In SPL Private Finance (PF1) IC Ltd and others v Arch Financial Products LLP and others [2014] EWHC 4268 (Comm), the Commercial Court held that Arch Financial Products LLP (Arch), as agent, failed to act in the best interests of its principal and Arch’s chief executive was liable for inducing the breaches of fiduciary duty.

Arch, a fund manager, was responsible for managing a number of cell companies and their assets.

Two claims were brought against Arch.

1. The first claim was initiated by 18 cells under management, including Lonscale, who alleged that Arch had breached its fiduciary duty and acted negligently making investments based upon Arch’s financial interest through obtaining illegitimate payments, as opposed to acting in the interests of the cells.
2. In addition, Lonscale claimed that Arch’s chief executive, Mr Farrell, had assisted the company to breach its fiduciary duties and provisions of the contract between the parties by overseeing the investments, despite knowing that what he was doing was wrong.

The Court upheld the claim.

A copy of the judgment is available. http://bit.ly/1xO4gmO