Jersey Unreported Judgments

Companies.

[2021]JRC187

Royal Court

(Samedi)

8 July 2021

Before     :

J. A. Clyde Smith, Esq., OBE., Commissioner sitting alone

 

Advocate R. S. Christie for the Plaintiff.

Advocate M. C. Seddon for the Defendants.

Advocate O. J. Passmore for the Parties Cited.

judgment

the commissioner:

1.        The Defendants apply for certain Norwich Pharmacal disclosure orders made by the Court against the Parties Cited to be varied and/or discharged.  The application is resisted by the Plaintiff.  The Parties Cited rest on the wisdom of the Court. 

Background

2.        We take the background principally from the skeleton argument filed by Advocate Christie on behalf of the Plaintiff ("Sakab").

3.        The First Defendant ("Dr Al Jabri") is Saudi Arabian, but now resides in Canada.  He was previously a high-ranking official in the Saudi Arabian Ministry of Interior.  The Second to Seventh Defendants are his children, all of whom are adult, save for the Fifth Defendant, who is a minor.  

4.        The Plaintiff is a Saudi Arabian company.  It, and a group of sixteen other companies, were established pursuant to a royal instruction from King Abdul Aziz of Saudi Arabia to the Minister of Interior.  The royal instruction required the establishment of companies to engage in anti-terrorism activities.  Although trading, they were principally funded with funds allocated from the Minister of Interior. 

5.        During the period 2008 - 2017, Sakab and the other group companies established pursuant to the royal instruction received funding in excess of SAR 30 billion (US $ 8 billion).  This was paid principally through Sakab. 

6.        Dr Al Jabri left his position in the Ministry of Interior in September 2015.  In 2017 Prince Mohammed bin Salman ("Prince bin Salman"), a Crown Prince of the Kingdom of Saudi Arabia, assumed power, and ownership of Sakab and the other group companies was transferred to the Saudi Public Investment Fund chaired by Prince bin Salman. 

7.        Following Prince bin Salman's assumption of power, Dr Al Jabri left the Kingdom of Saudi Arabia for Turkey and ultimately for Canada, he says for his own safety.  

8.        On 21^st January 2021, Sakab and other group companies, commenced proceedings in the Superior Court of Ontario against the Defendants (and others) and on the same date, were granted ex parte, Mareva and Norwich Pharmacal orders.  They pleaded that the defendants to the Ontario proceedings had misappropriated at least SAR 13 billion (US$ 3.47 billion) from them. 

9.        Deloittes, had been engaged by Sakab to perform a forensic tracing analysis and had identified SAR 4.8 billion (US$ 1.2 billion) as having been misappropriated from Sakab, of which SAR 980 million (US$ 261 million) was allegedly paid to Dr Al Jabri. 

10.       On 3^rd and 11^th February 2021, Dr Al Jabri provided declarations of his assets and on 11^th February 2021 he was cross-examined by counsel for the Ontario plaintiffs. 

11.      Dr Al Jabri applied to have the Ontario Mareva and Norwich orders discharged, but that application was dismissed by the Ontario court on 11^th March 2021. 

12.      Dr Al Jabri, who is yet to plead in the Ontario proceedings, denies the allegations made against him, and says that he and his family have been subjected to a campaign of persecution ultimately directed by Prince bin Salman, who Dr Al Jabri says has gone to great lengths to locate and harm him and his family members. 

13.      In his declarations and in cross-examination, Dr Al Jabri disclosed, inter alia:

(i)        the existence of a Jersey proper law trust known as the Black Stallion Trust and its wholly owned Jersey incorporated investment company Black Stallion Investments Limited ("Black Stallion Investments");       

(ii)       that he had gifted all of his assets to his son, the Third Defendant, Mohammed Saad Kh Al Jabri ("Mohammed Al Jabri") on 21^st June 2017. 

It is fair to say that Dr Al Jabri was vague in the answers given in relation to the Black Stallion Trust. 

14.      On 21^st April 2021, the Statement of Claim in the Ontario proceedings was amended so as in summary:

(i)        to add the Parties Cited as defendants.

(ii)       to make a proprietary claim to the assets settled on the Black Stallion Trust as being derived from the fraud allegedly perpetrated by Dr Al Jabri and others and, in the alternative, to claim that the transfers to the Black Stallion Trust were a fraud on Dr Al Jabri's creditors. 

(iii)      to assert that the Black Stallion Trust is a sham trust, established by Dr Al Jabri for the purpose of dissipating and secreting assets acquired through his fraudulent scheme. 

(iv)      to assert that Dr Al Jabri retains ultimate control over both the Black Stallion Trust and Black Stallion Investments. 

(v)       to assert that the alleged gift by Dr Al Jabri of his assets to Mohammed Al Jabri was a sham transaction and any transfers made pursuant to it were fraudulent conveyances. 

It is not known whether the Parties Cited will submit to the jurisdiction of the Ontario courts.

15.      Mohammed Al Jabri (with others) disputed the jurisdiction of the Ontario court and claimed that he now lived in England.  That application was dismissed on 22^nd June 2021 with C Gilmore J concluding at paragraph 65:

"In summary, fairness dictates that the Plaintiffs' claims including the legitimacy of the Gift Deed be heard In Ontario.  The Van Breda test has been made by way of an arguable case with respect to multiple connecting factors including contract, property and location of the torts in Ontario.  While the presumption of jurisdiction from these connecting factors is not irrebuttable, for the reasons noted throughout I do not accept that the Objecting Defendants have met the burden of negating the presumption."

16.      The Jersey proceedings were brought by Sakab by way of Order of Justice signed by the Bailiff on 10^th May 2021, and in essence, seek freezing and disclosure orders.  No substantive claim is made against the Parties Cited.  By the Order of Justice:

(i)        Freezing and associated disclosure orders were made against the Defendants.   Dr Al Jabri deposed that he did not hold any assets in his name or personal capacity in the Island of Jersey and was not the settlor or beneficiary of any trust in Jersey other than Black Stallion Trust. The remaining Defendants deposed to the same effect. 

