Aiman Meqham Almeqham (Liquidation Trustee of Maan Bin Abdul Wahed Al-Sanea and Saad Trading, Contracting & Financial Services Company ) v Maan Bin Abdul Wahed Al-Sanea (an individual (in Liquidation))

Hearing dates: 17–18 December 2024

APPROVED JUDGMENT

Jonathan Hilliard KC sitting as a Deputy Judge of the High Court:

Introduction

The Claimant is the liquidation trustee of Mr Al-Sanea and Saad Trading, Contracting & Financial Services Co. ( “STCFSC”), appointed by 2 March 2022 order of the Saudi Arabian Courts (the “2022 Order”). On the application of the Claimant, the Saudi Arabian liquidation proceedings in which the Claimant has been appointed (the “Saudi Arabian Proceedings”) were recognised in England and Wales pursuant to the Cross Border Insolvency Regulations 2006 (the “CBIR”) by 16 February 2024 orders (the “Recognition Orders”).

Having obtained recognition, the Claimant has issued proceedings against the Defendants for (a) a declaration that the Second to Sixth Defendants ( “D2–D6”), who are offshore companies, held 19 English properties (the “English Properties”) on resulting or constructive trust for Mr Al-Sanea and/or STCFSC following a purported transfer to D2–D6 in 2012 by two other companies, Markant Holdings Inc ( “Markant”) and Saad Inc. (the “Trust Claim”), and (b) in the alternative, an order under section 423 of the Insolvency Act 1986 that title to the English Properties should be vested in the Claimant on the ground that the 2012 transfers were made for the purpose of putting them beyond the reach of Mr Al-Sanea's and/or STCFSC's creditors (the “s.423 Claim”).

By 24 May 2024 order, Richard Farnhill sitting as a Deputy High Court Judge ( “DHCJ Farnhill”) granted the ex parte application of the Claimant for permission to serve the Defendants out of the jurisdiction and granted a proprietary injunction, which has been referred to before me as the asset preservation order (the “APO”). The claim was served out of the jurisdiction on D2–D6 and, the Claimant considers, on Mr Al-Sanea, who is currently serving a 9 year prison sentence in Saudi Arabia. The Claimant also purported to serve on D2–D6 within the jurisdiction, at the address that they had given for the purposes of the Economic Crime (Transparency and Enforcement) Act 2022 (the “2022 Act”). However, in case that does not constitute valid service for the purposes of the Civil Procedure Rules, the Claimant brought the service out application as well.

Four applications are before me:

(1) The application of D2–D6 to set aside service out of the jurisdiction and have the claims against them dismissed (the “Jurisdiction Challenge”).

(2) The Claimant's application to continue the APO on the return date of the injunction (the “Return Date Application”).

(3) The Claimant's application to amend its particulars of claim (the “Amendment Application”), both in response to points made by D2–D6 in the course of their Jurisdiction Challenge and also to deal with documents reviewed following the production of the original version.

(4) The Claimant's application for substituted service upon the First Defendant ( “Mr Al-Sanea”) (the “Substituted Service Application”).

As recently as 25 October 2024 it was common ground between the parties that all four applications could be heard together. However, in the immediate lead up to the hearing D2–D6 contended that the hearing should be limited to dealing with the Jurisdiction Challenge (and if the Court thought fit the Substituted Service Application), on the grounds that:

(1) the Return Date Application and Amendment Application would not be relevant if the Jurisdiction Challenge succeeded;

(2) there was not time in the 1.5 day hearing before me to deal with the Return Date Application and Amendment Application; and

(3) D2–D6 would risk submitting to the jurisdiction if they made substantive submissions on the Return Date and Amendment Applications.

Therefore, D2–D6 only appeared before me in relation to the Jurisdiction Challenge, although, as I shall come onto later, Mr Morgan did address me relatively briefly on the other applications. Mr Morgan rested the D2–D6's stance orally on point (1) above.

