Sharab v Prince Al-Waleed bin Talal bin Abdul-Aziz Al-Saud [ChD]
| Jurisdiction | England & Wales |
| Judge | Sir William Blackburne |
| Judgment Date | 29 June 2012 |
| Date | 29 June 2012 |
| Court | Chancery Division |
Chancery Division.
Sir William Blackburne.
Clive Freedman QC and Alexander Robson (instructed by TLT Solicitors LLP) for the claimant.
Christopher Pymont QC (instructed by Hogan Lovells International LLP) for the defendant.
The following cases were referred to in the judgment:
AK Investment CJSC v Kyrgyz Mobil Tel LtdUNK [2011] UKPC 7; [2011] 1 CLC 205.
Albon v Naza Motor Trading Sdn BhdUNK [2007] EWHC 9 (Ch); [2007] 1 WLR 2489.
British Steel Corp v Cleveland Bridge and Engineering Co LtdUNK [1984] 1 All ER 504.
Cecil v BayatUNK [2010] EWHC 641 (Comm); [2011] EWCA Civ 135 (CA).
Collier v WilliamsUNK [2006] EWCA Civ 20.
Donohue v Armco IncUNK [2001] UKHL 64; [2002] CLC 440; [2002] 1 All ER 749.
Edwards v GoldingUNK [2007] EWCA Civ 416.
Lloyds Investment (Scandinavia) Ltd v Ager-Hanssen [2003] EWHC 1740 (Ch).
Metall und Rohstoff AG v Donaldson Lufkin & Jenrette IncELR [1990] 1 QB 391.
Way v LatillaUNK [1937] 3 All ER 759.
Service out of jurisdiction — Agency — Contract — Restitution — Consultant intermediary based in Jordan — Services in respect of sale of aircraft by Saudi prince to Libyan interests — Claim for commission — Permission to serve out of jurisdiction for claims in respect of alleged contract — Permission confined to contractual claims and not including quantum meruit claim in so far as it was of restitutionary (i.e. non-contractual) kind — No good arguable case for service out in respect of restitutionary claim — Acts said to give rise to defendant's liability not taking place within jurisdiction — Civil Procedure Rules 1998, 6.20(5)(a), (15), Practice Direction 6B, para. 3.1(6)(a), (16).
These were applications by the defendant concerning the scope of the claimant's permission to serve the proceedings out of the jurisdiction, and by the claimant to amend.
The claimant ran a consultancy business based in Amman. A major part of its business was effecting introductions for clients in Libya. The defendant was a member of the Saudi royal family. The claimant claimed to be entitled to commission as a result of services she performed for the defendant in relation to the sale by him of an aircraft to a Libyan company. Negotiations for the sale took place over many months between 2003 and 2005. The price ultimately achieved was $120 million.
The claimant contended that she undertook her role as broker between the defendant and the Libyan purchaser pursuant to an oral agreement reached at a meeting between her and the defendant's agent (D) in a London restaurant in August 2001, and that the agreement was varied at a meeting with the defendant in Libya in April 2003, as confirmed by D at a meeting in Libya in July 2003. She claimed that after the sale of the aircraft she became entitled to the agreed commission which the defendant refused to pay.
The defendant, while admitting that the claimant negotiated with the Libyan purchaser, contended that his arrangement with her was that he would decide at his own discretion what she should be paid at the end of the transaction. He denied that D had any authority to bind him, and therefore that he became contractually bound to pay the claimant any commission, let alone the amounts that she claimed.
The claim form and particulars of claim sought commission for the claimant's services in relation to the sale or that amount by way of a quantum meruit or as damages for breach of contract. The judge gave permission to serve the claim on the defendant out of the jurisdiction. He held that the claimant had sufficiently shown that the claim was made in respect of a contract made within the jurisdiction or made by or through an agent within the jurisdiction. The judge was not satisfied that any agreement was governed by English law nor that any breach of contract was committed within the jurisdiction.
The defendant then unsuccessfully challenged the jurisdiction of the English court (see [2008] EWHC 1893 (Ch)). The judge hearing that application held that jurisdiction could be founded on a contract made within the jurisdiction and a breach within jurisdiction. The defendant's challenge to England as the appropriate forum failed. The defendant appealed and the Court of Appeal ([2009] EWCA Civ 353) held that his challenge succeeded on breach within the jurisdiction but not otherwise.
The defendant then served a defence in which he took the point that the claimant did not have permission to serve out of the jurisdiction in respect of a claim for a quantum meruit. The claimant contended that she had been given permission to serve the entire proceedings on the defendant out of the jurisdiction, without limitation.