(ii)       Freezing orders were made against the Parties Cited in respect of the assets of the Defendants in Jersey or elsewhere, including in particular, the assets of the Black Stallion Trust and Black Stallion Investments.  Disclosure orders were made against the Parties Cited, part of which have been complied with ("the First Stage Disclosure") and part of which is disputed by the Defendants ("the Disputed Disclosure"). 

17.      By consent, time for compliance with the Disputed Disclosure was extended to 4^th June 2021.  Time for compliance with the First Stage Disclosure was not extended, but it was agreed that the Parties Cited would redact from that disclosure any of the following information concerning each of the Defendants, namely their residential address, their telephone numbers, their e-mail addresses and/or their passport and national insurance numbers. 

18.      Following the First Stage Disclosure and the earlier disclosures made by Dr Al Jabri and Mohammed Al Jabri (who had also been examined in the Ontario proceedings), Sakab had learnt the following in relation to the Black Stallion Trust and Black Stallion Investments: 

(i)        The Black Stallion Trust was established by declaration by the First Party Cited, HSBC Trustee (CI) Limited on 19^th December 2017.  It is an irrevocable Jersey law discretionary trust, the beneficiaries of which comprise the issue of Dr Al Jabri.  He and his wife are excluded.  The initial trust fund was US$ 10, and Dr Al Jabri caused to be transferred a further sum of US$ 50 million on 22^nd November 2017, the bulk of which had been lent to its wholly owned investment company Black Stallion Investments.   

(ii)       The Black Stallion Trust currently had assets of US$ 33.4 million comprising in the main the benefit of the loan due by Black Stallion Investments, as shown in the latest accounts of the Black Stallion Trust which had been disclosed.  A capital distribution of US $15 million had been made (through Black Stallion Investments) for the benefit of Mohammed Al Jabri. Black Stallion Investments held a bank account with HSBC Private Bank (Suisse) SA, Geneva Branch, the balance of which was US$ 35.3 million as at 31^st March 2021. 

(iii)      A letter of wishes executed by Dr Al Jabri on 24^th September 2018 has been disclosed, in which he expressed the wish that the trustee makes a monthly distribution of US$ 40,000 to Mohammed Al Jabri or if he is unavailable or incapacitated, to his other son, the Second Defendant, Khalid Saad Khalid Al Jabri and to look favourably on any distribution requests made by Dr Al Jabri in relation to his children.  

(iv)      The trust deed provides for a protective committee with powers, inter alia, to remove the trustee and whose consent is required to the exercise of certain powers. Sakab is uncertain as to the identity of any member of the protective committee.  

19.      On 2^nd June 2021, the Defendants issued their summons, seeking to vary or discharge the Disputed Disclosure. By consent, compliance with the Disputed Disclosure was stayed, pending determination of the Defendants' summons. 

20.      It is not in dispute that through the First Stage Disclosure, the Parties Cited have given the information that is required to police the freezing orders over the assets they hold in Jersey, all of which, as Advocate Seddon for the Defendants says, are now "locked down" pending further order. 

21.      The Disputed Disclosure is sought pursuant to the court's Norwich Pharmacal jurisdiction.  Without setting it out in full, Sakab seeks from the First Party Cited copies of all instructions and correspondence, internal and external, over the initial establishment of the Black Stallion Trust and the selection of the beneficiaries, copies of any letters of wishes other than the one already disclosed, copies of any supplemental instruments or documents evidencing the exercise of powers, copies of all KYC/CDD files in respect of any settlor and/or beneficiary and any address held on file in respect of the Third and Seventh Defendants.  In respect of Black Stallion Investments, Sakab seeks from the Second Party Cited (which owns the shares in Black Stallion Investments as nominee for the First Party Cited as trustee) the identity of any person on and/or via whose instructions it provides registered office services and/or company secretary services, copies of all KYC/CDD files held in respect of acting as shareholder and copies of each contract in respect of the same and the identity of any person on whose behalf it holds any shares in Black Stallion Investments.  From the Third Party Cited Sakab seeks copies of all registers of members, corporate registers, minute books, directors' and shareholders' resolutions, all accounts and financial statements and "all other documents in its possession, custody or control."  Advocate Passmore drew my attention to the very wide nature of this requirement for the production "of all other documents".

22.      By way of concession, and pursuant to the overriding objective, the Defendants do not object to the Parties Cited providing copies, where they exist, of any supplemental instruments or amending deeds in respect of the Black Stallion Trust or to the Parties Cited giving confirmation that certain, but not all, of the payments shown in the bank statements were legitimate expenses or capital distributions for the benefit of the Trust's beneficiaries. 

The Norwich Pharmacal Jurisdiction

23.      The leading authority in Jersey is the Court of Appeal decision in Macdoel Investments Limited, Sun Diamond Limited, Durant International Corporation and Kildare Finance Limited v Federal Republic of Brazil and Six Others [2007] JLR 201] which sets out the origin of the Norwich Pharmacal principle at paragraphs 7 and 8:

"The court's power to order pre-trial discovery

7.        It has long been established in the law of England and Wales (Plummer v May (1 Ves.Sen.at 426;37 ER at 1122, per Lord Hardwicke, LC) that a person cannot be made a defendant to an action -

'who is merely a witness, in order to have a discovery of what he can say to the matter ... But as against a party interested, the plaintiff is entitled to have discovery from him, if he is charged to be concerned in the fraud ....'

That rule is known as the 'mere witness rule'.

8.        Coexisting with the mere witness rule, however, is what Lord Reid has described (Norwich Pharmacal Co. v Customs & Excise Commrs. 9[1974] AC at 175)) as 'a very reasonable principle' which is that -

'... if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers'.

It is convenient to refer to that dictum as 'Lord Reid's statement of principle.'

24.      The Court of Appeal continued at paragraph 38:

"38     In any event, whilst the cases in which the Norwich Pharmacal jurisdiction has been developed in England and Wales provide useful guidance on how Lord Reid's statement of principle may be applied, the courts of Jersey are in no sense bound by the scope of the jurisdiction that may have been delineated de facto by the circumstances of these cases.

