Gulf International Bank BSC v Sheik Badr Fahad Ibrahim Aldwood
| Jurisdiction | England & Wales |
| Judge | John Kimbell |
| Judgment Date | 01 July 2019 |
| Neutral Citation | [2019] EWHC 1666 (QB) |
| Date | 01 July 2019 |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB/2018/0292 |
[2019] EWHC 1666 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
John Kimbell QC
(Sitting as a Deputy High Court Judge)
Case No: QB/2018/0292
Matthew Cook (instructed by Enyo Law LLP) for the Claimant
Lexa Hilliard QC and Jamie Randall (instructed by Kingsley Napley LLP) for the Defendant
Hearing dates: 1, 2 May 2019
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.
John Kimbell QC (sitting as a Deputy High Court Judge):
Introduction
On 18 January 2019, the Defendant (‘Mr Aldwood’) was served in London with the claim form in these proceedings (‘ the Claim Form’) and a worldwide freezing order (‘ the WWFO’). The sum claimed in the Claim Form is SAR137.5 million (around £29 million). This is said by the Claimant to be due under a personal guarantee signed by Mr Aldwood on 28 July 2012.
The Defendant's applications
By an application notice dated 19 March 2019, Mr Aldwood applies to:
(i) set aside the Claim Form on the ground that this court has no jurisdiction to hear the claim; alternatively,
(ii) stay these proceedings on the ground that the courts of the Kingdom of Saudi Arabia, more specifically, the Banking Disputes Committee (also known as the Committee for the Settlement of Banking Disputes or SAMA Committee) is clearly and distinctly the more appropriate forum to determine the claim; and,
(iii) discharge and set aside the WWFO.
The Claimant's application
The Claimant opposes Mr Aldwood's application and seeks the continuation of the WWFO until judgment or further order.
Factual Evidence
The Claimant relies on three affidavits by Nicholas Jones, a solicitor and partner at Enyo Law LLP (‘ Enyo’) sworn on 12 December 2018, 17 January 2019 and 19 March 2019.
Mr Aldwood relies on two witness statements by Richard Foss, a solicitor and partner at Kingsley Napley LLP (‘ KN’) dated 19 March 2019 and 26 April 2019.
Foreign Law Evidence
Both parties rely on expert evidence of Saudi Arabian law. Mr Aldwood relied on a report by a retired judge, Dr Al Massad and a Memorandum of Advice by a Mr Aldowish, who is a lawyer employed by Clyde & Co. in their office in Riyadh. The Claimant relies two reports by a Mr Al Harbi.
Both parties' expert evidence was simply served as exhibits to the factual evidence referred to above. Neither party sought permission under CPR 35.4 to adduce expert evidence and all of the reports failed to comply (in varying degrees) with the requirements of CPR Part 35 and the accompanying practice direction. Unhelpfully, each report addressed different issues and each one raised new points not covered in the previous report.
This highly unsatisfactory state of affairs is strikingly similar to that described by Andrew Baker J. in B.B. Energy (Gulf) DMCC v Al Moudi and Others [2018] EWHC 2595. In that case, which was also an application to challenge jurisdiction, he said this:
“49. [I]t is a matter of significant regret that neither side identified, as undoubtedly they ought to have, that this was a heavy application that needed case management, not least because neither side had permission for reliance upon any expert evidence, permission being required for interlocutory hearings as much as for trials. …[T]hey ought to have appreciated that there was a need to regularise the matter and raise with the court what expert evidence would be required; but equally on the claimant's side, seeing that, identifying immediately, as they will have done, that there were matters seemingly asserted by the expert opinion that had been provided that would be contentious, the claimant ought to have identified that the defendants had not yet sought permission, that the claimant for its part would wish to challenge and deal with the matters of foreign law on their substance, not on the technicality of whether permission had been granted, and ought therefore to have raised with the defendants the need to come to court.
50. That is not a pedantic procedural concern on the part of the court in this case. In my view it has been a case, albeit that in the end these concerns have not become determinative of the application, in which the absence of either an agreed or directed-by-the-court review of what expert evidence was required, from what experts, answering what questions, has led to the exchange, through the service and counter-service of evidence, of an escalating volume of material not always addressing the same questions or analysing the case for the identification of the questions to be addressed in a consistent fashion and culminating in the late service of a second report by the claimant to which I referred earlier and in respect of which the defendants made a particular complaint.”
