THE HON. MR. JUSTICE PICKEN:
- There are a number of applications before the Court, as follows:
(1) an application by the Fourth Defendant, Mr Amir Hirani ('Mr Hirani'), to set aside a worldwide freezing order granted by Bryan J on 5 December 2017 (as varied by the order of Nicholas Vineall QC on 19 December 2017, and as further varied by the order of Patricia Robertson QC on 7 March 2018) ('the Freezing Order') or to vary the Freezing Order in relation to what has been described as the 'Electronic Devices Order';
(2) an application by the Fifth Defendant, Inflight Global Pte Ltd ('Inflight'), to set aside service out of the jurisdiction and for a declaration that the Court has no jurisdiction to hear the claims against it, together with an application to set aside the Freezing Order or to vary it as regards the Electronic Devices Order;
(3) an application in similar terms by the Sixth Defendant, Epcon Ltd ('Epcon'); and
(4) an application by the Claimant, Gulf Air B.S.C. (C) ('Gulf Air'), for continuation of the Freezing Order and amendment of the Electronic Devices Order which forms part of that order.
- The hearing of these applications took a whole day and there were as many as eight bundles before the Court at that hearing. There are, therefore, a number of issues which need to be addressed in this judgment. First, however, I should say something about the underlying claim in order that the context is understood.
Factual background in brief
- In very brief outline, on 18 April 2015 Gulf Air entered into a contract (the 'IFE Contract') for the provision of In-Flight Entertainment services with an entity described as "Global One Media" ('GOM') in circumstances where, unbeknown to Gulf Air, GOM did not exist. In fact, the services under the IFE Contract were provided not by GOM but by the First Defendant, One Inflight Ltd ('One Inflight'), and the similar sounding but different company, the Seventh Defendant, Global One Media Ltd ('Global One'). It is Gulf Air's case that the IFE Contract was a vehicle for fraud in that, put very simply, it says that two of its former employees, the Second Defendant, Mr Mohamad El Assaad, and his wife, the Third Defendant, Mrs Sara Abdallah Abdala, conspired against it, in breach of their employment contracts and/or fiduciary duties, to ensure that Gulf Air awarded the IFE Contract to GOM when, in fact, personally benefitting from the IFE Contract through One Inflight and Global One, their corporate vehicles. One Inflight, Mr El Assaad, Mrs Abdala and Global One are all represented by DLA Piper LLP and, for this reason, were described at the hearing before me as the 'DLA Defendants'.
- As Bryan J pithily put it when giving his short judgment on the original application for the Freezing Order:
"4. In summary, the case relates to what is said to be a fraud committed by the respondents against the applicant in the period 2014 to 2017 pursuant to which the respondents, at a time when the second respondent, that is Muhammad Assad, who was employed by the applicant and in a position of influence in relation to awarding relevant contracts, allegedly conspired to procure, and did procure, the applicant, which is a well-known Middle Eastern airline, to award a relevant contract with an entity, a non-existent entity, described variously, or known as Global One Media Limited (that is GOM). GOM's former registration documents are said to be, and have prima facie been shown to me, to be forgeries, as has been confirmed by the Register of Companies with the use of the barcode of a different company; and an approximation of the name of other companies that are, and at all material times have been, defunct.
5. The first respondent, One Inflight Limited, however, does exist and is an English corporate company. It was incorporated in November 2014, owned 51 per cent by the second respondent, 49 per cent by his wife, the third respondent, both of whom were directors. Shortly thereafter, and certainly by 9 January 2015, it is deposed that the fourth respondent had acquired 15 per cent of the shares in the first respondent. The fourth respondent signed a tender document, which is at the heart of this case, on behalf of GOM, the non-existent company, on or about 20 January 2015, and his name appears as a signatory for GOM as a relevant officer of the awarded company.
6. The background to this matter is that Gulf Air wished to issue tenders for the provision of in-flight entertainment content services and in October 2014 instigated this process. The personal behalf of the applicant who did this was the second respondent, as a senior manager in in-flight products. He is the person who issued the relevant documents, the invitation to tender, decided who will be invited, disqualified the lowest bidder, vetted the tenders and ostensibly carried out due diligence.
7. In the event, the contract for the provision of these services was awarded to GOM on 18 April 2015. GOM was defined as a company and its registration number, that is the false registration number, was given in the tender documents. It appears that GOM itself trades from the trading address of the first respondent, initially 9 Hendon, Ashford, TW15 1SS UK, which was also the registered office of the first respondent, One Inflight Limited, from its incorporation until 9 July 2015. Therefore it is said a pattern emerges as the first respondent's business address changed.
8. The invoices raised by GOM were paid by the applicant. They were all personally provided by the second respondent to the applicant using variously the first respondent's address from time to time. Seven of the invoices, which the second respondent personally approved for payment totalling US$1.5m, were actually processed before the awarded contract was effective. The contract was for a fixed term of four years and the contract price was US$22.1m for that four-year period, although within two years and two months Gulf Air paid GOM, in fact the first respondent as it transpires on the affidavit of evidence before me, US$22.1m. The payments were all directed by the second respondent through accounts either held by the first respondent in the UK, a branch of HSBC in Ashford, or by a connected company in Singapore, the fifth respondent, Inflight Global PTE, which it is said is owned by the six respondent, a Seychelles company, EPCON Limited.
9. Essentially the fraud is alleged to have been along these lines. The second respondent manipulated the tender process, of which he was in control, wearing his hat as a senior manager in in-flight products for the claimant inserted the first respondent into the supply chain, hiding the fact by a pretence that GOM was an active trading company with no connection to him or his wife, who was the third respondent. The first respondent's address appears on all the invoices. He then passed and approved all of the invoices and procure payment thereof. He never sought nor had any approval or authority to authorise payments that were in excess of the contract itself.
- Whilst acknowledging that the fraud alleged against the Defendants is denied by each of the Defendants, it is worthwhile expanding a little on Bryan J's summary by reference to how the case has been put, most recently in the draft Amended Particulars of Claim and in Mr Cogley's skeleton argument prepared for the purposes of the hearing before me. Mr Cogley highlighted certain particular matters, starting with a document which Mr El Assaad produced in October 2014 identifying parties which would be specifically invited to tender, entitled "CONTENT AND SOFTWARE MEDIA PROVIDER REVISION 01 OCTOBER 13". At that date, One Inflight did not exist since it was not incorporated until the following month, on 25 November 2014. Nor, as previously mentioned, was there in existence at that time a company or entity known as "Global One Media" (or GOM). Accordingly, in identifying those companies in Section VII ("Suppliers to Invite") of that document, Mr El Assaad was naming at that stage non-existent companies and companies which, although Gulf Air (Mr El Assaad's employer) did not know it, were apparently intended to be set up by Mr El Assaad.
- As to that, having been incorporated the following month, either straightaway or soon after, One Inflight had three shareholders, namely Mr El Assaad, Mrs Abdala and Mr Hirani who until July 2015, when he ceased to hold any shares, had a not insubstantial 15% shareholding. Even as to GOM, and leaving to one side the fact that this was not a company which was ever, as such and in the event, incorporated, the relevant certificate of incorporation having been seen to be a forgery, the fact again remains that Gulf Air would not have known that this was an entity which was connected to Mr El Assaad or his wife. Mr Cogley went on to point out, furthermore, that there is nothing to indicate that anybody held any shares in GOM, so making it very curious (Mr Cogley would, in fact, suggest more than merely that) that the IFE Contract came to be entered into by Gulf Air with GOM at all. This, in circumstances, too, where Mr El Assaad prepared a report on 4 February 2015 in which he had this to say under the heading "Technical Evaluation Global One Media":
"Global One Media is a limited company that has been working with Inflight entertainment, Software development and packaging for over 14 years. They are world-established in the industry of software designers and ancillary revenue services. They have substantial experience in Content and Software design, management and services.
In point 1: They published their profit margin 6.7% and by keeping an open book, Gulf Air would work through a transparent data exchange that will enable us not only to improve the quality but to accurately decrease the cost when any new offer or package is available.
In point 2: Global One Media has confirmed that they would not increase the cost throughout the life of the contract. With this statement which would be included in the contract and through an open book policy, we will be able to acquire better packages in cost and quality.
In point 3: All suppliers are rejecting to support Gulf Air through their insourcing of the production to Bahrain; except for Global One Media. They have ensured in their statement that we would support Gulf Air with Vendor Service Bulletin and help set up racks for insourcing.
Mr Cogley submitted that this shows Mr El Assad evaluating a tender submitted by a non-existent 'front' company connected to him.
- The point goes further, however, Mr Cogley would suggest, since, when corresponding with Gulf Air for the purposes of tendering, emails were sent to Gulf Air by Mr El Assaad not in his own name but using the pseudonym "Edward Grant" from a GOM email address. So, for example, on 9 December 2014 a Mr Al Ghasra, on behalf of Gulf Air, emailed Edward Grant inviting GOM to participate in the tender, seemingly unaware that he was, in fact, corresponding with Mr El Assaad (and a company, GOM, which did not exist). Subsequently, on 16 March 2015, Mr Ali Matooq, on behalf of Gulf Air, wrote to Edward Grant congratulating him (and GOM) on having been successful with the tender. Mr El Assaad's response the same day, using the name Edward Grant, was to say that "We at Global One Media are pleased to be serving Gulf Air team with this contract". Indeed, this type of correspondence continued after the IFE Contract had been entered into, with Mr El Assaad, on occasion, in effect, writing to himself as, for example, on 17 May 2015 when, copying Mr Matooq in, Edward Grant emailed Mr El Assaad starting with the salutation "Dear Mohamed" and signing off with "Ed".
