Dar Al Arkan Real Estate Development Company (c) and Another v Majid Al-Sayed Bader Hashim Al-Refai and Others

Approved Judgment

Hearing date: 29 November 2013

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

By a "committal application" dated 7 October 2013 the second defendants, Kroll Associates UK Limited ("Kroll"), seek a declaration that the claimants are in contempt of court in that they broke a so-called "preservation undertaking" and a "drives delivery order", and orders that they be fined and that Sheikh Abdullatif Al Shalash ("Sheikh Abdullatif"), the managing director of the first claimants, Dar Al Arkan Real Estate Development Company ("DAAR"), and a director of the second claimants, Bank Alkhair BSC ("BA"), be imprisoned. The applications before me are about the court's jurisdiction to order Sheikh Abdullatif's imprisonment and the service of the committal application upon him.

The committal application has been served on the claimants: they are incorporated overseas (DAAR in Saudi Arabia, and BA in Bahrain), but have submitted to the court's jurisdiction by suing the defendants here. Sheikh Abdullatif disputes the court's jurisdiction over him. He is domiciled and resident in Saudi Arabia, and Kroll cannot serve him in the jurisdiction unless he comes here or instructs solicitors to accept service.

The main (but not the only) issues between Kroll and Sheikh Abdullatif are:

i) Whether the court's power to order that a director or officer be imprisoned for a company's contempt has extra-territorial effect: that is, whether it applies to directors and officers who are outside the jurisdiction.

ii) Whether Sheikh Abdullatif can be served with the committal application under article 22(5) of the Brussels Regulation.

iii) Whether the court can and should give permission for service of the committal application under rule 6.36 of the Civil Procedure Rules, 1998 (the "CPR") on the grounds that Sheikh Abdullatif is a necessary or proper party to contempt proceedings against the claimants.

iv) Whether the court can and should dispense with service of the contempt proceedings on Sheikh Abdullatif under CPR rule 81.10(5)(a).

Before considering them, I introduce the litigation, the preservation undertaking and the drives delivery order, and explain the allegations of contempt.

The litigation

I can conveniently introduce the litigation by setting out part of my judgment in the case dated 12 December 2012, [2012] EWHC 3539 (Comm) (to which I shall refer as my "December 2012 judgment") at paras 4, 5 and 6:

"[DAAR], a Saudi Arabian property development company, and [BA], a Bahraini registered investment bank, have common shareholders and directors, including Sheikh Yousef Al Shelash ("Sheikh Yousef"), who is chairman of them both, and [Sheikh Abdullatif]. According to the claimants' pleading, "The business of BA is dependent in part upon the custom of DAAR". Until August 2010 Mr Al Refai was the Chief Executive Officer and the Managing Director of BA. He has since his dismissal been involved in criminal and civil proceedings in Bahrain, and has apparently left Bahrain: the claimants believe that he is now living in Kuwait. He has been convicted in his absence by the Bahraini courts of offences including embezzlement and misuse of BA's funds, destruction of their documents, forgery and money laundering.

"The claimants allege that Mr. Al Refai instigated a campaign after he was dismissed to discredit, damage and destroy their business "Whether out of frustration, desperation or a desire for revenge" (to quote … from the claimants' pleading), and to this end he enlisted the assistance of Kroll, an English company, who provide investigatory, business intelligence and other services, of Mr Richardson, a chartered accountant with a home in England but who is apparently ordinarily resident in Bahrain where he has a business called Business Solutions Incorporated WLL ("BSI"), and of FTI, an English company, who provide public relations services; that in the course of such a campaign, which, according to the claimants, began in November 2010, the defendants went about harming the claimants' commercial relationships with third parties and with the "business and financial world at large"; and that they engaged in "wholesale publication of damaging and untrue allegations and smears against DAAR or BA or [Sheikh Yousef]", and to this end deployed a large amount of information and material confidential to BA and DAAR to which Mr Al Refai had had access when employed and which he took without authority. (They estimate that Mr. Al Refai removed 150,000 to 200,000 documents in breach of his contract of employment.) Specifically, the defendants are said to have conducted the campaign and disclosed such confidential information through a website (the "Website") that was launched in February 2012 and closed only after these proceedings were brought and the court had made the ex parte orders that are now challenged. (The evidence indicates that the Website was closed on about 4 August 2012.)

