The Royal Bank of Scotland Plc v 1) Fal Oil Company Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Gloster, DBE,Mrs Justice Gloster |
| Judgment Date | 20 November 2012 |
| Neutral Citation | [2012] EWHC 3628 (Comm) |
| Docket Number | Case No: 2012 Folio 1260 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 20 November 2012 |
[2012] EWHC 3628 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
London, WC2A 2LL
Mrs Justice Gloster, DBE
Case No: 2012 Folio 1260
Ms. Vasanti Selvaratnam QC and Ravi Aswani Esq (instructed by Clyde & Co LLP) for the Claimant
Stephen Cogley Esq, QC and Emmet Coldrick Esq (instructed by DRG Solicitors LLP) for the Defendants
Hearing dates: 4 th October 2012; 16 th October 2012
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.
Introduction
On 16 October 2012 the following applications were before me:
i) an application by the Claimants, The Royal Bank of Scotland plc ("the Bank") to continue until final judgment the domestic and worldwide freezing orders originally granted by Field J on 26 September 2012 ("the September Order"), and continued by me over an ineffective hearing on 4 October 2012 ("the 4 October Order"), as against the respondents/defendants, FAL Oil Company Ltd ("FAL Oil)", FAL Shipping Company Ltd ("FAL Shipping"), Gulf Success International Shipping Inc ("Gulf Success") and Sea Victory International Shipping ("Sea Victory") (collectively "the Defendants") in an increased sum of US $12.5 million; I shall refer to this application as "the continuation application";
ii) an application by the Bank for an order requiring the Defendants to provide information as to the nature and location of their assets worldwide as had already been ordered by paragraphs 9 and 10 of the September Order; I shall refer to this application as "the disclosure application";
iii) an application by the Defendants to set aside the September and October Orders; I shall refer to this application as "the discharge application"; and
iv) an application by the Defendants to strike out the claim as made by the Bank in its Part Eight claim; I shall refer to this application as "the strikeout application".
The Bank's applications for continuation of the injunctions and disclosure orders are brought pursuant to section 25 of the Civil Jurisdiction and Judgments Act 1982 ("the 1982 Act"), which was extended to non-Brussels Convention countries by the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997 (S.I. 1997 No. 302). Although, before 1982, the court could not grant interlocutory relief when the substantive proceedings were taking place abroad, the Court now has such a power.
Factual and procedural background
The parties
The Bank is a substantial bank with headquarters in Edinburgh and offices located around the world. According to the evidence, it has core bank operating profits of £6.1 billion as at the end of 2011, and is one of the two principal subsidiaries of RBS Group plc, whose total assets at the end of 2011 stood at £1.5 trillion.
The first defendant, FAL Oil, is a company incorporated under the laws of the United Arab Emirates ("UAE"). It has three directors: Abdalla Juma Al Sari (chairman) ("Mr. Abdalla Al Sari"); Majid Abdalla Juma Al Sari (director and 25% shareholder) ("Mr. Majid Al Sari"); and Mohamed Adballa Juma Al Sari (director and 25% shareholder) ("Mr. Mohamed Al Sari"). The two last-named are sons of Mr. Abdalla Al Sari. The remaining 50% of the shares of FAL Oil are held by a company called Investment Group (Pvt Ltd), which is understood to be a vehicle for the investments of the Al Sari family. Mohamed Osman Fadul Ali ("Mr. Mohamed Osman") was at one time General Manager of FAL Oil but the Bank's belief is that he has since been removed from that position.
The second defendant, FAL Shipping, is a company also incorporated under the laws of the UAE. It has three directors: Mr. Abdalla Al Sari (chairman); Mr. Majid Al Sari; and Mr. Mohamed Al Sari. 99.98% of the issued share capital of FAL Shipping, (4,999 shares) are held by FAL Oil, and the remaining one share is held by Mr. Abdalla Al Sari. Mr. Mohamed Osman was at one time General Manager, but the Bank's belief is that he has been removed from that position.
The third defendant, Gulf Success, is a company incorporated under Liberian law. It has, or has had, three directors: Mr. Majid Al Sari (president and 50% shareholder); Mr. Mohamed Al Sari (treasurer and 50% shareholder) and Mr. Mohamed Osman (secretary). According to a voluntary filing made by Gulf Success, it would appear that Mr. Mohamed Osman's office as director and secretary has been terminated. Gulf Success is the registered owner of the oil tanker "Sea Lion".
