Ras Al Khaimah Investment Authority v Azima

Was the quantification in 2008 of HeavyLift’s contribution to the joint venture fair

What was the content of the representations to RAKIA in 2013 to 2015? ............... 24

Which party made the representations? ..................................................................... 32

Was the HeavyLift Investment Representation false?............................................... 34

Was Mr Azima aware that the HeavyLift Investment Representation was false? .... 35

Did RAKIA rely on the HeavyLift Investment Representation? .............................. 36

Loss ........................................................................................................................... 39

The Claimant, the Ras Al Khaimah Investment Authority (“RAKIA”), is the investment authority of Ras Al Khaimah (“RAK”), one of the seven Emirates making up the United Arab Emirates (“the UAE”). The Defendant, Farhad Azima, is a US businessman based in Kansas City, Missouri who has been involved in the aviation industry for many years.

RAKIA was represented at the trial by Hugh Tomlinson Q.C. and Edward Craven. Mr Azima was represented by Tim Lord Q.C. and Hugo Leith.

Between 2007 and 2016, Mr Azima became involved in various actual and proposed commercial joint ventures with RAKIA and other RAK entities. They included a joint venture between his company HeavyLift International Airlines FZC (“HeavyLift”) and RAK Airways for the establishment of a pilot training academy in RAK, the intended sale of a luxury hotel in Georgia owned by one of RAKIA’s subsidiaries and a proposed joint venture involving the provision to RAK of aerial intelligence, surveillance and reconnaissance services.

On 2 March 2016 Mr Azima and HeavyLift entered into a settlement agreement with RAKIA in respect of claims made by Mr Azima and HeavyLift against RAKIA in connection with the pilot training academy joint venture (“the Settlement Agreement”). Pursuant to the Settlement Agreement RAKIA paid Mr Azima the sum of $2.6 million.

RAKIA advances three claims against Mr Azima in these proceedings. The first is that Mr Azima fraudulently misrepresented the amount of HeavyLift’s investment in the training academy joint venture and that this misrepresentation induced RAKIA to enter into the Settlement Agreement and pay Mr Azima $2.6 million (“the HeavyLift Investment Misrepresentation Claim”). RAKIA is claiming part of this sum by way of damages under this head.

RAKIA’s second claim is a further claim for fraudulent misrepresentation inducing the Settlement Agreement. It is based on a provision in the Settlement Agreement by which Mr Azima warranted and confirmed that he had at all times acted in good faith and with the utmost professional integrity towards RAKIA, RAK Airways and any other RAK entity and would continue to do so. RAKIA alleges that this provision (“the Good Faith Clause”) constituted a representation which Mr Azima knew was false because of his wrongful conduct in connection with various episodes occurring between 2011 and 2015 (the “Good Faith Misrepresentation Claim”).

RAKIA is claiming by way of damages for the Good Faith Misrepresentation Claim the whole of the sum of $2.6 million which it paid to Mr Azima under the Settlement Agreement.

RAKIA’s third claim is for $1,562,500 by way of damages for an unlawful means conspiracy arising in connection with the intended sale of the luxury hotel in Georgia in 2011 - 2012.

A fourth pleaded claim, for damages for breach of warranty based on the Good Faith Clause in the Settlement Agreement, was not pursued by RAKIA in its closing submissions, RAKIA recognising that, even if breach of warranty were proved, it would only have a claim for nominal damages.

Mr Azima challenges RAKIA’s three remaining claims on two main grounds. First, he contends that the claims should be struck out or dismissed on the ground that, in bringing the claims, RAKIA is relying on confidential emails that RAKIA obtained through its unlawful hacking of his email accounts. Mr Azima has brought a counterclaim for damages resulting from what he alleges was RAKIA’s hacking of his emails. That counterclaim has been stayed pending the trial of RAKIA’s claims against Mr Azima.

Second, Mr Azima denies the claims made against him on their merits. He denies making the alleged representations, denies fraud and denies any reliance by RAKIA on the representations. He contends that the litigation is politically motivated, the culmination of a targeted attack on him, pursued because of his refusal to take RAKIA’s side in a bitter fight with Dr Khater Massaad, a former senior government official who RAKIA alleges was guilty of large scale embezzlement.

RAKIA does not dispute that, in bringing the claims, it is relying on hacked emails but it contends that it came across the hacked material innocently on publicly accessible websites where it had been put by anonymous hackers. It contends that, in any event, the hacking allegations provide no defence to RAKIA’s claims in this action and that, even if the Court found that the RAKIA was responsible for the hacking, the public interest in the Court reaching the correct decision on the basis of all the available evidence should prevail.

Dr Massaad was from 2005 until 2012 RAKIA’s chief executive officer. Dr Massaad was one of the most senior public officials in RAK and was entrusted with the management and control of RAK’s national and international investments. As RAKIA’s chief executive officer Dr Massaad had effective control over all of RAKIA’s affairs, operations, assets and funds and he was directly involved in certain of the transactions which have given rise to RAKIA’s claims in these proceedings. Dr Massaad and Mr Azima were friends.

RAKIA claims that in around late 2012 it discovered that Dr Massaad had perpetrated systematic and wide-ranging frauds against RAKIA and other RAK entities. Subsequent investigations undertaken by the Government of RAK are said to have established that between around 2005 and 2012 Dr Massaad and his associates engaged in an unlawful conspiracy to misappropriate monies and otherwise cause losses exceeding $2 billion. Dr Massaad fled the UAE in 2012 and was subsequently tried and convicted in absentia of an array of fraud, bribery and embezzlement offences.

In 2015 and 2016, Mr Azima acted as Dr Massaad’s representative in without prejudice settlement discussions with RAKIA concerning the return of misappropriated assets. Those discussions ultimately came to nothing and no agreement was reached between RAKIA and Dr Massaad.

Mr Azima first met Dr Massaad in around 2006 or 2007 in order to discuss the expansion of RAK’s aviation activities. Mr Azima was introduced to RAK Airways. Dr Massaad and Mr Azima had a shared interested in aviation and they became friends. Mr Azima was also introduced to Sheikh Saud, the current ruler of RAK (“the Ruler”) who was at that time the Crown Prince. There is a peripheral issue as to the closeness of the relationship between the Ruler and Mr Azima. Mr Azima contends that they were friends, a contention denied by the Ruler. Mr Azima exhibits an email exchange of New Year good wishes. From time to time, Mr Azima gave assistance to the Ruler in the form of effecting introductions to various contacts of his. My impression is that their relationship was one of mutual convenience rather than friendship.

Dr Massaad introduced Mr Azima to the management of RAK Airways, the national airline of RAK and discussions ensued about the possibility of establishing a training academy for pilots in RAK. These discussions led in 2007 to the establishment of a joint venture between HeavyLift, an aviation company established and owned by Mr Azima, and RAK Airways for the creation and operation of a pilot training academy at RAK International Airport (the “Training Academy JV”).

The parties agreed, amongst other things, that HeavyLift would provide and maintain a working DC-8 flight simulator and that RAK Airways would construct an appropriate facility at RAK International Airport to house the simulator. A RAK Free Zone company, RAK-HeavyLift Training Academy FZ-LLC, was incorporated on 11 April 2007 for the purpose of implementing and running the Training Academy JV. The directors of the company were Dr Massaad and Mr Azima.

The Training Academy JV was not a success. Although the simulator was eventually certified by several civil aviation authorities and was therefore able to provide some commercial training services, the partners to the joint venture were in conflict on various issues from an early stage.

