BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY DIVISION
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
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RASMALA TRADE FINANCE FUND |
Claimant |
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- and – |
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TRAFIGURA PTE LIMITED |
Defendant |
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NEIL KITCHENER KC and JAMES NADIN (instructed by Reed Smith LLP) for the Defendant
Hearing dates: 27 March – 8 April 2025
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Crown Copyright ©
Mr Justice Rajah :
Introduction
Trial
Facts
Farlin and Trafigura
Farlin and Rasmala
Payment 1
TPA 1
"Please note that I have drafted this on the basis that the funds paid to [Trafigura] by Rasmala (US $6.85m) are to be applied towards specific shipments under the 1493888, 1493889, 1493890, 1493891 trades (Sept-Dec). I need your clarity on which shipments these will be since this should be recorded in the document. This means that the document does not allow for a blanket third party agent type structure to be used going forward, which I understand is not the commercial intent in any case…"
"We have sighted the payment of $6.84 Million. Thank you for the same, however we have received the same from an unrelated party (Rasmala) which complicates the situation. We are unable to allocate the payment towards Farlin outstanding since Rasmala Fund is not a counterparty on any contract between Trafigura and Farlin. We understand that Rasmala are financing your trades and hence our legal team has drafted a tripartite agreement that elucidates the funds received are for future shipments of Alam Jaya for which we have entered into a term contract, however can be used to offset old outstanding including demurrage.
Appreciate if you can get the same signed by Rasmala as well as Farlin and send the same back to us."
Payment 2
Payment 3
Payment 4
Payment 5
Trafigura's Rabobank and Deutsche Bank Accounts
Post payment 5
"Dear John/Thomas,…
One of our obligors is a company by the name of Farlin Energy & Commodities FZE ("Farlin"), who are a customer of Trafigura Pte Limited for the supply of steam (non coking) coal. The facility we provide to Farlin is on the basis of a Murabaha, wherein they act as our undisclosed purchase agent to purchase goods on our behalf, which are then sold to Farlin's end buyers.
We now have past dues with Farlin and they have now advised us that the payments made to Trafigura (see below. Kindly note that under the facility, Farlin contribute 15% to each purchase, hence the payments made by Rasmala represent the balance 85%) for the purchase of steam (non coking) coal under the mentioned sales contracts (attached), have been used by Trafigura to offset against past dues Farlin owe to Trafigura under the credit line they hold with yourselves and the shipments in fact were never made.
Can I please ask if you can find out if the above statement is true and confirm if or not the shipments were made? Can you also confirm what the status of the current relationship is with Farlin i.e. are you still trading with them and if there are any further past dues with Trafigura? Any other relevant information would be kindly appreciated."
"1. Our client's decision to re-allocate the Farlin Payments was not based on a suspicion that those funds were the proceeds of fraud. In contrast to the Payments that are the subject of the current claim, the Farlin Payments were received direct from Farlin, with no indication that Farlin had been deceived into making them. We do not consider that we are obliged to explain why our client formed the view that it was entitled to retain the Farlin Payments, which were made directly from its debtor, and which were intended by Farlin to be applied against correctly identified and genuinely existing debts. The circumstances of the Farlin Payments are to that extent different from the Payments that are the subject of the current claim.
2. Our client decided in December 2019 that it could re-allocate the Farlin Payments. The trigger for that decision was that Rasmala became aware of the matters that are the subject of these proceedings, and formed the view that it was entitled to claim against Trafigura for the value of the Rasmala Trade Finance Fund payments in question. The specific re-allocations, on a first in-time basis, were then made in July 2021…."
Mr Jasani's alleged dishonesty
" As Mr Gupta (and Mr Gokhale and Mr Jasani) knew"
" As Mr Gupta (and/or Mr Gokhale and Mr Jasani) knew";
"As Mr Gupta (and it is to be inferred Mr Gokhale and Mr Jasani) knew"
"AsMr Gupta (and Mr Gokhale andMr Jasani)knew"
" AsMr Gupta (and/or Mr Gokhale andMr Jasani)knew";
"AsMr Gupta (and it is to be inferred Mr Gokhale andMr Jasani)knew".
