so. There was no evidence of an intermediate extension to 29 July 2017, but this gave an extension to 31 December

16. With the passing of 31 December 2017, the Bank did nothing to call in the indebtedness under the credit facilities. As appears below, there were buyers credits still to fall due for payment in February 2018. Yet again, the credit facilities were continued without formality, and the provision of the Irrevocable Letter in February 2018 was part of giving effect to the credit facilities.

Buyers credits and irrevocable letters

17. There were regular shipments to Kuwait Flour of rice bought by Amira from AK Global, almost always in shipments of 500 metric tonnes (“MT”). Not all transactions passed through the Bank, but where they did, Amira would obtain funds to pay AK Global under buyers credits, usually arranged by the Bank with correspondent banks against letters of undertaking given by the Bank. Amira would use payments received from Kuwait Flour to discharge its indebtedness under current buyers credits and obtain fresh buyers credits from the Bank from which it paid AK

18. To this was added, in May 2017, the provision by the Bank of an irrevocable

19. A letter dated 17 May 2017 was addressed to Amira and AK Global, in materially the same terms as the irrevocable letter of 11 February 2018 set out later in these reasons. A similar letter, although a copy was not in evidence, was provided on 15 November 2017. Mr Chanana said that when the first irrevocable letter was issued, the shipments were loaded by AK Global and:

“Upon documents being forwarded to KFM [Kuwait Flour], KFM remitted funds into our account with the Defendant and as agreed by the Irrevocable Letter, the Defendant then made payment to the Second Claimant with fresh buyer’s credit after settling our outstanding buyer’s credit.”

20. In September 2017 the Bank arranged a number of buyers credits, provided by Punjab National Bank for the benefit of Amira. Their validity was subsequently extended, such that:

(a) four buyers credits for a total of USD 2,520,000 were due for repayment on 15 February 2018;

(b) two buyers credits for a total of USD 1,260,000 were due for repayment on 22 February 2018; and

(c) four buyers credits for a total of USD 2,590,000 were due for repayment on 26 February

21. I will call these the 15 February, 22 February and 26 February buyers credits respectively, and together the “February uyers Credits”.

The rice contracts

22. As at early 2018, Amira had contracted to supply rice to Kuwait The written contract or contracts were not in evidence (Mr Chanana said because of confidentiality clauses), and the Bank made some point that their provisions as to price, quantity, crop specification and delivery times were not known.

23. However, there are references in correspondence to a contract RC-116.2016, and it is clear from numerous payments of USD 699,000 made by Kuwait Flour that the price was USD 1,398 per metric tonne. It is clear also that the contracts next mentioned with AK Global were intended to fulfil the contract with Kuwait Flour, whatever the overall quantity under the Kuwait Flour contract. Mr Chanana referred to shipment by AK Global mirroring the contract with Kuwait There is a question of a later higher price paid by Kuwait Flour, but subject to that I accept that the shipments of rice with which this case is concerned were or were to be purchased from AK Global for on-sale to Kuwait Flour in fulfilment of a contract or contracts for the supply of rice at $1,398 per metric tonne.

24. On 9 January 2018 Amira and AK Global entered into a purchase agreement for 30,000MT of rice, at a price of USD 1,287.50 per metric tonne (the “30KMT contract”). The specification of the rice included “New Crop 2016”, and shipment was to be “Up to March 2018”.

25. On the same day, Amira and AK Global entered into a purchase agreement for 10,000MT of rice at a price of USD 1,378 per metric tonne (the “10KMT contract”). Apart from the quantity and price, this purchase agreement was in the same terms as the 30KMT

26. It was Amira’s case that the 30KMT contract was an “umbrella” contract, and the 10KMT contract was one of four “execution” contracts. The other execution contracts were said to be:

(a) Notionally, a contract for the supply of 4,900 MT of rice at a price of USD 1,287.50 per metric tonne (the “9KMT Contract”). There was no written purchase agreement, and this contract was said to encompass ten shipments under and at the price in the 30KMT contract, five in January 2018 and five in May-June 2018: hence a notional contract.

(b) A contract for the supply of 8,200 MT of rice at a price of USD 1,289 per metric tonne (the “2KMT Contract”). This was evidenced by a purchase agreement entered into on 5 March 2018, again in the same terms as the 30KMT contract except for quantity and price and also that shipment was up to May 2018.

(c) Again notionally, a contract for the supply of 6,900 MT of rice at a price of USD 1,154.56 per metric tonne (the “9KMT Contract”). Again, there was no written purchase agreement, and the contract was a construct from the remaining quantity of the 30KMT Contract and a calculated price to achieve USD 1,287.50 per metric tonne over all four contracts.

27. The language of umbrella and execution contracts came from Mr Chanana. He agreed that the description in a letter from AK Global dated 11 July 2019, in evidence without objection, was accurate:

“I hereby confirm, as an authorised representative of AK Global Business FZE (“AK Global”), that the company undertook business with Amira C Foods International DMCC for the supply of 30,000 Metric Tons of Pusa 1121 Basmati Rice as per Purchase Agreement RC-116- B-2016, dated 9th January 2018. Our understanding is that the product was ultimately for Amira’s customer, Kuwait Supply Co / Kuwait Flour Mills (“KFM”), this is due to the fact that our contractual packing provision required the 30,000 MT to be packed in bags that were marked with “Kuwait Supply Co” and the shipment was destined for KFM. This purchase agreement was executed in a manner whereby there was a contract for 30,000 Metric Tons for supply to Amira. This contract was executed through partial shipment of 30,000 Metric Tonnes and also through separate execution documents, which were made as we shipped the product. This structure was due to the different prices that each delivery was invoiced at. This is standard business practice for companies managing their cash flow and bank facilities. It was our understanding that the full 30,000 MT supply would average at $1287.50 p/MT but that we would supply various volumes at various prices according to Amira’s requests so they could hold the majority of their profit with their preferred bank. Each shipment was made as and when the product became ready. The documents were made as the business required them, as the product became ready and Amira decided which bank they wanted each transaction to go through. The discussions of this structure were done in person and on the phone.”

28. Mr Chanana confirmed that all discussions for these arrangements were

29. For some time in the proceedings the Bank appeared to contest the umbrella/ execution contract arrangement, but I think in the end accepted its substance. In any event, I am satisfied that the 30KMT contract was entered into as an overarching contract for the supply of rice, on the understanding that discussions between Amira and AK Global could arrive at shipments of sub-quantities at different prices to suit Amira’s management of its finances, provided the overall quantity and price was achieved. The 10KMT Contract was an immediate step in doing this. On the evidence, it is too much to say that there was a 4.9KMT Contract, and these shipments were “executed” under the 30KMT c\Contract itself. The 8.2KMT Contract was another step, and if the dealings between Amira and AK Global had continued (at the end of June 2018 AK Global refused further supply, see later in these reasons), the remaining 6,900 MT would have been supplied at the balancing price of USD 1,154.56 per metric

30. However, the irrevocable letter was not provided with reference to the 30KMT contract, but with reference to the 10KMT contract – a matter on which the Bank relied to confine the damages

The irrevocable letter

31. On 28 January 2018 AK Global wrote to Amira, clearly enough with past practice in mind:

“Against the current shipment of 10,000MTS of rice we request you to arrange an irrevocable letter from IDBI Bank for the payment to us i.e. A K Global Business FZE against the funds to be received from ultimate buyer i.e. Kuwait Supply Co. (Kuwait Flour Mills & Bakeries Co.).

Upon receipt of the letter from the bank we will forward the documents to the buyer. Once the buyer remits the funds IDBI bank should remit the funds to us immediately.

Please request your bank to provide the irrevocable letter as early as possible.”

32. On the same day the Bank emailed Amira, pointing out that the February Buyers Credits were due for payment on their various dates and asking that Amira arrange “to fund your account for repayment on the respective due dates”.

33. On 1 February 2018, Amira emailed back to the Bank:

“Shipments to our buyer Kuwait Flour Mills are ready to ship. The payment will start coming in 15 days which will enable us to settle the below buyers credit and will pay our supplier with fresh buyers credit.

To get this payment in our account our supplier has requested a fresh irrevocable letter from your side same as previous letter. Copy attached of the same for your perusal. We request you to issue the same at the earliest and advise us when we can collect the same.

Awaiting your cooperation as usual.”

34. The Bank replied on 7 February 2018, referring to discussions in which certain documents were requested. After an email in which Mr Chanana asked that the irrevocable letter be issued urgently, on 8 February 2018 Amira emailed the Bank, referring to the requested documents:

“As required enclosed find attached below for your perusal. Request you to provide us irrevocable letter at the earlier.

1) A K Global contract copy

2) Request letter from supplier i.e. A K Global Business FZE

3) Bank statement

Stock statement will be provided by 1st week of March.

We appreciate your cooperation as usual and hope to receive the letter at the earliest.”

35. Attached to this email were the 10KMT contract and the letter from AK Global of 28 January

36. Amira followed up on 11 February 2018:

“As discussed request you to please update for irrevocable letter. We need to hand over the same to our supplier to get the shipment loaded.”

37. Finally, on 11 February 2018 the Bank provided the irrevocable It was addressed to Amira, and read:

“Subject: Irrevocable payment to AK Global Business FZE for supply

Dear Sir,

We refer to your e-mail dated February 11, 2018 and discussions your representative had with us in our office regarding utilization of the sanctioned working capital limits.

2. In context of your proposal to facilitate payment to your supplier A K Global Business Z.E. against the supply made to Kuwait Flour Mills & Bakeries Co. on your behalf by utilizing the sanctioned working capital limits and out of your current account No. xxxx1564 of your company with us; we advise that, we are agreeable in-principle to facilitate the said transactions and will remit funds to A K Global Business F.Z.E. on receipt of funds from Kuwait Flour Mills & Bakeries Co., and on receipt of remittance instruction from you to this effect with underlying documents to our satisfaction. The said remittance confirmation for the benefit of A K Global Business F.Z.E. is irrevocable in nature on compliance of the above process.

3. We further advise that “Payments against documents drawn by A K Global Business FZE on Amira C Foods International DMCC would irrevocably be paid upon receipt of payment from the client of Amira C Foods International DMCC viz., Kuwait Flour Mills & Bakeries” keeping in view on what has been stated

4. This letter is being issued at your request without assuming any risk or responsibility with regard to the underlying ”

38. The Irrevocable Letter was provided by Amira to AK Global, and loading of the shipments of rice

Funds are received but not remitted

39. It is convenient at this point to introduce the sales and purchase matrix (the “Matrix”). Mr Divyesh Gandhi, Amira’s Commercial Manager in Dubai, created a spreadsheet on a regular basis to record sales and purchases from source Shipments usually of 500 MT, were recorded in date order. For a given shipment, the information recorded included, on the purchasing side; the supplier, the price per metric tonne and the amount payable. On the sales side; the price per metric tonne, the amount payable and when it was paid (hence the numerous payments of USD 699,000). Sales invoice numbers and shipping details were also recorded.

40. Five shipments of rice, 4,500 MT in all, were recorded under bills of lading dated 23 and 25 January 2018. The purchase price was USD 1,287.50 per metric tonne and the sales price was USD 1,398 per metric tonne. This evidenced part of the notional 4.9KMT contract, which was further evidenced by payments from Kuwait Flour to Amira and by Amira to AK Global passing through an account held by Amira with Mashreq

41. A further six shipments of rice, 3,000 MT in all, were recorded under bills of lading dated from 31 January to 2 February 2018. The purchase price was USD 1,378 per metric tonne and the sales price was USD 1,398 per metric tonne. These were the shipments for which Kuwait Flour had paid the USD 4,194,000, which was received into Amira’s account with the Bank on 14 February

42. But the Bank did not pay AK Global and the normal flow of shipments was interrupted.

43. On 14 February 2018 the Bank told Amira that USD 4,194,000 had been received and asked that it “provide us the letter and invoice / BL copies”, a clear enough reference to expected instructions to remit funds to AK

44. Amira replied, thanking the Bank, and saying:

“Have forwarded the required documents in separate emails. Kindly update the records and provide us quote for the fresh buyers credit for our approval.”

