Keshav Global Trading LLC (2) Keshav Global Private Limited v Etg Commodities Holdings Limited [2025] DIFC CFI 069 (19 March 2025)

Claim No. CFI 069/2024

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

(1) KESHAV GLOBAL TRADING LLC
(2) KESHAV GLOBAL PRIVATE LIMITED

Claimants

and

ETG COMMODITIES HOLDINGS LIMITED

Defendant

ORDER WITH REASONS OF H.E. JUSTICE SIR JEREMY COOKE

UPON the Part 7 Claim Form dated 26 September 2024 (the “Claim”)

AND UPON the Defendant’s Application No. CFI-069-2024/1 dated 20 November 2024 with the supporting documents seeking an order for immediate judgement or alternatively that the claim be struck out; alternatively an order for security for costs in the sum of USD 2,093, 535 (and USD 80,000 in respect of enforcing any costs orders in Singapore); in the further alternative an order for an extension of time for the service of a defence by 42 days from the Court’s order on these applications (the “Application”)

AND UPON the Claimants’ evidence in answer dated 19 December 20274 and the Defendant’s evidence in reply dated 2 January 2025

AND PURSUANTTO the Rules of the DIFC Courts (“RDC”)

IT IS HEREBY ORDERED THAT:

1. The Defendant’s Applications for strike out and summary judgement are refused.

2. The Claimants shall, within 21 days, provide the further information and the copy documents set out below.

3. The Claimants shall, within 21 days, provide security for costs in the sum of USD 150,000 by payment into Court or in such other form as is reasonably satisfactory to the Defendant.

4. The Defendant shall serve its Defence within 28 days of this Order

5. The Defendant shall pay the Claimants the sum of USD 30,000 as the balance of costs owing to them on the summary assessments made by the Court.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 19 March 2025
At: 2pm

SCHEDULE OF REASONS

Background

1. On 20 November 2024, the Defendant applied for immediate judgement against the Claimants in respect of the entire claim pursuant to Rule 24.1(a) and 2 of the Rules of the DIFC Courts (the “RDC”) or alternatively that the claim be struck out pursuant to RDC 4.16 and the inherent jurisdiction of the court; alternatively an order for security for costs in the sum of USD 2,093, 535 (and USD 80,000 in respect of enforcing any costs orders in Singapore); in the further alternative an order for an extension of time for the service of a defence by 42 days from the Court’s order on these applications (the “Application”).

2. Particulars of Claim were served on 2 October 2024 and an acknowledgement of service filed on 12 October 2024. The Defence was therefore due to be served on the 30 October 2024 but was extended by agreement to 21 November 2024, as enshrined in a consent order dated 29 October 2024.

3. The basis upon which the Defendant seeks reverse summary judgement or a strike out is that the Particulars of Claim reveal no sustainable cause of action and/or that there is no realistic prospect of success in the pursuit of the matters pleaded. The Claim is framed in deceit, fraud, breach of contract and breach of duty as agents and fiduciaries. The alleged deficiencies in the Particulars of Claim all relate to the claim for damages as opposed to the claim for misrepresentation and inducement or liability for breach of contract or duty. Whilst damages is a necessary ingredient for any claim in tort, the terms of paragraph 43.1 of the Particulars of Claim reveal a direct loss as a result of entering into five trade transactions amounting to the difference between the purchase and sale contracts on those trades. The figures are pleaded and there can therefore be no doubt that a valid cause of action has been pleaded with a clear head of damage which has been fully particularised. Nonetheless, the Defendant claims that there are no realistic prospects of success in the pursuit of the claims and, at least until the hearing, maintained that, absent proper particularisation in the form of complete answers to the request for information which was made on 21 October 2024, it was impossible for the Defendant to plead to those claims. The Claimants had furnished answers on 4 November 2024 which were said to be wholly inadequate.

The Application for strike out/ Summary judgement

4. In my judgement, there was no difficulty in the defendant pleading a defence to liability, whatever issues might arise in relation to the quantum of damages. The Defendant has declined and failed to do so on the basis that it needed complete answers to its Request for Information before doing so. That does not reflect reality and whether or not damages are an integral constituent element in some of the claims, the quantification of damages is frequently uncertain and often remains uncalculated in particulars of claim with particularisation to be given by reference to future fact or expert evidence.

5. In the present case, some damage is quantified and the basis alleged is clear – see the reference to paragraph 43.1 of the Particulars of Claim mentioned above. Whilst the Claimants declined to provide further particulars of some of the other heads of damage in paragraph 43 on the basis that it was unnecessary and disproportionate to do so, there was nothing to prevent the Defendant from pleading to the damages claimed by way of denial on the basis of causation or otherwise or by non-admissions.

