Ashtiani v Kashi

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE DILLON,LORD JUSTICE NEILL,LORD JUSTICE NICHOLLS
Judgment Date25 Jun 1986
Judgment citation (vLex)[1986] EWCA Civ J0625-2
Docket Number86/0564

[1986] EWCA Civ J0625-2

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM AN ORDER OF SIR NEIL LAWSON, SITTING

AS A JUDGE IN CHAMBERS (QUEEN'S BENCH DIVISION)

Royal Courts of Justice

Before:

Lord Justice Dillon

Lord Justice Neill

Lord Justice Nicholls

86/0564

Esmaeel Ebrahimi Ashtiani

and

Majid Haj Mohammad Hossein Kashi
and
Habibullah Haj Mohammad Hossein Kashi

MR JAMES GOUDIE Q.C. and MR A.J. McGREGOR, instructed by Messrs Bennetts & Partners, appeared for the Appellants (Plaintiffs).

MR A.A.R. THOMPSON Q.C. and MISS HILARY HEILBRON, instructed by Messrs Joynson-Hicks & Co., appeared for the Respondent (Defendant).

LORD JUSTICE DILLON
1

This is an appeal by the plaintiffs in the action against an order of Sir Neil Lawson sitting as a judge in chambers in the Queen's Bench Division made on 22nd May 1986 whereby, on an undertaking by the defendant which I shall mention, he discharged an order of Mr Justice Hirst of 23rd April 1986. That was an order which had granted the plaintiffs a Mareva injunction together with ancillary relief by way of orders for discovery. The appeal raises an issue of some importance in relation to the practice on the grant of Mareva injunctions.

2

As to the facts, all three parties to the action are Iranian citizens. The plaintiffs, Mr Ashtiani and Mr Majid Kashi, are resident in Iran. They are poultry breeders. The defendant, Mr Habib Kashi, is not resident in Iran. At one time he was resident in California. Currently he is resident in England. He has been duly served with these proceedings in England and is subject to the jurisdiction in personam of the English court.

3

The first plaintiff, Mr Ashtiani, the defendant and a Mr Mohammad Kashi, who is a brother of the defendant and the father of the second plaintiff, were the shareholders and directors or partners in an Iranian company called Ashka—(its exact juristic nature is not material)—which was concerned with the import of grain and foodstuffs into Iran.

4

The second plaintiff, Mr Majid Kashi, has a partnership with his father, Mohammad Kashi, who is referred to conveniently in these proceedings simply as Mohammad, in relation to various agricultural ventures in Iran with which the activities of Ashka are concerned.

5

There is an issue between the parties in that the defendant claims that the first plaintiff and Mohammad ceased to have any interest in Ashka before the happening of the events which give rise to this litigation. That is disputed by the plaintiffs. Ashka imported some three cargoes of grain to Iran. There were then arrangements for a fourth cargo, but Ashka was defrauded by various persons in North America who secured payment for the cargo by the delivery of forged shipping documents, but failed to deliver the cargo. The defendant accordingly brought proceedings to recover the losses from these persons in the American courts; and in the year 1980 he succeeded in recovering 5.3 million United States dollars by way of damages for the fraud of the United States vendors of that cargo. Subsequently, further but much smaller sums have been recovered in further litigation in the United States. That money came at one stage to London. The defendant asserts that some 3 million dollars of it was paid to an Iranian bank which had financed the payment for the supposed cargo in reliance on the forged shipping documents and a further sum was spent on legal costs in the United States.

6

The plaintiffs and Mohammad put forward a claim to a share of these monies, but a written agreement was made in California on 13th February 1984 whereby the defendant agreed to pay the first plaintiff, Mr Ashtiani, U.S. $500,000 and to pay the second plaintiff, Majid Kashi. U.S. $750,000, and to pay Mohammad a further U.S. $750,000. It is on that agreement that the plaintiffs sue in this action. They concede that $200,000 were paid to Mr Majid Kashi, but they assert that there has been no further payment under the agreement. The defendant says that the agreement was entered into as a result of misrepresentation on behalf of the plaintiffs that they had suffered seizure of assets in Iran because of the activities of Ashka which were illegal by Iranian law. He also says that the agreement was entered into under duress and that there was no consideration for it if consideration is required by the proper law of the agreement. He also says that the full amounts due to either plaintiff under that agreement have been paid. He points to particular payments to each of the plaintiffs. As to the allegation of payment, the plaintiffs say either that one of the payments was never received, or, in the case of the first plaintiff, that a payment was received but was from Mohammad and not from the defendant and it was for something else not under the agreement.