- Mr El Assaad has admitted in the DLA Defendants' Defence that he is, indeed, Edward Grant and, furthermore, that his wife, Mrs Abdala, who makes the same admission, also used a pseudonym in emails, namely 'Eliana Fischer'. Examples of correspondence involving the use of those false names are certain exchanges in early June 2015, and so shortly after entry into the IFE Contract, involving Warner Brothers. These exchanges were revealed only when Mr El Assaad's laptop computer, the laptop computer which had been issued to him by Gulf Air and which he had been ordered to deliver up pursuant to the Freezing Order, became available to Gulf Air's legal team. They seem to show, however, that Mr Hirani knew that Mr El Assaad, and presumably also Mrs Abdala, were pretending to be other people. Specifically, the relevant email chain begins with an email from Mr Hirani, in which he described himself as "Chief Commercial Officer, Global One Media", to a Mr Jeff Crawford at Warner Brothers. In that email, amongst other things, Mr Hirani complained about having to arrange a conference call with Warner Brothers outside of office hours, saying this:
When CA starts its day, our business day has ended and it seems a bit strange for a content supplier to demand that Global One Media personnel make ourselves available to WB outside of our office hours but that WB can't be flexible and provide the same courtesy. Ed and I have been flying between London and Bahrain and it's been difficult to set up a suitable time for all that falls within our respective office hours.
Mr Crawford's response the same day, 3 June 2015, was to the point:
"No need for a call tomorrow, per your E-mail below you are backing out on an already agreed upon deal with a list of fairly lame excuses of why you never came back to us to discuss. I am sorry but Warner Bros. just does not do business with companies that act in this fashion. It sounds like you have a lot more important things to do than setting up a long-term business relationship with Warner Bros. I have never in 25 years of working in the business been treated like you have treated Warner Bros. in this whole process. Warner Bros. has no interest in any other deals with your company going forward. Warner Bros. Is looking for long term partnerships with companies as we are and will be the premium content company in the world."
That email was sent not only to Mr Hirani but also (like Mr Hirani's own email to which it was a response) to Edward Grant and Eliana Fischer. Mr Crawford then re-sent the email, this time copying in Mr El Assaad, obviously oblivious to the fact that Mr El Assaad and Edward Grant were the same person. Edward Grant's response (again copying in Mr El Assaad), on 4 June 2015, was to say this:
"We have been operational flat out for GF launch. We do not, unfortunately, have time to spare. Moh'd has been very nervy on GOM team to get the cycle prompt, the delay = hefty compensation. We will make it, no doubt about it. We have good studios like yourself who are backing us up, were the team, vast lab and most importantly, we have the support from GF management, increasing budget and a long unbreakable contract. Partnering with GOM = long relationship with GF with gold pot of contracts. GF is our crucial creative contract, We intend and we will make it the finest content in realm and not only in the region.
We will argue with GF at present the aftermath of this email. GOM and GF would enjoy working with WB but it needs to be within CCO commercial strategy, GF's obtaining content based on their HDD and GOM team completing the work on time."
Mr El Assaad then replied to that, using his own name rather than his pseudonym, the same day, saying this:
"Just landed to this issue. I am troubled by WB actions and will have a chat with GOM team today.
I personally want WB as a brand, BUT it is GOM decision and honestly they are doing a great job so far
GOM have received the complete trust from the executive management and board of GF with the lineup and design changes.
Please call me anytime when you have time and we will discuss all areas of this project. However, I am oblivious to the contract details between you and GOM. Amir, CCO, makes the decision since he is accountable to delivery of the cycle and will be penalized for delay.
That email did not copy in Mr Hirani, nor for that matter Edward Grant and Eliana Fischer. Mr El Assaad did, however, forward the email to Mr Hirani (and to himself as Edward Grant and his wife as Eliana Fischer), only for Mr Hirani to reply saying:
"This is good thanks but please resend it to Jeff with Amir Hirani as GOM in copy just like Jeff did. He needs to know I know where GF stands. PLEASE. This is important."
- Mr Cogley's submission was that these exchanges demonstrate that Mr Hirani was closely involved at this stage in the subterfuge that appears to have been engaged in by Mr El Assaad. Although, therefore, Mr Pearson was inclined to suggest during the course of his oral submissions that these exchanges are of little relevance, it seems to me that that is an overly ambitious stance for him to adopt. Likewise, in my view, the fact that Mr Hirani did not himself take part in the technical evaluation of GOM carried out by Mr El Assaad is likely to be of little consequence. Although, as Mr Pearson pointed out, in the draft Amended Particulars of Claim the case brought against Mr Hirani entails, at least in part, a misrepresentation allegation based on that technical evaluation, and so it will be for Gulf Air ultimately to make out that case, it is artificial to approach the overall case advanced by Gulf Air against Mr Hirani other than as a case in fraud, whether conspiracy to defraud or dishonest assistance.
- As demonstrated by the fact that no challenge to the jurisdiction has been put forward by Mr Hirani, or at least maintained since an objection was originally made, there is, at a minimum, a 'good arguable case' against Mr Hirani in these respects. That case entails, as Mr Cogley also highlighted, other what might most charitably be described as curiosities, such as the fact that, although he accepts that he arranged for Inflight to be incorporated having been asked by Mr El Assaad to do this, Mr Hirani has given no explanation in the Defence which he has served as to the circumstances in which, or the reason why, that request by Mr El Assaad came to be made. This seems to me, as Mr Cogley submitted, to be a significant omission. The more so, given the relevant timings since it should be borne in mind that the IFE Contract was signed by Mr Hirani in his capacity as Chief Commercial Officer of GOM (a non-existent company) on 18 April 2015 and, according to the DLA Defendants, it was only a few days before this that Mr El Assaad made the discovery that the GOM certificate of incorporation was a forgery. They plead as follows in paragraph 36 of their Defence:
"Mr El Assaad did not become aware that the GOM certificate of incorporation was a forgery until on or around 14 April 2015 when a company registration agent, Duport Associates Limited, informed him that GOM was not a registered company and the certificate of incorporation was invalid."
They then go on to plead in paragraph 36.1, as follows:
"Initially Mr El Assaad agreed with Mr Hirani that a new company incorporated in Singapore for tax purposes should take the place of GOM and Global One Media PTE Limited was registered by Mr Hirani in Singapore on 5 May 2015 for this purpose."
- Global One Media PTE Ltd was, I should explain, the original name of Inflight, the Fifth Defendant. Mr Cogley submitted that this was no accident: that it was decided, as part of the conspiracy alleged by Gulf Air, that the Fifth Defendant should be given a name similar to the non-existent GOM so that it could be said that it was always intended to be a party to the IFE Contract, only for the Seventh Defendant (Global One) then to be incorporated the following month, on 22 May 2015 and ultimately (but, perhaps, not completely) to perform the IFE Contract. I shall return to how the cases are put by Gulf Air against Inflight and, indeed, Epcon (the Sixth Defendant) when addressing the challenges to the jurisdiction which each of those companies make.
- Turning to the procedural background, these proceedings were commenced on 5 December 2017, the same day as Gulf Air applied for, and obtained, the Freezing Order from Bryan J. The Freezing Order having been obtained, a hearing then took place before Nicholas Vineall QC on 19 December 2017. This was the 'return date' hearing, the upshot of which was that the Freezing Order was continued, albeit with certain modifications including as to the Electronic Devices Order as I shall come on to explain later.
- A further hearing subsequently took place before Patricia Robertson QC on 7 March 2018, by which time Gulf Air had served its Particulars of Claim (on 19 January 2018), the DLA Defendants had served their Defence (on 16 February 2018) and Mr Hirani (but not Inflight and Epcon which have yet to serve a Defence given that they have challenged the jurisdiction) had served his Defence on 6 March 2018. The hearing before Patricia Robertson QC was mainly (if not exclusively) taken up with the position of the DLA Defendants as far as the Freezing Order is concerned. Although the DLA Defendants did not seek to suggest that the Freezing Order should be discharged, they nonetheless took issue with various aspects and certain modifications were made as regards them as a result (including, again as I shall come on to explain, as regards the Electronic Devices Order). There was insufficient time, in the circumstances, at the hearing before Patricia Robertson QC, to deal with the Freezing Order insofar as it relates to Mr Hirani, Inflight and Epcon, hence the hearing which took place before me.
- In the interim period between the hearing before Patricia Robertson QC and the hearing before me, Gulf Air has not only served a Reply to Mr Hirani's Defence and a Reply to the DLA Defendants' Defence (both on 4 April 2018) but have also produced a draft Amended Claim Form and draft Amended Particulars of Claim. In the latter, in particular, Gulf Air has sought to elaborate upon its initial pleas based on material obtained as a result of the return of Mr El Assaad's (Gulf Air-issued) laptop computer pursuant, as will appear, to the Electronic Devices Order made (as part of the Freezing Order) by Bryan J on 5 December 2017. The proposed amendments to the Claim Form and the Particulars of Claim have been agreed by Mr Hirani, Inflight and Epcon, as well as, at least as I understand it, by the DLA Defendants also.
- I come on, then, against this background, to address the various applications which have been made.
Mr Hirani's application to discharge the Freezing Order
- The first application which falls to be considered is Mr Hirani's application to discharge the Freezing Order. Mr Hirani's position is that Gulf Air has failed to demonstrate any real risk of dissipation as far as he is concerned and that, accordingly, the Freezing Order should be discharged as against him.
- Mr Pearson drew attention in the context of Mr Hirani's discharge application to The Niedersachsen  1 WLR 1412 in support of the uncontroversial submission that a freezing order should be granted only where there is a real risk of unjustified dissipation of a respondent's assets. Mr Pearson went on to refer to National Bank Trust v Yurov and others  EWHC 1913 (Comm). In that case, having at  reminded himself by reference to authorities such as Thane Investments Ltd v Tomlinson  EWCA Civ 1272, TTMI Ltd v ASM Shipping Ltd  EWHC 2666 (Comm),  1 Lloyd's Rep 401 and Congentra AG v Sixteen Thirteen Marine SA  EWHC 1615 (Comm),  2 Lloyd's Rep 602, that "the purpose of a freezing order is not to provide the claimant with security but to restrain a defendant from evading justice by disposing of assets otherwise than in the ordinary course of business in a way which will have the effect of making itself judgment proof", Males J went on at  to summarise the applicable principles as being the following:
"a. The claimant must demonstrate a real risk that a judgment against the defendant may not be satisfied as a result of unjustified dealing with the defendant's assets.
b. That risk can only be demonstrated with solid evidence; mere inference or generalised assertion is not sufficient.
c. It is not enough to rely solely on allegations that a defendant has been dishonest; rather it is necessary to scrutinise the evidence to see whether the dishonesty in question does justify a conclusion that assets are likely to be dissipated.
d. The relevant inquiry is whether there is a current risk of dissipation; past events may be evidentially relevant, but only if they serve to demonstrate a current risk of dissipation of the assets now held.
e. The nature, location and liquidity of the defendant's assets are important considerations.
f. Whether or to what extent the assets are already secured or incapable of being dealt with is also relevant.
g. So too is the defendant's behaviour in response to the claim or anticipated claim."
