Responsive Expenses
. So far as investments made with the proceeds are concerned there is now (following a refocussing of the Claimants’ case in closing) a single investment worth US$49.9 million in issue.9.By way of final introduction I note that this dispute has, in many ways, a family flavour unusual in the Commercial Court. Not only does it concern work with an actual family, but also Mr Jaffe and the Individual Defendants, who are the UBOs of all the corporate claimants and defendants, had worked closely together for some time before they parted ways. The dispute is hence flavoured with the kind of personal bitterness often seen in family disputes. The case has been pursued on both sides with utter commitment, verging on venom. This is illustrated by the fact that the Defendants' estimated costs for this phase of the trial were in the region of £20 million.10.Consistently with this, during the course of the trial a huge number of issues – factual, legal and expert – were raised. Each party served 99 page skeletons. The written closing submissions for each party were limited to 200 pages, but were accompanied by dense appendices. Plainly therefore it is impossible to deal with all of the issues at length. This judgment is therefore structured as follows: Part 1, dealing with the basic timeline and facts which any non-party reader may need in order to comprehend the judgment; Part 2 which provides a summary of the issues and the trial, Part 3 which deals with the law, Part 4 which deals with the essential factual and expert issues which remain and the application of that law to the facts and Part 5 which contains conclusions on contingent issues.11.In more detail: IntroductionPart 1: The FactsBadri and his assetsThe Individual DefendantsBefore the breakdown: 2008-2011Between the breakdown and the IRSA: May 2011 to September 2012The IRSAThe Recovery Services post the IRSA: October 2012-December 2017After the terminationPart 2: The Issues and the TrialThe issues on the scope of the accountThe Responsive Receipts and Responsive ExpensesCommon GroundThe IssuesThe Responsive InvestmentsThe TrialPart 3: The Legal IssuesLegal issues: backdropThe deterrent dimensionLegal issue 1: Equitable principles v. the circumstances of the caseLegal Issue 2: the nature or magnitude of the breachLegal Issue 3: “reasonable relationship” vs “equitable causation”DelayPre-existing agreementAllowance for skillThe relevance of the company to whom duties were owed: Mr MarsonPart 4: Fashioning the accountOriginal scope of the breach foundThe “transformation of the opportunity”Insufficient connection: October 2012 “or such other date as the Court may determine”Insufficient connection: RBS fundingAlleged profit-sharing agreementEstoppelSkill, time and riskThe Defendants' conduct of the litigationConnection issues: conclusionThe expert issuesForensic accountingResponsive ReceiptsValuation issuesRustavi Steel LLC (by valuing the interest in Tolanius Beheer BV)Teleimedi LLC and other related entities (by valuing their interested in Georgian Media Production Group Limited (GPMG)Studio Maestro LLC (by valuing their interest in Media Finance Group BV)Benahavis/TidjickaZurgovani LLC;Responsive InvestmentsResponsive Expenses