BL-2020-001417 - [2025] EWHC 2487 (Ch)

I shall start the analysis by repeating the section on background from the judgment on the summary judgment/strike out application. This read as follows:

“10.

The sole director of MRL is Mr Luke Reeves ("Mr Reeves"). He was formerly a director of MMM until 1 February 2011, which company entered a members' voluntary liquidation on 3 December 2012, and remains in liquidation. There was a group of companies known as the Matrix group which comprised financial services businesses and is said to have managed over £3 billion of assets with 230 professionals employed in four divisions including asset management and specialist finance. Ms Alexandra Galligan ("Ms Galligan") was employed by Matrix Securities Limited from 1 December 2008 as institutional business development manager, reporting to Mr Reeves. She was and is married to Mr Saleem Siddiqi ("Mr Siddiqi"), who is the beneficial owner of Musst.

11.

MMM and another company in the group traded as Matrix Asset Management ("MAM") and were in the business of finding investors to invest in hedge funds in return for fees paid by the managers of those funds. MAM had a network of relationships with potential investors.

12.

Mr Reeves first met Mr Siddiqi in 2008 or 2009 through Ms Galligan. His [Mr Siddiqi’s] expertise was to advise pension funds and other investment entities in relation to their selection of hedge funds into which to invest. Mr Reeves wanted MMM or Matrix to be introduced to managers of high-quality hedge funds to which Mr Siddiqi had access. Musst says that it successfully introduced Matrix to about nine different hedge funds from about 2009 to 2012.

13.

In 2009 or 2010 (Matrix says in 2011), Mr Reeves discussed with Mr Siddiqi and Ms Galligan a concept under which MMM or Matrix would provide for reward office space and legal and administrative services to new hedge funds. In about January 2012, Mr Siddiqi introduced Mr Reeves to Mr Mathur, then of Deutsche Bank, who was about to set up his own hedge fund business. In 2012, Mr Siddiqi was working for Tapestry Asset Management Limited ("Tapestry"), and during the year, he acquired Tapestry and by the end of the year, he operated through various Musst entities. From November 2012, he was joined by Ms Galligan.

14.

It is unnecessary in this summary to refer to the numerous meetings involving Mr Siddiqi and/or Mr Reeves and/or Mr Mathur. Mr Mathur had an investment strategy focussing on synthetic asset-based securities which were trading at low sums and was expected to increase substantially. There is controversy between the parties as to what then occurred about the level of remuneration between the parties. In the course of emails (particularly 15 and 16 February 2012), there was reference to Mr Reeves expecting that 25% should be paid to Musst of which the salespeople including Matrix would expect 80%. Mr Reeves in a statement had said that there was an 80/20 sharing arrangement that was made, but Mr Siddiqi denies that this was ever agreed, and says further that the emails do not evidence any such understanding.

15.

Musst accepts that the role of Matrix would be to act on behalf of Musst by (a) suggesting potential investors to Musst, (b) making initial contact with potential investors when Mr Siddiqi agreed to this, (c) helping set up meetings and to attend those meetings if Musst wished, and (d) providing administrative and operational support. Since the findings in the Astra Judgment (paras. 88-90), Musst now accepts that the role of MMM went beyond being an administrator or secretary. Musst says that no agreement was made as to fees with Mr Mathur until after agreement in principle between Musst and Octave in November 2012 resulting in an Introduction Agreement on 13 April 2013 between Musst and Octave. Musst's case is that thereafter there was no concluded agreement between Musst and Mr Reeves for sharing of Musst's fees.

16.

Mr Reeves gave evidence in the Musst v Astra action. The case then pursued by Astra was that there was a tripartite agreement made in November 2012, a part of which was that there would be a sharing of the sums received by Musst whereby Mr Reeves/Matrix would receive 80% on the basis of Musst receiving 25% of the fees on introductions, the sharing was said to be 80% Matrix and 20% Musst. The Judgment contained critical remarks about Mr Reeves' evidence which was rejected as "not satisfactory" . It was said that it "lacked precision about what agreement there was as regards Commission at any stage and between whom". The instant claims were not brought in the Musst v Astra action, and the case of Musst is that it is an abuse of process amounting to a challenge on the Judgment in that action for the instant claims to be brought in this action.

