QPR owner Mittal in court battle to recover £1bn from rival billionaire
TWO of the richest families in Britain are locked in a billion pound legal battle over a controversial iron ore contract that has driven a rift between the two business partners.
Lakshmi Mittal, who co-owns Queens Park Rangers and has a £67million mansion in Kensington, West London, is chasing £1billion in damages from a business linked to the billionaire Ruia family. Family head Ravi Ruia also has a residence in the UK and business interests and offices here.
The case, which has been thrust into the open by High Court papers in London, centres on a deal between the Ruia family’s Essar Steel business and ArcelorMittal, the world’s largest steel maker, where Mittal is chairman and chief executive.
The contract was terminated in 2016 and the following year, ArcelorMittal was awarded $1.3billion (£997 million) in damages in an arbitration award.
The High Court heard that this award ‘remained unsatisfied’ and there appeared ‘no prospect’ that Essar Steel was going to pay ArcelorMittal. The judge, Richard Jacobs, said that Essar had acted in ‘bad faith’ by concealing documents and warned there was a ‘serious risk’ the company would try to hide assets.
Essar is alleged to have hidden assets through a series of bogus internal transactions.
ArcelorMittal is separately trying to acquire Essar Steel, which has been in bankruptcy proceedings since 2017. In January this year, ArcelorMittal applied for and got a worldwide freezing order against Essar Steel and other branches of the group, as well as disclosure orders against various company officials.
Judge Jacobs said a squad of computer specialists and lawyers who had subsequently conducted a search of Essar’s London offices – just a short distance from the Ritz hotel – had acted legally. Essar company emails showed a ‘deliberate withholding or concealment of documentation’, the judge concluded. The court heard that Prashant Ruia, who is son of Essar’s co-founder Shashi, was a ‘key individual’ with Essar Steel, and one of the conglomerate’s beneficial owners.
Judge Jacobs said that there were parallel court actions in Mauritius, the Cayman Islands and Canada, where a ‘largely rejected evidence’ was presented by Prashant.
The Mittal family is fifth on The Sunday Times rich list, with a net worth of £14.6billion. Lakshmi, 67, and his family, own 37 per cent of Luxembourg-based ArcelorMittal and he has lived in London since 1995. He has paid more than £300million for three houses in Kensington Palace Gardens, adjacent to the home of Royals including the Duke and Duchess of Sussex.
Ravi and brother Shashi Ruia are worth an estimated £4.3billion. The family are based in India and control Essar Global, which is a conglomerate with interests in steel, oil, shipping, gas, communications and logistics.
Essar Oil owns Ellesmere Port refinery. The 1,900-acre site in Cheshire employs more than 900 staff and supplies 16 per cent of UK road transport fuels.
Though Judge Jacobs did not suggest improper conduct by Ravi or Shashi, he stated that ‘members of the Ruia family’ had shown ‘conduct (that) has led me to conclude that there is a serious risk of dissipation of Essar Steel’s assets’.
He upheld the freezing order and the disclosure orders.
A spokesman for Essar said: ‘Essar does not agree with many of the factual findings in the ruling, however it recognises that the orders remain in place and will continue to ensure that it adheres to their terms.’
The spokesman said the Essar Global holding company was not liable for the award against Essar Steel.
An ArcelorMittal spokesman declined to comment.