Bank of Beirut S.A.L. and Another v HRH Prince Adel El-Hashemite and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nugee |
| Judgment Date | 22 May 2015 |
| Neutral Citation | [2015] EWHC 1451 (Ch) |
| Docket Number | Case No: HC-2014-001497; HC-2014-001951 |
| Court | Chancery Division |
| Date | 22 May 2015 |
[2015] EWHC 1451 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Nugee
Case No: HC-2014-001497; HC-2014-001951
Case No: HC-2014-001497
Case No: HC-2014-001951
Iain Munro (instructed by CMS Cameron McKenna LLP) for the Claimants
Mark Mullen (instructed by Treasury Solicitor) for the Second Defendant
Iain Munro (instructed by Reed Smith LLP) for the Claimant
Mark Mullen (instructed by Treasury Solicitor) for the Second Defendant
Hearing date: 30 March 2015
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.
Introduction
On 30 March 2015 I heard an application by the Claimants in these two actions for summary judgment and other relief. I indicated at the end of the argument that I was satisfied that judgment should be given against the First Defendant and made an Order accordingly. I did not however have time on that day to give my reasons; and I also wished to consider my judgment on the question of the relief sought against the Second Defendant, which was opposed.
This judgment therefore both sets out the reasons why I gave judgment against the First Defendant, and my conclusions on the claim against the Second Defendant that I reserved for further consideration.
In each action the Claimants are Middle Eastern banks ( "the Banks"), as follows:
(1) In claim no. HC-2014-001497 they are two Lebanese banks, namely (i) Bank of Beirut s.a.l. ( "BoB"), one of the leading commercial banks in Lebanon; and (ii) Banque du Liban ( "BdL"), the Central Bank of Lebanon.
(2) In claim no. HC-2014-001951, there is one claimant, Arab National Bank ( "ANB"), a Saudi Arabian bank.
Each of the Banks claims to be the victim of a fraud carried out by a man who styles himself HRH Prince Adel El-Hashemite. I have heard no evidence or submissions as to whether he is entitled to use this title (there is an indication in the papers that he is, or claims to be, the grandson of King Feisal, who became the first ruler of the Hashemite kingdom of Iraq in 1921) but I will refer to him, as counsel did, as "the Prince". The Prince is the First Defendant in each action.
In outline the Banks' case is that the alleged fraud in each case followed the same pattern, as follows:
(1) The Prince claims (falsely) to be owed money by the relevant Bank.
(2) The Prince claims (falsely) to have an irrevocable power of attorney from that Bank.
(3) Using that supposed power of attorney, the Prince claims (falsely) to have entered into a limited partnership governed by English law pursuant to the Limited Partnerships Act 1907 ( "the 1907 Act"), under which the relevant Bank is the general partner and he is the limited partner.
(4) The Prince has registered that supposed limited partnership with the Registrar of Companies ( "the Registrar"), the Registrar being under a duty under the LPA 1907 to register limited partnerships, and has been issued by the Registrar with a certificate of registration.
(5) The Prince has used that certificate of registration as an instrument of fraud, in particular in Germany where he is resident.
The Banks' primary aim in these actions is to obtain rectification of the register by asking the Court to order the Registrar to delete the registration of the supposed limited partnerships, and have joined the Registrar as Second Defendant for that purpose.
The Registrar has appeared by counsel, Mr Mark Mullen, to oppose that relief, not because the Registrar challenges the factual basis of it, on which he is neutral, but because of concerns as to the limits of the Registrar's statutory powers and of the Court's jurisdiction. In particular s. 8C of the 1907 Act provides that a certificate of registration is "conclusive evidence" that a limited partnership came into existence on the date of registration; and the Registrar is concerned that if the Court were able to go behind the certificate of registration, there would be wider implications as a certificate of registration under the 1907 Act is but one example of various certificates issued by the Registrar which are made by statute conclusive evidence, and any decision that the Court might nevertheless hold that registration could in effect be set aside as a nullity would undermine the conclusive nature of such certificates. This is the point on which I heard extended argument and which I reserved.