17.

The principal fees which form the subject of MRL's claim are fees received by Musst from two customers, namely 2B and Crown. It was principally by reference to these fees that Musst sued Astra in the Musst v Astra action for fees from these introductions. Musst succeeded in its claim, and the Astra Judgment was dated 17 December 2021, and an order was made for an interim payment of US$3,826,952.20 on 18 March 2022. The claims made in this action are for a share of 80% of that sum or some other percentage which was to be agreed or for a restitutionary sum by reference to the value of the services rendered by MMM.”

In my judgment, starting with the contemporaneous evidence, this shows that Matrix was more than an administrator or a secretary. This is for the following reasons. First, it had a bank of contacts itself to whom it could reach out. Second, it made contact with potential investors which indicates much more than an administrative role. Third, Ms Galligan in particular presented as a person with 'the gift of the gab' and the charm that the best salespersons have. Until October/November 2012, she was acting for Matrix and not for Musst, despite her being married to Mr Siddiqi. In that capacity, she was doing more than simply administrative tasks. Fourth, when Mr Elliott reached out to LGT (without the prior approval of Mr Siddiqi), he was doing more than being an administrator, but seeking to get the business of a prospective investor.

The following is the history between 2011 and 2012 and is taken in part from the judgment in the Musst v Astra judgment, whilst taking into account the evidence received in this action. It is an extensively documented case.

In 2011, Mr Siddiqi was introduced to Mr Mathur by Dr Chander, who was a mutual acquaintance.  At the time, Mr Mathur was working for Deutsche Bank as head of Winchester Capital Principal Finance, where he managed a portfolio of cash and synthetic ABS, which was a multi-billion dollar pool of ABS consisting of various different types of ABS.

Mr Siddiqi was a partner in Tapestry Asset Management LLP, a hedge fund adviser focussing on institutional clients, with a reputation for “seeding” (providing initial finance to hedge fund managers), and he managed the London side of the business. 

Mr Siddiqi and Mr Mathur got along well and there were discussions about Mr Siddiqi helping Mr Mathur in a new business which would trade in synthetic ABS.   Mr Mathur would come round to Mr Siddiqi’s home, where he lived with his wife Alexandra Galligan, and they would discuss business plans, strategy and how to present the opportunity to potential investors.  The first such visit appears from the documents to have been on 25 October 2011.

Mr Mathur intended in due course to leave Deutsche Bank and set up a new company which ran a hedge fund focussing on synthetic ABS, and in which clients would subscribe for shares in return for capital contributions. Mr Mathur would manage the company and charge management fees and performance fees.

On 26 October 2011, Mr Mathur sent to Mr Siddiqi a “Draft Proposed New Regulatory/Special Situation Funds” document which set out the rationale of the proposed fund and a short power point presentation.  As a result of the 2008 banking crisis, banks were under pressure to get rid of credit instruments such as synthetic ABS.  This created an opportunity in that the assets were complicated and unlikely to mature for some time. Mr Mathur knew from his experience in the market where to acquire them cheap with a view to holding them for a few years, and selling them at a substantial profit on maturity, by which time it was expected that the market would have recovered.

Musst, was incorporated in the BVI by Mr Siddiqi on 2 February 2012, when he decided to leave Tapestry and devote himself to his own business.  Mr Siddiqi is the ultimate beneficial owner of Musst and it is a vehicle through which he (and since she left Matrix in October/November 2012, his wife Alexandra) conducts business. Musst was a part of a business group of companies through which Mr Siddiqi operated.

The business planned by Mr Mathur was referred to as “AMCo” (standing for Anish Mathur Company, and then latterly Astra Management Company).  On 16 January 2012 and 8 February 2012 Mr Siddiqi introduced Mr Reeves of Matrix to Mr Mathur. He knew Mr Reeves because his wife Ms Galligan worked for Matrix and Mr Reeves was her line manager. Subsequently, Mr Siddiqi and Mr Mathur presented the proposed AMCO business strategy to the Matrix sales team.  As a result, Ms Galligan and other members of the Matrix sales team started speaking to potential investors about the proposed AMCO business in March and April 2012.

