Asturion Foundation v Aljawarah Bint Ibrahim Abdulaziz Alibrahim

JurisdictionEngland & Wales
JudgeMr Justice Adam Johnson
Judgment Date21 December 2023
Neutral Citation[2023] EWHC 3305 (Ch)
Year2023
CourtChancery Division
Docket NumberCase No: HC-2015-001414
Between:
Asturion Foundation
Claimant
and
Aljawarah Bint Ibrahim Abdulaziz Alibrahim
Defendant

[2023] EWHC 3305 (Ch)

Before:

Mr Justice Adam Johnson

Case No: HC-2015-001414

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

PROPERTY, TRUSTS AND PROBATE (ChD)

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

David Mumford KC and James Kinman (instructed by Bryan Case Leighton Paisner LLP) for the Claimant

Rupert Reed KC and Simon Atkinson (instructed by Simmons & Simmons LLP) for the Defendant

Hearing dates: 5, 6, 7, 10, 11, 12, 14, 17, 20, 21 July 2023

APPROVED JUDGMENT

This judgment was handed down remotely at 2PM on 21 December 2023 by circulation to the parties or their representatives and by release to the National Archives.

CONTENTS

Paragraph

Introduction

1

The Case in Outline

15

The Evidence

17

Factual Evidence

17

For the Foundation

18

For the Princess

20

Expert Evidence

24

Liechtenstein law

25

Swiss Law

29

Saudi/Shari'a law

33

The Foundation

37

M e Assaly/the 1977 Regulation

38

The 1978 Power of Attorney

46

1985 – Changes to the Articles/M e Assaly reappointed to the Board

48

1988 – The 1988 Power of Attorney

54

1993 – Sole Signature Right for M e Assaly

55

The Relevant Articles in full

56

Public Register

57

Other Relevant Background

61

The 2001 Instruction

62

2005 – The Death of King Fahd

67

2006 – Initial plans for the transfer of Kenstead Hall

74

2007–2009 – A period of inactivity

76

January and February 2010 – Permission of the Council of Heirs

85

February 2010 – Mr Davies' Letter of 26 February

96

Consent of the Heirs – Prince Mohammed visit to London

104

Consent of the Heirs – Dr Al Rowaished visit to M e Assaly in Geneva

109

2011—Transfers of the Spanish Property and of Kenstead Hall

117

2012 – Exchanges between M e Assaly and Prince Mohammed

127

The French Property

133

Litigation in Liechtenstein

134

Some Initial Observations

139

The Foundation's Primary case: Is the Transfer of Kenstead Hall Void?

151

The TR1

151

Formal validity

154

Section 26 Land Registration Act 2002

156

The Foundation's Purpose

169

The Purpose as an Expression of the Founder's Will

169

Decisions of the Liechtenstein Courts

185

The 2001 Instruction

194

The Internal Competency Argument

195

The Issue of Principle

195

Execution of the TR1 – the 2001 Instruction as a “regulation”

207

The 1988 Power of Attorney

218

Non-delegability of duties/decisions of the Liechtenstein Courts

227

Summary

239

Representative Authority/Ostensible Authority

240

The Argument based on the law of Liechtenstein

240

The Argument based on English law

243

Discussion and Analysis

244

Some points about ostensible authority (and on the facts)

265

Summary and Conclusion on the Foundation's Primary Case

271

The Foundation's Secondary and Tertiary Claims

272

The Foundation's Claims

272

Secondary Claims

275i

Tertiary claims

275iii

The Princess's Arguments

277

Choice of Law

282

Land Registration Act 2002

297

Conclusions on the Foundation's Secondary and Tertiary Claims

305

Conclusion

307

Mr Justice Adam Johnson

Introduction

1

The essential question in this action concerns the validity of a transfer of registered land in England, purportedly undertaken by the Claimant, a Liechtenstein foundation.

2

The foundation's official name is “ Asturion Fondation”, but I will refer to it as “ the Foundation”. It was originally established in Liechtenstein in October 1974. It is common ground that the late King Fahd bin Abdulaziz of Saudi Arabia – then known as Prince Fahd – was the founder. I will refer to him as “ King Fahd”.

3

A foundation is a legal person under Liechtenstein law. However, it does not have members or shareholders. Rather, it is a legal personality attached to a pool of assets dedicated to a particular purpose. As explained by the experts, foundations are governed by the Personen-und Gessellschaftsrecht 1926 (Law on Persons and Companies) (the “ PGR”). The Foundation, being a foundation established prior to 1 April 2009 (when the PGR was extensively revised) is governed primarily by the PGR as it was in force prior to that date, subject to some specific exceptions.

