Khulood Abdulla Hassan Al Rostamani v Mohamed Hassan El Haddad

Hearing date: 16–17 July 2025

ICC JUDGE

Introduction

This was the final hearing of a bankruptcy petition (“ the Petition”) presented on 4 September 2024 by various members of the Al Rostamani family against Dr Mohamed Hassan El Haddad (“ Dr Haddad”). The Petition was based on three costs orders made against Dr Haddad in favour of the Petitioners (amounting in aggregate to £1,478,565) as follows:

1.1. an order to pay £1,377,565 (on account of costs to be assessed on the indemnity basis) made on 8 November 2021 by Zacaroli J (as he then was) on an application successfully made by the Petitioners and others to set aside permission (given by Master Bartlett) to serve on them outside the jurisdiction proceedings which had been commenced by Dr Haddad on 4 July 2019 (“ the Partnership Proceedings”, BL-2019-001262) – “ the First Costs Order”;

1.2. an order to pay £21,000 (again, on account of costs to be assessed on the indemnity basis) made in the Partnership Proceedings on 10 November 2021 by Zacaroli J on Dr Haddad's unsuccessful application (dismissed as totally without merit) for an order that Zacaroli J recuse himself from further hearing the case — “ the Second Costs Order”; and,

1.3. an order to pay £80,000 (summarily assessed, once more on the indemnity basis) made by Males LJ on 18 July 2022, on Dr Haddad's unsuccessful application for permission to appeal against the orders made by Zacaroli J – “ the Third Costs Order”.

Those Orders, made in 2021 and 2022, created judgment debts in liquidated sums which have not been paid; interest at 8%, the judgment rate, continues to accrue.

Broadly, the Petition was opposed by Dr Haddad on grounds that he has a serious and genuine cross-demand, and/or that the Petition was an abuse of process and would serve no useful purpose, and/or that the Petitioners have acted unreasonably by failing to accept certain alleged offers relating to land owned by a Saudi company in which Dr Haddad holds a 51% stake, and/or that the Costs Orders were procured by fraud (or in any event, that the court should “ go behind” those judgments, and refuse to make a bankruptcy order by reference to them). None of Dr Haddad's other creditors either opposed or supported the Petition.

To explain those grounds, it is necessary to say something about the history of this dispute.

The Background

Essentially, the purpose of the Partnership Proceedings (described in greater detail in the judgment of Zacaroli J at [2021] EWHC 1892 (Ch)) was to establish the existence of a partnership allegedly entered into by Dr Haddad with the First Petitioner, Ms Khulood Abdulla Hassan Al Rostamani (“ Ms Khulood”) in 2002. Dr Haddad alleged that Ms Khulood and the other defendants (including the Petitioners) had devised and executed a plan to misappropriate partnership assets in England and Dubai. Amongst other things, he sought an order for the dissolution and winding-up of the partnership, and all necessary accounts and inquiries.

Again in brief summary, amongst other things, Zacaroli J held that “ the issue which lies at the heart of these proceedings” — whether there was an “ overarching partnership” between Dr Haddad and Ms Khulood — had already been conclusively determined in proceedings in Dubai decided ultimately by the Dubai Court of Cassation (the final court of appeal) in 2020 in case number 508/2019 (in which it was held that the issue had been decided previously by the Court of Cassation in 2018 in case number 548/2017); he held that “ there is no serious issue to be tried as to whether Dr Haddad can refute the contention that his claim based on the alleged Partnership is barred by issue estoppel”; accordingly, he held that Dr Haddad had not established a good arguable case that his pleaded claim fell within any of the “ gateways” for service out of the jurisdiction in paragraph 3.1 of PD 6B.

Of some importance in the present context, before Dr Haddad began the Partnership Proceedings, the Petitioners' solicitors, Allen & Overy, had written a substantive response to his solicitors' letter before action, in which they had argued that the issue concerning the existence of the partnership had already been determined in the Dubai proceedings. However, when Dr Haddad applied for permission to serve out of the jurisdiction, he made no reference to that letter, and omitted to exhibit it to his evidence; indeed, he made no reference at all to the fact that the defendants intended, as he knew, to rely on issue estoppel.