The fourth defendant, Sea Victory, is a company incorporated under Liberian law. It has, or has had, three directors: Mr. Majid Al Sari (president and 50% shareholder); Mr. Mohamed Al Sari (treasurer and 50% shareholder) and Mr. Mohamed Osman (secretary). According to a voluntary filing made by Sea Victory, it would appear that Mr. Mohamed Osman's office as director and secretary has been terminated. Sea Victory is the registered owner of the oil tanker "Sharjah Pride".
The evidence before me (and in particular the relevant FAL Group website) showed that the Defendants are all part of a loose group of companies called "the FAL Group", which have the same or similar shareholders and directors. According to the website, FAL Oil, is "… a oil major in the Middle East with marketing offices in London and Singapore"; it is said to be
"… the largest independent oil and bunker trader in the Gulf Region with total sales for the year 2009 close to 20,000,000 tonnes of fuel oil gasoil and various other petroleum products …. a major supplier of oil to the Red Sea, the Mediterranean, the Indian Subcontinent, East Africa and occasionally to some regions in the Far East."
It is also said to have
"… enhanced its market presence with the opening of its offices in the UK and Singapore. This has helped FAL to venture in to new and prospective markets."
FAL Shipping manages a fleet of over 30 tankers owned by the FAL Group; it also apparently arranges the chartering of both its own vessels and those of other owners, and carries cargoes being traded by FAL Oil, or bunkers being supplied by FAL Oil.
Two FAL Group companies are companies which have been incorporated in the UK: FAL Oil (UK) Limited ("FAL Oil (UK)") and FAL Energy UK Limited ("FAL Energy UK"), and have offices in London. They are not defendants to the current proceedings. A Mr. Nicholas Colquhoun-Denvers ("Mr. Colquhoun-Denvers"), is the company secretary and General Manager of both FAL Oil (UK) and FAL Energy UK. The annual return of FAL Oil (UK) as at 19 May 2012 shows that Mr. Abdalla Al Sari, Mr. Majid Al Sari, and Mr. Mohamed Al Sari are directors of FAL Oil (UK) and that Mr. Majid Al Sari and Mr. Mohamed Al Sari each holds 45% of the issued share capital with the remaining 10% being held by women members of the family. The relevant filings at Companies House show that the directors of FAL Energy UK are Mr. Mohamed Al Sari and Mr. Majid Al Sari and that 999 shares in its issued share capital are owned by FAL Energy Ltd (another FAL Group company) and one is owned by Mr. Mohamed Al Sari. According to his business profile, Mr. Colquhoun-Denvers styles himself as "Head of the London representative office for a Middle East based, privately owned, Oil and Shipping Group".
Events leading up to the application for an injunction
By a loan agreement dated 4 April 2006, the Bank granted a $28 million loan and revolving credit facility to Gulf Success ("the Sea Lion Facility") to assist in the purchase of the Sea Lion. The facilities were secured by a First Preferred Liberian Mortgage over the vessel dated 10 April 2006, and guaranteed by both FAL Oil and FAL Shipping pursuant to guarantees dated 4 April 2006. According to the Bank's evidence the Sea Lion Facility was granted "on the basis of the financial strength of FAL Oil and the fact that the Defendants are beneficially owned by the Al Sari family".
By a loan agreement dated 26 October 2009, the Bank granted a $8 million loan facility to Sea Victory ("the Sharjah Pride Facility") to assist in the purchase of the Sharjah Pride. The facilities were secured inter alia by a First Preferred Liberian Mortgage over the vessel dated 30 October 2009, a Second Preferred Liberian Mortgage over the Sea Lion also dated 30 October 2009, and guaranteed by both FAL Oil and FAL Shipping pursuant to guarantees dated 26 October 2009. According to the Bank's evidence the Sharjah Pride Facility was also granted "on the basis of the financial strength of FAL Oil and the fact that the Defendants are beneficially owned by the Al Sari family". At the same time the Sea Lion Facility was amended and restated pursuant to an agreement dated 26 October 2009 and the Bank obtained further security for that facility in the form of a Second Preferred Liberian Mortgage over the Sharjah Pride. Further security for both facilities was also obtained through Cross Guarantees issued by Sea Victory and Gulf Success respectively dated 26 October 2009.
The loan agreements and the guarantees in all cases were subject to English governing law and exclusive jurisdiction provisions; however the exclusive jurisdiction clauses expressly reserved the right to the Bank (but not to the other parties) to bring proceedings in the courts of any country other than England concurrently with or in addition to proceedings in England or without commencing proceedings in England. In addition to the exclusive jurisdiction clauses, the guarantees contained the...
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