C2 Capital Ltd v Infinity Particles Ltd

• Jurisdiction: British Virgin Islands
• Judge: Mithani J
• Judgment Date: 28 November 2024
• Judgment citation (vLex): [2024] ECSC J1128-1
• Docket Number: CLAIM NO. BVIHC (COM) 2023/0040
• Court: High Court (British Virgin Islands)

Between:

C2 Capital Limited

Claimant

and

Infinity Particles Limited

Defendant

CLAIM NO. BVIHC (COM) 2023/0040

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

COMMERCIAL DIVISION

Appearances:

Mr Paul Chaisty KC, with him Mr Adam Hinks, and Mr Renell Benjamin of Walkers for the Claimant

Mr Stephen Moverley Smith KC, with him Mr James Noble, Ms Amelia Tan, and Mr Ryan Chong of Carey Olsen for the Defendant

EXPRESSIONS AND ABBREVIATIONS USED IN THIS JUDGMENT

1 Mithani J[AG.]: In this judgment, unless otherwise stated or the context otherwise requires, the following words and expressions shall have the following meanings assigned to them:

“the Agreements” shall mean “the Letter Agreements” or any other agreement (oral, or otherwise) found by this Court to have been concluded between the Parties;

“the Amount Claimed” shall mean the sum of US$9,159,564.74, excluding interest, claimed by the Claimant against the Defendant in the Claim, or any part of that amount;

“Chih” shall mean Cheung Chih Tin;

“Chih's witness statement” shall mean Chih's witness statement dated 16 July 2024;

“the Claim” or “this Claim” shall mean the claim made by the Claimants against the Defendant in this action;

“the Claimant” or “C2” shall mean C2 CAPITAL LIMITED;

“the Overarching Agreement” or “the Co-Investment Arrangement” shall mean the agreement allegedly reached between the Parties (or between Chih and Jenkin in their personal capacity) to explore joint investment opportunities between the Claimant and the Defendant or between Chih and Jenkin;

“the Court” or “this Court” shall mean this Division of the High Court of the Eastern Caribbean Supreme Court, based in the territory of the Virgin Islands, hearing the Claim;

“the Defendant” or “Infinity” shall mean INFINITY PARTICLES LIMITED;

“the Disputed Investments” shall mean the investments that are the subject of the Claim, known as “Kayak Investment Partners Offshore Fund Ltd” (or “Kayak”); “Global Uprising, PBC” (or “Cotopaxi”); “Appier Holdings Inc” (or “Appier”); “Loyal Valley Capital Advantage Fund LP1” (or “Loyal Valley”); “JAND Inc (or “Warby Parker”) and “CRCM Fintech Fund, LP” (“CRCM”). The reference to an individual disputed investment shall be made by describing the name of the disputed investment followed by the word “Investment”, for example, the “Kayak Investment”;

“the FSMA 2000” shall mean the UK Financial Services and Markets Act 2000;

“the investment opportunities” shall mean opportunities for investment alleged by Chih to have been introduced by him (whether in his personal capacity or on behalf of the Claimant) to Jenkin or the Defendant and shall include any one or more of such opportunities;

“the Investment Period” shall mean the period during which the Disputed Investments were made, being the period from roughly 2015 to 2021;

“the investments” shall mean the investments made by the Defendant in relation to the investment opportunities and shall include any one or more of such investments;

“JAMM ACTIVE” shall mean JAMM Active Limited. A helpful chart is provided in Bundle D2, Vol.1, p. 1496 of how this company fits within the structure of the company or companies owned by Jenkin and/or Chih or their associates. So far as the beneficial ownership of JAMM Active and the other companies in the chart is disputed by the Parties, the dispute is not materially relevant to my determination of the Claim.

“Jenkin” shall mean CHIANG, Wei-Ta 江韋達, also known as JENKIN CHIANG;

“Jenkin's witness statement” shall mean Jenkin's signed but undated witness statement filed with this Court on 17 July 2024;

“Jerry” shall mean Chi, Shen-Tien, an in-house financial analyst employed by JAMM Active from June 2021 to October 2021. He was reassigned and employed by Jowett from October 2021 to October 2022.

“Jowett” means Jowett Investment Co. Limited, a company within the JAMM Group, controlled by Jenkin;

“the Letter Agreements” or the “side letters” shall mean the side letters purportedly entered into between the Parties relating to the Disputed Investments. The reference to an individual letter agreement relating to a particular disputed investment shall be made by describing the Disputed Investment followed by the words “Letter Agreement”, for example, “the Kayak Letter Agreement”;

“the Parties” shall mean the Claimant and the Defendant;

“the proceedings” or “these proceedings” shall mean the proceedings that form the subject of the Claim;

“the SIBA 2010” shall mean the Securities and Investment Business Act 2010; and

“witness statement” or “written evidence” shall mean any witness statement made, or affidavit sworn, by any person in the Claim, and shall include any document signed by any person which is allowed by the Court to stand as a person's written evidence in the Claim.

