Dubai Aluminium Company Ltd v Salaam
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE EVANS,LORD JUSTICE ALDOUS,MR JUSTICE TURNER |
| Judgment Date | 07 April 2000 |
| Neutral Citation | [2000] EWCA Civ J0407-7 |
| Judgment citation (vLex) | [2000] EWCA Civ J0223-6 |
| Docket Number | Case No: QBCMF 98/1115/A3, QBCMF 98/1116/A3, PTA 00/5574/A3,SLJ 99/8086/A3 00/5889/A3 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 April 2000 |
[2000] EWCA Civ J0223-6
Lord Justice Brooke
SLJ 99/8086/A3 00/5889/A3
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
(MR JUSTICE RIX)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
Royal Courts of Justice
Strand
London WC2A 2LL
MR P BROOK-SMITH (Instructed by Messrs Barlow Lyde & Gilbert, London, EC3A 7NJ) appeared on behalf of the Applicants.
MR NIGEL DAVIS QC (Instructed by Messrs Biddle, London, EC2V 7BU) appeared on behalf of the Respondent
: This is an application made by Amhurst Brown, who were the defendants to the main suit brought by Dubai Aluminium Company, for security for costs in relation to an appeal brought by Hany Mohammed Salaam, the first defendant and the fourth third party, against an order of Rix J in contribution proceedings on 24 July 1998 after the main claim had been settled.
There are two prospective appellants. His Excellency Mahdi Mohamed Al Tajir, the third third party has provided security in the sum of £75,000, and the respondents to the appeal are seeking security in a similar amount in a similar form against Mr Salaam. The problem they face is that Rix J made his order on 24 July 1998. Their solicitors sought an agreement for an appropriate sum by way of security for costs as long ago as 3 September 1998. Mr Brook-Smith had the unenviable task of applying for security today, 23 February 2000, with the substantive appeal due to start on 13 March in less than three weeks.
The practice of the Court of Appeal in relation to the need to make applications for security for costs promptly is set out on page 1070 of the Supreme Court Practice 1999. Unhappily, those principles were overlooked by the respondents' solicitors who did their best to reach agreement with Mr Salaam's solicitors running through 1999.
On 27 June 1999 they sent to Mr Salaam's solicitors a consent order with the threat that, unless it was signed, they would apply to the court. They received a holding reply saying that their client was travelling round the world and that they would be surprised if they did not have instructions from him within 7 to 14 days. On 9 July the respondents' solicitors said they would agree to Mr Salaam providing £75,000 by way of a bank guarantee and requested Mr Salaam's solicitors to make all efforts to obtain instructions as the issue had been outstanding for some considerable time. Unhappily, they then let time go by.
They sent chasing letters, but they did not apply to the court and this application was not made until 20 December 1999. I am told that a return date was offered about a month ago when it could not be used because of counsel's unavailability on the other side. No urgent steps were taken, however, through the supervising Lord Justice, if necessary, to get an earlier date than today and I am now faced with the problem of how to do justice in view of the date of the substantive appeal.
Mr Brook-Smith has drawn attention to a sum of US$1 million which is held by a Californian attorney pending further order of the court. That sum was paid, pursuant to certain Bangladesh oil contracts which have featured in the discussions between the parties, to a firm called Gulf Regal Corporation. Mr Brook-Smith relies on his solicitor's suggestion and certain statements in correspondence that Gulf Regal is, in essence, Mr Salaam's alter ego and that it ought to be straightforward for me to make an order today requiring a sum to be paid out of this million dollars into court within seven days. Mr Davis has drawn my attention to the anxiety expressed earlier by the respondents' solicitors that there might be substantial difficulties involved with the corporate and trust interests in that money.
Although I can see no reason why this court would not have ordered security in a conventional way if this application had been made at the time that it ought to have been made, it is now too late for me to make an order of that kind. I have no idea how easy it would be to disentangle a sum of money from the money held to the order of this corporation. Mr Brook-Smith suggested that I should make an order that it be paid into court in England within seven days, presumably with a sanction that the appeal could not go ahead if it was not. I have no idea whether that would be practical or possible. Although Mr Brook-Smith has said it is really a matter for Mr Salaam to identify any difficulties, I do not think that is the right way of looking at it given the lateness with which I am having to consider this matter.