I considered that I should hear submissions on the Return Date Application as well before deciding how to deal with it, for the following reasons:

(1) The return date was listed for this date with the consent of D2–D6.

(2) It is efficient for me to deal with it if I can given that I am hearing the Jurisdiction Challenge.

(3) The Jurisdiction Challenge was initially listed for 1 day and in my judgment it did not require the full 1.5 day slot before me.

(4) There has been a late change of stance by D2–D6, in the 4 December 2024 letter of Pinsent Masons. The only basis on which the change was put is that the Return Date and Amendment Application would not be necessary if the Jurisdiction Challenge was successful, but that could not realistically be determined during the hearing.

(5) I do not consider that D2–D6 contesting the continuation of the APO or the Amendment Application would constitute submission to the jurisdiction if D2–D6 explained that they were opposing the continuation of the APO without prejudice to their primary position that there was no jurisdiction over them. It is clear from SWAY Investments Ltd v Sachdev [2003] 1 WLR 1973 at [44] that it is possible to oppose a freezing injunction without submitting to the jurisdiction as long as one makes clear that one is not so submitting and the same is in my judgment equally true in respect of a proprietary injunction. This reflects the general principle that a submission to the jurisdiction needs to be unequivocal. Taking objections to the continuation of an injunction as a fallback in case one is wrong on jurisdiction arguments is consistent with maintaining one's objection to jurisdiction. This also ensures that cases can be dealt with efficiently where—as here—it is convenient to deal with a jurisdiction challenge and continuation of an injunction at the same hearing and the same or similar objections by the defendants run in relation to each. Therefore, while D2–D6 did not file written submissions opposing the continuation of the APO, they were able to do so, and in any event were able to make short oral submissions before me, and did briefly address me orally on the continuation of the APO.

(6) In any case, the core arguments that they ran against jurisdiction were equally arguments against the continuation of the APO, such as that the Trust and s.423 Claims were misconceived and that there had been a failure of full and frank disclosure in the presentation of the ex parte application before DHCJ Farnhill.

In my judgment, I should also deal with the Amendment Application, because one of the bases on which it is made is to seek to cure any defect in the pleading arising from the fact that the Court has not yet granted relief under article 21 of the CBIR, which is a matter that D2–D6 put at the forefront of their Jurisdiction Challenge, as I shall come onto in a moment. Therefore, it is relevant to the Jurisdiction Challenge and the disposal of it, and what order I might make if I accepted that Jurisdiction Challenge. Save where otherwise stated, any references in this judgment to articles of the CBIR are to articles in Schedule 1 to the CBIR.

Having heard the Return Date and Amendment Applications, I consider that I should rule on them, for the reasons set out above.

Summary of my decision

In my judgment, for the reasons below:

(1) Leave to serve out should be set aside in respect of the Trust Claim, because at present there is no serious issue to be tried in respect of it. Leave to serve out should not be set aside in respect of the s.423 Claim, so I reject the Jurisdiction Challenge in respect of that claim.

(2) The APO should continue.

(3) The Amendment Application should be granted, save to the extent that I set out below in relation to paragraph 48 of the draft amended Particulars of Claim.

(4) The Substituted Service Application should be granted.

(5) The claims have been validly served on D2–D6 within the jurisdiction at the service addresses provided by them under the 2022 Act. However, I consider that the Particulars of Claim, whether in their current or proposed amended form, do not disclose reasonable grounds for bringing the Trust Claim and therefore that claim should be struck out.

(6) As floated by Mr Morgan orally, I considered that it was appropriate to allow on circulation of the draft judgment submissions on whether there should be a greater than usual time between provision of the draft judgment and the handing down of the final version, in order to allow the Claimant to make an application under article 21 of the CBIR as Mr Hunter indicated orally that the Claimant was minded to do if my judgment was as per (1) and (5) above on the Trust Claim. In the event, on circulation of my...