Azzam Faisal Khouj v Acropolis Capital Partners Ltd
| Jurisdiction | England & Wales |
| Judge | Christopher Hancock |
| Judgment Date | 24 June 2021 |
| Neutral Citation | [2021] EWHC 1667 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2013-000975 |
| Date | 24 June 2021 |
[2021] EWHC 1667 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Christopher Hancock QC
SITTING AS A JUDGE OF THE HIGH COURT
Case No: CL-2013-000975
George McPherson (instructed by HMA Law) for the Claimant
Ian Croxford QC and James Walmsley (instructed by Cooley) for the Defendants
Hearing date: 23 April 2021
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Christopher Hancock QC
Christopher Hancock QC:
Introduction and general background.
This is an application by the Claimant for an order that the Defendants, Acropolis Capital Partners Limited (“ ACP”) and Acropolis Capital Management Limited (“ ACM”), tender their officer, Mr Vinod Vaghadia, for cross-examination in relation to the contents of (selected parts of) his fourth affidavit dated 29 March 2021, and in particular paragraph 23 of that affidavit, which deals with the circumstances in which the ASFL Shares (as defined below) were transferred to Mrs Kurdi by reference to the eight issues identified in paragraph 18 of a letter dated 17 April 2021 from HMA Law, the Claimant's legal representatives, to Cooley (who represent the Defendants).
The Claimant is the Administrator of the Estate of Mr Abdulrahman Mansouri (“Mr Mansouri”), who died on 5 June 2010. The Defendants managed certain of Mr Mansour's substantial assets during his lifetime. The relevant individuals employed by or connected with the Defendants were:
1) Mr Vaghadia: a director of the Defendants and their Finance Director;
2) Mr Nabil Chartouni: the founder of ACM and an adviser to and co-investor with Mr Mansouri; and
3) Ms Carol Lapwood: Company Secretary of the Defendants and Office Administrator.
In 2013 the Claimant brought a claim for declaratory relief that the Defendants (1) were agents of Mr Mansouri and (2) owed the Claimant a duty to account in respect of transactions and other business conducted by the Defendants on behalf of Mr Mansouri during this lifetime. One of those transactions related to Mr Mansour's shares in an investment fund run out of the Cayman Islands (the “ Fund”) by Acropolis Select Funds Limited (“ ASFL”). There is a significant dispute about whether these shares (the “ ASFL Shares”) were effectively transferred by Mr Mansouri to his niece, Mrs Shahzaman Kurdi, before his death. In December 2010, the ASFL Shares were allegedly worth US$5,138,130.61. It is with this transaction that the current application is concerned.
In May 2016 there was a 5 day trial before Knowles J, which resulted in the Claimant obtaining wide-ranging declaratory and other relief in accordance with the terms of an Order dated 19 August 2016.
The Claimant succeeded at that trial and obtained the declarations sought. At the trial, Mr Vaghadia was the main witness to give evidence for the Defendants. Knowles J was not impressed with the evidence of Mr Vaghadia. In his judgment, he said the following:
“38. Save where there was other confirmatory material I did not have confidence in Mr Vaghadia's reliability as a witness. His evidence was marked by an approach that showed no concern for or interest in Mr Mansouri on the one hand and determined loyalty to Mr Nabil Chartouni on the other. This informed his view of corporate and investment arrangements that on any objective view were of questionable coherence.
39. Mr Vaghadia's partisanship and the lengths to which he would go in that connection were shown by his readiness to make a false representation in an attempt to obtain information for Mr Nabil Chartouni and Mrs Kurdi's husband in connection with a private jet that Mr Mansouri had (directly or indirectly) owned. He admitted this under cross examination from Mr Sutcliffe QC and I consider the representation to have been deliberately false.
40. In the case of the Park Lane Flat there are the two copy letters. In the case of the Multi-Strategy Fund there are the copy stock transfer forms. There is not similar contemporaneous confirmatory material in relation to the private equity investments, and I do not trust Mr Vaghadia's formulation (quoted in paragraphs 33 to 35 above) of how he says Mr Mansouri described these.
41. I wish to emphasise that it is only for the purpose of the claims made at this trial and as between the parties to this litigation that I accept the letters and the stock transfer forms as authentic, including their dates, and that there was a meeting. At this trial I did not have the benefit of forensic expert evidence or of disclosure or evidence from Mr Nabil Chartouni or Mrs Kurdi. In light of these limitations my acceptance at this trial of authenticity and that there was a meeting is unlikely to carry weight in any different context and in any future proceedings involving parties other than or additional to Mr Khouj, ACP and ACM, and for my part I would not wish it to carry weight.
