Family company wins dispute over £35m investment

A family company has won a dispute over a £35m investment that a businessman claimed had been given to him as a gift.

The family had signed an agreement with the businessman to fund half of a deposit to secure a contract for the supply of oil. He had claimed to be able to secure the deal and to have already paid the other half of the deposit.

The claimants transferred £35m to a Swiss bank account, which they believed was the account of the oil supplier. The deal did not proceed so they agreed to pursue an alternative joint venture and signed new agreements and guarantees.

No progress was made so the family took legal action for the repayment of the deposit.

Investigations revealed that the Swiss bank account belonged to the businessman and he had immediately spent it for his own private purposes on a property, luxury cars and investments.

He claimed that the family had agreed that he could retain the money to compensate him for losses incurred as a result of withdrawing from the oil venture and to purchase shares in a company to be used for the new venture.

He later claimed said that the money had been given to him as a gift in return for information about the location of assets hidden in bank accounts by the father of one of the family members.

The court found in favour of the family. It held that the businessman had received the money on trust to be held and used to pay the deposit for the oil venture. There was no substance in the defence that the money had been a gift.

It was also inconceivable that there was any truth in the story about finding the hidden bank account. The explanation was wholly incredible.

Please contact Neil O’Callaghan if you would like more information about the issues raised in this article or any aspect of contract law and litigation.