Mr Azima’s evidence was that RAK Airways failed to arrange to provide an adequate electrical power supply or air-conditioning (which was necessary for the operation of the simulator), a suitable building with the structural capacity and height needed to accommodate the additional simulators that had been contemplated and that it had made an unwarranted demand for rent which HeavyLift had no option but to pay. The Training Academy JV ceased operations in 2010.

The failure of the Training Academy JV later gave rise to the claim for compensation which was the subject of the Settlement Agreement. Mr Azima’s evidence was that the Training Academy JV’s failure was attributable to RAK Airways. This was not admitted by RAKIA.

A Georgian subsidiary of RAKIA, Ras Al Khaimah Investment Authority Georgia

Mr Azima received two payments of $400,000 and $1,162,500 on 25 October 2011 and 18 January 2012 respectively and, on the day that he received the latter of those payments, Mr Azima made a payment of $500,000 to Dr Massaad. Mr Azima’s case is that he was entitled to both payments under a referral agreement with RAKIA (“the Referral Agreement”) as commission for introducing to RAKIA three Iranians who were potential buyers of the Hotel (“the Potential Buyers”) and that the payment to Dr Massaad was in return for a share in an aircraft owned by Dr Massaad. This version of events is disputed by RAKIA which contends that the Referral Agreement is a sham, that Mr Azima did not introduce the Potential Buyers, that the two payments which he received were misappropriations and that his payment to Dr Massaad was a bribe.

There is a further dispute concerning an agreement between the Potential Buyers and Mr Azima under which he was to receive a 10% interest in the Hotel in exchange for a nominal payment of $10 “and other good and valuable consideration”. Mr Azima claims that RAKIA and the Ruler were aware of and approved this arrangement. This is disputed by the Ruler and RAKIA.

Following the signing of the Memorandum of Understanding between RAKIA Georgia and Eurasia Hotel Holdings Limited (a company beneficially owned by the Potential Buyers), the sale of the Hotel proceeded to a different company owned by them but was never completed. Mr Azima ceased to be involved in the sale transaction. The timing of, and reasons for, Mr Azima’s withdrawal are disputed.

HeavyLift’s claim for compensation from RAKIA arising out of the Training Academy JV was first made on 2 September 2013 when Ray Adams acting on behalf of Mr Azima sent a letter to the then Chief Executive Officer of RAKIA, Jim Stewart, concerning “unresolved” matters regarding the Training Academy JV.

A few months before the claims were first made, Mr Azima and Mr Adams arranged for the drafting of what purported to be a copy of a Joint Venture Agreement dated 12 April 2007 (the “Joint Venture Agreement”) including RAKIA as a guarantor of RAK Airways’ obligations. The circumstances in which the Joint Venture Agreement was produced is considered further at paragraphs 123 – 128 below.

HeavyLift’s claim for compensation was not dealt with in 2013 and Mr Azima did not press the matter for the next 22 months. The claim was resurrected in July 2015. Between July 2015 and March 2016 there were correspondence and discussions regarding potential claims that HeavyLift had against RAKIA arising from the Training Academy JV. During the course of those discussions, it was represented that HeavyLift had invested $2.6m in the assets of the Training Academy JV including expenditure of $1,726,000 on the simulator. This representation is alleged to have been made fraudulently and has given rise to the HeavyLift Investment Misrepresentation Claim. The alleged misrepresentation is also relied on by RAKIA as wrongful conduct on the part of Mr Azima contrary to the Good Faith Clause in the Settlement Agreement.

In late 2014 and 2015 plans were made by consultants acting for Dr Massaad to organise a media and public relations campaign which was intended to damage the reputation of RAKIA, RAK and other RAK entities. RAKIA contends that Mr Azima played a leading role in the planned campaign and that the campaign was malicious and intended to spread false stories about human rights violations in RAK. This episode is relied on by RAKIA as giving rise to further wrongful conduct on the part of Mr Azima, contrary to the Good Faith Clause; RAKIA’s allegations are disputed

By late 2014 investigations were under way within RAK into the actions of Dr Massaad and his associates.

In January 2015 Stuart Page, a private investigator, was engaged by the Ruler to investigate what the Ruler feared was a plot between a member of his family and Dr Massaad aimed at destabilising his rulership.

In March 2015 Mr Page provided the Ruler with a report entitled RAK Project Update (“the Project Update”) which was mainly concerned with Dr Massaad’s activities but which also described how Mr Azima was managing a team of advisers in the US, hired by Dr Massaad, who were planning to spread allegations about human rights issues in RAK; their campaign had not yet been made public. Mr Page’s agents who compiled the report said that they would be able to gather intelligence on the campaign team in order to monitor their progress and “attempt to contain or ruin their plans”.

In around April 2015, the Ruler told Mr Buchanan that he wanted Mr Buchanan and other assistants to “target” Mr Azima. The Ruler directed his associates to bring charges against Mr Azima. The Ruler's associates discussed meeting to "coordinate our attack" on Mr Azima and Dr Massaad but persuaded the Ruler not to pursue this plan at that time.

In or around July 2015, the Ruler instructed another of his assistants, Naser Al Bustami, to "go after" Mr Azima. Mr Azima’s case is that, just as Henry II’s question “Will no one rid me of this turbulent priest?” led to the murder of Thomas Becket, so the Ruler’s directions to “go after” Mr Azima led in due course to the hacking of Mr Azima’s emails, whether or not this was the Ruler’s express instruction.

A ‘phishing’ email is an email that seeks to trick the recipient into clicking on a hyperlink taking the user to a webpage that the criminal controls, or into downloading malicious software. A ‘spear-phishing’ email is a more targeted and sophisticated form of a ‘phishing’ email which indicates that the sender has purposely targeted the deception at that individual (as shown by the fact that the email has been constructed to include material pertinent to the recipient, or otherwise to be of more interest to them). The fact that the spear-phishing email contains material of particular interest to the targeted recipient makes it more likely to be effective in that the recipient is more likely to open the deceptive email and any further links it may contain.

It is common ground that in October 2015 Mr Azima received a number of spear- phishing emails. Mr Azima’s case is that these spear-phishing emails led at the time to the hacking of his confidential email accounts, that the hacking was organised by agents acting on behalf of RAKIA and that consequently by late 2015 RAKIA had accessed his confidential emails and the evidence which it now relies on in support of its claims. RAKIA denies that it had anything to do with the spear-phishing emails and does not admit that the spear-phishing emails led to the hacking of Mr Azima’s email accounts.

On 29 December 2015 a document called the “View from the Window” was drawn up by Andrew Frank, an employee of Karv Communications, a PR firm engaged by RAK. The document referred to Mr Azima as “having orchestrated, if not fully participated in numerous fraudulent activities” and to “companies being set up with Iranian nationals”. Mr Azima contends that this document shows that RAKIA had by this stage obtained access to Mr Azima’s confidential emails and data. This is disputed by RAKIA.

On 2 March 2016 RAKIA, HeavyLift and Mr Azima entered into the Settlement Agreement. The Recitals to the Settlement Agreement read as follows:

“(A)

By an agreement dated 12 April 2007, HeavyLift and RAK Airways PJSC (“RAK Airways”) entered into a joint venture (the “Joint Venture Agreement”) to establish an Aircraft Simulator and Training Facility at Ras Al Khaimah International Airport, located in Ras Al Khaimah, UAE (“RAK”);

(B)

RAKIA guaranteed the performance of RAK Airways under the Joint Venture Agreement;

(C)

HeavyLift, acting through Mr Azima, has asserted that RAK Airways owes HeavyLift for investments HeavyLift made in the joint venture pursuant to the Joint Venture Agreement;

(D)

RAKIA does not agree that there is any legal basis for any such claim;

(E)

Mr. Azima has recently provided negotiation assistance to RAKIA on an informal basis which RAKIA recognises and appreciates;

(F)

Each Party has the greatest of respect for the other Parties, and wishes to resolve all outstanding issues relating to the Joint Venture Agreement.”

