COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
Mr John L Powell QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RICHARDS
LORD JUSTICE RIMER
| Mrs Daad Sharab
|- and -
HRH Prince Al-Waleed Bin Talal Bin Abdal-Aziz Al-Saud
Kenneth Craig (instructed by TLT Solicitors) for the Respondent
Hearing date : 26 February 2009
Crown Copyright ©
Lord Justice Richards :
"During this conversation, the Prince told me that he would pay me commission for effecting an introduction to the President and arranging the deal, but we did not discuss how much commission I would be paid.
The Prince instructed me not to start to negotiate the sale of the aircraft until the new plane was ready. That was likely to be a considerable period of time as he had a number of personal requirements and extra equipment to be added. He said he would sent Mr Alaeddin to agree a contract with me. I left Cannes on or about 8 August and returned to London."
"On 25 August 2001, the Prince sent Mr Alaeddin after me to London to meet with me and discuss the proposed sale of one of the Prince's aircraft to Libya for the President, as the Prince had informed me he would do. We met in a London restaurant, Ayoush, James Street, London W1. The sole purpose of Mr Alaeddin's visit, so far as I was aware, was to discuss this deal and agree the terms on which I was to act. Mr Alaeddin told me that the Prince would pay me US$2 million commission if I could sell either one of the aircraft to Libya for the President and US$1 million commission if I could secure an investment in Project Toushca. No prices were discussed at this stage as to how much the Prince wanted for each aircraft as it was not yet known which one, (if at all), would be able to be sold. The Prince wanted to obtain an investment of US$20 million in Project Toushca. As Mr Alaeddin represented the Prince, I considered this to be a firm offer, which I accepted verbally. When I did so I was acting in a personal capacity and not through TAWCO, as indeed was the position in all of my dealings with the Prince. Nevertheless, I told Mr Alaeddin that I would still like to hear confirmation of this commission directly from the Prince."
"The Prince told me that the aircraft actually cost him US$90,000,000 (although in a letter from the Prince to the President, he subsequently stated that it cost him US$135,000,000). I wanted to improve the terms which we had agreed, because I knew how much money I would be making for the Prince if I could broker this sale, especially bearing in mind the use the Prince had already had from the aircraft, and so I requested that the contract between us be varied so that I would receive a margin of the sale price in the proposed transaction. The Prince told me that, if I could sell the aircraft for between US$100 million and US £110 million he would pay me the US$2 million commission (which had previously been agreed) but that if I was able to negotiate a sale at above US$110 million, I could keep anything above that US$110 million. He also confirmed that if I could persuade Libya to invest US$20 million in Project Toushca my commission … in respect of this investment would be the US$1 million (which, as I have already stated, had been agreed previously).
I suspect that the Prince thought that the most that would ever be agreed for the plane was US$110 million and that it would be very difficult for me to achieve more than this; consequently he offered such sum as I could obtain in excess of this as a way of incentivising me to get the full US$110 million for him. I asked for written confirmation of the commission but the Prince insisted that his word should be enough and I did not press the matter as I had not had problems with receiving commission from the Prince previously and Mr Alaeddin had also assured me that the payment would be made when we had met in London."
"We then went on to discuss where my full commission would be paid and I informed the Prince that the money should be paid into one of my bank accounts held in London. By this time, I had decided that I wanted this money to be paid into Dury's account in London [that is, the account of the offshore company which owns her London apartment] in order to ensure my daughter's future, for the reasons I have already set out above. The Prince said I should send him details of the account once he had received the remainder of the purchase price."
The deputy judge's analysis
"(5) a claim is made in respect of a contract where the contract:
(a) was made within the jurisdiction;
(b) was made by or through an agent trading or residing within the jurisdiction;
(c) is governed by English law …
(6) a claim is made in respect of a breach of contract committed within the jurisdiction."