Nor are these courts constrained by the limits which may be placed on the application of the principle in the different social and economic conditions that may prevail from time to time in England and Wales (see, generally, State of Qatar v Al Thani).  They will have regard to amongst other things the policy considerations which shape the law of Jersey and the social and economic context in which it operates.

39       We are conscious that, as the Court of Appeal of Jersey remarked in Durant Intl. Corp. v. Att. Gen. [2006] JLR 112 at para. 1, per Sumption JA:-

'Over the last half-century, Jersey has become a major financial centre, providing trust and banking facilities for an extensive international clientele. ... It has for some time been the policy of the legislature and of the executive agencies exercising statutory powers that the commercial facilities available in Jersey should not be used to launder money or mask criminal activities here or anywhere else.'

Although these remarks were made in the context of an action that concerned the provision of assistance by the authorities in Jersey to foreign prosecutors, they have relevance in the sphere of civil litigation, where the courts are conscious that Jersey's reputation as a major financial centre might suffer if it were not willing to assist victims of wrongdoing to obtain redress."

25.      The Court recently confirmed in Riba Consultaria Empresarial Limitada v Pinnacle Trustees Limited [2018] 1 JLR 79, the test that will be applied when the Court is asked to exercise its Norwich Pharmacal jurisdiction namely:

(i)        whether it is satisfied that there is a good arguable case that the plaintiff is the victim of wrongdoing;

(ii)       whether it is satisfied that there was a reasonable suspicion that the defendant was mixed up in that wrongdoing; and

(iii)      whether, as a matter of discretion, it is in the interests of justice to order the defendant to make disclosure.

26.      In the case of New Media Holding Company LLC v Capita Fiduciary Group Limited [2010] JLR 272, the Court noted at paragraph 19 that as to the third question, namely the exercise of discretion, the facts of each case will differ, and no comprehensive statement of principle could be made.  Ultimately, the Court would have to make its decision as to whether the interests of justice require that an order be made against the defendant for disclosure, but nonetheless, it set out some considerations which are liable to be relevant to the exercise of discretion in most, if not all, cases at paragraphs 20 - 28 as follows:

"20.    First of all, it is clear that the Norwich Pharmacal Jurisdiction is an extraordinary jurisdiction, not to be exercised lightly.  The focus is on whether it is just to make the order. ...

21       ....

22       Secondly, a review of the authorities tends to suggest that in England and Wales there is a requirement to have regard to whether it is necessary to make the Norwich Pharmacal order. ...

23       In the light of the judgment of the Privy Council in the Equatorial Guinea case, in our view the issue of necessity is a matter to be considered within the remit of the court's exercise of discretion.  If the plaintiff has a straightforward and available means of obtaining the information by some other route, it would probably not be reasonable, in most cases, to exercise the discretion in his favour.  That emphasizes that the Norwich Pharmacal jurisdiction is an exceptional one.  However, we do not consider that there is any formal requirement for the plaintiff to establish that there is no other way of gaining access to the information he seeks.

24       Thirdly, it seems to us to be clear that one has to have close regard to the purposes for which the Norwich Pharmacal order is sought.  It is clear from the authorities that these purposes may be for the identification of potential defendants in litigation, but they may be for other purposes, whether in connection with other litigation which is continuing (see for example Grupo Torras SA v Royal Bank of Scotland PLC and In re Lucas) or for the purpose of taking other lawful steps, albeit not steps in a court of law (see P v T Ltd.)

25       Fourthly, it is right to note that there is not a requirement that the defendant in Norwich Pharmacal proceedings should necessarily have been innocently involved in the wrongdoing of which the plaintiff complains. ...

26       ...

27       It is clear, however, from the case of CHC Software Care Ltd v Hopkins & Wood, noted by Lightman, J in Mitsui & Co. Ltd. V Nexen Petroleum UK Ltd, that the third party from whom information is sought need not be an innocent third party but may be a wrongdoer himself.  Where, however, the plaintiff seeks Norwich Pharmacal relief against a defendant who is asserted to be a wrongdoer and not innocently involved, that appears to us to be a factor which would need to be considered very carefully by the court when having regard to the purposes for which the order is sought.  Other than the pre-action disclosure which is permitted by statute under the Law Reform (Disclosure and Conduct Before Action) (Jersey) Law 1999, the law of Jersey does not permit pre-action discovery.  We do not have the equivalent of r.31.16 of the Civil Procedure Rules which applies in England and Wales and enables pre-action discovery to be made in appropriate cases.  If, therefore, the Royal Court were to be satisfied that the primary purpose of the Norwich Pharmacal application was to obtain pre-action discovery, it seems to us that it would be very unlikely that the discretion of the court would be exercised in favour of the applicant.  Any introduction of such a change to the rules of disclosure is one that, in our view, should be effected by new primary and secondary legislation which would have been subject to consultation before its adoption.

28.      Fifthly, we do not eschew the possibility that in an appropriate case it may be relevant to make a Norwich Pharmacal order in order to assist proceedings which are taking place in another court, whether that court is in Jersey or elsewhere.  The case of In re Lucas is authority for that proposition in Jersey.  It would be a matter for the court to determine, in the exercise of its discretion, whether it is appropriate to make an order on these grounds and it will do so if it considers that it is convenient in the interests of justice."

27.      In that case, substantive proceedings had been commenced in New York and the Norwich Pharmacal orders were set aside, because the plaintiff already had sufficient information to identify the appropriate defendants and the appropriate cause of action in respect of that wrongdoing, as the Court found at paragraph 31(ii):

"(ii)      Advocate O'Connell's submission that the plaintiff has not yet identified the full circle of potential defendants and the type of claims which might be brought may indeed be factually correct, but he has identified no wrongdoing in respect of which the plaintiff might claim to be a victim other than the wrongdoing where he already knows enough to be able to bring proceedings.  Norwich Pharmacal relief is not available as a form of pre-action discovery where one has already identified the potential defendant in advance, nor is it generally a remedy to supplement discovery in aid of existing foreign proceedings.  On the latter point, in our judgment such relief is available in order to identify a person who might be a defendant in foreign proceedings or to establish the cause of action or a tracing claim for the purposes of foreign proceedings, but generally one would otherwise allow the foreign court to exercise its jurisdiction over the disclosure which it required for the purposes of doing justice in the case before it.  We accept the submission that, to the extent that disclosure was sought for use in the New York proceedings, the correct approach was to obtain relevant orders from the New York court, including if necessary, the taking of evidence pursuant to the Hague Convention by means of a request to this court for assistance."

