Greig William Alexander Mitchell v Sheikh Mohamed Bin Issa Al Jaber

Hearing dates: 26 & 27 March 2024

Approved Judgment

This judgment was handed down remotely at 10.30am on 26 April 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

These are appeals from a judgment (“the Judgment”) given by Joanna Smith J (“the Judge”) on 24 February 2023. They raise difficult issues as to the liability of the first respondent to the application, Sheikh Mohamed Al Jaber (“the Sheikh”), for breach of fiduciary duty and of the fifth respondent to the application, JJW Limited (“JJW Guernsey”), a company incorporated in Guernsey, for knowing receipt.

Basic facts

The Sheikh is an international businessman and the founder and chairman of a large number of companies operating in the commercial property, finance, hospitality and food industries. Some of the companies incorporate the letters “MBI” in their names. As the Judge noted in paragraph 25 of the Judgment, the Sheikh has explained that the “MBI” is derived from the “Mohamed Bin Issa” found in his own name.

MBI International & Partners Inc (“the Company”) was incorporated in the British Virgin Islands (“the BVI”) and in 2004 became a “business company” under the provisions of the BVI Business Companies Act 2004 (“BCA 2004”). The Sheikh is both the Company's sole shareholder and a director. The only other director from 2006 was the second respondent to the application, Ms Mashael Al Jaber, whose father is the Sheikh.

By 2008, the Sheikh was contemplating a restructuring of companies associated with him. The restructuring would have involved a public offering of shares (“the IPO”) in another BVI company, JJW Hotels & Resorts Holding Inc (“JJW Inc”). The Sheikh was the only director of JJW Inc until 23 December 2016, when he was succeeded by MBI International Holdings Inc (“MBI International Holdings”) and, in February 2018, by MBI International Holding Group Inc. MBI International Holdings and MBI International Holding Group Inc were both incorporated in the BVI.

At the end of January 2009, the Sheikh held 8,038,120 shares in JJW Inc while the Company held 129,000. In March 2009, the Company acquired 891,761 further shares in JJW Inc in two tranches. 567,556 shares were transferred to the Company by a transfer agreement dated 18 March 2009 by JJW Guernsey for a consideration of €56,755,000. A further transfer agreement with the same date provided for the transfer to the Company of 324,205 shares for €32,420,500 by JJA Beteiligungsverwaltungs GmbH (“JJAB”). From 18 March 2009, therefore, the Company was the registered holder of 1,020,873 shares in JJW Inc, which represented 11.2% of its total issued shares.

On 10 October 2011, a winding-up order was made in the BVI in respect of the Company pursuant to an application by Unicredit Bank Austria AG on the basis of a debt of €4,340,965.10. The application was supported by Immoconsult Ares Leasinggesellschaft mbH, which asserted a claim of €6,321,838. Mr David Kinnon was appointed as liquidator on 11 October 2011. He was replaced as the liquidator by Ms Charlotte Caulfield from 31 March 2014, and the respondents, Mr Greig Mitchell and Mr Kenneth Krys (“the Liquidators”), became the liquidators on 8 July 2019.

On 10 October 2013, the Sheikh applied for the liquidation of the Company to be terminated. However, the application was dismissed on 30 October 2013 by Bannister J, sitting in the BVI High Court of Justice (Commercial Division). The Sheikh appealed that decision, but the appeal was dismissed by the Eastern Caribbean Court of Appeal on 14 January 2015.