45. In separate emails Amira then instructed the Bank to remit six amounts each of USD 689,000 to AK Global, as “payment on account against import of rice” with reference to six invoices, enclosed relevant documents and requested the Bank to pay out the 22 February Buyers Credits, in total USD 1,260,000. And to “allow us a fresh buyers credit as per the documents submitted to your office”. The last-mentioned request was accompanied by an application for six fresh buyers credits for 90/180 days, each in the amount of USD 689,000, as “payment against” the six invoices. The reason for the fresh buyers credits was given as; “due to delay in receipt of payment”.

46. The Bank did not remit the funds. There was evidence that on 15 February 2018 it invited an internal quote, and approached the Bank of Baroda for a quote, for buyers credit funding of USD 2,756,000, but nothing was

47. There were meetings in which Amira asked after remittance to AK Global. On 19 February 2018 Amira also addressed the imminent date for payment of the 26 February buyers credits, emailing the Bank:

“Enclosed find attached request for extension of buyer’s credit maturing on 26th February 2018. Request you to arrange for extension and provide us quote for our acceptance.

Also advise us fresh buyer’s credit status for payment of our supplier AK Global Business FZE.”

48. The attached request dealt with payment under the Irrevocable Which read:

“We would like to inform you that the below buyer’s credit are due for settlement in 26th February 2018.

[The buyers credits were set out]

Shipment to our Buyer – Kuwait Supply Co. is at loading stage. The documents will be ready and forwarded to our buyer by 2nd week March 2018. For which inward remittance will be received during 03rd week of March 2018. Hence we hereby request you to allow us extension of 30 days to settle the above buyer’s credit. Meanwhile you can debit the relevant charges & interest to our account held with you.

We have received inward remittance of USD 4,194,000/- on 14th February 2018 and against which have requested to settle buyers credit due on 15th & 22nd of February and have requested fresh buyer’s credit of USD 4,134,000/- to pay our supplier A K Global Business FZE. We request you to arrange fresh buyer’s credit and release the payment by today / tomorrow. The delay in releasing payment will result in delay in next shipments which will creates issue with our buyer which is a Govt. entity.

Kindly acknowledge our above request & we appreciate your cooperation for the same.”

49. This was followed up on 20 February by an email from Amira, marked as of high importance:

“As discussed with you we need to remit the funds by today anyhow. The supplier has stopped loading further cargo. This will result in default on our part with supplier as well as buyer. Supplier will go legal if we didn’t provide them swift copy by today. Supplier has informed that we have received irrevocable letter from the bank to pay us immediately then why the bank is delaying payment so much.

Request you to get the internal approval as a special case to convert our buyers credit limit into OD limit for this time and release the payment by today.

We highly appreciate your support to us and request to clear the payment to our supplier.”

50. It was followed up again on 21 February 2018:

“As discussed with you we have received payments from our buyer on Wednesday 14th February 2018 amounting to USD 4,194,000 against which we have requested to release the payment to our supplier amounting to USD 4,134,000 which is still not released.

If the payment is not released by today, the next remittances from the buyer will not come into account as the supplier has stopped loading the cargo. They are not releasing further shipments. We request you to release the payment by today and provide the swift copy.”

51. Another meeting between Amira and the Bank took place on 21 or 22 February 2018. There was some dispute about what was said. According to Mr Chanana, Amira was told that the Bank was waiting for Reserve Bank of India and head office guidance, and he was reassured. According to Messrs Ravi Kumar and Rahul Sreekumar of the Bank, it was told that buyers credits would not be provided. It is not necessary to resolve the

52. Over the next few days Amira chased up the Bank, asking after payment to AK Global and extension of the 26 February buyers credits. This included telling the Bank that AK Global was “holding” shipment of the 7,000 metric tonnes remaining under the 10KMT contract, “which has delayed inward remittances which were expected to receive in account on or before 26 of February 2018 to settle the buyers credit to be due on 26 February 2018”.

53. A request from Amira on 24 February 2018 for a “quote for extension of the buyers credit falling due on 26 February 2018” was met with the curt reply, “No extension of the BC is possible. Kindly organise to make the payment on the due date”.

54. On 27 February 2018 the Bank wrote to Amira stating, in summary, that Amira had been told in the meeting on 21 February 2018 that rollover of the buyers credits or issue of fresh buyers credits was not possible; that as the 26 February buyers credits (in total, USD 2,604,435) had not been paid, the remainder of the amount received from Kuwait Flour after payment of the buyers credits falling due on 15 and 22 February 2018 (in total, USD 3,795,291.38) had been appropriated to Amira’s overdraft account; and that USD 2,240,000 was owing on that account being an “irregularity … which needs to be addressed without any further delays”.

55. Amira replied on 28 February 2018, saying that the Bank’s default had caused the supplier (AK Global) to put shipments on hold; that the buyer (Kuwait Flour) was saying that it would cancel the contract if shipments were not made on time; that the supplier “is also backing out of the contract” and it was looking for an alternative supplier “who are quoting higher prices and also advance payment which [they] are not in a position to manage”. Apparently ever-hopeful, Amira asked the Bank to remit the funds as soon as possible, and assured it that upon payment to the supplier money would come in to “clear the over dues in the account”.

56. To no avail. The Bank did not pay AK Global, or provide buyers credits or overdraft finance.

Why did the Bank not pay?

57. The reason does not excuse the failure to But the reason may illuminate questions of causation addressed later in this judgment.

58. According to Mr Rahul Sreekumar, the Dubai Relationship Manager for the Bank, the Ministry of Finance in India had reported a fraud in Punjab National Bank in relation to a letter of undertaking to other banks, and as a consequence on 16 February 2018 the Bank’s head office issued an instruction which prevented the issue of letters of undertaking. This was conveyed to the Dubai branch as a WhatsApp message, “Note no fresh LOC/LOU to be issued until further instructions…”. The message was understood to preclude providing fresh buyers credits, and consequently as precluding payment under the irrevocable letter: Mr Rahul did not explain further, but presumably because the Bank could not issue a letter of undertaking to its correspondent

59. I see no reason why I should not accept this as the Bank’s thinking at the time. But it was badly

60. The head office minute was:

“16.General Directions

During the course of discussion on the agenda items, the EC gave following general directions.

(a) No fresh LOU/LOC limits to be sanctioned. Existing LOU/LOC limits to be on run off basis. To examine if additional LC limits are required considering withdrawal of LOU/LOC limits in these cases;

(b) For outstanding LOU/LOC, to verify the genuineness of the underlying trade transaction. To closely monitor these accounts till closure of the LOU/LOC;”

61. As discussed later in these reasons, the obligation to pay under the irrevocable letter carried with it an obligation to provide corresponding credit to Amira. This can be seen in reverse in the Bank’s reason: no buyers credits, therefore no payment under the irrevocable Following past practice, that would be by fresh buyers credits; or it could have been by overdraft accommodation. The head office minute (which, if inspired by the Reserve Bank of India report, appears to have feared fraud within the Bank, not fraud practised upon it) could not reasonably be understood as precluding letters of undertaking necessary to fulfil existing obligations binding on the Bank. Nor did it preclude providing buyers credits issued by the Bank or providing overdraft accommodation.

62. Even if the WhatsApp message was all the Dubai branch knew, which is unclear, it did not go back to head office to say that the Bank was obliged to pay under the irrevocable letter and had to arrange buyers credits. Nor did it respond to Amira’s email of 20 February 2018, asking that internal approval be obtained as a special case to convert the buyers credit limit into an overdraft limit. The Bank’s thinking blanked out that it had an obligation to pay under the irrevocable This was shabby treatment of its customer.

Direct payment is made to AK Global

63. On 21 February 2018, AK Global wrote to Amira saying it had “cancelled” the irrevocable letter as the Bank had not paid in accordance with the irrevocable letter, although Kuwait Flour had paid Amira. The letter concluded:

“As per irrevocable letter IDBI should have released payment to us latest by 15th February 2018 but after many reminders we have still not received the payment or any confirmation from your side or from IDBI. Till the time we received outstanding payment from your side, payment for the current contractual shipments will be directly received in A K Global Business FZE account from Kuwait Flour Mills and the monies received by us will be adjusted against the outstanding payments.”

64. It is not clear who came up with direct payment by Kuwait Flour, but it was put in place. Mr Chanana said that Kuwait Flour was “on the verge of cancelling its business with” Amira and spoke of blacklisting it. I accept that Amira had no choice.

65. On 22 February 2018 Amira wrote to Kuwait Flour:

“Reference to our agreement RC-116.2016 for the supply of Indian Basmati Rice, we have agreed with third parties including but not limited to our parent company and subsidiaries, under our responsibility, to supply the mentioned quantity of rice on our behalf to ensure timely shipments.

Kindly honour from Invoice No. BR/17-18/149 to Invoice No. BR/ 17-18/161 for a quantity of 6500 MTS as from us Amira C Foods International DMCC, and payment may be effected to: [banking details of AK Global were given]”

66. As well, at Kuwait Flour’s request Mr Chanana sent to Kuwait Flour thirteen letters from Amira’s immediate parent company, Amira Pure Foods Private Ltd, inappropriately in the same terms save that each referred to one only of the

67. There was some dispute over the number of shipments for which AK Global received direct payment. The Bank even submitted that Amira had not proved that any direct payments were made by Kuwait Flour to AK Global, a hopeless submission which deserves no more consideration. It otherwise said fourteen shipments, Amira said seventeen

68. In a correction to his first witness statement, Mr Chanana said that seventeen shipments were paid for Mr Gandhi said that seventeen shipments were paid for directly. Neither was challenged on this in cross-examination.

69. The matrix records 22 more shipments by AK Global, following the shipments for which the USD 4,134,000 was payable, with bill of lading dates starting at 12 February 2018 and running until 13 June 2018. The last five are at the price of USD 1,287.50, being the balance of the 4.9KMT contract, and the column for payment received records payment on dates in June 2018. For the preceding 17 shipments, that column is

70. In a letter dated 12 March 2019, again in evidence without objection, AK Global said that in all it received seventeen payments of USD 699,000 from Kuwait Flour over the period 5 March 2018 to 21 March 2018, against the invoices 149-161 mentioned in Amira’s letter of 22 February 2018 and a further four invoices, 162 to

71. I find that direct payment was made for seventeen

AK Global does no further business

72. From Amira’s letter of 28 February 2018 to the Bank, AK Global was (understandably) With direct payment from Kuwait Flour, it must nonetheless have been prepared to continue shipping rice. The 8.2KMT contract on 5 March 2018 continued the relationship with Amira, although necessarily with delivery extended beyond the March date in the 30KMT contract.

73. As earlier noted, the Bank paid the USD 4,134,000 to AK Global on 20 May 2018. On 28 June 2018, however, AK Global wrote to Amira advising that the money had been received, but:

“As per your visit in our office dated 2nd April, 1st May, 21st May, 3rd June and 28th June regarding continuation of our business, we have decided not to do any more business with you and cancel all pending contracts.”

74. There was no direct evidence of what transpired on the visits mentioned in the letter, but the discussions must have included AK Global expressing discontent: Mr Gandhi said that it became apparent from the meetings that AK Global was not keen to continue business with Amira, and that he was aware by around early May 2018 that it was likely that it was no longer interested in doing

75. Why did AK Global decide not to do any more business with Amira? On Amira’s case, it was because the irrevocable letter had not been honoured. The Bank’s submissions included that it had not been shown that this was the reason. In its submission, the 8.2KMT contract showed that all was well, it was “business as usual”. It was put to Mr Chanana that Amira and AK Global had resumed business as usual, with which he agreed, although the agreement had little meaning when taken with the evidence as a whole. But the Bank did not ask anything about the meetings referred to in the letter of 28 June 2018, or challenge in any way the evidence of Mr Chanana that Amira lost its supplier because of the Bank’s breach, or Mr Ghandi’s evidence to the same

76. I accept that AK Global decided not to do any more business with Amira because of the Bank’s failure to honour the irrevocable It was not business as usual. It was business without the comfort of an irrevocable letter, with the stopgap of direct payment from Kuwait Flour, and with Amira appearing to AK Global to be unable to pay from its own resources. AK Global had clearly enough been unhappy, from its letter of 21 February 2019 through the discussions in May and June 2019. Continuation of the relationship, and entry into the 8.2KMT contract, is understandable while payment had not been made for the six shipments, in the hope that the relationship would bring payment but after payment was received on 20 May 2018 AK Global was unconstrained.