28.      More recently, the Supreme Court has considered the Norwich Pharmacal jurisdiction in the case of Rugby Football Union v Consolidated Information Services Ltd (formerly Viagogo Ltd) (in liquidation) [2012] 1 WLR 3333, in which the governing body for Rugby Union in England sought orders disclosing the identity of those who had advertised for sale or sold tickets for rugby matches at above their face value in breach of contract.  The defendant appealed on the ground, inter alia, that the order would constitute an unnecessary and disproportionate interference with the rights of those who have sold or purchased tickets to the protection of personal data under article 8 of the Charter of Fundamental Rights of the European Union.  Dismissing the appeal, the Supreme Court held:

"That the need to order the disclosure of information would be found to exist only if it were a necessary and proportionate response in all the circumstances and the test of necessity did not require the remedy to be one of last resort; that the essential purpose of the remedy was to do justice, which involved the exercise of a discretion by a careful and fair weighing up of all relevant factors ....."

29.      Noting that more recent cases emphasise the need for flexibility and discretion in considering whether the remedy should be granted, the Supreme Court said this at paragraphs 17 and 18 (omitting citations):

"17     The essential purpose of the remedy is to do justice.  This involves the exercise of discretion by a careful and fair weighing of all relevant factors.  Various factors have been identified in the authorities as relevant.  These include: (i) the strength of the possible cause of action contemplated by the applicant for the order... (ii) the strong public interest in allowing an applicant to vindicate his legal rights... (iii) whether the making of the order will deter similar wrongdoing in the future...(iv) whether the information could be obtained from another source... (v) whether the respondent to the application knew or ought to have known that he was facilitating arguable wrongdoing... (vi) whether the order might reveal the names of innocent persons as well as wrongdoers, and if so whether such innocent persons will suffer any harm as a result... (vii) the degree of confidentiality of the information sought... (viii) the privacy rights under article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms of the individuals whose identity is to be disclosed... (x) the public interest in maintaining the confidentiality of journalistic sources, as recognised in section 10 of the Contempt of Court Act 1981 and article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms...

18       Many of these factors are self-evidently relevant to the question of whether the issue of a Norwich Pharmacal order is proportionate in the context of article 8 of the Charter."

30.      These factors, formulated in the context of Article 8 of the ECHR, supplement rather than detract from the factors of general application relevant to the particular circumstances of this jurisdiction under the third part of the test helpfully summarised in New Media v Capita.

The Defendants' case

31.      The Defendants' case is that Sakab has already identified the wrongdoers, namely the defendants to the Ontario proceedings, which includes the Defendants, as evidenced by the Amended Statement of Claim which pleads the case against the Ontario defendants fully. Furthermore, Sakab has now joined in the Parties Cited as defendants in the Ontario proceedings making a proprietary claim, inter alia, against the assets they hold in Jersey and alleging the participation of the First Party Cited in a sham trust.

32.      The Defendants say the Disputed Disclosure is therefore nothing more than an evidence gathering exercise, aimed at supporting Sakab's pleaded case in the Ontario proceedings and in particular, the case against the First Party Cited, alleging sham or a fishing exercise for evidence of any cause of action it may have against other persons. 

33.      The proper route to the gathering of such evidence was either by discovery orders made by the Ontario court, assuming the Parties Cited submitted to its jurisdiction, or by the Ontario court making a request for the evidence of the Parties Cited to be obtained in Jersey under the provisions of the Service of Process and Taking of Evidence (Jersey) Law 1960 ("the Taking of Evidence Law").

34.      As the wrongdoers having been identified, KYC/CDD information was outside the scope of a proper Norwich Pharmacal order.  The specific request for the addresses of Mohammed Al Jabri and the Seventh Defendant, Saleh Saad Khalid Al Jabri, were justified by Sakab on the basis that it would assist in enabling the service of the Ontario proceedings on them.  That, say the Defendants, is an impermissible use of the Norwich Pharmacal jurisdiction.  Service of the Ontario proceedings on defendants who had been identified and against whom a case had been pleaded is a matter for the Ontario courts, and they had not sought the assistance of this Court to facilitate the same.  

35.      The Defendants have grave concerns that the disclosure of the information requested presents a very real security threat and imperils their safety.  Their London lawyer, Christian James Thomas Tuddenham of Jenner & Block London LLP, deposes that the attempts of Prince bin Salman having included (quoting from paragraph 26(b) of his affidavit):

"i.        banning two of the First Defendants' children from leaving the Kingdom and subsequently deploying a team of armed men to kidnap them from the family residence during the night in March 2020. Since the children's disappearances, the Defendants have been unable to contact the children and do not know where the children are being held - only that they have been tried and convicted in private of 'attempting to flee from the Kingdom of Saudi Arabia unlawfully' and on charges of money laundering.

ii.        deploying agents personally employed by bin Salman known as the 'Tiger Squad' (which was responsible for the high profile extrajudicial killing of Jamal Khashoggi) to Canada on or around 15 October 2018, in an attempt to assassinate the First Defendant (which was thwarted by the Canada Border Services Agency Officers who refused the agents entry at Ottawa International Airport after the agents aroused suspicion and lied during questioning that they did not know one another) and

iii.       the disappearances of approximately twenty of the First Defendant's family members and business associates in the Kingdom and elsewhere, such as the First Defendant's son-in-law Salem Almuzaini (alleged by the Plaintiff (and others) in the Canadian Proceedings to have been involved in the management of some of the plaintiff companies) who was abducted in Dubai in September 2017 and extra-judicially extradited to the Kingdom where he has been held in detention.  The First Defendant's brother, Abdulrahman Aljabri, was detained by an armed team wearing masks in May 2020 and subsequently disappeared."