Zacaroli J held that this failure was a breach of Dr Haddad's obligation to give full and frank disclosure; moreover, he held that his failure was no mere “ oversight”, but was born of “ a positive desire … to avoid engaging with the possibility” of an issue estoppel. At [134], Zacaroli J said:

“ For these reasons, had it been necessary to do so, I would have found that not only was Dr Haddad in breach of the obligation to provide full and frank disclosure on his application for service out, but that the evidence was positively misleading and that these failings were the result of deliberate conduct as opposed to accidental omission. In accordance with the principles set out at [122] to [126] above, I would have set aside the Service Out Order, leaving it to Dr Haddad to make a further application for service out. ….”

From that it follows that the costs order made by Zacaroli J on 8 November 2021 — the First Costs Order — would very likely have been made against Dr Haddad regardless of the merits of the argument concerning issue estoppel (in respect of which, in any event, Dr Haddad lost).

On 23 February 2023, Dr Haddad began further proceedings ( BL-2023-000283 — “ the Fraud Proceedings”) against the Petitioners and eleven other Defendants, including lawyers acting for the Petitioners (comprising Allen & Overy (now A&O Shearman), Clyde & Co, senior solicitors at both firms, as well as leading counsel and junior counsel). By those Proceedings, Dr Haddad sought to set aside the orders made by Zacaroli J and all other orders made against him in the Partnership Proceedings (including in the Court of Appeal) on grounds (as stated in the Claim Form) that “ they had been procured by deliberately misleading the court, and/or obtained by fraud and/or were tainted by deceit and/or were tainted and affected by fraudulent conduct”.

By his judgment given on 1 March 2024 (at [2024] EWHC 448 (Ch)), as against the “ Lawyer Defendants” (as he defined them at paragraph [3] of his judgment), Fancourt J struck out the proceedings and gave reverse summary judgment. Between paragraphs [8] and [20], as follows, the judge described events since the judgment of Zacaroli J in July 2021:

“ 8. To say that Dr Haddad was aggrieved by the judgment would be a considerable understatement. He first applied to Zacaroli J to recuse himself from hearing his application for permission to appeal, and when this was inevitably refused he advanced 66 grounds of appeal, which included that the judgment was obtained by fraud of the defendants' expert witness of UAE law, Mr Aidarous, and that the Judge was apparently biased. Permission to appeal was refused.

9. Dr Haddad then applied to the Court of Appeal for permission to prepare a skeleton argument estimated to require 139 pages to address 111 alleged errors of fact or law in the judgment (62 of which related to the issue estoppel issue), one allegation that the judgment was obtained by fraud and six allegations of misleading the court, and allegations of breach of natural justice and fairness and lack of independence on the part of the tribunal. (Dr Haddad was represented before Zacaroli J by Andrew Ayres QC but prepared the intended appeal himself and then persuaded junior counsel, Mr Baki, to lend his name to the skeleton argument.) At the same time, Dr Haddad applied to the Court of Appeal for permission to adduce a bundle of about 1350 pages instead of the permitted 350 pages in support of his application for permission to appeal.

10. The Court of Appeal refused permission for a longer skeleton argument and larger appeal bundle, but Dr Haddad took no notice. He filed a skeleton argument running to 81 pages, his extensive appeal bundle, and an application to rely on new evidence, including a new, further expert report from his UAE law expert, Dr Khrais. The skeleton argument addressed (in the event) 57 grounds of appeal that were pursued, which focused mainly on the issue estoppel argument, contending (essentially, but in multifarious different formulations) that the Judge had erred in concluding that the existence of an English partnership with Ms Khulood had been the subject of consideration or decision in the UAE cases. The skeleton also contained grounds:

i) that, on the basis of the new evidence of Dr Khrais, that the expert evidence of Mr Aidarous had deceived the Court;

ii) that the solicitors acting for the defendants to the Partnership Claim and their leading and junior counsel had dishonestly misled the court, and so the...