In the trial in Musst v Astra, there was a dispute between Mr Siddiqi and Ms Galligan on the one hand, and Mr Mathur and Mr Reeves on the other, as to what happened in the period between January 2012 and October 2012, as to how much, if at all, the introductions of prospective investors was by Matrix, and the basis on which the parties were operating. 

Mr Siddiqi wanted to involve Mr Reeves in discussions as to how to take things forward. Mr Reeves was keen to be involved in them as was apparent from a number of emails between 16 January 2012 and 18 January 2012.

In an email of 16 January 2012, Mr Siddiqi wrote to Mr Reeves as follows:

 “So, I had a two hour meeting with Anish and laid down a gauntlet. The net result is he will work with Musst Investments and understands how we operate. The specifics of a deal have not been decided, but the essence of the deal has been transmitted, and I think he gets it…. Hence, it is time to morph his pitch book and move the story forward.

I have suggested a meeting with the three of us. I have told him, I will write his pitch book, but before that I will ascertain his competition. One of them, who is EU focused is [gives website address] and as it happens is advised by Radosh. The other is [gives website address]. I will get meetings with both of them and ascertain what they do. Will give me ideas for our pitch.”

There were encouraging emails between Mr Siddiqi and Mr Mathur including on 17 and 18 January 2012 in the following terms:

“i.

17 January 2012 from Mr Siddiqi: “It was really good talking yday, Anish, and I am happy that you are comfortable involving me. From my side, let me assure you … as I mentioned to you yesterday, I would never put my name on anything that I did not completely believe in nor had an interest in. …. Most importantly, I am happy that you feel comfortable trusting me and vice versa. Looking forward to building a big business that is successful and has long term legs”.

ii.

18 January 2012 from Mr Mathur: “As usual, I am quite amazed with your network and ability to connect dots. I hope we are able to take this forward. Not only am I pleased that you’re keen to be involved, I am actually very happy that you believe in the opportunity and my abilities to capitalized it [sic] for all of us.”

After a meeting with Mr Siddiqi, Ms Galligan, Mr Mathur and Mr Shamil Chandaria on 8 February 2012, Mr Reeves sent an email on 9 February 2012 setting out what he believed needed to be done, which involved, amongst other things, creating a “pitch book”, a “product structure”, and working out which clients to target. He also gave a few initial thoughts on a sales strategy.  At a further meeting the next day, Mr Siddiqi, Mr Mathur and Mr Reeves spent a few hours working on the “pitch”, which resulted in Mr Siddiqi coming up with a “one pager”. Matrix would have more people to do this work than Mr Siddiqi who was a one person team, and whose forte was to present the technical intricacies of the product to persons who were interested. Matrix would find potential customers and have a sales strategy.

In emails in February 2012 and March 2012, Mr Reeves suggested various terms which could apply as between MUSST and Matrix in relation to Mr Mathur’s project, and also on another deal, which involved raising money for an equity fund backed by Mr Shamil Chandaria and run by Octave.  He noted that terms needed to be agreed between MUSST and Mr Mathur before agreement could be reached between Musst and Matrix.

More particularly, on 15 February 2012, there was an email from Mr Reeves to Mr Siddiqi and Ms Galligan as follows:

“MUST should go for full global distribution requiring min of eg 25% fees. Must could take an override via 2 methods

1)

Take 25% mandate and then pay 80% to "sales people"

2)

Negotiate a higher mandate eg 30% and receive the 5% spread. 3) Equity component. If not palatable then x% for x around of sales. Sales people defined as Matrix, Rahul etc etc

Next stages:

1)

Question is how all split at MUST level?

2)

Contracts need to be completed for both Must and the manager and then between Must and the sales people - I have templates

3)

Timescales

4)

Who negotiates contracts? Let me know what u think L Luke Reeves Director - Head of Retail and Institutional Business Development” (emphasis added)

Mr Siddiqi responded stating “These are exactly the type of questions I too am thinking about” and Mr Reeves replied stating “Money conversations are good, after all it’s the point of all this…”

On 6 March 2012 (and another on 21 March 2012), there was an email from Mr Reeves to Mr Siddiqi stating: “We need to start moving with below as the prospectus will take circa 8 to 10 weeks and should only be commenced once the pitch book and indicative terms are ready.” The e-mail then set out an 11-point list of things to do. It referred to “MUST (sic) Fee agreement (SS to complete once completed then MUST (sic) to complete with Matrix).”  This appears to indicate that there should be a fee agreement first between Musst and Octave and then between Musst and Matrix.

