The Public Institution for Social Security v Mr Kamran Amouzegar

Hearing dates: 28 th and 29 th April 2020.

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.

A: The application

This is an application by the Fifth Defendant in these proceedings, Mr. Kamran Amouzegar, to set aside an order of Teare J. made on 29 July 2019 (“the extension order”). Teare J extended time for service of a claim form which had been issued on 21 February 2019 (“the Claim Form”). Time was extended, in relation to Mr. Amouzegar and a number of other defendants, until 31 October 2019. In the usual way, that order was made pursuant to a without notice application which was determined on consideration of the papers by the judge. The effect of that order was to give the Claimant, the Public Institution for Social Security (“PIFSS”), an additional period of just over 2 months in order to serve the claim form: from 21 August 2019 to 31 October 2019.

PIFSS contends that the order was properly made and that there is no basis for setting it aside. However, PIFSS also applies pursuant to CPR 6.16 (1) for an order dispensing with service of the Claim Form on Mr. Amouzegar. This application only has significance in the event that the extension order is set aside. If it remains, then there is no dispute that Mr. Amouzegar was validly served on 27 August 2019 via the Office of the Civil Court in Geneva, where Mr. Amouzegar is resident.

The overall context of the present proceedings, in which I am the principal designated judge, is set out in my judgment on an application for freezing and ancillary orders by PIFSS against the First Defendant, (“Mr. Al Rajaan”): see [2019] EWHC 2886 (Comm). Mr. Al Rajaan was the Director General of PIFSS. The Amended Consolidated Particulars of Claim (“the POC”) pleads in detail seven specific schemes (“the Schemes”), pursuant to which PIFSS claims that Mr. Al Rajaan obtained hundreds of millions of dollars in unlawful secret commissions (“the Secret Commissions”). PIFSS alleges that a very large number of individuals and corporate entities were involved in the payment of these commissions to Mr. Al Rajaan, and there are therefore numerous defendants to the present consolidated proceedings.

One of those individuals is Mr. Amouzegar. He was from 1997 to 2003 an associate at Pictet & Cie (“Pictet”). PIFSS alleges that from 2003 to (at least) 2015 he was remunerated by Pictet as a business finder/agent. It is alleged that Mr. Amouzegar was complicit in two of the Schemes.

First, Section G of the POC pleads “the Pictet Scheme”. In summary, PIFSS alleges that Mr. Amouzegar was a key player in the creation and operation of the Pictet Scheme, pursuant to which: (i) between 1999 and 2015, Secret Commissions of some US$26.7 million were paid in return for Mr. Al Rajaan procuring that PIFSS invested into certain funds or investment products; and (ii) the Defendants involved in the Pictet Scheme also assisted in relation to other Schemes pleaded in the POC in the total sum of at least US$294.2 million. Mr. Amouzegar is alleged to have received at least US$3.9 million via the receipt of corrupt secret payments under this Scheme.

Secondly, Section J(2) of the POC pleads “the VP Banking Assistance Scheme”. In summary, PIFSS alleges that, between 2006 and 2012, substantial Secret Commissions were paid pursuant to this Scheme, which also involved the relevant defendants assisting in relation to Mr. Al Rajaan's misconduct more generally. Mr. Amouzegar is alleged to have introduced Mr. Al Rajaan to his friend Mr. Ghittini of VP Bank, and to have benefitted personally from this Scheme, via the receipt of further corrupt secret payments.

The present applications concern only the Pictet Scheme. This Scheme is within the ambit of the Claim Form issued on 21 February 2019, and which was the subject of the extension application and order. By contrast, the VP Banking Assistance Scheme was pleaded under a subsequent (third) claim form. There is no dispute as to service of that particular (third) claim form, and therefore jurisdiction in respect of that claim will not be affected by the outcome of the present application to set aside the extension order. Mr. Amouzegar has proposed that jurisdictional issues which arise in relation to the third claim form should await the determination of jurisdictional issues which he and certain other defendants have raised in relation to the Claim Form issued on 21 February 2019.

