Apex Global Management Ltd Faisal Abdel Hafiz Almhairat (Petititioners) v FI Call Ltd and Others

Hearing dates: 11 th & 12 th November 2013

Introduction

This judgment concerns two applications in proceedings relating to two unfair prejudice petitions in the Companies Court. The proceedings are complex and involve a wide array of allegations. They are listed to be heard together at a five week trial to begin in February and are subject to a tight timetable.

The application made by Prince Abdulaziz ("the Prince"), the third respondent to one of the petitions, was listed first. It was optimistically listed for about half a day. It took a day. Riding on the back of that, the parties on the other side of the record ("the Apex parties") brought an application to strike out certain parts of the pleadings, and for allied relief. It was obviously intended that this should fill the rest of the day, and it was listed accordingly. That was a hopeless underestimate of an application of its complexity. It took a day by itself, and even then some of the complexities had to be rather skated over. This was an unsatisfactory way of bringing on these matters, albeit that there was a degree of urgency because of a forthcoming PTR and trial.

Before dealing with the applications, it is necessary to set out to some extent the factual and procedural background of this case. The two unfair prejudice petitions were presented in respect of the company Fi Call Ltd ("the company") which was incorporated on 23 October 2009 under the Companies Act 2006 ("the 2006 Act"). The Company's principal shareholders were, at all material times, Global Torch Ltd ("Global Torch") and Apex Global Management Limited ("Apex"). Apex was incorporated in the Seychelles and Global Torch was incorporated in the British Virgin Islands.

On 2 December 2011, Global Torch presented an unfair prejudice petition ("the GT Petition") in relation to the company under section 994 of the 2006 Act and, in the alternative, under section 122(1)(g) of the Insolvency Act 1986. The respondents to the petition were Apex and Mr Almhairat, who I refer to together as "the Apex Parties". Mr Almhairat is a director of and sole shareholder in Apex, and a de jure director of the company. The principal relief sought in the GT Petition was a share purchase order or, in the alternative, an order to wind up the company. Global Torch made various allegations, including in particular the allegation that the Apex Parties destroyed the relationship between Global Torch and Apex.

On 12 December 2011, Apex presented its own unfair prejudice petition (the "Apex Petition") in relation to the company under section 994 of the 2006 Act. The respondents to the petition were Global Torch, HRH Prince Abdulaziz bin Mishal bin Abdulaziz Al Saud ("Prince Abdulaziz"), HRH Prince Mishal bin Abdulaziz Al Saud ("Prince Mishal") and Mr Abu-Ayshih, who I will refer to together as "the GT Parties". Prince Abdulaziz is a director of and shareholder in Global Torch. He and Prince Mishal are members of the Saudi Royal Family. The Apex Parties say that Global Torch is a corporate vehicle of Prince Abdulaziz, that Prince Abdulaziz purports to be Chairman of the Board of the company although he is not a de jure director, and that Prince Abdulaziz has acted as a de facto and/or shadow director of the company. Prince Mishal is the father of Prince Abdulaziz and is implicated in a number of respects in the allegations contained in the Apex Petition. Mr Abu-Ayshih is a private advisor to Prince Abdulaziz, a director of and shareholder in Global Torch, and a de jure director of the company. The main relief sought in the Apex Petition was a share purchase order. Apex made various allegations; principally that it had lost trust and confidence in the willingness of the GT Parties to manage the company in a fair and proper manner.

On 12 July 2012, the Apex Parties served Points of Defence in response to the GT Petition, which contained a Counterclaim and "Additional Claims". The Respondents to the Counterclaim and the "Additional Claims" were Global Torch, Prince Abdulaziz, Mr Abu-Ayshih and Mr Al Shehri. The "Additional Claims" included a claim for US$5,984,000 plus interest against Prince Abdulaziz in relation to the proceeds of sale of certain company shares. This claim is central to one of the applications in this case. I shall call it "the $5m claim". On the same date, Global Torch served Points of Defence in response to the Apex Petition. On 7 September 2012, Apex served Points of Reply in the Apex Petition and on 12 September 2012, Global Torch served Points of Reply in the GT Petition.