On 8 March 2016, JJW Guernsey was entered in JJW Inc's share register as the new holder of the 891,761 shares which the Company had acquired from JJW Guernsey and JJAB in 2009. The registration was effected pursuant to a written resolution of the Sheikh as the sole director of JJW Inc dated 29 February 2016. The resolution stated that “share transfer instruments … from [the Company] wishing to transfer shares in [JJW Inc] (the ‘Transferring Shares’)… to [JJW Guernsey] have been received and reviewed by the Director” and that the “Director” (i.e. the Sheikh) had “ascertained that the Instruments of Transfer were signed for and on behalf of the transferor on the 6 ^th day of July 2010 (the ‘Signing Date’)” so that “beneficial ownership of the Transferring Shares transferred to [JJW Guernsey] on the Signing Date”. It was “resolved that … the Instruments of Transfer are each in a form consistent with [JJW Inc's] articles of association and [BCA 2004] and the transfer of the Transferring Shares to [JJW Guernsey] is authorised and approved by the directors” and, further, that “the registered agent of [JJW Inc], Maples Corporate Services (BVI) Limited, be and is hereby authorised and instructed … to … update [JJW Inc's] Register of Members to reflect the transfer of the Transferring Shares to [JJW Guernsey]”. It was noted that the Sheikh “discloses that he is a director of [the Company] and that he is also a member (direct or indirect), director, officer or trustee of [JJW Inc] and, accordingly, is interested in the matters which are the subject of these resolutions”.

The “Instruments of Transfer”, which were not themselves dated, provided for the transfer of the 891,761 shares in JJW Inc from the Company to JJW Guernsey. Each of the two transfers (“the Share Transfer Forms”) was signed by the Sheikh “For and on behalf of MBI International & Partners Inc” (i.e. the Company) as “Director”.

The Judge concluded in paragraph 453 of the Judgment that the resolution of 29 February 2016 “was designed to address the fact that the Share Transfer Forms had not been signed in July 2010 and that no steps had been taken at that time to effect any transfer”. In paragraph 456 of the Judgment, the Judge said:

“I find in all the circumstances that the Sheikh signed the Share Transfer Forms in 2016 and that he did not act honestly, or in good faith, in doing so and in causing the transfer of the 891K Shares (or purported transfer) to JJW Guernsey on 8 March 2016, pursuant to the February 2016 Resolution. Further he did not act in the best interests of the Company.”

There is no appeal from these findings.

JJW Inc's share register records the transfer of the 891,761 shares in JJW Inc from JJW Guernsey to MBI International Holdings on 23 June 2017. JJW Inc minutes dated 17 July 2017 refer to indebtedness of JJW Inc to MBI International Holdings of €600 million. Minutes of a further meeting, of JJW Inc's board on 27 July 2017, explain that MBI International has assigned its debt to the fourth respondent to the application, JJW Hotels & Resorts UK Holdings Limited (“JJW UK”), and that, on the advice of the auditors, it is “in the best interest” of JJW Inc, its shareholders, employees and creditors, “to proceed with the offer to acquire a 100% of [JJW Inc], taking over all the assets and liabilities by [JJW UK]” (“the July 2017 Resolution”). JJW UK, a UK company, is wholly owned by MBI International Group UK Holdings Limited, which is also a UK company. It became common ground before the Judge that at this stage JJW UK took over all JJW Inc's assets and liabilities.

Shortly before this, on 9 June 2017, Registrar Derrett had made an order recognising the liquidation of the Company as a foreign main proceeding in accordance with the UNCITRAL Model Law on Cross-Border Insolvency, as set out in schedule 1 to the Cross-Border Insolvency Regulations 2006, and recognising Ms Caulfield as the Company's foreign representative.

The present proceedings were issued in May 2019. They came on for trial, with a 10-day time estimate, at the beginning of February 2021. On the fourth day, when the Sheikh was due to give evidence, a list of corrections to the Sheikh's witness statements was served as a result of which the Liquidators applied for permission to amend their points of claim. In the days that followed, the Judge both granted such permission and heard evidence from expert witnesses as to BVI law. The trial was then adjourned and, although it resumed in July 2021, further adjournments proved to be required as a result of the Sheikh's ill health. The trial eventually resumed, and was concluded, in October 2022, the Judge having taken the view that there was no prospect of the Sheikh ever being well enough to give oral evidence.

A winding-up order had been made in respect of JJW Guernsey in Guernsey on 31 July 2020. Not having funding to do so, JJW Guernsey was not represented at the trial, but counsel appeared for it at the hearing at which consequential matters were addressed following the handing down of the Judge's judgment.

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