ARCELORMITTAL NORTH AMERICA HOLDINGS LLC v RAVI RUIA & Ors

On a strike-out or summary judgment application in an unlawful means conspiracy claim, the court must apply the relevant procedural threshold without conducting a mini-trial. A realistic prospect is more than an arguable case, although the court may consider evidence reasonably expected at trial. Particulars must identify a reasonable factual basis for individual participation and, where deception is alleged, satisfy the strictures applicable to fraud pleadings. Those requirements do not create a blanket rule that a director’s status cannot support an inference of participation. Its significance depends on the pleaded and evidential context, including the director’s roles, knowledge, involvement in relevant transactions and expertise. Where those matters provide a sufficiently arguable case, the applications should be refused.

ArcelorMittal Holdings, as assignee, claimed up to US$1.5 billion in damages for unlawful means conspiracy. It alleged that the defendants stripped Essar Steel of assets and prevented payment of an ICC arbitration award. The Sixth Defendant, Mr Gujadhur, applied under rule 3.4(2)(a) of the Civil Procedure Rules 1998 to strike out the claim, alternatively under rule 24.2 for summary judgment.

The application challenged the pleading and evidence concerning Mr Gujadhur’s roles as a director and accountant across Essar Group companies, the alleged waiver of a US$1.5 billion receivable, and transfers of Essar Steel’s UAE assets. The judgment records earlier decisions by Henshaw J ([2020] EWHC 740 (Comm)) and Butcher J ([2020] EWHC 3349 (Comm)). The central issue was whether the claim against Mr Gujadhur was inadequately pleaded or had no realistic prospect of success.

Both applications were dismissed. The claim against Mr Gujadhur was permitted to proceed.

1. Under rule 24.2 of the Civil Procedure Rules 1998, summary judgment requires the claimant to have no realistic prospect of success and there to be no compelling reason for trial. The court applied the principles in Easyair Ltd v Opal Telecom Limited [2009] EWHC 339 (Ch), King v Stiefel [2021] EWHC 1045 (Comm) and The Football Association Premier League Limited v PPLive Sports International Ltd [2022] EWHC 38 (Comm). The court had to avoid a mini-trial but could consider evidence reasonably expected at trial.
2. Under rule 3.4(2)(a), the strike-out inquiry was confined to whether the pleading disclosed reasonable grounds. Pleaded facts were assumed to be true and evidence about the claim was inadmissible. The court applied Allsop v Banner Jones Limited [2021] EWCA Civ 7 and Josiya v British American Tobacco plc [2021] EWHC 1743 (QB).
3. The applicable law of unlawful means conspiracy was stated by reference to Kuwait Oil Tanker Co SAK v Al-Bader (No 3) [2000] 2 All ER (Comm) 271. Loss caused by unlawful action pursuant to a combination to injure by unlawful means is actionable, even though injury need not be the defendant’s predominant purpose. A defendant need not perform every unlawful act, know every act, or know that the means were unlawful if the conduct fell within the common design. Barclay Pharmaceuticals Ltd v Waypharm LLP [2012] EWHC 306 (Comm) and The Racing Partnership Limited v Sports Information Services Ltd [2020] EWCA Civ 1300 supported those conclusions.
4. Dishonesty was not an essential element, but a reasonable basis for alleging individual participation had to be pleaded. Where deception was alleged, the strictures applicable to fraud pleadings were engaged. The court nevertheless recognised the need for a generous approach where secret conduct made pre-disclosure evidence difficult, applying ED&F Man Sugar Ltd v T&L Sugars Ltd [2016] EWHC 272 (Comm) and the approach discussed in Portland Stone Firms Ltd v Barclays Bank plc [2018] EWHC 2341 (QB).
5. There was no blanket prohibition on relying on directorship as support for an inference of participation. ED&F Man Sugar Ltd v T&L Sugars Ltd was distinguished as a fact-specific decision. Mr Gujadhur’s multiple directorships, involvement in relevant board matters, signature of accounts and assignments, financial expertise, and continued position on Essar Steel’s board provided a realistic basis for inferring knowledge and involvement. Knowledge acquired in an earlier capacity could remain relevant when the accounts were later restated.
6. The pleaded allegations included alleged breaches of sections 61(2), 62(5)(b), 68(4) and 143(1)(c) of the Mauritius Companies Act 2001. The court did not determine those alleged breaches but held that they formed part of a sufficiently arguable unlawful-means case. It was unnecessary to plead control against an actual director, and the claimant’s motive in pursuing Mr Gujadhur was not a proper basis for disposing of an otherwise viable claim.

No appellate history is stated. The judgment records earlier interlocutory decisions: Henshaw J dismissed an application for freezing relief ([2020] EWHC 740 (Comm)), and Butcher J dismissed the claim against Mr Seifert and determined amendment issues ( [2020] EWHC 3349 (Comm)).