The defendant applied for an order that the claimant should only be allowed to pursue the contract claims for which she had obtained permission to serve out and not a claim in restitution, and for the order giving permission to be varied accordingly. The claimant applied to amend her particulars of claim and to rely on the jurisdictional gateway for a claim in restitution.
Held, ruling accordingly:
1. The defendant had not been told when the proceedings were served on him that the only gateways which had found favour with the judge granting permission to serve out were for a claim in respect of a contract made within the jurisdiction or by an agent within the jurisdiction. It was desirable that, as with any other without notice application, the successful applicant should be required to serve on the respondent against whom he had obtained without notice relief a note of what was said by the judge hearing the application. In this case, on the defendant's challenge to the jurisdiction, the claimant repeated the submissions covering all four gateways so that, in effect and without saying so, she was supporting the judge's order on grounds additional to those which had found favour with him.
2. It was necessary to examine carefully whether the quantum meruit claim fell within the scope of the only gateway which the Court of Appeal found to have been established, namely a claim in respect of a contract made within the jurisdiction. The issue was whether the pleaded claim was founded on the existence of a contract under which the claimant was to render certain services in return for a commission where, however, the amount of the commission was not finally agreed; or whether it was a claim founded on the conduct of the claimant in rendering services to the defendant at his request in circumstances where it could not be said that a valid contract came into being. The permission to serve out was to be understood as confined to those claims which were in respect of a contract. Those claims did not include the quantum meruit claim in so far as it was of the restitutionary (i.e. non-contractual) kind.
3. The claimant should not have permission to serve out in reliance on the restitutionary gateway. She failed to show a good arguable case that the acts said to give rise to the defendant's liability to make restitution were committed within the jurisdiction. The defendant, in so far as his acts were material, had not personally done anything within the jurisdiction. Secondly, the services that the claimant said that she rendered in negotiating and bringing about a sale of the aircraft were performed almost entirely in Libya.
4. The court had power under CPR, r. 3.1(7) to make an order ancillary to an earlier order clarifying, where it was appropriate to do so, the meaning and effect of that earlier order. It was appropriate to exercise that power in this case. The substance of the matter was that the permission granted by the court was confined to claims “made in respect of a contract” and the restitutionary claim was not such a claim. The defendant was entitled to a declaration that the permission granted to serve the claim form and particulars of claim on the defendant out of the jurisdiction did not extend to the claim in restitution pleaded in the particulars of claim. That declaration would not affect the quantum meruit claim in so far as it was contractual in nature.
1. There are four applications before me. They arise in proceedings which began in November 2007 and have yet to come to trial. I shall first explain what the case is about, after which I shall summarise the procedural background. This will set the scene for the four applications.
2. The claimant Daad Sharab, whom I shall refer to simply as the claimant, is of Jordanian nationality, lives in Jordan but has a flat in London. She was born in Saudi Arabia where she lived for 18 years before moving to Jordan. She has a daughter, now aged 18, who lives and has been educated in Jordan. The claimant spends three months or so each year in her London flat and has done so since 1988 with the exception of the years 1995 to 1998 when she was again in Saudi Arabia. She was represented before me by Clive Freedman QC and Alexander Robson.
3. The claimant runs a family-owned consultancy business called Trans Arab World for Commercial Mediation of which she is the chairman. In that role she acts as a consultant intermediary, providing commercial introductions between parties. She runs it with her father who acts as its general manager. She has a 65% interest in it and her father the remaining 35%. It is based in Amman and has a substantial turnover. A major part of its business is (or was) effecting introductions for clients in Libya. She used frequently to visit that country.
4. The defendant Prince Al-Waleed, whom I shall refer to as the defendant, is a member of the Saudi royal family. He is a man of very considerable wealth. He is chairman of Kingdom Holdings Company which he established. It manages and holds investments. Among the assets owned by him are (or were at the material time) two aircraft, an Airbus A340 and a Boeing 767. He was represented...
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Failures for Consideration: Re‐Analysing Jurisdiction in Unjust Enrichment Claims
...3.1(16)(a) but also the purpose of the gateways.52 This is perhaps why Sir William Blackburne in Sharab vAl-Saud [2012] EWHC 1798 (Ch),[2012] 2 CLC 612 (Sharab) at [59] confessed he was ‘unable to follow’the reasoning of HamblenJ in concluding that the claim fell within the contract gateway......