For those reasons, I am not willing to make what I might call a conventional order. On the other hand, on 31 July 1998, when Rix J stayed execution on the judgment, he made an order which has the effect of restraining money from the Bangladesh oil contracts so as to provide protection for the total judgment sum of over US$10 million. Mr Davis has argued that the sum of £75,000 suggested by Mr Brook-Smith's solicitors is excessive. He has put forward various arguments as to why it might be excessive and he has reminded me that they already have £75,000 security from the other appellant.
In my judgment, it would be appropriate to order an amendment of Rix J's order to include an additional sum of £50,000 to the sum now mentioned in Rix J's order. To that extent there will be protection in relation to the funds flowing from the Bangladesh oil contracts. They may continue to flow vigorously, I do not know. This is what Mr Salaam and everybody else in this case hopes. But that is the limit of the relief I am prepared to grant.
I would be grateful if counsel would prepare an agreed minute.
No order as to costs.
[2000] EWCA Civ J0407-7
Lord Justice Evans
Lord Justice Aldous and
Mr Justice Turner
Case No: QBCMF 98/1115/A3, QBCMF 98/1116/A3, PTA 00/5574/A3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF
JUSTICE QUEEN'S BENCH DIVISION
COMMERCIAL COURT MR JUSTICE RIX
MR ALI MALEK QC/MS SARA COCKERILL (instructed By REID MINTY for the APPELLANTS)
MR ANTHONY BOSWOOD QC/MR PHILIP BROOK SMITH (instructed By BARLOW LYDE & GILBERT for the RESPONDENTS)
MR NIGEL DAVIS QC (instructed By BIDDLE & Co.for MR SALAAM APPELLANT/FIRST DEFENDANT)
MR GEORGE LEGGATT QC (instructed By CMS CAMERON MCKENNA) for MR AMHURST RESPONDENT/SECOND DEFENDANT)
Background
These facts were found by Mr Justice Rix and they are not contested on this appeal. Between September 1987 and March 1993 the government-owned Dubai Aluminium Company Ltd ("Dubal") paid sums in excess of $50m. to Marc Rich Co. A.G. ("Richco") ostensibly in accordance with a Consultancy Agreement dated 1.9.87 which entitled Richco to a 2.5% commission on all sales of Dubal products. The agreement was a sham, dishonestly conceived between the managing director of Dubal, Mr Ian Livingstone, and senior officers of Richco and Mr H. Salaam. It was a cover for abstracting those sums from Dubal so that they could find their way into the pockets of Mr Livingstone and Mr Salaam and also of H.E. Al Tajir who received some 40% of the total. The original distribution was 20% (one fifth) to Richco, equal to 0.5% of the commission, and the remaining four-fifths to Mr Al Tajir, Mr Livingstone and Mr Saad Salaam in the proportions 40 : 30 : 30. Soon afterwards, some time in 1988, a 15% share of the four-fifths (80%) of the total commission was diverted to Mr Salaam's brother, Mr Saad Salaam, and it was only the remaining 85% of that amount which was divided between Mr Al Tajir, Mr Livingstone and Mr Salaam. Mr Al Tajir continued to receive 40 per cent and so the other two were reduced to 22.5% each (or 25.5% —see the judgment page 436).
As the result of the detailed examination of accounts and figures at the trial, and the full and meticulous judgment of Mr Justice Rix, the following figures were established:-
| Claim (paid to Dubal to Richco) | $50,117,622 |
| Paid on by Richco | $49,780, 944 |
| Receipts |
| H. Salaam | $20,338,348 (40.5%) |
| Al Tajir | $16,466,667 (32.9%) |
| Livingstone | $6,327,918 (12.5%) |
| Said Salaam | $6,001,861 (12%) |
Richco passed on four-fifths of the payment it received from Dubal under a number of Subsidiary Agreements between off-shore companies in which Mr H. Salaam was taken to have a controlling and beneficial interest. On the face of these Subsidiary Agreements Richco undertook to pay only half of the 2.5%...
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