- It was Mr Pearson's submission that, having regard to these principles, Gulf Air should be regarded as having failed to establish a real risk of dissipation. Specifically, Mr Pearson submitted as regards principles (a), (b) and (c) that there is in the present case insufficiently "solid evidence" demonstrating the required risk of dissipation. He submitted, indeed, that there is instead "mere inference or generalised assertion". It is not sufficient, Mr Pearson went on to submit, for Gulf Air merely to rely upon (at this stage necessarily unproven) allegations of fraud. That is made clear by Males J's principle (c). I do not, for my part, however, consider that Males J should be taken as saying that the fact that a case in fraud has been brought ought to be disregarded. On the contrary, as Males J himself made clear it is necessary "to scrutinise the evidence to see whether the dishonesty in question does justify a conclusion that assets are likely to be dissipated".
- That is the approach which was also adopted by Flaux J (as he then was) in Aquarius Holdings Ltd v Barber and others  EWHC 2806 when he described the position at  as being as follows:
"Mr Barden relied on the decision of the Court of Appeal in Thane Investments Ltd & Ors v Tomlinson & Ors  EWCA Civ 1272 and in particular the judgment of Peter Gibson LJ who suggests that even in a case of fraud, the mere fact that there is fraud does not of itself lead to a freezing injunction being granted. I dealt with the case of Thane v Tomlinson in some detail in my judgment in Madoff Securities International Ltd v Raven & Ors  EWHC 3102 (Comm), reported at  2 All ER (Comm) 634 at paragraphs 163 and following, and I pointed out that there were two earlier decisions of the Court of Appeal which were not cited in Thane, possibly because the defendant was unrepresented, which suggest to the contrary that, in an appropriate case, the mere fact that sufficiently serious allegations of fraud are made may be sufficient to justify the conclusion that there is a risk of dissipation."
Indeed, as Flaux J went on to explain, in saying what he did in the Madoff Securities case, the analysis of Patten J (as he then was) in Jarvis Field Press v Chelton  EWHC 2674 (Ch) as to how the Court should approach the Thane Investments case is helpful:
"It is necessary to have regard to the particular respondents to the application and to ask oneself whether, in the light of the dishonest conduct which is asserted against them, there is a real risk of dissipation. As Peter Gibson LJ made clear in the passage I have already quoted, the court has to scrutinise with care whether what is alleged to have been dishonesty justifies the inference. That is not, therefore, a judgment to the effect that a finding of dishonesty (or, in this case an allegation of dishonesty) is insufficient to found the necessary interference. It is merely a welcome reminder that in order to draw that inference it is necessary to have regard to the particular allegations of dishonesty and to consider them with some care."
- I myself adopted this approach in PJSC Tatneft v Bogolyubov & others  EWHC 2816 (Comm), a case which went to the Court of Appeal on a different aspect, in which I stated as follows at :
"As to the principle to which Males J makes reference at (c), Tatneft accepts that, following the Thane Investments case, not every general allegation of dishonesty will be sufficient to justify an inference that there is a real risk of dissipation. It was submitted, however, correctly in my view, that it is appropriate to take into account the underlying allegations made against a defendant."
In this respect, I referred to VTB v Nutritek  EWCA Civ 808,  2 Lloyd's Rep 313 in which Lloyd LJ said this at :
"We agree with Peter Gibson LJ that the court should be careful in its treatment of evidence of dishonesty. However, where (as here) the dishonesty alleged is at the heart of the claim against the relevant defendant, the court may well find itself able to draw the inference that the making out, to the necessary standard, of that case against the defendant also establishes sufficiently the risk of dissipation of assets. That is supported by two earlier Court of Appeal decisions, not cited in Thane Investments. These are Norwich Union v Eden (25 January 1996 unreported) and Grupo Torras SA v Al Sabah (21 March 1997 unreported). Both of them were cited by Flaux J in his judgment in Madoff Securities International Ltd and others v Raven and others
. Those decisions are not inconsistent with what Peter Gibson LJ said in Thane Investments v Tomlinson, but they put it into context, and their context is a good deal closer to that of the present case."
I then went on to refer to the Madoff Securities case and what Flaux J had to say in that case about the Thane Investments case, before observing that the Court of Appeal in the VTB case agreed with Flaux J's approach at , as follows:
"We agree with those observations by Flaux J. On that basis it seems to us that it would have been right for the judge to take into account a finding of a good arguable case that Mr Malofeev had been engaged in a major fraud, and that he operated a complex web of companies in a number of jurisdictions, which enabled him to commit the fraud and would make it difficult for any judgment to be enforced. We would regard such factors as capable of providing powerful support for the case of a risk of dissipation."
- I explained in the PJSC Tatneft case at  that, given the nature of the case which was advanced against the defendants, "in particular the complexity and scale of the Oil Payment Siphoning Scheme which is alleged", the requisite risk of dissipation had been made out. It seems to me that the same conclusion is reached in the present case also for a number of reasons. In short, like Males J in the NBT case itself at , I consider that there is "an air of unreality" about Mr Pearson's submissions to the contrary. Although it is disputed by each of the Defendants (including, therefore, Mr Hirani, Inflight and Epcon), the case advanced against them, which is either accepted (by the DLA Defendants and Mr Hirani) to have sufficient prospects for jurisdictional purposes or which (as I shall explain when dealing with Inflight's and Epcon's jurisdictional challenges) I consider has such prospects, entails allegations that the Defendants redirected not inconsiderable amounts of money belonging to Gulf Air as part of a conspiracy to defraud Gulf Air. That conspiracy is alleged to have involved the use of subterfuge and, if Gulf Air is right, the use of corporate structures (in the form of Inflight and Global One, the Seventh Defendant) seemingly established as a means of perpetrating the frauds alleged. Indeed, in the case of Epcon, a company owned by Mr Hirani's brother, the suspicion is that this was introduced into the scheme (if a scheme there was) in order to avoid the connection between Mr Hirani and Inflight being too obvious, notwithstanding that Inflight was only incorporated by Mr Hirani at the request of Mr El Assaad. In short, the Defendants (and significantly in the present context Mr Hirani, in particular) have shown themselves ready and able to use corporate structures in what, at least on the face of things and anyway based on what Gulf Air alleges, in a dishonest way. As such, this is a case which comes within the category described by Males J in the NBT case at , as follows:
"There are many cases where the use of and familiarity with a network of offshore companies has been regarded as a factor tending to support the existence of a risk of dissipation, albeit that the weight to be given to such a factor has to be assessed in all the circumstances of each individual case (see Elektromotive Group Ltd v Pan  EWHC 2742 (QB) at [84(b)]; A.H. Baldwin & Sons Ltd v Al-Thani  EWHC 3156 (QB); and Holyoake v Candy  EWHC 970 (Ch) at ). As the Court of Appeal said in VTB Capital Plc v Nutritek International Corporation  EWCA Civ 808,  2 Lloyd's Rep 313 at  and , 'the factor of a good arguable case as to fraud against the person in question, and the use of a web of offshore companies in connection with the fraud, could properly provide a basis for taking this into account in favour of the grant of an injunction
We would regard such factors as capable of providing powerful support for the case of a risk of dissipation.' In my judgment that is also the position here."
- Mr Pearson went on, nonetheless, to submit by reference to Males J's principle (d) that it does not assist Gulf Air to point to past conduct on the part of Mr Hirani, specifically what Mr Pearson characterised as isolated acts carried out between January and April 2015, in support of the submission that there is a risk of dissipation. It was Mr Pearson's submission that, as there is no suggestion that Mr Hirani has performed any relevant act since that time, so it would be wrong to conclude that there is a sufficient dissipation risk. He added that nor is there even any suggestion that past events demonstrate any current risk of dissipation. Again, however, I cannot agree with Mr Pearson about this since it seems to me that it is artificial to view the matter in the way suggested. This is a case in which serious allegations of fraud are put forward. It is also a case in which it is not yet known, at least with any precision, what went on as between the various Defendants (including Mr Hirani). In such circumstances, bearing in mind (again) the nature of the allegations which have been levelled against the Defendants (including Mr Hirani), past events are obviously highly relevant in assessing whether there is a sufficient risk of dissipation or not.
- Nor am I persuaded by Mr Pearson's invocation of principles (e) and (f), in particular the point (made by reference to Mr Hirani's affidavit in which he identified his assets) that a significant proportion of his assets are in the form of immovable property, located in France and the US. Although Mr Pearson submitted that these are not assets which are susceptible to easy dissipation, he had no answer when I put to him that it would presumably be relatively easy to transfer such assets into the names of other entities (whether natural or corporate) or to use the properties as security for the raising of finance. In short, there is nothing in this further objection taken on Mr Hirani's behalf.
- Furthermore, as to principle (g), Mr Pearson sought to make a virtue out of the fact that, having originally disclosed his assets in response to the Freezing Order, Mr Hirani subsequently realised that he had mistakenly omitted to disclose the existence of a US money market account and so immediately came forward and did so despite the fact, Mr Pearson suggested, that this asset would have been difficult for any third party to detect. Mr Hirani was obviously right to do this. It should be appreciated, however, that he was also obliged, because of the Freezing Order, to do what he did. It would be somewhat odd, in my view, were the Court to conclude, on the basis of this, that there was no risk of dissipation and so to discharge the Freezing Order, the very thing which meant that Mr Hirani was under an obligation to do what he did. Similarly, although Mr Pearson pointed to the fact that in an affidavit dated 26 January 2018, Mr Hirani stated that he has "no intention of dissipating my assets to frustrate a Court judgment", that can in no way justify a conclusion that there is no dissipation risk. It is irrelevant that, as Mr Pearson went on to point out, this statement has not been challenged in Gulf Air's evidence since, besides the fact that it is not at all easy to know what could really be said by way of challenge, it again just makes no sense to discharge the Freezing Order on that basis. It would be different if Mr Hirani were to undertake not to dissipate, as defendants in his position frequently do, because then there would be consequences were there to be dissipation in breach of the undertaking. That is not the position in this case, however.
