Background
In April 2020, at the height of the COVID-19 pandemic, the Mexican federal health body INSABI (later replaced in these proceedings by IMSS) paid US$59.2 million to Viva Enterprises Limited (VEL), an English lighting and electrical products importer, for 1,000 VG70 medical ventilators manufactured by Beijing Aeonmed Co., Ltd. VEL’s Managing Director Robert Dangoor and his son Joseph, who was centrally involved despite holding no directorship, presented a delivery schedule promising 200 units on day one with the full order completed within 21 days. The ventilators were urgently needed to treat uninsured Mexican patients during the pandemic. INSABI paid the full contract price in advance, as required.
VEL sourced the ventilators through a Hong Kong intermediary, American Venture, contacted on Easter weekend 2020 with no prior business relationship. The invoice and ventilator supply agreement (VSA) — which described VEL as “willing and able” to source and deliver the units — were drafted overnight and transmitted in the early hours of Easter Sunday. VEL ultimately delivered only 50 units extra-contractually. After protracted negotiations, VEL refunded 30% of the contract price and purported to satisfy the remaining 70% by arranging deliveries through Encore, the Mexican authorised Aeonmed distributor, but IMSS alleged that these deliveries had in fact been made by Encore on its own account (under a pre-existing contract between Encore and INSABI) rather than on VEL’s behalf, in a covert scheme involving forgery and backdating of documents.
IMSS brought proceedings in the English courts claiming US$41.4 million — the unrefunded balance — on grounds of fraudulent misrepresentation (VEL’s knowing overstatement of its delivery capability), repudiatory breach of contract, and unjust enrichment based on total failure of consideration. The trial took place before Mr Justice Richard Smith over ten hearing days in January and February 2026. The case was bitterly contested, with serious allegations on both sides including dishonesty, deliberate document destruction, forgery, and backdating.
The Court’s Holding
Mr Justice Richard Smith found that the Claimant’s case was substantially made out. The court was highly critical of the Defendants’ credibility, finding as a fact that both Robert and Joseph Dangoor had been untruthful on one important aspect of the case. When questioned on the most contentious elements, both Dangoors consistently deferred to undocumented conversations with third parties — particularly Carlos Dávila and Javier Jileta, who were unavailable or unreachable as witnesses — even where such reliance was improbable. The court applied circumspection to disputed elements of their evidence that lacked independent documentary support and found their explanations regarding critical gaps in the record unconvincing.
On the disclosure difficulties that beset the Claimant — including INSABI’s automatic deletion of emails after 15 days during active litigation and the wiping of rented laptops — the court declined to draw the adverse inferences pressed by the Defendants. While accepting that the Claimant’s disclosure process had taken a seriously wrong turn from the outset, Mr Justice Richard Smith was not satisfied that there had been deliberate concealment or cherry-picking of documents. The court noted that the scale of the problems was readily detectable and that the Claimant had taken extensive and expensive remedial steps, including the restoration of two separate sets of backup materials, which yielded results inconsistent with selective suppression. The court also declined to draw adverse inferences against the Defendants in respect of their own missing Signal messages and the unavailability of key witnesses, including Mr Dávila, while noting that the Defendants’ reliance on Signal conversations to fill critical evidential gaps could only take them so far given the broader documentary record.
Key Takeaways
- An English supplier’s written representation that it was “willing and able” to deliver 1,000 specialist medical ventilators within 21 days — made without a confirmed supply chain and over a single Easter weekend — can ground a claim in fraudulent misrepresentation where the court finds the seller knew, or was reckless as to whether, it could not perform.
- Serious but non-deliberate disclosure failures by a foreign government claimant — including automatic email deletion and wiped devices — will not automatically attract adverse inferences if the court is satisfied the failures resulted from institutional incompetence rather than intentional concealment, and if remedial steps are taken.
- Courts will treat reliance on undocumented oral communications via ephemeral messaging platforms with heightened scepticism, particularly where defendants bear the burden of explaining critical absences in the documentary record and where the suggested conversations involved individuals unavailable to give evidence.
- A purported scheme to satisfy a supply obligation by re-attributing deliveries already made on a third party’s account — especially where forgery and backdating are alleged — can constitute a separate fraud vitiating any apparent performance of the original contract.
Why It Matters
This judgment is a significant post-pandemic reckoning for emergency procurement contracts entered under extreme time pressure. Governments worldwide made rapid, multi-million-dollar commitments to intermediary suppliers during COVID-19 who lacked verified supply chains, and many disputes over non-delivery or partial delivery remain unresolved. The decision provides important guidance on how English courts will assess fraudulent misrepresentation where a seller’s representations were made with unverified confidence and how the courts will weigh credibility in cases involving missing digital communications and unavailable witnesses.
The case also has broader relevance for international commercial disputes involving sovereign or quasi-sovereign claimants. The court’s nuanced treatment of the Claimant’s disclosure failures — acknowledging serious institutional failures without treating them as litigation misconduct — offers a template for how courts may balance the disclosure obligations of foreign public bodies, which operate under different records management cultures, against the principle that parties must not benefit from document loss.