77. There was direct evidence of AK Global’s reason in the letter of 11 July 2019, earlier mentioned in connection with the umbrella/execution contract

78. The letter was addressed to Mr Gandhi. From its date, Amira probably asked AK Global to write it in order to use it in these proceedings. Mr Gandhi and Mr Chanana were obvious targets if it was to be suggested that they had prevailed on AK Global to write in more favourable terms than were warranted. Mr Chanana gave some rather obscure evidence that the letter came when Mr Gandhi “reached out” to AK Global and asked them to start business again. Neither he nor Mr Gandhi was asked any more about the origins of the It was not suggested to Mr Gandhi, or to Mr Chanana, that they had asked AK Global to write in favourable terms, and the Bank had no basis for inviting the Court

to disregard it as a statement of no or little weight.

79. AK Global wrote:

“I confirm that 16,400 Metric Tons were supplied to Amira out of the 30,000 Metric Tons contracted. The remainder of the 30,000 Metric Tons would have been supplied to Amira had it not been for the revocation of IDBI’s Irrevocable Letter.

The revocation of IDBI’s Irrevocable Letter caused us to have significant concerns about the future of Amira’s business. The revocation became common knowledge in our industry and resulted in a breakdown of trust, we therefore required future payments against stock already shipped to be made directly to A K Global from KFM rather than through Amira’s banking process.

Due to the revocation of IDBI’s irrevocable letter we were worried that Amira would be closed down and so once we had received payment for the shipment’s already made, we declined to continue future business with Amira.”

80. In my view, the failure to honour the irrevocable letter caused AK Global to cease to do business with

81. It is appropriate at this point to recall the rule of practice, sometimes called the rule inBrowne v Dunnfrom the case of that name (1893) 6 R 67. It is stated inPhipson on Evidence, 19th Ed, at [12-12]:

“In general a party is required to challenge in cross-examination the evidence of any witness of the opposing party if he wishes to submit to the Court that the evidence should not be accepted on that point … This rule serves the important function of giving the witness the opportunity of explaining any contradiction or alleged problem with his evidence. If a party has decided not to cross-examine on a particular important point, he will be in difficulty in submitting that the evidence should be rejected.”

82. As a rule rooted in procedural fairness, the rule is applicable in these Courts as in the Courts of England and It is to be applied flexibly, having regard to its purpose, for example, if the point is minor or issue is thoroughly joined through exchange of opposing witness statements – or default may be remedied by recall of the witness. But on a number of occasions the Bank’s counsel appeared unaware of the rule.

Replacement supplies are obtained

83. As at 28 June 2018, 13,600 MT of rice remained to be shipped under the 30KMT contract. Amira used replacement suppliers for these

84. First, it had entered into a purchase agreement dated 26 May 2018 with TIA Agro Trading DMCC (“TIA Agro”) for the supply of 17,000 MT of rice at a price of USD 1,389 per metric tonne (the “TIA Agro Contract”). The contract was in the same terms as the 30KMT contract except for quantity and price, and also that the specification of the rice included “New Crop 2017” and delivery was up to September From the matrix, eight shipments totalling 4,000 MT were supplied as shipments to Kuwait Flour, at the stated price.

85. Secondly, again from the matrix, a further 9,600 MT of rice was obtained from Impulse International Trading FZE (“Impulse”), at a price of USD 1,389 per metric tonne, and shipped to Kuwait

86. There was some confusion over this in the proceedings. The evidence included a purchase agreement dated 16 October 2018 with SR Agro Trading FZF (“SR Agro”) for the supply of 7,000 MT of rice at a price of USD 1,389 per metric tonne. SR Agro was said to be Impulse under a different name. The terms of the contract (the “SR Agro Contract”) were as for the TIA Agro Contract, but with delivery up to December 2018. Both parties appeared to treat the SR Agro contract as the contract under which Amira obtained the replacement 9,600 MT of rice. That does not seem correct. The shipments as recorded in the matrix – which were for a greater tonnage than in the SR Agro Contract – were in August-September 2018, prior to the date of the SR Agro Contract. Mr Chanana said only that the 9,600 MT was supplied “by Impulse and SR”, not linking the supply to the SR Agro Contract. While Mr Gandhi said that Amira “secured a contract with Impulse to continue with further shipments”, he said that the Impulse Contract ended around September 2018 and also did not link the supply to the SR Agro

87. This was not explored with the witnesses. On the evidence, the replacement supply of the 9,600 MT was from Impulse / SR Agro at a price of USD 1,389 per metric tonne, but the operative contract is

88. In short, shipments of the remaining 13,600 MT of rice was completed with shipments of 4,000 MT by TIA Agro and 9,600 MT by Impulse / SR Agro and payment to them at USD 1,389 per metric

The Bank demands payment from Amira

89. In its letter of 27 February 2018, described above, the Bank had called on Amira to address an irregularity of USD 2,240,000 owing on the overdraft account, demands followed.

90. On 22 April 2018 the Bank wrote to Amira, saying that the 26 February Buyers Credits totalling USD 2,590,000 had been “devolved owing to non-payment by the company and after adjusting available cash margin”; that accordingly USD 1,495,282.83 was “overdue in our books”; that interest on the overdraft of USD 12,403.20 also due on 1 March 2018 and USD 28,556.43 due on April 2018 had not been paid; and that the entire overdue amount of USD 1,536,242.46 had to be paid immediately. The evidence did not explain the

91. On 26 April 2018, Amira’s lawyers replied saying, in summary, that the “current position” was due to the Bank’s failure to pay AK Global under the Irrevocable Letter, that the interest had been paid but “under duress” and that Amira was quantifying its losses from the Bank’s

92. On 1 May 2018 the Bank wrote asserting defaults under the credit facilities, in failure to repay the 26 February Buyers Credits, as well as other respects and demanded payment of USD 2,319,025.34.

93. On 17 May 2018 the Bank’s lawyers wrote to Amira, saying that it was prepared to pay the USD 4,134,000 as an advance under the overdraft facility, inviting a repayment plan for that sum, and asserting that non-payment of the 26 February Buyers Credits on their due date had been an Event of Default under the Facilities Agreement as to which the Bank reserved its

94. According to a further letter dated 21 May 2018 from the Bank’s lawyers, Amira owed the Bank USD 2,215,934.40 in relation to the buyers credits plus another USD 1,660,720.90 under the overdraft facility. The letter noted that a repayment plan for the USD 4,134,000 had not been proposed.

95. Further demands between lawyers followed, however, the variation in the figures in these letters were not explained. I will return to the Bank’s demands when addressing its counter- claim against

Amira’s Damages


96. Amira claimed damages for:

(a) Lost profit on the AK Global transactions, due to the direct payments to AK Global;

(b) Reduced margin, due to AK Global’s cancellation of the 30KMT Contract and obtaining rice from TIA Agro and Impulse / SR Agro at higher prices;

(c) Lost profit on a soybean meal transaction, because it could not obtain credit;

(d) Loss of value in its business, due to reputational damage; and

(e) Losses arising from diverted management

97. In addition, Amira claimed:

(f) To recover the interest payments of USD 12,403.20 and USD 28,556.43 it had made under protest.

98. I had the benefit of expert reports from forensic accountants, Mr Stephen Peters called for Amira and Mr Matthew Fritzsche called for the Bank. However, there was limited occasion for their expertise. Each made calculations based upon scenarios reflecting their instructions or their conclusions on matters of fact. The outcomes depend on the Court’s resolution of those matters. I intend no disrespect in making only occasional reference to the experts’ opinions.

99. The Bank has been held to be in breach of contract. Provisions of the Law of Damages and Remedies, DIFC

Law No 7 of 2005 (the “Damages Law”), then applying, include:

  • Article 8: Amira has a right to damages for the Bank’s non-performance.
  • Article 9: Amira is entitled to:

“…full compensation for loss sustained as a result of the non- performance. Such loss includes both any loss which it suffered and any gain of which it was deprived, taking into account any gain to [Amira] resulting from its avoidance of cost or loss.”

  • Article 10: The right is to damages:

“…as measured by:

(a) The loss in the value to [Amira] of [the Bank’s] performance caused by its failure or deficiency, plus

(b) Any other loss, including incidental or consequential loss caused by the breach less

(c) Any cost or other loss that [Amira] has avoided by not having to ”

(d) Article 11, providing:

“11. Certainty of harm

  • Compensation is due only for loss, including future loss, that is established with a reasonable degree of
  • Compensation may be due for the loss of an opportunity in proportion to the probability of its
  • Where the amount of damages cannot be established with a sufficient degree of certainty, the assessment is at the discretion of the ”

  • Article 12, providing:

“11. Foreseeability of harm

The non-performing party is liable only for loss which it foresaw or could reasonably have foreseen at the time of its non-performance as being likely to result therefrom.”

100. It should be noted that, unlike the position under the common law where foreseeability is at the date of entering into the contract, under Article 12, foreseeability is at the date of

(a) Lost profit on the AK Global transactions

101. The amount of the profit depends on how many shipments were paid for directly, and on the price(s) payable to AK Global for those

102. In the letter of 22 February 2018, Amira asked Kuwait Flour to pay directly for thirteen shipments. Mr Peters relied on instructions for a total of seventeen shipments, but Mr Fritzsche said that he had no contemporaneous evidence for the additional four shipments. This was before the letter of 12 March 2019 from AK Global. I have accepted that seventeen shipments were paid for directly, in accordance with the evidence of Mr Chanana and Mr Gandhi, the Matrix, and the 12 March 2019

103. The seventeen shipments followed the five shipments part of the so-called 4.9KMT Contract and the six shipments under the 10KMT Contract for which the Bank ultimately made payment on 20 May 2018. The seventeen shipments, therefore, were fourteen under the 10KMT Contract at a price of USD 1,378 per metric tonne and three under the 8.2KMT contract at a price of USD 1,289 per metric tonne. The profit was 7,000 metric tonnes at USD 20 and 1,500 metric tonnes at USD 109, a total of USD 303,500.

104. I note that the Matrix records a purchase price of USD 1,378 against all the seventeen shipments. Mr Fritzsche therefore took that price for all the shipments. The price under the 8.2KMT contract does not appear at all in the Matrix. Mr Gandhi was not asked about this. I have accepted that the 8.2KMT contract was entered into as an execution contract and the price under that contract should have been in the matrix. I conclude that the Matrix is wrong in this

105. That is not an end to the contest over the lost profit. The Bank submitted that, whatever the amount of the profit, it was not a lost profit. It relied on, or at least drew attention to, AK Global’s letter of 21 February 2018 saying that it would receive direct payment from Kuwait Flour “and the monies received by us will be adjusted against outstanding payments”. The submission had two

106. The first limb was to the effect that AK Global may have adjusted the moneys against outstanding payments or, since it recognised that it was receiving overpayment, may have paid the profit to Amira. Adjustment is not realistic because there were no future payments after AK Global ceased to do business with Amira. What about payment?

107. Mr Chanana said in his first witness statement that, as a result of the direct payment, Amira “has lost its profit from these transactions”. Inherent in this was that the profit had not been later received by payment from AK Global. Mr Gandhi also said that Amira “lost profit” from the seventeen

108. It was not put squarely to Mr Chanana, or at all to Mr Gandhi, both of whom are likely to have had knowledge of any payment, that AK Global had accounted to Amira. Mr Chanana was taken to credit entries in Amira’s account with Mashreq Bank, in total USD 1,097,755. It was suggested to him that the total profit under the 10KMT Contract was USD 1,105,000 and that the credits were “enough to cover the profit that would have been payable to Amira for the delivery of the 10,000 metric tonnes under the 30,000 metric tonnes contract”. He agreed as to the mathematics. In re-examination, Mr Chanana said that the credits could relate to shipment claims or shortfalls in supply, and that Mr Gandhi might Mr Gandhi was not asked.