- I conclude, in the circumstances, that Gulf Air has established a sufficient risk of dissipation as regards Mr Hirani, and that therefore the Freezing Order should remain in place as against him.
Inflight's jurisdictional challenge and its application to discharge the Freezing Order
- The first of the jurisdictional challenges before me is made by Inflight. As I have explained, Mr Hirani no longer seeks to challenge jurisdiction and, therefore, necessarily accepts that a 'good arguable case' has been made out by Gulf Air against him. Inflight's position is that, in contrast, a 'good arguable case' has not been demonstrated as against it.
- As Mr Pearson pointed out, Gulf Air required permission to serve Inflight out of the jurisdiction in Singapore. Furthermore, as Mr Pearson went on to point out, where, as here, a defendant seeks to set aside the order giving permission to serve out of the jurisdiction, the claimant bears the burden of demonstrating that the order was properly granted: see Canada Trust Co v Stolzenberg (No. 2)  1 WLR 547 at page 555A-G per Waller LJ, and Bols Distilleries v Superior Yachts  1 WLR 12. As is well established, a claimant wishing to obtain permission to serve out of the jurisdiction must satisfy the Court that three criteria are met, as summarised by Lord Collins in AK Investments CJSC v Kyrgyz Mobile Tel Ltd  WLR 1804 at , as follows:
"First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: e.g. Carvill America Inc v Camperdown UK Ltd  EWCA Civ 645,  2 Lloyd's Rep 457, at . Second, the claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context 'good arguable case' connotes that one side has a much better argument than the other: see Canada Trust Co v Stolzenberg (No 2)  1 WLR 547, 555-7 per Waller LJ, affd  1 AC 1; Bols Distilleries BV v Superior Yacht Services  UKPC 45,  1 WLR 12, -. Third, the claimant must satisfy the court that in all the circumstances the Isle of Man is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction."
- It was Mr Pearson's submission that, as regards Inflight, Gulf Air fails to satisfy both the first and the second of these criteria, although he suggested that, in the present case, the two criteria may be treated together given that the only 'jurisdictional gateway' relied upon by Gulf Air as against Inflight (and, for that matter, Epcon) is CPR PD 6B 3.1(3) and that applies where there is a 'good arguable case' that:
"A claim is made against a person ('the defendant') on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and
(a) there is between the claimant and the defendant a real issue which it is reasonable for the court to try; and
(b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim."
- As to what amounts to a 'good arguable case', both Mr Pearson and Mr Cogley advanced their submissions by reference to the guidance recently given by Lord Sumption JSC in Brownlie v Four Seasons Holdings Inc  1 WLR 192,  UKSC 80 at , as follows:
"An attempt to clarify the practical implications of these principles was made by the Court of Appeal in Canada Trust Co v Stolzenberg (No 2)  1 WLR 547. Waller LJ, delivering the leading judgment observed at p 555:
'"Good arguable case" reflects
that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i.e. of the court being satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which allow the court to take jurisdiction.'
When the case reached the House of Lords, Waller LJ's analysis was approved in general terms by Lord Steyn, with whom Lord Cooke and Lord Hope agreed, but without full argument:  AC 1, 13. The passage quoted has, however, been specifically approved twice by the Judicial Committee of the Privy Council: Bols Distilleries (trading as Bols Royal Distilleries) v Superior Yacht Services Ltd  1 WLR 12, para 28, and Altimo Holdings, loc cit. In my opinion it is a serviceable test, provided that it is correctly understood. The reference to 'a much better argument on the material available' is not a reversion to the civil burden of proof which the House of Lords had rejected in Vitkovice. What is meant is (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the Court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it. I do not believe that anything is gained by the word 'much', which suggests a superior standard of conviction that is both uncertain and unwarranted in this context."
- As to the requirement that Inflight be "a necessary or proper party", Mr Pearson submitted (correctly, as I see it, and uncontroversially as far as Mr Cogley was concerned) that paragraph 3.1(3)(b) of the Practice Direction, in the present case, requires Gulf Air to establish that Inflight would have been a proper party to the action under CPR 19 had Inflight been within the jurisdiction. That is what was explained by Lord Collins in the AK Investments case at :
the question whether D2 is a proper party is answered by asking: 'Supposing both parties had been within the jurisdiction would they both have been proper parties to the action?': Massey v Heynes & Co (1888) 21 QBD 330 at 338, per Lord Esher MR. D2 will be a proper party if the claims against D1 and D2 involve one investigation: Massey v Heynes & Co at 338, per Lindley LJ; applied in Petroleo Brasiliero SA v Mellitus Shipping Inc (The Baltic Flame)  EWCA Civ 418,  1 Lloyd's Rep 203, at  and in Carvill America Inc v Camperdown UK Ltd  EWCA Civ 645,  2 Lloyd's Rep 457, at , where Clarke LJ also used, or approved, in this connection the expressions 'closely bound up' and 'a common thread': at ,  ."
- It was Mr Pearson's submission that the claim as levelled against Inflight is tenuous and that, in such circumstances, the 'good arguable case' hurdle (as well as any associated 'serious issue to be tried' hurdle, Mr Pearson and Mr Cogley using 'good arguable case', in effect, to cover both situations in this case, and my doing so also, therefore, in this judgment) has not been overcome so as to mean that jurisdiction has not been established. Mr Pearson focused, for these purposes, on certain aspects of the way in which the claim against Inflight has been put in the draft Amended Particulars of Claim. Specifically, he highlighted the allegation that Inflight is Mr Hirani's 'alter ego', something which he explained was not an issue at least inasmuch as it is accepted that Mr Hirani is the sole beneficial owner of Inflight, as well as Gulf Air's reliance on the fact that Inflight was formed after it was discovered that GOM did not exist and at Mr El Assaad's request. Mr Pearson submitted that nothing turns on this, however, since it does not amount to the pleading of a cause of action by Gulf Air against Inflight itself.
- I cannot accept this submission. As Mr Cogley pointed out, in circumstances where it is conceded by Mr Pearson, both on Mr Hirani's and on Inflight's behalf, that Mr Hirani's knowledge is attributable to Inflight, it seems to me wholly unrealistic to arrive at the position where there is a 'good arguable case' against Mr Hirani but not also against Inflight. The more so, given that, as Mr Cogley submitted, Inflight owes its very birth to what is (at least) alleged by Gulf Air to have been a fraudulent scheme. As Mr Cogley put it, Inflight is Mr Hirani's creature and, furthermore, there appears to be some legitimate ground for suspecting that Mr Hirani hid his shareholding in Inflight. Its name, when incorporated, Global One Media PTE Ltd, also rather suggests that the company was intended to be integral to the (alleged) fraudulent conspiracy. Although, as acknowledged by Mr Cogley, it is not at this stage fully known what the intention was in relation to Inflight, and so what role was ultimately played by Inflight, I am in little doubt that, applying the approach described in the AK Investments case at , the claims against Inflight and the other Defendants involve one investigation and have a sufficient 'common thread'. Put shortly, the case against all of the Defendants is that they took part in a fraudulent scheme, the causes of action being put in two main legal ways (conspiracy to defraud and dishonest assistance). To suggest, in the circumstances, that there is no cause of action against Inflight (or Epcon) simply cannot be right. Nor can it be right to seek to separate out the claims levelled against the various Defendants as Mr Pearson's submissions sought to do. I have in mind, in this respect, that liability in a case such as this is not necessarily confined to acts carried out by individual defendants since joint liability can cover involvement or facilitation provided that that is more than merely minimal (see Clerk & Lindsell on Torts, 22nd Ed., 2018, paragraph 4-04) and liability in conspiracy merely requires that a defendant is "sufficiently a party to the combination and the common design" (see Clerk & Lindsell, paragraph 24-97). I am quite clear that, viewed realistically, there is a 'good arguable case' against each of the Defendants, and so including Inflight (and, as I shall come on to explain, Epcon).
- Moreover, it is not only to Inflight's genesis that Gulf Air points in support of its case against the company. This is because there is evidence before the Court which points to the continued involvement by Inflight (even if Mr Hirani ceased himself personally to be involved, about which there is an issue) after 25 July 2015 when Mr Hirani sent the following email to somebody at the BBC (Zina Neophytou):
"Good to hear from you and apologies for my late response. Just some unofficial news for you; official email will be sent out next week. I will no longer be acting as Chief Commercial Officer for Global One Media. I have decided to move back to my aviation consulting company: Airborne Communication & Entertainment, LLC (contact shown below in signature field).
Please address any further questions regarding Global One Media to its CEO, Natan Blanchman at email@example.com. Alternatively, you may also contact Mohamad El Assaad at Gulf Air. Both are in copy of this message. Gulf Air will be signing and managing all contracts moving forward.
As Mr Cogley pointed out, and notwithstanding the reference to Gulf Air "signing and managing all contracts moving forward", the fact that "any further questions" were directed to Mr Blanchman at "Global One Media" might suggest that Inflight had a continuing role. It should be acknowledged that by this stage the Seventh Defendant, Global One, had, of course, been incorporated also and, as such, that might be the explanation for the reference to "Global One Media". However, Mr Hirani's email was a response to an email from the BBC which attached a draft contract identifying the BBC's contractual counterpart as Inflight (then known as Global One Media PTE Ltd), and so it must be open to question, at the very least, whether Mr Hirani's email really entailed anything more than Mr Hirani saying that he himself (as opposed to Inflight) was ceasing to be involved. There is also the fact that two contracts exist (in the case of the first signed only by Mr El Assaad and not also by the BBC) from early September 2016 and dated 11 July 2017 respectively, in which the so-called "technical services provider" is identified as "Global One Media PTE Ltd" (and so Inflight). These two contracts describe the parties as being BBC Worldwide Ltd and Gulf Air. As such, they are consistent with what Mr Hirani, at least on one view, had in mind when he sent his email on 25 July 2015, namely that he personally would no longer be involved but that there would be continued involvement on the part of Global One Media PTE Ltd albeit that the BBC's contractual counterpart would be Gulf Air directly. Ultimately, these seem to me to be matters which are appropriately resolved at a trial and which are not capable of summary dismissal (in Inflight's favour) at this stage. Specifically, whether Mr Pearson is right when he submitted that what happened as regards the identification of Global One Media PTE Ltd as "technical services provider" was a matter which was unknown to Mr Hirani and Inflight at the time is a matter which cannot readily be assumed bearing in mind the overall evidential position.
