Rasmala v Trafigura: Key Restitution and Unjust Enrichment Ruling

Rasmala, a Cayman Islands trade finance fund, made the payments to Singapore commodities trader Trafigura between August 2017 and March 2018. The payments were arranged through Farlin Energy & Commodities FZE, which used fabricated coal trading contracts to defraud Rasmala.

When the fraud emerged, Rasmala sued Trafigura for unjust enrichment, arguing the commodities trader had been enriched at its expense through fraudulently procured payments. Trafigura defended the claim by arguing it had changed its position in good faith.

The defence hinged on tripartite agreements

Central to Trafigura's defence were tripartite agreements (TPAs) that allegedly authorised applying Rasmala's payments against Farlin's existing debts. Although these agreements were based on fraudulent documentation, Trafigura argued it had relied on them in good faith and materially altered its commercial relationship with Farlin as a result.

Mr Justice Rajah accepted this argument. Despite the fraudulent origins of the TPAs, he found that Trafigura's good faith reliance and subsequent changes to its trading arrangements with Farlin were sufficient to defeat the restitution claim.

Change of position remains robust

The judgement confirms that defendants can successfully invoke change of position even where their altered circumstances stem from fraudulent documentation, provided they acted in good faith. The court took a pragmatic view, focusing on commercial reality rather than strict contractual formalities.

This creates a challenging environment for claimants in three-party fraud scenarios. The defendant's knowledge and good faith become crucial factors, and the evidential burden on claimants is substantial.

Impact on trade finance and commodities

Trade finance providers now face clearer evidence of the difficulties in recovering funds from innocent recipients, even where fraud is proven. This reinforces the critical importance of front-end due diligence rather than relying on post-fraud recovery.

For commodities traders and similar businesses, the decision provides comfort that good faith reliance on apparently legitimate commercial arrangements will generally be protected. The court's approach demonstrates willingness to assess how commercial relationships evolve in response to payment arrangements.

The case shows how change of position defences operate in sophisticated commercial disputes. Rasmala v Trafigura makes clear that innocent recipients who materially alter their position in good faith retain strong protection against restitution claims, even in complex fraud cases involving substantial sums.