Judge Rules £12 Million Loan Contracts Worthless After Truth Comes Out

12th March 2020 by

Judges are very familiar with attempts to hoodwink them. However, due to the litigation process, the truth does come out in the vast majority of cases. In a case on point, the High Court dismissed a £12 million claim after ruling a series of purported loan contracts not worth the paper they were written on.

A British Virgin Islands-registered company launched proceedings to enforce what it alleged were 17 loan contracts it had entered into with a Russian businessman. These loans were made to fund his purchase of a UK property portfolio. His defence was that the supposed contracts had been fraudulently created. He also argued that the claim against him was driven by a former business associate as a form of corporate raid.

In dismissing the company’s claim, the Court noted that, without any satisfactory explanation, it had failed to comply with judicial orders requiring production of originals of the documents in dispute. Moreover, the testimony of a man who claimed to be the company’s beneficial owner was unsatisfactory. As a result, the Court declined to accept the truth of what he said without independent corroboration.

The company’s own handwriting expert testified that there was strong evidence that the businessman’s signature on five of the contracts had been forged. The evidence that a computer had been used to transpose his signature onto the other contracts was even stronger. The Court was entirely unpersuaded that the businessman had signed any of the contracts or that he had entered into them at all.

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