The property entrepreneur Robert Tchenguiz dropped his multimillion-pound lawsuit against accountancy firm Grant Thornton and several other defendants, hours before he was due to give evidence in the case.
Mr Tchenguiz had accused Grant Thornton, two of its partners and a lawyer who worked for the failed Icelandic bank Kaupthing of conspiring to get the UK’s Serious Fraud Office to open an investigation against him by feeding it dishonest allegations.
The accountancy firm had been a “major source of information” for the SFO, Mr Tchenguiz’s lawyer told the court last week, and the anti-fraud agency had swallowed the allegations “hook, line and sinker”.
All the defendants vigorously denied the claims.
Mr Tchenguiz and his brother Vincent were arrested in 2011 and had their homes and business premises searched as part of an SFO investigation into Kaupthing, which collapsed in 2008. Grant Thornton acted as the bank’s liquidator.
But the SFO shut down its probe into the brothers in 2012, with a judge severely criticising the way the agency had gone about preparing search warrants, and in 2014 the pair received £4.5m in damages and an apology.
Years of civil litigation followed and in the current lawsuit, which was brought in 2015, Mr Tchenguiz was seeking hundreds of millions of pounds in damages. He himself had been expected to enter the witness box on Monday.
But in a packed courtroom in London’s Commercial Court, proceedings were delayed by several minutes before the businessman’s lawyers presented a draft order withdrawing the claim.
Stephen Rubin QC, for Mr Tchenguiz, told the judge that his client and Kaupthing had reached an agreement during the course of the morning, as a result of which “the claimants in this action shall withdraw all allegations and release all claims in this action”.
The agreement is between the entrepreneur and the bank, rather than the defendants. Mr Tchenguiz has also agreed to pay the defendants’ costs, with the amounts yet to be agreed. Other terms of the settlement were confidential.
The trial was adjourned until Wednesday to reach final agreement on discontinuing the case.
In a statement, Mr Tchenguiz said the settlement with Kaupthing “means that the long legal saga which has dominated my life for years is almost over”.
He added he was “satisfied with the financial element of the settlement” and that, in withdrawing his claims against the other parties, “I am finally able to get on with my life and rebuild my business interests”.
Adrian Beltrami QC, for Grant Thornton, told the judge that Mr Tchenguiz “has always known there was no case, it should never have been brought and . . . it has been a disgrace”.
The allegations had been “unrestrained in their scope and in their ferocity” even though the “entire case was “implausible to the point of incredible”.
Johannes Johansson, the lawyer who worked for Kaupthing, said he welcomed the abandonment of the “ill-conceived and baseless” claim. He added: “I am pleased that after years of litigation, I am now entirely vindicated.”
Grant Thornton said the withdrawal “of all of their allegations today, just as Mr Tchenguiz was about to give evidence, is a total capitulation and fully vindicates the position that we and the other defendants have maintained throughout this litigation. These claims should never have been brought.”
A similar lawsuit brought by Vincent Tchenguiz was settled a year ago when Kaupthing agreed to make “certain payments” to the property tycoon and the Tchenguiz Family Trust, with the amount and terms of the settlement kept confidential.
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