Clause 1.1 required RAKIA to pay the sum of $2.6 million in settlement of any claims that Mr Azima or HeavyLift might have had against RAKIA or another RAK entity:

“RAKIA will pay HeavyLift the sum of $2,600,000 to resolve all claims which Mr Azima or HeavyLift may have against it or any other RAK Entity as further detailed in paragraph 3.1.”

RAKIA’s case is that it was deceived into entering the Settlement Agreement by fraudulent misrepresentations made by and on behalf of Mr Azima regarding the amount of HeavyLift’s investment, that the settlement sum of $2.6m was intended to

In exchange for the payment of $2.6m, Mr Azima and HeavyLift agreed to relinquish any claims they had against RAKIA or any other RAK entity. Clause 3.1 of the Settlement Agreement stated as follows:

“This Settlement Agreement is in full and final settlement of all claims, in any jurisdiction, whether or not presently known to them or to the law that Mr Azima or HeavyLift or any of its owners has had, shall or may have against RAKIA, RAK Airways or any other RAK Entity.”

Clause 3.2 of the Settlement Agreement, the Good Faith Clause, provided as follows:

“Mr Azima and HeavyLift each expressly and separately warrants and confirms to RAKIA that he/it (respectively) has at all times acted in good faith and with the utmost professional integrity and will continue in the future to act in good faith and with the utmost professional integrity towards RAKIA, RAK Airways and any other RAK Entity.

The payment made to HeavyLift pursuant to this Settlement Agreement is made in reliance on this express warranty and confirmation.

For the purposes of this Sub-clause, “acted in good faith” and “act in good faith” each means (1) participating in conduct which meets the standard expected of reasonable business persons in the context and includes acting in ways which were or are, or are likely to be, non- detrimental to the interests of RAKIA or any other RAK Entity, and (2) not encouraging others to participate in the conduct which fails to meet the standard expected of reasonable business persons in the context or acting in ways which were or are likely to be detrimental to the interests of RAKIA or any other RAK Entity and (3) not participating in any illegal activity.

In this Agreement “RAK Entity” shall mean any entity in which RAKIA or the Government of RAK has a shareholding interest (irrespective of where that entity may be incorporated).”

Clause 4 provided that the Settlement Agreement did not constitute an admission of liability or wrongdoing by either party. Clause 7 was a governing law and jurisdiction clause:

“This Settlement Agreement and any dispute or claim arising out of, or in connection with, it or its subject matter or formation (including, without limitation, any contractual or non-contractual disputes, claims or obligations) is governed by and shall be construed in accordance with English law and the Parties submit to the exclusive jurisdiction of the courts of England and Wales.”

Mr Azima’s case is that the Settlement Agreement was a device cynically entered into by RAKIA which insisted on the inclusion of the Good Faith Clause and an English jurisdiction clause, while at the same time harbouring a conviction, informed by surveillance and other covert sources, that he was not acting in good faith. He states that in doing so, RAKIA sought to use Mr Azima in its dispute with Dr Massaad: it believed the Settlement Agreement gave it leverage over Mr Azima, insurance to recover the funds paid (which were modest compared to the $2 billion it was seeking to recover from Dr Massaad), and possibly the means of turning Mr Azima against Dr Massaad.

Pursuant to the terms of the Settlement Agreement, on 7 April 2016, RAKIA paid the settlement sum of $2.6m to Mr Azima.

Alongside the negotiations concerning the Settlement Agreement, in late 2015 and early 2016 RAKIA was also engaged in discussions with Mr Azima and other individuals with whom he was collaborating regarding a proposed joint venture for the provision of aerial intelligence, surveillance and reconnaissance services (“ISR services”) (“the Proposed ISR JV”). RAKIA relies on alleged wrongful conduct in connection with the Proposed ISR JV in support of its Good Faith Misrepresentation Claim.

The proposed partners for the Proposed ISR JV were RAKIA and Global Defence Services Corporation (“GDS”), a company of which Mr Azima was a director and shareholder. RAKIA alleges that Mr Azima made misrepresentations to RAKIA in the course of the negotiations and failed to correct other false representations made by the individuals with whom he was collaborating. This is disputed by Mr Azima.

The negotiations concerning the Proposed ISR JV ultimately came to an end around June 2016 and it did not proceed.

Between the autumn of 2015 and July 2016 Mr Azima represented Dr Massaad in negotiations with RAKIA concerning RAKIA’s entitlement to redress. During the course of those negotiations, Mr Azima attended meetings (which took place on a without prejudice basis) with Mr Buchanan and (in some instances) RAKIA’s legal representatives at Dechert LLP (including Mr Neil Gerrard) on various dates in 2015 and 2016.

On 16 July 2016, a without prejudice meeting took place between Mr Buchanan, Mr Gerrard and Mr Azima. This meeting took an acrimonious turn. There is an issue as to precisely what was said. According to Mr Azima, Mr Gerrard threatened him that if Dr Massaad could not be made to agree to a settlement, then RAKIA would pursue Dr Massaad, and Mr Azima would be rendered “collateral damage”. This is disputed by RAKIA.

The dispute with Dr Massaad was not resolved. RAKIA admits to creating websites attacking Dr Massaad a few days after the July 2016 meeting and shortly after those sites were created, in early August 2016, blogging websites began appearing denigrating Mr Azima as a “fraud” and a “scammer” and linking to websites containing Mr Azima’s confidential emails which appeared at around the same time.

There is an issue as to how these blogging web sites came to the attention of RAKIA. RAKIA’s case is that they were discovered by a journalist, Majdi Halabi, who drew them to the attention of Mr Page, by whom Mr Halabi had been allegedly asked to look out for references to Mr Azima on the internet. Mr Page is alleged to have communicated the information to Mr Gerrard and Mr Buchanan. Mr Azima contends that this version of events is fictitious, that Mr Halabi played no part in the discovery of the blogging web sites and that RAKIA’s account of the discovery of the blogging websites is designed to conceal RAKIA’s role in the hacking.

RAKIA subsequently instructed an independent third party, Northern Technology Inc. (“NTi”) to download the material from these links and others which were subsequently discovered and which RAKIA contends had been posted by unknown hackers. The material was downloaded by NTi in August and September 2016.

RAKIA’s case is that the subsequent analysis of the internet data established that, contrary to the Good Faith Clause, Mr Azima had in fact committed multiple acts of serious wrongdoing towards RAKIA and other RAK entities and that, as a result of that discovery, the present action was commenced on 30 September 2016.

On Mr Azima’s case, RAKIA already had access to the hacked data by late 2015 so that the downloading process in August/September 2016 was a charade.

On the same day as these proceedings were commenced (30 September 2016) Mr Azima brought proceedings against RAKIA in the US District Court for the District of Columbia alleging that RAKIA had hacked his computers. RAKIA challenged the proceedings on jurisdictional grounds. Its challenge failed in the US District Court but on 18 June 2019 the US Court of Appeals allowed RAKIA’s appeal and dismissed the US proceedings.

