BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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(1) COMMERCIAL BANK OF DUBAI PSC (2) HORTIN HOLDINGS LIMITED (3) WESTDENE INVESTMENTS LIMITED (4) LODGE HILL LIMITED (5) VS 1897 (CAYMAN) LIMITED |
Claimants |
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(1) MR ABDALLA JUMA MAJID AL SARI (2) MR MAJID ABDALLA JUMA AL SARI (3) MR MOHAMED ABDALLA JUMA AL SARI (4) FAL OIL INC (5) INVESTMENT GROUP PRIVATE LIMITED (6) IPGL GENERAL TRADING LLC (7) GLOBE INVESTMENT HOLDINGS LIMITED (8) MENA INVESTMENT HOLDINGS LIMITED (9) MAS CAPITAL HOLDINGS LIMITED (10) MR HAMAD SAID HAMA ABDALLA ALMHEIRI |
Defendants |
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Jonathan Cohen KC and Nicola Allsop (instructed by PCB Byrne LLP) for the Seventh, Ninth and Tenth Defendants
Hearing dates: 12, 13, 14, 15 and 18 November 2024
Draft judgment to parties: 9 December 2024
Further submissions: 10, 13, 14, 16 and 17 December 2024
Further draft judgment to the parties: 17 December 2024
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Crown Copyright ©
Mr Justice Foxton :
i) The Tenth Defendant's ("D10"'s) application to set aside the order of Dias J granting the Claimants permission to serve proceedings on him out of the jurisdiction ("the Service Out Application").
ii) The Claimants' application for a Worldwide Freezing Order ("WWFO") against D10 ("the WWFO Application").
iii) The Seventh and Ninth Defendants' application to strike out or for summary dismissal of the Claimants' claims ("the Summary Judgment Application").
iv) The Claimants' application for permission to amend ("the Amendment Application").
BACKGROUND
i) In the case of Article 169(1), "if the adverse party has committed an act of fraud which affected the underlying judgment or ruling."
ii) In the case of Article 169(6), "by a party who considers that the judgment or ruling rendered in the legal proceedings is adversely affecting its interests where such a party has neither intervened in, nor been impleaded into, the underlying legal proceedings, provided that such a party proves fraud, collusion or gross negligence of the representative acting on his behalf".
i) The Bank, not being a party, could not seek reconsideration under Article 169(1).
ii) The BVI Companies' petition did not set out the substance of the fraud alleged.
iii) The Bank had not shown that it had purchased the BVI Companies at the relevant time and that it could seek relief under Article 169(6).
i) The Sharjah Court of Appeal recorded the BVI Companies' Article 169(1) grounds, including that the Globe Documents were fabricated;
ii) The Sharjah Court of Appeal held that Article 169(1) was concerned with attempts to deceive the court, and permitted reconsideration for "what was not apparent to the opponent throughout the duration of the hearing of the case so that it was not given the opportunity to make the defense thereof in the case and demonstrate the truth therefore to the Court and in which it was impossible for the Pleader to discover then".
iii) The Sharjah Court of Appeal held that the BVI Companies had not proved fraud, "being a fraud that was not apparent to the Pleader throughout the duration of hearing the appeal" and that "what was mentioned by the Pleaders however is nothing else than a challenge against the appealed judgment, a thing for which the plea may not be filed".
iv) The Sharjah Court of Appeal said that the Bank had not proved Article 169(6) was applicable and the plea "may not be filed".
v) Accordingly, the pleas for reconsideration could not be filed.
i) It submitted that the Cassation Court could not hear argument on the trial court's decision "so long as the trial court's judgment is reasonable and sufficient to substantiate its ruling".
ii) It repeated its argument that the Bank had not adduced evidence to show it had purchased the BVI Companies, who had been represented by the BVI court-appointed receiver.
iii) It submitted that the BVI Companies had failed to substantiate the fraud, emphasised the need for "the fraud alleged to have affected the petitioned judgment", and the BVI Companies had not produced "new papers appearing after rendering the petitioned judgment", referring to a UAE Cassation judgment which it said showed that it was necessary to show "fraud that was concealed from the opponent throughout the period of considering the lawsuit" which the petitioner did not have the opportunity to reveal to the court.
THE CLAIMS AND APPLICATIONS
The Claims brought against the PCB Defendants
i) Globe represented that the Globe Documents were genuine when deploying them in the Globe Sharjah Proceedings, and in pursuing claims to enforce the First and Second Globe Appeal Judgments in the Globe DIFC and BVI Proceedings (in which it also represented that the First and Second Globe Appeal Judgments were capable of recognition and enforcement).
ii) The representations were false and known to be false, and made maliciously, and induced the Bank to rely upon them,
iii) Globe is liable in deceit and for the tort of malicious falsehood and Mr Almheiri is liable as a joint tortfeasor.
How the various applications interrelate
i) A good arguable case that their claims against D10 fall within a jurisdictional gateway. This issue arises on two bases:
a) whether and to what extent the Claimants have causes of action of the requisite arguability against D10; and
b) whether the Claimants can serve D10 as a so-called non-cause of action defendant, the WWFO Application also being made against him on that basis.
ii) A serious issue to be tried on the merits.
There is also a free-standing issue of whether the duty of full and frank disclosure was complied with and, if not, what consequences should follow.
i) the preclusive effects of the First to Third Globe Appeal Judgments (which also forms the basis of D7 and D9's summary judgment application);
ii) whether the subject-matter of any claim benefits from absolute privilege by reason of judicial proceedings immunity ("JPI");
iii) the alleged absence of loss;
iv) the failure to plead a claim under the applicable law;
v) the arguability of:
a) the deceit claim;
b) the malicious falsehood claim;
c) the Marex tort claim;
d) the malicious prosecution claim;
e) the dishonest assistance claim;
f) the s.423 claim; and
g) the conspiracy claim.
i) Have the Claimants shown a serious issue to be tried in respect of the causes of action advanced against D10?
ii) So far as WWFO relief sought on a Chabra basis is concerned:
a) Is there a good arguable case or good reason to suppose that D10 controls assets amenable to execution of the Bank Sharjah Judgment against the Al Saris?
b) Is there a gateway for service out of such a claim where there are no ongoing pre-judgment proceedings against the Al Saris?
c) Is there a proper case for bringing proceedings in this jurisdiction?
iii) In both cases, has a real risk of dissipation been established; and is it just and convenient to grant the WWFO, having regard to the fact the Claimants have not adequately quantified their loss and by reason of delay?
i) The allegedly preclusive effect of the First to Third Globe Appeal Judgments (which will also decide the Summary Judgment application).
ii) Do the causes of action pleaded against D10 and the other PCB Defendants have a real prospect of success?
iii) The remaining service out issues.
iv) The remaining WWFO issues.
v) The Amendment Application.
THE ALLEGEDLY PRECLUSIVE EFFECT OF THE FIRST TO THIRD GLOBE APPEAL JUDGMENTS
The Law
i) A foreign judgment may have preclusive effect in English proceedings in respect of matters which are "necessarily decided" by it (Carl Zeiss Stiftung v Rayner & Keeler (No 2) [1967] 1 AC 853, 916-917, 947).
ii) Some caution is required before concluding that a foreign judgment has preclusive effect in English proceedings, because "English courts are unfamiliar with modes of procedure in many foreign countries, and it may be difficult to see whether a particular issue has been decided or that a decision was a basis of foreign judgment and not merely collateral or obiter" (Carl Zeiss, 918).
iii) A foreign judgment can only have the preclusive effect it would have in its own jurisdiction (Carl Zeiss, 919, 927, 936, 949 and 969-70).
iv) A foreign judgment will not be recognised or enforced in this jurisdiction if it was procured by fraud (Owens Bank v Bracco [1992] 2 AC 443, 465) or results from proceedings which do not meet requirements of natural justice (Adams v Cape [1990] Ch 443, 563).
v) It is open to the judgment debtor to resist the recognition or enforcement of a foreign judgment on the grounds of fraud even where the issue of fraud was raised, litigated and rejected in the foreign proceedings (and, necessarily therefore, even where it was not litigated in foreign proceedings but the point could have been raised had due diligence been exercised): Abouloff v Oppenheimer & Co (1882) 10 QBD 295. I should note that while Abouloff was concerned with an action to enforce a judgment, and Owens Bank with registration of a foreign judgment, the argument before me proceeded on the basis that the same approach applied when the court was asked to recognise the judgment and give effect to it under the doctrine of issue estoppel, consistent with the treatment in Spencer Bower and Handley: Res Judicata 6th [17.08].
vi) However, where a party has itself litigated before a foreign court the issue of whether a prior foreign judgment was procured by fraud, it may be precluded by a second foreign judgment rejecting that claim from seeking to resist recognition or enforcement of the earlier foreign judgment on the basis that it was procured by fraud: House of Spring Gardens Ltd v Waite (No 2) [1991] QB 241.
vii) An issue estoppel will not operate in "special circumstances", which include where new material becomes available which could not have been discovered at the time of the earlier determination by the exercise of due diligence (Arnold v National Westminster Bank [1991] 2 AC 93, 108-109).
i) When House of Spring Gardens was decided, it was unclear whether an action to set aside an English judgment on grounds of fraud could only be brought where a "due diligence" condition was satisfied (whether in relation to the discovery of the fraud or of new evidence not considered at trial capable of shedding a sufficiently different light on events).
ii) Following Takhar v Gracefield Developments Ltd [2019] UKSC 13, the position so far as an action brought to set aside a judgment of the courts of England and Wales on the basis that the judgment was procured by fraud is concerned is as follows. If no allegation of fraud had been raised at trial, the party seeking to set the judgment aside on grounds of fraud does not have to meet any due diligence requirement. Where the allegation of fraud had been raised at trial, and new evidence was relied upon, Lord Kerr of Tonaghmore expressed the view that the court had a discretion as to whether to entertain the action, but did not finally determine the matter ([55]). The remaining Justices (save for Lord Briggs) agreed with Lord Sumption's judgment. He noted that it was "well-established" that an action to set aside a civil judgment "must be based on new evidence not before the court in the earlier proceedings", but expressed the provisional view that where the issue of fraud was raised in the earlier proceedings, but the "new evidence" condition was satisfied, there was no due diligence requirement ([66]).
iii) The key difference, therefore, between resisting the enforcement of a foreign judgment on the basis that it was procured by fraud and seeking to set aside a judgment of this jurisdiction on the same basis where the allegation of fraud was litigated and rejected in the impugned judgment, is the absence in the former context of any requirement for new evidence (still less new evidence of some particular quality).
"In none of these cases was the question, whether the judgment sued upon here was obtained by fraud, litigated in a separate and second action in the foreign jurisdiction. Unless Egan J.'s decision is itself impeached for fraud, it is conclusive of the matter thereby adjudicated upon, namely, whether Costello J.'s judgment was obtained by fraud Mr. Swift argued that if Mr. Parish's and Mr. Waldie's evidence had been tendered before Costello J. and had been rejected, it would still have been open to the defendants, in enforcement proceedings in this country, to set up an allegation, based upon that evidence, to the effect that Mr. Sacks had given perjured evidence and so procured his judgment by fraud. Why, then, should it make any difference that the evidence is adduced, and the issue contested in a second action in Ireland? The answer is that no question of fraud on the part of Mr. Sacks was in issue in the Costello action; it was in the Egan action."
"no doubt whatever that, even if the judgment of Egan J. did not create an estoppel, it would be an abuse of process for the Waites to re-litigate the very same issue in the English courts upon which they failed in Ireland, not least because they themselves chose that forum, which was the natural forum in which to challenge the judgment of Costello J. They could, if they had wished, merely have waited for enforcement proceedings to be taken here and then attempt to set up fraud. They did not do so. They cannot try again here to obtain a different verdict."
i) a party raising the allegation of fraud to answer a claim the claimant had set in motion against it in the foreign jurisdiction; and
ii) a party raising the allegation of fraud in new proceedings after a final and enforceable judgment has been entered in earlier foreign proceedings, on the basis that that earlier judgment was obtained by fraud.
The Evidence of Sharjah Law
"20. The points are made by Mr Arden QC on the defendant's behalf, first, that there is at present before the court no opinion on the meaning of the Spanish provision given by an independent expert. The opinions currently expressed on each side are from individuals who work for the law firms acting for each party. Secondly, the evidence which has been given is not subject to the CPR provisions governing expert reports and the duties imposed on experts under that regime. Those duties include, for example, the duty to draw attention to the range of opinions on an issue, including those which conflict with the expert's own opinion. Thirdly, there is no full exegesis, and indeed the claimants' evidence contains no real exegesis at all, of the legal methods which would be used to answer the relevant question of foreign law in the foreign legal system. In particular, there has been no full explanation of the applicable principles of statutory interpretation, the hierarchy of relevant legal sources, the status of decided cases and matters of that sort. Fourthly, I must recognise that the opinion given by the claimants' lawyer is contradicted by an opposite opinion which is not simply a bare and unreasoned opinion but is one for which reasons have been provided. There has, at this stage, been no testing of the opinions of the witnesses on each side such as would occur through the court process, including a meeting between experts if the case proceeds to trial and, most importantly of course, the process of cross-examination.
21. I do not say that those difficulties automatically or necessarily would preclude the court from granting summary judgment. There may well be points on which foreign law is so clear and the opinion expressed by one lawyer is so clearly right and that expressed by the lawyer on the other side so obviously wrong that the points can be decided summarily. Indeed, I take the view, although the point is no longer live, that the argument based on article 55 of the Spanish Insolvency Act fell into that category.