7

On 12th April 1985 there was a letter before action from solicitors for the plaintiffs. Nothing immediately happened, but on 19th August 1985 there was a meeting between the defendant and Mohammad. The defendant asserts that a final settlement was then reached. The effect of that meeting was that a sum of money was paid by the defendant to Mohammad and that certain post-dated cheques were given by the defendant to Mohammad, though these cheques have in fact never yet been presented.

8

These proceedings were commenced in April of this year with the application ex parte to Mr Justice Hirst for the Mareva injunction. The writ was issued on the same day, 23rd April of this year. So far as the facts which I have very briefly summarised are concerned, it is common ground that they raise serious questions to be tried. It is impossible to say, on the voluminous documentary evidence before the court, that there is a probability that one side rather than the other will win when the action comes on for trial.

9

The order of Mr Justice Hirst provided that, on certain undertakings in usual form by the plaintiffs, the defendant "be restrained until after judgment or further order in the meantime from doing or authorising the doing of…the following acts of any of them that is to say:—removing from the jurisdiction or otherwise disposing of or dealing in any manner whatsoever with any of his assets (whether held in his own name or jointly with any other person or persons) within the jurisdiction and without prejudice to the generality of the foregoing, pledging, charging or parting with possession of the same save insofar as such assets exceed in value…the sum of $1,250,000 U.S.", except that the defendant was to be at liberty to spend £300 a week on ordinary living expenses and reasonable sums for legal advice and representation in respect of these proceedings "upon informing the Plaintiffs' Solicitors in writing of the source or account from which such sums are to be drawn."

10

The order further directed that the defendant "do disclose the full value of his assets within and without the jurisdiction identifying with full particularity the nature of all such assets their whereabouts and whether the same be held in his own name or jointly with some other person or persons or by nominees or otherwise howsoever on his behalf and without prejudice to the generality of the foregoing specifying the identity and whereabouts of all bank or other accounts whether held in the Defendant's name or jointly held or held by nominees on his behalf including any such account wherein the proceeds of" the litigation in America might be held. "Such disclosure to be effected by Affidavit to be made by the Defendant and served upon the Plaintiffs' Solicitors by 4.30 p.m. on Tuesday the 29th April 1986."

11

Then power was reserved to the defendant to apply to vary or discharge the order on notice. In fact the time limit for disclosure of overseas assets was extended by order of Mr Justice Tucker to which I need not refer. The defendant swore affidavits disclosing his assets within the jurisdiction and outside the jurisdiciton. So far as assets within the jurisdiction are concerned, there was only one, apart from trivia which do not fall to be taken into consideration having regard to the size of the sums in issue in the litigation. That was a leasehold flat at a property called "Fairacres", London SW15. As a result of a subsequent order it is charged with a sum for improvements and legal costs, and the equity is of a value of some £100,000.

12

The defendant also disclosed a list of his foreign assets exhibited to an affidavit. This sets out the following. Firstly, a call deposit account with Hambros Bank (Guernsey) Ltd. in Guernsey, the account No. being given, with a credit balance of some U.S. $400,000. This account was said to have been charged to Hambros Bank to secure payment of a loan to a Dutch company. It appears that the amount in this account was transferred from England in November of last year. Secondly, there is a deposit account with Habib Bank Limited, Brussels, and the account No. is given, with a credit balance of approximately £680,000. The account was said to be charged to Habib Bank to secure the indebtedness of a business associate, a Mr Afdhal, to that bank. It appears that that amount was transferred to Belgium from London in March of this year. Thirdly, there is a term deposit account with International Mercantile Bank S.A. of Luxembourg with a credit balance of U.S. $455,503 plus interest at maturity, which was charged to the International Mercantile Bank to secure repayment of the defendant's overdraft on current account with that bank, the debit balance on which was some £274,000, it is said, in the list of assets. That sum was also transferred from England in March of this year. Then there is a bank account in Portugal which does...

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