MUSST HOLDINGS LIMITED v ASTRA ASSET MANAGEMENT UK LIMITED

A contractual revenue-share entitlement is determined by the objective construction of the agreement, read as a whole and in its factual and commercial context. Where a definition of introduction focuses on the investor ultimately making an investment at the introducer’s initiative, preparatory conduct before the contractual effective date may qualify if the investment is made afterwards. A contract may be novated by conduct where the parties’ objective dealings clearly show that a new entity has assumed the relevant rights and obligations. A strategy condition tied to the making of an investment does not ordinarily extinguish accrued fee rights merely because the strategy later changes. In a slander claim, the claimant must prove publication of the words complained of with sufficient precision. Hearsay may suffice in principle, but the absence of the publishee and reliable contemporaneous evidence may leave the burden undischarged.

Two claims were tried together. Musst claimed unpaid management and performance-fee revenue shares under an introduction agreement originally made with Octave, concerning investments by 2B LLC and Crown Managed Accounts SPC. It alleged that the agreement had been novated to Astra Asset Management LLP and then to Astra Asset Management UK Limited. Astra disputed the agreement’s application, the introductions, the novations, the continuing effect of the Current Strategy provisions, and relied on alleged illegality under US law and alleged disparaging statements.

Astra UK and Astra Capital International Limited separately claimed damages for alleged slander and malicious falsehood arising from statements said to have been made by Mr Siddiqi to an LGT representative in Rome. The central issues were whether the contractual fee entitlement survived the transfers and strategy changes, and whether the alleged statements were proved.

1. Contract claim allowed in substance. There was no voluntary November Arrangement limiting payment to three years or excluding earlier introductions. The contemporaneous documents and commercial probabilities supported an agreement in principle which was subsequently recorded in the written Octave Contract.
2. The definition of “Introduction” contained a second, broad limb. It applied where a prospective investor ultimately invested at the instigation or on the initiative of Musst. The relevant investment, rather than merely the first contact, was decisive. The investments by 2B and Crown were made after the Effective Date, and Musst’s substantial coordinating, technical and presentational work was sufficient. The involvement of Matrix did not prevent Musst from being an introducer, and conduct by Musst Investments LLP could be treated as delegated conduct under clause 2.2.
3. The agreement was novated by conduct first to Astra LLP and then to Astra UK. The transfer of management, the transfer of the income stream, requests that Musst invoice the Astra entity, and payment of those invoices objectively demonstrated assumption of the relevant contractual obligations. The draft replacement agreements were intended to formalise an existing arrangement. Clauses 16 and 17 did not prevent the new entities assuming obligations by a new contract or novation. Alternatively, estoppels by convention arose.
4. The Current Strategy condition was assessed when each investment was made. Once an investment qualified, a later change in strategy did not end the revenue-share entitlement before redemption or another contractual termination event. The amended and restated agreements with Astra LLP and Astra UK did not constitute new investments.
5. The illegality defence failed. The 2B Contract had not been shown to be an investment contract or security under the 1934 US Act. Any breach would have made the contract voidable rather than void, and equitable defences would have defeated rescission. A mere risk of aiding and abetting was insufficient; clause 3.5 required payment actually to contravene the law.
6. The defamation and malicious-falsehood claims failed. Astra did not prove that the alleged statements were made. The absence of evidence from the publishee, the lack of reliable contemporaneous records, delayed reporting, and contaminated hearsay evidence were decisive. The alleged admitted comments to Dr Chander were not material or repudiatory breaches and did not justify termination or forfeiture of future revenue shares.
7. Astra UK was required to provide information concerning the 2B and Crown I accounts and the fees received. Consequential orders, interest and the precise revenue share were reserved.