Commercial Bank of Dubai PSC v Abdalla Juma Majid Al Sari
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bright |
| Judgment Date | 14 July 2023 |
| Neutral Citation | [2023] EWHC 1797 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2022-000048 |
[2023] EWHC 1797 (Comm)
Mr Justice Bright
Case No: CL-2022-000048
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Anthony Peto KC and Mr Andrew Trotter (instructed by Jones Day) for the Claimants
Mr Chris Smith KC and Mr Craig Williams (instructed by Axiom Ince Ltd) for the 7 th, 8 th and 9 th Defendants
The 1 st, 2 nd, 3 rd, 4 th, 5 th and 6 th Defendants did not appear and were not represented
Hearing dates: 13, 14 June 2023
Approved Judgment
A: INTRODUCTION
A1: The hearing
It is a truism, but one that bears endless repetition, that litigation is a dynamic process.
This judgment follows a hearing on 13 and 14 June 2023 which was primarily concerned with the application of the Seventh, Eighth and Ninth Defendants ( “Globe”, “Mena” and “MAS” respectively; collectively “the Globe Defendants”) in respect of their challenge to the jurisdiction pursuant to CPR Part 11. Their application notice was issued on 24 May 2022.
Also before the Court was an application notice dated 26 April 2022, issued by Charles Russell Speechlys ( “CRS”) on behalf of the Defendants they then represented – i.e., the First, Second, and Fourth to Sixth Defendants (collectively, the “Former CRS Defendants”). This, too, was an application challenging jurisdiction. As explained later, CRS recently came off the record. Since then, the Former CRS Defendants have been unrepresented, and they did not attend the hearing. In all the circumstances, their application is dealt with briefly, at the end of this Judgment.
Finally, the Claimants have applied to amend their Particulars of Claim and have produced draft Amended Particulars of Claim ( “APOC”). My understanding from Mr Smith KC, for the Globe Defendants, is that, if the Globe Defendants' jurisdictional challenge fails, they do not object to the amendments in principle. Their primary position, however, is that I should dismiss the claims against them, irrespective of the amendments.
Throughout the hearing, Mr Peto KC, for the Claimants, emphasized to me that the main interest of the Claimants, and the factor which had driven this litigation throughout, was to gain possession of premises at a commercial and residential complex in London called The Bridge (the “Bridge Properties”), and to claim damages associated with the various Defendants' efforts to keep the Claimants from achieving this.
Within a few days of the hearing, there was an important development in another jurisdiction. I explain this in more detail below, but the important consequence is that there no longer appears to be anything preventing the Claimants from obtaining possession.
I have no doubt that the submissions that I received at the hearing would have been very different had this development occurred before the hearing, rather than after it.
A2: The parties
The First Claimant ( “CBD”) is a commercial bank incorporated in the UAE.
The Second to Fourth Claimants ( “Hortin”, “Westdene” and “Lodge Hill”, together the “BVI Companies”) are companies incorporated in the BVI. The BVI Companies were formerly ultimately beneficially owned by the Second and Third Defendants but are now owned by the Fifth Claimant ( “VS 1897”), a company incorporated in the Cayman Islands.
The First to Third Defendants ( “Abdalla Al Sari”, “Majid Al Sari”, and “Mohamed Al Sari”, together the “Al Sari Defendants”) are Emirati nationals and members of the Al Sari family. They appear to be normally resident in Sharjah, UAE. They are the ultimate beneficial owners of an international group of companies with various business interests (the “Al Sari Group”).
The Fourth to Sixth Defendants ( “FAL”, “IGPL” and “IGPL GT” respectively) are companies incorporated in Sharjah (collectively, the “Sharjah Companies”). They are ultimately owned by various members of the Al Sari family.
Globe and MAS are companies incorporated in the Jebel Ali Free Zone in Dubai, UAE. Mena is a company incorporated in the BVI and is the owner of Globe and MAS.
A.3: The relationship between the Defendants
It is the Claimants' case that the Al Sari Defendants are the controlling mind(s) and will(s) of Globe, MENA and MAS, just as they are of the Sharjah Companies. The Globe Defendants deny this and will dispute it in any subsequent proceedings. However, their case that they are not associated with the Al Sari Defendants is not a point that the Globe Defendants rely on for the purposes of this application.