- This is sufficient, without more, to mean that the 'good arguable case' hurdle has been overcome as regards Inflight. However, really out of convenience, I would add that there is a further issue which bears on the underlying claim against Inflight made by Gulf Air and which seems to me to justify the conclusion that there is a 'good arguable case'. This concerns Mr Hirani's evidence, contained in his second affidavit, that he changed the name of the Fifth Defendant from Global One Media PTE Ltd to Inflight in May 2015 in order that the company could carry on the business which was previously carried on by another of his companies, namely Inflight Global LLC, which he had incorporated in June 2013 in Nevis, thereby avoiding having to pay certain annual company registration fees for the Nevis company. The business which Mr Hirani described Inflight as thereafter carrying on entailed the provision of "specific products and/or services for airline cabins, especially pertaining to WiFi streaming and USB power systems". It was Mr Pearson's submission that the bank statements which have been disclosed pertaining to Inflight are consistent with trading activity having taken place, in particular to payments each amounting to US$76,648.50 which were received in December 2016 and which, according to Elizabeth Seborg, from Byrne & Partners LLP, were made by a company described on its website as providing in-flight entertainment and power systems. As Mr Cogley pointed out, however, besides these two payments, it does not appear that other payments were received by Inflight, certainly not with the regularity that might be expected if trading activity was, indeed, being carried on. Furthermore, as Mr Cogley also observed, the bank statements reveal no sums of money being paid out, and that is somewhat surprising if trading activity was being carried out. On the face of it, therefore, Mr Hirani's explanation seems somewhat doubtful. The fact that that explanation has been given in an effort to meet Gulf Air's case concerning the continued involvement of Inflight strengthens my conclusion that there is, in this case, sufficient material available to enable Gulf Air to surmount the 'good arguable case' hurdle.
- It follows that Inflight's jurisdictional challenge must fail.
Application to discharge
- Turning to Inflight's application to discharge the Freezing Order, this is made on three bases: first, that the Freezing Order should be discharged because there is no 'good arguable case' against Inflight on the merits; secondly, that there is an insufficient risk of dissipation; and thirdly, that the Freezing Order was granted as regards Inflight as a result of a material non-disclosure. It was Mr Pearson's submission that, in such circumstances, whether for all these reasons or for any of them, the Freezing Order against Inflight should be discharged.
- In the light of what I have decided in relation to the jurisdictional challenge, it is clear (and was accepted by Mr Pearson) that the first objection takes matters no further. Put simply, the fact that for a freezing order to be made there needs to be a 'good arguable case' on the merits (see, for example, Rasu Maritima SA v Perusahaan  QB 644 at page 661G-H where Lord Denning MR equated the 'good arguable case' requirement with the requirement concerning leave to serve out of the jurisdiction) plainly represents no additional hurdle, the Court having already concluded in the context of the jurisdictional challenge that there is no only a 'serious issue to be tried' but also a 'good arguable case'.
- Similarly, again as Mr Pearson acknowledged, the risk of dissipation objection raised by Inflight depends on precisely the same matters as have been raised by Mr Hirani. It follows, in view of my conclusion in relation to Mr Hirani's application to discharge, that the second of the bases relied upon by Mr Pearson on Inflight's behalf falls away, too.
- This brings me to the third of the points raised. This is a freestanding matter applicable only to Inflight (although there was some suggestion, at least during the course of oral argument, that it might also operate, indirectly, in relation to Epcon) which rests on what I am bound to say is an overly strict (some might say pedantic) approach to what Bryan J was told by Mr Cogley when he appeared before him on 5 December 2017 to seek the Freezing Order.
- At that hearing before Bryan J, Mr Cogley based the application as regards Inflight on the fact that Mr El Assaad requested that Gulf Air transfer US$14.2 million to a bank account in Singapore belonging to Inflight. It was Mr Cogley's submission (and Gulf Air's case) that this transfer demonstrated Inflight's connection to the alleged conspiracy. Specifically, at what was a without notice hearing and so a hearing where Gulf Air and those representing them were subject to the duty of full and frank disclosure, the following exchanges took place between Bryan J and Mr Cogley concerning Inflight (described as "R5"):
"MR COGLEY: Now, yes; R5 now R5
MR JUSTICE BRYAN: Yes.
MR COGLEY: - is a company incorporated in Singapore and the first five invoices that were to be raised by One Inflight, by R1 and this was before the contract was even operative, but the first five invoices, and indeed they were paid, the bank account details that were given on them were bank account details in Singapore.
MR JUSTICE BRYAN: This oh, I see, an account in Singapore; right.
MR COGLEY: They had an account in Singapore.
MR JUSTICE BRYAN: Right.
MR JUSTICE BRYAN: By an account in Singapore, do we now know that it's
MR COGLEY: Yes, it's the account of
MR JUSTICE BRYAN: Of R5?
MR COGLEY: That's right, it's R5's account.
MR JUSTICE BRYAN: Right.
MR JUSTICE BRYAN: Those or the bank account details of R5?
MR COGLEY: R5, yeah.
MR JUSTICE BRYAN: How do I know that that's the bank account of R5?
MR COGLEY: I think you do, my Lord, yes.
MR JUSTICE BRYAN: No, I'm saying how do I know?
MR COGLEY: Oh how
MR JUSTICE BRYAN: Can you just prove it to me?
MR COGLEY: Oh, how do you know? We don't have a single document that proves it, my Lord, but it's dealt with in the affidavit.
MR JUSTICE BRYAN: Yes.
MR COGLEY: And, my Lord, what we can do is - my Lord, while I'm giving this reference, I also add this point
MR JUSTICE BRYAN: Yeah.
MR COGLEY: - if you go to paragraph 95, here's reference to what has become R5; at that time it was called Global One Media Group; it changed its name to Inflight Global PTE. Yes, it doesn't actually say, my Lord, expressly, that it is the account. My Lord, can I put it this way; we know it is and any affidavit that I am required, that we are required to produce to pose into those matters -
MR JUSTICE BRYAN: Yes.
MR COGLEY: - as I indicated at the beginning, we will add that in, because we know, if I may put it that way
MR JUSTICE BRYAN: Right.
MR COGLEY: - because we can make we can make
MR JUSTICE BRYAN: Well, I think you should."
Later on, Mr Cogley explained that it was this evidence, concerning Inflight having the relevant Singaporean bank account identified in the invoices, which was "how we tie in Hirani and Inflight Global PTE Limited".
- Mr Pearson contrasted what Mr Cogley told Bryan J at the hearing with what, the next day, came to be stated in the affidavit which was made in order to address the point in line with what Bryan J had made clear he required be done. This was the Second Affidavit of Carol Anderson, Deputy General Counsel of Gulf Air. Specifically, paragraph 10 stated as follows:
"We believe that the Singapore account is operated by the Fifth Respondent because the Fifth Respondent is the only Singaporean entity that has been discovered. We have not been able to identify a One Inflight Limited or Global One Media in Singapore or any business connection between the First Respondent and/or the Second Respondent in Singapore but we do know that the fourth respondent, who was intimately involved in the fraud and without whose participation the fraud would not have occurred, is a director of the Fifth Respondent."
- It was Mr Pearson's submission that the use of the word "believe" at the start of this paragraph amounts to something less than Mr Cogley's repeated use of the word "know" in his exchanges with Bryan J at the hearing. Mr Pearson submitted that, whereas at the hearing Mr Cogley was telling the judge that he knew that Inflight owned the Singapore bank account, Carol Anderson was not saying that she knew this to be the case but, merely, that she believed it to be so on the basis that Gulf Air had yet to identify another relevant entity in Singapore. In fact, Mr Pearson explained, Inflight is not the owner of the bank account and Global One (the Seventh Defendant) is. Mr Pearson points in this regard to the fact that this is what has been stated in the DLA Defendants' Defence, and Mr Cogley was content for the purposes of the hearing before me (whilst preserving the position going forwards) to proceed on the basis that Mr Pearson and the DLA Defendants are right about this.
- It was Mr Pearson's submission, in the circumstances, that what was stated by Mr Cogley to Bryan J concerning his (and, implicitly, Gulf Air's) knowledge that Inflight was the owner of the Singapore bank account was false and that, as such, "the inevitable conclusion" is that Gulf Air made a material non-disclosure of fact in obtaining the Freezing Order against Inflight. So, Mr Pearson submitted, the Freezing Order should be discharged as regards Inflight without more. In this respect Mr Pearson prayed in aid a decision of the House of Lords in the criminal context, specifically the proceeds of crime case dealing with section 93C(2) of the Criminal Justice Act 1988, namely R v Montila  1 WLR 3141. At , Lord Hope stated as follows:
"Subsection (2) states that a person is guilty of an offence 'if knowing or having reasonable grounds to suspect that any property is
another person's proceeds of drug trafficking [section 49(2) of the 1994 Act] / of criminal conduct [section 93C(2) of the 1988 Act]' he does one or other of the things described to 'that property' for the purpose which the subsection identifies. A person may have reasonable grounds to suspect that property is one thing (A) when in fact it is something different (B). But that is not so when the question is what a person knows. A person cannot know that something is A when in fact it is B. The proposition that a person knows that something is A is based on the premise that it is true that it is A. The fact that the property is A provides the starting point. Then there is the question whether the person knows that the property is A."