109. It was incumbent on the Bank, if it wished to submit that Amira had been paid the profit by AK Global, clearly to put that to Mr Chanana and, when Mr Chanana said he was not familiar with the in and out payments, to Mr Gandhi. The suggestion of sufficiency in amount was not

110. The suggestion was in any event unsound as a basis for such a submission. First, and apart from a possible, if not likely, other explanation, sufficiency rather than corresponding amounts is of little value. Secondly, profit calculated on the 10KMT Contract was not the measure; nor even was the figure of USD 1,105,000 put to Mr Chanana a profit on the 10KMT Contract – it was one-third of the profit on the 30KMT Contract. It was incongruous to use that erroneously calculated profit. Even more so when Amira claimed a lost profit of USD 303,500 and the Bank, through Mr Fritzsche, contended for a lost profit of no more than USD 130,000.

111. This limb of the submission came down to one of burden of proof; that where AK Global had shown willingness to account for the profit, Amira had not shown that it had kept any profit. The evidence of Mr Chanana and Mr Gandhi necessarily included that AK Global had not paid the profit to Amira. As earlier stated, this was not really challenged by the Bank. Lest there be any doubt, I find that AK Global did not pay the profit to

112. The second limb of the submission, within a wider submission that Amira could not recover damages because it had not tried to hold AK Global to the 30KMT Contract, was a question of mitigation; that Amira should have mitigated its loss by taking action against AK Global to recover the profit, and because it had not done so could not claim the lost

113. Article 16 of the Damages Law, in this respect reflecting the common law, provides that the non-performing party is not liable for loss suffered by the aggrieved party “to the extent that the loss could have been reduced by the latter party’s taking reasonable steps”. The Bank’s submission did not descend into why it was reasonable for Amira to have taken action against AK Global, nor was anything put to Mr Chanana or Mr Gandhi in that regard. At common law, it was for the Bank to demonstrate that Amira unreasonably failed to pursue AK Global (see for exampleRoper v Johnson(1873) LR 8 CP 167;Garnac Grain Co v Faure & Fairclough[1968] AC 1130), and Article 16 should be so understood in accordance with that well established position. It has not done so.

(b) Reduced margin

114. AK Global shipped a total of 16,400 MT of rice to Kuwait There remained under the umbrella 30KMT Contract a balance of 6,700 MT under the execution 8.2KMT Contract at a price of USD 1,289 per metric tonne, and the final 6,900 MT under the balancing contract at a price of USD 1,154.56. These quantities were shipped to Kuwait Flour in part (4,000 MT) from supplies under the TIA Agro Contract and in part (9,600 MT) by supplies obtained from Impulse / SR Agro, for which Amira paid a higher price and thus, on its case, enjoyed a reduced margin. It claimed losses of USD 670,000 and USD 1,617,636, a total of USD 2,287,636.

115. The Bank responded in three ways. The first was the submission that no loss was recoverable because, with reference to Article 12 of the Damages Law, the only loss it foresaw, or could reasonably have foreseen, to flow from its failure to pay under the irrevocable letter was loss in relation to the 10KMT Contract – not loss in relation to the 30KMT Contract or the execution 8.2KMT Contract and the balancing contract (“the Foreseeability Issue”). The second was the submission that, in fact, Amira did not make a loss but made a profit on the transactions, calculated by Mr Fritzsche at USD 198,000 (the “Loss Issue”). The third, put briefly, was that Amira failed to mitigate its loss by seeking to hold AK Global to the 30KMT contract: for reasons earlier given, that response cannot be accepted, and I will say no more of

(i) The Foreseeability Issue

116. For the Foreseeability Issue and adjusting its submission to acceptance of the umbrella/execution contract arrangement, the Bank said that AK Global’s request on 28 January 2018 was for an Irrevocable Letter “[a]gainst the current shipment of 10,000 MTS of rice”. Furthermore, that in the emails between the Bank and Amira, in early February 2018, the Bank asked for copies of “contracts relating to the transaction” and AK Global’s request letter, but Amira provided the 10KMT Contract and the above letter. Additionally, that Mr Chanana’s witness statement of 29 April 2018, at the commencement of these proceedings, referred only to the 10KMT Contract and that the first it knew of the 30KMT Contract, and the other execution contracts, was later in the proceedings, after it had paid AK Global. Thus, it submitted, it was neither foreseen nor reasonably foreseeable at the time of breach that Amira would suffer loss in relation to any contract other than the 10KMT Contract. The Bank added that the TIA Agro and SR Agro Contracts were also different from the 30KMT Contract, in having different delivery periods and referring to the 2017 crop instead of the 2016

117. Although made in relation to the reduced margin claim, these submissions would appear to be relevant in part to the lost profit on the three shipments under the 8.2KMT Contract part of the AK Global

118. Article 12 of the Damages Law governs the Foreseeability Issue, but inTVM Capital Health Care Partners Ltd v Hashemi(CFI 045/2012, 22 May 2014) (“TVM Capital”), I observed (at [159]) that:

“…The Damages Law in general reflects common law principles. While differences may be found from its terms, which must be adhered to, it should not be construed narrowly so as to detract from fullness of compensation, or from compensation for the kinds of loss which would attract compensation on common law principles.”

119. The case went on appeal (CA 006/2014, 25 December 2014), but without damage to this observation. Article 12 is concerned with remoteness, and while it differs from the common law in the time at which there must be foresight or foreseeability. The common law provides guidance in considering remoteness through the restatedHadley v Baxendaleprinciples, sufficiently found inChitty on Contracts, 33rd Ed (2019) (“Chitty”), at 26-121:

“A type or kind of loss is not too remote if, at the time of contracting

… it was within [the parties’] reasonable contemplation as a not unlikely result of [the breach of contract].”

120. Reasonable foreseeability in Article 12 equates to reasonable contemplation. In that regard,Chittyat 26-126 states, citing fromChristopher Hill Ltd v Ashington Piggeries Ltd[1969] 3 All ER 1496 at 1524:

“The reference to ‘the loss’ in the formulation of the test for remoteness of damage is to be interpreted as the type or kind of loss in question. The:

‘…party who has suffered damage does not have to show that the contract-breaker ought to have contemplated as being not unlikely, the precise detail of the damage or the precise manner of its happening. It is enough if he should have contemplated that damageof that kindis not unlikely.’”

121. There remains a judgment: how broadly is the type or kind of loss expressed? So it has been said, in relation to loss of profit, that “loss of ordinary business profits is different in kind from that flowing from a particular contract which gives rise to very high profits” (Brown v KMR Services Ltd[1995] 4 All ER 598 at 621), and that “loss of profits claimed by reference to an extravagant or unusual bargain are not of the same type as damages referable to a bargain that is unusual” (North Sea Energy Holdings v Petroleum Authority of Thailand(1997) 2 Lloyds Rep 418 at 437-8).

122. But that is not this case. Closer to this case isH Parsons (Livestock) Ltd v Uttley, Ingham & Co[1978] QB 791, in which it was held that loss of profit from “repeat orders” from disappointed customers may be

123. The Bank knew from previous dealings that over a period Amira had bought rice from AK Global for resale, to Kuwait Flour and maybe to others. It knew that this was its business. Although at the time of the irrevocable letter it was told only of the 10KMT Contract, it was reasonably foreseeable that there were and would be other supply contracts with AK Global for resale of rice. That was indeed so, in the form of the 30KMT Contract and the execution of contracts. The 30KMT Contract was not unusual in terms or profitability in comparison to the 10KMT Contract. The terms were the same, although the price difference was not large, so that the umbrella 30KMT contract, while more profitable than the executed 10KMT Contract, was not out of the ordinary.

124. The Bank also understood that AK Global had asked for the Irrevocable Letter as an assurance of payment prior to shipment and Mr Ravi, the Bank’s CEO in Dubai, acknowledged this. It was more than reasonably foreseeable that, if the Irrevocable Letter was not honoured, AK Global would refuse further shipments of rice. It was also reasonably foreseeable that, when payment was not made and the assurance of payment evaporated, AK Global would not want to perpetuate the interim direct payment regime and would refuse to make any further shipments. In my view, the loss to Amira in the purchase of rice from AK Global for resale was foreseeable within Article 12, going beyond the 10KMT Contract and extending to loss in relation to the 30KMT Contract and the execution

125. The Bank’s reference to the differences in the TIA Agro and SR Agro Contracts raised a slightly different The submission, as I understand it, was that because the substituted supply contracts were for crops of a different year and for different delivery periods from the 30KMT Contract, they and their prices could not be used to arrive at the reduced margin, because substituted contracts with those differences were not foreseeable. The submission should be modified in that, for reasons earlier explained, the SR Agro Contract appears not to have been the contract under which replacement supplies were obtained. It does not matter for present purposes I will assume that the unknown contract similarly differed from the 30KMT Contract in crop year and delivery period.

126. I doubt that this is a question of foreseeability. If foreseeability is the correct approach, it was foreseeable that Amira would obtain replacement shipments of rice from another supplier or suppliers, as best it reasonably could. The preferable approach is to ask whether Amira had not acted reasonably in obtaining the replacement supplies with the differences to which the Bank referred being due to the availability of replacement

127. On Mr Chanana’s evidence, when AK Global refused any further business with Amira, he negotiated “a replacement contract” with TIA Agro, under which 4,000 MT of rice was supplied to cover the AK Global supply, and the remaining 9,600 MT was supplied by Impulse / SR Agro. This evidence was not challenged; it was not put to Mr Chanana that the shortfall under the 30KMT Contract had not been made up by supplies under the TIA Agro Contract or from Impulse / SR Agro, or that it could or should have been made up in some other way by obtaining rice from a supplier or suppliers other than Impulse / SR Agro. The differences in delivery periods and crops were not raised with Mr Chanana. While Mr Gandhi was taken to them, nothing was put to him about any significance they might have had. Effectively, there was unchallenged evidence that supplies under the TIA Agro Contract and from Impulse / SR Agro were reasonable replacements for the AK Global

128. The differences could readily be explained by the timing; Amira had to find replacement rice in and after May 2018. The Matrix records shipments starting in early July 2018. TIA Agro may have been sourced as an alternative supplier when continuation of the relationship with AK Global was seen as doubtful. As the Bank did not go beyond pointing to the differences in crop and delivery periods, I decline to find that Amira acted unreasonably in obtaining rice from TIA Agro and Impulse / SR Agro. As a question of foreseeability; reasonable foreseeability of loss remains. As a question of reasonable action; the action was

(ii) The Loss Issue

129. The Bank’s submissions on the loss issue were presented through the report of Mr Fritzsche. He pointed to entries on the sales side of the Matrix for the shipments by TIA Agro and Impulse, indicating sales at USD 1,549 per metric tonne and receipt of USD 774,500 per shipment. He said that the Matrix appeared to show that the rice was sold to fulfil a new sales contract with Kuwait Flour, a contract RC-118.2017 signed on 1 May 2018. Therefore, he suggested, Amira made a profit of USD 160 per metric tonne, which based on other instructed or assumed inputs meant a calculation that Amira received USD 198,000 more than if AK Global had supplied the

130. Adjusting the calculation to 6,700 MT under the 8.2KMT Contract and 6,900 MT under the balancing contract, I believe the comparators are USD 2,410,036 if AK Global had supplied the rice and it was all resold to Kuwait Flour for USD 1,398 per metric tonne, And USD 2,176,000 on resale of the rice supplied by TIA Agro and SR Agro to Kuwait Flour for USD 1,549 per metric tonne. These figures should be checked if necessary. On Mr Fritzsche’s approach, there would not be a profit of USD 198,000, but a loss of USD 234,036 in place of Amira’s claimed loss of USD 2,287,636.

