Cyberaxle Limited & Anor v Morteza Moosavi

In determining the parties to an oral contract, the court may consider the parties’ words and conduct before and after the agreement. Post-contract conduct may test competing recollections of what was agreed at the time.

Where company business is conducted informally, the court may identify the contracting party from the documentary and factual context. An alleged salary increase requires evidence of a decision made in accordance with the company’s articles.

Cyberaxle Limited and Vanessa Manasseh brought claims against Morteza Moosavi arising from cryptocurrency mining undertaken while Mr Moosavi was employed by Cyberaxle. The disputes concerned entitlement to 25% of mined cryptocurrency, ownership of 40 Ethereum transferred between digital wallets, and an alleged increase in Mr Moosavi’s salary from £48,000 to £200,000 per year.

The action was tried in the High Court. The central issues were the identity of the parties to the oral mining agreement, ownership and transfer of the Ethereum, and whether the alleged salary increase had been validly agreed under Cyberaxle’s articles.

1. Mining agreement. The oral agreement was concluded by the end of 2017 between Land Logical Dartford Limited and Cyberaxle. In identifying the parties to an oral agreement, the court could consider what the parties and appropriate witnesses said and did before and after the agreement. The subsequent documents, reporting arrangements, payment of travel expenses and Cyberaxle’s involvement supported the conclusion that Cyberaxle, rather than Mr Moosavi personally, was the contracting party.
2. Cryptocurrency ownership. The 25% share of mined cryptocurrency belonged to Cyberaxle. Mr Moosavi held it in his wallet as a matter of convenience. Digital assets attracted property rights for the purposes of the claim. His transfer of 40 Ethereum to Ms Manasseh and subsequent transfer back to himself did not entitle him to take the coins.
3. Salary. Cyberaxle adopted the Model Articles in Companies (Model Articles) Regulations 2008/3229. The directors’ decision-making provisions required a majority decision at a meeting or a unanimous written decision. No relevant minute or resolution existed. The alleged salary increase was therefore not agreed, and the overpayment from August to December 2021 was not recoverable as salary. Mr Moosavi remained entitled to his £48,000 salary for January 2022.
4. Disposition. The claimants succeeded in their claims to ownership of the cryptocurrency under the mining agreement, the 40 Ethereum and Mr Moosavi’s salary. The court was to hear counsel on the form of order.