22. However, I am unable to say that the remaining issue in this case is as straightforward as that
25. In these circumstances, strong as I consider on the face of it the claimants' case on the meaning of article 97.2 to be, I do not feel able to reach the conclusion on the material now before the court, with all the inherent limitations which that material has at this early stage of proceedings, that there is no real prospect of the defendant's interpretation being accepted. I therefore do not consider that I can take the view that the argument is bound to fail and on that basis grant summary judgment to the claimants."
i) It is strongly arguable that Article 169(1) was not available to the BVI Companies because it only applies to fraud discovered after the judgment was obtained. Mr Ramadan referred to a number of UAE court decisions to this effect (see for example the Dubai Court of Cassation, Case No 43.2011, 26 September 2011), and reference to that issue is a recurring feature of the various court filings and judgments. While the BVI Companies argued for a different approach, there does not seem to be any strong basis for such an argument, and the argument does not appear to have been accepted.
ii) It is arguable that the BVI Companies' challenge to the First Globe Appeal Judgment was rejected at the "admissibility" stage on this basis, this being a consistent theme of the filings and a point which features in the Second Globe Appeal Judgment.
iii) It follows that there is a serious issue to be tried that the BVI Companies had no right to challenge the First Globe Appeal Judgment in respect of the fraud relied upon for Abouloff purposes, and that there has been no determination of the fraud case now relied upon by the BVI Companies in the Sharjah Proceedings (given the uncertain scope of the Second Globe Appeal Judgment).
iv) Turning to Article 169(6), it is strongly arguable that it only applies where the interests of a non-party are adversely affected by a judgment, and the non-party can establish fraud, collusion or gross negligence on the part of the party representing its interests in the proceedings. It is also strongly arguable that this requires the Bank to establish fraud, collusion or gross negligence by those acting for the BVI Companies in the First Globe Appeal Judgment, and that it is not enough to point to alleged fraud by one of the parties prior to, and independently of, the litigation (e.g. the Al Saris committing the BVI Companies to the transaction in the Globe Documents). That appears to be the more natural reading of Article 169(6) and derives some support from case law to which Mr Ramadan referred: in particular the Dubai Court of Cassation, Case No 204/11, 19 February 2012 and Federal Supreme Court, Case No 125/19, 30 May 1999.
v) It is fair to say that the various filings and the Third Globe Appeal Judgment do not track this legal structure as closely as they might, and there are passages which can be relied upon to suggest that a wider assault on the Globe Documents was being invoked and rejected, with the Bank advancing a different interpretation of Article 169(6). However, it is arguable that the Bank had no legal right to challenge the First Globe Appeal Judgment on the basis of the fraud it now invokes under the Abouloff principle, and that this was one of the reasons why the challenge did not succeed, such that it cannot be said that it was a necessary element of any of the Sharjah court decisions relied upon by the PCB Defendants that the fraud now relied upon by the Bank was considered and rejected on the merits.
vi) I am also satisfied that it is arguable that the Second and Third Globe Appeal Judgments rejected the Bank's application for reconsideration at the "admissibility" stage for the purposes of Article 172 of the Code of Civil Procedure, although the position is not clear, at least to me.
vii) Once again, it follows that there is a serious issue to be tried that the Bank had no right to challenge the First Globe Appeal Judgment in the UAE respect of the same fraud as can be relied upon for Abouloff purposes, and that there has been no determination of the fraud case now relied upon by the Bank in the Sharjah Proceedings.
DO THE CAUSES OF ACTION PLEADED AGAINST THE PCB DEFENDANTS HAVE A REAL PROSPECT OF SUCCESS?
Are Any of the Proposed Claims Barred by Judicial Proceedings Immunity?
Introduction
i) The deceit and malicious falsehood claims rely upon:
a) The deployment of the Tenancy Agreement in the Possession Proceedings in this jurisdiction (and in the DIFC Tenancy Proceedings).
b) The bringing of the claim in the Sharjah Globe Proceedings on the basis of the Globe Documents.
c) The bringing of proceedings in the Globe DIFC Proceedings on the basis of the First and Second Globe Appeal Judgments.
d) The bringing of proceedings in the Globe BVI Proceedings on the basis of the First and Second Globe Appeal Judgments.
ii) The unlawful means / joint tortfeasor claims to the extent that they depend on the claims of deceit, malicious falsehood or contempt, rely on the same events.
Would JPI be engaged on the assumption the relevant events all took place in English court proceedings?
The authorities
i) In the first category, he referred to attempts to bring claims for conspiracy to give false evidence at a trial, which had been rejected in a large number of cases including Marrinan v Vibart [1963] 1 KB 528, where Sellers LJ observed at 535:
"It has been sought in this case to draw a difference between the action of libel and slander, the action of defamation, and that which is set up in this case, one of conspiracy. I can see no difference in the principles of the matter at all. Whatever form of action is sought to be derived from what was said or done in the course of judicial proceedings must suffer the same fate of being barred by the rule which protects witnesses in their evidence before the court and in the preparation of the evidence which is to be so given."
ii) In the second category, he referred to the decisions in Watson v M'Ewan [1905] AC 480 (holding that JPI prevented a witness being sued in defamation and for breach of confidence for what he had told the lawyer who took his proof of evidence) and Taylor v Director of the SFO [1999] 2 AC 177 (where JPI was applied to a letter one investigator had written to another).
i) Lord Hope noted at p.466 that one of the justifications for JPI the Multiplicity of Actions Justification was not engaged, because the "core immunity is limited in its application to things said or done in court" (although it was actually the fact that the proceedings had been stayed, such that there had never been a determination in court in that case, which avoided the spectre of a "multiplicity of actions"). It is important, however, that he approached the case as one in which the Multiplicity of Actions Justification was not engaged, and the application of JPI in that case had to be substantiated on the basis of the other justification of JPI, "to encourage freedom of speech and communication in judicial proceedings by relieving persons who take part in the judicial process from the fear of being sued for something they say".
ii) He held that this alternative justification required JPI to extend to pre-hearing matters such as interviews with solicitors and investigating police officers for the purpose of proceedings in contemplation. However, at p.488, he distinguished between "statements made by police officers prior to giving evidence and things said or done in the ordinary course of preparing reports for use in evidence, where the functions that they are performing can be said to be those of witnesses or potential witnesses as they are related directly to what requires to be done to enable them to give evidence" on the one hand, "and their conduct at earlier stages in the case when they are performing their functions as enforcers of the law or as investigators" on the other. At p.499, he held that JPI did not extend to "such acts to procure false evidence as the planting of a brick or drug or the fabrication of a record of interview", drawing a distinction between "the act itself and the evidence that may be given about the act or its consequences":
"This distinction rests upon the fact that acts which are calculated to create or procure false evidence or to destroy evidence have an independent existence from, and are extraneous to, the evidence that may be given as to the consequences of those acts. It is unlikely that those who have fabricated or destroyed evidence would wish to enter the witness box for the purpose of admitting to their acts of fabrication or destruction. Their acts were done with a view to the giving of evidence not about the acts themselves but about their consequences. The position is different where the allegation relates to the content of the evidence or the content of statements made with a view to giving evidence, and not to the doing of an act such as the creation or the fabrication of evidence. The police officer who is alleged to have given false evidence that he found a brick or drug in the possession of the accused or that he heard an accused made a statement or a remark which was incriminating is protected because the allegation relates to the content of his evidence. He is entitled to the immunity because he was speaking as a witness, if he made the statement when he was giving evidence, or was speaking as a potential witness, if he made it during his preliminary examination with a view to his giving evidence."
iii) Lord Clyde said, at p 460-461 (emphasis added):
"No immunity should attach to things said or done which would not form part of the evidence to be given in the judicial process. The reason for admitting to the benefit of the immunity things said or done without the walls of the court is to prevent any collateral attack on the witness and circumvention of the immunity he or she may enjoy within the court."
It cannot be that everything which is said or done in the preparation for judicial proceedings is necessarily immune."
At p.461, he also noted:
"So far as the second purpose of the immunity is concerned, the desirability of avoiding repeated litigation on the same issue, that too has no relevance to the present case. In the event there was no concluded trial. The proceedings were stayed on the ground of an abuse of process. There is no decision against which a collateral attack can be made."
iv) Lord Hutton stated at p 469:
"[T]he immunity in essence relates to the giving of evidence. There is, in my opinion, a distinction in principle between what a witness says in court (or what in a proof of evidence a prospective witness states he will say in court) and the fabrication of evidence, such as the forging of a suspect's signature to a confession or a police officer writing down in his notebook words which a suspect did not say or a police officer planting a brick or drugs on a suspect."
"(i) the core immunity relates to the giving of evidence and its rationale is to ensure that persons who may be witnesses in other cases in the future will not be deterred from giving evidence by fear of being sued for what they say in court;
(ii) the core immunity also comprises statements of case and other documents placed before the court;
(iii) that immunity is extended only to that which is necessary in order to prevent the core immunity from being outflanked;
(iv) whether something is necessary is to be decided by reference to what is practically necessary;
(v) where the gist of the cause of action is not the allegedly false statement itself, but is based on things that would not form part of the evidence in a judicial inquiry, there is no necessity to extend the immunity (emphasis added);
vi) in such cases the principle that a wrong should not be without a remedy prevails."
i) Not every cause of action which includes an averment that false evidence was given will be struck out on the basis of witness immunity, and it is not appropriate to divide allegations into those that involve giving evidence, and those that do not.
ii) Lord Morris' statement in Roy v Prior [1071] 1 AC 470, 477 that JPI "does not involve that an action which is not brought in respect of evidence given in court but is brought in respect of an alleged abuse of process of court must be defeated if one step in the course of the abuse of the process of the court involved or necessitating the giving of evidence" was capable of a wider or narrower interpretation. The narrower interpretation was that JPI did not preclude the bringing of claims for specific torts such as malicious prosecution, malicious arrest and an abuse of process. The wider interpretation was that "if the action is not brought simply in respect of evidence given or supplied but is brought in relation to some broader objective during the currency of which it may well be that evidence was given, witness immunity should not apply."
iii) On either approach, Surzur's claim was not barred by JPI. It would be absurd if Surzur could bring a claim in conspiracy if deceived into releasing the vessels from the WWFO without the need for a court decision but not otherwise. If the conspiracy was correctly classified "as a conspiracy to hide assets and cheat Surzur by the manufacture of false documents", JPI did not apply.
iv) In any event, a conspiracy to defeat the WWFO and obtain the release of assets from the scope of the order by non-parties "must be a conspiracy to abuse the process very akin to the malicious arrest which was the subject of Roy v Prior."
"I have real doubts as to whether English law recognises a tort of unlawful means conspiracy dishonestly to defend a claim through the production of forged documents in those proceedings. The extension of the tort of malicious prosecution to the initiation of civil proceedings is not without controversy (see the differing views in Willers v Joyce [2016] UKSC 43), and there is no tort of maliciously defending proceedings. Even if it is possible to overcome those difficulties through the tort of unlawful means conspiracy, further issues would arise as to whether the deployment of forged evidence at trial can provide the basis for a private law cause of action, or is a matter to be dealt with under the court's jurisdiction (through strike-out or committal) or under the criminal law (cf. Marrinan v Vibart [1963] 1 QB 234)."
i) Darker had confirmed that JPI did not apply "to the fabrication of documentary evidence then presented to a court" ([558], [559.5]).
ii) Surzur had determined that if the giving of false evidence is not a necessary allegation in the claim but merely an incidental part of a wider conspiracy, there is no JPI ([559.4]).
iii) JPI does not apply to a claim for abuse of process.
iv) The claim for forgery of the signature was not barred by JPI for each of those reasons ([562]).
The considerations apparent in the authorities?
i) While in Darker, there was a relatively clear delineation between the planting of false evidence by investigating officers prior to the claimant's arrest, and the evidence which would have been given in their subsequent prosecution, the line between those two types of unlawful act can be a fine one. Take the case where the forged document is first deployed as an exhibit to a statement, with the statement itself ascribing the false description to it; or where a genuine document is falsely presented in evidence as relating to a particular event (e.g. a receipt for a taxi to address A on a particular date when it is fact a receipt for a taxi to Address B). Further. a complaint that a relevant document was deliberately concealed will not amount to an act which is unlawful independent of the court-process, and yet may otherwise involve conduct of a very similar level of iniquity to the creation of a false document.
ii) In an age when it is generally documents rather than witness testimony which win cases (as Judge Tindal noted in Takhar at [562.1]), permitting free-standing claims that the claimant suffered loss because of an adverse court decision reached as a result of a forged document creates a very significant risk of re-litigation.
iii) I note that in Smart v Forensic Science Service Ltd [2013] EWCA Civ 783, [26], Moses LJ interpreted Darker as holding that JPI did not extend to "fabrication or creation of evidence in circumstances where that fabrication is never intended to appear in any evidence." While it is difficult to find that qualification in the passages in Darker referred to, it is a distinction which would address some of the concerns in (i) and (ii), although it may not be consistent with Surzur and Gracefield.
i) As I have stated, in Darker, the case had been permanently stayed prior to any conviction.
ii) In Smart v Forensic Science Service Ltd [2013] EWCA Civ 783, in which negligent or possibly dishonest forensic evidence had led the claimant to plead guilty to a strict liability offence, the conviction had been set aside before the civil action for loss was commenced.
iii) In Singh, the claimant was amending its existing claim to add a claim based on events during the proceedings and prior to any judgment.
iv) In Takhar, the prior judgment which was said to have been procured by the forgery had already been set aside on that basis (although I do not understand Judge Tindal's conclusion that forging and deploying forged documents which led to an adverse judgment being entered can form the basis of a claim in the tort of unlawful means conspiracy to be limited to cases in which an action to set aside a judgment on grounds of fraud had previously succeeded: see [560.2]).
v) In Surzur, the claimant had already obtained judgment on the merits when it commenced its unlawful means conspiracy claim, and its success in that judgment was a necessary ingredient of its claim to have suffered loss from the variation to the WWFO (such that its ability to enforce that successful judgment against the three "transferred" vessels was impaired).
vi) In JSC BTA Bank v Khrapunov [2018] UKSC 19, to which Judge Tindal also referred, the defendant was sued for participation in an unlawful means conspiracy to deal with assets in breach of a WWFO, the unlawful means being the contempt of court constituted by the original respondent's breach of the WWFO. The Supreme Court rejected an argument that the claims were barred by JPI. Once again, the decision did not involve the contention that fraud had led to a subsisting merits judgment which would not otherwise have been reached and which was the instrumentality of the claimant's loss. As Sales LJ noted in Khrapunov in the Court of Appeal ([2017] EWCA Civ 40, [55]:
"Mr Samek submitted that recognition of civil contempt of court as unlawful means for the purposes of the tort of conspiracy to injure by unlawful means would open the floodgates to liability and should be discounted on that ground. I do not agree. Looking first at the person who is subject to a court order, no floodgates issue arises. Since typically either the court order will directly reflect some underlying private law right of the claimant in relation to that person (e g where a final injunction is issued to protect such a right) or in the case of a freezing order will only protect the claimant to the extent that he can establish his underlying claim in damages against that person which the freezing order was issued to protect. If civil contempt is recognised as unlawful means for the purposes of the tort of conspiracy, it has only a duplicative rather than a floodgates effect."
vii) Clearly there may be cases in which proceedings seek to recover loss caused through the instrumentality of an interim decision reached by the court: Surzur is one, as the Court of Appeal emphasised. However, Moore-Bick J's decision to vary the WWFO did not involve a final determination, but an interim decision which was capable of being reviewed or set aside in the event of a material change of circumstances, still less a final merits determination of a substantive claim. "Re-litigation" of interim determinations has never raised the same level of concern about the issue of finality as attempts to re-litigate substantive determinations.
i) the loss is said to have been inflicted by the instrumentality of that final merits determination (and losses ancillary to such a determination, such as liability for one's own or the other party's costs following defeat on the substantive claim); and
ii) that final merits determination has not been set aside.
