Commercial Bank of Dubai PSC v Mr Abdalla Juma Majid Al Sari

Hearing dates: 12, 13, 14, 15 and 18 November 2024

Further Written Submissions: 28 January 2025

Draft judgment circulated: 19 February 2025

Further written submission: 19 February 2025

Approved Judgment

This judgment was handed down remotely at 10.00am on 27 February 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

This judgment addresses an outstanding issue following my judgment reported at [2024] EWHC 3304 (Comm) (“ the Judgment”). The background to the issue is set out in the Judgment, and I adopt the defined terms there used. The issue concerns the applicable law of the Claimants' claim that certain of the Defendants maliciously prosecuted two sets of DIFC Proceedings.

I reached the view that further submissions were required, in addition to those made at the November 2024 hearing, to resolve this issue. Shortly after the handing down of the Judgment, the PCB Defendants' solicitors came off the record, and counsel ceased to be instructed. In these circumstances, I made provision for both parties to serve additional written submissions. In the event, submissions were filed by the Claimants but not the PCB Defendants. Inevitably those submissions introduced new arguments not raised at the hearing, as well as further development of those that were.

This judgment was circulated in draft at the start of the working day on 19 February 2025. It became apparent in response that a letter had been filed with the court on CE file at 9.30am on 18 February 2025, accepted onto the system at 3.54pm that day but not yet alerted to me, raising a new matter which fundamentally changed the legal context in which this issue had arisen. That matter had first been raised within the Claimants' legal team around opening hours UK time on Wednesday 12 February 2025. I return to the impact of this matter below.

THE RELEVANT CLAIMS IN SUMMARY

By way of brief summary, claims that court proceedings were brought maliciously in the DIFC are made in respect of two sets of proceedings:

i) the DIFC Tenancy Proceedings brought by IGPL GT against the BVI Companies; and

ii) the Globe DIFC Proceedings brought by Globe against the BVI Companies and the Bank.

The malicious prosecution claims are brought:

i) by the BVI Companies in relation to both sets of proceedings, against IGPL GT, and Globe, and against the Al Saris and Mr Almheiri as joint tortfeasors and/or on the basis that they caused the proceedings to be brought; and

ii) by the Bank in relation to the Globe DIFC Proceedings against Globe, and (on the same basis) against the Al Saris and Mr Almheiri.

In addition, both malicious prosecution claims are relied upon by both the BVI Companies and the Bank as unlawful means for the purposes of unlawful means conspiracy claims. There was no argument as to whether the unlawful means relied upon have to be actionable at the suit of each unlawful means conspiracy claimant, and that issue does not arise for decision at this point.

So far as the Globe DIFC Proceedings are concerned, the losses claimed are:

i) legal fees paid by the Bank from an account in “onshore” UAE pursuant to retainers signed by the Bank in the UAE (although it is not clear whether, in each case, the retainer was signed before or after the Globe DIFC Proceedings were commenced) for work done by lawyers in the DIFC, England and Australia caused by the bringing of the Globe DIFC Proceedings;

ii) losses resulting from the delay to the BVI Companies in recovering the Bridge Properties in England and Wales (user damages for lost enjoyment of the Bridge Properties or a reduction in market value together with lost use of proceeds and expenses during the period sale is said to have been prevented).legal fees for work done by lawyers in the DIFC, England and Australia caused by the bringing of the Globe DIFC Proceedings.

So far as the DIFC Tenancy Proceedings are concerned, the losses claimed are:

i) legal fees paid by the Bank from an account in “onshore” UAE pursuant to retainers signed by the Bank in the UAE (the same issue arising as to the date the retainer was signed); and

ii) losses resulting from the delay to the BVI Companies in recovering the Bridge Properties in England and Wales (user damages for lost enjoyment of the Bridge Properties or a reduction in market value together with lost use of proceeds and expenses during the period sale is said to have been prevented).

THE ARGUMENT THAT THE DEFAULT RULE HAS NOT BEEN DISPLACED

The first argument raised by the Bank and the BVI Companies is that they have pleaded their claim by reference to English law, in reliance on the “default rule” (cf Brownlie v FS Cairo (Nile Plaza) LLC [2022] AC 995, [108]–[126]), and that D7 and D9, who served a defence, did not plead that some other system of law applied to this claim.

I dealt with this issue in the Judgment at [101]:

i) So far as Mr Almheiri is concerned, no defence has been served and the issue is whether there is a serious issue to be tried. At the main hearing, Mr Almheiri advanced the argument that the applicable law was DIFC law. This judgment determines the argument which Mr Almheiri advanced, but which it was not possible to resolve on the basis of the oral arguments alone. The terms in which other defendants have responded to the Claimants' case provide no answer to Mr Almheiri's entitlement to have the argument he raised determined.

ii) So far as D7 and D9 are concerned, they did raise the argument at the hearing that these claims were doomed to fail because they were governed by DIFC law and, by their application for summary judgment and strike out, clearly signalled their challenge to the application of the default rule. I am satisfied that I should resolve that issue, on which I heard full argument, and which raises essentially the same issues for D7 and D9 as for Mr Almheiri.

THE ARGUMENT BY REFERENCE TO ARTICLE 4(1)

Introduction

Article 4 of Rome II provides as follows:

“(1) Unless otherwise provided for in this Regulation, the law applicable to a noncontractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.

(2) However, where the person claimed to be liable and the person sustaining the damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.

(3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a preexisting relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.”

The Claimants contend that the effect of Article 4(1) is that the claims for malicious prosecution of the Globe DIFC Proceedings are governed by UAE law, or alternatively involve a series of claims, governed, inter alia, by UAE and English law, and that the claims for malicious prosecution of the DIFC Tenancy Proceedings are likewise governed by English law and/or UAE law. In the alternative, by way of a new argument, they contend that UAE law applies as between some parties by virtue of Article 4(2).

It is common ground that the law of the DIFC does not recognise a tort of malicious prosecution of civil claims.

The cases relied upon

The issue of what constitutes damage arises not simply in relation to Article 4(1) of Rome II but also in relation to Article 5(3) of the Lugano Convention and Article 7(2) of the Brussels Recast Regulation (via Case 21/76 Handelskwekerij GJ Bier BV v Mines de Potasse d'Alsace SA [1978] QB 708). A consistent approach is to be adopted to the application of the concept of damage in both contexts: Anton Durbeck GmbH v Den Norske Bank ASA [2003] QB 1160, although the cases disclose consideration in the former context of issues which do not seem to be directly germane to the latter. In both contexts, an autonomous interpretation of the concept is required ( CA Indosuez (Switzerland) SA v Afriquia Gaz SA [2023] EWCA Civ 1072 and Recital (11) of Rome II).

The Claimants relied upon a number of authorities which had considered where pure economic loss had been suffered for both jurisdictional and applicable law purposes. Many of these are cases in which the claimant contended it had made what proved to be a worthless, or at least insufficiently valuable, investment in reliance on negligent advice or inaccurate statements....