Rasmala's case at trial was that Mr Jasani suspected that Rasmala had not consented to the TPAs (and presumably suspected that the TPAs were forgeries and part of some fraud being perpetrated on Rasmala) but dishonestly turned a blind eye.
i) Rasmala says that Mr Jasani had an incentive in turning a blind eye, because Farlin was a big account for Mr Jasani. I observe that most people have at some level a financial incentive to be dishonest but are not. On its own that is not sufficient to infer dishonesty.
ii) As stated above, at [29], on 21 August 2017 Mr Pinto of Farlin emailed Mr Gokhale (as well as Mr Jasani) the doctored remittance confirmation letter and payment SWIFT message which removed the reference to the payment being in respect of the 551 Contract. At some point that day, presumably before Mr Pinto's email, an apparently earlier draft of the remittance confirmation letter was sent to Mr Gokhale and Mr Jasani by Farlin. Mr Gokhale had no idea why he had been sent it and I accept his evidence. The gist of the letter was the same as the doctored remittance confirmation letter. There was no explanation accompanying the draft as to why it was being sent. It seems likely that it had been preceded by a conversation between Mr Pinto and Mr Jasani. Rasmala contends that it is very odd that Mr Pinto was discussing with Mr Jasani the drafting of a letter to come from Rasmala. It is not odd at all. It is not uncommon to check with a receiving party whether the proposed form of a letter from the sender will meet the receiving party's requirements. Mr Gokhale confirmed in cross-examination that this was commonplace in Trafigura's dealings with counterparties. There was nothing in the draft sent to Mr Jasani which indicated that reference to the 551 Contract had been deliberately excluded, and nothing from which it could properly be inferred that Mr Jasani was or might be colluding with Farlin in producing a doctored remittance confirmation letter.
iii) Rasmala placed reliance on the 23 August 2017 email from Farlin which said that Rasmala "will never sign any tri-partite agreement allowing offset of this money against existing liability" to assert that it is suspicious that Mr Jasani so readily accepted Rasmala's change of heart and apparent signature of the TPAs. However, the 23 August 2017 email was in my judgment just ordinary to-and-fro in a commercial negotiation and the fact that Farlin later said that Rasmala had agreed, and TPAs were produced with Rasmala's apparent signature, were not the "red flags" Rasmala seeks to argue that they were. Rasmala's reliance on the fact that only Mr Jasani and Mr Samdani of Farlin had been party to the call in which Farlin said that Rasmala had consented, and there is no evidence of what was said, is a point which goes nowhere. Mr Power says that, absent evidence as to what was said, it is impossible to understand how the red flags which must have been in Mr Jasani's mind as to how Rasmala had come to change its mind were allayed. The short answer is that there were no red flags.
iv) Rasmala submitted that an adverse inference should be drawn from Trafigura's failure to call Mr Jasani to give evidence that he had no answer to the case of dishonesty being asserted. I observe that apart from the bald assertion of dishonesty, there is no real "case" of dishonesty to answer. Whether to draw such an adverse inference is, as Lord Leggatt JSC observed in Efobi v Royal Mail Group Ltd [2021] 1 WLR 3863 at [41], a matter of common sense. Common sense dictates that no adverse inference is drawn. Mr Jasani left Trafigura in 2019 and now lives in India managing his family's business interests which keep him very busy. Mr Loughnan gave evidence which was not challenged that Trafigura would have liked Mr Jasani to give evidence but it has no means of securing his cooperation. This is not a case in which some inference could be drawn from a party's choice not to call a witness. Mr Jasani could have voluntarily chosen to give evidence and Mr Loughnan confirmed that had he done so Trafigura would have paid his travel and expenses. His decision not to do so is consistent with any number of innocent explanations, such as the absence of any personal interest in the outcome of these proceedings, the demands on his time of his business or his family, a belief there was no real case to answer and no real risk to his reputation, an absence of any specific recollection about these events eight years ago, or a multitude of other innocent reasons. I decline to draw an adverse inference from his failure to give evidence.
Unjust enrichment
Enrichment
At the Claimant's expense
(i) Rasmala and Farlin
i) Rasmala was the intended purchaser of the coal in the bogus contract with Trafigura.
ii) Farlin was to act as Rasmala's undisclosed agent (and Rasmala was to be an undisclosed principal) in relation to that bogus contract.
(ii) Farlin and Trafigura
(iii) Trafigura and Rasmala
(iv) Drawing the strings together
Which is Unjust
Good consideration
Change of Position
But for
Detriment
In good faith
Conclusion