"When a writ is issued the rights of the parties are crystallised. The function of the litigation is to ascertain what those rights are and grant the appropriate remedy. The submission of the defendants in this case is that, notwithstanding this, one party's conduct of the litigation can not only change that party's substantive rights but do so retrospectively avoiding the contract ab initio. It cannot be disputed that there are important changes in the parties' relationship that come about when the litigation starts. There is no longer a community of interest. The parties are in dispute and their interests are opposed. Their relationship and rights are now governed by the rules of procedure and the orders which the court makes on the application of one or other party. The battle lines have been drawn and new remedies are available to the parties. The disclosure of documents and facts are provided for with appropriate sanctions; the orders are discretionary within the parameters laid down by the procedural rules. Certain immunities from disclosure are conferred under the rules of privilege. If a party is not happy with his opponent's response to his requests he can seek an order from the court. If a judgment has been obtained by perjured evidence remedies are available to the aggrieved party. The situation therefore changes significantly. There is no longer the need for the remedy of avoidance under section 17; other more appropriate remedies are available. The same points have been persuasively made by Callahan AJ sitting in the Supreme Court of Connecticut in Rego v Connecticut Insurance Placement Facility (1991) 593 A 2d 491, 497 .
I recognise that it is possible for something to be done in the litigation which may amount to a contractual act; the delivery of pleadings and similar documents are a form of communication. Such communication can have a contractual significance which can and will still be given effect to. Thus it is possible by a pleading to repudiate a contract or accept a repudiation as terminating the contract. Similarly, a claim or defence may affect the substantive rights of a landlord and tenant inter se. But the acts and omissions of the assured relied upon by the defendants in the present case are not of that character. They are solely relevant as alleged failures to observe good faith under section 17. The section 17 principle is a principle of law and if its rationale no longer applies and if its operation, the conferment of a right of avoidance, ceases to make commercial or legal sense then it should be treated as having been exhausted or at the least superseded by the rules of litigation. It will also very often be the case that by the time the litigation has started the cover has expired or its subject matter has ceased to exist so as to make the continuing relationship of insurer and insured no longer current and the observation of good faith only significant to the litigation."
At [110], Lord Scott saw "a great deal of force in the argument that the section 17 duty does not apply to conduct in the prosecution of litigation, as to which the Rules of Court that govern litigation constitute the regulatory code."
"A court awarding costs in a civil action is entitled to have regard to all relevant matters, including the absence of any prospects of success and the state of mind in which it was pursued, when deciding what costs, and whether on an indemnity or standard basis; should be recoverable. To permit litigation about these issues after the close of an unsuccessful action would be to invite or risk re-litigation of issues which were or could have been decided in the first action. And in so far as the costs assessed by a costs judge are not likely to or may not enable full recovery of all costs incurred, the reason is likely to be that the costs incurred were not in the eyes of the law necessary, reasonable or proportionate in the context of the issues. To allow a claim for their recovery in a separate action for malicious pursuit of the original action would in each of these cases run contrary to the general policy of the law regarding costs."
The position in this case
i) I am not persuaded that the fact that the false evidence deployed in court took the form of forged documents rather than witness evidence always precludes the operation of JPI, and I am not persuaded that the "act/evidence" distinction referred to at [81] above is sufficient to oust the operation of JPI in this core "re-litigation" context.
ii) There was no attempt to deploy the Globe Documents prior to their deployment in the Globe Sharjah Proceedings. If there are contexts in which that may be sufficient to take the claim outside the scope of JPI (as Surzur might suggest, albeit that decision was not reached in a re-litigation context), this is not one of them.
iii) I am not persuaded that the allegation of a broader purpose conspiracy to frustrate the enforcement of the Bank Sharjah and BVI Judgments is sufficient to take the claim outside of the scope of JPI, at least in this core "relitigation" context. The immediate purpose of the alleged conspiracy was to procure a Sharjah court judgment against the BVI Companies. The fact that this may have formed a new front in a longer war does not render JPI inapplicable, nor the fact that there may have been an ulterior intent to deploy the judgment thus obtained to frustrate enforcement of the Bank Sharjah Judgment against the Bridge Properties.
i) It is likely to be permissible in both the DIFC and BVI to resist the enforcement of a foreign judgment on the basis that it was procured by fraud. That suggests that even if JPI does apply to foreign proceedings, it does not preclude challenging enforcement on that basis.
ii) The Claimants do not claim that they have suffered loss through the instrumentality of a decision of the DIFC or BVI courts induced by fraud, as I understand that neither court has delivered any decision in Globe's favour. The difficult issue which would arise if it was said that the judgments of the enforcement courts had been procured by fraud and this was relied upon as the basis of a private law claim for damages does not arise.
iii) The issue of whether the claim might be barred on some other basis e.g. because it would involve outflanking costs orders of those courts was not explored and may not arise.
i) The Tenancy Agreement was first deployed in correspondence with the receiver on behalf of the BVI Companies on 27 June 2019.
ii) On 31 January 2021, the Sixth Defendant obtained an interim injunction from the Court of First Instance of the DIFC to prevent the BVI Companies from dealing with the Bridge Properties in breach of the Tenancy Agreement, and the Sixth Defendant also issued proceedings in the DIFC for specific performance of the Tenancy Agreement.
iii) On 22 August 2021, the DIFC granted immediate judgment in the BVI Companies' favour in the DIFC Tenancy Proceedings. The DIFC injunction was continued pending the Sixth Defendant's appeal, which was dismissed, with the DIFC injunction set aside, on 23 March 2022.
iv) On 14 April 2022, the Sixth Defendant issued a claim in the Sharjah Court of First Instance seeking a declaration that the Tenancy Agreement was valid, but on 15 June 2022 those proceedings were dismissed for want of jurisdiction.
v) On 5 April 2022 the Possession Proceedings were commenced in the CLCC. The Sixth Defendant applied to join the Possession Proceedings and sought to defend them on the basis of the Tenancy Agreement. On 28 April 2023, the Possession Judgment made an order for possession and declared that the Tenancy Agreement was fabricated.
i) In no case was a judgment on the merits obtained through reliance on the Tenancy Agreement, all of the applications ending in failure or dismissal.
ii) The Tenancy Agreement was deployed prior to the commencement of any relevant proceedings in an effort to persuade the receiver of the BVI Companies not to seek possession.
iii) The damages claims are not brought against a party to the relevant proceedings (raising arguments of how private law claims against a counterparty in litigation for costs interrelate with the relevant court's costs jurisdiction).
iv) The order obtained in the DIFC Tenancy Proceedings was an interim order, not a final determination, and could be and was set aside.
Does JPI arise where the relevant judicial proceedings are in another jurisdiction?
i) In Brownlie v FS Cairo (Nile Plaza) LLP [2022] AC 995, [108]-[126], Lord Leggatt distinguished between the "default rule" so far as claims before the English courts governed by foreign law are concerned, and the "presumption of similarity". The former reflects the fact that the parties may choose not to raise issues as to the content of any foreign law, but to conduct the case entirely by reference to English law principles. The latter is an evidential presumption, which may sometimes arise in a case in which foreign law is engaged but no evidence of some aspect of that law is before the court, that the relevant foreign law is the same as English law.
ii) The Claimants' claims have been pleaded by reference to English law under "the default rule". As yet, D7 and D9 (who have served defences) have not pleaded that any of the claims are governed by some other system of law, and D10 has yet to plead.
iii) Nonetheless, in the jurisdiction and strike out challenge, the PCB Defendants have contended that some other system of law is the applicable law for certain claims.
iv) Further, in the jurisdiction challenge of D7 and D9 dismissed by Bright J ([2023] EWHC 1797 (Comm)), Bright J at [147]-[148], [151-[153]) suggested that the law applicable to claims under "the deceit heading" was the law of the place of relevant proceedings (UAE, DIFC and BVI respectively), and that those claims relating to "knowing false representations" in the Globe Sharjah and Globe DIFC Proceedings were governed by UAE law, with there being no claim in relation to the Globe BVI Proceedings because there was no evidence of loss.
v) If there is a limitation of the English law doctrine of JPI that it does not (or does not always) apply to events in foreign proceedings, then it is open to the Claimants to rely upon it. To the extent that this (or a related) issue turns on what the law concerning JPI is in the relevant foreign jurisdiction, it might be argued that the effect of the parties currently advancing their case by reference to the default rule is that I should assume the application of English law principles for all purposes.
vi) However, it is clear from the argument I have heard that the Claimants will, to the extent that I hold that their claims relating to the Globe Sharjah Proceedings are barred by JPI if applicable, advance a case that those claims would not be barred by JPI under UAE law, and they have already submitted expert evidence to that effect which, although disputed, is accepted as raising a triable issue.
vii) In these circumstances, and having heard considerable argument on the point, I have decided that it is appropriate to address the point at this time.
The authorities
"That absolute privilege attaches to words spoken or written in the course of giving evidence in proceedings in a court of justice is a rule of law, based on public policy, that has been established since earliest times. That the like privilege extends to evidence given before tribunals which, although not courts of justice, nevertheless act in a manner similar to that in which courts of justice act, was established more than a hundred years ago by the decision of this House in Dawkins v. Lord Rokeby (1875) L.R. 7 H.L. 744
The kind of tribunal in which the evidence of witnesses is entitled to absolute privilege was described by Lord Atkin in O'Connor v Waldron [1935] AC 76, 81, as a tribunal which 'has similar attributes to a court of justice or acts in a manner similar to that in which such courts act.'"
"When in Trapp v. Mackie [1979] 1 W.L.R. 377, 379 Lord Diplock referred to a tribunal acting 'in a manner similar to courts of justice' and Lord Fraser of Tullybelton at p. 385G to tribunals having 'similar attributes' to courts of justice, I think that they must have had a wider concept in mind which would embrace courts of justice operating both under common law and under civil law procedures."
i) She accepted that Hasselblad offered support for the contention that there was no territorial restriction to JPI ([117]-[118]). It will be apparent that Heather Williams J's interpretation of the case differs from my own.
ii) She held that "the common law principle of comity and the strong public policy interest in ensuring harmony between English law and foreign jurisdictions in the context of foreign-seated arbitrations" supported the absence of any territorial limitation ([119]).
iii) In the specific context of foreign arbitrations, she accepted a submission that those comity considerations were supported by the UK's obligations under the New York Convention for the Recognition and Enforcement of Arbitral Awards ([121]-[122]).
iv) She concluded that there was no basis for the suggestion that JPI (including its application to foreign proceedings) breached Article 6 of the ECHR (applying Heath v Commissioner of Metropolitan Police [2005] ICR 329) ([131]).
"98. Decisions of co-ordinate Courts.
There is no statute or common law rule by which one Court is bound to abide by the decision of another Court of co-ordinate jurisdiction. Where, however, a judge of first instance after consideration has come to a definite decision on a matter arising out of a complicated and difficult enactment, the opinion has been expressed that a second judge of first instance of co-ordinate jurisdiction should follow that decision; and the modern practice is that a judge of first instance will as a matter of judicial comity usually follow the decision of another judge of first instance unless he is convinced that that judgment was wrong.
It is undesirable that different judges of the same division should speak with different voices."
What assistance can be obtained from other areas of law?
"The policy rationale for witness immunity, as articulated by the Supreme Court in Briscoe, applies with equal or near equal force in the arbitral context: '[T]he truth finding process is better served if the witness's testimony is submitted to 'the crucible of the judicial process so that the factfinder may consider it, after cross-examination, together with the other evidence in the case to determine where the truth lies.'"
"I agree with the judge that the principle in the Abouloff case in its extreme formulation should not be extended to arbitration awards but would put the matter a little differently but only in degree. I would suggest that the reason why the Abouloff principle should not be extended to foreign arbitration awards is first that an arbitration award is an award from the tribunal chosen by the parties to decide their dispute; that will very often not be the case either when a domestic or a foreign judgment has been obtained. Second, there is thus a logic in placing foreign arbitration awards into the same category as domestic arbitration awards and not into the same category as foreign judgments."
i) The privilege against self-incrimination is essentially a procedural rule arising under the law of the forum, whereas, as I explain below, I am not persuaded that JPI is properly so classified: see [122]-[123].
ii) While English criminal law is given a privileged status, incrimination under foreign criminal law is not ignored.
i) I have concluded that the application of JPI as a matter of English law does not depend on England and Wales being the relevant forum: see [122]-[123] below. Once again, the issue for the English court in the LPP and WPP context is the manner in which its own proceedings should be conducted.
ii) While there has been an increasing recognition of LPP as a fundamental right, and it is a right which can be invoked outside legal proceedings, it is a right which has a procedural character (conferring an immunity from document production inside and outside court proceedings), rather than a conventional private law right or immunity. In particular, this is a context in which the English court, when asked to enforce that "fundamental right" by restraining disclosure or use of documents subject to LPP in foreign (or arbitral) proceedings, is likely to leave matters to the decision of the court or tribunal rather than pre-empt their control of the production of evidence in their own proceedings through injunctive relief: Wang v Floreat Private Ltd [2023] EWHC 224 (Comm).
iii) There are particular challenges with applying anything other than the law of the forum to evidential immunities in English proceedings, including the need for both parties to be on an even-playing field, and the fact that decisions on disputes as to production of documents are determined in short interlocutory hearings rather than at trials. These are not engaged here.
