Trader Saurabh Mehrotra has been jailed for a year in a case relating to a crude oil deal that ended up in London arbitration.
The son of London-based shipowner Ravi Mehrotra was sent to Pentonville prison in London in April on the order of a High Court judge after failing to provide enough documentation in the case.
In an October hearing, Mehrotra had pledged to repay $6m for which he acted as guarantor, following a court order last June.
Mehrotra is being pursued by Hong Kong’s Heritage Lane Oil & Gas Development and United Arab Emirates-based financier PTPY.
The legal row arose from a February 2020 deal by ZAD Investing to sell a cargo of crude to Heritage Lane. Mehrotra said in the October hearing that he controls ZAD.
A source close to PTPY said a VLCC and a suezmax were subsequently chartered, or were intended to be chartered, to ship Kuwaiti oil from Kuwait, but the cargo was never delivered.
On 17 December 2021, the High Court ruled Mehrotra was in breach of an information order to produce all relevant documents in the case.
A new court order reveals that on 22 February, the defendant served a witness statement which “was in purported compliance” with the order.
“Mr Mehrotra, however, did not produce any documents,” Mrs Justice Cockerill said.
On 18 March, Mehrotra sent a number of documents to PTPY’s solicitors to meet the deadline, but these were judged insufficient.
The judge was unimpressed by attempts to provide WhatsApp messages from one of Mehrotra’s banks.
Missing messages?
The order said a provided screenshot demonstrated that there must have been more messages from the bank.
“An explanation is given that there are no more WhatsApp messages because all the WhatsApp messages were effectively set to automatically delete,” Cockerill said.
“But that does not explain the continued existence of these two particular messages, which logically ought to have something in between them and certainly there ought to be further text messages.
“So it has on its face … every sign of being a disingenuous answer. This is effectively a situation where Mr Mehrotra has cried wolf too often.”
A long history of failing to comply
The judge described the case as having a long history of failures to comply with court orders by Mehrotra.
He received three-and-a-half months as a punitive sentence and eight-and-a-half months as a coercive term.
This means he will serve the three-and-a-half months but can avoid a further stretch by complying with the disclosure order.
In a statement to the court at the October hearing, Mehrotra said: “PTPY had requested me to arrange the delivery of a cargo from a sanctioned country.”
He added that one of the tankers involved “had its own issues with breakdowns and things like that, which resulted in the start of the chaos”.
Asked where the money had gone, Mehrotra responded that he would have to get a statement from his bank.
He said the money was used to “procure the structure that would allow the delivery for the crude oil which included the chartering of ships”, as well as sundry other service fees.
