A court has ordered the Quintar Kimura Special Credit Fund to repay an investor just over US$4mn for a sub-participation in a loan to a troubled Chilean copper mine.
The bulk of the award reflects what a London judge determined was the market value of US asset manager Yieldpoint Stable Value Fund’s sub-participation in the loan at the agreed maturity date of March 31, 2022.
Rosalind Phelps, sitting as a deputy High Court judge, said she assessed the fair market value of the participation at maturity was US$3.1mn and found “Kimura was in breach of contract in failing to pay it on that date”.
Kimura was also ordered to pay US$731,431 in interest and US$250,000 in legal costs, a separate court order showed.
The ruling, handed down on July 1, is the latest development in a dispute that has already generated two earlier judgments and raised wider questions about sub-participation agreements.
Yieldpoint originally paid the fund, then known as the Kimura Commodity Trade Finance Fund, US$5mn in April 2021 to participate in a fully funded US$22.5mn pre-export facility Kimura had extended to borrower MTV, the operator of a copper mine in Chile.
MTV began defaulting on its obligations to lenders in late December 2021, according to court rulings, and Kimura in turn halted payments to Yieldpoint, after which the latter began legal proceedings.
In 2023, a court found Kimura had to repay Yieldpoint’s full US$5mn investment because the deal between the pair specified a maturity date.
That decision was overturned on appeal, but not before it triggered alarm in the trade finance sector because of its implications for widely used sub-participation agreements.
Crucially for Yieldpoint, the appeals court found that although Kimura did not have to repay Yieldpoint’s original US$5mn investment in full, it was still required to pay the market value of the participation at the date of maturity.
The two parties then disagreed on how to calculate the market value, prompting Yieldpoint to launch another legal claim that culminated in a three-day trial last month.
Both sides relied on expert evidence. Yieldpoint’s expert valued the participation at between US$4.09mn and US$5mn, while Kimura’s expert said it was between US$200,000 and US$300,000.
Justice Phelps found in favour of Yieldpoint’s analysis, which she said was supported by the analysis of Kimura’s own valuation committee at the time.
Kimura Capital, previously a high-profile non-bank provider of trade finance, closed down in 2024. The previous year, it announced it had formed a joint venture with Hong Kong’s Quintar Capital, which subsequently assumed the role of fund manager of the main commodity trade finance vehicle.
Approached for comment on the ruling, Quintar Capital said it no longer manages the fund. A note on the website of Macquarie Bank said JTC Special Situations Advisors Limited was appointed as investment manager in January. JTC and a lawyer representing the fund did not immediately respond to requests for comment. Yieldpoint declined to comment.