Analysis and conclusion
i) It is a rule of the forum, like LPP, WPP and the privilege against self-incrimination.
ii) It takes effect as part of the lex causae.
iii) It is a mandatory rule of English public policy which applies regardless of the lex causae under (for present purposes) Article 16 Regulation (EC) No 864/2007 of 11 July 2007 ("Rome II").
i) If JPI was a rule of the forum, it would seem to follow that a claim could be brought under English law in another forum (possibly including, for this purpose, arbitrations seated in England and Wales) which, if brought in this jurisdiction would engage JPI. To my mind, this would defeat the policies underlying JPI: the Witness Inhibition Justification, because the risk of being sued in a foreign court for evidence given in English court proceedings would have every bit as chilling an effect as the risk of being sued here, and perhaps a greater one; and the Multiplicity of Proceedings Justification, because the claim in the foreign court would provide a means of re-visiting the correctness of the judgment of the English court. In Erhard-Jensen, [123] I understood Heather Williams J to agree with this position. If a foreign court was hearing such a claim and wished to ascertain the position under English law as the lex cause, in my view the evidence which should be given is that English law does not recognise a substantive right to relief in such a situation.
ii) Similarly, I do not think the position under the lex causae can be determinative. If it were possible here to establish English jurisdiction in respect of a cause of action governed by foreign law which, if English law applied, would be defeated by JPI, I have no doubt the claim would fail, the foreign lex causae notwithstanding. Once again, both the Witness Inhibition and Multiplicity of Proceedings Justifications would be undermined were this not to be so.
iii) For that reason, I have favoured the third classification of JPI as a mandatory rule of English public policy.
i) The comity considerations which featured prominently in Heather Williams J's judgment tell strongly against the first approach, and in a case in which the claim is governed by the applicable law of the foreign jurisdiction, it would involve treating the immunity under the law of that jurisdiction differently to the manner in which, I would suggest, we would wish a foreign court to treat a claim governed by English law in respect of English court proceedings (see [123] above). There is much to be said for a principle of "do as you would be done by".
ii) The difficulty with the second formulation is that neither the Witness Inhibition nor Multiplicity of Proceedings Justifications support such a course, to the extent that the relevant conduct is actionable in the place of the judicial proceedings. If the witness could be the subject of suit in respect of their evidence in the place they give it, it seems fanciful to suppose that the prospect of being sued in England and Wales in respect of the same activities could meaningfully increase the chilling effect of potential civil liability for conduct in the foreign proceedings. Further, the ability to bring the proceedings in that jurisdiction itself creates the risk of multiplicity of proceedings. English law does temper its commitment to the finality of the determination of foreign court proceedings where the result of those proceedings is not final under the law of that foreign court (Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] 1 AC 853, 918-19).
Applications to the facts of this case
The Failure to Plead the Claims by Reference to UAE Law
i) D7 and D9, whose jurisdiction challenge has already been rejected and who have served their Defence, have not pleaded that the claims are governed by UAE law, Bright J's conclusions notwithstanding, but have been content to proceed on the basis of the default rule (see [101]) above.
ii) As D10 is a director of D7 and D9, it was entirely reasonable for the Claimants to proceed on the same basis so far as he was concerned. It remains to be seen if D10 will seek to disapply the default rule if this action proceeds.
iii) In any event, evidence of UAE law is before the court. The PCB Defendants have identified the specific occasions when they say this gives them a "knock out" blow, and I will consider those submissions on their merits.
The Deceit Claim
"Mr Hayward's deceitful conduct was intended to influence the mind of the insurers, not necessarily by causing them to believe him, but by causing them to value his litigation claim more highly than it was worth if the true facts had been disclosed, because the value of a claim for insurers' purposes is that which the court is likely put on it."
"In modern terms, we can perhaps regard the action to set aside a judgment for fraud as akin to an action for deceit. The only significant differences are that the court, rather than the opposing party to the first action, has to be shown to have been deceived, deliberate dishonesty is required, and materiality rather than simple reliance must be shown. If the elements are made out (misrepresentation or misleading conduct, made or undertaken fraudulently, with reliance for deceit and materiality for an action to set aside a judgment), the contract or the judgment can be rescinded or set aside."
In this case, the key features of Hayward the dishonest statement being made to the representee for the purposes of inducing the representee to act in a certain way, and the representee so acting because of the dishonest statement whether they believed it or not are absent.
i) "Knowingly false representations by Globe about the Globe Documents" in the Globe Sharjah, DIFC and BVI Proceedings ([145]-[147]) which he found were governed by UAE law in relation to the Globe Sharjah and DIFC Proceedings, and possibly BVI law so far as the BVI proceedings are concerned (although I understand that no permission was given to serve out in respect of the Globe BVI Proceedings because there was no evidence of any loss). I am satisfied that it is also strongly arguable that the law governing the claim relating to deceit in the DIFC Proceedings is DIFC law.
ii) Allegations that knowingly false representations were made which led to the Sharjah and DIFC decisions (there remains no identified decision in the Globe BVI Proceedings). At [149], Bright J held that the claims relating to the Globe Sharjah and DIFC Proceedings are governed by UAE law. I am satisfied that it is also strongly arguable that the claim relating to the Globe DIFC Proceedings are governed by DIFC law.
i) Article 298 of the UAE Civil Code provides for a 3 year limitation period from the date the victim becomes aware of the harm and the identity of the wrongdoer. In UAE Court of Cassation Case Number 71/2022, the Court suggest that what is required is that the claimant "knows with certainty" the identity of the wrongdoer. The Abu Dhabi Court of Cassation has suggested that the claimant must have "true knowledge of the harm" and the person responsible for it. Mere suspicions or "uncertain knowledge" are insufficient to start the limitation period.
ii) However, a claim for abuse of right has a 15 year limitation period under Article 473(1). There is a dispute between the UAE lawyers as to how far the claims in the Particulars of Claim could be asserted as abuse of rights claims under Article 106 of the UAE Civil Code, and whether a claim which can be asserted both as a tort and an abuse of rights can be pursued as an abuse of right claim to benefit from the 15 year limitation period. Mr Ramadan can point to a Ras Al Khaimah Court of Cassation decision in Petition No. 100/2 which provides some support for his position. To the extent that these matters are in dispute, I am unable to resolve that dispute now. Therefore, to the extent that the Claimants seek to rely on the UAE provisions governing claims for abuse of right to support the actionability of the facts currently pleaded, it is arguable that such a claim would not be time-barred.
iii) What of any claims which cannot be brought as an abuse of rights? I understand that the claim was issued against D7 and D9 on 18 February 2022, which is also the "relation back" date of any amendments for D7 and D9. That is within 3 years of the commencement of the Globe Sharjah Proceedings when the Globe Documents were first deployed. While proceedings were commenced against D10 on 23 February 2024, there is disputed evidence that the commencement of proceedings against D7 and D9 would "toll" the limitation period against D10. In these circumstances, there is an arguable basis to overcome any limitation defence D10 may have under UAE law, even leaving aside the argument (which also does not lend itself to summary determination) as to when the Claimants knew "for certain" rather than merely "suspected" that D10 was a willing participant in any dishonest behaviour, rather than merely signing documents he was asked by the Al Saris to sign without appreciating their significance. It is the Claimants' case, which the court cannot determine at this hearing, that they did not learn of D10's personal involvement in negotiating the Globe Documents until after the proceedings were commenced in 2022. Finally, there are also disputed issues of UAE law as to whether the claims concern "continuing torts", and whether, under UAE law, time does not start to run until harm ceases.
The Malicious Falsehood Claim
"(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which
(a) the operation of section 4A of this Act prejudices the plaintiff or any person whom he represents, and
(b) any decision of the court under this subsection would prejudice the defendant or any person whom he represents,
the court may direct that that section shall not apply to the action or shall not apply to any specified cause of action to which the action relates.
(2) In acting under this section the court shall have regard to all the circumstances of the case and in particular to
(a) the length of, and the reasons for, the delay on the part of the plaintiff;
(b) where the reason or one of the reasons for the delay was that all or any of the facts relevant to the cause of action did not become known to the plaintiff until after the end of the period mentioned in section 4A
(i) the date on which any such facts did become known to him, and
(ii) the extent to which he acted promptly and reasonably once he knew whether or not the facts in question might be capable of giving rise to an action; and
(c) the extent to which, having regard to the delay, relevant evidence is likely
(i) to be unavailable, or
(ii) to be less cogent than if the action had been brought within the period mentioned in section 4A."
i) I accept that claim is currently pleaded by reference to English law under the "default rule", although the hearing did canvas the position under other laws.
ii) I accept that it is arguable whether Rome II applies to the tort of malicious falsehood: Qatar Airways Group QCSC v Middle East News FZ LLC [2020] EWHC 2975 (QB), [165]-[166] (Saini J). However, the candidates for applicable foreign law remain UAE, DIFC and BVI law for the different claims, for reasons set out above, whether Rome II applies or not.
iii) There was an argument as to whether any claims have to satisfy the requirement of double-actionability due to the exclusion of malicious falsehood from the Private International Law (Miscellaneous Provisions) Act 1995 by s.13. I accept that it is not necessary to determine this issue on this occasion.
iv) Had it been necessary to address the issue of double actionability at this stage:
a) So far as the position under UAE law is concerned, I am satisfied that it is arguable that the facts relied upon to establish the malicious falsehood claim are actionable (it may be under the same general delictal cause of action discussed elsewhere in this judgment).
b) There was no evidence before me as to whether a tort of malicious falsehood exists under DIFC law. Had it been necessary at this hearing to consider the position under DIFC law, I would not have been willing to apply the presumption of similarity to a system which involves a rather careful and "business-orientated" selection of common law principles, and which operates by reference to a statute which appears to contain a comprehensive statement of the applicable principles of tort law.
c) There was similarly no evidence of BVI law, but I would have been willing to apply the presumption of similarity to the existence of the tort under BVI law.
d) As to limitation, if the requirement of double actionability had arisen for determination, the effect of sections 1(1) and (2) of the Foreign Limitation Act 1984 is that the limitation law of England and Wales remains relevant in a "matter in the determination of which both the law of England and Wales and the law of some other country fall to be taken into account." As a result, both the English and any applicable foreign limitation period must be satisfied: Deutsche Bahn AG v Mastercard Inc [2018] EWHC 412 (Ch), [157]-[158].
e) I accept for reasons I have already set out at [147] above that there is an arguable basis for overcoming any limitation defence under UAE law. I would require further evidence before being able to reach a view as to whether the special limitation provisions introduced into the Limitation Act 1980 for claims in defamation and malicious falsehood have BVI equivalents. If the ordinary six-year rule applies, then no limitation issue would arise under BVI law.
f) It follows that determining the issue now of whether the requirement of double actionability applied would have had limited impact on the case, and I am satisfied that it is not necessary to do so.
The Marex tort
The pleaded case
i) The PCB Defendants induced or procured the Al Saris not to satisfy their liabilities under the Bank Sharjah and BVI Judgments by "providing the false pretext that Globe had enforceable rights under the Globe Documents against the BVI Companies and is entitled as a creditor to prevent the BVI Companies from disposing of the Bridge Properties."
ii) That was "a sufficient condition to induce the Al Sari Brothers to fail to transfer the Bridge Properties to the Bank and as a result delayed the Bank realising their value".
iii) The PCB Defendants deployed the Globe Documents and First Globe Appeal Judgment on 2 May 2023 to obtain the WWFO in the Globe DIFC Proceedings for the purpose of obstructing the Possession Judgment obtained by the BVI Companies on 28 April 2023.
iv) Alternatively, in so far as the Globe Documents created enforceable obligations, the Globe Documents were entered into "to impose obligations on the BVI Companies for no or no adequate consideration" thereby prejudicing the Bank's ability to enforce its judgments.
i) The Bank had reduced the value of the judgment debt by £9 million in return for acquiring shares in the BVI Companies on 6 April 2021. The Claimants' pleaded case acknowledges that this involved partial satisfaction of the judgment debt. That occurred after the Globe Documents had been deployed and been found to be forgeries in the Globe First Instance Judgment, after Globe had appealed that decision, and after the BVI Companies had received the expert committee's preliminary report of 17 January 2021 which was to the same effect as its final report and which treated the Globe Documents as authentic.
ii) The value of the BVI Companies was exclusively located in the Bridge Properties.
iii) The only pleaded instance of the Globe Documents being deployed as a reason not to transfer the Bridge Properties into the possession of the BVI Companies was the reference to the WWFO granted in the DIFC Globe Proceedings on 2 May 2023 and discharged on 19 June 2023. That was relied upon by Mr Gebremedhin, the housekeeper, on 3 May 2023 as a reason not to hand over possession.
iv) By this date the Bank had already executed the Bank Sharjah and BVI Judgments to the extent of the value of the BVI Companies and its assets. The Bank's real complaint is that the realisable value of assets acquired in part satisfaction of the Bank's Sharjah and BVI Judgments was diminished by a failure to transfer the Bridge Properties to the Bank.
v) By contrast, the BVI Companies can point to the deployment of the DIFC freezing order as a step arguably taken to obstruct the enforcement of the Possession Judgment through the actions of Mr Gebremedhin which were arguably part of the co-ordinated strategy to resist handing over possession of the Bridge Properties.
vi) The alternative complaint is that before the Bank acquired the BVI Companies, there was an attempt to reduce their value (and hence the value which the Bank could realise from enforcing against the BVI Companies as assets of the Al Saris) by saddling the BVI Companies with debt. I accept it is arguable that the Globe Documents were created after the Bank Sharjah and BVI Judgments were entered and that this provides an arguable basis for the Marex tort.
The applicable legal principles
"There is a crucial difference between cases where the defendant induces a contracting party not to perform his contractual obligations and cases where the defendant prevents a contracting party from carrying out his contractual obligations. In inducement cases the very act of joining with the contracting party and inducing him to break his contract is sufficient to found liability as an accessory. In prevention cases the defendant does not join with the contracting party in a wrong (breach of contract) committed by the latter. There is no question of accessory liability. In prevention cases the defendant acts independently of the contracting party "
i) The entry of a judgment in the claimant's favour.
ii) Breach of the rights existing under that judgment.
iii) The procurement or inducement of that breach by the defendant.
iv) Knowledge of the judgment on the part of the defendant.
v) Realisation on the part of the defendant that the conduct being induced or procured would breach the rights owed under the judgment.
vi) It suffices that the defendant intended to violate the claimant's rights under the judgment. The defendant does not need also to intend thereby to damage the claimant.
vii) It is not essential that the defendant to a claim for the Marex tort has actual knowledge of the contents of the judgment.
viii) Blind-eye knowledge is sufficient.
ix) Any active step taken by the defendant having knowledge of the covenant (sc. the judgment debt) by which he facilitates a breach of that covenant falls within the ambit of the tort.
x) There is no need to establish "spite, desire to injure or ill will" on the part of the defendant.
i) It had generally been supposed that mere prevention without the accessory acting on the mind of the contracting party was not sufficient, unless the conduct of the accessory was itself tortious.
ii) A distinction between conduct which does and does not act on the mind of the contracting party receives some support from the judgments of Lord Hoffmann and Lord Nicholls in OBG Ltd v Allan [2008] 1 AC 1 and the Court of Appeal in Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] AC 33, suggesting that the accessory must do "something which joins in with the conduct of B in a way which makes him an accessory to the breaking of the contract by B" in the form of "persuasion, encouragement or assistance of B to break the contract with C."
iii) The particular issue of whether entering into an inconsistent contract, the performance of which would prevent a contracting party from complying with an existing contractual obligation, can itself constitute "persuasion, encouragement or assistance" in the breach has been considered in two cases: Meretz Investments NV v ACP Ltd [2007] EWCA Civ 1301, in which Toulson LJ held that the third party's conduct "had to operate on the will of the contracting party" and Lictor Anstalt v Mir Steel [2011] EWHC 3310 (Ch), [49]-[52], in which David Richards J held that it was arguable that entering into an agreement to purchase equipment as part of a business which the other party had already agreed to sell to a third party was sufficient for liability in the tort of inducing breach of contract. In Kemball the decision in Lictor was explained as involving "accessory liability in the form of assistance rather than persuasion".