131. Amira’s submissions did not go into these calculations. Nor did it take issue with Mr Fritzsche’s reading of the Matrix. Neither Mr Chanana, nor Mr Gandhi, was asked about a new contract, or a new sale price for sales to Kuwait Flour by Amira or by the Bank, but from the Matrix, the 13,600 MT in question must have been resold to Kuwait Flour at the increased price in circumstances not

132. Amira’s submission was simple. It said that the increased sale price was not relevant, because it was “a collateral benefit” and not a result of the Bank’s breach of its obligations under the Irrevocable It claimed on the basis of the reduced margin and not of a lost profit. Amira said that if the Bank wished to submit that the increased sale price was caused by the breach it should have had evidence and put it to Amira’s witnesses.

133. Amira did not support its submission beyond stating this position. The Bank did not respond to the submission or otherwise support the validity in law of Mr Fritzsche’s approach. The issue deserved better attention from the

134. Damages are compensatory; one manifestation of this is that a party recovers the net loss it has suffered, for exampleHussain v New Taplow Paper Mills Ltd[1988] 1 AC 514 at 527 per Lord Bridge of Harwich:

“…financial gains accruing to the plaintiff which he would not have received but for the event which constitutes the plaintiff’s cause of action are prima facie to be taken into account in mitigation of losses which that event causes to him.”

135. It does not necessarily follow that the only financial gains to be taken into account are those caused by the event constituting the cause of action, butLaverack v Woods of Colchester[1967] 1 QB 278 may illustrate Amira’s reference to collateral

136. In that case, the Plaintiff was wrongfully dismissed. He took employment with another company, at a lesser salary but having purchased half its share capital, he also purchased shares in a second company which he could not have done under his original employment because of an anti-compete provision. It was held that the increase in value of his shares in the first company should be taken into account in assessing damages, but not the increase in the value of the shares in the second company because (per Lord Denning MR at 290):

“I realise that the Plaintiff was only at liberty to invest in [the second company] because his employment was terminated. But nevertheless the benefit from that investment was not a direct result of his dismissal. It was an entirely collateral benefit, for which he need not account to his employers.”

137. The question under Article 9 is one of the loss sustained by Amira as measured in accordance with Article 10. Looking beyond labels, cases on non-delivery of goods sold provide some

138. Where there is an available market for the goods, the ordinary measure of damages for non-delivery of said goods (now codified in England and Wales under theSale of Goods Act 1979) is the difference between the market price of the goods at the contractual time for delivery (or, if there is no such time, at the time of refusal of delivery) and the contract price. This represents the amount the buyer must pay in order to put himself in the position he would have been in had the contract been carried out – in effect, a reduced margin. One ground for this is the buyer’s obligation to mitigate. Damages so measured are recoverable even if the buyer obtained substitute goods at less than the market price, or even at no cost, because the purchase at lower cost was not only because of the seller’s breach in non-delivery (Joyner v Weeks[1891] 2 QB 31 at 34;Chittyat 44-396). See alsoCampbell Mostyn (Provisions) Ltd v Barnett Trading Co[1954] 1 Lloyds Rep 658, for the equivalent position where the buyer defaults, the actual price obtained by the seller on resale is not

139. Again ordinarily, the buyer cannot recover loss of profit on a resale (Williams Bros Ltd v Ed T Agius Ltd[1914] AC 510), even if the seller knew that it was the buyer’s practice to resell (Kwei Tek Chao v British Traders & Shippers Ltd[1954] 2 QB 459 (“Kwei Tek”) at 489-90). This is because what is contemplated on non-delivery, where there is a market, is that the buyer will go out into the market and But the loss of profit can be recovered if the seller knew that the buyer could resell the same goods, for example under a string contract, because the seller would foresee that the buyer would necessarily be in default under the contract of resale. In that case, the damages are the difference between the contract price and the resale price (Re R & H Hall Ltd and W H Pim (Junior) Co’s Arbitration[1928] All ER Rep 763;Kwei Tek, ibid).

140. The present case is not a claim for damages for non-delivery of goods but is akin to such a case because the Bank’s default caused AK Global’s failure to deliver rice following the seventeen shipments. There was a market, and Amira went into the market and purchased rice in substitution from TIA Agro and Impulse / SR Agro. The reduced margin is equivalent to the difference between the market price of the rice when AK Global should have delivered it and the contract price, using the actual price of the purchases from TIA Agro and Impulse / SR Agro as that market price. It was not a situation where damages for loss of profit could be recovered because although the shipments were to be delivered to Kuwait Flour in fulfilment of a contract with it, so far as appears each shipment supplied by AK Global was not an identified subject of that contract and non-delivery by AK Global did not put Amira in default under

141. The central consideration is that non-delivery of rice caused by the Bank’s breach could be and was met by going into the market to obtain supply from TIA Agro and Impulse / SR Agro. That brings the measure of Amira’s The increased sale price to Kuwait Flour is not relevant.

142. This is consistent with Articles 9 and 10. I do not accept the reduced assessment on Mr Fritzsche’s

(c) Lost profit on a soybean meal transaction

143. The evidence was

144. On 6 June 2018 another employee of Amira emailed Mr Gandhi saying he was; “planning for shipment of Soybean meal, Rice and some other commodities to Bangladesh”,\ and setting out a “transaction flow”. The email read:

“We are planning for shipment of Soybean meal, rice and some other commodities to Bangladesh. The transaction flow as follows:

1)The Bangladesh buyer will open LC on Amira C foods International

2) The shipment will be from India and we will pay the supplier of India by LC, which will be opened by Amira C Foods

3) Suppose 1000 MT Soybean Meal shipment and buyer agreed to open Lc @ $535 pmt, the value of LC $5,35,000.

4) Amira C Foods will open LC to Indian suppliers for 1000 MT soybean meal shipment @ $500 PMT, the value of LC $5,00,000

5) Indian supplier agreed to ship the 1000 MT soybean meal in 4 lots and after complete of every lots they will send dogs to our bank for payment. The same dogs we will forward to Bangladesh buyer’s bank for our ”

145. Mr Gandhi was asked what the bank charges would be for a 1,000 MT soybean meal shipment.

146. Mr Gandhi said in his witness statement:

“We had lost business as a result of not being able to establish a LC for the shipment to Bangladesh buyer against procurement from India. In and around June 2018 we were planning for a shipment of soya bean meal, rice and other commodities to Bangladesh … This transaction did not go ahead. The value of this business was USD 500,000 with a margin of 8%. Hence, we lost an estimated profit of USD 40,000.00 from this potential contract.”

147. In addition, Mr Chanana said in his second witness statement:

“In around June of 2018, I was in talks with a potential buyer from Bangladesh. The transaction did not complete because the First Claimant was unable to secure letters of credit. The potential of the value of this business was pegged at USD 500,000 with a margin of 8%. The profit linked to this transaction stood at around USD 40,000.00. Had the facilities been there, the First Claimant would have had realised a business that generated approximately USD 2-2.5 million from this potential client.”

148. In his oral evidence, Mr Chanana corrected this to say that he did not talk with the potential buyer, but a colleague

149. I do not think this claim has been established. The 1,000 MT in the email was a supposition; the talks with the Bangladeshi buyer, to which neither Mr Chanana nor Mr Gandhi was a party, do not match the supposition. The talks are not at all specific. It is said that Amira could not obtain letters of credit but, while Mr Gandhi spoke of inability to obtain alternative sources of funding, there is no more direct evidence of efforts to obtain letters of credit in the relatively small amounts involved, or that the failure in those efforts was because of the Bank’s default under the Irrevocable In that regard, while Mr Chanana asserted that “suppliers and customers and other trading partners” lost confidence in Amira’s business and ability to meet contractual obligations, other banks and their lending considerations are a different matter.

150. Damages can be awarded for loss of an opportunity (Article 11(2) of the Damages Law), but I am not satisfied that a soybean meal sale or the opportunity of one was lost in consequence of the Bank’s

(d) Loss of value of Amira’s business

151. Amira claimed damages for loss suffered by reason of the reputational damage caused by the Bank’s failure to pay under the Irrevocable

152. In his second witness statement, Mr Chanana asserted that because of this breach, Amira’s suppliers, customers and other trading partners had lost confidence in Amira’s business and ability to meet its contractual obligations. He said that its parent ANFL had “witnessed its share price drop as a result of this breach” from USD 4.04 on 14 February 2018 to USD 1.50 on or around 12 October 2018. And that on 37,186,142 shares on issue on 14 February 2018 the value of the shares was reduced by approximately USD 89 million. At least initially, Amira claimed this amount as the loss caused by the Bank’s

153. Amira did not hold shares in ANFL and the fall in value of the shares was, in the words of Mr Peters “a proxy for the loss of future business”. Amira did not seek to establish a loss of business from accounting information in the nature of decline in sales. It instructed Mr Peters to assume that the diminution in ANFL’s share price between the dates above “arose entirely from the revocation by [the Bank] of the Irrevocable Letter”. On that assumption, Mr Peters calculated a fall in the market’s view of the value of ANFL of $89,185,980.

154. However, Mr Peters could not say that this was the measure of a loss to Amira. He pointed out that many matters could affect the value of the shares in a public company, such as the state

The State
of, and outlook for, the worldwide economy, the economy in which the company operated, the market’s knowledge of the assets and liabilities of the company and its subsidiaries and their trading, as well as other matters, in the public domain. That is that the share price depended amongst other things, on the market’s knowledge. Mr Peters said that he had not been provided with anything to evidence a causal link between the “revocation” of the Irrevocable Letter and the fall in the value of ANFL’s shares, or to enable him to ascertain the factors influencing that fall in value. He had a table showing a decrease over the last four financial years in ANFL’s revenue and gross profit, but relative consistency in Amira’s revenue accompanied by a decline in gross profit; he could not exclude that the share price movement was due in part to ANFL’s trading

155. In summary, Mr Peters said:

“6.19 As noted above, the reduction in value could be as a result of various external factors. It is likely that the Irrevocable Letter did have some effect on the share price and it is the Claimant’s position that the entire fall is as a consequence of its revocation. However, I have not been provided with, or been able to obtain, information to enable me to consider whether this is likely to be the case or whether it was just one of a number of factors. If the latter, then the reduction in value attributable to the revocation of the Irrevocable Letter would be reduced accordingly with a consequent reduction in the claimable loss.”

156. Mr Fritzsche agreed with the limitations identified by Mr Peters and elaborated on them. He added that the table to which Mr Peters referred showed that Amira represented only 43% to 63% of the size of ANFL by revenue; that there was no evidence of company announcements or press releases connected to the Bank’s actions which had an impact on ANFL’s share price and that other factors associated with ANFL’s other subsidiaries and with Amira itself would have an impact on ANFL’s share price, unconnected with the Bank’s The table suggested that historically there was little correlation between the financial results of Amira and ANFL, “suggesting that it is unlikely to be Amira’s results which are causing ANFL’s financial losses (and potentially the fall in share price)”.

157. These demolitions of establishing Amira’s claim through the market price of ANFL’s shares, to which there may be added a question of taking October 2018 as the time for a decreased value, are convincing. Unsurprisingly, in submissions the claim was put a little differently, although still with some reference to the fall in market value of ANFL’s

158. Amira’s submissions were founded on a proposition found inDrake v Harbour[2008] EWCA Civ 25 at [28] per Toulson LJ:

“In the absence of any positive evidence of breach of duty, merely to show that a Claimant’s loss was consistent with breach of duty by the Defendant would not prove breach of duty if it would also be consistent with a credible non-negligent explanation. But where a Claimant proves both that a Defendant was negligent and that loss ensued which was of a kind likely to have resulted from such negligence, this will ordinarily be enough to enable a court to infer that it was probably so caused, even if the Claimant is unable to prove positively the precise mechanism. That is not a principle of common law nor does it involve an alteration in the burden of proof; rather, it is a matter of applying common sense. The court must consider any alternative theories of causation advanced by the Defendant before reaching its conclusion about where the probability lies. If it concludes that the only alternative suggestions put forward by the Defendant are on balance improbable, that is likely to fortify the court’s conclusion that it is legitimate to infer that the loss was caused by the proven negligence.”

