Court upholds unjust enrichment claim in relation to advance payments under steel products contract

AMNS Middle East FZE -v- LIQS Pte Ltd [2025] EWHC 150 (Comm)

This was an unjust enrichment claim brought by the claimant, AMNS Middle East FZE, against the defendant, LIQS PTE LTD. 

The claimant successfully sought repayment of US$52,803,513.90, advanced as payments under a contract for purchase of steel products that were never delivered. The defendant did not appear at trial, but the Court exercised its discretion and proceeded in its absence. 

The Court analysed the case based on the presented evidence and found in favour of the claimant, determining that the basis for the advance payments had failed. The Court further rejected the defendant’s counterclaim and awarded the claimant the full amount plus interest.

The background facts 

The claimant was a UAE company and part of a joint venture between the ArcelorMittal group and Nippon Steel Corporation. 

The defendant was a Singapore company and part of the Liberty Steel Group, owned by Sanjeev Gupta of the GFG Alliance.

The parties entered into a trade advance agreement (TAA), under which the claimant would advance sums of money to the defendant against future supplies of steel or related products or service. The TAA had a 10-year term, commencing from the date of the contract and expiring on 1 December 2023.

The claimant made payments totalling US$52.8 million to the defendant and third parties, but never received any steel or related products or services in return.

The defendant argued that the advances were made in accordance with an alleged oral agreement and that the TAA was no more than a mechanism to funnel money to the Liberty Group to meet the costs of a Dollarisation Programme. The latter was a plan by Essar Steel India Limited, the claimant’s parent company, to refinance its high-cost, short-term Indian Rupee debt with US dollar debt using third party lenders. 

The case presented a number of difficulties as the defendant did not comply with the Court’s earlier order for specific disclosure of documents and did not ultimately attend trial or called any witnesses for cross-examination. The Court proceeded on the evidence available before it and considered the three categories of payments made by the claimant (a) directly to the defendant, (b) to third parties per the defendant’s request, (c) to third parties and subsequently ratified by the defendant.

Unjust enrichment 

The Court considered the elements of unjust enrichment as follows:

1. Has the defendant been enriched? 

2. Was the enrichment at the expense of the claimant? 

3. Was the enrichment unjust? 

4. Does the defendant have a defence?

The defendant was enriched by receiving the payments from the claimant. The Court clarified that enrichment is tested at the date of receipt, and it does not matter whether the defendant still retained the benefit at the time of the action.

The payments were made from the claimant’s account, making the enrichment at the Claimant’s expense.

The claimant made the payments under the TAA on the understanding that the defendant’s right to retain them was conditional upon the supply of steel or related services. Since this did not happen, the basis for the payments failed. There was no evidence that the sums should be retained by the defendant. 

The Court considered potential defences by the defendant but ultimately rejected them.

The Court rejected the defendant’s argument that the TAA was a sham and that the payments were actually made under a separate oral agreement related to the Dollarisation Programme. There was no evidence of this alleged agreement.

The defendant argued that it had changed its position by paying the money to Liberty SPVs, but the Court found this argument unpersuasive because the defendant knew these were advance payments made under the TAA and that if the steel was not supplied, it would have to repay those sums. If the defendant disbursed those sums, that would have been at its own risk. 

The claim was not time-barred under the Limitation Act 1980 as the failure of basis occurred only after the term of the TAA expired.

As to payments to third parties, the Court found that:

• Payments made to third parties at the defendant’s request were considered a benefit to the defendant because it requested that these payments be treated as advances to the defendant under the TAA. As such, the claimant was entitled to restitution of payments made to third parties in accordance with the defendant’s request.

• Where the defendant provided backdated requests or there was no request letter, the Court determined that the Defendant had ratified these payments. A document called the Balance Confirmation indicated that the defendant knew it owed the sum to the claimant and the payments were treated as advances under the TAA.

Applicable principles 

This judgment dealt with a number of useful principles:

1. Striking out a defence does not automatically lead to a default judgment:
    

   1. Default judgment can be entered if a defendant fails to file a defence within the specified time limit, as per CPR 12.3.
       

   2. Striking out a defence is a measure that the Court can take when a defendant does not attend the trial, as per CPR 39.3(1).
       

2. The defendant’s witness statements had no evidential status:
    

   1. A witness must be called to give oral evidence unless the Court orders otherwise or the statement is put in as hearsay evidence, under CPR 32.5(1).
       

   2. As the defendant did not attend the trial, it did not call its witnesses, nor did it apply for the witness statements to be admitted as hearsay evidence. As a result, the Court did not consider the witness statements as evidence.
       

   3. The claimant’s counsel was under no obligation to present the defendant’s case to the claimant’s witness, and it was not the Court’s role to cross-examine the claimant’s witness.
       

3. The Court drew adverse inferences from the defendant’s failure to provide disclosure of financial records. Specifically,
    

   1. The Court made an order for the defendant to disclose its ledgers, management accounts, annual financial statements, and audit reports prepared between 2014 and 2019, along with any documents referring to the Balance Confirmation provided to the Claimant on 25 April 2017. Despite the order, the Defendant did not provide any response or disclosure.
       

   2. The Court inferred that the defendant’s reason for not disclosing these documents was because they would not have supported its defence.
       

4. The Court considered limitation and found that the claim was not time-barred:
    

   1. The defendant argued that the claim was time-barred under s.5 Limitation Act 1980 as it was issued on 23 March 2021, and the payments were advanced to them before 23 March 2015. 
       

   2. The defendant misunderstood when the cause of action for restitution accrues in a failure of basis case.
       

   3. The Court stated that in cases of unjust enrichment due to a failure of basis, the cause of action accrues when the failure of basis occurs, not when the payments were initially made.
       

   4. In this case, the failure of basis could not have happened before the term of the TAA expired. This was because until the TAA’s term ended, the defendant could still have supplied steel or related services, thereby fulfilling their obligations under the TAA.

Comment

The decision provides useful guidance on a number of principles regarding trial absences, failure to present evidence, and striking out defences. 

It is also a valuable analysis of unjust enrichment when the enrichment does not involve direct payments to a defendant, confirming that that enrichment can occur when payments are made to a third party at a defendant’s request or when the Court is satisfied that a defendant agreed to credit those payments.