Mr Azima amended his defence in these proceedings on 18 July 2018 to allege that RAKIA was responsible for hacking his computers and emails and publishing their contents on the Internet and on 8 August 2019 was given permission to add a Counterclaim for damages and other relief arising out of the alleged hacking which was stayed pending final judgment on RAKIA’s claim.

RAKIA served witness statements from twelve witnesses, nine of whom gave oral evidence. The evidence of two of the witnesses, Richard Garcia and Jessica Gray, who were involved in the downloading of data from the BitTorrent sites, was uncontroversial and admitted by Mr Azima without cross-examination.

The Ruler of RAK, Sheikh Saud bin Saqr Al Qasimi, provided a witness statement responding to Mr Azima’s first witness statement but did not attend the hearing. RAKIA submitted that for the Ruler to attend the hearing or appear by video link would be incompatible with this constitutional role and status as sovereign ruler. It is regrettable that the Ruler chose not to attend the hearing or give evidence by video link as there were a number of issues on which he could have given relevant evidence. As the Ruler’s witness statement was not tested by cross-examination, I do not propose to attach significant weight to it.

Jamie Buchanan was RAKIA’s main witness. Between September 2014 and December 2019 when he took retirement, Mr Buchanan was the chief executive of

Counsel for Mr Azima submitted that Mr Buchanan gave dishonest evidence on a number of issues relating to Mr Azima’s hacking clam. In relation to one matter, namely Mr Buchanan’s claim to have been mistaken, until shortly before the trial, as to the authorship of the Project Update, which I address at paragraph 266 below, I consider that Mr Buchanan’s evidence was disingenuous. I was not persuaded that Mr Buchanan’s evidence was dishonest in other respects. He struck me as a generally reliable witness who gave his evidence in a measured way and was prepared to concede a number of points adverse to RAKIA’s case that were put to him in cross examination.

Neil Gerrard is a former policeman and a partner in the firm of Dechert LLP which was instructed to assist with the investigation into Dr Massaad’s alleged fraudulent activities which it has continued to work on to the present time. His witness statement dealt with his engagement by RAK, the meeting he had with Mr Azima in July 2016 and the events in August 2016 surrounding the downloading of the hacked material. He was cross-examined about his involvement with the questioning of detainees within RAK, in particular Karam Al Sadeq and Shahab Izadpanah. Allegations that Mr Gerrard had attempted, on behalf of RAK, to extort money from Mr Izadpanah and had offered Mr Izadpanah and Mr Al Sadeq to drop all charges against them if they confessed to charges implicating Dr Massaad were put to Mr Gerrard who denied them in forthright terms. On the basis of the material before me, I am not in a position

Counsel for Mr Azima submitted that Mr Gerrard gave dishonest evidence on key issues. He was also criticised for not referring to Mr Page and the Project Update in his witness statement. In my view, Mr Gerrard’s witness statement should have dealt with the Project Update which was a clearly relevant document and one which, as he accepted in cross-examination, was of concern to him when it was produced because it referred to the threat of a press campaign to smear RAK and its Ruler with human rights allegations. I do not, however, regard the omission to deal with the Project Update, or the other criticisms made of his evidence, as leading to the conclusion that I should treat Mr Gerrard as dishonest.

Stuart Page, also a former policeman and now the Chairman and majority shareholder of a business providing security and surveillance services, dealt in his witness statement with his engagement in RAK to assist with the investigations into Dr Massaad and the discovery of the hacked material. Counsel for Mr Azima submitted that Mr Page was a dishonest witness who lied about a number of matters. I consider that Mr Page was an unsatisfactory and unreliable witness. As set out in greater detail in the context of the hacking claim, his witness statement was misleading in relation to two significant matters. First, his witness statement implied that he did not produce written reports for the Ruler on his investigations whereas in fact he did so on a regular basis. Second, his witness statement said that he first came across the name of Mr Azima in early 2016 whereas in it was in fact a year earlier. His evidence in connection with the discovery of the hacked material was both internally inconsistent and at odds with the contemporary documents. I have concluded that it would be unsafe to rely on any evidence from Mr Page that was not corroborated by some other source.

Amir Ali Handjani is on the board of RAK Petroleum and was involved in discussions with Mr Buchanan and Mr Bustami regarding both the money that Mr Azima said was owed to him and matters involving Dr Massaad. Mr Azima criticised him as an evasive witness giving further dishonest evidence. Mr Handjani was criticised for his contention that the Ruler’s instruction to “go after” Mr Azima was in part prompted by a demand for payment of $8 million by Mr Azima. I do not regard the evidence on this point to be so clear cut as to justify the inference that he gave deliberately false evidence on it.

Naser Al Bustami sits on the boards of a number of companies owned by the government of RAK and is one of the Ruler’s advisers. He was criticised for an email proposing that the Government of Georgia be enlisted to support RAKIA’s claims against Dr Massaad. It is not clear from the email what assistance Mr Bustami had in mind and his oral evidence was that the assistance sought would be subject to Dr Massaad being convicted in a fair trial in a court of law. Even accepting that the email was improper, I do not consider that it supports the inference that Mr Bustami was a dishonest witness.

Majdi Halabi gave evidence in relation to the discovery of the hacked material. As set out later in this judgment, I came to the conclusion that his evidence was inherently implausible and not credible.

Stuart Leach ran the specialist litigation division at the public relations agency Bell Pottinger at the relevant time. Dave King is the Chief Executive of Digitalis, an online reputation and digital risk management firm, who were engaged by Bell Pottinger. I consider that they were both reliable witnesses who were seeking to assist the court.

Nicholas del Rosso gave evidence as to his involvement in retaining NTi to download the Hacked Material from the BitTorrent sites. His evidence was uncontroversial.

For Mr Azima, there were three witnesses. First there was Mr Azima himself. Second there was Mr Adams, a close friend and confidant of Mr Azima who deals with the accounts and paperwork for Mr Azima’s business, who provided a short witness statement expressing agreement with Mr Azima’s first witness statement. Finally there was Professor Donald Fowler, a friend of Mr Azima, who did not appear at the trial but provided an unchallenged witness statement describing an assignment that he had carried out for the Ruler at Mr Azima’s request.

Mr Azima is a businessman with more than forty years’ experience in all aspects of aviation, the airline industry and logistics. He has served as chairman of various airlines in different parts of the world. I am told that he has never before faced an allegation of fraud. RAKIA submitted that Mr Azima and Mr Adams were dishonest witnesses. After hearing evidence from Mr Azima and Mr Adams, I reached the conclusion that their evidence in opposition to RAKIA’s claims was frequently inconsistent with the contemporaneous documents and inherently implausible. One example was their evidence concerning the retrospective drafting of the Joint Venture Agreement, which I deal with at paragraphs 123 to 128 below. I consider that Mr Azima and Mr Adams, in giving evidence, were more concerned to support Mr Azima’s case than to assist the court with an honest recollection of the true facts.

The two expert witnesses, in the field of Computer Forensics and Investigations, were Christopher Tarbell (for Mr Azima) who is Director of Cyber Security and

Mr Azima made wide ranging criticisms of RAKIA’s documentary evidence and invited me to draw inferences against RAKIA on the ground that it had destroyed relevant documents.

