Background
The underlying proceedings concern an alleged US $1.2 billion fraud centred on gold-bullion loans advanced by a group of banks (“Bullion Banks”) to two Indian companies, Winsome and Forever Precious, secured by standby letters of credit from a consortium of banks. When Winsome and Forever Precious defaulted, the consortium banks were left exposed and are said to be the ultimate victims. The claimants are six companies that were allegedly used as conduit vehicles in the fraud and are now in creditors’ voluntary liquidation, together with their joint liquidators from Grant Thornton. The defendants include Jatin Rajnikant Mehta and members of his family, who are accused of receiving and concealing the misappropriated proceeds through multiple layers of corporate entities, and two associated Singapore-incorporated companies.
The case was at trial before Mrs Justice Joanna Smith when, on the first day of oral openings (27 April 2026), senior counsel for the claimants confirmed the abandonment of their claims in unlawful means conspiracy and contribution. The scope of any further abandonment — particularly whether the claimants had also conceded their constructive trust arguments and their knowing receipt claim against the Family Defendants — was far less clear. Counsel’s exchanges with the court on that day were described by the Active Defendants’ counsel as “very difficult to follow.” The court directed the claimants to serve a written notice of discontinuance identifying every abandoned claim, which they did on 1 May 2026. The notice retained the underlying factual pleading in paragraphs 132–135 and 138 of the particulars of claim, prompting the Active Defendants to argue that this exceeded what had actually been conceded and to issue a formal application on 20 May 2026 seeking, among other things, the introduction of an entirely new illegality defence and a counterclaim against the joint liquidators in unlawful means conspiracy.
The court heard submissions on both the claimants’ informal amendment application and the Active Defendants’ formal application over two days (5 and 8 June 2026) before reserving judgment to allow the trial — listed to run until 8 July 2026 — to continue.
The Court’s Holding
On the Claimants’ Application, Mrs Justice Joanna Smith granted permission for the proposed Consolidated Re-Re-Re-Re-Amended Particulars of Claim and declined (subject to one minor exception) to strike out paragraphs 132–135 or the residual part of paragraph 138. She held that the oral concessions made by the claimants’ counsel on 27 April 2026 were not objectively unequivocal as to a complete abandonment of all constructive trust arguments. A careful reading of the transcript showed that counsel had conceded only that the claimants were no longer pursuing a standalone cause of action or declaratory relief in constructive trust, while expressly reserving the factual matrix — including the constructive trust pleading — in support of the surviving knowing receipt claim against the Sixth and Seventh Defendants (the two corporate defendants). In those circumstances, the court refused to hold the claimants to a more extensive implied abandonment.
The court distinguished the position from that in Compania Sud-Americana De Vapores SA v Nippon Yusen Kaisha [2009] EWHC 1606 (Comm), where an implied abandonment had been found because the opposing party had received no correction to its stated understanding and had cross-examined the claimant’s witnesses on that basis without objection. Here, the Active Defendants had themselves requested a written notice of discontinuance precisely because they were not confident they knew the full scope of what had been abandoned; they had not proceeded on the assumption of a clear concession, and were put on notice by Gateley’s letter of 28 April 2026 — before they had even commenced cross-examination of the key factual witness — that paragraphs 132–135 and 138 were being retained. Having received that letter without objection, they could not later claim prejudice from the retention of those paragraphs.
The court also criticised the claimants’ trial skeleton argument for failing to comply with the Chancery Guide’s requirement that a skeleton argument identify the points that are and are not in issue, noting that the lack of clarity in that document was the root cause of the entire dispute. Nonetheless, that failure did not, without more, constitute an implied abandonment of the omitted claims.
Key Takeaways
- An implied abandonment of a pleaded claim requires an objectively unequivocal concession; ambiguous or qualified oral statements in opening submissions will not suffice, and surrounding circumstances — including the opposing party’s own reactions and requests for clarification — are relevant to that assessment.
- Where the opposing party responds to apparent concessions by seeking a formal written notice of discontinuance rather than proceeding on the assumption of abandonment, that conduct is inconsistent with a later assertion that it relied on a clear, unequivocal concession and was prejudiced thereby.
- Parties in Chancery Division trials must comply strictly with the Chancery Guide requirement that skeleton arguments positively identify both the causes of action being advanced and those that have been abandoned; omission is an insufficient method of signalling that a claim is no longer pursued.
- A party may maintain the underlying factual matrix and pleaded facts for constructive trust in support of a surviving knowing receipt claim, even after abandoning standalone constructive trust relief, without that constituting an impermissible re-run of the abandoned cause of action.
Why It Matters
This decision provides important practical guidance for managing large, multi-party commercial fraud trials in which pleadings inevitably evolve and claims are refined or abandoned as the case progresses. It confirms that courts will take a contextual and holistic view of mid-trial concessions, resisting attempts to hold parties to an implied abandonment wider than what was clearly and unequivocally communicated, particularly where the opposing side’s own conduct demonstrates it did not treat the concession as settled. The emphasis on the Active Defendants’ failure to object when the written clarification departed from what they now claim was agreed is a salutary reminder that parties must raise concerns about the scope of concessions promptly or risk being taken to have accepted the formulation offered.
For practitioners in the Chancery Division, the judgment reinforces the obligation to use trial skeleton arguments not merely as advocacy tools but as case-management documents that give the court and opponents a clear, accurate map of the issues that remain alive. Failure to do so — as occurred here — risks generating precisely the kind of satellite dispute that the Chancery Guide requirements are designed to prevent, and in a high-value fraud trial running for many weeks, such disputes impose significant costs and disruption on all parties.