Winsome Diamonds case: Jatin Mehta invokes 50-year-old case involving Maharani of Baroda

Jatin Mehta (2009 photo via Wikimedia Commons)

The latest round of the legal battle between diamantaire Jatin Mehta and Standard Chartered Bank and Grant Thornton, on the former’s application that India, and not England, is the appropriate jurisdiction for the proceedings, has concluded after a two-day hearing in the high court. The Mehtas have challenged the English court’s jurisdiction on grounds of forum non conveniens (inconvenient forum), but interestingly references were made to another case originating in the late 1960s involving the Maharani of Baroda and an international French art dealer.

Mehta and his family members face allegations of using UK registered companies to launder proceeds of a fraud involving $1 billion of gold which arose due to default on repayments to 15 Indian banks in 2013. Over a decade after the default, the Mehtas are subject to a worldwide freezing order, but are seeking to halt the proceedings on the ground that the dispute has “everything to do with India" and has no meaningful connection with England.

This has the echo of the case decided by the court of appeal in London in 1972 wherein influential art dealer Daniel Wildenstein was served with a writ while he was in England just for a day at the Ascot races. Just like the Mehtas, Wildenstein had resisted the efforts to “Anglicise" the case, characterising it as oppressive and vexatious, but ultimately the Maharani of Baroda had triumphed.

In 1965, the Maharani of Baroda, who resided in France, bought a painting from Wildenstein for £32,920. It was supposed to be the painting of a female allegorical figure ‘La Poesie’ by the 18th century master Francois Boucher. It was a highly-sought-after work. Wildenstein belonged to a family famous for dealing in artefacts – his grandfather had started the business which had a presence in New York, Paris and London. In London he had an office in New Bond Street – incidentally, Nirav Mody too had an outlet there – and was a regular visitor to England. The painting he sold to the Maharani was certified by his London office to be authentic and valuable. The painting was brought to London to be sold in an auction by Sotheby’s. To the Maharani’s surprise, the auction house said it was worth £750 as it was not by Boucher but from someone in his circle.

The Maharani approached the UK court seeking return of the money she paid for the painting along with damages. It took nine months for the writ, filed in 1969, to be served on Wildenstein. In June 1970, he was at the Ascot Races for a day where he was handed the papers. Wildenstein asked the court to set aside the writ on the ground that it was frivolous, vexatious, an abuse of process and caused him inconvenience. He also advanced the argument that France and not England was the correct jurisdiction.

The two lower courts agreed that the serving of the writ was oppressive as Wildenstein was in England for a short visit. Besides, the correct jurisdiction would be France where the transaction took place and where both the parties ordinarily resided. The Maharani went to the court of appeal which ruled in her favour in March 1972.

One of the reasons advanced by the Maharani for not proceeding in French court was that the case would take much longer to come there. Another reason put forth for choosing English jurisdiction was that under French law she had no right to subpoena the expert witnesses. The two experts who had told her that the painting was not a real Boucher were not willing to give evidence and the only way to get them to do that would be by subpoena. Francis Watson, surveyor of the Queen’s art treasures, and Christie’s both expressed their views that it was not a Boucher. There was also a different procedure in France regarding the expert witnesses to give evidence in court.

The court of appeal emphasized the international nature of the case and pointed out that the real controversy was whether the painting was fake or not, i.e., was it done by Boucher or not. The determination of this question of fact had nothing French about it. The court of appeal said the petition might be bad form but was nevertheless legal. Besides, the defendant had to show that the stay must not cause an injustice to the plaintiff. The three-judge bench constituting the court of appeal also refused permission to challenge the ruling in the House of Lords.

In coming to this conclusion, Lord Denning, the lead judge, remarked that though the Maharani lived in France, she was connected with English social life and spoke English. Since 1949, the Maharani had lived in England and the Republic of Ireland although she was now a regular resident of France. Similarly, Wildenstein too was a regular visitor to England, knew English, and both were referred to as “citizens of the world”. Wildenstein and the Maharani also had a common passion for racing.

Years after the court of appeal judgment, there is near unanimity among law scholars that the Baroda case is the starkest example of forum shopping – wherein a particular jurisdiction is chosen where a favourable outcome is likely. The Baroda proceedings in the court of appeal is now seen as a manifestation of the unwarranted paternalistic view of the English judges. The case involved a French resident suing another French resident who was in England to attend a quick sporting event for a contract made in France under French laws.

Lawyers for Grant Thornton were quick to point out that the case against the Mehtas is not the one like the “classic case of Maharanee of Baroda v Wildenstein.” Though the Baroda case was won by the Maharani, it is no longer considered to be good law, which is why submissions by counsels for Grant Thornton stated that the Mehta family have made a life for themselves in England for a number of visits. The family’s presence in the UK has not been denied by the Mehtas who say that it is in India where multiple proceedings are on, and it is only fair that the English case must be stayed, and fought in India, along with other related cases. That decision has to be made by Justice Edwin Johnson who asked some pointed questions during the arguments and at one stage reminded the competing counsels to not spar in the court.

The Maharani led a colourful life traversing through the Indian sub-continent, Europe and the US. In 1943, she married Pratap Singh Gaekwad, the Maharaja of Baroda, after divorcing her first husband. Since 2012, the Mehtas too are known to have moved around the world till they settled down in England.

A decade after the default, the Mehtas are now feeling the heat, but are hoping that the English court rules in their favour, just like it did for the Maharani of Baroda 50 years ago, although the relief sought by them is opposite to what was sought by the vivacious princess.