36.      Advocate Seddon referred to the case of the Coca Cola Co. v Gilbey [2003] EWHC 91 (Ch) in which the defendant contended that an order requiring him to give information about the activities of third parties would expose him to the risk of violence from those individuals.  The Court declined, as a matter of discretion, to set aside the order.  Simon Brown LJ considered that save "just possibly, in the very most exceptional circumstances ..... the court ought never to accede to such a submission ....".  As stated in Gee, on Commercial Injunctions, 7^th edition at paragraph 117-031, the reason for this is the public interest in the upholding of the rule of law.  The risk of violent repercussions might be relevant in the context of mitigating a contempt of court, but the court is bound to approach such a submission with caution and to have regard that the public interest lies in not giving in to violence.  Advocate Seddon distinguished the facts in that case because the threat of violence here comes from those behind the very party, Sakab, which is requesting disclosure of their addresses. 

Sakab's case

37.      Advocate Christie focused in some detail on the strength of the case against Dr Al Jabri and his co-defendants and the difficulties Sakab had encountered in getting detailed information in relation to the Black Stallion Trust and Black Stallion Investments.  

38.      He referred to the case of Satfinance v Valla [2020] JRC 027, a case concerned with the deployment of documents disclosed under a Norwich Pharmacal order, where the Court had commented at paragraph 37:

"This is said to be civil fraud, and the Court will wish to assist victims of fraud whenever it can."

He also referred to the recent case of Hellard & Richardson v Young & Young [2020] JRC 113A, where the Court again emphasised, by implication and citing English  cases with approval, that in fraud cases, the Court will be more willing to grant disclosure in the interests of justice.

39.      Advocate Christie submitted that the issue of the gift between Dr Al Jabri and Mohammed Al Jabri and what assets are held by Dr Al Jabri was absolutely crucial and urgent for the purpose of policing the Mareva orders given by the Ontario courts and for seeking to obtain freezing orders against Mohammed Al Jabri.  Furthermore, the question of whether Dr Al Jabri had been or is more generally exercising indirect influence over assets held in the name of Mohammed Al Jabri was an absolutely crucial question to which answers are urgently needed in order for the Ontario court to police the Ontario Mareva.  The Disputed Disclosure sought was likely to shed significant light on this question both directly and by analogy with the treatment of the assets in the Black Stallion Trust.  Dr Al Jabri is subject to the personal jurisdiction of the Ontario court and the question of whether he exercises an indirect influence on the administration of the Black Stallion Trust is caught by the Ontario Mareva. 

40.      There has been no explanation for the monthly payments of US$ 40,000 to Mohammed Al Jabri (totalling some US$ 360,000).  Neither Mohammed Al Jabri nor Dr Al Jabri had made any reference in their examinations to the distribution of US$15 million made to Mohammed Al Jabri on 10^th June 2020.  The Parties Cited should be ordered, he said, to disclose as a matter of urgency everything that is known about this payment.  Advocate Christie identified further payments that have been made out of the trust and the company about which similar explanations were requested. 

41.      In the conclusion to his skeleton argument, Advocate Christie submitted that broad disclosure, as he put it, is in the interests of justice for the following purposes:

"(i)       to urgently aid the Ontario court in the policing of the freezing injunction;

(ii)       to aid Sakab and the Ontario plaintiffs in investigating this extremely serious and massive scale fraud and in identifying further assets which need to be frozen, the missing US$ 15 million in particular;

(iii)      to aid Sakab and the Ontario plaintiffs in being able to identify and plead their case in fraud in relation to which (as can be seen from the Deloitte report) it has been difficult to establish the facts because of a lack of proper documentation of Dr Al Jabri's activities."

42.      In his oral submissions Advocate Christie put forward the following reasons why the Disputed Disclosure should be made by the Parties Cited:

(i)        To enable Sakab to properly trace the distribution of US$ 15 million, which according to the accounts of Black Stallion Investments had been made "in favour of" Mohammed Al Jabri, a description which leaves it open as to where precisely the payment went.

(ii)       To help establish whether or not Dr Al Jabri had any influence over the making of that distribution or other payments.  If so, that evidence would be relevant by way of similar fact to the issue of the validity of the gift allegedly made by Dr Al Jabri to Mohammed Al Jabri.

(iii)      To assist generally in the investigation of a serious fraud where there was little documentation and which by its very nature was opaque.  Not to assist in such circumstances would be, he said, to create a fraudster's charter.

Decision

43.      Addressing the basic test, I am satisfied that there is a good arguable case that the Plaintiff, Sakab, is the victim of wrongdoing based on the detailed pleaded case in the Amended Statement of Claim, the evidence filed in support of these proceedings and the report from Deloittes. Advocate Seddon did not seek to argue that there was no good arguable case. 

44.      Whilst the allegations against Dr Al Jabri and his co-defendants are yet to be determined by the Ontario court, I noted these observations by C Gilmore J in his decision of 11^th March 2021, (in which he refers to Dr Al Jabri as Dr Saad) rejecting Dr Al Jabri's application to set aside the ex parte orders:

"[93]   Dr Saad complains that the Plaintiffs have mischaracterized the purpose of the Group Companies  They were not established to further counterterrorism activities.  This is why the Group Companies were not owned by the KSA and why funds for the companies were paid to MBN personally who then paid the Group Companies.  There was deliberate 'murkiness' in the financial arrangements of the Group Companies to ensure concealment of the Royal Family's involvement.

[94]     For example, the use of nominee shareholders was necessary as Saudi officials could not hold roles in the Group Companies without revealing the involvement of the Royal Family.  The top-secret nature of the operations of the Group Companies explained the poor record keeping practices and the accounting irregularities. The court was not directed to these important facts as the Plaintiffs failed to highlight that Dr Saad was not involved in the Group Companies in a commercial context.

