The Truth Will Out! Judge Rules £12 Million Loan Contracts Worthless
Judges are sadly familiar with attempts to hoodwink them, but the great advantage of the litigation process is that, in the vast majority of cases, the truth will out. In a case on point, the High Court dismissed a £12 million claim after ruling a series of purported loan contracts not worth the paper they were written on.
A British Virgin Islands-registered company launched proceedings to enforce what it alleged were 17 loan contracts it had entered into with a Russian businessman in order to fund his purchase of a UK property portfolio. His defence was that the supposed contracts had been fraudulently created and that the claim against him was driven by a former business associate as a form of corporate raid.
In dismissing the company's claim, the Court noted that, without any satisfactory explanation, it had failed to comply with judicial orders requiring production of originals of the documents in dispute. The testimony of a man who claimed to be the company's beneficial owner was unsatisfactory and the Court declined to accept the truth of what he said without independent corroboration.
The company's own handwriting expert testified that there was strong evidence that the businessman's signature on five of the contracts had been forged. The evidence that a computer had been used to transpose his signature onto the other contracts was even stronger. The Court was entirely unpersuaded that the businessman had signed any of the contracts or that he had entered into them at all.