6. Put shortly;

a) The claims in paragraph 43.2 – 43.3 were for losses said to result from the need to repay credit facilities granted by banks on the discovery of the sham transactions in which the Claimant had allegedly been involved as a result of the deceit by the Defendant. This led to “lost interest on the cash reserves used to make those repayments, the same to be the subject of evidence, including expert evidence at trial”.

b) The claim in paragraph 43.4 relied on the inability to obtain facilities elsewhere which was said to result in losses under existing contracts in the form of forfeit of advance payments and incurring of penalty payments, with specified figures given as the consequent loss.

c) The claim in paragraph 43.5 was for lost profits on contracts made that could not be fulfilled, with again figures set out.

d) The claim in paragraph 43.6 was for lost profit opportunities under anticipated contracts where Memoranda of Understanding had been concluded. Once again figures were given for the quantified loss.

e) The claim in paragraph 43.7 was for “the benefit of sums that it had invested in anticipation of being able to trade raw cashew nuts from Ghana, Nigeria and Ivory Coast (including but not limited to its cost of obtaining registration in those territories, operational costs and the renting of warehouses). The full amount of loss was to be the subject of evidence, including expert evidence, at trial but was said to be not less than USD 1.04 million.

f) The claim under paragraph 43.8 was for lost opportunity to invest in alternative suitable investments (including but not limited to potential investments in the sugar refining joint venture in Liberia and a multi-territory bio stimulants manufacturing business). Once again amount of loss was to be the subject of evidence, including expert evidence but was said not to be less than USD 5.04 million

7. There is no difficulty in the Defendant understanding the nature of the case made against it, regardless of the need to see details of the terms of the credit facilities, the basis and rationale for repayment, the unfulfilled contracts which gave rise to lost profits, to the forfeit of advance payments or to penalties incurred and the Memoranda of Understanding which are alleged to have given rise to lost profits on anticipated contracts, nor to the wasted expenditure and lost opportunities for alternative investment. Whilst pleading to such matters would necessarily not descend into any detail, that is frequently the case where matters of loss and damage are concerned because disclosure is often required, since the consequences of the alleged breach can only be seen by reference to documents internal to the claimant. The Defendant could and should have pleaded to the allegations of fraud, misrepresentation, breach of duty and breach of contract, while seeking further particularisation of damages and production of documents referred to in the Particulars of Claim. I see no reason why this could not have been done by 21 November 2024, as agreed between the parties, without any further information of the kind requested on 21 October 2024 which consisted of 67 separate requests (or possibly 94, depending on the characterisation of requests and sub- requests) to which replies were furnished on 4 November 2024, however inadequate the Defendant considered them to be.

8. Furthermore, the remedy for a party seeking information where that supplied is considered inadequate in response to a request, is to apply to the Court for an order for such deficiency to be remedied by ordering the further necessary information to be given. If there was then a failure to comply with the order, this would ordinarily lead to a further application for an unless order with the possibility of a strike out following, if the order was contumeliously disobeyed. Instead, on 20 November 2024, rather than serve a Defence, the day before the Defence was due, the current Application was made. That was a wholly inappropriate step to take without making prior applications to the Court for the further information for which no adequate answers were considered to have been given.

9. On a strike out application, the Court must assume the truth of the factual matters pleaded and the Defendant must establish that no cause of action could succeed as a matter of law and/or that the proceedings are an abuse of process. There is simply no sustainable argument available to the Defendant on these grounds because the facts pleaded, if true, due amount to valid causes of action for the Claimants to pursue and damages are pleaded even if not fully particularized. There is, moreover, a clear distinction between pleading facts and pleading evidence, and parties are discouraged from pleading evidence. The purpose of pleadings is to set out the material facts which constitute the ingredients of the causes of action pursued. This is a fundamental of common law procedure. Particulars of facts pleaded may be sought and request made for the documents relied on to which reference is made in the statement of case in question, but not particulars of evidence for the facts pleaded.

10. In the present case, no application has been made under RDC 19.1 for any order for further information to be provided, nor for any document mentioned in the Particulars of Claim to be produced. The attempt to strike out the Claim is misconceived in the circumstances and doomed to fail.

11. The same point holds good for the application for reverse summary judgement, supposedly on the footing that the claim has no realistic prospects of success and that there is no compelling reason for trial. Without any evidence adduced by the Defendant in relation to the alleged deceit or misrepresentations alleged, which would, if produced, inevitably have given rise to issues of contested fact on witness statements and the need for a trial with cross examination, the burden of the Defendant’s song is that damages cannot be substantiated and the basis of this is the alleged deficiency in particularisation of them. This point, too, is unsustainable. With a statement of truth in the Particulars of Claim and no evidence to the contrary, the facts pleaded in paragraph 43 stand without contradiction, whatever arguments might be raised with regard to causation, remoteness or failure to mitigate, none of which have as yet been pleaded by the Defendant. The basis of the Defendant’s Application as set out in paragraph’s 32 – 39 of the Defendant’s skeleton argument has, therefore, no foundation.