On 12 March 2012, Mr Siddiqi and Ms Galligan had a brainstorming session together about their contacts including the Observatory (who eventually invested through 2B). LGT Capital Partners (“LGT”) (who eventually invested through Crown). Although this was not documented, I found as a fact in my judgment in Musst v Astra that this took place. It does not follow from the fact that it took place that the instigation of the contacts with the Observatory and LGT respectively was that of Mr Siddiqi. The evidence was that whilst there was not a great deal of knowledge of The Observatory, that of Ms Galligan was greater than that of Mr Siddiqi who struggled in cross-examination to mention anything other than a chance encounter at a conference or two without any detailed recollection. Mr Siddiqi had greater knowledge of LGT, but it was still very limited, and Matrix also had had contact with LGT.

On 11 April 2012, Mr Mathur gave a presentation to the Matrix sales team about his proposed fund, along with Mr Siddiqi.  This sales team included Mr Christopher Elliott and Mr Ben Fox, as well as Mr Reeves and Ms Galligan.

By about mid-April 2012, Mr Mathur had decided to trade under Octave’s regulatory umbrella (he had to have some umbrella until his vehicle obtained the relevant authority to trade in its own right from the (then) Financial Services Authority).  He was still at the time with Deutsche Bank.

From mid-April 2012, the following is to be noted from the contemporaneous documents:

At about this time, there was an email from Mr Reeves to Mr Siddiqi, copying Ms Galligan, saying “As I understand it we are outstanding the following: 1) agreements between Musst and Matrix on Anish and Octave. This needs to include how Matrix can get paid on certain institutional clients... I understand this will be a lower rate...”

The Matrix sales team became involved in assisting Mr Siddiqi and Mr Mathur to prepare the presentations for the fund to send to prospective investors as is apparent from emails in the second half of April 2012 especially.  They were also making the initial contact with investors in many cases and going on road trips with Mr Siddiqi and Mr Mathur either locally or abroad e.g. 12 April 2012 planning European trips, 8-9 May 2012 two presentations in the UK offices of Matrix in London with 12 investors at each, 14-17 May 2012 referring to a trip to Switzerland, 30 May 2012– 1 June 2012 trip to Sweden.  The Matrix team assisted Mr Siddiqi and Mr Mathur in drawing up the prospectus and the “due diligence questionnaire” (the “DDQ”) for Octave to send out to prospective investors about the fund (especially in late June 2012 and July 2012).

Mr Reeves continued to suggest that agreements needed to be reached between Musst and (now) Octave, and between MUSST and Matrix.  Mr Siddiqi chased Mr Mathur to finalise the agreement which he said they had reached, given that “the AMCo/Octave marriage is now in place and hence we need to draw up T&C’s between us” (25 June 2012).

When challenged by Mr Mathur as to whether he was seeking to revisit their agreement, Mr Siddiqi responded:

“No revision, just finalisation. Want to put it down on paper. There have been some changes at your end, that affect me and now that you have clarity, we need to noterise (sic) it. I need to have that for Musst/Matrix too … they need to see that I have a written up deal with AMCo …” [Emphasis added]

By early July 2012, Simmons & Simmons had drawn up a “Summary of Principal Fund Terms” for what was now called “AMCO Special Situations Credit Fund Ltd”, which noted that the fund was to pay the “Investment Manager” (i.e. Octave as then expected) 20% of net realised appreciation on investments and a 2% management fee. They had also started work, with Mr Siddiqi’s assistance, on the proposed offering memorandum. Octave sent a rough draft of the first prospectus to Mr Reeves, Ms Galligan and Mr Siddiqi.

On 25 September 2012, there was a Matrix trip to Stockholm and on 16/17 October 2012 a further Matrix roadshow in Switzerland.  On 9 October 2012, another one was fixed for 9 December 2012.