Mr Pearson submitted that, since the Singapore bank account was not owned by Inflight but by Global One (the Seventh Defendant), or so it is assumed for present purposes, Mr Cogley (and Gulf Air) cannot have known that it was owned by Inflight when Bryan J was told that that was the case. It was Mr Pearson's submission that the crucial difference between knowledge and belief is that knowledge is a justified true belief.
- I cannot accept Mr Pearson's submissions in this regard. I am quite clear that, in context, there was nothing misleading about what Mr Cogley told Bryan J and that the distinction between the use of the word "know" and the use of the word "believe" which is at the heart of Mr Pearson's submissions is as artificial as it is inapposite. Mr Cogley was quite obviously telling Bryan J what he believed to be the position. In the same way, Carol Anderson was telling the Court in her Second Affidavit what she believed to be the position. The fact that one of them used the word "know" and the other used the word "believe" is nothing to the point. Had Mr Cogley instead used the word "believe", I cannot accept that Bryan J would have thought anything of the matter, even though it was Bryan J who first used the word "know". Mr Pearson's reliance on the Montila case takes his argument nowhere. The essence of what was decided in that case was that a person cannot know something (described as A) which is not actually the case, and so the relevant statutory provision cannot operate in such circumstances. The present case, at least in the context of Mr Pearson's submissions concerning alleged breach of the duty of full and frank disclosure, is not a case where what is under consideration is whether the Singapore bank account is actually, as a matter of objective fact, owned by Inflight. What matters for present purposes is something different: whether, when Mr Cogley told Bryan J that he knew that to be the case, Mr Cogley should be regarded as saying something more than that this was his then belief. Unless, however, Mr Cogley were to be regarded as, in effect, guaranteeing that what he told Bryan J was objectively the case, then, I fail to see how the suggested distinction between the use of the word "know" (by Mr Cogley) and the use of the word "believe" (by Carol Anderson) can have any significance at all. Indeed, if Mr Pearson were right, then the logic of his submission would be that, even if Mr Cogley had used the language of belief (as opposed to knowledge), still there would have been a breach of the duty of full and frank disclosure because, as a matter of fact, the Singapore bank account was not that of Inflight because, either way, whether Mr Cogley was describing his knowledge or his belief, the position was not as described.
- I am strengthened in this conclusion by what Carol Anderson had to say in paragraph 3 of her Second Affidavit where, entirely conventionally, she stated as follows:
"The facts and matters deposed in this Affidavit are true to the best of my knowledge, information and belief. Save where the context indicates, the contents of this Affidavit are based upon my own personal knowledge. Where the matters which I depose to herein are not within my own personal knowledge, they derive either from documents that I have read or information that has been provided to me by senior managers of the Applicant, and I believe the same to be true."
Clearly, it would not have been appropriate for Mr Cogley to have sought, in his exchanges with Bryan J, to say something similar to this. He did not need to do so since it is implicit: Mr Cogley was telling Bryan J what he knew to be the case in the sense that what he told Bryan J was based on what he believed to be the case. The more so, because (unlike Carol Anderson, somebody who was putting evidence before the Court) Mr Cogley was not giving evidence when he was making his submissions to Bryan J. The more so also, because Mr Cogley expressly pointed out to Bryan J that "We don't have a single document that proves it". It was obvious that what Mr Cogley was saying to Bryan J was that, as far as he and Gulf Air were concerned, the Singapore bank account was Inflight's bank account: in other words, that that was what they understood to be the position, not that that was certainly the position.
- In short, therefore, I reject Mr Pearson's distinction between knowledge and belief. It follows that I reject Mr Pearson's breach of the full and frank disclosure duty submissions based on what Mr Cogley had to say concerning the ownership of the Singapore bank account. Even if there were the distinction suggested by Mr Pearson, however, still it does not seem to me to be right to conclude that there was a breach since I am not persuaded that the distinction means that there was suppression or mischaracterisation of anything which can properly be said to be material. I do not consider, in short, that Bryan J would have needed or wished to have taken into account the fact that Mr Cogley (and Gulf Air) believed (as opposed to knew) that the Singapore bank account was owned by Inflight when deciding to grant the Freezing Order. I bear in mind in this context the way in which materiality was described by Males J's judgment in the NBT case at [18(a)], namely that "A fact is material if it is one which the judge would need (or wish) to take into account when deciding whether to make the freezing order."
- Furthermore, even if this is wrong, I am quite clear that this would still not be an appropriate case in which to discharge the Freezing Order on the basis that there was a breach of the duty of full and frank disclosure, having regard to the further guidance given by Males J in the NBT case at [18(b)-(e)], as follows:
"b. Failure to disclose a material fact will sometimes require immediate discharge of the order. This is likely to be the court's starting point, at least when the failure is substantial or deliberate.
c. Nevertheless the court has a discretion to continue the injunction (or to impose a fresh injunction) despite a failure of disclosure; although it has been said that this discretion should be exercised sparingly, the overriding consideration will always be the interests of justice.
d. In considering where the interests of justice lie, it is necessary to take account of all the circumstances of the case including (without attempting an exhaustive list) (i) the importance of the fact not disclosed to the issues which the judge making the freezing order had to decide; (ii) the need to encourage proper compliance with the need for full and frank disclosure and to deter non-compliance; (iii) whether or to what extent the failure to disclose was culpable; and (iv) the injustice to a claimant which may occur if an order is discharged leaving a defendant free to dissipate assets, although a strong case on the merits will never be a good excuse for a failure to disclose material facts.
e. The interests of justice may sometimes require that a freezing order be continued, but that a failure of disclosure be marked in some other way, for example by a suitable order as to costs."
Specifically, as to (b), Mr Pearson having expressly disavowed any suggestion that the breach (if there was one) was deliberate, the question is whether the failure was substantial. Consistent with what I have explained above, however, I cannot accept that the failure was substantial since I cannot accept that Mr Cogley's use of the word "know" as opposed to "believe" amounts to anything substantial (or, indeed, substantive) at all. It follows that this is not a case where, even if there were a relevant failure, there should be immediate discharge of the Freezing Order. It follows, too, that the discretion described in (c) and amplified in (d) does not arise. If, however, it did come into play, then, the interests of justice perfectly obviously justify the continuance of the Freezing Order and not its discharge. The fact not disclosed (even assuming that it is a fact at all and, if it is, that it is material) is either wholly unimportant or is so lowly on the importance scale as not to warrant immediate discharge: see (d)(i). Nor, in my view, is this a case in which (d)(ii) applies since I am clear that any failure was inadvertent at worst. That addresses (d)(iii) also and, as to (d)(iv), in my assessment, the injustice to Gulf Air through discharging the Freezing Order would be significant. For all these further reasons, I decline to discharge the Freezing Order as against Inflight.
Epcon's jurisdictional challenge and its application to discharge the Freezing Order
- I propose, in the circumstances, to deal with Epcon's jurisdictional challenge in relatively short order. The relevant principles are the same as those applicable to Inflight's jurisdictional challenge and have, therefore, already been addressed.
- Epcon is a Seychelles company which Mr Hirani, Inflight and Epcon itself (as well as Mr Hirani's brother, Mr Pharaohs Hirani) say is wholly beneficially owned by Mr Pharaohs Hirani. Mr Pearson submitted that, in the circumstances, the only connection of Epcon to the claims put forward in these proceedings being that it holds the shares of Inflight as nominee for Mr Hirani, the necessary 'good arguable case' has not been made out by Gulf Air.
- The draft Amended Particulars of Claim dealing with Epcon's (the Sixth Defendant) status follows at paragraphs 52A (xii) and (xiii), in support of an overarching plea that Inflight and Epcon "also dishonestly assisted the Second Defendant in breaching his fiduciary duties, and also conspired with each of the other Defendants by assisting in the Scheme, joining in the same and actively participating therein in concert with the others":
"(xii) Yet further, the suggestion that the Sixth Defendant held the shares in the Fifth Defendant on behalf of the Fourth Defendant because the latter '
did not have an appropriate company already in existence
' [Fourth Defendant's second Affidavit, paragraph 33] is inconsistent with the existence of another company solely incorporated by the fourth defendant Inflight Global LLC, a company incorporated in June 2013 in Nevis, owned by the Fourth Defendant, and that had (up until June 2016) a bank account. Inflight Global LLC was not only directly owned by the Fourth Defendant, but was clearly a more 'appropriate company' than the Sixth Defendant, as Inflight Global LLC provided IFE (type) services, whereas the Sixth Defendant's activities consisted of management consultancy in the cement, power generation, renewable energy and mining industry sectors;
(xiii) The Sixth Defendant is said to be solely and beneficially owned by the Fourth Defendant's brother, Pharaohs Hirani. The Claimant does not admit this, and requires it to be strictly proved. However, on 30 December 2016, the Fifth Defendant transferred to the Sixth Defendant the sum of USD$22K. The Fourth Defendant/Fifth Defendant and Sixth Defendant assert that this sum was a gift made by the Fourth Defendant personally to his brother, Pharaohs Hirani to assist the latter in a move. The Claimant's case is that in fact this was a payment either in consideration of the fact that the Sixth Defendant was holding (and on the Claimant's case hiding) the shareholdings of the Fourth Defendant in the Fifth Defendant or alternatively was a payment reflecting the fact that the Fourth and/or Fifth Defendant hold an interest in the Sixth Defendant; and in any event is not a transfer between individuals, but a transfer between corporate entity;"
Later on, in paragraph 60, under the heading "The Role of the Fifth and Sixth Defendants", this is then stated:
"The Fifth and Sixth Defendants or offshore companies. The Fifth Defendant is wholly beneficially owned by the Fourth Defendant. The Claimant cannot presently fully state its case in relation to the beneficial ownership of the Sixth Defendant, but for the avoidance of doubt does not admit that the Fourth Defendant has no interest therein. It is the Claimant's case that each has been involved in the Scheme although the precise involvement cannot presently be particularised beyond that identified under paragraph 52 and the subparagraphs thereunder. The same will be further voluntarily particularised upon the earlier of Disclosure or the provision of Further Information. It is, however and in any event, to be inferred that the Fifth Defendant is the alter ego of the Fourth Defendant and that the Fourth Defendant treats the assets of the Fifth Defendant as his own. The Sixth Defendant, at the very least, was a vehicle utilised by the Defendants to hide the Fourth Defendant's shareholding in the Fifth Defendant and such was in furtherance of the Scheme. In further support of this latter assertion, the Claimant relies on the fact that, according to the Defendants, the Fifth Defendant was incorporated by the Fourth Defendant at the request of the Second Defendant and it follows that each of the Defendants knew and/or consented/agreed or acquiesced in the issued shares of the Fifth Defendant, owned by the Fourth Defendant, being held by the Sixth Defendant. Further the Defendants are liable on that basis or as having received either the Claimant's monies or the benefit of the Claimant's confidential information, and are liable as co-conspirators in the Scheme to like extent and in relation to the same matters (whether discrete causes of action or incidents of dishonest assistance or knowing receipt) as the Fourth Defendant. Further and in support of this, the Fourth Defendant's knowledge is to be imputed to the Fifth Defendants. In the case of the Sixth Defendant, whilst not directly imputed, the Sixth Defendant agreed/acquiesced in hiding the Fourth Defendant's shares in the Fifth Defendant. The same could not have occurred without, in turn, the intervention/agreement of Pharaohs Hirani, whose knowledge as a Director of the Sixth Defendant is imputed to it."