i) In the course of a rather limited search, I have found little discussion in the pre-judgment context of the tort of inducing breach of an obligation to pay money by conduct of this type rather than persuasion. As to the latter, in Law Debenture Trust Corp v Ural Caspian Oil Corp Ltd [1995] Ch 152, 164 Sir Thomas Bingham MR stated that "if, following default by the principal debtor, a third party induced a guarantor to dishonour his secondary obligation to pay the creditor, I would need much persuasion that the third party was not liable in tort." However, he also stated at 166:
"The court will restrain a defendant and potential judgment debtor from making himself judgment-proof by dissipating his assets and may order him to give disclosure of assets in support of the injunction. But the defendant violates no legal right of the plaintiff if he makes himself judgment-proof by dissipating his assets before he is enjoined from doing so and he does not act unlawfully in failing to give disclosure before he is ordered to do so."
ii) Liability in tort for assisting a debtor in dissipating assets such that the debtor can no longer meet a monetary obligation could raise complications not found in relation, for example, to contractual obligations to provide services or deliver goods, namely that the control of debtors who enter into transactions which impede their ability to pay their creditors is generally regulated by bankruptcy and insolvency laws, and by provisions which aim to increase the class of assets available for the creditor pool as a whole rather than giving a claim in damages to an individual creditor. There is, however, room to frustrate enforcement without effecting a reduction in the debtor's net assets, such as moving assets to enforcement-hostile jurisdictions or replacing readily realisable assets with those which are harder to sell. Further, issues might also arise as to (i) how such a private law claim for damages would co-exist with remedies such as those arising under s.423 of the Insolvency Act 1986, particularly where the claims are brought by different creditors and (ii) whether participating in a transaction which is susceptible to s.423 relief can constitute unlawful means for the purpose of the law of unlawful means conspiracy (see [204] below).
iii) Robin Knowles J identified as one argument in support of the Marex tort that where there was a right to payment of the sum in contract (and implicitly, accessory liability for procuring breach of that obligation) before judgment, there was no reason why the same should not apply after judgment had been entered on the debt. Reflecting the fact that the court was only concerned with the arguability of the claim, there was limited discussion of how the tort of inducing or procuring breach of contract operates in relation to obligations to pay money. Further, there is not a complete symmetry between the pre- and post-judgment positions: it seems to be the law that there is no tort of inducing breach of an obligation to pay damages (if it is meaningful to speak of such an obligation: see Sandy Steel and Robert Stevens, "The Secondary Legal Duty to Pay Damages" (2020) 136 LQR 283): see Merkur Island Shipping v Laughton [1983] 2 AC 507, 608; Dimbleby & Sons Ltd v National Union of Journalists [1984] 1 WLR 427, 434-435 and Law Debenture Trust Corp v Ural Caspian Oil Corp Ltd [1995] Ch 152. However, the Marex tort would appear to be in play once judgment had been entered for damages and a judgment debt had come into being.
iv) The core of the concept of inducement, where the accessory persuades or encourages the judgment debtor not to comply, is likely to feature rarely in the Marex tort (Mr Cohen KC went so far as to suggest that it could never be sufficient for the Marex tort, although it is not easy to identify a principled reason why this should be the position). This is because the law provides directly and readily available means to enforce judgments against judgment debtors who are able, but not willing, to discharge their judgment debts, to a much greater extent than it does, pre-judgment, for breaches of contract. Indeed, the complaint in most Marex tort cases (including this one) is not that the defendant has persuaded a contracting party not to perform its obligations of its own volition, but that it has taken steps which have obstructed the claimant's ability to procure forced compliance by a recalcitrant judgment debtor with the judgment debt.
The position here
i) No issue of foreign law applies in relation to the Possession Judgment.
ii) I am willing to apply the presumption of similarity in relation to the Bank BVI Judgment.
iii) There was conflicting evidence as to whether the facts relied upon to establish the Marex tort in relation to the Bank Sharjah Judgment gave rise to a cause of action under UAE law, and I accept it is arguable that they do.
i) On the Bank's alternative case that the Globe Documents are genuine, I accept that it is arguable that the PCB Defendants assisted the Al Saris in saddling the BVI Companies with debt and thereby reduced the value of those assets against which the Bank Sharjah and BVI Judgments could be enforced. I accept it is arguable that the Globe Documents were created after the Bank Sharjah and BVI Judgments were entered and possibly after the Bank obtained a final charging order over the shares in the BVI Companies on 19 February 2019. I am also satisfied that accessory liability on the basis of the "prevention" conduct element is arguable, not least because (as I explain below) it is arguable that if the Globe Documents are genuine, they involved a breach of duty by the Al Saris and dishonest assistance in that breach by the PCB Defendants (so that prevention arises through an act which is independently unlawful).
ii) There may be an issue as to the effect of the Bank's decision, with knowledge of the Globe Documents, to acquire the BVI Companies in return for a US$9 million reduction in the amount of the Bank's BVI and Sharjah Judgment, such that the alleged conduct has not in fact caused the Bank loss qua judgment debtor. However, that issue was not explored before me.
i) I understand from the Claimants' submissions after the draft judgment was circulated that the Bank is not seeking to argue that the deployment of the Globe Documents in the course of the Possession Proceedings is actionable by the Bank as the Marex tort.
ii) As noted at [153(iii)] above, the only pleaded instance of the Globe Documents being deployed as a reason not to transfer the Bridge Properties into the possession of the BVI Companies was the DIFC Globe Injunction obtained on 2 May 2023 and discharged on 19 June 2023, and the reliance thereon by Mr Gebremedhin on 3 May 2023. By this date the Bank had executed the Bank Sharjah and BVI Judgments to the extent of the value of the BVI Companies and its assets. The Bank's complaint here is that the value of assets acquired in part satisfaction of the Bank's Sharjah and BVI Judgments was diminished, or the realisation of that value through the BVI Companies impeded, by the failure to transfer the Bridge Properties to the BVI Companies. Whatever legal claims that might generate, the Marex tort is not amongst them.
i) I am willing to apply the presumption of similarity to the position under BVI law so far as the Bank BVI Judgment is concerned.
ii) It is possible that a claim for loss caused by interference with the Bank's BVI Judgment can be brought under UAE law, but the evidence of UAE law (and indeed the relevant legal provisions) are in the most general terms, and the submissions received to date are not sufficient for me fairly to decide this point.
i) I will require further oral argument on this part of the Bank's claim, as the pleadings are not easy to follow, and I do not recall being taken through them in oral argument. This can be done at the restored hearing when the malicious prosecution claim is addressed (see below).
ii) So far as limitation under UAE law in relation to any cause of action based on Marex-tort facts, for the reasons set out at [147] above, I am unable to conclude that the PCB Defendants have a "knock out blow".
Malicious prosecution of the DIFC Globe Proceedings
i) It is common ground that DIFC law does not recognise a tort of malicious prosecution: see [131] above.
ii) Article 25 of Rome II provides:
"Where a State comprises several territorial units, each of which has its own rules of law in respect of non-contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Regulation."
iii) This raises the issue of whether the DIFC can be regarded as a "territorial unit" of the UAE with "its own rules of law in respect of non-contractual obligations". The DIFC is a special economic zone in Dubai which, by Federal Law No. 8 of 2004, is exempt from all federal civil and commercial laws within the UAE, although UAE criminal law still applies. It has a geographic area of 110 acres.
iv) In Harrison Jalla v Shell International Trading and Shipping Company Limited [2023] EWHC 424 (TCC), Mrs Justice O'Farrell considered whether the Nigerian Exclusive Economic Zone constituted a territorial unit of Nigeria for Article 25 purposes. At [335]-[338], she rejected that argument, noting that the Nigerian EEZ was not a territorial unit, and did not have its own laws. Those conclusions are unsurprising. The EEZ was simply an area of the sea extending off the coast of Nigeria over which certain sovereign rights are claimed. By contrast the DIFC is a designated territorial area with its own distinct laws and institutions, whose separate and particular identity within the UAE is recognised by UAE law. I am satisfied that it falls to be treated as a country for Article 25 purposes.
"Malicious prosecution: UAE law. Although there is no UAE law tort of malicious prosecution specifically so called, such acts would nevertheless give rise to liability."
"Malicious prosecution
(a) Applicable law. Damage occurred where the costs were incurred. That is onshore Dubai, where the Bank signed the retainers and paid the fees. UAE law applies.
(b) No tort. Ds do not maintain the position that malicious prosecution is not actionable in UAE law. Third Hadef Letter makes clear that it is.
(c) Loss. No reason why Cs should not be entitled to costs as damages. Damages at §59.6 (malicious prosecution in Tenancy/Possession Proceedings) also claimed against PCB Ds under overarching conspiracy."
i) referred to one authority which had not featured on the list of 119 authorities I was asked to read after the hearing, and another which only featured as relevant to the issue of full and frank disclosure, but was now relied upon for a wholly different purpose;
ii) suggested that the legal costs were largely made up of work done in England (and Australia);
iii) indicated that the BVI Companies' claim for loss from malicious prosecution was not (or at least not predominantly) legal fees but the consequences of delay in selling the Bridge Properties in England (although it was later indicated that this was only relevant so far as the PCB Defendants are concerned as an alleged unlawful means in the claim of unlawful means conspiracy and not a claim in its own right); and
iv) suggested that the malicious prosecution claims were or might be "governed by different systems of law."
Dishonest assistance
i) I accept that it is arguable that this claim does not depend on the Globe Documents being genuine or the Al Saris having authority to sign them. Someone acting in a fiduciary capacity in relation to a company who helped bring about the existence of forged documents purporting to show the existence of a major liability on the part of that company would arguably be in breach of their fiduciary duties to the company and be liable for loss where those documents forced the company to incur legal fees, or because it was exposed to an adverse judgment on the transaction purportedly evidenced, or where the forgery delayed its recovery of its property. I accept that the measure of loss might differ depending on whether or not the transaction was valid. I also accept that it is possible to be a shadow or de facto director of a company without necessarily having actual authority to bind that company (Eurohome UK v Deutsche Bank [2022] EWHC 2408 (Ch), [36]-[37]).
ii) If the Globe Documents are genuine, then Mr Cohen KC contended that there was no arguable breach of fiduciary duty because the Al Saris were the sole shareholders of the BVI Companies, there was no evidence that the BVI Companies had any creditors, and that it was open to the Al Saris to ratify any breach of duty on the Duomatic principle (Re Duomatic Ltd [1969] 2 Ch 365). However, I do not feel able to resolve the issue of whether the BVI Companies had any creditors on a summary basis (for example I have seen references to service charges being paid on the properties, and there may be issues of council tax). Nor was there any evidence from the Al Saris as to the fact and circumstances of any alleged ratification. In any event the effect of the Globe Documents, if genuine, was arguably to leave the BVI Companies insolvent. There was no time for consideration at the hearing of whether the Duomatic principle (whatever may be necessary to invoke it) applied to a transaction which would immediately have the effect of making the company insolvent and unable to meet its obligations to the creditor in that transaction (cf. Precision Dippings Ltd v Precision Dippings Marketing Ltd [1986] Ch 447). In short, this issue was insufficiently explored for me to be able to conclude at this hearing to the summary judgment standard that the dishonest assistance claim had no real prospect of success.
" this form of estoppel by conduct is one which is approached by means of a broad, merits-based assessment, and is not constrained by strict rules (as, for example, issue estoppel). The matters to consider include, but are not limited to, those enumerated by Ginsburg J in the New Hampshire case. It is material to ask the question whether it is apparent that the earlier decision was obtained on the footing of, or because of, the stance taken by the party in the earlier proceedings. Absent that factor, whilst the change of position may affect the credibility of the party or the witness concerned, there will not be an impression that one or other court was misled into giving its decision, so that the administration of justice risks being brought into disrepute."
i) The Claimants challenge the 2014 date even on their alternative case (i.e. that case asserts that there was a genuine but back-dated transaction).
ii) While there may be difficulties with this thesis, to the extent that the Globe documents record events as far back as 2014, transactions can embrace events which have already happened as well as those which are yet to occur (particularly when the former were undertaken in anticipation of a future contract which would apply to them when concluded).
iii) I have seen nothing to suggest that the de jure directors had any knowledge of the Globe Documents at any point.
Section 423 of the Insolvency Act 1986
i) The documents suggest that the Al Saris owed certain debts to banks totalling AED 651,803,603.
ii) D9 agreed to pay those debts, acquiring a right to re-payment from the Al Saris which it assigned to D7 (the amount repayable was in fact AED 550 million for reasons which were not explored).
iii) The Al Saris transferred their liability to pay D7 AED 550 million to the BVI Companies.
iv) The BVI Companies acknowledged their debt of AED 550 million to Globe and agreed to pay that debt in instalments, the dates for which were later revised by a subsequent settlement agreement.
"(1) This section relates to transactions entered into at an undervalue; and a person enters into such a transaction with another person if
(a) he makes a gift to the other person or he otherwise enters into a transaction with the other on terms that provide for him to receive no consideration;
(b) he enters into a transaction with the other in consideration of marriage or the formation of a civil partnership; or
(c) he enters into a transaction with the other for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by himself.
(2) Where a person has entered into such a transaction, the court may, if satisfied under the next subsection, make such order as it thinks fit for
(a) restoring the position to what it would have been if the transaction had not been entered into, and
(b) protecting the interests of persons who are victims of the transaction.
(3) In the case of a person entering into such a transaction, an order shall only be made if the court is satisfied that it was entered into by him for the purpose
(a) of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him, or
(b) of otherwise prejudicing the interests of such a person in relation to the claim which he is making or may make.