Mr Buchanan’s disclosure statement referred to an incident at the Covent Garden Apple store on 16 October 2016 when a substantial number of emails had been inadvertently deleted from his iPhone by an Apple employee. In witness statements filed for the purposes of an interim application before HHJ McCahill QC, it was explained that Mr Buchanan had attended the Apple store because of a problem in sending emails from his phone. On 22 October 2016, six days later, Mr Buchanan was informed of the need to preserve documents, whereupon he informed Dechert of the possible deletion of emails. Steps were then taken to address the situation by restoring the deleted emails but these were only partially successful.

It was submitted for Mr Azima that it was “very likely” that Mr Buchanan deliberately destroyed emails. It was said that Mr Buchanan’s account of the loss of his emails was inherently implausible, given that an employee would not have worked on his iPhone without first ensuring that there was a back-up of data. My attention was also drawn to the absence of corroborative evidence from the witness who Mr Buchanan said for the first time in cross-examination was with him at the time of the incident. Furthermore, according to Mr Buchanan’s evidence, there were no deletions as a result of the incident on 16 October 2016 from his inbox or its sub folders. It was said that this could not be reconciled with the number of emails (more than 20%) that had disappeared from his inbox. Practically all of Mr Buchanan’s “sent” items are unavailable.

Mr Buchanan was cross-examined about the emails missing from his inbox as well as about correspondence with his solicitors in August 2017 when he was asked about his emails and failed to mention the Apple shop episode. Mr Buchanan was adamant that he had not used the Apple shop episode as cover for prior deletions of potentially damaging material. I accept Mr Buchanan’s evidence on this point and conclude that he had not deliberately destroyed any emails.

It was submitted on behalf of Mr Azima that there were other “huge gaps” in the documentary evidence. I have addressed certain specific criticisms of RAKIA’s documentation later in this Judgment. I was not persuaded that RAKIA had adopted a policy of deliberately destroying documents or withholding documents that should have been disclosed.

RAKIA’s case, shortly stated, is as follows.

Mr Azima’s response to this claim was, in summary, as follows.

RAKIA’s claim therefore gives rise to the following main issues:

Was the quantification in 2008 of HeavyLift’s contribution to the joint venture fair and honest?

From early 2008, HeavyLift had sought to prepare a set of joint financial accounts with RAK Airways, for submission to HeavyLift’s auditors,

The balance sheet showed total assets contributed by HeavyLift of $2,281,883 including an amount of $1,725,959 in respect of “Simulator (includes delivery, installation & certification)” and an entry for $450,000 in respect of “Training Aids”.

At around the same time, a more detailed spreadsheet was prepared by Mr Adams. That spreadsheet (which was not sent to RAKIA or RAK Airways) contained a tab (entitled “Simulator”) in respect of the costs associated with the acquisition, storage, installation and certification of the simulator. This showed how the entry of $1,725,959 in the preliminary balance sheet had been calculated. According to the spreadsheet:

Mr Azima and Mr Adams gave differing and unsatisfactory explanations regarding the “Investment” of $832,500. Mr Azima stated that it represented “time, material, equipment, money.” When it was pointed out to him that all of those expenses were recorded separately elsewhere in the spreadsheet, Mr Azima said that he could not address the numbers and that the numbers were produced under the supervision of Mr Adams. Mr Adams initially stated that the investment reflected the fact that Mr Azima had issued an invoice for this amount:

“Q. So what does it mean by “investment”?

A. It means that Mr Azima owned 100% of HeavyLift and he contributed that value to HeavyLift.

Q. In what sense did he contribute it, Mr Adams?

A. He wrote a bill of sale, he gave an invoice.”

When it was pointed out to Mr Adams that at this point in time Mr Azima had not produced any invoice for the simulator, he asserted that the $832,500 was an “agreed value”.

Mr Azima’s evidence was that a $1 million valuation of the simulator had been discussed and agreed between HeavyLift and Dr Massaad on behalf of RAKIA, after the simulator was purchased but before it was installed.

There are no contemporaneous documents that support the existence of this alleged agreement. There are no references to such an agreement in any of the communications between HeavyLift and RAK Airways during the lifetime of the Training Academy JV, including communications specifically concerning the value of the simulator. There was no reference to the alleged agreement in the discussions with RAKIA in 2015 culminating in the conclusion of the Settlement Agreement. The only document to contain any reference to this alleged agreement is a draft letter to Dr Massaad dated 24 January 2008 but there is no evidence that this letter was ever actually signed by Mr Azima and no documentary evidence that it was actually sent to Dr Massaad or to any other employee of RAK Airways or RAKIA.

When asked during cross-examination why none of the contemporaneous communications with RAK Airways contained any mention of an agreement that the simulator would be valued at $1 million for the purposes of valuing HeavyLift’s contribution, Mr Azima claimed that Dr Massaad had told him “don’t discuss that with anybody” and had said that “if there’s a problem, come and see me”. Mr Azima also claimed that, “There’s an email to that effect” although no such email had been disclosed. Mr Azima did not explain why Dr Massaad would have instructed him not to talk to anyone at RAK Airways about what was (on Mr Azima’s case) a perfectly valid and straightforward agreement between the two joint venture partners.

Taking this evidence into account, I am not persuaded that there was any agreement with RAK Airways or RAKIA that the simulator would be valued at $1 million. I consider that the draft letter was probably created by Mr Adams to support the entry in the accounts but which did not accord with the true position.

Following Mr Adams’ submission of the preliminary balance sheet, on 19 March 2008 Mr P.B. Hegde, an employee in the Finance Department of RAK Airways, emailed Mr Adams requesting the provision of further documents concerning HeavyLift’s investment in the training academy, including “Copy of the Agreement and Invoice for the purchase of Simulator from MK Airlines” and “Copy of the Agreement and Invoice for the purchase of Training Aids”.

Mr Adams forwarded Mr Hegde’s email to Mr Azima and stated: “Here is the email from Hegde. We need to have a clear strategy on this.”

This request for documents prompted Mr Adams and Mr Azima to produce a number of backdated documents designed to provide support for the figures shown in the balance sheet in respect of the simulator and the training aids.

I accept RAKIA’s contention that the backdated letter was a misleading document. It was not written (or sent) on the date shown on its face and Mr Azima did not provide

“additional consideration” of $832,500 (or any additional consideration) for the purchase of the simulator. Mr Adams accepted during cross-examination that this letter was backdated although he insisted that the document was not misleading, on the basis that it was perfectly acceptable to backdate accounting documents for an audit. Mr Azima made a similar statement in his evidence.

Mr Adams was asked to explain why, if Mr Azima and RAK Airways had agreed that the simulator would be valued at $1 million, Mr Adams did not simply inform RAK Airways of this, rather than creating a backdated letter regarding the payment of “additional consideration”. Mr Adams could not answer this, merely stating, “I don’t know”.

Also on 22 March 2008, Mr Adams produced a backdated invoice which purported to show that Mr Azima had “SOLD” the simulator to HeavyLift on 31 October 2007 for a “UNIT PRICE” of $1 million and that HeavyLift had “advanced” the amount of $167,500 to Mr Azima with the result that HeavyLift owed $832,500 to Mr Azima. None of this information was true.

Although none of these points are disputed by Mr Azima, he nevertheless asserts that the invoice was not misleading. In his witness statement, Mr Azima says that there “was nothing improper about this invoice” which “was intended to reflect the substantial value that had been added to the simulator (which was not operational at the time it was acquired) by HeavyLift, my wholly owned company”. It was submitted on behalf of Mr Azima that it was legitimate for Mr Azima to produce the invoice and book the $1 million value as this reflected the work and expertise contributed by Mr Azima.

