3VB team successfully defend $1BN Freezing Order on return date

Ewan McQuater KC, Ian Wilson KC, Philip Hinks, James McWilliams and William Day appeared for Colin Diss and Nicholas Wood of Grant Thornton at a heavily contested return date for a near $1bn dollar worldwide freezing order, instructed by John Tillman and Oliver Humphrey of Hogan Lovells International LLP. Paul Bonner Hughes also appeared at an earlier stage of the proceedings.

Colin Diss and Nicholas Wood act as liquidators of six UK companies through which the proceeds of an alleged international fraud are said to have been laundered by four members of the Mehta family (and others). Jatin Mehta was the moving influence behind the Winsome and Forever Precious diamond and precious metals businesses before they defaulted on their borrowings under facilities with various financial institutions. The liquidators’ case is that the defaults were fraudulent and that various proceeds were laundered through the UK to other entities controlled by the Mehta defendants.

The Mehta defendants were recently located in England, and the liquidators obtained a worldwide freezing order against them.

The 3 day return date hearing before Edwin Johnson J is the first of a series of applications that the Mehta defendants have brought in respect of the proceedings. At this first hearing, they sought to discharge the freezing order for material non-disclosure and opposed its continuation on the basis of no good arguable case.

The Judge dismissed the discharge application and allowed the continuation application, noting that the “evidence that a major international fraud took place seems to be strong”, and that there was a good arguable case that each of the Mehta defendants were involved in it. Over a 113 page judgment, the Judge considered numerous allegations of material non disclosure, the particulars of which ran to 11 pages (described in the judgment as a “mass of arrows”). Despite the myriad of complaints, the Judge found there to be only one failure of disclosure or fair presentation and did not consider that it justified discharge of the freezing order.

The next phase of the litigation involves a 2 day jurisdiction hearing in December 2022, also before Edwin Johnson J.

The judgment is Harrington & Charles Trading Co Ltd & Ors v Mehta & Ors [2022] EWHC 2960 (Ch).