Gulf Air B.S.C. (C) v One Inflight Ltd
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Picken |
| Judgment Date | 03 May 2018 |
| Neutral Citation | [2018] EWHC 1019 (Comm) |
| Docket Number | Case No: CL-2017-000741 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 03 May 2018 |
[2018] EWHC 1019 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HON. Mr. Justice Picken
Case No: CL-2017-000741
Stephen Cogley QC and Erin Hitchens (instructed by Charles Russell Speechlys LLP) for the Claimant
Andrew Pearson (instructed by Byrne & Partners LLP) for the Fourth, Fifth and Sixth Defendants
Hearing date: 25 April 2018
Judgment Approved
Introduction
There are a number of applications before the Court, as follows:
(1) an application by the Fourth Defendant, Mr Amir Hirani (‘Mr Hirani’), to set aside a worldwide freezing order granted by Bryan J on 5 December 2017 (as varied by the order of Nicholas Vineall QC on 19 December 2017, and as further varied by the order of Patricia Robertson QC on 7 March 2018) (‘the Freezing Order’) or to vary the Freezing Order in relation to what has been described as the ‘Electronic Devices Order’;
(2) an application by the Fifth Defendant, Inflight Global Pte Ltd (‘Inflight’), to set aside service out of the jurisdiction and for a declaration that the Court has no jurisdiction to hear the claims against it, together with an application to set aside the Freezing Order or to vary it as regards the Electronic Devices Order;
(3) an application in similar terms by the Sixth Defendant, Epcon Ltd (‘Epcon’); and
(4) an application by the Claimant, Gulf Air B.S.C. (C) (‘Gulf Air’), for continuation of the Freezing Order and amendment of the Electronic Devices Order which forms part of that order.
The hearing of these applications took a whole day and there were as many as eight bundles before the Court at that hearing. There are, therefore, a number of issues which need to be addressed in this judgment. First, however, I should say something about the underlying claim in order that the context is understood.
Factual background in brief
In very brief outline, on 18 April 2015 Gulf Air entered into a contract (the ‘IFE Contract’) for the provision of In-Flight Entertainment services with an entity described as “Global One Media” (‘GOM’) in circumstances where, unbeknown to Gulf Air, GOM did not exist. In fact, the services under the IFE Contract were provided not by GOM but by the First Defendant, One Inflight Ltd (‘One Inflight’), and the similar sounding but different company, the Seventh Defendant, Global One Media Ltd (‘Global One’). It is Gulf Air's case that the IFE Contract was a vehicle for fraud in that, put very simply, it says that two of its former employees, the Second Defendant, Mr Mohamad El Assaad, and his wife, the Third Defendant, Mrs Sara Abdallah Abdala, conspired against it, in breach of their employment contracts and/or fiduciary duties, to ensure that Gulf Air awarded the IFE Contract to GOM when, in fact, personally benefitting from the IFE Contract through One Inflight and Global One, their corporate vehicles. One Inflight, Mr El Assaad, Mrs Abdala and Global One are all represented by DLA Piper LLP and, for this reason, were described at the hearing before me as the ‘DLA Defendants’.
As Bryan J pithily put it when giving his short judgment on the original application for the Freezing Order:
“4. In summary, the case relates to what is said to be a fraud committed by the respondents against the applicant in the period 2014 to 2017 pursuant to which the respondents, at a time when the second respondent, that is Muhammad Assad, who was employed by the applicant and in a position of influence in relation to awarding relevant contracts, allegedly conspired to procure, and did procure, the applicant, which is a well-known Middle Eastern airline, to award a relevant contract with an entity, a non-existent entity, described variously, or known as Global One Media Limited (that is GOM). GOM's former registration documents are said to be, and have prima facie been shown to me, to be forgeries, as has been confirmed by the Register of Companies with the use of the barcode of a different company; and an approximation of the name of other companies that are, and at all material times have been, defunct.
5. The first respondent, One Inflight Limited, however, does exist and is an English corporate company. It was incorporated in November 2014, owned 51 per cent by the second respondent, 49 per cent by his wife, the third respondent, both of whom were directors. Shortly thereafter, and certainly by 9 January 2015, it is deposed that the fourth respondent had acquired 15 per cent of the shares in the first respondent. The fourth respondent signed a tender document, which is at the heart of this case, on behalf of GOM, the non-existent company, on or about 20 January 2015, and his name appears as a signatory for GOM as a relevant officer of the awarded company.
