Ammar Al Assam v Dimitrios Tsouvelekakis
| Jurisdiction | England & Wales |
| Judge | Davis-White |
| Judgment Date | 11 August 2022 |
| Neutral Citation | [2022] EWHC 2137 (Ch) |
| Docket Number | Case No: PT-2021-000836 |
| Court | Chancery Division |
[2022] EWHC 2137 (Ch)
HH JUDGE Davis-White QC
(SITTING AS A JUDGE OF THE HIGH COURT)
Case No: PT-2021-000836
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY, TRUSTS & PROBATE LIST (ChD)
Rolls Building, 7 Rolls Building,
Fetter Lane,
London EC4A 1 NL
Mr Simon Adamyk and Ms Jessica Powers (instructed by DWF Law LLP) for the Claimants
Mr David Head QC and Ms Clarissa Jones (instructed by Peters & Peters Solicitors LLP) for the Defendant
Hearing dates: 19, 20, 25 May 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HH JUDGE Davis-White QC
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30 on 11 August 2022
HH Judge Davis-White QC:
Introduction
On 25 May 2022, following a two-day hearing on 19 and 20 May 2022, I decided that a worldwide freezing order should be made against the defendant. This was on the application of the claimants dated 29 September 2021, which was before me. However, I said that I would provide the reasons for that decision separately in writing. The detailed terms of the order were then settled at such hearing. So far as matters were in dispute, I made various decisions and gave reasons at the time, save in relation to one matter. That related to costs. I ordered that the costs should be reserved and, whilst indicating in broad terms my reasons for that decision, I said that I would also enlarge upon such reasons in writing. This sets out my reasons for both the granting of the freezing order and the order for costs that I made.
By way of very broad summary, the claimants bring various claims against the defendant in connection with investments made by two Cypriot trusts. The claims involve allegations regarding the defendant's role in advising upon and/or bringing about and/or reporting (or failing to report on) such investments. The investments in question appear to have, in some cases, experienced significant loss in capital value compared with the sums invested. The losses currently claimed, which include a claim for lost investment returns on the sums which were invested, are in the region of US$16 million. In other cases, the losses are said to amount to loss of income/capital growth by reason of the relevant sums apparently not being invested at all. The 1 st to 8 th claimants are beneficiaries, or potential beneficiaries, under the relevant trusts. The 1 st and 2 nd claimants are also the settlors of the trusts. The 9 th and 10 th claimants are companies owned by the trusts, which companies owned and held the underlying relevant trust investment assets.
The court has already dealt with the question of whether the English court should decline jurisdiction and stay the proceedings on the grounds of “ forum non conveniens” or, put another way, on the basis that Cyprus is clearly or distinctly the more appropriate forum for determination of the claim. That application by the defendant was rejected by Judge Jonathan Richards sitting as a Deputy Judge of the High Court for the reasons set out in his judgment dated 7 March 2022 ( [2022] EWHC 451 (Ch)) (the “March 2022 Judgment”). The March 2022 Judgment sets out a very helpful explanation of these proceedings, the claims brought and the potential issues that are likely to arise. The decision that that application should be determined before the application for a freezing injunction explains some of the delay in the court dealing with the freezing injunction application, now before me.
The claims in the proceedings involve allegations of breaches of the duty of care in tort, breach of fiduciary duty, deceit, dishonest assistance in the breach by the trustees of their fiduciary duties, an alternative claim in tort under Swiss law and a contractual claim under Swiss law by the 9 th and 10 th claimants. The claims (other than those brought under Swiss law) are brought under Cypriot law. At this stage at least, it appears uncontentious that Cypriot law is the relevant applicable law in respect of the non-Swiss law claims and that it does not materially differ from English law.
The claimants seek a worldwide freezing injunction. They say that the classic requirements for such relief are met, namely:
(1) The claimants have a good arguable case on the merits of the substantive claims.
(2) The defendant has insufficient assets within the jurisdiction to settle the claims but has assets outside the jurisdiction.
(3) There is a real risk of dissipation or secretion of assets by the defendant so as to render any judgment against him which the claimants may obtain worthless: such risk is demonstrated (in broad terms) by the underlying facts forming the relevant causes of action, what is said to be unsatisfactory evidence from the defendant on this application and that the defendant has the tools to effect the same by reason of the network of worldwide entities that he has used in the past and which is available to him.
(4) In all the circumstances, it is just and convenient that an order should be made.
Again, in very broad terms only, the defendant's position is as follows:
(1) By affidavit dated 20 April 2022, whilst making clear that he vehemently rejects all and any allegations of wrongdoing, breach of duty and dishonesty, the defendant made clear that he is prepared to accept (but for the purposes of the current application only) that the claimants have a good arguable case in respect of the claims advanced (but that various undisputed matters make the claims “implausible”).
(2) I did not detect that the defendant really disputed the claimants' case regarding his assets and their location.
(3) There is no real risk of dissipation or secretion made out. That is so looking at, in broad terms, the underlying causes of action which are asserted, the delay in bringing this application and in bringing it to a hearing and the good character of the defendant.
(4) It is not just or convenient to make an order. In addition to the points in (3), such an order would be excessively onerous and have severe consequences for the defendant.
The parties, connected persons and legal representation
I take the following facts from the Particulars of Claim. A defence was due to be served in the month or so after the hearing and so the defendant's case, so far as it was then disclosed, had to be gleaned from the evidence that he had filed to the date of the hearing both on the application before me and the earlier application made by him challenging the jurisdiction of this Court.
In brief, the first two claimants are settlors and beneficiaries respectively of two Cypriot trusts, the AAA Family Trust (the “AAA Trust”) and the Hamza Family Trust (the “Hamza Trust”) (together the “Trusts”). Before me, and for convenience, the first claimant was referred to as “Ammar” and the second claimant was referred to as “Mohamed”. I adopt the same convention, with no disrespect intended.
The third to eighth claimants are also beneficiaries (or potential beneficiaries to the extent that the trusts are discretionary trusts) under one or both of the Trusts and members of the same family.
Ammar and the fourth and fifth claimants are children of Mohamed and his wife, the third claimant. The sixth claimant is married to Ammar. The seventh and eighth claimants are the children of Ammar and the sixth claimant. The first to eighth claimants are all resident in Dubai, United Arab Emirates.
Ammar and Mohamed own are majority owners of and operate a family business, Dewan Architects & Engineers. That business is based in Dubai, with branches in several other countries.
The defendant is a financial and investment advisor and investment manager. He has had a long relationship with the first two claimants, both on the basis of personal friendship and as professional advisor. He was involved in the setting up of the Trusts and with certain investment decisions thereafter taken.
The AAA Trust was established by Ammar as settlor by Deed dated 2 December 2009. At all material times, the main asset of the AAA Trust was the entire shareholding in a Panamanian incorporated company, AAA Group Inc (“AAA Group”), the ninth claimant.
The Hamza Trust was established by Mohamed as settlor by Deed, also dated 2 December 2009. At all material times, the main asset of the Hamza Trust was the entire shareholding in a BVI incorporated company, Hrostenco Corporation (“Hrostenco”), the tenth claimant. That shareholding was held indirectly. The shareholding in Hrostenco was held in its entirety by Vector Projects Limited (“Vector”), a company incorporated in the Seychelles, as nominee. Vector was also...
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...rely on the recent decision of his Honour Judge Davis-White KC sitting as a judge of the High Court in Al Assam v Tsouvelekakis [2022] EWHC 2137 (Ch) as authority for the proposition that the costs of an application for a freezing order, including a contested inter partes application, shou......