(5) In relation to a transaction at an undervalue, references here and below to a victim of the transaction are to a person who is, or is capable of being, prejudiced by it; and in the following two sections the person entering into the transaction is referred to as 'the debtor'".
i) First, there is the person who "enters into a transaction" with the relevant purpose, referred to in s.423(5) as "the debtor", but who I shall refer to as the Principal. For s.423(3) to apply, the actual or prospective claim motivating the transaction must be a claim against the Principal.
ii) Second, there is "another person", viz the person with whom the Principal "enters into a transaction" ("the Counterparty").
iii) For section 423(1)(c) to apply, the consideration provided by the Counterparty must be significantly less than the consideration provided "by himself" ("the Consideration Provided"). The identity of the person invoked by the reference to "himself" is considered below.
i) The Bank's claim was against the Al Saris, not against the BVI Companies (which were simply an asset of the Al Saris against which the Bank sought to enforce the judgment).
ii) It is said that the Bank was making a claim against the BVI Companies in BVI Proceedings 115 of 2014. This is a reference to a Chabra freezing injunction which was obtained in the BVI on 18 November 2014.
iii) I am not persuaded that this constitutes the making of a claim for s.423 purposes. The claim was made against the Al Saris, the BVI Chabra injunction being a procedural order, which does not involve or culminate in monetary relief, made for the purpose of seeking to make any judgment against the Al Saris effective. It has been suggested that s.423 contemplates "a debtor-creditor sort of relationship" (Westbrook Dolphin Square Ltd v Friends Life Ltd (No2) [2015] 1 WLR 1713, [414]). I am not persuaded that it extends to claims for procedural relief enforceable by the court's committal powers.
iv) Accordingly, I am not persuaded that this way of putting the Claimants' s.423 case is arguable, and refuse permission to amend or serve out of the jurisdiction in respect of it.
i) On the basis of Invest Bank, there is no difficulty with the Al Sari Defendants being treated as the Principal who caused the BVI Companies to enter into a transaction.
ii) However, this argument treats the Consideration Provided as that provided by the BVI Companies (i.e. the construction discussed at [191]) which, currently at least, is not supported by the authorities. The viability of that construction is likely to be resolved by the Invest Bank appeal, and I do not believe it would be appropriate summarily to dismiss it at this stage, while acknowledging the difficulties which Mr Cohen KC identifies.
"The Al Saris did not in fact receive any consideration as contemplated by the Globe MOU because (i) no debts owed by them were repaid by [D9], or (ii) as pleaded at Amended Reply §16.4(c), insofar as any such debts were repaid by [D9], they were repaid using funds ultimately sourced from the Al Sari Defendants"
(a plea based on inference, albeit one which I am satisfied is arguable).
Unlawful means conspiracy
i) From 2016, D10 was the "general manager" of D6, the supposed tenant under the Tenancy Agreement, and which intervened in the Possession Proceedings. While the PCB Defendants allege that D10 ceased to hold this role in 2017, documents appear to show D10 representing D6 in some capacity on the board of another company in 2019 and 2022, and I am persuaded that it is arguable D10 held a role with D6 when the Tenancy Agreement was produced and deployed.
ii) There is evidence that in March 2019, shortly before the Globe Documents were deployed for the first time in the Globe Sharjah Proceedings in April 2019, Mr Abdalla Al Sari met the Chairman of the Bank, begged the Bank not to enforce against the Bridge Properties and said that the Bank would not get its hands on those properties. No comfort was given in response. While objection is taken that this conversation is not pleaded, it is in evidence, and I am entitled to take it into account in considering whether the case has a real prospect of success. In any event, my conclusion that an arguable case has been shown does not depend on this evidence.
iii) The following month, the Globe Sharjah Proceedings were commenced in the circumstances I have described at [13] and [15] above.
iv) Steps to enforce the First Globe Appeal Judgment were taken only when it was becoming clear that the reliance on the Tenancy Agreement to resist the Possession Proceedings would fail. Bright J described this timing as "striking" ([2023] EWHC 1797 (Comm), [53]) and, unexplained, I agree that it is.
v) The WWFO obtained in the Globe DIFC Proceedings was deployed by the housekeeper in occupation of the Bridge Properties (or one of them) as a reason not to leave the property. Once again, that provides a basis for inferring that this formed part of a concerted effort to resist transferring the Bridge Properties, of which the Tenancy Agreement and Globe Documents were separate strands.
vi) While Mr Cohen KC submits that this provides a weak basis for the serious allegation that D10 was involved in deploying the forged Tenancy Agreement, the inference is strengthened by the allegation (which it is accepted is arguable) that D10 was involved in forging the Globe Documents and their deployment.
i) I accept that breach of a freezing injunction is capable of constituting unlawful means: JSC BTA Bank v Khrapunov [2018] UKSC 19.
ii) The s.25 Injunction prevented the Al Saris (the first to third respondents) from taking the following acts:
"Until after the return date, the First, Second and Third Respondents (and each of them) must not remove from England and Wales or in any way dispose of, deal with or diminish the value of any of their assets which are in England and Wales up to the value of AED 430,000,000".
The prohibition was specifically stated to apply to any beneficial interest in the Bridge Properties.
iii) The s.25 Injunction also granted Chabra relief against the BVI Companies which provided that they could not "in any way dispose of, deal with or diminish the value of" the Bridge Properties.
iv) The Claimants argued that (if genuine) the Globe Documents breached the s.25 Injunction. I am unable to accept this conclusion, which turns on the interpretation of the s.25 Injunction and can be determined now.
v) The Claimants did not maintain their rather improbable suggestion that the Bridge Properties were not beneficially owned by the BVI Companies but held on trust for the Al Saris: one might ask why the Al Saris would establish offshore companies simply for them to hold assets on trust for the Al Saris, thereby eliminating many of the benefits which an offshore corporate holding structure would normally bring. Further, the argument that, in effect, the BVI Companies have no assets cuts across almost the entirety of the remainder of the Claimants' arguments, the Bank's decision to acquire the BVI Companies, the manner in which the Possession Proceedings have been pursued and most of their other causes of action. In any event, I do not think the issue of whether the s.25 Injunction was breached turns on that question.
vi) We have been reminded in ADM International Sarl v Grain House International [2024] EWCA Civ 33, [64] that freezing orders are to be strictly construed. The Claimants' argument is that the entry of any economically adverse transaction by the BVI Companies amounts to the Al Saris dealing with the Bridge Properties (it is only assets in England which are caught by the s.25 Injunction) or the BVI Companies dealing with or disposing of the Bridge Properties. In my view, neither is the case. That reflects the true construction of the s.25 Injunction, and the Claimants' construction would give worldwide force to an injunction limited to assets in England and Wales.
vii) Having raised some of these issues at the hearing, I understood the Claimants to have abandoned this argument.
i) Mr Justice Bright held that the applicable law was English law: [2023] EWHC 1797 (Comm), [167]. I accept that that is arguably the case. I also accept that it is arguable that Article 4(2) of Rome II displaces the ascertainment of applicable law by reference to where loss was suffered to UAE law so far as the Bank and D10 are concerned (an issue which did not arise before Bright J). I am also satisfied that it is arguable that the applicable law of the unlawful means conspiracy claim is UAE law under Article 4(3) of Rome II. It may be there is an arguable case that BVI law governs the claims (it is not clear to me if anyone is contending for this as a fall-back).
ii) I will apply the presumption of similarity to the content of BVI law, if that is engaged, and I accept on the expert evidence before me that it is arguable that the facts relied upon to establish the tort of unlawful means conspiracy under English law are also actionable under the law of the UAE.
iii) Even if the claim is governed by UAE law, I am unable summarily to determine it by reference to the UAE law of limitation for the reasons set out at [147] above.
THE REMAINING SERVICE OUT ISSUES
Discretion
Lack of full and frank disclosure
i) The innocence or culpability of any breach is a relevant, but not necessarily determinative, factor.
ii) The court is required to assess the importance and significance to the outcome of the application of the matters which were not disclosed to the court.
iii) The court is also required to keep considerations of proportionality well in mind.
iv) An application for permission to serve out of the jurisdiction is of a very different nature to an application for without notice injunctive relief.
THE REMAINING WWFO ISSUES
i) First, the WWFO sought in respect of the substantive claims brought against D10 ("the Conduct WWFO"). The specific issues which arise here are whether, following Dos Santos v Unitel SA [2024] EWCA Civ 1109, the claims disclose a serious issue to be tried (which I have already addressed); the operation of maximum sum order (for which purpose it is necessary to consider the amount of the arguable claim for loss and the risk of any judgment in that amount going unsatisfied), and whether it is just and convenient to grant the injunction.
ii) Second, the WWFO sought against D10 on the Chabra basis against D10 as a non-cause of action defendant ("NCAD") that he may hold assets falling within the scope of the WWFO granted against the Al Saris or against which the Bank's judgment against the Al Saris could be enforced ("the NCAD WWFO"). This raises an issue of whether the claim falls within a permission to serve out gateway, whether permission to serve out should be given, and whether it is just and convenient to grant injunctive relief.
Is there a risk of dissipation?
i) In this case, it is arguable that D10 was party to the forging of documents to assist the Al Saris obstruct the enforcement of the Bank Sharjah and BVI Judgments. While the existence of an arguable claim against the respondent will not always establish a real risk of dissipation, it may do, depending on the nature of the claim and its factual basis (Lakatamia v Morimoto [2019] EWCA Civ 2203). In this case, the substantive claim, the factual basis of which is accepted to be arguable, involves conduct which in its conception and execution is strongly suggestive of a risk of dissipation of assets to defeat any judgment which might be obtained against D10, or in respect of any assets he holds for the Al Saris.
ii) D7 and D9, against whom a WWFO has been in place since 22 February 2022, have pleaded in their Defence that their actions are controlled by D10. D7 and D9 have themselves pleaded that the purpose of the transaction purportedly embodied in the Globe Documents is "to protect the asset from enforcement" ("the asset" being a reference to the supposed debt to MAS).
iii) D7 and D9 failed to comply with their disclosure obligations under the WWFO for three months, only doing so after committal proceedings were commenced, and gave false information to the court about their knowledge of the proceedings (as Mr Justice Calver found: [2022] EWHC 701 (Comm)). As, on his own case, their "controlling mind", that failure also raises legitimate concerns about D10's readiness to comply with court orders.
iv) D8, a company D10 claims to control, sent an email after it was placed into liquidation stating, "please do the needful to transfer the ownership of MAS Capital Holdings Limited and Globe Investment Holdings Limited to Mr Hamad Saif Hamad Abdalla Al Mheiri on an urgent basis". That is suggestive of an attempt to move assets away from creditors.
v) That material amply establishes a real risk of dissipation in the required sense.
i) There has been a WWFO in place against D7 and D9 since 18 February 2022, giving D10 ample opportunity to dissipate his assets should he wish to do so.
ii) The present application was brought on notice, which itself strongly suggests that the Claimants do not believe that there is a real risk of dissipation.
iii) In a brief submission made orally, that the Claimants had only sought a £400,000 freezing order in respect of D7 and D9 from Cockerill J in February 2022 which showed (a) there was no substance to the sum now claimed because it was so much higher and/or (b) there was no risk of dissipation because there had been no application to increase the £400,000 so far as D7 and D9 are concerned.
i) As to the first, this is not a case in which there is evidence to show that D10 has not dissipated assets despite being on notice of a possible claim. The court has no visibility of movements in his assets during the intervening period. In any event, there are reasons why respondents who are seeking to challenge the jurisdiction (as D10 has, and to some success) may not take steps which would prejudice their standing before the court while that issue is pending, but become more sanguine about doing so once that challenge has failed. To the extent the argument is that all the dissipation will have taken place already, it is answered by Mr Justice Cooke's observation in Antonio Gramsci Shipping Corp v Recoletos [2011] EWHC 2242 (Comm), [28]-[29] (now too well-known to require quotation) and by the fact that some assets e.g. real property can take longer to dissipate than others, but may nonetheless be dissipated if sufficient time is available. That is also an answer to the alleged delay.
ii) As to the third point, I had not recollected the third point (advanced briefly only orally on the morning of the fourth day) when I circulated the draft judgment which did not deal with it. I accept that is regrettable, and that dealing with the point now may not be the most propitious occasion from Mr Cohen KC's perspective. However, both parties have indicated that they are content I should do so. I am not persuaded by this argument either. As to the amount, Mr Peto KC said that a great deal more work had been done on quantum since the "without notice" application before Cockerill J 2 years 10 months ago, with the benefit of disclosure, and with further losses incurred. I do not feel able to go behind that explanation at this stage. The material placed before me is more extensive than that placed before Cockerill J.
iii) As to the failure to seek additional relief from D7 and D9, D7 and D9 had provided asset disclosure. The Claimants' position is that D10 is funding D7 and D9's legal fees and that, on the basis of that asset disclosure, D7 and D9 do not have assets to repay that funding. D7 and D9 have themselves said that they lacked the assets to fund their legal fees. If that is right, it would explain why it was not thought worthwhile seeking to increase the Maximum Sum for D7 and D9.
iv) Indeed, consideration of the position of D7 and D9 undermines the position of D10 on risk of dissipation generally. D10 is, on his own case, the controlling mind and will of D7 and D9. If there is a sufficient risk of D7 and D9 dissipating their assets, it necessarily follows that there is a sufficient risk of D10 being the controlling mind and will behind that dissipation. Yet D10 has never caused D7 or D9 to seek to challenge the conclusion of Cockerill J and Calver J that there is a real risk of D7 and D9 dissipating their assets.