The Banks also sought various declaratory and other relief against the Prince either in default of acknowledgment of service or by way of summary judgment. The Prince has not acknowledged service and did not appear at the hearing. Instead he took the bold, but undoubtedly consistent, step of using his supposed powers of attorney to serve notices of discontinuance on behalf of each Bank thereby seeking to put an end to each action. He has not served any witness statement as such, although the notices of discontinuance contain lengthy statements of his position and numerous attachments. He has also by e-mail sought an adjournment of the hearing.
Strictly speaking the questions of whether the hearing should be adjourned, and whether the notices of discontinuance are (or may be) valid, are no doubt logically prior to the question whether the Banks have made out their claims for relief, but in practice it makes sense to consider all the material before me before deciding any of the questions as it is impossible to divorce the questions of adjournment and of the validity of the notices of discontinuance from the Banks' substantive case.
The facts – ANB
This account of the facts is taken from the material before me, making due allowance for the fact that a summary judgment application is not a mini-trial and that the substantive question before me in the end is whether the Banks have shown that the Prince has no real prospect of successfully defending the claims (and that there is no other compelling reason for a trial).
I will start with ANB where there has been a long history which has already involved three applications to the High Court, one in 2004 which was dealt with in the Commercial Court by Morison J; a second in 2005 which was dealt with in the Chancery Division by Lawrence Collins J; and a third in 2007 also dealt with in the Chancery Division, by David Richards J and Pumfrey J. The background to the application to Morison J can be taken from his judgment dated 22 October 2004, Arab National Bank v El-Abdali [2004] EWHC 2381 (Comm), as follows:
(1) In 1994 ANB had provided banking services in Saudi Arabia to Mr El-Abdali (the defendant in that action). Disputes arose between them and litigation in Saudi Arabia followed. ANB recovered judgment against Mr El-Abdali on two promissory notes for some $6.6m. There was also litigation before the Saudi Arabian Monetary Authority ( "SAMA") concerning Mr El-Abdali's margin trading account which had not concluded when Morison J gave judgment.
(2) On 2 January 2002 ANB received out of the blue a fax purporting to be an Order, made in an arbitration commenced by Mr El-Abdali as Applicant against ANB as Defendant, requiring ANB to provide copy documents in relation to the margin trading account. None of the agreements between ANB and Mr El-Abdali contained an arbitration agreement (and in Saudi Arabia all proceedings relating to banking, including claims under arbitration agreements, have to be submitted to SAMA for approval which Mr El-Abdali had not done). The fax purported to come from the "International Fraud Bureau, Division Of Human Rights Arbitration Forum, Member of London Court of International Arbitration", and was signed by the Prince, described as "President & CEO, Human Rights Arbitration Forum". It gave a docket number of 281201S02 and a "current Saudi address" at a hotel in Mecca.
(3) The evidence before Morison J (and before me) is that Mr Zuhair Al-Herbish, the Head of Legal Affairs for ANB, contacted the hotel to see if the fax was authentic and spoke to someone claiming to be the Prince very briefly. ANB contacted SAMA who told it not to respond, and Mr Al-Herbish says he did not send any written acknowledgment of the fax. Nevertheless in May 2004 Richards Butler, who acted for ANB in the proceedings before Morison J, received a copy of what purported to be an acknowledgment of the fax signed by Mr Al-Herbish. Mr Al-Herbish's evidence (before Morison J and before me) is that the signature was a copy of his signature which he believed had been taken from genuine legal documents signed by him in the proceedings between ANB and Mr El-Abdali in Saudi Arabia and cut and pasted onto the acknowledgment form. Morison J concluded that this document was a forgery.
(4) On 8 February 2002 ANB received what purported to be an arbitral award, dated 13 January 2002 and signed by the Prince, awarding Mr El-Abdali very large sums (81m Saudi Riyals and some $110m) against ANB. The basis for the assertion of jurisdiction over ANB was the return of the form of acknowledgment of service.
(5) Also in February 2002 Richards Butler was contacted by an English solicitor, Mr Michael Robinson. Mr Robinson had been approached by the Prince (of whom he had never previously heard) to register the arbitral award, and to register at Companies House a mortgage against an English branch of ANB. He made inquiries of the London Court of International...
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