Almazeedi v Penner and another
| Jurisdiction | UK Non-devolved |
| Judge | Lord Mance,Lord Wilson,Lord Hughes,Lord Lloyd-Jones,Lord Sumption |
| Judgment Date | 26 February 2018 |
| Neutral Citation | [2018] UKPC 3 |
| Court | Privy Council |
| Docket Number | Privy Council Appeal No 0054 of 2016 |
| Date | 26 February 2018 |
[2018] UKPC 3
Lord Mance
Lord Wilson
Lord Sumption
Lord Hughes
Lord Lloyd-Jones
Privy Council Appeal No 0054 of 2016
From The Court Of Appeal Of The Cayman Islands
Judge - Bias — Transparency — Disclosure — Whether proceedings before judge for a specific time ought to be set aside — Appeal allowed in part.
Appellant
James Guthrie QC (Instructed by Axiom Stone Solicitors)
Respondents
Francis Tregear QC Matthew Goucke (Instructed by Walkers and Edwin Coe LLP)
JUDGMENT GIVEN ON
(with whom Lord Wilson, Lord Hughes and Lord Lloyd-Jones agree)
This appeal concerns a challenge to the independence of a judge sitting in the Financial Services Division of the Grand Court of the Cayman Islands. The challenge is made solely on the ground of an alleged lack of independence due to “apparent bias”, that is on the basis that the “fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased”: Porter v Magill [2001] UKHL 67; [2002] 2 AC 357, para 103, quoted and applied recently in Yiacoub v The Queen [2014] UKPC 22; [2014] 1 WLR 2996, para 11. There is no suggestion of actual bias; but, as the Court of Appeal pointed out in the present case (para 61), if a judge of the utmost integrity lacks independence, “then there is a danger of the unconscious effect of that situation, which it is impossible to calibrate or evidence”. The right of a litigant to an independent and impartial tribunal is “fundamental to his right to a fair trial”: Millar v Dickson [2001] UKPC D4; [2002] 1 WLR 1615, para 52. The right to a fair trial is enshrined in article 7(1) of the Cayman Islands Constitution, set out in the Cayman Islands Constitution Order (2009), providing:
“Everyone has the right to a fair and public hearing in the determination of his or her rights and obligations by an independent and impartial court within a reasonable time.”
The circumstances in which the challenge arises are unusual. They arise from the modern development across the world of courts with an international element in their judiciary, designed to serve the business and financial community. The judge in the present case was Cresswell J, a distinguished former judge of the High Court of England and Wales from 1991 to 2007. Following his retirement from that position, he became in 2009 an additional judge of the Financial Services Division of the Grand Court, sitting ad hoc from time to time as required. The Division consisted of the Chief Justice and two other full-time judges, together with three additional judges sitting part-time, one of whom was Cresswell J. From a time late in 2011, he also became a Supplementary Judge of the Civil and Commercial Court, Qatar Financial Centre, though he was not sworn in there until 8 May 2012. Again, it appears that this could only have involved him in sitting ad hoc, and he does not in fact appear ever to have done so or to have received any remuneration.
Between November 2011 and September 2014, Cresswell J was the judge assigned with the conduct of a winding-up petition and associated applications and thereafter with the winding-up of BTU Power Company (“BTU”). The entire economic interest in BTU was held by its preference shareholders who were in the main Qatari interests with strong state connections, and to a minor extent Dubai Islamic Bank. The present case involves a challenge to all aspects of Cresswell J's activity. The challenge is made having regard to Cresswell J's position as a judge in Qatar and to the involvement in the proceedings before him of these Qatari interests and of Qatari personalities representing or interested in them (particularly a Mr Al-Emadi, but also, as is now stressed, his father-in-law H E Youssef Hussain Kamal (“Mr Kamal”)).
The Court of Appeal (Mottley, Rix and Newman JJA) rejected the challenge as regards the period up to 26 June 2013, but accepted it as regards the period thereafter. It identified 26 June 2013 as a critical date, because that was the date when Mr Al-Emadi became Minister of Finance of Qatar and acquired a direct responsibility relating to judicial appointments in the Qatar Civil and Commercial Court. The appellant, Mr Almazeedi, appeals on the basis that the Court of Appeal should have found that Cresswell J lacked the requisite independence from the outset of his involvement in December 2011, while the respondents, the joint official liquidators of BTU (“the JOLs”) cross-appeal on the basis that the Court of Appeal was wrong to find that he lacked such independence from 26 June 2013.