I disagree. If it was true that HeavyLift had done work which enhanced the simulator’s value, the honest way of reflecting that increase in value would not involve the creation of a backdated invoice purporting to record a sale of the simulator from Mr Azima to HeavyLift that never took place.

On 3 March 2008 Mr Adams sent an email to Mr Azima stating: “I think we will get our $1MM capital value on the DC8 sim approved by the auditors but we will need a desktop valuation from Jeremy to confirm. Please can you arrange.” Jeremy Leggett was an old friend of Mr Azima. Mr Azima replied a short while later copying in Mr Leggett, the owner of Aerospace Management Capital Limited (“AMCL”) and stating: “Dear Jeremy, In your court!”. Mr Leggett replied seven minutes later stating: “Fine just have ray advice [sic] what he needs exactly”.

Two days after that initial exchange, Mr Adams emailed Mr Leggett stating, “I think the installed and certified value should be in the $1.75MM-$2.0MM range. Need ASAP.” Mr Leggett responded by copying in his son, Rupert Leggett, and asking him to “go on the internet and find out something about the simulator” because “we need to do a valuation for him and I need some story line”.

On 10 March 2008, Mr Adams emailed Mr Azima stressing that, “The valuation on the sim is going to be critical for the audit and also to give us fuel with Hegde. I am not sure he is our friend”. Mr Adams’ evidence was that the “fuel with Hegde” meant

“To give him a basis on which we booked it”.

On 18 March 2008, Rupert Leggett emailed Mr Adams asking “what the revenues are like” for the simulator and adding that he hoped “to draw up something to a level which you are satisfied with”. Mr Adams responded by providing revenue projections which bore no relation to the revenue actually generated by the simulator. On 19 March 2008, numerous alternative drafts of the simulator valuation were sent to Mr Azima and Mr Adams. The final valuation stated that the “Total Asset Value” of the simulator was $1,475,000.

Mr Hegde’s reaction was that the AMCL valuation was “quite unreasonable considering the age (exactly 40 years old) of the simulator, its condition and utilization in the next 6 years, Current market value of the same should not be more than $100,000 to $150,000, provided it is in a good condition, serviceable for another 6 years. Therefore, we would like to get this simulator re-assessed by some professional and reputable firms.”

It was submitted on behalf of Mr Azima that the appraisal provided by AMCL was independent and reliable, on the basis that:

Mr Adams relied on the valuation as the basis for a statement to PwC that the

“simulator transferred during the year to the subsidiary in the revalued amount of USD 1,000,000 is valid and supported by the valuation report done by an independent assessor”.

In my judgment, the AMCL valuation was not independent or a reliable appraisal of the simulator’s value. Jeremy Leggett was a friend and AMCL unquestioningly adopted Mr Adams’ projections regarding the projected revenues and costs of the simulator. Mr Azima and Mr Adams were extensively involved in reviewing and proposing changes to drafts of the valuation.

In support of the entry for $450,000 in respect of “Training Aids” in the 2008 accounts, Mr Adams produced a further backdated invoice which purported to show that Mr Azima had sold DC8 Training Aids to HeavyLift on 31 December 2007 for that amount.

Mr Adams sent the draft invoice to Mr Azima, who responded with various suggested changes which appear to have been intended to make the invoice look as authentic and plausible as possible. Mr Adams made the requested changes later the same day.

Mr Adams also created third party invoices which purported to show that HeavyLift had paid $450,000 to purchase training aids from Blosser Consulting on 31 December 2007. On 24 March 2008, Mr Adams sent an email to George Blosser stating: “Per your discussion with Farhad, here are 2 more invoices that he would like from you in order to clarify things. Please send marked “Paid” at your earliest convenience.”

Mr Azima and Mr Adams did not refer to the training aid invoices in their witness statement. In his oral evidence Mr Azima admitted that, contrary to the terms of the backdated invoices, neither he nor HeavyLift had made a specific payment of $450,000 to acquire training aids from Blosser Consulting but he claimed for the first time that training aids had been acquired as part of a larger transaction or package and that an unidentified person had evaluated the package and come up with a number which they inputted. When pressed on whom the alleged “package” had been purchased from, Mr Azima said that he could not remember but shortly afterwards, he claimed that he could now recall that the transaction was with Mr Blosser.

Mr Azima acknowledged that on 31 March 2008 he drafted an email to a Mr Lopez enquiring about the possibility of purchasing training aids for the Training Academy JV. He was unable to explain why he had done this in circumstances where (on his case) HeavyLift had already purchased training aids from Blosser Consulting some three months earlier.

Mr Adams, for his part, stated that, he knew nothing about an independent valuation of the training aids. Instead, he said that the figure of $450,000 “came off the invoice from George Blosser” i.e. the invoice that Mr Adams had requested Mr Blosser to produce and approve. In the light of this, Mr Adams was forced to concede that, insofar as HeavyLift’s audited accounts were based on the representation that the training aids had been independently valued at $450,000, the accounts were based on a false premise.

It was submitted on behalf of Mr Azima that Blosser’s allocation of $450,000 was fair and reasonable and that RAKIA has failed to adduce any evidence to show that the training aids did not have a value of some $450,000 so it cannot make out a case based on the difference between cost and value.

I do not accept that submission. RAKIA’s case was that the accounts were misleading in so far as they represented that HeavyLift had actually paid $450,000 for the training aids when they had not in fact done so. It was not necessary for RAKIA to go on to establish that the value of the training aids was less than the represented cost.

Following his request in the email of 24 March 2008 for a re-assessment of the value of the simulator by a professional and reputable firm, and further details of the training aids, to which there had been no response, Mr Hegde sent a further email as follows:

“In the absence of any response to my below e-mail, we believe, you have no further clarification to our queries. This matter was referred to our Managing Director - Dr. Khater Massaad and he was apprised of the present condition of the Simulator. In view of the above, we do not wish to continue our partnership in this simulator.”

There is an issue between the parties as to whether PwC audited the Training Academy JV as well as HeavyLift. An email dated 2 July 2015 from Ms Afsaneh Azadeh, a longstanding close associate and senior employee of Mr Azima, records that, according to HeavyLift’s auditor Mr Kadiri, there was no record of an audit of the joint venture ever having been carried out. However the audit document produced by PwC states in terms that the audit was conducted of the Training Academy JV for the year ended 31 December 2008, as well as of HeavyLift. I proceed on the basis that there was an audit of the Training Academy JV.

It was contended on behalf of Mr Azima that PwC were made aware of, and were content with, the basis on which it was alleged that the simulator and the training aids had been supplied to the joint venture; that is, at a value that was agreed and then reflected in invoices rather than at the value of an acquisition cost paid out to third parties in arms’ length transactions. This was said to be obvious from the fact that the PwC audit booked the value of the simulator and the training aids as arising from related party transactions.

I do not accept this submission. The fact that PwC booked the value of the simulator and training aids in the consolidated accounts for the year ended 31 December 2008 as arising from related party transactions does not mean that PwC was aware or agreed that those assets would be valued on a false basis. I am not satisfied that there was any agreement on the part of RAKIA or RAK Airways that the simulator would be valued at $1 million. The way in which Mr Azima and Mr Adams produced invoices for the simulator and training aids, which did not reflect the terms of an actual transaction, and the way in which the valuation report was presented as an independent report were not fair or reasonable, in my view.