4

In this case, the assets making up the Foundation were a number of properties used by members of the Saudi Royal family as residences. From 1977 when it was acquired, they included the property at the centre of the present dispute, a large house known as Kenstead Hall, situated on The Bishop's Avenue in North London. Also forming part of the assets of the Foundation (either directly or indirectly) were Chateau de l'Aurore in Golfe-Juan (the “ French Property”); land in Grünwald, Germany (the “ German Property”); and an interest in the Al-Nahda Palace in Marbella (the “ Spanish Property”).

5

The present litigation arises as follows. The Defendant – I will refer to her as “ the Princess” – is the widow of the late King Fahd. Her case is that, in June and September 2001, King Fahd gave instructions for the four properties I have mentioned, including Kenstead Hall, to be transferred into her name (the instruction concerning Kenstead Hall is dated 2 September 2001 – I will refer to it as the “ 2001 Instruction”).

6

The various instructions, including most importantly for this action the 2001 Instruction, were directed to M e Faisal Assaly, a long-standing and trusted adviser to King Fahd, who at the time was a member of the Foundation's board. The instructions were not, however, actioned immediately, and in fact none had been actioned by the time King Fahd died in August 2005.

7

King Fahd's heirs under Islamic or Shari'a law were the Princess (his widow), Prince Abdul Aziz bin Fahd (his son with the Princess) and eight other children from prior marriages, including Prince Mohammed bin Fahd, another son of King Fahd by an earlier marriage (“ Prince Mohammed”).

8

As is customary under Islamic practice, a council of King Fahd's heirs was established to oversee management of his estate (“ the Council of Heirs”). The Council came to be headed by Prince Mohammed, and had as its adviser a Dr Abdul Mohsen Saad Abdulaziz Al Rowaished (“ Dr Al Rowaished”), a senior Saudi Arabian lawyer.

9

There were then further delays after the King's death in actioning the instructions I have referred to. Although the German Property was transferred to the Princess in June 2006, the Spanish Property was transferred only in April 2011, Kenstead Hall in October 2011, and the French Property in December 2012.

10

I will explain more in the chronology below, but in short the delays at least partly reflect a question which developed about whether consent of the Council of Heirs was needed, and had been given, before the transfers could be effected. In the event, during late 2010, M e Assaly determined that he should proceed in light of the instructions given to him by the late King, and did so.

11

We are concerned in these proceedings with the transfer of Kenstead Hall. This was effected by means of a transfer of the registered estate of Kenstead Hall via a Land Registry Form TR1, signed as a Deed by M e Assaly and dated 14 October 2011 (the “ TR1”).

12

At the time, the Foundation in fact had three board members. These were M e Assaly, Dr Wiederkeher, a Liechtenstein lawyer, and Prince Mohammed. The fact of its execution by M e Assaly, in particular against the background of some uncertainty about the position of the Council of Heirs, gives rise to one of the objections to the transfer now taken by the Foundation, which is that it was beyond the internal competence of M e Assaly, acting alone, to effect a distribution of the Foundation's assets without engaging the other board members, which he failed to do.

13

The second objection concerns the way in which the Foundation says its assets were to be divided up. This relates to the question of the Foundation's purpose, which I have mentioned above. The argument of the Foundation is that part of the purpose of the Foundation, as identified by King Fahd himself, was the distribution of its assets to his heirs under Islamic or Shari'a law, either in their Shari'a shares (which would involve the Princess, as widow of King Fahd, receiving a 1/8 th share, and King Fahd's sons and daughters sharing the residue on the basis that each daughter received half as much as each son); or if that is wrong, then in equal 1/10 th shares. Either way, it is said that the effect of the transfer of Kenstead Hall to the Princess, either alone or in combination with the transfers of the other properties I have mentioned, was to confer on her benefits in excess of her rightful share, and that was contrary to the Foundation's purpose. As this, the Foundation relies on agreed valuation evidence showing that, as at October 2011, the value of Kenstead Hall corresponded to 14% of the value of the overall assets of the Foundation – so in excess of her 1/8 th Shari'a share and well in excess of a 1/10 th share, which would be even smaller.

14

I will briefly explain below the history of at least some of the litigation which has affected the Foundation. For now it is sufficient to note that the present claim, together with other claims relating to the French, German and Spanish Properties, is being brought by a new Foundation board, M e Assaly having sadly died in May 2015, and Prince Mohammed having been removed by Order of the Liechtenstein Court of Appeal in April 2017 (as later upheld by the Liechtenstein Supreme Court).

The Case in...

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