Yash Bheeroo successful in High Court claim by Fund Adviser against former CED of First Investment Bank

On 17 April 2020, judgment was handed down in the case of GML International & Others v Jonathan Harfield [2020] EWHC 909 (QB), in which Yash Bheeroo acted for the Claimants.

The case concerned competing accounts of the existence of oral contracts between the Claimants and the Defendant, formerly the Chief Executive Director of First Investment Bank, Bulgaria (“FIB”). The case stems from a €20 million deal in which two investment funds, one managed by the First Claimant, purchased a 20% share in FIB in 2005. Following the transaction, the Defendant alleged that his position had become untenable, but that he resolved to remain at FIB on the basis of an oral agreement reached with the Second Claimant, whereby the investment funds would indemnify him from any losses that he sustained by continuing as CED. Following the Defendant’s departure from FIB, the Claimants advanced various sums to the Defendant from 2008 to 2014 by way of loans. The Defendant alleged that these sums were payments under the indemnity.

Following a 5-day trial, the Judge found that most of the payments provided by the Claimants to the Defendant were payments advanced by way of loans and had to be repaid. The Judge described the case as having “some unusual evidential features, including allegations of involvement of the Bulgarian mafia, criminality at Russian banks, arguments about the dress code that would have applied to a disputed meeting at the Ritz Hotel and the engagement of a firm of investigators staffed by former members of the Israeli intelligence services.” The Judge “unhesitatingly” concluded that the Defendant’s case was untrue and found in favour of the Claimants, as well as ordering the Defendant to pay indemnity costs.

The Judge also considered the importance of contemporaneous documents to judicial fact finding following the formulation of the ‘Gestmin Principle’ by Leggatt J in the case of Gestmin v Credit Suisse UK & Another [2013] EWHC 3560 (Comm).

The Judgment can be found here: https://www.bailii.org/ew/cases/EWHC/QB/2020/909.html

Press Reporting: https://www.law360.com/financial-services-uk/articles/1264711/fund-adviser-wins-row-with-ex-bulgarian-bank-exec

Yash Bheeroo was instructed by Kelly Tinkler and Howard Waterman of Keystone Law.

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