The fact that Mr Azima and Mr Adams had not behaved honestly towards RAK Airways and PwC is further confirmed by an exchange of emails concerning certain entries in the management accounts for the Training Academy JV. Mr Adams informed Mr Azima that paying $250,000 for generator rent and diesel was “a reasonable compromise if all of our financial engineering on the academy is accepted which it appears to have been”. Mr Azima replied that he had no recollection of agreeing to this, to which Mr Adams responded: “We will agree to disagree. When you start believing our financial engineering we are in trouble. I think you need to change writers.”

In my view, RAKIA are justified in treating this exchange as an acknowledgment that Mr Azima and Mr Adams had presented false and misleading financial information about the Training Academy to RAK Airways.

I consider that the way in which Mr Adams and Mr Azima accounted for HeavyLift’s contribution to the joint venture, including the cost of the simulator and the training aids, in 2008 was not reasonable or honest.

RAKIA’s case is that, through communications sent to RAKIA between September 2013 and November 2015, Mr Azima repeatedly represented that HeavyLift had invested a total of $2,685,000 into the Training Academy JV, which included expenditure of approximately $1,726,000 in respect of the flight simulator as described in the documents provided to RAKIA.

It was submitted for Mr Azima as follows.

Before considering the correspondence, it is necessary to refer to the production in 2013 by Mr Adams and Mr Azima of the backdated Joint Venture Agreement,shortly before HeavyLift launched its compensation claim. RAKIA does not contend that this document misstated the parties’ legal obligations (including RAKIA’s guarantee of RAK Airways’ obligations). I infer that RAKIA has not been able to find an original joint venture agreement. RAKIA nevertheless submits that the fact that Mr Azima and Mr Adams created the document more than 6 years later and then gave untrue evidence about its genesis is relevant to an assessment of their credibility as witnesses.

The sequence of events was as follows:

In cross-examination Mr Azima and Mr Adams denied retrospectively drafting, amending and backdating the Joint Venture Agreement in 2013. Instead, they claimed that Mr Azima was always in possession of a copy of the agreement that was signed on 12 April 2007, and that between May and August 2013 he had been asking Mr Adams to send him a series of drafts of the agreement so that he could make sure that what he had was consistent with this, in order to ensure that the signed copy he had was “the same one and there’s no others in existence”.

According to Mr Adams, the revisions sent in 2013 had all occurred in 2007, rather than in 2013. He claimed that he was only in possession of “drafts” of the agreement, and that Mr Azima had asked him to send the drafts. He was unable to explain what conceivable purpose Mr Azima would have had in asking him to send several non- final and superseded drafts of an agreement of which (according to both men) Mr Azima already had a signed final version. When asked why he had described the version sent on 27 May as the “final clean copy” but had subsequently sent Mr Azima further amended versions of the agreement several weeks later (all of which Mr Adams claimed had been produced in 2007) Mr Adams replied unconvincingly that: “I was obviously in error”.

I consider that the explanations given by Mr Azima and Mr Adams of these communications made no sense and were untruthful. If Mr Azima had simply asked Mr Adams to send him “all” previous drafts of the agreement in his possession (as Mr Adams claimed), which is inherently unlikely, they would not have been sent over a period of nearly two months in an evolving sequence. Moreover if the drafts were really prepared in 2007 one would also expect to see them and emails exchanging them in 2007 in Mr Azima’s disclosure. None of these documents were disclosed other than as attachments to emails in 2013.

I agree with RAKIA’s submission that the overwhelming inference from the documentary evidence is that Mr Azima and Mr Adams retrospectively drafted the Joint Venture Agreement in the summer of 2013. Mr Azima and Dr Massaad (who by then had no authority to enter agreements on behalf of RAKIA) then signed that retrospectively drafted and backdated document on board Mr Azima’s yacht on 25 August 2013 and thereafter misrepresented to RAKIA that this document was the original document that had been signed on 12 April 2007.

The relevant correspondence concerning HeavyLift’s claim for compensation is as follows:

The central issue is whether the communications sent to RAKIA in the period 2013 to 2015 concerning HeavyLift’s claim for compensation are to be construed as representations as to the amounts actually expended by HeavyLift or whether they should be construed more loosely as referring to valuations of HeavyLift’s contribution to the joint venture.

I have come to the conclusion that the communications did amount to a representation that HeavyLift had actually spent a total of $2.685 million in making its contribution to the Training Academy, including expenditure of approximately $1.726 million in respect of the flight simulator.

This is for the following reasons:

In short, the relevant statements expressly referred to the amount of HeavyLift’s “investment”, “substantial investment”, “total investment” and “net investment” in terms that were clearly a representation about the total costs that HeavyLift had incurred through its contribution to the Training Academy JV, not the value of its contribution.

RAKIA’s case is that the HeavyLift Investment Representation was made by Mr Azima (and individuals acting on his behalf). Although only one of the communications pleaded by RAKIA was actually sent by Mr Azima (namely, the email dated 10 November 2015 referred to at paragraph 129.14 above) RAKIA contends that the pleaded communications collectively constituted a single representation made by Mr Azima. In support of this case, RAKIA contends as follows:

In response, Mr Azima contends as follows:

In my judgment, Mr Azima’s contention that the HeavyLift Investment Representation was made by HeavyLift and not by him personally is artificial and lacking in substance.

I conclude that the HeavyLift Investment Representation was made on behalf of Mr Azima.

RAKIA’s case is that, contrary to Mr Azima’s representations to RAKIA in 2015 that the simulator had cost HeavyLift upwards of $1 million, HeavyLift in fact acquired the flight simulator in 2006 for just $167,500 as evidenced by the signed sale agreement with MK Airlines dated 7 August 2006 and the email from amir@HeavyLift.com to Mr Azima dated 10 June 2007 which contained a table stating that the “Cost of DC8 Simulator (MK Airlines)” was “[$]167,500”.

Mr Azima contends that it would then be necessary for RAKIA also to prove that the out of pocket costs actually incurred by HeavyLift on the simulator and training aids were less than represented.

I disagree. The communications regarding the simulator were clearly referring to the cost of the simulator itself, rather than the costs of the simulator plus ancillary services or equipment. In any event, the costs in respect of equipment and services provided in connection with the installation of the flight simulator fail to support a claim that the costs of acquiring and installing the simulator were more than $1.7 million. For example, according to an email sent to Mr Azima on 10 June 2007, in addition to the “Cost of DC8 Simulator (MK Airlines)” of “$167,500.00” HeavyLift had incurred total costs (including the cost of acquiring the simulator) in the sum of $291,788.78. In contrast, according to HeavyLift’s preliminary accounts for the year ended 31 December 2007, HeavyLift had spent a total of $725,959 in respect of all simulator freight and storage charges, outside contractors, salaries and benefits, travel and accommodation charges, legal and administrative charges (more than $185,000 of

Accordingly, even taking into account the costs of ancillary services and equipment, the total costs incurred in relation to the installation of the flight simulator were nowhere near the amount represented to RAKIA by Mr Azima.

Furthermore, it is now common ground that HeavyLift did not make a payment of $450,000 in respect of training aids. There is in fact no evidence that HeavyLift incurred any expenditure on this.

Was Mr Azima aware that the HeavyLift Investment Representation was false?

Mr Azima must have been aware that the HeavyLift Investment Representation was false. Mr Azima had at all material times been a director of both HeavyLift and RAK-HeavyLift Training Academy FZ-LLC. In his evidence he confirmed that throughout the operation of the Training Academy “Mr Adams…always…sen[t] me a copy of everything”. As a result, he knew what expenditure HeavyLift had incurred through its investment in the Training Academy JV. Mr Azima therefore knew that HeavyLift’s expenditure on the joint venture was nothing like the amounts represented to RAKIA in 2015 and 2016.

