On 2 October 2020, Moulder J. handed down judgment in the Commercial Court in Raiffeisen
Bank International AG (RBI) v (1) Asia Coal Energy Ventures Limited (ACE); and (2) Ashurst LLP
 EWHC 2602 (Comm). Squire Patton Boggs acted for the successful First Defendant, ACE.
The case, which was featured in The Lawyer’s Top 20 Cases
of 2020, involved a US$70 million claim by RBI arising out of
ACE’s takeover in 2015 of Asia Resource Minerals plc (ARM),
the indirect owner of PT Berau Coal, one of Indonesia’s
largest coal producers.
The case was conducted at Squire Patton Boggs by
Commodities and Shipping Group partners Christopher Swart
and Katie Pritchard and associates Joseph Magoon and
Alex de Wild, instructing Matthew Hardwick QC. The case
transferred to Squire Patton Boggs from HFW in April 2020
when Chris, Katie and Joseph joined the firm together with
corporate partner Brian Gordon, who had been instructed by
ACE in the underlying takeover in 2015.
The claim was brought against ACE (an SPV) for specific
performance of a 2015 SPA by which ACE had agreed to
purchase a series of defaulted loans and underlying security
from the bank, together with the shares it controlled in ARM.
ACE opposed the claim on the basis that it was induced
by the bank to enter into the SPA by misrepresenting the
security it had over certain land, shares and vessels in
A claim was also brought against Ashurst LLP for damages
for the alleged breach of its duties in respect of a “Solicitor’s
Confirmation” in relation to a US$85 million escrow fund.
In a comprehensive success for ACE, and following a three-week
trial in July 2020 (conducted entirely remotely due
to COVID-19 with witnesses in Vienna, London and Hong
Kong), Moulder J. accepted that (1) the bank had made a
series of material misrepresentations (express and implied)
to ACE in a data room marketing document (an Information
Memorandum) provided during the due diligence period in
relation to the status of the loans security; (2) ACE had relied
on these false representations; and (3) ACE was entitled to
rescind (and had rescinded) the SPA. The bank’s claim against
Ashurst also failed for related and other reasons.
ACE was managed by Argyle Street Management Limited,
a Hong Kong-based hedge fund, of which Mr Kin Chan is
chief investment officer. Mr Chan gave oral evidence at the
trial and Moulder J noted that he had elected to defend the
proceedings against an SPV in order to protect his reputation,
and accepted his evidence on all contentious issues.
The judgment is of particular interest for the importance
attached by the judge to the accuracy of due diligence data
room marketing material and the reliance counterparties
are entitled to make in respect of such documents. It also
provides a modern example of the power of the equitable
remedy of rescission. A link to the judgment can be found here.