- Mr Pearson submitted that none of this amounts to a sufficient basis to enable Gulf Air to found jurisdiction against Epcon. He submitted, in particular, that as to the existence of the nominee arrangement, this does not give rise to an inference of Epcon's involvement in the alleged conspiracy. Even if such a nominee arrangement were unusual (which it is not), and even if it were entirely unexplained (which it is not), Mr Pearson submitted that it provides Gulf Air with no cause of action against the Sixth Defendant and is, therefore, irrelevant. He submitted also that the fact that Mr Hirani owned another company, the Nevis company Inflight Global LLC, which he could have employed instead of Epcon, adds nothing. Furthermore, as to the transfer between Inflight and Epcon, Mr Pearson submitted that an explanation had been given and there is no reason to doubt that explanation, especially as Inflight and Epcon were, in effect, 'one man' corporate vehicles used by the two Hirani brothers to make non-business type payments.
- The difficulty with these submissions, however, is that they ignore the context in which Epcon came to be involved in this matter at all. This followed Mr El Assaad having asked Mr Hirani to incorporate Inflight (or Global One Media PTE Ltd, as Inflight was previously known) at about the time that the IFE Contract, signed by Mr Hirani on behalf of GOM, came to be entered into. As Mr Cogley rightly submitted, it needs to be remembered that, according to the DLA Defendants and, indeed, Mr Hirani himself, Inflight was incorporated, at Mr El Assaad's request, in order to be a trading entity servicing in some way the IFE Contract. It seems likely, and is, in any event, sufficiently arguable, that the holding of the shares in the name of Epcon would have been agreed, or at least discussed, between the DLA Defendants and Mr Hirani. The only explanation which has been given as to why or how Epcon became involved in this way is Mr Hirani's suggestion that Epcon was to be Inflight's owner of record as a temporary measure, specifically that it was regarded as desirable for Inflight to have a corporate shareholder and, since he did not have an appropriate company already in existence, he agreed with his brother that Epcon should perform this role until he formed a company to replace it. However, as pointed out in the draft Amended Particulars of Claim, Mr Hirani had Inflight Global LLC, the Nevis company, available to him and the business of that company was, apparently, not dissimilar whereas Epcon's activities were markedly different. This, together with the fact that US$22,000 was paid by Inflight to Epcon gives rise to a sufficient suspicion that things did not happen in quite the way which Mr Hirani has described, in particular that the US$22,000 was paid as recompense rather than to assist Pharaohs Hirani's move, and, moreover, that the reason why Epcon was used at all (as opposed to a company belonging to Mr Hirani himself) was to try and conceal the fact that it was Mr Hirani who stood behind Global One Media PTE Ltd (Inflight).
- Ultimately, it may prove at trial that what Gulf Air has alleged concerning Epcon is not made out and that what Mr Hirani has to say is accepted. However, I am unable to conclude that there is an insufficient case to proceed to trial; on the contrary, in the circumstances, my conclusion is that a 'good arguable case' has been made out, and so that there is jurisdiction as against Epcon.
Application to discharge
- Epcon's discharge application is put on the same three bases as Inflight's similar application. As to the first, that the Freezing Order should be discharged because there is no 'good arguable case' against Epcon on the merits, this fails in view of my conclusion on the jurisdictional challenge. So, too, does the second objection that there is an insufficient risk of dissipation in the light of the conclusion which I have arrived at in relation to the (same) arguments advanced by Mr Hirani. As to the third matter relied upon, if it is relied upon which is not entirely clear, namely material non-disclosure, this also fails given that the non-disclosure concerns the knowledge or belief issue which I have addressed in the context of Inflight. Put shortly, if there is a point here, which theoretically there might be in that it is only through Inflight that Epcon is (allegedly) implicated in the wrongdoing alleged, it is not a point which goes anywhere in view of my rejection of Mr Pearson's submissions as regards Inflight. It follows that Epcon's discharge application must also be dismissed.
The Electronic Devices Order
- The final topic which needs to be addressed concerns the Electronic Devices Order (as opposed to the related order requiring retention and preservation of documents) which formed part of the Freezing Order granted by Bryan J. Although Mr Pearson, on behalf of Mr Hirani, Inflight and Epcon, was at one stage (including, indeed, in his skeleton argument) inclined to suggest that the Electronic Devices Order ought to be set aside in its entirety on the basis either (i) that it had been "obtained through a material non-disclosure of law, and that the Court has been materially misled", in breach of Gulf Air's duty of full and frank disclosure, alternatively (ii) on the basis that no element of the Electronic Devices Order is appropriate under CPR 25.1(c)(i) and (ii), ultimately his position was that the Electronic Devices Order should be permitted to remain in place but only in modified (and more limited) form.
- In view of this change of position on Mr Pearson's part, it is unnecessary to say too much about the circumstances in which the Electronic Devices Order came first to be made (as part of the Freezing Order) by Bryan J on 5 December 2017. It is necessary, however, to say something, for two reasons: first, because it explains the context in which the remaining dispute as to the form of the Electronic Devices Order falls to be considered, and secondly, because, in not pressing his submission that the Electronic Devices Order should be discharged in its entirety, Mr Pearson nonetheless suggested that there should be a costs sanction to reflect the fact that Bryan J did not have drawn to his attention certain observations made in the White Book at 25.1.18.
- Paragraph 11(3) of the Freezing Order in its original form, as granted by Bryan J on 5 December 2017, was in these terms:
"The Respondent must upon service of this order preserve and keep safe any device capable of transmitting and/or storing electronic communication and make such available to the Applicant's solicitor for collection along with a copy of the password or passwords or other means of access for purposes of the same being inspected by the Applicant, its servants or agents."
- This paragraph followed immediately on from a paragraph (paragraph 11(2)) which required Mr El Assaad to preserve and keep safe, and make available for collection, a laptop computer which he had been issued by Gulf Air. It followed also paragraph 11(1) which stated (and continues to state since it has not been revised), as follows:
"The Respondent must from the time of the service of this order preserve and keep safe and secure any document, meaning anything in which information of any description is recorded, whether a physical document or an electronic document which relates to any transactions, agreements or correspondence between the Applicant and the Respondents, and any transactions, agreements or correspondence between them and any other Respondents."
This paragraph is not in dispute and, it would appear, never has been in dispute, albeit that in the most up-to-date version of the Freezing Order, following the hearing which took place on 7 March 2018 before Patricia Robertson QC, the relevant paragraph has been re-numbered so that it is paragraph 7(1).
- The issue coming into the hearing before me concerned paragraph 7(4) of the Freezing Order (again in its most up-to-date version), as follows:
"The Fourth, Fifth and Sixth Defendants must:
a. Preserve and keep safe any device capable of transmitting and/or storing electronic communication; and
b. The obligation to 'make such available to the Applicant's solicitor's [sic] for collection along with a copy of the password or passwords or other means of access for purposes of the same being inspected by the Applicant, its servants or agents' as previously ordered is suspended
In the event, however, as I have mentioned, Mr Pearson adopted a slightly modified position during the course of argument. He accepted that it would be appropriate for paragraph 7(4)(a) to remain in place. Indeed, it was his submission that, precisely because Mr Hirani, Inflight and Epcon were, in any event, under an obligation to preserve and keep safe "any device capable of transmitting and/or storing electronic communication", it would be unnecessary and disproportionate to require them to permit inspection of the devices as contemplated by the original (but, as matters stand, suspended) obligation contained in paragraph 11(3) of the freezing order granted by Bryan J.
- I shall come on to address Mr Pearson's submissions on this point in a moment. First, however, I should point out that, in the context of the hearing before Patricia Robertson QC, Gulf Air and the DLA Defendants agreed a replacement wording as regards paragraph 11(3) of the (original) Freezing Order, as follows:
"(2) The First, Second, Third and Seventh Defendants must preserve and offer for inspection all devices owned by each of them capable of transmitting or storing electronic communications so that the Applicant's forensic expert may inspect and take a mirror image of the data on such devices by 20 May 2018, the manner and location of such inspection to be agreed between the parties. In the absence of such agreement either party shall have liberty to apply to the Court.
(3) After the date upon which inspection and imaging occurs pursuant to paragraph 7(2) of this order or further order of the Court the First, Second, Third and Seventh Defendants shall be released of the obligations set out in paragraph 7(2) of this order. The mirror images shall be held by the Applicant's forensic expert to the order of the Court."
- Secondly, I should also record that Gulf Air's application to vary the Freezing Order, which was also before me, entails a revised version of paragraph 11(3) of the (original) Freezing Order, and a replacement for the (existing) paragraph 12(4) (up-to-date) Freezing Order, in the following terms:
"The Respondent must upon service of this order:
(i) Preserve and keep safe any device capable of transmitting and/or storing electronic communication; and
(ii) Make available such devices to an expert for the purpose of interrogating, extracting and/or downloading all material, data and metadata of thereon."
