HDR GLOBAL TRADING LIMITED v GEORGI SHULEV & Anor

A settlement agreement is enforceable where its commercial terms can reasonably be given meaning, even if the document lacks strict legal precision. A clause requiring delivery of requested assets may extend to requests made after the agreement, provided the request falls within the contractual definition and the relevant commercial context. A separate obligation to release and waive claims concerning an account may operate independently of prior performance obligations. Where a party opens and operates an account as agent for an undisclosed principal, the principal may enforce the account contract if the agency requirements are satisfied. The court may determine entitlement by examining the parties’ objective conduct, the source and use of the assets, and the contractual terms.

HDR Global Trading Limited brought stakeholder proceedings concerning a cryptocurrency trading account held in the name of Georgi Shulev. Nexo Capital Inc claimed that the account was opened and operated by Mr Shulev as its agent and that the cryptoassets were corporate assets. Mr Shulev claimed personal entitlement to at least some of the account and its contents.

During the proceedings, Mr Shulev and Nexo entered into a settlement agreement. The dispute before the court concerned the enforceability and construction of that agreement, whether Mr Shulev had completed the steps required to earn the first payment, whether the account had to be released to Nexo, and, alternatively, which party was entitled to the account and assets.

1. Settlement agreement. The Settlement Agreement was binding. The court did not determine the separate misrepresentation and duress issues concerning the Confidentiality Agreement and Release of Claims Agreement because the available evidence and submissions were insufficient.
2. Clause 3. The definition of “Assets” was sufficiently certain. It covered assets in relation to which Nexo made a bona fide claim that they were corporate assets, that Mr Shulev had accessed them while working for Nexo, and that they remained to some degree in his possession or control. “Any requested Assets” included assets requested after the agreement was concluded. The erroneous time stated in the clause did not prevent enforcement; payment was due forthwith after successful receipt of the requested assets.
3. Clause 4. The obligation jointly to notify HDR that the account would be released to Nexo, and that Mr Shulev waived rights and claims to it and its assets, was freestanding. It was not conditional on prior performance of clause 3. Mr Shulev and Nexo had been obliged to give that notification since execution of the agreement.
4. Performance. Mr Shulev had transferred the Nexo Tokens but had not transferred nine further cryptocurrency values requested by Nexo. Those assets belonged to Nexo and were within Mr Shulev’s access or control. He remained obliged to provide them, subject to deducting the value of the first instalment from the assets transferred. Nexo had not ceased payments for a reason outside clause 10, so clause 11 had not operated to release Mr Shulev from obligations under clause 8.
5. Alternative entitlement. Applying the principles concerning undisclosed principals in Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199, Nexo was entitled to enforce the account agreement. Mr Shulev had acted on Nexo’s behalf within his actual authority. The account’s purpose, the source of the funds, its use by Nexo personnel, the corporate email address and contemporary communications established that it was a corporate account. Nexo therefore had agency and fiduciary rights in relation to the account and title to the cryptoassets.
6. The court concluded that the dispute over entitlement had been compromised by the Settlement Agreement and directed that further relief be addressed after hearing from the parties.

First-instance decision. The judgment does not state any prior appellate decision.