07/02/2025

Commercial Court gives judgment for over US$50 million in unjust enrichment claim

On 28 January 2025, the Commercial Court in London handed down judgment in AMNS Middle East FZE v LIQS PTE Ltd [2025] EWHC 150 (Comm), finding that the claimant was entitled to recover US$52.8 million (plus interest) from the defendant, in a claim for unjust enrichment.

Sudhanshu Swaroop KC and Rishab Gupta acted for the successful claimant, AMNS Middle East FZE.

The judgment has already attracted media interest, and is also of legal interest, both as to matters of procedure (the defendant’s non-attendance at trial) and matters of substance (the law of unjust enrichment).

Background

The claimant is a UAE company, and part of a joint venture between the ArcelorMittal group and Nippon Steel Corporation. The defendant, LIQS PTE Ltd, is a Singapore company and part of the Liberty Steel Group owned by Sanjeev Gupta of the GFG Alliance.

The claimant and defendant had entered into a ‘trade advance agreement’, which provided for the claimant to advance sums of money against future supplies of steel. The claimant argued that it had made advances totalling US$52.8 million, that it had received nothing in return, and that it was entitled to recover these sums in unjust enrichment, as there had been a failure of basis for the payments.

The defendant argued that the advances had actually been made in accordance with an alleged oral agreement and that in the circumstances there had not been any failure of basis.

The defendant’s non-attendance at trial

The defendant participated in all stages of the proceedings, up to and including service of witness statements. However, a few months before the trial, the defendant’s solicitors came off the record, and the defendant did not then attend the trial. The judgment gives guidance as to the law and practice in these circumstances.

The court held that:

1. It would exercise its discretion under CPR 39.3(1) to proceed with the trial in the absence of the defendant, in particular because the defendant was aware of the trial date and had made a deliberate decision not to attend [18–21].
2. It would not exercise its discretion under CPR 39.3(1)(c) to strike out the defence. Furthermore, even if it had struck out the defence, then judgment in default would not have been the automatic consequence [22–31].
3. The defendant’s witness statements had no evidential status and would not be taken into account. That was because CPR 32.5(1) provides that the witness “must” be called to give oral evidence unless the court orders otherwise or the statement is put in as hearsay evidence (applying Williams v Hinton [2012] CP Rep 3).
4. The claimant, having called its own witness to give oral evidence, was under no duty to put the defendant’s case to that witness. Furthermore, it was not for the court to cross-examine that witness [36].
5. The claimant was required to prove its case on the balance of probabilities [34].

Unjust enrichment

The judgment also provides an example of the four-stage approach to an unjust enrichment claim, as outlined by Lord Steyn in Banque Financière de la Cite SA v Parc (Battersea) Ltd [1999] 1 AC 221. This involves the following questions: (1) Has the defendant been enriched? (2) Was the enrichment at the expense of the claimant? (3) Was the enrichment unjust? (4) Does the defendant have a defence?

The court’s analysis of these questions is noteworthy in various respects, including:

1. The court held that, as regards the alleged “unjust” factor (ie, failure of basis), where payments are made under a contract, then in general the “basis” of the payment cannot be extraneous to and inconsistent with the terms of that contract [127–137, 180–183], drawing an analogy with Dargamo Holdings Ltd and another v Avonwick Holdings Ltd and others [2021] EWCA Civ 1149).
2. In relation to sums that the claimant had paid directly to the defendant, the court held that the defendant was “enriched”, even if it had paid the sums away to third parties, because the extent of the enrichment is tested at the date of receipt [117, 148].
3. The court also had to consider whether the claimant could claim against the defendant for certain sums that it had paid to third parties (mainly other Liberty companies), rather than to the defendant. The court held, inter alia, that in principle, party A may be “enriched” if it ratifies or adopts a payment by party B to party C, providing that party A in fact obtains a benefit as a result of that payment [115–123, citing Leigh v Dickeson [1884] 15 QBD 60].

Sudhanshu Swaroop KC and Rishab Gupta were instructed by Duncan Bagshaw, Eloise Crompton and Ajay Fournillier of Howard Kennedy LLP.