As to the standard of good arguable case, the deputy judge referred to Canada Trust v Stolzenburg (No.2)  1 WLR 547, 555, where Waller LJ stated that "good arguable case" reflects in this context that one side has a much better argument on the material available; and Cherney v Deripaska  EWHC 1530 (Comm), where the discussion of later authorities casts no doubt on the correctness or usefulness, for present purposes, of the approach in Canada Trust.
i) First, the Prince's favoured forum, Libya, was not a jurisdiction in which a court might be able to exercise jurisdiction over him as of right, at least in relation to the subject-matter of the present dispute. The exercise of jurisdiction over him by the Libyan court would be just as "exorbitant" (in the sense used by Lord Diplock in Amin Rasheed) as the exercise of jurisdiction over him by an English court.
ii) Second, if Mrs Sharab were to pursue her claim in Libya, she would need to persuade that court to grant her permission to serve process on the Prince out of that jurisdiction. The Prince had resisted the present application on the basis that Libya was the appropriate forum, but it had not been submitted on his behalf that he would voluntarily submit to that jurisdiction. It might be that if he succeeded in resisting the present application on the basis that Libya was the appropriate forum, a Libyan court would not be tolerant of his contending otherwise; but that was not clear.
iii) Third, it was not suggested, and could not credibly be suggested, that it was not reasonable for Mrs Sharab to have started proceedings here and not to have started them in Libya or elsewhere. The initiative having been taken by her to start proceedings here and to incur the expense of so doing, nothing was achieved consistent with the interests of the parties and the ends of justice in depriving her of the advantage of that initiative and resulting in her having wasted time and costs.
iv) Fourth, there was nothing in the intrinsic nature of the dispute that favoured one forum over another. It was a relatively simple and straightforward contractual dispute, turning mainly on issues of fact. The judge rejected any suggestion that the trial of the action would engage any unusually difficult issues or any issues that of itself made this jurisdiction less appropriate than Libya.
v) Fifth, London was a convenient venue for Mrs Sharab, the Prince and Mr Alaeddin. The case would turn mainly on their oral evidence and their credibility. The documentary evidence was relatively limited. It was submitted for the Prince that the contention that Mrs Sharab did not broker the ultimate transaction "depends in large part" on the evidence of those involved in negotiations in Libya, principally government officials, who were not compellable in this jurisdiction but who would be subject to the Libyan courts. On the material before him, the deputy judge found that submission less than convincing. He also observed that no mention of a causation defence or the need to call Libyan government witnesses in support was made in Mr Baker's statements.
vi) Sixth, he rejected the submission for the Prince that the fact that he, Mrs Sharab and Mr Alaeddin were "all Middle Eastern" was relevant to the choice of jurisdiction. In so doing he referred to geographic, ethnic, cultural and religious considerations.
vii) Seventh, as to various connecting factors invoked, he accepted that the fact that Mrs Sharab had an arguable case that the contract was made here and the breach occurred here favoured the choice of this jurisdiction. In so far as Libya was the place of characteristic performance, that factor favoured Libya as a forum; but that was not to be taken as more potent than other factors.
viii) Eighth, he rejected the submission that in evaluating the appropriate jurisdiction much weight was to be attached to the fact that "the underlying transaction", namely the sale of the Airbus, had multiple connections with Libya, whereas connections with England and Wales seemed limited to the choice of law and arbitration venue in the settlement agreement. The alleged commission contract and the aircraft sale agreements were wholly separate transactions. They were interrelated to the extent that entitlement to commission pursuant to the former contract was predicated on conclusion of the latter agreements (and payment pursuant thereto); but apart from that factor, which was itself neutral in relation to the issue of choice of jurisdiction, there was nothing intrinsic to the aircraft sale agreements themselves that was of relevance to that choice.
ix) Ninth, on the issue of enforcement, he was unpersuaded by a submission for Mrs Sharab that her prospects of enforcing a judgment in her favour in Saudi Arabia would be poorer if the judgment were that of a Libyan court rather than a judgment of an English court. He was persuaded, however, that the ease of enforcement in this country was a factor clearly favouring this as the appropriate forum for the determination of Mrs Sharab's claim; and the enforceability of such judgment had obvious relevance if the Prince had assets here. In reaching that view, he accepted that there was no statutory basis for the recognition of a Libyan judgment in this country, and he considered that the prospects of Mrs Sharab being able to invoke successfully the common law jurisdiction to enforce a Libyan judgment in this country were at best theoretical.