The Conduct WWFO: the maximum sum order
i) It is right to say that I was initially unsympathetic about the PCB Defendants' complaint about the late introduction of this material, but became more sympathetic when it became apparent from post-hearing submissions that the interrelationship between the different heads of loss addressed in Mr Richards' seventh affidavit was rather more complicated than first appearances might suggest, and that on proper analysis it was said to lead to a different total to that suggested at the hearing (see [236]). I accept that more time is required properly to consider these issues.
ii) I have, nonetheless, concluded that it is appropriate to have regard to the contents of that affidavit and its exhibits, which to a large extent pull together material which was already "in play" in a more diffuse form in the litigation, and where the PCB Defendants' criticisms largely came into focus in Mr Cohen KC's skeleton argument which, for entirely legitimate reasons, was filed 4 days after the deadline. Having reviewed the transcripts, I can see that on the first day of the hearing, without consenting to the admission of this material, Mr Cohen KC stated that he did not object to Mr Peto KC taking me to it, concluding "we can look at the situation at the end of this application, see where we have got to and work out what the objections are and the significance of those at that stage." When addressing this material, Mr Cohen KC made some short submissions about it, criticising the redaction of fee notes, referring to Justice Michael Black KC's comments on the fees claimed before him and submitting that the documents before the court suggest the value of the Bridge Properties had risen between September 2021 and today (when they are on the market for £8m). His submission concluded "you just do not have the evidence to be able to determine what the maximum sum was it has been wholly unevidenced even if you admit the late witness statement." I have addressed the points Mr Cohen KC raised.
iii) Were I to have adopted the view that the argument on the Maximum Sum should be held over in its entirety, the result is that the Claimants would not have been able to obtain WWFO relief for many months. In these circumstances, I have decided that it is appropriate to fix an interim Maximum Sum amount at this hearing, but that both parties must be entitled to re-visit the amount of the Maximum Sum when more time is available.
iv) At that hearing, fairness demands that it is open to the PCB Defendants to raise the issues raised in Mr Mascarenhas' fifth witness statement.
i) The fact that the Bank has obtained an order for costs in its favour in some of the proceedings does not diminish its loss until the order has been paid, which it has not. On the evidence, only unpaid costs feature in the amount claimed.
ii) Judge Black KC in the DIFC found that the costs claimed there were "grossly over-inflated" and included costs of other proceedings. I accept that there is likely to be scope for argument as to the recoverability of the costs, and the matters to which they related. Nonetheless, I am satisfied that a loss figure of £2,500,000 for WWFO purposes would be appropriate before considering the effect of my rulings elsewhere in this judgment.
i) Valuation reports exhibited in an earlier stage in the proceedings are relied upon by Mr Richards to suggest delay in obtaining possession of and being able to sell the Bridge Properties has led to a fall in value of their realisable value by £800,000. D10 has pointed to materials in the bundle which are said to be inconsistent with this figure and suggests that the market may have risen during the period. However, that raises an obvious dispute of fact which cannot be resolved at an interim hearing of this kind. D10 also suggests that the delay caused by the DIFC would have ended when the order was discharged, but the housekeeper remained in place in any event, and prevented the BVI Companies from taking possession. However (i) where there are two concurrent actionable causes for the failure to provide vacant possession of the Bridge Properties, it seems to me arguable that the party responsible for one of them cannot point to the other and say they are not liable at all, and that it is arguable that the full period of delay is recoverable from either of them; and (ii) the Claimants' conspiracy case would appear to embrace the continued occupation by the housekeeper in any event.
ii) The Claimants advance a claim for loss of possession in the sum of £810,000. That would appear to provide an alternative claim to [226(ii)] above (in that if the property had been sold earlier, the Claimants would not have had the use of the Bridge Properties thereafter).
iii) There is a claim for loss of use of the proceeds of sale which would appear to be recoverable in addition to the fall in value at (i). The extent to which the claim for loss of use of the proceeds of sale is recoverable in addition to the claim for loss of use was not sufficiently explored at the hearing and it has been suggested that I have misunderstood Mr Richards' evidence. This matter can be addressed at a further hearing.
iv) There is a claim for the expenses of ownership in the amount of £557,315, which would appear to be recoverable in addition to the fall in value at (i) but not the claim for loss of use at (ii) (when the expenses, or at least some of them would have been incurred in any event).
i) I am instinctively resistant to the suggestion that the Claimants should obtain a WWFO on what is very much their alternative case, the value of which so substantially exceeds that of their primary case.
ii) The Claimants' choice of primary and secondary case reflects their views as to the merits of that claim. On the material before me, I can well understand why they have formed the view that the Globe Documents did not document a genuine and authorised transaction which is and remains binding on the BVI Companies.
iii) Further, the Claimants have placed very significant reliance, for the purposes both of establishing a real risk of dissipation on D10's part and that it would be just and convenient to make a WWFO order against him, on his arguable involvement in forging and deploying the Globe Documents. The conspiracy case to the extent that it links the Tenancy Agreement and the Globe Documents also relies upon the fact that both are arguably forgeries. The entirety of the Claimants' case is likely to have looked very different if approached through the prism of its alternative case in isolation. No effort was made to explain the Claimants' claims on delay and risk of dissipation if the Globe Documents are genuine.
iv) In Unitel SA v Dos Santos [2024] EWCA Civ 1109, Popplewell LJ made it clear that there will be cases in which the strength of a claim, even if it has passed the "serious issue to be tried" threshold, will be relevant when considering whether it is just and equitable to grant relief ([130]).
v) Having regard to the apparent strength of the claims related to the fact that the Globe Documents are not binding (as reflected in the Claimants' strategy in this litigation and the judgment in the Globe DIFC Proceedings), and the matters in (i) and (iii) above, it would not be just and convenient to make a WWFO by reference to the amount claimed by the BVI Companies on their alternative case.
Conclusion on the Conduct WWFO
The NCAD WWFO
The background
"Good reason to suppose"
"[I]t is not necessary to decide which of the two formulations (good arguable case/good reason to suppose) is the most appropriate one. The former is derived from TSB Private Bank International SA v Chabra [1992] 1 WLR 231 and the latter from SCF Finance Co Ltd v Masri [1985] 1WLR 876. It was not submitted to us that, for the purposes of the present case, there was any significant difference between them and certainly none which it is now necessary to explore. Nor is it necessary to decide whether, given that Lapointec and Limia are the applicants for an order, it is sufficient for the bank to show that there is a real prospect of success in defeating that claim, i e the test under CPR 24.2 or the extent to which, if at all, there is any practical distinction between that and the other two tests."
"Although it is plain that the court's Chabra-type of jurisdiction will only be exercised where there are grounds to believe that a co-defendant is in possession or control of assets to which the principal defendant is beneficially entitled, it does not seem to me that the jurisdiction is limited to cases where such assets can be specifically identified in the hands of the co-defendant. Once the court is satisfied that there are such assets in the possession or control of the co-defendant, the jurisdiction exists to make a freezing order as ancillary and incidental to the claim against the principal defendant, although there is no direct cause of action against the co-defendant. Since the purpose of granting such an injunction against the co-defendant is to preserve the assets of the principal defendant so as to be available to meet a judgment against him, the form of order made against the co-defendant should be as specific as the circumstances permit in respect of the principal defendant's assets of which he has possession or control. Thus, generally, the form of injunction will be tailored to that purpose and should be no wider than is necessary to achieve it. However, subject to that requirement, if a co-defendant is mixed up in an attempt to make the principal defendant judgment-proof and the assets or their proceeds are not readily identifiable in his hands it is open to the court, where it is just and convenient to do so, to make an order which catches the co-defendant's general assets up to the amount of the principal defendant's assets of which he appears to have possession and control."
i) It was not legitimate to disregard the separate corporate personalities of the NCAD and the CADs and treat the assets and liabilities of one company as the assets and liabilities of the other company.
ii) The fact that the group, as a whole, had taken steps to render certain companies in the group judgment proof, did not per se justify an order against the NCAD or indeed against any other subsidiary in the group.
i) I accept that there is good reason to suppose that D10's interest in D7 to D9 is held on behalf of the Al Saris. That was also the view of Mr Justice Calver ([2022] EWHC 705 (Comm), [20]) and Mr Justice Butcher ([2022] EWHC 2697 (Comm), [23]). It is also consistent with the submissions made by Globe in the Globe Sharjah Proceedings, in what may have been an unintended moment of candour:
"Mr Muhammad Abdullah al-Sari and Mr Majid Abdulla al-Sari own multiple companies including the Appellant [Globe], the Second Party in the MOU [MAS]".
ii) I accept that there are numerous other business links between D10 and the Al Saris. For example, D10 was a director of the Al Saris' company Gulf General Investment Company PSC ("GGICO") from 2012 to at least 2022, and he shared a PO Box with the Al Saris and two companies accepted to be owned by them. The evidence suggests that D10 was a director (or at least arguably a director) of numerous other companies owned or controlled by the Al Saris.
iii) Finally, D10 was a director of Horizon Energy (UK) Limited from 3 June 2013 and held 50% of its shares, a company which acted on behalf of another Horizon company owned by the Al Saris.
Permission to serve out: Gateway
Introduction
"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."
"While para. 3.1(2) may not be available, what about para. 3.1(20) which provides a service out gateway for claims brought under any enactment which allows proceedings to be brought?
a. In Orexim Trading v Mahavir Port [2018] EWCA Civ 1660, the Court of Appeal suggested that the first question which arises in this context is whether there is a relevant territorial limit on the operation of the statute. If there is not, then presumptively it should be possible to serve the proceedings out of the jurisdiction. On that basis, it was held that a claim under s.423 of the Insolvency Act 1986 could, in principle, be served out of the jurisdiction through this gateway.
b. In Gorbachev v Guriev [2023] EWCA Civ 327. the Court of Appeal held that a claim for third party disclosure under s.34 of the Senior Courts Act 1981 could be served out of the jurisdiction through the same gateway, on the basis that a claim for relief under the Senior Courts Act 1981 was brought 'under' any enactment."
c. In Broad Idea, [12]. [20], [40] and [118]. it was noted that the statutory power to grant injunctions is conferred by s.37(1) of the Senior Courts Ac1 1981.
d. It would seem to follow that, unbeknown to Lord Diplock in The Siskina and the Privy Council in Mercedes Benz and Broad Idea, there was a basis for serving a freestanding application for freezing order relief out of the jurisdiction all along just under a different gateway."
(That last paragraph pays insufficient regard to amendments of the "enactment" gateway over time, but as a statement of the current position, it remains relevant).
The authorities
i) As no substantive relief was sought against the CAD, the proper procedure was to serve an application notice in the existing action on him.
ii) That involved applying the "necessary or proper party" test to the application. He identified a "real issue" between the parties in the context of the outstanding application to appoint a receiver over the CAD's right of indemnity from the NCAD.
iii) The CAD was a proper party to that application, having an interest in opposing the appointment of a receiver (and, one might add, in disputing the existence of the right over which the receiver was to be appointed).
i) At the relevant time, CPR 6.30(2) provided "where the permission of the court is required for a claim form to be served out of the jurisdiction, the permission of the court must also be obtained for service out of the jurisdiction of any other document to be served".
ii) CPR r 6.18(h) and (i) stated that "claim form" includes "application form" and "claim" includes "application."
i) The "necessary or proper party" gateway was "limited to cases where the substantive dispute is before the English courts, because only in such a case is any 'claim' going to be tried between the claimant and the defendant who has been or will be served with the proceedings."
ii) C Inc v L was a case in which there was a substantive dispute between C and the CAD before the English court.
iii) Even if the gateway was applicable, as matters stood, there was no dispute between the claimants and the first defendant, let alone between the claimants and the parents (as to the ownership of the assets). If the first defendant (or the parents) were to contend that the relevant assets in Monaco were in truth their assets and not their son's, at that stage the court might order an issue to be tried but unless and until that happened, there would be no 'claim' to be tried.
iv) In C Inc v L, there was a real dispute between the claimant and Mrs L as to the appointment of a receiver.
v) The purpose of joining the parents as parties to the claim form (as was demonstrated by the relief sought in the amended claim form) was not to have any such issue tried but to obtain interim measures against the parents, by way of a Chabra order in aid of the worldwide freezing order against the first defendant, in circumstances where there was no (and never would be any) substantive dispute between the claimants and the first defendant to be tried in England.
i) Paragraph 3.1(3) of the Practice Direction is limited to cases where the substantive dispute is before the English courts, because only in such a case will any "claim" ever be tried between the claimant and CAD 1 who has been or will be served with the proceedings. In the present case, the claims of the claimant against CAD1 for breach of the charterparties would all be determined in London arbitration rather than by the English court.
ii) So far as CAD 2 was concerned, there was no arguable basis for Chabra relief. The issue of whether the entry of judgments against CAD2 changed the position is not expressly addressed in the judgment.
"There were several sets of proceedings that continued against Mr Ablyazov in which judgement had not yet been obtained and even in those actions where judgement had been entered against Mr Ablyazov, there was an issue between the Bank and Mr Ablyazov as to whether the Receivership and Freezing Orders ought to be continued in respect of the Dregon Land shares on the basis of Mr Ablyazov's beneficial ownership therein, as to which the applicants were necessary and proper parties."
"I accept Mr Smith's alternative submission based on C Inc plc v L that the court has jurisdiction to make a Chabra order against the applicants under paragraph 3.1(3) of CPR PD 6B. In my judgement, the Bank's claim that the Dregon Land shares belong beneficially to Mr Ablyazov and not Lapointec and Limia is a classic Chabra claim and there is an issue between the Bank and Mr Ablyazov (who was served within the jurisdiction) as to whether he retains beneficial ownership of the Dregon Land shares which it is reasonable for the court to try and the applicants in my view are necessary and proper parties to that claim."
"The approach argued for by the applicants would have strange consequences. The supposed requirement that there be an issue between the claimant and the defendant to the resolution of which another person is a necessary or proper party is, in this context, inappropriate. A claimant may obtain an order restraining a defendant from disposing of an asset abroad which he accepts is his and should come within the order. Someone in the country in question may then claim that, whatever the defendant says, the asset belongs to him. The court should not be disabled from making freezing orders against a defendant who is within its jurisdiction, which may impact on third parties, because there is no dispute by the defendant that the asset is his. Nor should that position change when the foreign claimant applies for the asset to be released from the order."
i) That there is a claim which is being made against Mr Ablyazov, on whom the claim form has been served, that he has, in relation to the Dregon Land shares, colluded with Mr Gutseriev and, thus, the applicants; and that they are necessary or proper parties to that claim: paragraph 3.1(3) of Practice Direction 6B. He observed that the difficulty with that approach is that the practice direction appears to contemplate that a claim form has or will have been served on one defendant and the same claim form served on the person outside the jurisdiction. In that case, there was no claim of the sort now under consideration advanced in any originating proceedings so that service of the claim form would not be service of a document which put forward any such claim.
ii) For the bank (i) to issue an application in the action against Mr Ablyazov and (at least) the applicants (ii) to serve it on Mr Ablyazov; and then (iii) to apply for permission to serve that application on the applicants out of the jurisdiction (i.e. the route adopted in C Inc v L). Christopher Clarke LJ stated that "this appears to me to be a permissible approach. I did not understand Miss Newman to suggest the contrary", although he did not decide the point.
i) He referred to the judgments of Flaux J in Belletti v Morici and Linsen International Ltd v Humpuss Sea Transport Pte Ltd referring to the need for substantive proceedings before the English court.
ii) He also referred to C Inc v L, observing at [74] that Flaux J had distinguished that case in Belletti at [37] on the basis that the substantive dispute in the earlier case was before the English court, and stating:
"With respect I am not sure that this is a valid ground of distinction as in C Inc plc v L the claim against Mrs L had already been determined by the default judgment and there was nothing of substance left for the court to try. Moreover, this was not the basis of Aikens J's reasoning. If it had been necessary to set aside the default judgment, there would have been a substantive claim against both defendants and therefore no difficulty in establishing jurisdiction over them. As it was, however, this was not necessary and jurisdiction was in fact established over Mr L on the basis that he was a necessary or proper party to the application for appointment of a receiver over his wife's assets. It seems to me, therefore, that the decision in C Inc plc v L is difficult to reconcile with the Belletti and Linsen cases."
iii) At [75], he held that "the requirement of a substantive claim against the anchor defendant is in accordance with the language of PD 6B, para 3.1(3) and with principle". He held that "the wording of para. 3.1(3) with its references to 'a claim', a 'real issue' and a trial ('reasonable for the court to try') suggest that what is required is a substantive claim against the anchor defendant. Relief which is ancillary to the enforcement of a judgment or award does not fit naturally into this language, even if such an interpretation is possible."
iv) At [77]-[79], he referred to the need for caution in the interpretation and application of the service out gateways, and the "necessary or proper party" gateway in particular, stating:
"To interpret the paragraph as requiring a substantive claim against the anchor defendant is also consistent with the long-standing approach to construction of the rules for service out of the jurisdiction, namely that they are generally to be construed as relating to claims which involve the determination and enforcement of legal rights, and not to applications for interim relief which involve no process of adjudication upon substantive rights".
v) In this context, he referred to the following passage in the Privy Council decision in Mercedes-Benz AG v Leiduck [1996] AC 284, 301-302:
"In their [Lordships'] opinion the purpose of Ord. 11, r. 1 is to authorise the service on a person who would not otherwise be compellable to appear before the English court of a document requiring him to submit to the adjudication by the court of a claim advanced in an action or matter commenced by that document. Such a claim will be for relief founded on a right asserted by the plaintiff in the action or matter, and enforced through the medium of a judgment given by the court in that action or matter. The document at the same time defines the relief claimed, institutes the proceedings in which it is claimed, and when properly served compels the defendant to enter upon the proceedings or suffer judgment and execution in default. Absent a claim based on a legal right which the defendant can be called upon to answer, of a kind falling within Ord. 11, r.1(1), the court has no right to authorise the service of the document on the foreigner, or to invest it with any power to compel him to take part in proceedings against his will.
