Manek & Ors v Wirecard AG

For summary judgment or strike out, the question is whether the claim has a realistic prospect of success. The court must avoid a mini-trial, but may conclude that a claim is fanciful where the pleaded case is contradicted by contemporaneous documents and the available evidence. In an unlawful means conspiracy claim, the claimant must show a combination, an intention to injure, unlawful acts carried out pursuant to it, and resulting loss. Blind-eye knowledge requires a suspicion that relevant facts may exist together with a conscious decision not to confirm them. Extensive due diligence does not itself establish actual or blind-eye knowledge. The claim was dismissed because the allegations against the defendant lacked a realistic prospect of success.

The claimants alleged that Wirecard AG joined a conspiracy to injure them by unlawful and fraudulent means. They said that they had sold minority shareholdings in Hermes at an undervalue and that Wirecard knew, or deliberately failed to confirm, the relevant facts when later acquiring Hermes from an investment vehicle.

Wirecard applied for summary judgment and strike out under CPR Part 24 and CPR 3.4(2)(a). The central issues were whether the pleaded facts gave rise to a realistic prospect of proving Wirecard’s actual or blind-eye knowledge, and whether the claim could properly proceed to trial.

1. Application granted. The claimants’ case had no realistic prospect of success. Judgment was entered for Wirecard and the particulars of claim were struck out.
2. The applicable test under CPR r.3.4 and CPR r.24.2 was whether the claim had a realistic, rather than fanciful, prospect of success. The court should not conduct a mini-trial. It could nevertheless reject factual assertions where contemporaneous documents contradicted them, while considering evidence reasonably expected to be available at trial and whether fuller investigation might affect the result.
3. The pleaded cause of action was unlawful means conspiracy. Its ingredients were a combination or agreement, an intention to injure, unlawful acts carried out pursuant to the combination, and loss caused by those acts. Knowledge relevant to joining the conspiracy could be actual or blind-eye knowledge. Blind-eye knowledge required suspicion that facts might exist and a conscious decision not to take steps to confirm them.
4. The allegations did not provide a realistic basis for proving that Wirecard knew the price paid by EMIF or knew of the alleged fraud. The inherent probabilities were that Wirecard’s price resulted from its strategic assessment of the Indian market, not knowledge of the earlier transaction price.
5. The due diligence evidence did not establish actual or blind-eye knowledge. The lawyers’ focus was on title to the shares. Information about earlier transfers was sought, but the price information was not treated as relevant, was not flagged in the reports, and did not generate suspicion. The claimants made no allegation that the lawyers were dishonest.
6. The court declined to decide the late-joiner issue arising from Kuwait Oil Tanker v Al Bader [2000] 2 All ER (Comm) 271, because the issue did not arise on the pleaded facts. There was no compelling reason for a trial.