Ras Al Khaimah Investment Authority v Farhad Azima
| Jurisdiction | England & Wales |
| Judge | Mr Justice Michael Green |
| Judgment Date | 01 November 2022 |
| Neutral Citation | [2022] EWHC 2727 (Ch) |
| Docket Number | Case No: HC-2016-002798 |
| Court | Chancery Division |
| Year | 2022 |
and
[2022] EWHC 2727 (Ch)
Mr Justice Michael Green
Case No: HC-2016-002798
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (Ch)
ON REMITTAL FROM THE COURT OF APPEAL [2021] EWCA CIV 349
(LEWISON, ASPLIN AND MALES LJJ)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Thomas Plewman KC, Frederick Wilmot-Smith and Sophie Bird (instructed by Burlingtons Legal LLP) for the Counterclaimant
Fionn Pilbrow KC (instructed by Charles Fussell & Co LLP) for the Second Additional Defendant to the Counterclaim
Roger Masefield KC, Laura Newton and Robert Harris (instructed by Enyo Law LLP) for the Third Additional Defendant to the Counterclaim
Anthony White KC and Ben Silverstone (instructed by Kingsly Napley LLP) for the Fourth Additional Defendant to the Counterclaim
Hearing dates: 17 and 18 October 2022
Approved Judgment
This judgment was handed down remotely at 10.30am on 1 November 2022 by circulation to the parties or their representatives by email and by release to The National Archives.
INTRODUCTION
This is an application by Mr Farhad Azima, the Counterclaimant, for permission to bring an additional counterclaim against the original Claimant, Ras Al Khaimah Investment Authority ( RAKIA), and to amend his statement of case in the form of a draft Re-Re-Re-Amended Counterclaim and Claim Against Additional Parties (the draft RRRACC). The application is made pursuant to CPR 20.4(2)(b) and CPR 17.1(2)(b).
RAKIA is the sovereign wealth fund of the Emirate of Ras Al Khaimah ( RAK), part of the United Arab Emirates. Mr Azima is a US-based businessman, principally involved in the aviation industry, who had various dealings with RAKIA between 2007 and 2016. Since 2016, they have been engaged in litigation against each other. RAKIA sued Mr Azima for fraudulent misrepresentation and conspiracy; the former was in relation to a Settlement Agreement dated 2 March 2016 between RAKIA, Mr Azima and his company, HeavyLift International Airlines FZC ( HeavyLift), whereby RAKIA paid $2.6 million to settle various claims (the Settlement Agreement); the latter in relation to payments to Mr Azima of $400,000 and $1,162,500 in 2011 and 2012 said to have been in respect of commission owed to Mr Azima for introducing RAKIA Georgia to three prospective purchasers of the Sheraton Metechi Palace Hotel in Tbilisi (the Hotel).
Mr Azima denied both claims and alleged by way of defence and counterclaim that his email accounts and data had been unlawfully hacked by RAKIA prior to the Settlement Agreement and the information so obtained by RAKIA was then used against him in RAKIA's claim. He argued that RAKIA's claim should be struck out for abuse of process or that the evidence should be excluded. RAKIA said that it was not responsible for the unlawful hacking and that it only discovered the hacked material when it was posted on the internet in August and September 2016.
The trial of RAKIA's claim was heard by Mr Andrew Lenon QC, sitting as a deputy Judge of the Chancery Division (the deputy Judge). He found in favour of RAKIA on its claims for fraudulent misrepresentation and conspiracy. He rejected Mr Azima's hacking defence and dismissed the counterclaim. His judgment is reported at [2020] EWHC 1327 (Ch) (the First Judgment).
Mr Azima was granted permission to appeal by Arnold LJ on certain terms as to payment in of the judgment sum. The Court of Appeal (Lewison, Asplin and Males LJJ) heard the appeal on 2 to 4 March 2021, and their joint judgment was delivered only a week later on 12 March 2021 (the CA Judgment). This is reported at [2021] EWCA Civ 349. It will be necessary to examine the CA Judgment in some detail. In short the Court of Appeal dismissed Mr Azima's appeal against RAKIA's claims but, based on new evidence in relation to RAKIA's responsibility for the hacking which the Court of Appeal admitted, it allowed the appeal on the counterclaim and remitted the counterclaim to be tried by a different judge of the Chancery Division. I am the assigned Judge to hear the remitted counterclaim and have now dealt with a number of applications in relation to it. The trial has recently been set down and is listed to commence in a 5-day window from 7 May 2024, with an estimated duration of between 8 and 10 weeks.