Since the Secret Commissions under the Pictet Scheme date back to 1999, there is, and was at the time that the application for an extension was made, a possibility that a limitation defence might be relied upon by a defendant allegedly involved in that Scheme (including Mr. Amouzegar). However, the potential availability of such a defence will obviously depend upon the law which is applicable to the relevant claims, since it is well-known that limitation laws can vary significantly from country to country.

B: Procedural history

The relevant procedural history leading to the extension order of Teare J. is as follows.

The Claim Form was issued on 21 February 2019. It was served on Mr. Al Rajaan on 21 June 2019.

Prior to service of the proceedings on 21 June, a hearing had taken place before Teare J. on 17 June 2019, pursuant to a letter which PIFSS had sent to the Commercial Court seeking directions in the present potential major piece of litigation. By that time PIFSS had issued a second claim form relating to further Schemes, but Mr. Amouzegar was not a defendant to that claim. As a result of that hearing, Teare J. ordered an expedited 1 day hearing to be listed between 3 and 12 July, with one day of court pre-reading. This was for the purposes of hearing or otherwise considering a number of applications which PIFSS intended to issue, namely: (a) for permission to serve the claim forms and other documents in both claims on defendants out of the jurisdiction; (b) for directions, including consolidation of the claims; and (c) for a freezing order and accompanying asset disclosure against Mr. Al Rajaan. Teare J. also ordered that there should be a principal and supporting designated judge assigned to the proceedings, and shortly afterwards I was appointed as the principal judge.

On the same date as serving Mr. Al Rajaan, PIFSS applied (as foreshadowed in the hearing before Teare J.) for consolidation of claims and directions as well as for a freezing order against Mr. Al Rajaan based on, amongst other things (i) a real risk of dissipation; and (ii) PIFSS' proprietary claim.

The hearing of PIFSS' applications came before me on 4 July 2019. Mr. Al Rajaan was represented by counsel, as was the second defendant (Mr. Al Rajaan's wife) who had by then been served. By that time, and as contemplated at the hearing on 17 June, PIFSS had applied for permission to serve the proceedings out of the jurisdiction on a number of defendants. In addition, PIFSS also made an application, in relation to certain defendants (but not Mr. Amouzegar) for an extension of the time for serving the Claim Form.

The orders made at the hearing on 4 July 2019 were in summary as follows.

a) PIFSS' application for freezing relief was adjourned on the basis of interim undertakings given by Mr. Al Rajaan. The full hearing of that application subsequently took place on 15 and 16 October 2019, and resulted in a worldwide freezing order in the sum of US$847.7 million being made against Mr. Al Rajaan: see [2019] EWHC 2886 (Comm). The principal argument advanced in response to the application concerned whether there was a real risk of dissipation, which encompassed an extensive argument concerning material delay in seeking relief.

b) An order was made consolidating the Claim Form presently in issue (CL-2019-000118) with the second claim form (CL-2019-00015), and directing that Consolidated Particulars of Claim be filed and served.

c) Permission to serve out of the jurisdiction was granted in relation to a number of defendants.

d) In relation to certain defendants for whom permission to serve out of the jurisdiction had been granted, an order was made extending the time for service of the claim form on the basis of anticipated delays in effecting service.

e) No order for service out of the jurisdiction was sought in relation to Mr. Amouzegar. This was because he could potentially be served without permission pursuant to CPR 6.33 and Article 6 (1) of the Lugano Convention. At that stage, no order was sought extending the time for service of the Claim Form on him. However, towards the conclusion of the hearing, Mr. Ritchie QC (who appeared then, and now, on behalf of PIFSS) indicated that such an application might need shortly to be made in relation to service of the Swiss defendants because of a concern that “we are quite close to the wire” since the “guillotine falls on 21 August”. The possibility was canvassed of an application for an extension, either on paper or at a hearing, within the next 3 weeks, and I indicated that I was available for a...