12. The Defendant’s position is misguided because there are clear issues of fact which will require investigation. On the basis of the Particulars of Claim, with its statement of truth, there are quantified and unquantified damages sustained, the validity of which will turn on factual evidence and/or expert evidence and disclosed documents. The Defendant’s Application for strike out and summary judgement must therefore be dismissed with costs.

Further Information and Production of Documents

13. Whilst the Defendant made no application to this Court for an order for further information on the basis of the allegedly deficient answers to the request to which I have already referred, under RDC 19.1 the Court may at any time order a party to clarify any matter which is in dispute in the proceedings or give additional information in relation to any such matter, whether or not the matter is contained or referred to in a statement of case. The RDC refers to the strict requirement of reasonable necessity and proportionality in 19.1.2 and 19.6.1. It is said that “a Request should be concise and strictly confined to matters which are reasonably necessary and proportionate to enable the first party to prepare his own case or to understand the case he has to meet”. A balance has to be struck between permitting the other side to know the case being made in sufficient detail to enable that party to answer the case and giving unnecessary particulars in such a way as to lead to delay and unnecessary interlocutory battles, which often occurs when evidence is pleaded. The general nature of the case of the pleader should be sufficient to mark out the parameters of the case being advanced, particularly in circumstances where the parties will give disclosure and exchange witness statements in due course.

14. RDC 19.22 – 19.28 set out the rules relating to applications to the Court for orders for further information. The Court decides whether the test set out in RDC 19.1 and 19.6 and the notes thereto have been met.

15. Despite the absence of any application by the Defendant for further information and production of documents, as a matter of efficient case management and in order to avoid further delay and further interlocutory disputes, it seemed to me that I should grapple with the alleged deficiencies in the information supplied and make any necessary order. There is room for thinking that the Defendant has, as the Claimant suggested, sought to delay matters in relation to the issues of deceit and misrepresentation and, whilst I obviously can form no views about the merits of either party’s position, the very nature of the alleged circular purchases and sales raises obvious questions in the judicial mind as to the purpose of the five trading transactions as viewed by both parties and the role of the five individuals who are alleged to have acted as agents for the Defendant. I was told that none of those individuals work for the Defendant any longer and their cooperation cannot be assumed.

16. Whilst therefore the Defendant was able to understand the nature of the case it had to meet and could have had no difficulty in pleading its defence to liability whilst perhaps doing little more than making no admissions in relation to the quantum of damages, there is room for debate as to whether or not it was reasonable and proportionate for some further particulars to be given above and beyond the information supplied in answer to the Defendant’s request. I consider that matters in this action will advance more speedily if further information is given as set out below. Before giving such directions, I should say that the Defendant’s attempts to reserve an option to bring further strike out or summary judgement applications or an application for further information are inapposite. The Defendant should have brought forward all its objections and applications at the same time in relation to this pleading and further delay in making any application which should have been made at the same time as the current Application will not be countenanced. Of course, if the orders I now make are not observed, applications based on such failure would have to be addressed by the Court.

17. The following further information should be given within 21 days of this Order, by reference to the following paragraphs in the Particulars of Claim:

a) Under paragraphs 38,39 and 43.2: particulars of the credit facilities extended to the Claimants by the Bank of Baroda and Bank of India, and the requirement of those banks to make early repayment, producing documents showing the terms of such facilities and any demands for repayment. Additionally, particulars of the loan facility with Mashreq Bank and details of the repayments made. There is no need for any particulars to be given of the attempts to obtain replacement credit facilities, since this is a matter of evidence and will doubtless give rise to requests for disclosure.

b) Under paragraph 43.3: details of the lost interest and the cash reserves referred to, including, so far as possible without expert evidence, the quantification of the same.

c) Under paragraph 43.4: details of the contracts into which the Claimants had entered which gave rise to the forfeiture of advance payments and incurring of penalty payments, providing copies of the same together with details of the advance payments and penalty charges incurred. As figures have been advanced for such payments and penalties, this information must be available to the Claimants

d) Under paragraph 43.5 details of the Contracts entered into prior to the closure of the facilities which are said to give rise to the figures for lost profit pleaded. Copies of the contracts should be disclosed now and details of the basis of the figures claimed provided.

e) Under paragraph 43.6: the Memoranda of Understanding with third parties should be produced and the basis of the figures claimed as lost profits under these anticipated contracts set out.

f) Under paragraph 43.7: particulars of the wasted costs in Ghana, Nigeria and the Ivory Coast should be provided making up the minimum figure of USD 1.04 million that has been pleaded. If any other heads of loss beyond registration costs, operational costs and warehouse rent are claimed, particulars should be provided.

g) Under paragraph 43.8: particulars of the alternative suitable investments in which the Claimants would have invested should be given, not limited to the sugar refining joint venture in Liberia and the multi-territory bio stimulants manufacturing business, and the basis upon which a minimum loss of USD 5.04 million has been calculated.

