Dar Al Arkan Real Estate Development Company (a company incorporated in the kingdom of Saudi Arabia) and Another v Mr. Majid Al-Sayed Bader Hashim Al Refai and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Smith |
| Judgment Date | 12 December 2012 |
| Neutral Citation | [2012] EWHC 3539 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2012-834 |
| Date | 12 December 2012 |
[2012] EWHC 3539 (Comm)
Mr Justice Andrew Smith
Case No: 2012-834
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Anthony Trace QC, Mark Warby QC, Andrew Ayres, Richard Munden, Rosanna FoskettandNarinder Jhittay (instructed by Dechert LLP) for the Claimants
Daniel Toledano QC and David Peters (instructed by PCB Litigation LLP) for the 1 st Defendant
Craig Orr QC, Adam Wolanski, Nicholas SlobodaandSophie Weber (instructed by Slaughter and May) for the 2 nd Defendant
Anthony Peto QC and David Lowe (instructed by Mishcon de Reya) for the 3 rd Defendant
Hearing dates: 6,7,8,12,13 and 14 November 2012
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 first defendant, Majid Al-Sayed Bader Hashim Al Refai ("Mr Al Refai"), the second defendant, Kroll Associates UK Limited ("Kroll") and the third defendant, Mr Alexander Richardson ("Mr Richardson"), apply to set aside orders made on ex parte applications on the grounds (i) that, when they applied to the court, the claimants did not make full and frank disclosure and misled the court in their evidence and submissions and (ii) the claimants have not complied with an associated undertaking to and order of the court. The claimants dispute that the orders should be set aside, and also submit that, even if some or all of them are set aside, I should replace them with new orders against the defendants to similar effect (except for an increase in the amount of a freezing order against Mr Al Refai).
There were other applications before me, including applications made by the claimants to cross-examine Mr Al Refai, Mr Richardson and Mr Thomas Everett-Heath, Kroll's managing director, on affidavits that they swore in response to an order made by Popplewell J on 18 June 2012.The claimants say that none of the affidavits complies with the order. The fourth defendant, FTI Consulting Group Limited ("FTI"), was not concerned with the applications that I heard and took no part in the hearing: there was some uncertainty about whether they had been given formal notice of it. The claimants have applied for permission to amend the claim form and to serve it on Mr. Al Refai out of the jurisdiction, Mr. Al Refai having indicated his intention to dispute the court's jurisdiction over the claims against him, but that application was not before me for determination.
This litigation is being pursued on the extravagant scale: the troublingly long particulars of claim (175 pages, plus a wealth of lengthy annexes) are signed by six pleaders; 14 counsel, including five leading counsel, appeared on these applications; the documentation in the thirty crammed (indeed over-crammed: see the Commercial Court Guide, appendix 10, 2(vii)) lever arch files was an embarras de richesse; and the citation of authority (even in support of the uncontroversial) was generous to a fault. That said, it would be graceless not to acknowledge the considerable help that I had from counsel on these applications.
The first claimant, Dar Al Arkan Real Estate Development Company ("DAAR"), a Saudi Arabian property development company, and the second claimant, Bank Alkhair BSC(c) ("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 Al Shalash ("Sheikh Abdullatif"), who is the managing director of DAAR and a director of BA. 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 again 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. As I have said, the claimants have applied to amend their pleadings, and they intend (i) to include a claim against Mr Al Refai in breach of contract, and (ii) to bring claims under various foreign laws. These claims were not canvassed on the ex parte applications, and I have not heard argument about whether the amendments should be permitted. They do not arise for consideration in this judgment.
The defendants have not yet pleaded defences to the claims, but Kroll and Mr Richardson have made it clear that they will assert that what was published on the Website and elsewhere was true, and rely on what I shall call an "iniquity defence", a defence that the claimants seek to protect confidentiality in iniquity and that the publication was in the public interest. (Generally when I use the expression "iniquity defence", I refer also to a defence of justification to the defamation claims.) They say that they disclosed through the Website breaches of regulations and other wrongdoing on the part of BA, in particular because of Sheikh Yousef's control of BA, because BA were involved with DAAR in improper dealings between related parties and because BA made misrepresentations about these matters to the Central Bank of Bahrain ("CBB").
It is convenient, before describing how the ex parte orders came to be made, to explain two other matters:
i) The claimants rely in support of their claim of breach of confidence upon the terms of Mr Al Refai's contract of employment dated 31 December 2003 (the "Employment Contract"), which provided at clause 12.2 that:
"Upon termination of this Agreement, regardless of the time, manner or cause of the said termination, [Mr Al Refai] agrees to surrender to Unicorn all lists, books and records of or relating to Unicorn and its affiliates or Proprietary Information (as defined in Exhibit C) and all other property belonging to Unicorn and all affiliated businesses…".
(Apparently it was planned that The Unicorn Group should be the parent company of BA, who were formerly called Unicorn Investment Bank BSC, and for present purposes the reference to Unicorn can be taken to be to BA.) The essence of the definition of Proprietary Information (for it is not necessary to set out the full definition) is in paragraph 1.1 of Exhibit C:
"… [Mr Al Refai] agrees, during the term of his … employment and forever thereafter, to keep confidential all information and material provided to him … by Unicorn, its customers, or by third parties in connection with the performance of his … services as an employee on behalf of Unicorn (hereinafter referred to as "Proprietary Information"), excepting only such information as is already known to the public…"
ii) Because, according to the claimants' evidence, financial institutions in Saudi Arabia typically only lend on a short-term basis, in order to raise longer-term funds DAAR issues sukuk (which, in effect, are bonds...
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