BTU was formed to raise substantial sums from institutional investors for specific investments in power projects in the Middle East and North Africa. Its preference shareholders, holding the effective economic interest in BTU, were the Qatar Investment Authority (“QIA”), the Supreme Council for Economic Affairs and Investment of Qatar (“SCEAI”), the Qatar Foundation Fund, the Qatar National Bank (“QNB”), which held 7% of BTU's preference shares, Broog Trading Company (the Emir of Qatar's investment vehicle) and the Dubai Islamic Bank. QIA is state-owned and owns 50% of QNB. The chief executive officer of QNB was, from some date in 2006, Mr Al-Emadi. QNB's chairman was Mr Al-Emadi's father-in-law, Mr Kamal. Mr Kamal was also Minister of Finance of Qatar until 26 June 2013, when Mr Al-Emadi succeeded him both in that position and, it appears, as chairman of QNB.
BTU was managed by BTU Power Management Company (“the Manager”), of which the appellant, Mr Almazeedi, was the controlling shareholder. At the outset, the appellant and a Mr Hayat were directors of BTU and the Manager. Mr Hayat also had what the appellant has alleged was an undisclosed interest in Evolvence Capital (“Evolvence”), placement agents engaged by BTU to find investors who would become preference shareholders in BTU. By April 2006 BTU and the appellant on the one hand and Mr Hayat on the other were in dispute with regard to Evolvence's activities. As from 2007 the appellant was the sole director of both BTU and the Manager, and in or about September 2007 he commenced litigation against Mr Hayat in the Grand Court. In March 2008, Mr Hayat countered with proceedings against BTU, the appellant and the appellant's wife in the United States, alleging self-dealing, mismanagement and misfeasance. The Grand Court proceedings included the allegation that Mr Hayat had an undisclosed interest in Evolvence and had unlawfully diverted placement fees to executives of QIA and QNB. The litigation drew the attention of Mr Al-Emadi, who, according to the appellant's first affidavit in these proceedings dated 30 October 2014 (para 8), was a business partner of Mr Al Muhairy, CEO of Evolvence. On 12 November 2007, again according to the appellant's evidence, Mr Al-Emadi personally threatened the appellant and demanded that he withdraw the proceedings against Mr Hayat. At about the same time, QNB and QIA sought an exit from their investment in BTU.
On 17 October 2009 the appellant wrote a letter to all members of the board of directors of QNB, headed by Mr Kamal, recounting and complaining strongly about Mr Al-Emadi's conduct, including his support for Mr Hayat, which the appellant saw as motivated by personal ties, rather than by any interests of QNB. The letter made a number of serious and quite specific complaints against Mr Al-Emadi. It concluded by asking the board “to assign a new team, free of the influence of Mr Al-Emadi, to interface with my firm”. The response, put before the Board though it was not before the Court of Appeal, was a blunt letter of blanket rejection dated 5 November 2009, signed by Mr Kamal as chairman, stating:
“The Board was extremely surprised and disappointed to have received your letter, which makes a number of serious and potentially defamatory allegations against officers of QNB.
While QNB, of course, takes any genuine complaint seriously, it cannot meaningfully respond to unsubstantiated allegations of this nature, and it does not propose to do so.”
The letter went on to urge the appellant to focus on finding a mutually agreeable exit for QNB, and concluded by reserving its “right to take any legal action required to protect its reputation and interests in relation to any wrongful allegations made against it and its officers”.
On 11 November 2011, a preference shareholders' petition was presented to the Grand Court for the winding-up of BTU on just and equitable grounds. The petition was presented by QIA and SCEAI for themselves and the Qatar Foundation Fund, and was supported by all the other preference shareholders. The petition was supported by a very lengthy affidavit from Mr Longmate, QIA's senior legal adviser. This made numerous and serious allegations of misconduct against the appellant, terminating in a conclusion that the Manager and he had so “oppressed, disregarded and/or undermined” the rights and interests of the preference shareholders that “it would be wholly unjust and inequitable for them to be forced to remain as members” of BTU or to be forcibly redeemed on terms which had apparently been offered (para 82). The matters relied on included the outstanding litigation with Mr Hayat in the Grand Court and the United States, which Mr Longmate relied on as giving rise to “serious concerns about the probity of management of the Company and the status of its investments” (para 37), as well as a proposed asset swap between BTU and a Japanese company, Marubeni Corporation, for which it was alleged that the appellant had never sought approval and which it was alleged that he had only disclosed after executing an agreement with Marubeni in or about February 2011.
In response, the...
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