159. Amira referred also to the observation by Longmore LJ at [15] that, where negligence had been found and the damage which occurred was the sort of damage which one might expect to occur from the nature of the Defendant’s work, the Court should “be prepared to take a reasonably robust approach to causation”.

160. InDrake v Harbourit was alleged that an electrician’s negligence had caused the fire in a property but the cause of the fire was obscure. The Judge considered other possible causes and held that the electrician had negligently failed to examine a used cable before re-using it and that, on the balance of probabilities, its faulty insulation was the cause of the fire. The Court of Appeal upheld the

161. Amira submitted that harm to reputation had been established, in a manner binding on the Bank, in the Judge’s judgment issued on 31 May 2018. It said, with reference toKpohraror v Woolwich Building Society[1996] CLC 510 (“Kpohraror”), that there is a presumption of loss as a result of harm to a trading entity’s credit reputation, whereby the entity can recover more than nominal damages for loss of business reputation without proof of actual damage. There was evidence of the extent of harm, it said, from Mr Chanana and Mr Gandhi, namely the assertions of lost confidence of suppliers, customers and other trading partners mentioned earlier in these reasons; inability to find a supplier who would contract on the same terms as the 30KMT contract; refusal of banks approached by Amira to provide alternative funding and consequent difficulty in generating sales; and the renewed financing obtained in August 2018 being “insufficient for Amira’s business model”.

162. Amira then referred to the fall in the market value of ANFL’s shares and to a table in Mr Gandhi’s evidence showing falls in Amira’s revenue from AED $958.95 million in 2017-18 to a projected AED $502 million in 2018-19 (in fact, sales targets), and in its gross profit from AED $119.61 million to AED $34.53 million. Repeating that it was entitled to general damages and did not have to prove an actual loss. It took up the proposition inDrake v Harbourand invited the Court to take a robust approach to infer that the falls were caused by the Bank’s breach and to strike a figure, if not USD 89 million then a “very substantial award”.

163. The position for which Amira citedKpohraroris well recognised and is regarded as a case where some damage is presumed. It is explained by Lord Birkenhead inWilson  v United Countries Bank[1920] AC 102 at 112, a case of failure to meet a cheque, as where the failure:

“…is so obviously injurious to the credit of a trader that the latter can recover, without allegation of special damage, reasonable compensation for the injury to his credit.”

164. The failure to pay in accordance with the Irrevocable Letter is akin to the position of failure to meet a cheque. The Bank did not contest the principle, it submitted that there was “simply no evidence at all to assist the Court” in coming to a figure for damages. It said that Article 11(1) of the Damages Law called for reasonable certainty and that the Court should not strike a figure when it was open to Amira to demonstrate a loss of business not by generalities and uncertain comparisons, but by more direct linking of loss of business with the Bank’s breach and analysis of its trading figures to come to a rationally-founded figure. It further submitted where this could have been done but was not the Court should not be robust in Amira’s

165. It is too much to say that there was no evidence on which the Court could act, but the evidence was in a number of respects unsatisfactory. The only descent into detail of loss of trade was Mr Gandhi saying:

“We have lost another one of our key clients, a Seychelles trading company, who has indicated that they no longer want to continue business with [Amira]. I am aware that this is probably as a result of the reputational damage [Amira] has suffered since [the Bank’s] breach of the Irrevocable Letter.”

166. This instance was linked with the Bank’s breach only by Mr Gandhi’s unexplained awareness that it was “probably” a result of reputational damage. Mr Chanana’s assertion of lost confidence of supplers, customers and other trading partners was not backed up or further explained. Amira did contract with TIA Agro and Impulse / SR Agro, it is true for a higher price but in fact reselling to Kuwait Flour also for a higher price. The evidence was unclear on Amira’s continuation of its business of purchase and resale of rice in other respects, but it must have continued. As noted earlier in these reasons, refusal of other banks to provide alternative funding is not necessarily due to the Bank’s breach of the obligations, as distinct for example, from the Bank’s more general refusal of further credit

167. This is not to deny some reputational damage and some effect on Amira’s But the assistance in determining its extent is compromised by the lack of accounting information in the nature of decline in sales. And when it comes to figures, for the reasons given by the experts, the market value of ANFL’s shares does not provide a guide to Amira’s financial loss from loss of business. The bare figures given by Mr Gandhi, while indicative of a downturn in business, are not well related to an effect of reputational damage.

168. Amira’s invitation to robust finding of causation must be read with the requirement in Article 11(1) of the Damages Law that loss must be established with a reasonable degree of Albeit that the requirement is with the rather contradictory qualification through Article 11(3) permitting assessment of the amount of damages at the discretion of the Court where the damages cannot be ascertained with a sufficient degree of certainty. The appeal to the proposition stated by Toulson LJ inDrake v Harbouris unsound. The present question is not one of causation of a given event, like the fire inDrake v Harbour, it is one of quantifying a loss, when it cannot be said that a loss in any particular amount is likely to have resulted from the Bank’s failure to honour the irrevocable letter.

169. As noted inTVM Capitalat [189], difficulty in quantifying damages does not relieve a Court from the responsibility of estimating them as best it can, this is reflected in Article 11(3). The Article encompasses the awarding of general damages for loss of business reputation in accordance withKpohraror, which the Bank did not dispute. I am satisfied that Amira should receive damages under this head of claim, but in the unsatisfactory state of the evidence, the damages should be assessed not robustly but with restraint. I accept that there was damage to Amira’s reputation, and that there was some effect on its trading. As an attempt at a rational basis, I take the diminished profit figure in Mr Gandhi’s evidence of approximately USD 23 million, and discount it for uncertainty in the affect on future business of the Bank’s failure to honour the irrevocable The damages should be USD 10 million.

(a) Loss because of diverted management time

170. Mr Gandhi said that he spent a considerable amount of time from around the end of January 2018 to 28 November 2018 “working to mitigate the damage to [Amira’s] business that was caused by [the Bank’s] breach of the Irrevocable Letter”. He described this as “dealing with the documents for [Kuwait Flour], seeking alternative sources of funds and effecting various documents with new suppliers”. He produced a table of time spent, listing tasks and their estimated times in minutes, to a total of 27,075 minutes. His salary was AED $304,000 for a 48 hour week. At a calculated hourly rate, Amira claimed AED $53,550, converted to USD 14,581.

171. The Bank submitted that the claim was not maintainable because there was no incremental cost to Amira. Mr Gandhi was not paid any more for time spent on the tasks in the table. Amira responded that it did not have to show an incremental cost, referring toR+V Vershicherung Attorney General

Attorney General
v Risk Insurance and Reinsurance Solutions SA[2006] EWHC (Comm) 42 (“R+V”).

172. In that case, R+V was entitled to damages for conspiracy from Risk. It claimed for internal management and staff time and internal overheads. Risk said that it could only recover to the extent it proved that it had suffered a loss of profit due to diversion of resources as a result of the conspiracy. Gloster J observed that the authorities were not easy to reconcile, and after a lengthy examination held (at [77]) that in principle such a head of loss is recoverable notwithstanding that no additional expenditure or loss of revenue or profit can be shown, provided the time spent was directly attributable to the

173. It fell to Tomlinson J to assess the damages to which R+V was entitled: [2006] EWHC 1705. His Lordship agreed with Gloster J in the rationale cited at [3] a passage fromRatcliffe v Evans[1892] 2 QB 524 at 532-3, to the effect that the Court should not insist on more certainty and particularity in the evidence or proof of damage than was reasonable having regard to the character of the acts producing the damage and the circumstances in which the acts were

174.R+Vhas since been accepted. It supports Amira’s claim and I do not accept the Bank’s Damage can be suffered not only by additional expenditure, but also by wasted expenditure – expenditure which is ordinarily incurred but does not produce the profit it would otherwise have produced. On the rationale expressed by Tomlinson J; particularity in proof of the loss of profit is not required; although not so stated, the loss of profit is regarded as proved provided the Plaintiff shows significant diversion of staff from their usual activities. So viewed,R+Vis consistent with and an elucidation of the requirement of a reasonable degree of certainty and its discretionary fallback in Article 11.

175. Some of Mr Gandhi’s time was not directly attributable to the Bank’s breach, being the time before 15 February 2018 and the last entry of time spent on preparing the table itself. The Bank did not question the intermediate entries. Reducing the time to 23,500 minutes, Amira is entitled to USD 12,655.

(b)Recovery of the interest payment made under protest

176. At one point the Bank appeared to say that, even if the interest was deemed not to be payable, it had been paid and the Bank could keep it. Fortunately, the Bank accepted that if the interest had not been payable, it should be repaid or at least credited to

177. This claim is best considered as part of Amira’s defence to the Bank’s counter-claim, which involved that the failure to repay the 26 February buyers credits was due to the Bank’s breach of the obligations. For reasons there given, interest referable to the amount of the 26 February buyers credits should be repaid to

The Bank’s counter-claim against Amira

178. The Bank filed its counter-claim in September 2018, claiming USD 6,421,224.71 plus interest from 1 February 2018 (the “Debt”). The Debt was said to comprise of the following; USD 2,590,000 being the amount of the 26 February buyers credits, USD 4,134,000 being the amount paid to AK Global and USD 1,628,920.27 being the amount of the overdraft; less USD 1,931,695.56 otherwise recovered. For the hearing, the Bank provided a calculation to 29 July 2019 of $7,306,092.84.

179. Save for the interest earlier mentioned, Amira did not contest the amount claimed. Its primary defence was that the Debt was not payable as at September 2018 because:

(a) Notice of an Event of Default under the Facilities Agreement was necessary in order that it become payable;

(b) The only Event of Default on which the Bank could rely, on the evidence of notice of an Event of Default and on the pleading of the counter-claim, was failure to pay the 26 February buyers credits;

(c) That failure was caused by the Bank’s breach;

(d) The Bank could not rely on a failure caused by its own breach;

(e) Therefore, the Debt had not become

180. This might be thought a technical defence. The Debt remained unpaid, and if the defence were upheld it could be made payable and recovered by the Bank in fresh proceedings. However, the defence was taken, which I must rule on according to law, there may be other defences available if fresh proceedings are

181. The Bank’s principal response was that it was not confined to failure to repay the 26 February Buyers Credits as the Event of Default trigger for the Debt becoming payable. It said that it could rely as the trigger, on the evidence and on its pleading, on notice of other Events of Default. As its secondary response, it said that it could in any event recover the amounts of the 26 February Buyers Credits and of the overdraft indebtedness as amounts payable regardless of an Event of Default, and that its pleading was adequate for recovery on that

182. As a fallback, Amira said that it was entitled to set off against the Bank’s claim the damages. As will appear, it is not necessary to rule on

(a) The notice of an Event of Default

183. I have described the course of the credit facilities. As at 2014, they were governed by the terms of the Facilities While the Sanction Letter of 8 March 2018 contemplated a new Facilities Agreement, it appears that a new agreement was not executed and the Facilities Agreement continued to govern. The Bank relied on the provisions of the Facilities Agreement in the proceedings, Amira’s pleadings and submissions also treated the Facilities Agreement as continuing in force.

184. The Facilities Agreement provided in cl 14.1 for numerous Events of Default. One was failure to pay any sum payable under,inter alia, the Facilities Agreement itself or a buyers credit. Another (cl 14.1(b)), on which the Bank appeared to rely, was misrepresentation in various

185. By cl 14.2 of the Facilities Agreement:

“Upon the occurrence of an Event of Default and at any time thereafter the Bank may by notice in writing to the Borrower:

(a) Require the Borrower to provide an amount equal to the face of each letter of Credit and/or Buyer’s Credit to be deposited in the Cash Collateral Account and such amounts shall be used in accordance with Clause 7;

(b) Declare each Outstanding Amount under each Advance to be immediately due and payable whereupon each such Outstanding Amount(s) shall become so payable together with accrued interest thereon and any other sums owed to the Bank under this Agreement; and/or

(c) Declare any unutilized portion of the Facilities to be cancelled whereupon the same shall be cancelled and the Facility Amount reduced to, and thereafter remain, zero; and/or

(d) Invoke all legal remedies (including legal action) available including, without limitation enforcement of any Security Documents or Security ”

186. Initially, the Bank submitted that under cl 14.2 there was no need to identify an Event of Default in the notice in writing to which it referred. While notice in writing was required in order that money become payable immediately, it was necessary only that there be an Event of Default. If there was, the Bank could rely on it whether or not it was referred to in the notice in writing.