The proposed draft variation then includes an additional paragraph 12(5), as follows (after a correction to the word "available" through the addition of the letters "un" at its start):
"The expert referred to in paragraph 12(4)(ii) shall provide copies and images of all material, data and metadata are located on the devices to the Claimant's solicitors and the respective Defendants' solicitors. The Claimant's solicitors shall not examine, read or consider that material unless with the consent of the respective Defendant's and/or by order of the court. Upon receipt of the material described herein the respective Defendants' solicitors shall examine the same and identify any privileged material or material that does not in any way relate to this dispute. If there is a doubt as to whether it does so relate it will remain unavailable to the Claimant's solicitors. The material identified as irrelevant/privileged shall be extracted/removed and the respective Defendants' solicitors shall send to the Claimant's solicitors a copy of all remaining material in electronic form. The Claimants shall be at liberty to examine, read and consider this material. The parties expressly have permission to apply to court for further directions in relation to access to certain materials or any part thereof."
- It was Mr Pearson's submission that, whether looking at the original paragraph 11(3) or the proposed paragraphs 12(4)(b) and 12(5), the obligation to make devices available for inspection ought not to be imposed upon Mr Hirani, Inflight and Epcon. In this regard, whilst acknowledging that it is open to the Court under CPR 25.1(c)(ii) to make an order "for the inspection of relevant property", Mr Pearson drew attention to the fact that the White Book at 25.1.18 states as follows:
"This remedy includes the power to order the inspection of a database and to order access to a party's computer or to direct the provision of an imaged version of a database, but it will only make such order where this relief can be shown to be both necessary and proportionate (Patel v Unite  EWHC 92 (QB), January 26, 2012, unrep. (Judge Richard Parkes QC); M3 Property Ltd v Zedhomes Ltd  EWHC 780 (TCC), March 26, 2012, unrep. (Akenhead J))."
Mr Pearson highlighted, in particular, the words "but it will only make such order where this relief can be shown to be both necessary and proportionate". He did so both to make good his point that there had been a failure to comply with the duty of full and frank disclosure at the hearing before Bryan J and in support of his submission that an order requiring inspection of devices is neither necessary nor proportionate and ought not, therefore, to be continued.
- Dealing with the first of these points, Mr Pearson's complaint was that Mr Cogley's skeleton argument prepared for the purposes of the without notice hearing before Bryan J referred to the passage in the White Book at 25.1.18 quoted above, specifically the reference to the remedy under CPR 25.1(c) including "the power to order the inspection of a database and to order access to a party's computer or to direct the provision of an imaged version of a database", but without going on to include the words "but it will only make such order where this relief can be shown to be both necessary and proportionate". Accordingly, Mr Pearson submitted, Bryan J made the order for inspection contained in paragraph 11(3) of the Freezing Order without having had drawn to his attention the fact that any such order ought only to be made if it is necessary and proportionate. Mr Pearson suggested that this omission was compounded by the fact that at the hearing itself Mr Cogley told the judge this:
"Preservation and delivery up of documents; my Lord, I am not proposing to, because it's fully dealt with in my skeleton argument, but I am happy to do so if you wish the court has ample jurisdiction to make the orders sought under 11(1)(2) or (3). They are essentially in relation to preservation ---".
The impression given, in other words, so Mr Pearson submitted, was that there is no particular hurdle to be overcome in order to obtain an inspection order such as that made on 5 December 2017.
- Mr Cogley explained before me that the fault lay with him and that the omission in relation to the additional wording contained in the notes at 25.1.18 was wholly unintentional. He went on to explain that, in the lead-up to the first 'return date' and the hearing which took place before Nicholas Vineall QC on 19 December 2017, he came to appreciate that the order as made by Bryan J was too sweeping and that this was the reason why he was prepared to agree to its being suspended for the time being. That, indeed, is why paragraph 7(4)(b) of the most up-to-date version of the Freezing Order is in the terms which it is.
- Having considered the matter with some care, I feel unable to conclude that Mr Pearson has made good his submission that there was in this respect a failure to comply with the duty of full and frank disclosure. On the contrary, I see no reason at all not to accept Mr Cogley's frank explanation as to how what happened came about. Furthermore, in circumstances where it is acknowledged by Mr Pearson that not only the document preservation order but also the device preservation order is appropriate and in circumstances where the disputed aspects of the order have been suspended since 19 December 2017, having not been complied with in the period between 5 and 19 December 2017, I see no real justification even for imposing a costs sanction against Gulf Air.
- Turning, then, to Mr Pearson's substantive objections to the controversial aspects of the Electronic Devices Order, his overarching submission, as I have mentioned, was that an order requiring inspection of electronic devices is neither necessary nor proportionate. Specifically, Mr Pearson relied for these purposes on McLennan Architects Limited v Jones  EWHC 2604 (TCC) in which Akenhead J listed certain factors which might legitimately be taken into account when deciding whether to make an order under CPR 25.1(c), as follows:
"(a) The scope of the investigation must be proportionate.
(b) The scope of the investigation must be limited to what is reasonably necessary in the context of the case.
(c) Regard should be had to the likely contents (in general) of the device to be sought so that any search authorised should exclude any possible disclosure of privileged documents and also of confidential documents which have nothing to do with a case in question.
(d) Regard should also be had to the human rights of people whose information is on the device and, in particular, where such information has nothing or little to do with the case in question.
(e) It would be a rare case in which it would be appropriate for there to be access allowed by way of taking a complete copy of the hard drive of a computer which is not dedicated to the contract or project to which the particular case relates.
(f) Usually, if an application such as this is allowed, it will be desirable for the Court to require confidentiality undertakings from any expert or other person who is given access."
- It was Mr Pearson's submission that, taking into account these six factors, the Electronic Search Order should never have been granted and the revised order now sought by Gulf Air ought also not to be made. As to (a) and (b), Mr Pearson submitted that there is no possible basis on which the Electronic Devices Order could be said to be proportionate since its scope is too wide-ranging and nor is there any basis on which it could be said to be reasonably necessary. Mr Pearson went on to observe that there is no basis for supposing that destruction of evidence has occurred or is likely to occur in the future. He submitted, in particular, that the simple fact that the present proceedings allege fraud is an insufficient basis on which to make the order sought since, if that were the position, then, such relief would be granted in every fraud case. Nor, he went on to submit, is it sufficient for Gulf Air to make a generalised allegation against the Defendants collectively and so without focusing on the necessity or proportionality of an order being made against the individual Defendants. Mr Pearson also prayed in aid the fact that the Defendants do not object to the making of a preservation order; indeed, he pointed out that such an order has been in place since 5 December 2017. It was his submission that this makes an order for inspection unnecessary.
- I cannot agree with Mr Pearson about this. It seems to me, on the contrary, that Mr Cogley must be right when he submitted that in a case such as the present an order for inspection is both necessary and proportionate. This is a fraud case - or at least a case in which fraud has been alleged. Whilst I do not mean to suggest that in every fraud case an order for inspection would fall to be made, since it will obviously depend on the nature of the fraud allegations made in individual cases, nonetheless in a case like this where communications were, it seems, overwhelmingly electronic in nature, if only because the alleged participants in the fraud were located in different places around the globe and travelled frequently, in my view, it is eminently appropriate that an order for inspection is made. Indeed, as Mr Cogley pointed out, the delivery up of the laptop used by Mr El Assaad pursuant to paragraph 11(2) of the (original) Freezing Order has itself served to confirm these matters. That laptop has also enabled Gulf Air to piece together events which would otherwise have not been possible. I agree with Mr Cogley that there can be no doubt that the Defendants' electronic devices will almost certainly contain material which is highly relevant to Gulf Air's claims. I consider that it is only right, in the sense of being both necessary and proportionate, to put Gulf Air and its lawyers in a position where they have access to this material at this stage so that they can ascertain the full picture.
- In a sense, given that the original inspection order has been suspended now for several months, the fact that this application is being considered in the context of the Freezing Order is less significant than it might otherwise have been. Statements of case have now been exchanged and the proceedings have, accordingly, advanced since the original (and then suspended) inspection order was made. Put differently, were an application now to be made under CPR 25.1(c) in circumstances where no such application had previously been made in the context of an application for a freezing order, I consider that the application would have had independent merit. Given this, the fact that the application is being considered in the context of the Freezing Order ought not to detract from the appropriateness of an inspection order being made at this juncture.
- I consider, in the circumstances, that an order is both necessary and proportionate - at least in the terms which have now been put forward. It is right, however, in my view, that the wording should make express provision which preserves the confidentiality of documents disclosed as part of the inspection process. Although I am clear that CPR 31.22 (or what used to be known as the 'implied undertaking'), in any event, applies, it seems to me that it would be sensible for an express undertaking on the part of Gulf Air to the effect that the documents are not used for collateral purposes is included. Otherwise, although Mr Pearson also complained that factors (c) and (f) have not adequately been taken into account in the revised paragraphs 12(4) and (5), that plainly is not the case at all since the wording put forward by Mr Cogley contains a mechanism which is expressly directed towards these matters. The reference in the second line of paragraph 12(5) to "the Claimant's solicitors and" should, however, come out and Mr Cogley was prepared to accept this. In short, whatever criticisms might legitimately have been made in relation to the original paragraph 11(3) as regards factor (c), as I see it, such criticisms no longer pertain. The same applies to Mr Pearson's reliance on factor (d) since the revised draft order contemplates that any "material that does not in any way relate to this dispute" will be identified by the Defendants' solicitors and will not be made available to Gulf Air. This is also the answer to Mr Pearson's reliance on factor (e).
- I am clear, in the circumstances, that an order in the form of the revised paragraphs 12(4) and (5) put forward by Gulf Air (as further revised through the deletion of the words identified above and through the insertion of CPR 31.22-type wording) is appropriate in this case.
- In conclusion, therefore:
(1) Mr Hirani's, Inflight's and Epcon's applications to set aside the Freezing Order are each dismissed;
(2) Inflight's and Epcon's applications to set aside service out of the jurisdiction and for a declaration that the Court has no jurisdiction to hear the claims against them are each dismissed; and
(3) Gulf Air's applications for continuation of the Freezing Order and for amendment of the Electronic Devices Order which forms part of that order are granted.
- I am grateful to all counsel for their assistance in this matter.