Timetabling

18. The Claimants are to furnish such further information within 21 days of this Order and the Defendant is to serve its Defence within 28 days of this Order. It is not anticipated that the Defendant will be able to respond in detail to the claims for damages, save on matters of principle and matters of causation, but this is no more than is often the case in claims of this kind. The Defendant should have pleaded already to the issues of liability and has had plenty of opportunity to do so. There is therefore no need for a greater interval than seven days between the provision of the further information on damages and the service of a defence.

Security for Costs

19. It is accepted by the Claimants that the jurisdictional threshold set out in RDC 102(1) in relation to the Singapore company is met and the jurisdictional threshold provided by RDC 102 (2) is met for both Claimants. There is insufficient evidence before the Court to show that an order for costs would stifle the Claim or to show that any inability to provide security has been caused by the Defendant’s breaches of duty or contract.

20. There was a deficiency in the Defendant’s Application in not providing a Schedule of anticipated future costs but that has now been remedied, but only with a Schedule which is extremely limited in supporting a large claim for security in the sum of USD 2,903,535. At paragraph 15 of a witness statement served by the Defendant, figures appear for different stages of the proceedings but there is no breakdown of the expected number of fee earners nor the hours that they would spend. This is most unsatisfactory. The figure equates to 100% of the Defendant anticipated costs and is in my view excessive for what is said by the Defendant (and accepted by the Claimants) requires a trial of eight days involving several fact witnesses and experts.

21. It is clearly inappropriate to order security at this early stage for the action through to its completion and potential enforcement. Security should be provided now but only up to the Case Management Conference when a fresh application can be made if there is no agreement or future security thereafter. The Claimants themselves say that they may be in a better position to provide security as time goes by where they may currently be in difficulty in providing anything like the total figure claimed of over USD 2 million. I look with some scepticism on the figures claimed and consider that the Court will be in a better position to assess the scope of the action and an appropriate figure for the future at the Case Management Conference.

22. It is inevitable that the Court must take a broadbrush approach to the figures and the breakdown in the witness statement at paragraph 15 falls to be considered against the background I have described. The idea that over USD 213,000 should be spent on the defence is not one I am prepared to countenance; nor that a further USD 70,000 will be spent on case management up to and including the Case Management Conference. If further information is given as ordered and a defence served, with a reply to follow, there will be a need for the Defendant to approach the five individuals who are said to have been involved in the trading transactions and time and costs will be incurred in so doing no doubt. Nonetheless, the ambit of the pleas of deceit and misrepresentation is limited and I cannot conceive that the total claimed up to and including the Case Management Conference of some USD 405,000 can be justified. Whilst the parties bandied figures about, the appropriate figure in my view at this stage is USD 150,000.

23. The Claimants are therefore ordered to provide security for costs in the sum of USD 150,000, by payment into Court or in such other form as is reasonably satisfactory to the Defendant.

Costs

24. The Claimants seek the costs of the applications to strike out and for reverse summary judgment in the sum of AED 356,698.01. Costs should follow the event on those applications and I have examined that schedule of costs which does descend to the level of detail usually employed in summary assessment of costs. I conclude that a figure of USD 70,000 is recoverable from the Defendant in respect of those applications.

25. The Defendant is entitled to its costs of the application for security for costs because it had to come to this Court to obtain such an order which had previously been resisted. Its own statement of costs is not broken down between the different applications, whilst the Claimants’ statement of costs for this application total of AED 189,179.17. I assess the Defendant’s costs of this application in the sum of USD 40,000.

26. I make no order for costs in relation to the debate about the terms of the order for further information that I have made and there is therefore a balance of costs owing to the Claimants in the sum of USD 30,00 which is to be paid by the Defendant to the Claimants within 21 days.

The Dubai International Financial Centre

CFI 069/2024 (1) Keshav Global Trading LLC (2) Keshav Global Private Limited v Etg Commodities Holdings Limited

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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Keshav Global Trading LLC (2) Keshav Global Private Limited v Etg Commodities Holdings Limited [2025] DIFC CFI 069 (19 March 2025) URL: http://www.bailii.org/ae/cases/DIFC/2025/DCFI_069.html Cite as: [2025] DIFC CFI 69, [2025] DIFC CFI 069