This is an application by the Claimant ('AMUSA') for permission to amend its Particulars of Claim. In circumstances to which I will refer, AMUSA seeks to substitute its draft Amended Particulars of Claim ('APOC') for its original Particulars of Claim. The Defendants, other than the Fifth Defendant ('Mr Seifert') have consented to the APOC, save for certain categories of amendment which I will consider below. Mr Seifert does not consent to any of the amendments on the basis that he contends that there is no properly pleaded case which stands a realistic prospect of success that he was a party to the alleged conspiracy.
There is already a significant background to this dispute. I intend to summarise it as briefly as possible, bearing in mind that there are various aspects of it which are in contention between the parties, and that there have already been a number of judgments which consider parts of it.
AMUSA is a Delaware company and is part of the ArcelorMittal Group, a major steel and mining business. The 8th - 10th Defendants (collectively 'the Corporate Defendants') are companies in the Essar Group. The Essar Group is a conglomerate ultimately owned by the Ruia family. The 1st Defendant founded the Essar Group with his brother, Shashi, who is the father of the 2nd Defendant. The 8th Defendant ('EGFL') is the holding company of the Essar Group.
The dispute arises out of an arbitral award obtained by AMUSA against Essar Steel Limited ('ESL'), a company incorporated in Mauritius, for some US$1.5 billion. ESL is a wholly owned subsidiary of EGFL and was formerly an intermediate holding company of the Essar Group's steel business, holding interests in Essar Steel Minnesota LLC ('ESML') and Essar Steel India Limited ('ESIL'), amongst others. The arbitration against ESL arose out of a contract dated 17 December 2012 between AMUSA and ESML, which owned a mine in Minnesota called the Nashwauk Project, for the supply of iron ore pellets (the Pellet Sale Agreement or 'PSA'). That contract was amended to add ESL as an additional party, but it appears that there may be an issue as to when that occurred, the Corporate Defendants contend that it was in January 2014.
AMUSA contended that ESML had defaulted on its obligations under the PSA. In May 2016 it terminated the amended PSA and in August 2016 commenced an ICC arbitration. By that time ESML was in Chapter 11 bankruptcy and the arbitration was begun against ESL only.
The arbitral tribunal issued its award on 19 December 2017. It has not been paid. AMUSA commenced enforcement proceedings in various jurisdictions. In support of those efforts, AMUSA obtained a Worldwide Freezing Order against ESL and Search Orders against the 2nd and 10th Defendants. An attempt to discharge these orders failed in front of Jacobs J, who gave judgment on 25 March 2019. On 26 March 2019 ESL was placed into administration in Mauritius.
On 30 December 2019 AMUSA commenced the present proceedings. In its original Particulars of Claim it alleged that the Defendants had conspired on a date or dates between January 2012 and the date of those original Particulars of Claim to cause loss to AMUSA and had used unlawful means in furtherance of that conspiracy. It alleged ten instances of concerted action taken pursuant to that conspiracy. These included: (1) a series of transactions undertaken in 2012 and 2013 by which ESL had transferred a shareholding in ESIL, which was at the time worth about US$1.5 billion, to another company in the group at an undervalue, by means of the transfer of ESL's shares in ESIL to another group company in return for the issuance of promissory notes ('the Promissory Notes') in amounts equal to the value of the relevant shares and then ESL assigning the Promissory Notes to EGFL in consideration of a 'future capital reduction'; (2) the procurement, in or around November 2014, of Essar Steel Algoma Inc (an indirect Canadian subsidiary of EGFL) ('Algoma'), to enter into certain transactions which stripped Algoma of its assets in order to insulate those assets from the claims of ESL's creditors; (3) entry into the amended PSA, by means of fraudulent misrepresentations by ESL as to its intention to perform; (4) a transaction in about September 2015 in which ESL transferred away a shareholding in a company called Essar Steel UAE Ltd ('Essar UAE') worth approximately US$200 million, for no or no adequate consideration; (5) a restatement of ESL's accounts in September 2016, whereby there was an improper change to the accounting treatment of the Promissory Notes from showing an inter-company receivable to being treated as a negative entry against ESL's capital; (6) failure by ESL to take steps to recover the intercompany receivable; and (7) procuring ESL in 2016 to enter into a Subordination Deed with the Essar Group's principal lender.
In support of that claim, AMUSA sought a Worldwide Freezing Order against the 1st and 2nd Defendants and EGFL. That application was dismissed by Henshaw J, his judgment being dated 30 March 2020. He found that AMUSA did not have a good arguable case, could not show a solid risk of dissipation, and considered that it would not be just and convenient to grant a Worldwide Freezing Order. Amongst the reasons why Henshaw J considered that the allegations in relation to the divestment of the shares in ESIL did not meet the standard of a good arguable case was that the chronology of the allegation was flawed, in that the restructuring of the Essar Group's steel portfolio had been proposed in 2011, before the PSA was executed. Similarly in relation to the Algoma allegations, Henshaw J considered that there were difficulties with the chronology, in that the timing of the Algoma events in 2014 made it hard to detect any plausible link with the PSA or any wish to dissipate assets of ESL some 18 months before the termination of the PSA.
In consequence of this, AMUSA has reformulated its case in the APOC. The conspiracy is now alleged to have occurred over the period 29 September 2015 to 29 September 2016. The actions taken in pursuance of the conspiracy are alleged to have been threefold: (1) that the Defendants caused or procured ESL and its directors wrongfully to refrain from taking any steps to recover an intercompany debt of US$1.5 billion which EGFL owed to ESL as a result of the 2012/13 transactions to which I have referred; (2) that the Defendants caused or procured ESL to waive that intercompany debt (the 'Waiver'), the restatement of ESL's accounts in September 2016 evidencing the Waiver; and (3) that the Defendants caused or procured ESL to part with its shareholding in Essar UAE on terms which resulted in ESL receiving no or no adequate consideration (the 'UAE Disbursements').
The Amendments Objected to