It was made clear in the CA Judgment and this was given effect in its Order dated 15 March 2022 (the CA Order) that whatever the outcome of the remitted counterclaim, the First Judgment and the factual findings on RAKIA's claim made by the deputy Judge “ must stand”. Accordingly when I come to hear the retrial of the counterclaim, I am not bound by the deputy Judge's factual findings on the hacking counterclaim but I cannot interfere with the findings made on RAKIA's substantive claim. I will however be able to vary the deputy Judge's orders in relation to interest and costs and consider whether damages should be ordered against RAKIA if found to be responsible for the hacking.
Mr Azima sought permission to appeal from the Supreme Court, it having been refused by the Court of Appeal. The principal basis for the application was that the Court of Appeal was wrong to have held, before the counterclaim had been retried, that the possible remedies available to Mr Azima did not include overturning RAKIA's judgment and/or having it struck out on the grounds of abuse of process. Some months after the application for permission had been lodged, Mr Azima sought to adduce further fresh evidence recently obtained that was said to show that RAKIA was responsible for the hacking and had concocted a false story as to its discovery of the hacked material, including perjured evidence, that was put to the deputy Judge at the trial.
On 28 April 2022, the Supreme Court refused permission to appeal “ because the application does not raise an arguable point of law”.
Now Mr Azima wishes to bring an additional counterclaim in which his cause of action is to have the First Judgment set aside on the grounds that it was procured by fraud. He has discovered yet more evidence which he says shows that a pervasive fraud was perpetrated on the Court at the original trial by or on behalf of RAKIA and that he therefore satisfies the test for permission, namely that there is a real prospect of establishing the conditions necessary to have the judgment set aside.
RAKIA is now no longer participating in these proceedings and has not appeared before me at this hearing. On 16 June 2022, it made an open offer to settle the counterclaim against it for $1 million plus costs, but this was rejected by Mr Azima. Then on 22 June 2022, RAKIA wrote to the Court to say that it had withdrawn its instructions to its solicitors, Stewarts Law LLP ( Stewarts), and that it did not intend to take any further part in the proceedings. Stewarts have come off the record for RAKIA but by my Order of 8 July 2022 a mechanism for serving RAKIA with documents was set out. So the entity against which the proposed new counterclaim is made does not appear to oppose Mr Azima being granted permission.
However the Additional Defendants do strongly oppose the application. On 16 July 2021 I gave permission to Mr Azima to join four Additional Defendants to the counterclaim. They are:
(1) Mr Stuart Page, a private investigator, who has since admitted involvement in the hacking on behalf of RAKIA and that he gave false evidence at the original trial; he has settled with Mr Azima and has provided an affidavit that supports Mr Azima's case;
(2) Mr Neil Gerrard, a retired solicitor and former partner of Dechert LLP; following an adverse judgment against him by Waksman J in the Commercial Court in an unrelated case brought by Eurasian Natural Resources Corporation on 16 May 2022 ( [2022] EWHC 1138 (Comm)), he is now separately represented by Charles Fussell & Co; Mr Fionn Pilbrow KC made submissions on his behalf at the hearing;
(3) Dechert LLP, represented by Mr Roger Masefield KC leading Ms Laura Newton and Mr Robert Harris, instructed by Enyo Law LLP; and
(4) Mr James Buchanan, who was employed by companies in RAK and was authorised to undertake certain activities on behalf of RAKIA; he is represented by Mr Antony White KC leading Mr Ben Silverstone, instructed by Kingsley Napley LLP.
Even though the proposed new counterclaim is not brought against them, the Additional Defendants have vigorously opposed the grant of permission, principally on the basis that this would effectively be Mr Azima's third attempt to overturn the First Judgment on the grounds of fraud and that this amounts to an abuse of process, both on the finality principle and as a collateral attack on the CA Judgment. They also say that my jurisdiction is limited to what the Court of Appeal has remitted to me and that the only route that Mr Azima can use, particularly given that he is seeking also to set aside the CA Order, is to go back to the Court of Appeal under CPR 52.30 to re-open the appeal. The Additional Defendants further submit that, in any event, Mr Azima does not have a real prospect of satisfying the materiality condition required to justify the setting aside of the First Judgment and CA Order on the grounds of fraud.
Mr Azima is represented by Mr Thomas Plewman KC leading Mr Frederick Wilmot-Smith and Ms Sophie Bird, instructed by Burlingtons Legal LLP. He seemed to be taking a point on the standing of the Additional Defendants to object but Mr Plewman KC confirmed at the hearing that he does not submit that they have no standing;...
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