2 In addition, in this judgment, unless otherwise stated or the context otherwise requires:

• (a) any reference to “the Agreements” shall be to any one or more agreements found by the Court to have been concluded by the Parties;

• (b) any reference to “the Disputed Investments” shall be to any one or more Disputed Investments;

• (c) any reference to “the Letter Agreements” shall be to any one or more Letter Agreements;

• (d) where a passage in a court judgment or a publication is cited, the passage will not include any footnote references contained in it; and

• (e) the reference to Chih or Jenkin shall be to those individuals personally or, to any company or companies owned or controlled by, or associated with, them (including in the case of Chih, the Claimant and, in the case of Jenkin, the Defendant).

3 The other expressions that I will use in this judgment will be obvious from the description I give to them in the course of this judgment.

THE CLAIM

4 In the Claim, as now formulated in the Amended Statement of Claim dated 27 August 2024, the Claimant seeks the payment of US$9,159,564.74 (i.e., the Amount Claimed), together with interest on that amount, from the Defendant.

5 The Claimant alleges that, in or around 2015, Chih and Jenkin agreed, over a series of oral discussions, to explore joint investment opportunities. They eventually reached a binding oral agreement in the matter. This agreement (referred to in these proceedings, and defined herein, as the “Overarching Agreement” or the “Co-Investment Arrangement”) was to the following effect:

• (a) the Claimant, through Chih, would look for suitable financial opportunities, for the Defendant, through Jenkin, to invest in;

• (b) the Claimant would act as “financial advisor” to the Defendant. The evidence of Chih was that the expression “financial advisor” in the Agreements was not being used by him in any technical sense, but simply to denote that he would look out for financial opportunities for the Defendant to invest in;

• (c) the Claimant and the Defendant would share equally in any net profits from the investments, after the payment to the Defendant of a return on the capital it invested, in the sum of 2% per annum of the amount invested;

• (d) if any investment made a loss, the net loss made on the investment would be shared equally by the Parties 1; and

• (e) each investment would be the subject of separate and distinct letters (“the Letter Agreements”) to be signed by the Claimant and the Defendant to reflect the Overarching Agreement and provide a record of the terms upon which each relevant investment was made.

6 In accordance with the Overarching Agreement, a standard Letter of Agreement (“Letter Agreement”, also referred to in these proceedings as a “side letter”) was prepared and agreed upon between the Claimant and the Defendant in relation to each investment opportunity taken up by the Defendant.

7 The Letter Agreements are not all identical. However, a typical or standard Letter Agreement was in the following terms:

“This letter confirms that C2 Capital Limited (Advisor) will serve 2 as the financial advisor to Infinity Particles Limited (Infinity) related to [ ] for the investment in [ ]. Infinity will promptly execute all necessary documents and fund the investment amount on a timely basis. In consideration of the advisory role, Advisor will be responsible for 50% of any losses and will share 50% in any gains beyond 2% IRR resulting from the Investment. Thus, any distribution from Investment will go 100% to Infinity until the cumulative amount (taking into account all prior distributions made or deemed made to Infinity) distributed would provide Infinity with an Internal Rate of Return of 2%. Thereafter, any distribution from Investment will go 50% to Advisor as consideration. If Investment fails to return 100% of contributed capital, Advisor is obligated to pay Infinity 50% of the

realized loss after fully accounting for all distributions to Infinity from Investment.”

8 Between the Investment Period, i.e., 2015 and 2021, some 50 investments were made by the Defendant in investments alleged to have been introduced by the Claimant to the Defendant. Each investment was the subject of a Letter Agreement in the terms (or substantially the terms) set out above. They included the following investments (“the Disputed Investments”), which form the subject of the Claim:

• (a) Kayak Investment Partners Offshore Fund Ltd (“Kayak”), made on or about 3 March 2016, in which a total sum of US$5,000,000 was invested by the Defendant. The net profit from the investment was US$744,341.63, of which the Claimant's share was US$372,170.82.

• (b) Global Uprising, PBC (“Cotopaxi”), made on or about 13 February 2017, in which a total sum of US$500.000.53 was invested by the Defendant. The net profit from the investment was US$460.280.33, of which the Claimant's share was US$230,140.17.

• (c) Appier Holdings Inc (“Appier”), made on or about 17 August 2017, in which a total sum of US$250,017.00 was invested by the Defendant. The net profit from the investment was US$579,453.56,...