"The claimants have asserted against the defendants six causes of action:

i) Breach of confidence;

ii) Conspiracy to injure using unlawful means ("unlawful means conspiracy");

iii) Conspiracy the predominant purpose of which was to injure ("conspiracy to injure");

iv) The tort of unlawful interference with business or commercial interests, or, as it is sometimes called, of causing loss by unlawful means;

v) Defamation; and

vi) Malicious falsehood.

The claimants have not yet quantified their claim, but they estimate DAAR's loss to be at least $500 million and BA's loss to be at least $130 million."

Since I gave the December 2012 judgment the claimants have introduced further claims of breach of contract against the first defendant, Mr Majid Al-Sayed Bader Hashim Al Refai, and of inducing breach of contract against the other defendants.

Before the proceedings were brought on 19 June 2012, the claimants applied without notice to Popplewell J for interim relief by way, inter alia, of an injunction against Mr Al Refai, Kroll and the third defendant, Mr Richardson: when I refer to "the defendants" in this judgment, I refer to these three defendants and not to FTI Consulting Group Limited, the fourth defendant. They sought orders to prevent the disclosure of confidential information and documents belonging to BA, to prevent confidential information from being uploaded and displayed on the Website and to prevent the defendants from "furthering by conduct their revealed aim of causing financial loss to both claimants". The application was first heard on 1 June 2012, but Popplewell J adjourned it to 14 June 2012 and then to 18 June 2012. On 18 June 2012 he made orders with a return date of 27 June 2012 prohibiting disclosure by the defendants of so-called "Proprietary Information" and uploading it to the Website. His order recorded an undertaking given to the Court by the claimants, which has been referred to as the "preservation undertaking": that they would "preserve and keep safe the original hard drives containing the Material and delivered to [DAAR] as described [by Sheikh Abdullatif in his affidavit of 7 June 2012]". On 27 June 2012, the return date, Popplewell J extended the non-disclosure and other orders against the defendants, and he also made an order against the claimants (the "drives delivery order") in these terms: "The original hard drives … shall be delivered as soon as reasonably practicable to the Claimants' solicitors (Dechert LLP) and preserved and kept safe in the London offices of Dechert LLP pending further order of the Court. Upon delivery of the Original Hard Drives to Dechert LLP in accordance with this Order, the Claimants shall be released from [the preservation undertaking]."

I should explain what was being referred to as the "Material" and the "original hard drives". The "Material" was defined as "the email documents, information and material received by [DAAR] in electronic form and referred to [by Sheikh Abdullatif in his affidavit]". On 31 May 2012, the claimants had applied to Blair J for authorisation "(if and in so far as is necessary) … to disclose and deploy in court and otherwise use certain emails and other evidence" for the purposes of the proceedings, including any application for interim injunctive relief. The application was made under section 55 of the Data Protection Act, 1998 (the " DPA"), which prohibits disclosure of "personal data" and makes it an offence to do so, subject to a number of exceptions including disclosure authorised by a court order. It was supported by a witness statement of Mr Antony Dutton, a partner in Dechert LLP, who said that the claimants had "come into possession of a quantity of data, which may constitute data under section 1 of the DPA, and which may have been procured unlawfully". Mr Dutton explained that, according to Sheikh Abdullatif, the claimants had two hard drives which had been sent to DAAR by post anonymously, and they believed that they contained emails from mailboxes operated by Mr Al Refai and "potentially" from mailboxes operated by...