[95]     The problem with this position is the evidence provided by the Plaintiffs that some $194M USD was transferred to Dr Saad after he left the government in September 2015.  Table 5.0 in the Deloitte report dated January 18, 2021 (page 21) clearly traces only 180M Saudi Riyal ("SAR") to Dr Saad while he was working for the Saudi government.

[96]     At page 109 of the Deloitte report, tracing of Dr Saad's account statements also showed that he received over 114,000,000 SAR directly from MBN between March and May 2017 - almost two years after he had left the Saudi government and while living in Turkey.

[97]     I agree with the Plaintiffs' submission that any argument related to murkiness or poor record keeping on the part of Dr Saad is hard to reconcile when a large part of the traced funds were removed after Dr Saad was asked to leave his position in the KSA government.

[98]     I also agree with the Plaintiffs that the affidavits of Dr Al Jabri do not adequately explain any of the alleged fraudulent activities.  Whilst not required to respond to the merits of the case, Dr Saad (through his son's affidavit) has merely glossed over the Deloitte report.  Without an affidavit from Dr Saad, the Plaintiffs were left without a means to fully explore the issues raised by his counsel.

[99]     Further, and contrary to Dr Saad's assertions, the court was made aware of the fact that the Group Companies were established pursuant to a Royal Instruction and that funds were allocated to them by the KSA Ministry of the Interior for counterterrorism activities.  This is clearly set out in the Plaintiffs' factum which was before the court on the ex parte motion.

[100]   While nominee shareholders may have been necessary to ensure that the Group Companies were distanced from the KSA government, it remains a question as to why Dr Saad's spouse, children, relatives and friends were named as such nominee shareholders, especially where the nominee shareholders received profits from the Group Companies without performing any services for them.

[101]   Finally, with respect to the murkiness and poor recording keeping as an explanation for the secrecy required for the counterterrorism activities, there is a limit to such disorder when dealing with the large amounts of money that flowed through the Group Companies.  For example, payments made to Dr Saad, his family and friends from Sakab, totalling over $848M USD, were accounted for by handwritten notes or undated and signed Excel tables without explanations for the payments  'Rewards' for board members of Alpha Star, Security Control Company and Technology Control Company ("TCC") were recorded in handwritten notes, and profits were paid out based on 'valuations' which appeared to bear no relationship to reality or based on the company's actual net profit.  These are only some of the examples.  Many more appear in the Deloitte report.  Poor record keeping might have been a way of covering up counterterrorism expenditures while MBN and Dr Saad were working in the government, but this cannot explain the large amounts paid out to them and Dr Saad's family and friends after they left."

45.      Furthermore, there are the circumstances surrounding the gift by Dr Al Jabri to Mohammed Al Jabri, alleged to have been entered into in the same year that the Black Stallion Trust was established.  Dr Al Jabri produced a sworn declaration to which was appended a translation of the written gift bearing the date "Ramadan 27, 1439/June 21, 2017".  His lawyers clarified that the gift was apparently made verbally on 21^stJune 2017 in Bodrum, Turkey in accordance with customary Islamic law, and the written document only produced in 2018, despite being dated June 2017. 

46.      I am also satisfied that there is reasonable suspicion that the Parties Cited were mixed up in that wrongdoing through the Black Stallion Trust and Black Stallion Investments, into which Dr Al Jabri had settled US$ 50 million in 2017, after the alleged fraud.  There is at least a suspicion that this money was derived from the alleged fraud or was settled in fraud of his creditors.  Advocate Seddon did not seek to argue that there were no grounds to reasonably suspect that the Parties Cited were mixed up in the wrongdoing. 

47.      The issue, therefore, relates to the third part of the test, namely whether as a matter of discretion it is in the interests of justice to order the Parties Cited to make the Disputed Disclosure. 

48.      Referring back to Lord Reid's statement of principle the Parties Cited are under a duty to assist Sakab, the victim of this alleged fraud, with full information and the identity of the wrongdoers.  In this case the wrongdoers have already been identified by Sakab and a case fully pleaded against them in the Ontario proceedings.  The Parties Cited have provided Sakab with the identity of the settlor of the Black Stallion Trust, the initial property and subsequent funds settled, the current assets of the Black Stallion Trust and Black Stallion Investments and the bank statements of the Black Stallion Trust and of Black Stallion Investments. Sakab already had a copy of the latest accounts of the Black Stallion Trust.  The Defendants object to the Parties Cited giving further disclosure, effectively into the workings of the trust and the company and which I agree appear to be aimed at discovering the rationale behind their establishment and operations. 

49.      The perhaps unusual nature of this case is that even before Sakab had issued proceedings in Jersey, it had sufficient information to join the Parties Cited in as defendants in the Ontario proceedings, and to plead a substantive case against them, in particular to allege that the Black Stallion Trust is a sham and under the control of Dr Al Jabri. 

50.      It is perhaps surprising that Sakab felt able to allege sham at that stage, and that it was necessary to do so (bearing in mind its proprietary and other claims), given the somewhat vague information given by Dr Al Jabri and Mohammed Al Jabri about the Black Stallion Trust.  It is well established that as a matter of Jersey law, to make good a claim in sham, it is necessary to establish a common intention on the part of the settlor and the trustee to mislead or to deceive by not expressing their true intentions in the trust deed - see McKinnon v Regent Trust Company [2004] JLR 477.  The allegation against the First Party Cited is therefore a serious one, namely that in agreeing to act as trustee, it intended with Dr Al Jabri to mislead or deceive by not expressing their true intentions in the trust deed.  The Disputed Disclosure focuses very much on the circumstances in which the Black Stallion Trust was established, communications with Dr Al Jabri and internal communications within the First Party Cited. 

51.      It is not known whether the Parties Cited will submit to the jurisdiction of the Ontario court, but I note in passing that in the case of In re Fountain Trust [2005] JLR 359 the Court expressed the view that a Jersey Court would be reluctant to enforce any finding by a foreign court that a Jersey proper law trust is a sham. 