A.4: The Bridge Properties
Hortin and Westdene are the owners of leasehold interests in various flats and commercial premises comprising the Bridge Properties. Lodge Hill owned the freehold interest in the Bridge Properties until it was sold in July 2020. VS 1897 is a corporate nominee of CBD, through which CBD's interests in the BVI Companies are held.
The Bridge Properties include an extensive residential apartment, which is said to be the UK residence of the Al Sari family, and which has for some time been occupied on their behalf by their housekeeper, Mr Gebremedhin.
B: BACKGROUND
B1: CBD's claim in Sharjah and the s. 25 Freezing Order
On 25 November 2012, CBD issued a claim in the Sharjah Court of First Instance ( “Sharjah CFI”) in respects of amounts said to have been outstanding under credit facilities CBD had granted to FAL (as borrower), in relation to which IGPL and the Al Sari Defendants acted as guarantors (“ the Sharjah Proceedings”).
On 17 November 2014, on the Bank's application, this Court granted an ancillary freezing order against the Al Sari Defendants and the BVI Companies in respect of assets in England and Wales, in aid of the Sharjah Proceedings (the “ s.25 Freezing Order”). Amongst other things, paragraphs 5 to 7 of s.25 Freezing Order prohibited the Al Sari Defendants from dealing with or diminishing the value of their assets in England and Wales up to the value of AED 430 million, specifically including any beneficial interest in the Bridge Properties and Freehold. The s.25 Freezing Order (as continued by subsequent orders) was discharged as against the BVI Companies on 19 March 2021 but remained in force against the Al Sari Defendants until discharged on 11 March 2022, following the grant of a worldwide freezing order in these proceedings.
On 29 March 2016, the Sharjah CFI handed down its judgment on CBD's claim, ordering that the Sharjah Companies and the Al Sari Defendants jointly pay CBD AED 433,831,166.81 plus interest and costs ( “CBD's Sharjah Judgment”).
On 27 February 2017 an appeal against CBD's Sharjah Judgment was dismissed.
Abdalla Al Sari and Majid Al Sari filed a petition for review of CBD's Sharjah Judgment on 23 February 2020. The appeal was dismissed by the Sharjah Appeal Court on 26 April 2021.
B2: The practical significance of the Bridge properties
The Bridge properties are among very few assets of any significance that CBD has identified as amenable to enforcement. This led CBD to seek to enforce its claims first against the BVI Companies (on the basis that they were owned by Majid Al Sari and Mohamed Al Sari) and then directly against the Bridge Properties.
B3: CBD's claim in the BVI
On 29 June 2017, CBD issued proceedings in the BVI seeking to enforce CBD's Sharjah Judgment. On 7 June 2018, the BVI Court entered judgment in CBD's favour ( “CBD's BVI Judgment”). On 25 October 2018, the BVI Court dismissed an application by Majid Al Sari to set aside the BVI Judgment.
On 19 February 2019, the BVI Court granted a charging order, appointed a receiver for the BVI Companies (the “Receiver”) and made an order for sale of the shares in the BVI Companies (the “Charging Order”).
Majid Al Sari applied for a stay of the Charging Order, which was dismissed on 13 May 2019. On 11 November 2020 he made a second application for a stay of the Charging Order, which was rejected on 15 December 2020.
The Charging Order resulted in CBD acquiring the shares in the BVI Companies pursuant to a share purchase agreement dated 6 April 2021 ( “the SPA”). In return, CBD agreed to release CBD's Sharjah Judgment debt in the sum of £9 million, this being the estimated value of the BVI Companies at that time – reflecting, in turn, the estimated value of the Bridge Properties (being the BVI Companies' only assets).
The Charging Order was directly ancillary to CBD's BVI Judgment. CBD's purpose in bringing enforcement proceedings in the BVI was, precisely, to enforce against the BVI Companies, via a charge; and, through them, to acquire the Bridge Properties. It was evidently anticipated that, following the SPA, it would then be possible to realise the value of the Bridge Properties.
This would first necessitate the BVI Companies obtaining possession of the Bridge Properties. To this end, Hortin and Westdene have been involved in possession proceedings, commenced in England in the Central London County Court (the “CLCC Possession Proceedings”), which I summarise a little later in this judgment. However, the CLCC Possession Proceedings have to be considered in the context of two obstacles that have impeded the BVI Companies' attempts to gain possession.
B4: The Tenancy Agreement
The first such obstacle is a Tenancy Agreement dated 16 January...
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