Bank of Tokyo-Mitsubishi UFJ, Ltd & Anor v Baskan Gida Sanayi VE Pazarlama A.S. & Ors

Unlawful means conspiracy requires a combination, unlawful conduct that is the instrumentality of the loss, and an intention to injure. Foreseeability or vague suspicion is insufficient. A participant acting on a need-to-know basis is liable only where the shared objective, known unlawful means and resulting injury are established against that participant. Permanent release of pledged goods to the owner for processing and sale may extinguish the pledge, leaving later purchasers with good title. A negligent trade reference about delivery timeliness does not make the provider liable for losses caused by an independent fraud where the loss would have occurred if the reference had been accurate.

The claimant banks provided structured trade finance to a Turkish hazelnut exporter. They alleged that members of the borrower’s family defrauded them by diverting their money and pledged hazelnuts, transferring the business to front companies, and misdirecting payments.

The banks sued Ferrero companies, their principal customer, and Mr Abidali, an intermediary and investor, alleging unlawful means conspiracy, deceit, negligence, conversion and knowing receipt. The central questions were whether Ferrero or Mr Abidali shared the unlawful objective, whether Ferrero made actionable misrepresentations, and whether Turkish-law security rights survived the release and resale of the hazelnuts.

1. Ferrero. The banks’ claims against the Ferrero defendants in conspiracy, deceit, conversion and knowing receipt failed. Ferrero did share the objective of preserving the hazelnut business and its supply chain through Aksu Gida, but the evidence did not establish that Ferrero shared an objective of defeating the borrower’s creditors or knew that the scheme necessarily injured the banks. The applicable approach required analysis of the parties’ shared objective, their knowledge of unlawful means, the necessary injury to the claimant and the loss attributable to that objective. This reflected OBG Ltd v Allan [2008] 1 AC 1 and Kuwait Oil Tanker Co v Al Bader [2000] 2 All ER (Comm) 271.
2. Mr Abidali. He joined the conspiracy on 19 January 2002. He knew that the sham documents concealed a preference, falsely represented ownership and control of Aksu Gida, and supported continued trading by an insolvent company while major creditors would remain unpaid. He therefore intended injury to the banks in the relevant sense. His liability was limited to loss occurring after he joined and required an inquiry on documents and submissions, without oral evidence.
3. Proprietary claims. Under the Turkish Civil Code, permanent release of the hazelnuts from Warehouse 2 for processing and sale extinguished the pledge. Even if the pledge had been suspended, it was ineffective in rem against later transferees. The owner retained authority to sell, so Ferrero obtained good title without needing to prove good faith. The knowing-receipt claim also failed because Ferrero lacked knowledge making retention unconscionable: BCCI (Overseas) Ltd v Akindele [2001] Ch 437.
4. Misrepresentation. The December trade reference negligently represented that deliveries were timely, judged objectively against contractual delivery periods. It was not fraudulent, and the July reference was not continuing. The claim nevertheless failed for lack of reliance, under the information-and-advice principle in South Australia Asset Management Corp v York Montague Ltd [1997] AC 191, and for remoteness. The banks’ loss was caused by the premeditated fraud, not by delivery delays.