52.      This brings into play the observations of the Court in New Media at paragraph 27 (set out above) that where a plaintiff seeks Norwich Pharmacal relief against a defendant who is asserted to be a wrongdoer, and not innocently involved, which is Sakab's pleaded case against the First Party Cited, this is a factor that needs to be considered very carefully when having regard to the purposes for which the orders are sought. 

53.      The Defendants' case is that the Disputed Disclosure is an evidence gathering exercise which is beyond the scope of the Norwich Pharmacal jurisdiction.  If evidence is required from the Parties Cited for the Ontario proceedings, then the appropriate mechanism was either a discovery order made by the Ontario court, assuming the Parties Cited submit to its jurisdiction, or an application from the Ontario court under the Taking of Evidence Law for that evidence to be obtained in Jersey. 

54.      In Essar Global Fund Limited v Arcelormittal USA LLC CICA (Civil) Appeal No 15 of 2019, it was argued that the Cayman court had no jurisdiction to make a Norwich Pharmacal order in support of foreign proceedings, because the Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978 ("the Evidence Order") provided the exclusive means of obtaining information or documents for use in overseas litigation.  The Evidence Order is in this respect broadly similar to the relevant provisions of the Taking of Evidence Law.  It was held that the statutory regime under the Evidence Order did not displace the Norwich Pharmacal jurisdiction for a number of reasons, including:

(i)        The Evidence Order only concerned the giving of evidence (whether oral or documentary) for the purposes of foreign proceedings, whereas the Norwich Pharmacal jurisdiction cannot as a matter of principle relate to evidence at all.  This was clear from the Norwich Pharmacal case itself, where the distinction was drawn between the equitable remedy of discovery (which was the remedy utilised in Norwich Pharmacal) and the ability to compel the giving of evidence.

(ii)       Whilst the courts in the Cayman Islands, like those in England and Wales, have no inherent jurisdiction to order evidence to be provided for the purposes of foreign proceedings, the basis of the Norwich Pharmacal jurisdiction is not an obligation to provide evidence: it is a duty to provide information about wrongdoing.  There was no obvious reason why that duty should be confined to domestic wrongdoing.  Nor was it easy to see why legislation dealing with the giving of evidence in foreign proceedings should be treated as impliedly excluding jurisdiction to order the provision of information necessary to enable foreign proceedings to come into existence at all - such as, in the Norwich Pharmacal case itself, information about the identity of the wrongdoer. 

55.      In his judgment, Martin JA said this at paragraph 56:

"56.    It is true that the further the Norwich Pharmacal jurisdiction gets from its roots, the greater the risk that orders will be made for the production of what on proper analysis is evidence, not merely information.  The risk is the greater because of the lack of a clear conceptual distinction between information and evidence (see Omar at [12], cited in paragraph 48 above, and the conflicting views expressed by Lord Sumption and Lord Mance SC JJ in Singularis at [20]-[22] and [141] - [142] respectively).  But so long as care is taken to confine the Norwich Pharmacal jurisdiction to its proper scope, there can in principle be no overlap between that jurisdiction and the statutory regime relating to evidence in foreign proceedings, and accordingly no reason to regard the former as excluded by the latter."

56.      I note that at paragraph 61 Martin JA went on to say:

"61     ...  In my view, the Evidence Order is to be treated as impliedly excluding Norwich Pharmacal relief in support of foreign proceedings only, if at all, where those proceedings are on foot or where the applicant has available to him in the relevant jurisdiction procedures for pre-action disclosure or the provision of non-documentary evidence.  It should go without saying that Norwich Pharmacal relief is unlikely to be granted where an applicant could have started his projected foreign proceedings, or applied for pre-action relief, but has chosen not to do so in the hope of obtaining a NPO instead of using the Evidence Order procedure."

57.      Sakab and the other plaintiffs have chosen to start proceedings in Ontario but even so, this passage is supportive of the Defendants' proposition that having started proceedings in Ontario, the appropriate route for obtaining evidence for the purpose of those proceedings is through the Ontario court making orders for discovery, assuming the Parties Cited submit to its jurisdiction, or through the Taking of Evidence Law.

58.      It is helpful to consider the reasons put forward by Sakab in the skeleton argument filed in support of its ex parte application for the Norwich Pharmacal disclosure orders.  In summary those reasons were:

(i)        The only information Sakab had in relation to the Black Stallion Trust was the Black Stallion Trust declaration and, in relation to Black Stallion Investments, the information available on the Companies Registry (paragraph 119).

(ii)       Sakab did not know whether the sums Mohammed Al Jabri had disclosed as being settled by his father had actually been paid or whether other funds had been settled (paragraph 121). 

(iii)      There was a good arguable case that the First and Second Parties Cited had been innocently involved in processing the proceeds of the alleged fraud (paragraph 129) and should therefore disclose their involvement, the origin and the handling of the funds (paragraph 130).  I note this reference to the innocent involvement of the First Party Cited is inconsistent with the allegation of sham contained in the Amended Statement of Claim. 

(iv)      There was no evidence as to the value of the Black Stallion Trust (paragraph 130(a)), the nature of the assets now held and where they were held (paragraph 130(b)), the origin of the assets settled (paragraph 130(c)), any distributions made (paragraph 130(d)), the value, nature, location and providence of the investments held by Black Stallion Investments (paragraph 130(e)), the directors or other managers or controllers of Black Stallion Investments (paragraph 130(f)) and finally, the whereabouts of the Third and Seventh Defendants, to enable proper service of the Ontario proceedings upon them.

59.      Sakab has been provided with information as to the funds settled and who settled them, the current assets held (all of which are locked down under the freezing order), the latest accounts of the Black Stallion Trust and the bank statements of both the Black Stallion Trust and Black Stallion Investments which show all payments out.  This substantially comprises, in my view, the information which Sakab originally put forward as justifying the invocation of the Court's Norwich Pharmacal jurisdiction and contrasts with the reasons now put forward to justify the Disputed Disclosure. 