187. The Bank later retreated from this submission, acknowledging that the Bank could not “write a blank letter”. In my view, that is a correct interpretation of cl 14.2. Identifying an Event of Default allows the recipient of the notice in writing to contest it, or to put it right; the recipient is not left in the dark, exposed to unstated Events of Default. As a matter of construction, cl 14.2 should be understood as meaning a notice in writing identifying an Event of

188. I go then to notices in writing given by the Bank. The Bank submitted that it had given notices in writing in which it identified Events of Default other than failure to repay the 26 February Buyers

189. A notice given on 6 June 2018, from the Bank’s lawyers to Amira’s lawyers, was a clear declaration in accordance with cl 14.2 of the Facilities Agreement and a demand for $6,421,224.71. But the Bank relied on earlier communications; being the letters dated 27 February, 22 April and 1 May 2018 earlier mentioned, as well as a number of letters from its lawyers to Amira’s

190. Neither the letter of 27 February 2018 nor the letter of 22 April 2018 purported to be a notice under cl 14.2, neither declared the Debt or its equivalent at the earlier time immediately repayable. The letter of 1 May 2018 did assert Events of Default; being failure to repay the 26 February Buyers Credits and failure to provide certain information. The letter further declared payable and demanded USD 2,319,024.34 as the then outstanding amount of the credit facilities. The description of that sum in the letter is an overdraft amount. In fact the amount of the 26 February Buyers Credits which had been “devolved” into the overdraft account, as is made clear in a letter of 24 May 2018 from the Bank’s lawyers to which I later

191. The letters between lawyers were, from the Bank’s side; dated 17 May, 21 May, 24 May and 27 May 2018, in addition to the notice of 6 June 2018. The first of these asserted that $2,215,934 was outstanding and that its non-payment constituted an Event of Default but did not go further: it “reserves all [the Bank’s] rights in respect of that Event of Default”. The second asked whether Amira intended to pay the $2,215,934.40 by 24 May 2018. The third, on 24 May 2018 asserted that failure to pay the amount of the 26 February buyers credits, which was given the name “the Amount”, was an Event of Default, but only reserved the Bank’s rights if the Amount was not paid on that Then the letter of 27 May 2018 gave Amira three days to pay the Amount, and reserved the Bank’s rights “to call an Event of Default pursuant to clause 14.1 of the Facilities Agreement” and to exercise its right, amongst others, to declare all Outstanding Amounts immediately due and payable if payment was not made.

192. There followed the notice of 6 June 2018. In that notice, the prior letters from the lawyers were recited and the stated Event of Default was non-payment of the Amount, that is the 26 February Buyers

193. From this survey of the communications, I do not accept that the Bank can rely on giving a notice in writing resting on an Event of Default other than failure to repay the 26 February Buyers Credits. The letter of 21 May 2018, the only one which asserted Events of Default other than failure to pay those buyers credits, declared payable and demanded only the amount of the 26 February Buyers Credits. It was superseded by the subsequent communications, giving time and the fresh declaration and demand on 6 June 2018 resting on, and only on, the Event of Default of non-payment of the Amount – that is, the amount of the 26 February Buyers

194. It may be noted that this is consistent with the account given by Mr Ravi in his second witness statement, that:

“Following a number of written demands for payment, by a letter dated 6 June 2018, the Bank provided the Borrower with formal notice of an Event of Default under the Facilities Agreement…”

195. The Bank submitted, however, that it could rely on an Event of Default other than that contained within the notice in writing. That if it identified an incorrect Event of Default in the notice in writing but there was in fact a correct Event of Default, it could rely on then other Events of

196. If this be accepted, there would remain the pleading question: was the other Event of Default pleaded? But I do not accept

197. It is a question of construction of cl 14.2 of the Facilities Agreement; must the notice in writing identify the Event (or Events) of Default the, occurrence of which grounds the giving of the notice in writing? It is clear that the Bank gave the operative notice in writing, that of 6 June 2018, grounded on failure to repay the 26 February Buyers Credits, and on that

198. By its cl 21.1, the Facilities Agreement is to be construed in accordance with the laws of the UAE

. I am grateful to the parties for their post-hearing submissions. They could not find specific guidance under UAE However the UAE Civil Code, by construction looks to intention and meaning rather than words and form (Article 258(1)). Furthermore, if the words are not clear and there is scope for interpretation, the enquiry is into the mutual intentions of the parties “and guidance may be sought in so doing from the nature of the transaction and the trust and confidence which should exist between the parties in accordance with the custom current in dealings” (Article 265). Further, a contract must be performed “in a manner consistent with the requirements of good faith” (Article 246(1)).

199. Once it is accepted that the notice in writing cannot be “a blank letter” but should identify an Event of Default, it is hard to maintain that an Event of Default not stated in the notice in writing can trigger repayment. The matters which the notice in writing can trigger, under paras (a) to (d) in cl 14.2, are of high importance. The reason for requiring identification of an Event of Default apply also to require identification of all Events of Default on which the notice in writing is grounded, and preclude additional assertion of an Event of Default which was not a ground stated as being that upon which the notice in writing was given. The mutual intention to be found in the Facilities Agreement should be one of fair dealing between the parties, consistent with good faith in performance and the Bank’s construction could operate harshly and inconsistently with such a mutual

200. I test this against the parties’ researches into English law, which the post-hearing submissions also

201. A party who refuses to perform a contract, giving a wrong reason, may justify such a refusal if at the time there were facts giving a good reason, even if he did not know of the facts at the time, pursuant toBoston Deep Sea Fishing v Ansell(1888) 39 Ch D 339. However, that cannot be transposed to a contractual provision for exercising a right upon notice of a

202. The Bank referred to a statement inPaget’s Law of Banking, 15th Ed (2018) at 8.6, that if a bank proceeds on the incorrect basis that a certain event of default occurred:

“…it may be able subsequently to justify its actions by reference to facts then existing but not expressly relied on, even if only discovered later, which constituted an event of default.”

203. The cases cited, however, justify the caution with which the statement is expressed.Glencore Grain Rotterdam NV v Lebanese Organisation for International Commerce[1997] 4 All ER 514 was not an event of default case, but a refusal to perform case. InByblos Bank SAL v Al-Khudhairy[1987] BCLC 232 it was held that the bank appointing a receiver could rely on a ground it had not relied on when it made the appointment, but so far as appears there was no equivalent to cl 14.2 providing for notice of an event of default – the receiver could be appointed simply if the company became unable to pay its debts (see at 244).Brampton Manor (Leisure) Ltd v McLean[2007] BCC 640 was similar: money became repayable upon an event of default, without any requirement of a notice (see at [8]).

204. Regard to these cases does not alter my conclusion that, on the construction of cl 14.2, an Event of Default not stated in the notice in writing cannot be relied on as the trigger for the Debt becoming

(b) The pleading of the Event of Default

205. After a general allegation of failure to comply with obligations under the Facilities Agreement, the Bank alleged that Amira was obliged to pay the respective amounts of the 15 February Buyers Credits, the 22 February Buyers Credits and the 26 February buyers credits; that the first two amounts had been “recovered”; and that the major part of the 26 February Buyers Credits had not been repaid. It said that non-payment of amounts due constituted an Event of Default, referring to cl 14.1 and 14.2 of the Facilities Agreement and to other provisions about charging interest and appropriating It then alleged in its pleadings:

“Particulars of Breach

40. In breach of contract, the First Claimant did not pay the amounts due in respect of the 26 Feb Buyer’s Credits on 26 February 2018, or at all. On 26 February 2018, the principal amount of the 26 Feb Buyer’s Credits (i.e. USD 2,590,000) was devolved into the First Claimant’s Overdraft

41. The First Claimant’s failure to pay the amounts due in respect of the 26 Feb Buyer’s Credits on 26 February 2018 constitutes an Event of Default pursuant to clause 14.1 of the Facilities Agreement.”

206. The pleadings then referred to demands for “payment in respect of the 26 February Buyer’s Credits and/or other Outstanding Amounts”, referring to the letters from 26 February to 27 May 2018 earlier It alleged that formal notice of an Event of Default was given by the notice of 6 June 2018; that “[g]iven the Event of Default” it was entitled to demand immediate repayment of the Debt and that it had done so by the notice of 6 June 2018.

207. This pleading tied the counter-claim to payment because of the Event of Default was failure to repay the 26 February Buyers Credits. No other Event of Default was pleaded.

208. Only in its reply to Amira’s defence to the counter-claim did the Bank go further. The defence to the counter-claim alleged breaches by the Bank in refusing to provide further credit facilities and presenting the cheques. In reply to this paragraph, the Bank alleged a host of other breaches of the Facilities Agreement as at May 2018 which “amounted to Events of Default”. As the document was set out, this appeared to be a reply only to the allegation of breach in presenting the cheques but I think it was intended to be read, and should be read, as a reply also to breach in refusing to provide further credit

209. As a reply to the allegations in the defence to the counter-claim, the other breaches of the Facilities Agreement went only to whether the Bank was in breach as alleged – that is. It was said that Amira’s breaches entitled the Bank to refuse to provide credit facilities and to present the cheques. The other breaches of the Facilities Agreement were not put forward as Events of Default entitling the Bank to declare money payable in accordance with cl 14.1 of the Facilities Agreement. The pleading of the claim in the Bank’s counter-claim was not thereby

210. Even if the Bank had given notice of an Event of Default other than failure to repay the 26 February buyers credits, as a trigger for the Debt becoming payable, its pleaded case would not have permitted it to rely on that

(c) The cause of the failure to repay the 26 February Buyers Credits

211. Amira submitted that the Judge had found that the failure to repay the 26 February Buyers Credits was caused by the Bank’s breach and that the finding was binding on the Bank. The Bank contested

212. The Judge said, in referring to the “terms” in the Irrevocable Letter meaning the events on which the Bank was obliged to make repayment:

“22. Those terms were, on the evidence, complied with and so the Bank’s obligation to pay crystallised on 14 February 2018 in the sum of USD 4,134,000. Having received USD 4,194,000, there was thus some USD 60,000 in hand, if payment was made. The effect of the Bank’s failure to pay and its refusal on the 24 February, some 10 days later, to extend the buyers’ credit facilities, a refusal which was repeated subsequently on 27 February was to prevent A K Global from making further shipments under the 10,000,000 MT Contract to Amira and to prevent Amira from receiving further sums from Kuwait Flour, in respect of the balance of shipments which were to take place thereafter, which would have been utilized to pay off the Buyers’ Credits due for repayment on 26 February.

23. On 14 February 2018, when Kuwait Flour made the payment,    no buyers’ credits were actually due. I have already referred to the dates when buyers’ credits were due for repayment as falling later in the month. It was only 3 days prior, that the Irrevocable Letter had been issued and the Bank had been told buyers credits falling due would be settled from Kuwait Flours’ payments. On the evidence, the sums due on 15 and 22 February 2018 to the Bank would have been and were met by the sums received from Kuwait Flour from the 6 shipments made and the sums which fell due on the 26th February would have been met from the further shipments which would have taken place if the Bank has honoured its Irrevocable Letter of 11 February. Then there would have been no question of default at all if the Bank has complied with its obligations under the Irrevocable Letter. Mr Chanana says that in those circumstances, it was clear to him, that the Bank had in effect agreed to roll over the credits at least to the extent of the amount be paid to A K Global and the letter inevitably did have the effect of extending credit to Amira at least for a short period of time.”