6. The background to this matter is that Gulf Air wished to issue tenders for the provision of in-flight entertainment content services and in October 2014 instigated this process. The personal behalf of the applicant who did this was the second respondent, as a senior manager in in-flight products. He is the person who issued the relevant documents, the invitation to tender, decided who will be invited, disqualified the lowest bidder, vetted the tenders and ostensibly carried out due diligence.
7. In the event, the contract for the provision of these services was awarded to GOM on 18 April 2015. GOM was defined as a company and its registration number, that is the false registration number, was given in the tender documents. It appears that GOM itself trades from the trading address of the first respondent, initially 9 Hendon, Ashford, TW15 1SS UK, which was also the registered office of the first respondent, One Inflight Limited, from its incorporation until 9 July 2015. Therefore it is said a pattern emerges as the first respondent's business address changed.
8. The invoices raised by GOM were paid by the applicant. They were all personally provided by the second respondent to the applicant using variously the first respondent's address from time to time. Seven of the invoices, which the second respondent personally approved for payment totalling US$1.5m, were actually processed before the awarded contract was effective. The contract was for a fixed term of four years and the contract price was US$22.1m for that four-year period, although within two years and two months Gulf Air paid GOM, in fact the first respondent as it transpires on the affidavit of evidence before me, US$22.1m. The payments were all directed by the second respondent through accounts either held by the first respondent in the UK, a branch of HSBC in Ashford, or by a connected company in Singapore, the fifth respondent, Inflight Global PTE, which it is said is owned by the six respondent, a Seychelles company, EPCON Limited.
9. Essentially the fraud is alleged to have been along these lines. The second respondent manipulated the tender process, of which he was in control, wearing his hat as a senior manager in in-flight products for the claimant inserted the first respondent into the supply chain, hiding the fact by a pretence that GOM was an active trading company with no connection to him or his wife, who was the third respondent. The first respondent's address appears on all the invoices. He then passed and approved all of the invoices and procure payment thereof. He never sought nor had any approval or authority to authorise payments that were in excess of the contract itself. …”.
Whilst acknowledging that the fraud alleged against the Defendants is denied by each of the Defendants, it is worthwhile expanding a little on Bryan J's summary by reference to how the case has been put, most recently in the draft Amended Particulars of Claim and in Mr Cogley's skeleton argument prepared for the purposes of the hearing before me. Mr Cogley highlighted certain particular matters, starting with a document which Mr El Assaad produced in October 2014 identifying parties which would be specifically invited to tender, entitled “CONTENT AND SOFTWARE MEDIA PROVIDER REVISION 01 OCTOBER 13”. At that date, One Inflight did not exist since it was not incorporated until the following month, on 25 November 2014. Nor, as previously mentioned, was there in existence at that time a company or entity known as “Global One Media” (or GOM). Accordingly, in identifying those companies in Section VII ( “Suppliers to Invite”) of that document, Mr El Assaad was naming at that stage non-existent companies and companies which, although Gulf Air (Mr El Assaad's employer) did not know it, were apparently intended to be set up by Mr El Assaad.
As to that, having been incorporated the following month, either straightaway or soon after, One Inflight had three shareholders, namely Mr El Assaad, Mrs Abdala and Mr Hirani who until July 2015, when he ceased to hold any shares, had a not insubstantial 15% shareholding. Even as to GOM, and leaving to one side the fact that this was not a company which was ever, as such and in the event, incorporated, the relevant certificate of incorporation having been seen to be a forgery, the fact again remains that Gulf Air would not have known that this was an entity which was connected to Mr El Assaad or his wife. Mr Cogley went on to point out, furthermore, that there is nothing to indicate that anybody held any shares in GOM, so making it very curious (Mr Cogley would, in fact, suggest more than merely that) that the IFE Contract came to be entered into by Gulf Air with GOM at all. This, in circumstances, too, where Mr El Assaad prepared a report on 4 February...
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