Thus, at the centre of the powers conferred by Order 11 is a proposed action or matter which will decide upon and give effect to rights. An application for Mareva relief is not of this character. When ruled upon it decides no rights, and calls into existence no process by which the rights will be decided
This opinion, that Order 11 is confined to originating documents which set in motion proceedings designed to ascertain substantive rights, is borne out by its language ".
vi) At [82], he considered the position if a substantive claim against an anchor defendant is not required, stating that "it is necessary to identify the 'real issue' as between the claimant and Unitech which the claimant contends that it is reasonable for the court to try" (the implication being that, if as Males J had concluded, a substantive claim was required, the "real issue" would have to be one arising in that substantive claim). He held the "real issue" could not be found in orders already made and determined, or scheduled to be determined without the NCAD's involvement.
vii) At [84], he held that "the mere possibility that such issues may arise in the future, for example if there is a dispute about any particular step which the receivers require Unitech to take, is not enough to establish jurisdiction now against the Chabra defendants. Since there is no such real issue requiring to be tried, the Chabra defendants cannot be necessary or proper parties to the trial of that claim."
"Unless paragraph (3) applies, where the permission of the court is required for a claim form to be served out of the jurisdiction the permission of the court must also be obtained for service out of the jurisdiction of any other document to be served in the proceedings."
i) At [28]-[29], he held that the primary purpose of CPR r 6.30(2) was to require leave for service out of the jurisdiction on a defendant to proceedings and that the Court of Appeal's conclusion that it provided a basis for service on a non-party "leads to a surprising result."
ii) At [36], he approved Tomlinson J's decision in Vitol SA v Capri Marine Ltd [2009] Bus LR 271 that CPR r 6.30(2) was concerned with the service of documents on parties to the proceedings.
"Service of application notice on a non-party to the proceedings
6.39
(1) Where an application notice is to be served out of the jurisdiction on a person who is not a party to the proceedings rules 6.35 and 6.37(5)(a)(i), (ii) and (iii) do not apply.
(2) Where an application is served out of the jurisdiction on a person who is not a party to the proceedings, that person may make an application to the court under Part 11 as if that person were a defendant, but rule 11(2) does not apply."
i) Steven Gee KC, Commercial Injunctions (7th) [6-093] states that C Inc v L "cannot be supported for the reasons given in Cruz City I Mauritius Holdings Inc v Unitech". At [13-051], the text continues:
"In C Inc v L, CPR r.6.20(3) (broadly equivalent to what is now CPR PD 6B 3.1(3)) was relied upon to enable there to be a claim for interim relief against the third party husband when there was judgment in the action against the wife. This decision is incorrect because: (1) the gateway itself only applies when there is a substantive claim against the third party, as well as a substantive claim against the anchor defendant; (2) there needs to be a substantive claim against the anchor defendant; and (3) even if (1) and (2) were satisfied there still needs to be satisfaction of each of (a) and (b). CPR PD 6B para.3.1(3) applies to substantive claims made in England, the justification for allowing the substantive claim against the second defendant being the bringing of the substantive claim against the anchor defendant and the fulfilment of the requirements in (a) and (b). When there is only a Chabra claim against a third party for Mareva relief and no substantive claim against the third party to which the injunction would be ancillary, para.3.1(3) does not apply."
ii) Grant and Mumford, Civil Fraud: Law, Practice and Procedure (2018), [18-171] state:
"If the substantive claim against the cause of action defendant is being heard in the English Court, then (arguably) the claimant can rely on the necessary or proper party gateway under para.3.1(3) of Practice Direction 6B. If, however, the substantive claim is proceeding in a foreign court or in arbitral proceedings, or has already resulted in judgment, it is thought that there is no "claim" to be heard by the English Court for the purposes of the necessary or proper party gateway and so jurisdiction against the Chabra defendant cannot be established on that basis."
Analysis
i) That is the position taken in Gee (in respect of both questions) and it derives some, more qualified, support from Grant and Mumford. It is also supported by Cruz City, [74].
ii) There is support for the contrary view in C Inc v L, the explanation of that case offered in Belletti v Morici, [37] (although Belletti can be read as supporting the requirement of substantive claims) and in the comments of Christopher Clarke LJ in Ablyazov, [94], although when an issue of ownership of property arises in the context of a freezing order (as it did in Ablyazov), and is to be finally determined on the basis of a trial, the distinction between substantive and procedural relief begins to blur.
iii) To the extent that both gateway (3) and (20) use the word "claim", the decision in Gorbachev v Guriev is also inconsistent with such a requirement, as is Jacobs J's brief observation on gateway (3) in that case. I respectfully question whether the interpretation of the word "claim" in gateway (3) in Cruz City, [76] can stand with the interpretation of the word "claim" in gateway (20) in Gorbachev. If gateway (3) is to operate differently to gateway (20), that must be because of the words "a real issue which it is reasonable to ask the court to try" (which is also mentioned in Cruz City, [76]).
iv) However, in circumstances in which CPR 6.39 contemplates applications against non-parties (which will generally not involve substantive claims) being served out of the jurisdiction, it is suggested that the word "try" cannot carry sufficient weight such that gateway (20) applies to claims for non-substantive relief but gateway (3) does not.
v) There are cogent reasons why the second and third questions should be answered in the same way, because the necessary commonality of investigation or enquiry which gateway (3) pre-supposes (cf. AK Investments CJSC v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804, [87]) is unlikely to be present as between a substantive claim against an anchor defendant and an application for a procedural order against an NCAD.
vi) On the basis of the current authorities, I conclude that provided there is a substantive claim against the defendant proceeding in the jurisdiction, gateway (3) can apply where procedural relief is sought against that defendant, and the NCAD is a necessary or proper party to such relief. It is not necessary in this case to address the issue of whether gateway (3) can be invoked where there is a substantive claim against the defendant proceeding in the jurisdiction, an application has been served for procedural relief against NCAD1 in the jurisdiction, and permission is sought to serve NCAD2 out of the jurisdiction on the basis that it is a necessary or proper party to the relief sought against NCAD1.
i) The meaning of the words "necessary or proper party" are to be answered by asking whether, if both parties had been in the jurisdiction, it would have been appropriate that they both be parties to the proceedings: Massey v Haynes (1881) 21 QBD 330, 338; United Film Distribution v Chhabria [2001] 2 All ER (Comm), [36]-[38].
ii) The court should therefore ask itself if there was no issue as to jurisdiction, would it be appropriate to exercise the power to join the NCAD to the proceedings under CPR 19.2(2).
iii) The court can exercise the joinder power after proceedings against the existing defendant have culminated in a judgment: Prescott v Dunwoody Sports Marketing [2007] 1 WLR 2343, [23].
iv) When an issue arises in relation to a Chabra defendant, it is appropriate to join the Chabra defendant to the proceedings.
v) Where this is done, there is a legal power to serve proceedings on that Chabra defendant out of the jurisdiction under gateway (3) (by definition, because the exercise of the joinder jurisdiction conclusively determines that the "necessary or proper party" requirement is satisfied).
"The necessary or proper party head of jurisdiction is anomalous, in that, by contrast with the other heads, it is not founded upon any territorial connection between the claim, the subject matter of the relevant action and the jurisdiction of the English courts: Tyne Improvement Comrs v Armement Anversois SA (The Brabo) [1949] AC 326, 338, per Lord Porter. Piggott, Foreign Judgments and Jurisdiction, 3rd ed (1910), Pt III, p 238, said: 'This is perhaps the most important of the sub-rules, for it throws the net of jurisdiction over a wider area; and the principle of considering the nature of the cause of action which pervades the whole subject, appears here to be ignored.' Consequently, as Lloyd LJ said in Golden Ocean Assurance Ltd v Martin (The Goldean Mariner) [1990] 2 Lloyd's Rep 215, 222:
'I agree that caution must always be exercised in bringing foreign defendants within our jurisdiction under Ord 11, r 1(1)(c). It must never become the practice to bring foreign defendants here as a matter of course, on the ground that the only alternative requires more than one suit in more than one different jurisdiction.'"
"there might at first blush always seem to be O. 11 jurisdiction under sub-r. (1)(c) 'necessary or proper party.' Since, however, the joinder is only for the purpose of costs and not in respect of any substantive cause of action, it is not at all clear to me that such use of O. 11 is within the rationale of The Siskina, [1979] A.C. 210 or Mercedes-Benz A.G. v. Leiduck, [1996] AC 284. Moreover, R.S.C., O. 11, r. 4(1)(d) requires that in the case of sub-r. (1)(c) the applicant must provide evidence of grounds for the belief -
. . .that there is between the claimant and the person on whom a claim form has been served a real issue which the claimant may reasonably ask the court to try.
That may work in the (unusual) case where the non-party has been joined for the purpose of costs at a stage in the proceedings before trial. Once, however, judgment with costs has been given against the party served within the jurisdiction, it is by no means clear to me how any applicant could bring himself within r. 4(1)(d), for there is no longer any issue, not even one regarding costs, for trial involving that party."
i) In C Inc v L, Aiken J referred to the dispute as to whether a receiver should be appointed. That embraced the issue of whether Mrs L had a right to an indemnity over Mr L over which the receiver could be appointed. Had there been a hearing involving Mrs L which determined that there was such a right of indemnity, and then Mr L had resisted enforcement by the receiver on the basis that there was not, there would have been an obvious risk of inconsistent judgments (as well as the duplication of resources arising from trying the same issue twice in two jurisdictions).
ii) In Belletti, [39], Flaux J contemplated a scenario in which "the first defendant (or the parents) were to contend that the relevant assets in Monaco were in truth their assets and not their son's, at that stage the court might order an issue to be tried" at which point he appeared to accept that there would be a "'claim' to be tried."
iii) That is exactly the common issue which arose in Ablyazov, and which Field J did order to be tried with the involvement of the NCAD.
i) First, there must actually be a common issue to be investigated as against the anchor defendant and the NCAD. The mere possibility that such an issue might arise at some point cannot be sufficient. As Males J observed in Cruz City, [84]:
"the mere possibility that such issues may arise in the future, for example if there is a dispute about any particular step which the receivers require Unitech to take, is not enough to establish jurisdiction now against the Chabra defendants. Since there is no such real issue requiring to be tried, the Chabra defendants cannot be necessary or proper parties to the trial of that claim."
See also Belletti, [39].
ii) If there is to be a hearing of a "live" issue against the anchor defendant, an issue arises as to the significance of the fact that the anchor defendant is not actually engaging with the proceedings (cf Ablyazov). In the context of a substantive claim, this issue was discussed in Erste Group Bank AG v JSC (VMZ Red October) [2015] EWCA Civ 379, in which it was suggested that if the anchor defendant is unlikely to defend the claim, it is unlikely that there will be a real issue between the claimant and the anchor defendant which it is reasonable for the court to try ([78] and [136]). However, there may be reasons why, even in a case with a non-engaging anchor defendant, it is reasonable to ask the court to determine an issue and bind the anchor defendant and the NCAD to its outcome, e.g. as to the ownership of property (Satfinance Investment Ltd v Athena Art Finance Corpn [2020] EWHC 3527 (Ch), [92]-[94]) or for reasons of enforcement (as suggested in Lakatamia Shipping Co v Su [2024] 1 WLR 746, [87]).
iii) If the relevant issue is being determined against the anchor defendant in a hearing which will take place without the NCAD's involvement (as in Cruz City) the requirements of gateway (3) are unlikely to be satisfied.
iv) The extent of the NCAD's participation will be defined by reference to the issues satisfying the gateway (3) requirements, and to the extent that further relief is sought against the NCAD, it will be necessary to show a separate jurisdictional justification for those additional claims: Ablyazov in the Court of Appeal.
The position in this case
i) The proceedings to which the NCAD WWFO relates are proceedings to enforce a foreign judgment, in which judgment has been entered in these proceedings on that judgment. With the exception of the Bridge Properties, which have now been returned to the possession of the BVI Companies, there is no evidence of any assets in this jurisdiction against which the Bank Sharjah Judgment might be enforced (and indeed the Bridge Properties ceased to be objects of even indirect enforcement by the Bank when it acquired the BVI Companies).
ii) There appear to be no live post-judgment applications in this jurisdiction against the Al Sari defendants to which D10 is a necessary or proper party, and there was no attempt to justify the application for permission to serve out by reference to any such application. Indeed, there is no evidence of ongoing enforcement activity in this jurisdiction at all.
iii) I do not accept that the mere possibility that such issues might arise in the future is sufficient for the court to grant permission to serve out on this basis.
iv) In any event, on the basis of the material before the court, it is highly unlikely that the Al Saris will engage in the post-judgment phase of the English proceedings in Mr Peto KC's words, "they have dropped out of these proceedings", and they would face a two year prison sentence for contempt if they did come to this jurisdiction.
v) The real purpose of the application was, in my view, revealed by Mr Peto KC's submission at the close of the case that I could confine any order in the first instance to one for disclosure of assets. However, as free-standing relief on a Chabra-basis (in contrast to the position on the Conduct WWFO), I am not persuaded that gateway (3) is applicable merely because the information is sought to support the enforcement of what is now a judgment debt of this court.
Permission to serve out: Discretion
THE AMENDMENT APPLICATION
CONCLUSION