42. Mr Vaghadia also gave evidence in these terms:
“At a later date Nabil Chartouni explained to me that Mr Mansouri had gifted these assets to Mrs Kurdi because she and Mr Mansouri were very close and she and her husband had been helping him, both personally and in his businesses, particularly in his later years. I also understand, from Nabil Chartouni, that Mr Mansouri believed he had to gift assets to Mrs Kurdi before he died because he believed she would not inherit anything from him due to Saudi forced heirship rules.”
I am not prepared to accept this evidence, of what Mr Nabil Chartouni said to Mr Vaghadia was the intention, purpose and belief of Mr Mansouri, as reliable evidence of what Mr Mansouri's intention, purpose and belief was. In addition to my assessment (above) of Mr Vaghadia as a witness, Mr Vaghadia's evidence tells me nothing of what Mr Mansouri in fact said on these aspects to Mr Nabil Chartouni. And Mr Nabil Chartouni is not at this trial to tell me himself.”
Following the trial, Knowles J made an order which included an order requiring an officer of the Defendants to swear an affidavit providing information and documentation in respect of the three categories of “Relevant Assets” in relation to which the Defendants acted as Mr Mansouri's agent during his lifetime. Under the Order, the Claimant had liberty to apply for (1) further information and documentation and (2) cross-examination of the deponent of the affidavit in relation to its contents and any other relevant matter.
In more detail, the order provided as follows:
1) paragraphs 1(b), 2, 3 & 4: which obliged the Defendants as the agents/fiduciaries of Mr Mansouri to account to the Claimant in relation to “ transactions and other business” conducted (1) on behalf of Mr Mansouri or (2) jointly with another in relation to the ASFL Shares;
2) paragraph 6(2)(a) & (b): which required the affidavit provided by the Defendants (1) to address the basis on which the transfer of the ASFL Shares (a) was effected and (b) (if different) is said to have been legally effective and (2) to exhibit any documents recording the transfer of the ASFL Shares to Mrs Kurdi;
3) paragraph 9 (i) & (ii): which entitled the Claimant to apply for an order for further information and documentation in relation to the transfer of the ASFL Shares and to seek an order for cross-examination in relation to “ any other relevant matter”.
Following the trial before Knowles J, the Defendants sought permission to appeal, an application which was only finally disposed of by virtue of orders of Briggs LJ (as he then was) dated 1 February 2017 and Sharp LJ dated 3 November 2017. Prior to this date, Knowles J's order was stayed. Immediately following the dismissal of the application for permission to appeal, however, the affidavit contemplated by the order of Knowles J was filed, on 8 November 2017. That affidavit was Mr Vaghadia's first affidavit, and is referred to in this judgment as Vaghadia 1, and contained four paragraphs relating to the ASFL shares. There was in addition an exhibit served to that Affidavit, which contained 17 pages relating to the ASFL shares.
On 12 November 2017 TA Legal Consultancy (acting for the Claimant) required BNY Mellon to provide (1) copies of all documents held by BNY Mellon which evidenced “ any instructions received” in relation to the registration of the ASFL Shares in Mrs Kurdi's name in April 2011; and (2) “ any other document” relied on by BNY Mellon to register Mrs Kurdi as the owner of the ASFL Shares (including any indemnity given by any party in BNY Mellon's favour).
On 9 December 2019, HMA Law resumed correspondence on the information in Mr Vaghadia's affidavit after resolving disputes relating to the Defendants' costs liability. The letter to BNY Mellon appended a schedule of “requested information” in relation to the transfer of the ASFL Shares from Mr Mansouri to Mrs Kurdi, which was copied to Cooley and Dechert (the “ BNY Mellon Schedule”). This included requests for the following information:
1) copies of all documents submitted to/received by BNY Mellon requesting the transfer of the ASFL Shares from Mr Mansouri to Mrs Kurdi;
2) originals of the stock transfer forms;
3) the reasons why the transfer of the ASFL Shares was not documented by BNY Mellon until 31 March 2011.
On 11 December 2019, Mr Vaghadia forwarded the letter from Cooley to Dechert with the message “ I will...
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