At a CMC on 30 July 2013, Vos J ordered, inter alia, that the petitions shall be managed and heard together. He ordered Apex and Global Torch to each serve a single set of pleadings (with Apex to go first) in relation to all of their claims, and set out various other constraints which the new pleadings should adhere to. On 23 August 2013, the Apex Parties served Amended Points of Claim (which included under "Further or alternative claims") the $5m claim against Prince Abdulaziz (including a claim for interest). On 3 October 2013, Global Torch and Mr Ayshih served an amended Defence and Counterclaim and on 1 November 2013, the Apex Parties served an Amended Reply and Defence to Counterclaim. Thus we now have a consolidated set of pleadings in relation to the two petitions.

Since the petitions were originally presented in December 2011, they have been the subject of numerous applications and appeals in the High Court and Court of Appeal. They included an application by Price Abdulaziz and Prince Mishal claiming sovereign immunity under Section 20 of the State Immunity Act 1978, which were dismissed by Vos J on 19 March 2013 and the Court of Appeal on 11 June 2013. There was also a jurisdictional dispute. Such applications also include those by the Apex Parties who, following an "unless order" by Norris J dated 9 September 2013, applied for judgment under CPR 3.5(2) against Prince Abdulaziz in relation to the $5m claim. An order recording Norris J as making it gave judgment for the $5m claim on 15 October 2013.

The applications now before the court are: (1) an application by Prince Abdulaziz dated 25 September 2013 to set aside or stay the judgment made against him by Norris J on 15 October 2013; and (2) an application by the Apex Parties dated 31 October 2013 to strike out various parts of the Amended Defence and Counterclaim, and related orders. Mr Wardell QC and Mr Saoul appeared for the Global Torch parties (including the Prince); Mr Howe QC and Mr Lightman appeared for the Apex parties.

Facts relating to the set aside/stay application

The background to the judgment lies in the failure by Prince Abdulaziz to personally sign a disclosure statement relating to electronic sources of documents. The provision of disclosure statements was one of the things that Vos J dealt with at a CMC on 30 ^th and 31 ^st July 2013. He determined that the disclosure statements should be served by the individual (as opposed to corporate) parties personally (and therefore not by an agent). At the hearing before him it was argued that the Prince should not be required to sign his statement personally because there was said to be a "protocol" (the word was first coined in these proceedings by Vos J, and it has stuck even if that is not the original description of the arrangement) under which members of the Saudi Royal Family do not participate in litigation by signing documents or giving evidence. He rejected the submission that that meant the Prince should be treated differently and made an order that he, like other individuals, should sign personally.

On 30 July 2013 Vos J ordered the Prince (at paragraphs 14 and 15 of his order) personally to file and serve those documents by 4pm on 6 and 12 August 2013. He did not do so. On 9 September 2013, Norris J heard an application that he do so, and ordered that unless he complied with paragraphs 14 and 15 of Vos J's order by 4pm on 18 September 2013, his Points of Defence would be struck out and he would be debarred from defending the Apex Petition and the claims in the Amended Points of Claim. Prince Abdulaziz failed to comply with the order, so his Points of Defence were struck out and he was debarred from defending the action. He rejected the suggestion that the Prince should be allowed to comply, or had procured effective compliance, by getting his personal assistant to sign the statement as to the Prince's knowledge.

The Prince still failed to comply. On 4 October 2013, the Apex Parties wrote to "the Applications Judge" requesting judgment against the Prince pursuant to CPR 3.5(2), in respect of the $5m claim (amounting to US$5,984,000 plus interest). They did not seek to have it entered as an administrative act. As it happened Norris J was the applications judge in that week, so the matter was placed before him. He was concerned that there were other claims that were being made against the Prince in respect of which judgment was not sought and wrote a letter stating that unless the other claims were abandoned then something more than an...