Charles Ridley v Dubai Islamic Bank PJSC
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Moulder |
| Judgment Date | 31 July 2020 |
| Neutral Citation | [2020] EWHC 2088 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2018-000827 |
| Date | 31 July 2020 |
[2020] EWHC 2088 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
THE HONOURABLE Mrs Justice Moulder
Case No: CL-2018-000827
Matthew Morrison (instructed by Charles Ridley) for the Claimant
Robert Anderson QC and William Edwards (instructed by Baker McKenzie) for the Defendant
Hearing dates: 17 July 2020
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.
THE HONOURABLE Mrs Justice Moulder
This is the reserved judgment on the application by the defendant, Dubai Islamic Bank PJSC (the “ Bank”) to set off a costs award in favour of the claimant, Mr Charles Ridley, against a judgment debt owing to the Bank.
By an order of 11 June 2020 Mr Christopher Hancock QC sitting as a deputy judge dismissed an application by the defendant to set aside the order of Carr J (as she then was) dated 8 February 2019 granting permission for the claimant to serve the claim form out of the jurisdiction and by an alternative method. The Deputy Judge ordered the Bank to pay the costs of the set aside application. The Deputy Judge ordered that the question of whether the amount due to Mr Ridley (the “ Costs Award”) may be set off against the outstanding judgment and costs order made by Flaux J (as he then was) on 6 December 2013 in favour of the Bank in a previous action (the “ Judgment Debt”) shall be determined at the CMC. The CMC was held on 17 July 2020 and judgment on the application was reserved.
The hearing was held remotely in the light of the current pandemic. However, the court had the benefit of written skeleton arguments and oral submissions from Mr Morrison on behalf of the claimant and Mr Anderson QC on behalf of the defendant.
A preliminary point was taken for Mr Ridley that no application had been made by the defendant and no evidence served.
Given the terms of the order that was made by the Deputy Judge this court took the view that no application was necessary by the defendant and to the extent that the defendant does not seek to rely on any evidence other than documents in the public domain the matter can be resolved even though the defendant has not filed any evidence.
The claimant has however filed evidence in the form of the fifth witness statement of Mr Ridley dated 9 July 2020.
Background to the current proceedings
The events out of which the present proceedings arise is that the Bank had advanced money pursuant to trade finance agreements (the “Agency Agreements”) and pursuant to a restructuring agreement in August 2007 entered into between (amongst others) the Bank, Plantation Holdings FZ LLC (“ Plantation”) and Mr Ridley (the “ RSA”) there was an agreement for the repayment to the Bank of monies owing and profit thereon of approximately US$501 million. Plantation had been formed for the purpose of the development of a parcel of land in Dubai (the “ Plantation Land”) and had taken a lease from the Dubai Development and Investment Authority. Mr Ridley, among others, was an investor in the Plantation Project. In addition by the RSA Plantation conditionally assigned to the Bank by way of security the Plantation Land. In 2011 Mr Ridley was convicted by a Dubai criminal court of misuse of funds under the Agency Agreements.
In June 2008 the Bank alleged that Plantation had breached the RSA and, as a result, the Bank perfected the assignment of the lease and took control of the Plantation Land. In proceedings brought by the Bank under the RSA, following a trial in 2013 the Bank obtained the Judgment Debt in its favour. Flaux J held that events of default occurred under the RSA which led to the acceleration of repayment of the sums due with the result that Mr Ridley and others who were guarantors under the RSA were jointly and severally liable to the Bank for the outstanding amount due. In a judgment of 23 October 2013, ( [2013] EWHC 3781 (Comm) at [131] to [140]) Flaux J considered the value of the Plantation Land: Flaux J noted that the land had been assessed as having significant value on an “as is” basis even though it was a vacant plot with minimal development completed: [133]. However, he was aware of the effects of the then-recent economic crisis and said “ such evidence as there is, suggests that since the collapse of the property market in Dubai, the Plantation land has been essentially worthless and unsaleable”: [140]. On 6 December 2013, judgment was entered for the Bank against four defendants including Mr Ridley for the sum of approximately $432 million. The defendants were also ordered to pay the costs of the action.
In 2016, Plantation brought a claim against the Bank in which Plantation alleged that the Bank had no right to enforce over the Plantation Land and as a result Plantation had suffered substantial losses. Plantation alleged that in July 2008 the lease was worth $2 billion or, at least, $800 million. Picken J found that the Bank had enforced its security at a time when it had no right to do so. However, since the Bank would have been entitled to enforce its security after 1 October 2008, Picken J awarded only nominal damages to compensate Plantation for loss suffered between mid July 2008 and 1 October 2008.
In a judgment of 23 March 2017, Picken J considered (obiter) the value of the Plantation Land in relation to an argument concerning damages payable to Plantation in its claim against the Bank: [2017] EWHC 520 (Comm) at [263] to [271]. He considered the evidence of two valuers who were agreed that the Plantation Land held significant value as at June/July 2008. However, Picken J stated that “ those valuations assumed the existence of a market and there was none at the time”: [265]. Picken J noted and approved expert evidence to the effect that “ any disposal would require a considerable period of marketing”: [267]. Picken J concluded that “ since there was no market in existence at the relevant time, the valuations… are nothing more than notional”: [270].
More recently there has been a decision of the Bahrain Chamber for Dispute Resolution (“ BCDR”) in a case brought by the Bank against Mr Ridley and others as guarantors under the RSA for which judgment was given on 15 April 2020. The Bank sought a sum of US$30 million. The BCDR found that, the Bank had taken over the Plantation Land and that in accordance with an expert report, its value was up to US$544 million at the time (July 2008) and therefore, after deducting the indebtedness, there would be a balance of US$70 million to Plantation's credit. The BCDR concluded that under Bahraini law the Bank had accepted the Plantation Land in place of payment by...
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