I share Andrew Baker J's concerns. Better case management is clearly needed for challenges to jurisdiction which involve foreign law expert evidence. Permission ought to be sought under CPR 35.4 to reply on foreign law evidence in all cases. It would also assist if there were a list of issues approved by the court for the foreign experts to address at the very latest before the applicant's initial report (usually served with the application to challenge jurisdiction) is responded to. The enforcement of the requirement to obtain permission and the production of a list of issues for foreign law experts would go a long way in preventing the situation which has occurred both in this case and in B.B. Energy (Gulf) DMCC v Al Moudi and Others recurring.
Factual Background
The Claimant (‘ the Bank’) is a bank based in the Kingdom of Bahrain. It operates a registered branch in Riyadh in the Kingdom of Saudi Arabia (‘ KSA’).
Mr Aldwood is a 51 year-old businessman. He is citizen of the KSA.
In April 2013, Mr Aldwood purchased a leasehold interest in a substantial house in Chester Terrace near Regent's Park in London NW1 for £7.7 million. Mr Aldwood also owns a property on the Côte D'Azur in France.
In July 2013, Mr Aldwood sought advice on how to apply for a visa from KN. KN formally accepted instructions in January 2014 to “prepare and submit an application for a Tier 1 (Investor) entry clearance for you, your wife and children”
The renovation work on his house in Chester Terrace was complete in May 2015. Later that year Mr Aldwood sought further legal advice from KN on an “overall strategy” for his move to the UK and he began to consider appropriate schools in London for his three children.
Mr Aldwood's visa application was finally submitted in April 2016 and applications were made for school places for his children for entry in September 2016. The visa application form stated that Mr Aldwood's planned arrival date was June 2016. In fact, he arrived in London with his wife and three children in July 2016.
Mr Aldwood was granted a Tier I (Investor) visa in August 2016. His children have attended schools in London since September 2016.
By the time of the hearing before me, it was common ground that Mr Aldwood was domiciled in England both on the day these proceedings were issued and the day they were served on him. I am satisfied on the evidence I have seen that he has been domiciled in England within the meaning of Article 9(2) of the Civil Jurisdiction and Judgments Order 2001 since August 2016.
DMT
Before he left Saudi Arabia in July 2016, Mr Aldwood was the owner of a majority shareholding in, and was a director of, the Dar Al Mustawred Trading Company (‘ DMT’), a limited liability company incorporated in KSA. He retains those shares but they are said to be worthless.
It appears that DMT ran into financial problems in 2016. It is no longer trading. DMT sold a wide variety of products including office supplies, construction materials and medical products and purchased metals such as copper, zinc, lead and aluminium.
The 2012 Commodity Agreement
In 2012, the Bank made available to DMT a revolving credit facility on the terms set out in a Commodity Murabaha Financing Agreement dated 28 July 2012 (‘ the Commodity Agreement’). DMT is defined as “the Customer” in the agreement but the benefit of the facility is extended to three other companies by clause 2(i). 1 Under the Commodity Agreement, the Bank provided DMT and the three other companies an aggregate sum of SAR50 million (around £8.5 million at the time) for the purchase and sale of goods. The terms are set out in parallel English and Arabic text. Amongst its terms were the following (English text only):
“ Clause 2
(b) Without Prejudice to Clauses (17) “Events of Default” of this Agreement, the Facility shall not, unless the Bank otherwise agrees in writing, be available for utilization after June 27 2013 ( Termination Date)
(c) If the Parties agree to renew the Facility following the Termination, then renewal shall be subject to renewal fee to be determined by the Bank
(i) Subject to the Bank consent, the Facility shall be availed for utilization by Tawreedkom for Trading Co. Baher Al Ahbar for Trading Co and Adweyatcom Trading Est
Clause 4 Condition Precedent
The Customer may not make a request to enter any Murabaha Transaction pursuant to Clause (5) of this Agreement unless the Bank has received in form and substance satisfactory to it:
…
(d) Irrevocable and unconditional personal guarantee dully (sic) signed by Mr Badr Fahad Aldwood in form and substance acceptable to the Bank.
(e) Irrevocable and unconditional cross corporate guarantee dully (sic) signed by each of Tawreedkom for Trading Co. Baher Al Ahbar for Trading Co and Adweyatcom for Trading Est in form and substance...
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