60.      I agree with Advocate Seddon that the information now being sought is in reality evidence to support Sakab in building and pursuing its case in Ontario. It is not within the scope of the Norwich Pharmacal jurisdiction: 

(i)        to assist the Ontario courts in the policing of the Ontario Mareva injunction and in the service of process upon identified defendants in those proceedings, at least in the absence of a request from the Ontario court; 

(ii)       to require disclosure of KYC/CDD files held by the Parties Cited when the identity of the wrongdoers is known;

(iii)      to provide evidence as to the influence of Dr Al Jabri upon the Black Stallion Trust and Black Stallion Investments in order to support, by way of analogy, Sakab's contentions in the Ontario proceedings in relation to the gift; and

(iv)      finally, to provide evidence as to the intentions of Dr Al Jabri and the First Party Cited in establishing the Black Stallion Trust, when Sakab has alleged in the Ontario proceedings that the trust is a sham.  

61.      As the Court said in New Media v Capita, the Norwich Pharmacal jurisdiction is there to identify a person who might be a defendant or to establish a cause of action or to make a tracing claim.  Here the defendants to Sakab's claims have been identified, the causes of action have been established and extensively pleaded and the information required for a tracing claim provided (save as below).  It is for the Ontario court to exercise its jurisdiction over the disclosure it requires for the purpose of doing justice in the case before it.  That it can do by making orders for discovery against the Parties Cited, assuming they submit to its jurisdiction, or by making a request for evidence to be taken here pursuant to the Taking of Evidence Law.  

62.      I accept that the Court would wish to assist the victims of fraud whenever it can, but the following points arise:

(i)        Whilst I am satisfied that Sakab has a good arguable case that it is the victim of fraud, the allegations are denied by the Defendants and there has been no finding of fraud against any of them. Sakab's current status is that of a complainant with a good arguable case rather than an established victim. 

(ii)       The Court has given very considerable assistance to Sakab through the freezing orders, which have locked down the assets held by the Parties Cited in Jersey, and through the First Stage Disclosure, which has given Sakab the information it needs to trace its claims (save as below). 

(iii)      The correct approach is to seek orders for discovery against the Parties Cited in the Ontario proceedings to which they have been made defendants, assuming they submit to the jurisdiction, or for the Ontario court to make a request for the evidence of the Parties Cited to be obtained here under the Taking of Evidence Law. If the Parties Cited decline to submit to the jurisdiction of the Ontario court, then it would be open to Sakab and the other plaintiffs to issue substantive proceedings here against the Parties Cited in respect of which discovery would follow in the usual way.  

(iv)      There is no authority for the proposition that if the wrongdoing alleged is fraud, the scope of the Norwich Pharmacal jurisdiction is widened to allow what is in effect discovery of evidence in aid of foreign proceedings. 

63.      I conclude, therefore, that the Disputed Disclosure is beyond the proper scope of the Court's Norwich Pharmacal jurisdiction and stands to be discharged save to the extent set out below. 

64.      Whilst Sakab knows what has gone into the Black Stallion Trust, it is entitled to trace those funds to the extent that they have been paid out of the Black Stallion Trust or Black Stallion Investments.  The duty of the Parties Cited under the Norwich Pharmacal jurisdiction is to provide Sakab with any information they may have to enable Sakab to trace those funds - see Bankers Trust Co v Shapira [1980] 1 W.L.R. 1274.

65.      There are a number of payments out, namely:

(i)        The bank statements of Black Stallion Investments show an outgoing payment "in favour of" Mohammed Al Jabri on 10^th June 2020 in the sum of US$ 15,000,042.19. 

(ii)       The bank statements of the Black Stallion Trust show outgoing payments, "in favour of" Mohammed Al Jabri in multiples of US$ 40,000 totalling US$ 360,000.

(iii)      There are a number of other payments out of the Black Stallion Trust and Black Stallion Investments listed in Sakab's skeleton argument at paragraph 87b) and paragraph 88c), some of which are substantial.

66.      In respect of sub-paragraphs (i) and (ii) above, Sakab should be provided with the following information which in my view it should have for the purpose of the onward tracing of these funds:

(a)       the account to which the payments were made;

(b)       the identity of the person requesting the payment and the purpose of the payment, and

(c)       copies of any letters, e-mails, or other communications (including notes of telephone conversations) with any person in relation to any of these payments.

67.      In respect of sub-paragraph (iii) above, Sakab is entitled to confirmation from the relevant Party Cited that each comprises a legitimate expense for the Black Stallion Trust and Black Stallion Investments respectively and in brief terms, the reason for each expense being incurred. 

68.      This disclosure is being ordered prejudgment and in the light of the concerns of the Defendants as to their personal security, the Parties Cited shall redact from that disclosure any of the following information concerning each of the Defendants, namely their residential address, their telephone numbers, their e-mail addresses and/or their passport and national insurance numbers. 

69.      There will be liberty to apply.

70.      I invite Advocate Christie to draft an order within these parameters to be agreed, if possible, by Advocate Seddon and for consideration when this judgment is handed down.  

Authorities

Macdoel Investments Limited, Sun Diamond Limited, Durant International Corporation and Kildare Finance Limited v Federal Republic of Brazil and Six Others [2007] JLR 201.

Riba Consultaria Empresarial Limitada v Pinnacle Trustees Limited [2018] 1 JLR 79

New Media Holding Company LLC v Capita Fiduciary Group Limited [2010] JLR 272

Rugby Football Union v Consolidated Information Services Ltd (formerly Viagogo Ltd) (in liquidation) [2012] 1 WLR 3333

Service of Process and Taking of Evidence (Jersey) Law 1960

Coca Cola Co. v Gilbey [2003] EWHC 91 (Ch)

Gee, on Commercial Injunctions, 7th edition

Satfinance v Valla [2020] JRC 027

Hellard & Richardson v Young & Young [2020] JRC 113A

McKinnon v Regent Trust Company [2004] JLR 477

In re Fountain Trust [2005] JLR 359

Essar Global Fund Limited v Arcelormittal USA LLC CICA (Civil) Appeal No 15 of 2019

Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978

Bankers Trust Co v Shapira [1980] 1 W.L.R. 1274