King & Spalding achieves landmark victory in decade-long $325 million fraud case

The Commercial Court dismissed all claims against the defendants, including allegations of a $325 million conspiracy involving oil trading fraud. The judgment, delivered on 22 January 2025 by Mr Justice Henshaw after a three-month trial, spans over 400 pages and represents a decisive victory for Mr Kelbrick and Attock Oil. Mr Justice Henshaw, the Judge in Charge of the Commercial Court, fully exonerated the defendants, concluding they had acted honestly throughout the transactions in question.

The claims were initially brought in February 2015 by entities within the Farahead Holdings group, owned by Norwegian billionaire shipowner John Fredriksen. Farahead alleged that two former executives of its companies conspired with other defendants, including Mr Kelbrick and Attock Oil, to orchestrate a fraud involving the trading of West African crude oil.

Key witnesses for the claimants, including Mr Fredriksen and his former partner Tor Olav Trøim, were criticised in the judgment. Mr Fredriksen’s evidence was described as “implausible,” and the court found he had “seemingly regardless of the facts, apparently convinced himself that he had been the victim of a fraud.” Mr Trøim’s evidence was deemed “unsatisfactory” due to an “unfortunate omission” on a central issue. Additionally, Paul Henry Adams, former CEO of Arcadia, declined to be cross-examined, further undermining the claimants' case.

Mr Justice Henshaw determined that there was no evidence of conspiracy and was “fully satisfied” with the honesty of Mr Kelbrick’s conduct. The court also noted the profound impact of a worldwide freezing injunction imposed on Mr Kelbrick at the start of proceedings in 2015. Dubbed the court's “nuclear weapon,” the injunction restricted Mr Kelbrick’s professional activities and caused significant personal and financial strain for nearly a decade.

With the injunction now lifted, Mr Kelbrick plans to call on the claimants’ undertaking in damages and pursue an inquiry into substantial compensation for the losses he and his family endured during the proceedings.

King & Spalding’s team included lead counsel Tom Sprange KC, supported by Sarah Walker, Charity Kirby, Liam Petch, Kate Williamson, Nadine Soliman, and Lisa Wong. Freddie Popplewell of Essex Court Chambers served as Junior Counsel.

This case underscores the significant consequences of pre-judgment freezing injunctions and the importance of judicial scrutiny in balancing such measures against potential harm to defendants. It also highlights the complexities of fraud litigation, especially in the international oil trading sector.

King & Spalding’s victory is a testament to their expertise in handling high-stakes commercial disputes and reaffirms their position as a leading global law firm in complex fraud and asset recovery cases.