The issues in the appeal
Contract made within the jurisdiction: CPR 6.20(5)(a)
"I think that the correct analysis is that the contract was made in London and amended in Dallas; not that it was made partly in London and partly in Dallas, or elsewhere. The 1967 amendment could not stand alone; it merely amended certain provisions of the 1960 agreement. The position would, of course, have been different if the 1967 amendment had operated as a discharge of the 1960 agreement and substituted a fresh agreement. The foregoing analysis is also in accord with what Denning LJ appears to have thought in Entores Ltd v Miles Far East Corporation  2 QB 327, 334, where he preferred the view that an agreement made in one country and amended in another should be regarded as not having been made in the latter country."
Kerr J went on to say that, even if that analysis was wrong, the contract in question had been "substantially" made within the jurisdiction; but it is unnecessary to look any further at that aspect of his reasoning.
Breach of contract committed within the jurisdiction: CPR 6.20(6)
"85. I conclude that Mrs Sharab has a good arguable case that, arising from the August 2003 telephone conversation with the Prince, the place of payment of her commission was agreed as London and not elsewhere and that the alleged contract was further varied so as to impose that obligation. An alternative argument open to her and of like strength is that it was an implied term of the alleged contract and/or the alleged contract as varied that her commission would be paid at a place to be nominated by her and that in the August 2003 telephone conversation London was nominated by her. On either argument, breach consisting of non-payment occurred within this jurisdiction."
Appropriate forum: the Prince's stance as to submission to the jurisdiction in Libya
i) The appeal should proceed in the normal way as a review of the deputy judge' decision. It is plain that the interests of justice do not require a rehearing.
ii) The normal approach on a review is to consider whether the decision of the lower court was or was not wrong on the basis of the material that was before that court. I refer to "material" so as to include not only the evidence placed before the court but also any undertaking given or offered to the court: contrary to Mr Craig's submission, I doubt whether the giving or offer of an undertaking through counsel can strictly be regarded as a matter of evidence.
iii) The court has a discretion whether to receive fresh evidence or to permit a party to rely on a matter not contained in the notice of appeal. It seems to me that the discretion should apply to the acceptance of an undertaking in much the same way as to the admission of fresh evidence properly so called. The court must of course seek to give effect to the overriding objective of doing justice, but in that respect the pre-CPR cases, including Ladd v Marshall, remain of relevance and indeed of powerful persuasive authority: see, for example, Hamilton v Al-Fayed (No.4)  EMLR 15, at -, and Al-Koronky v Time-Life Entertainment Group Limited  EWCA Civ 1123, at -.
iv) The Prince had the clearest of opportunities to give or offer an undertaking at the time of the proceedings before the deputy judge. The explanation given by Mr Pymont shows that a considered decision was taken not to do so. It was decided instead to submit that no such undertaking should be required and that no adverse inference should be drawn from the omission to offer one. It was open to the Prince to take that position, but he must have appreciated the risk that it might be rejected by the court and that no subsequent opportunity might be afforded for an undertaking to be given. That is the position in which he found himself when the deputy judge ruled against him. Even then he adhered to the same position for the purposes of the appeal, allowing the appeal to proceed on that basis until the conclusion of the hearing and seeking to change his position only after the hearing as a result of the exchanges that had taken place during the hearing. I do not think that the Prince should be permitted to reverse, so late in the day, a tactical position deliberately adopted for the purposes of the proceedings below and the appeal.
v) Moreover, the position adopted by the Prince on the question of an undertaking had an important effect in shaping the arguments before the deputy judge and on the appeal. To allow an undertaking to be given now might not have as broad an effect on the arguments as suggested by Mr Craig, but it would produce a situation materially different from that considered by the deputy judge and would alter the character of the case sufficiently to make it necessary, in the interests of fairness, to give the parties an opportunity to address fresh argument to the court, with a strong likelihood that a further hearing would be needed. The exercise in which this court would then be engaged would strictly remain one of review of the deputy judge's decision, but the difficulty of determining the impact of the changed circumstances on the deputy judge's decision would make it in practice very similar to carrying out a fresh exercise of discretion. I do not think that such a departure from the normal approach is at all appropriate in this case. The further delay that would be caused to the ultimate determination of the appeal is an additional factor telling against it.
Appropriate forum: the deputy judge's decision
Lord Justice Rimer :
Lady Justice Arden :