213. I doubt that there is an issue estoppel binding on the Bank. While the Judge made these observations, he was concerned with payment to AK Global, not with the consequences of failure to pay – the consequences were left for later resolution of a damages claim. The question of the effect of the Irrevocable Letter on the working of the credit facilities was also left for later argument. The observations made on the evidence then before his Honour, placing payment under the Irrevocable Letter in context, were not definitive as to how the remaining shipments would have been fulfilled with money coming in to Amira or how the 26 February Buyers Credits would have been

214. It does not matter, since I accept Amira’s submission that the evidence makes out causation.

215. As a result of the Bank’s failure to pay AK Global, subsequent payments for shipments which would have repaid the 26 February Buyers Credits were not received by Amira. Instead, as shown in the Matrix, payment for subsequent shipments (being the seventeen shipments earlier considered) was made directly to AK

216. In his witness statements Mr Chanana said in terms that Amira was unable to repay the 26 February Buyers Credits “because IDBI blocked a large part of its cash flow by failing to pay AK Global the sums due”, and that if the Bank had paid as agreed “business would have carried on as normal”. He explained that Amira was forced to agree to direct payment by Kuwait Flour for the seventeen shipments and lost the profits from these transactions. Furthermore, that it had been unable to use the proceeds from the transactions to pay down the outstanding buyers credits. In his oral evidence he further asserted and explained that the failure of the Bank to pay AK Global “led to the 26 February buyers credits not being paid”.

217. The Bank did not directly challenge this evidence. It took Mr Chanana to a number of invoices from Amira to Kuwait Flour, in which payment was directed to Mashreq Bank. There were ten such invoices in evidence, numbered 149 to 158 and dated from 12 February 2018 to 19 February 2018. The Bank suggested that the payments were not going to go to the Bank and Mr Chanana agreed that in the normal course they would not have gone to

218. However, this is false comfort to the Bank. Mr Chanana explained that the invoices had been issued in respect of shipments then at the port, for which payment was later directed to be made to AK Global – and the invoices are amongst those identified in Amira’s letter of 22 February 2018, directing payment to AK Global. Even if, had that not occurred, payments would have been made to Mashreq Bank, the money would still have been in Amira’s hands and available to repay the 26 February buyers credit. The Bank did not attempt the necessary step of putting to Mr Chanana that it could not or would not have been taken from the Mashreq Bank account for that purpose. There was evidence that Amira did not have credit facilities with Mashreq Bank, so the money would ordinarily have been available to

219. Other questions could have arisen. Would the timing of the shipments, and payment for them, have been such that enough money would have been paid by Kuwait Flour by 26 February 2018? Amira had to repay the 15 February and 22 February Buyers Credits from the money received from Kuwait Flour – would there have been enough money, and did it have some indulgence from AK Global, so that it could use the money first to repay the 26 February Buyers Credits? Or would repayment have been made from funds coming from the fresh buyers credits? None of this was taken up with Mr Chanana or Mr

220. In accordance with Mr Chanana’s explanation of the ordinary course of events, Amira would have had funds from fresh buyers credits prior to 26 February 2018, so use of money from Kuwait Flour to pay AK Global was not critical. That is so because the USD 4,134,000 to be paid to AK Global was a provision of credit to Amira, on terms to be found in the existing credit facilities, the previous dealings between Amira and the Bank, and the request in Amira’s email of 1 February 2018. As had happened in the past, as Amira had asked, and as the Bank began before it stopped in compliance with its understanding of the head office direction, credit would be provided by arranging fresh 90 day buyers credits. Thus, the undertaking to pay the $4,134,000 carried with it an obligation to arrange or issue the fresh 90 day buyers credits, and the Bank’s breach of the Irrevocable Letter, was not only a breach in failing to pay the money to AK Global, it was also a breach in failing to arrange or issue the fresh buyers

221. Had the Bank done so, Amira would have been in funds ample to repay the 26 February Buyers Credits. Amira’s emails and letters to the Bank in February 2018 show clearly that it was intent on repaying the 26 February Buyers Credits – a reason why I have set them out in more detail than may otherwise have been desirable. I am satisfied that it would have done so but for the Bank’s

222. I mention a further At one point it appeared to be the Bank’s case that it was entitled to refuse to issue fresh buyers credits because Amira was in default in failing to provide certain information, and/or in failing to disclose its umbrella/execution contract mode of doing business (hence the Bank’s reference to cl 14.1(b) of the Facilities Agreement, mentioned above). It is not clear to me whether it maintained that position. In any event, there is nothing in it. From the consideration of why the Bank failed to pay in accordance with the Irrevocable Letter, any such defaults (and there was not misrepresentation within cl 14.1(b) had nothing to do with the Bank’s failure to issue fresh buyers credits. It failed to issue them because of its understanding of the head office direction. Any entitlement the Bank had, but did not exercise, is irrelevant to causation in fact.

(d) Failure to repay the 26 February buyers credits as the Event of Default

223. I do not think the Bank disputed that, if its breach caused the failure to pay the 26 February Buyers Credits, it could not rely on that failure as an Event of Default. In any event, in my view, it could not do

224. Under the common law, a party to a contract cannot rely on his own breach to obtain a benefit under it: seeChittyat 13-099. This is either an implied term of the contract, or a manifestation of the principle that a person cannot be permitted to take advantage of his or her own wrong. The common law finds expression in Article 78 of the DIFC Contract Law, Law No 6 of 2004 (the “Contract Law”):

“78. Interference by the other party

A party may not rely on non-performance of the other party to the extent that such non-performance was caused by the first party’s act or omission or by another event as to which the first party bears the risk.”

225. The contract is the Facilities Agreement, governing the provision of the credit facilities. The failure to repay was caused by the Bank’s It cannot rely on it  as the Event of Default.

(e) Conclusion as to the Debt

226. The only Event of Default in a notice in writing on which the Bank can rely in order to declare the Debt payable is failure to repay the 26 February Buyers Credits. Separately, the only Event of Default on which it can rely as a matter of pleading is failure to repay the 26 February Buyers Credits. It is unable to rely on that failure. It follows that, as at the filing of the counter-claim, the Debt was not

(f) Recovery regardless of an Event of Default

227. The Bank’s submission was brief. If it could not rely on failure to repay the 26 February Buyers Credits on 26 February, nonetheless if they had been replaced by the fresh buyers credits, the fresh buyers credits would have been repayable in 90 days. An equivalent amount, at the least, would have been payable without demand in late May 2018. The overdraft was repayable on demand, and the letters amounted to demand for its repayment. So, it was said, the components of the Debt were payable, even if the Debt had not become payable in consequence of an Event of Default and notice in writing under cl 2.

228. Amira’s answer was equally brief. It cannot properly be said that an amount equivalent to the 26 February Buyers Credits has become payable on a hypothesis – fresh buyers credits were not in fact issued. And recovery of separate components of the Debt had not been pleaded, and in particular recovery of the amount of the overdraft upon demand had not been pleaded. Counsel for Amira emphasised that at one point counsel for the Bank observed that he did not want to

229. It is correct that the Bank cannot claim to recover the amount of hypothetical buyers credits – that would be incongruous. In any event, the amount of the 26 February buyers credits plus the amount of the overdraft is not the Debt. The Debt included the USD 4,134,000 and a credit amount for recoveries. The pleading of the counterclaim did not claim the separate amounts. It rested upon an Event of Default making the Debt payable. The Bank cannot seek to recover some of the Debt on a different

(g) Return to recovery of the interest payment

230.In the light of the preceding discussion, I return to Amira’s claim to cover the interest payment made under

231. If the interest claimed by the Bank was referable to the 26 February Buyers Credits, the Bank was not entitled to it. It is not clear that it was all so referable. The tenor of the Bank’s letter of 22 February 2018 is that the interest is referable to USD 1,495,282.33, being the balance of the USD 2,590,000, devolved into the overdraft account. This is puzzling, because the Bank later treated USD 2,215,934 as the devolved sum. But from the bank statement recording the debiting of interest, it appears to be interest on a larger sum of uncertain

232. None of this was explored or explained in evidence or submissions. I will direct the parties to agree on the interest referable to the amount of the 26 February Buyers Credits. It was not payable and should be repaid: it is not enough that it be credited to Amira.

The Bank’s third party claim against Mr Chanana

233. This was treated as standing or falling on the Bank’s claim against Amira. Since the Bank fails in its claim against Amira, nothing is recoverable in its claim against Mr Chanana as

Mr Chanana’s counter-claim against the Bank

234. The counterclaim was pleaded economically. It was alleged that, as a result of the Bank’s failure to pay under the Irrevocable Letter and refusal to provide further credit to Amira under the Facilities Agreement as extended, Mr Chanana suffered loss. The loss was estimated at USD 45 million. Damages were claimed from the

235. The loss was subsequently quantified in Mr Chanana’s reply to the Bank’s defence to his counterclaim, by reference to reduction in the value of Mr Chanana’s shareholding in ANFL. It was said that as at 14 February 2018, Mr Chanana held a large parcel of shares in ANFL, pledged as security to UBS Wealth Management (“UBS”). Their market value on that date was USD 4.04 per share. Their value

236. UBS made a margin call, and in May 2018 sold 1,011,995 shares for a total of USD 2,534,564.06. As at 12 October 2018, the remaining 30 million shares held by Mr Chanana had a market value of USD 1.50 per share. The loss comprised of firstly, the difference between the value obtained for the shares sold by UBS and USD 4.04 per share, erroneously calculated but correctly being USD 1,553,895.74; and secondly, the difference between the value of USD 4.04 per share and USD 1.50, being USD 76,200,000.

237. For at least two reasons, the counter-claim

238. First, Mr Chanana’s pleading did not include a basis in law (a cause of action) for recovery of the loss. It was simply that the Bank caused a loss, he should be compensated. But Mr Chanana was not a party to the contract found by the Judge in the Irrevocable Letter, or a promisee under the Facilities Agreement. No right in law appears to complain of the Bank’s breach of the obligations.

239. When counsel for Amira was taxed with the need for a cause of action, he observed that it had not been a point taken against him by the Bank and adverted, without enthusiasm, to the rights of a third party beneficiary under Article 104 of the Contract For Article 104, there must be a term purporting to confer a benefit on the third party, which on the construction of the contract was intended to confer the benefit and the third party must be expressly identified by name, membership of a class, or description. It is clear that Mr Chanana was not such a beneficiary. I do not accept the suggestion that the Facility Agreement conferred on him a “negative benefit” that it would be complied with.

240. Counsel said he would take instructions but did not return to the In my view, no basis in law is shown for recovery of the loss.

241. Secondly, and without undue repetition, I return to the discussion in relation to loss of value in Amira’s business because of reputational The market value of the shares in ANFL is not the measure of a loss to Mr Chanana, any more than a loss to Amira. In Mr Chanana’s claim, the reduction in ANFL’s share price is not a proxy for the loss of future business, but Mr Chanana still depends on it representing the loss of future business caused by the Bank’s default. Mr Peters was instructed to assume that the reduction in ANFL’s share price and the sales by UBS were as a consequence of the Bank’s revocation of the Irrevocable Letter, but said that he had not been provided with or been able to obtain information to enable him to consider whether the revocation was likely to have had an effect on the share price or whether it was just one of a number of factors. Mr Fritzsche repeated his strictures on the use of the market value of the shares in ANFL.

242. Other questions such as remoteness would arise in relation to this quantification of Mr Chanana’s loss but cannot usefully be explored in the absence of a cause of

The cheques

243. No submissions were addressed to the cheques. I will invite further submissions in the light of these

Other matters

244. I will hear the parties on interest and


1)Judgment for Amira against the Bank for USD 12,603,791 together with the sum agreed in accordance with order 5 and interest to be

2) The Bank’s counterclaim against Amira be dismissed.

3) The Bank’s counterclaim against Mr Chanana be dismissed.

3) Mr Chanana’s counterclaim against the Bank be dismissed.

4) The parties are to agree on the interest referable to the amount of the 26 February buyers credits, the agreed sum to be added to the judgment sum in order 1.

5) Questions of the cheques, interest and costs be reserved for further

6) The parties are to provide the Registry within 21 days agreed directions for determination of the questions of the cheques, interest and


Issued by:

Nour Hineidi

Deputy Registrar


Date of Issue: 7 October 2019

At: 12pm