Mr Azima knew in particular that the simulator had been purchased by HeavyLift from MK Airlines for just $167,500 and that he had not personally paid anything towards the cost of its acquisition. He therefore knew that the simulator had not cost$1 million to acquire and was aware that the total costs of acquiring, installing and certifying the simulator were nowhere near $1.726 million.

Third, Mr Azima knew that the invoices from him in the sum of $1 million for the simulator and $450,000 for the training aids had been backdated and did not reflect actual purchases. It is noteworthy that none of these invoices were supplied to RAKIA during the 2015 negotiations.

In order to succeed with its claim for misrepresentation, RAKIA must establish that it relied on the relevant representation.

RAKIA’s case on reliance is as follows:

Mr Azima denies that RAKIA has established reliance. He submits as follows:

In order for RAKIA to succeed with its claim for damages for misrepresentation, it must establish a causal link between the representation and the decision to enter the Settlement Agreement. It is not necessary to prove that the misrepresentation was the sole or even predominant cause of the decision to enter the contract but it is necessary to show that misrepresentation contributed to the decision to contract; Edgington v Fitzmaurice (1885) 29 Ch D.

The evidence establishes that Mr Buchanan relied on the HeavyLift Investment Representation in deciding that RAKIA should enter the Settlement Agreement. The payment of $2.6 million to resolve all claims which Mr Azima or HeavyLift may have against it or any other RAK entity was calculated by him as the amount of HeavyLift's total investment in the Training Academy JV, as represented by Mr Azima. Mr Buchanan was unable independently to verify what, if anything, was properly owing to Mr Azima, “The fact that Mr Azima was willing to stand behind the figures on

Mr Buchanan then recommended to the Ruler that RAKIA should enter the

The fact that the Ruler was not personally aware of the HeavyLift Investment Representation does not negate the reliance placed on the representations by RAKIA via Mr Buchanan. If a misrepresentation is made to an agent who relies on it to make a recommendation to the decision-making principal but does not pass the representation on, the principal will nevertheless be entitled to relief for misrepresentation; see Chitty on Contracts 33^rd Edition, paragraph 7-032; Brown v InnovatorOne Plc [2012] EWHC 1321 at paragraph 885; OMV Petrom v Glencore International AG [2015] EWHC 666 at paragraph 139.

For reasons set out below in relation to the hacking claim, I was not persuaded that RAKIA entered into the Settlement Agreement for ulterior motives, negating reliance on the HeavyLift Investment Representation.

In short, the evidence establishes that RAKIA did rely on the HeavyLift Investment Representation.

Mr Azima contends that, to the extent that RAKIA’s contention of a misrepresentation is upheld, the damages to which it is entitled should be limited to the difference between the costs that the Court finds HeavyLift did incur, and the level of costs that the Court finds were represented as having been incurred.

The victim of a fraudulent misrepresentation is entitled to be put in the position it would have been in had the misrepresentation not been made (Doyle v Olby (Ironmongers) Limited [1969] 2 QB 158). On this footing, I consider that RAKIA would be entitled to total damages of $2.6 million. This is on the basis that, had Mr Azima not fraudulently misrepresented the total cost of HeavyLift’s investment in the Training Academy JV then RAKIA would not have entered into the Settlement Agreement and paid the sum of $2.6 million to Mr Azima in the erroneous belief that this equated to the costs actually incurred by HeavyLift in making that investment. Even assuming in Mr Azima’s favour that damages should be calculated on the different basis he contends for, Mr Azima failed to establish what the actual incurred costs were. However, in its closing submissions RAKIA limited its damages claim to what it says it would have been prepared to pay, had the true position with regard to HeavyLift’s expenditure been explained and that it would therefore give credit for the

It was submitted on behalf of Mr Azima that RAKIA had failed to adduce cogent evidence commensurate with the seriousness of the allegation of fraudulent misrepresentation and that, in seeking to prove its case, RAKIA should not be permitted to take advantage of deficiencies in documentation as it failed to ensure that the joint venture’s records, which were left at the premises of RAK after the termination of the joint venture, were properly maintained.

I am satisfied that the evidence relied on by RAKIA in support of its fraud claim is sufficiently cogent and that RAKIA did not take unfair advantage of a failure to maintain the joint venture’s records (assuming in Mr Azima’s favour that RAKIA was under a duty to so) in advancing the claim.

I therefore conclude that Mr Azima is liable to RAKIA in the sum of $1,733,000 by way of damages for fraudulent misrepresentation in respect of the HeavyLift Investment Misrepresentation.

RAKIA submitted as follows.

Mr Azima’s response is, in summary, as follows.

The Good Faith Misrepresentation Claim therefore gives rise to the following main issues:

Mr Azima denies that Clause 3.2 is a representation. In particular, he contends that:

I reject this submission. There is no requirement for a factual statement to expressly utilise the terminology of “representation”, “represents” etc. in order to constitute a representation for the purposes of the law of misrepresentation. Clause 3.2 of the Settlement Agreement stated that Mr Azima “expressly…warrants and confirms” and that the payment to HeavyLift was made “in reliance on this express warranty and confirmation”.

I accept RAKIA’s submission that the addition of the words “and confirms” and “and confirmation” after “warrants” and “warranty” makes it clear that in addition to providing a contractual warranty, Mr Azima was also making a representation of fact regarding his past conduct and his current intention with respect to his future conduct. The existence of a representation is also demonstrated by the statement that the payment to HeavyLift “is made in reliance on” the “warranty and confirmation”. If there were only a warranty and no representation, then the words “made in reliance on” would make no sense since “reliance” is relevant only to tortious, rather than contractual, liability. The reference to “reliance” suggests that that Mr Azima had made a representation as well as a contractual warranty.

The wrongful conduct alleged by RAKIA is that Mr Azima:

I have already addressed the sixth allegation. The remaining five allegations are addressed in turn below.

Did Mr Azima falsely represent to RAKIA that he had introduced the prospective purchasers of the Hotel to RAKIA?

Mr Azima’s account in his witness statement of how he came to introduce the Potential Buyers to the Hotel transaction was as follows:

“79.

In or around 2010, after Sheikh Saud became ruler of RAK, Dr Massaad told me that the Sheikh was under pressure to liquidate foreign assets and to invest in RAK to improve RAK's economic situation. This was later confirmed to me by Sheikh Saud himself at a subsequent meeting. Dr Massaad asked if I could assist with the sale of a number of overseas assets owned by RAK, including the Sheraton Metachi Palace Hotel in Tbilisi ("the Hotel") and the Poti Free Zone. I understood this to be the implementation of the Sheikh's wishes.

80.

I was told the minimum price that would be accepted for the Hotel

($50,000,000) and asked to introduce potential buyers. Dr Massaad said I

would receive a 5% commission from the gross sale price plus 50% of any amount in excess of US $50,000,000.

81.

1 had previously met with three individuals (Houshang Hosseinpour, Pourya Nayebi and Amir Farsoodeh) in Istanbul, Turkey in around August

2011 to discuss the possibility of helping them to establish an airline in Georgia. They had approached me to assist in this regard because of my expertise and reputation in the airline industry. However, this venture did not ultimately proceed because terms could not be agreed.

82.

Mr Hosseinpour subsequently contacted me in September 2011 and asked if HeavyLift was for sale. It was around this time that he also introduced me to Houshang Farsoodeh, Amir Farsoodeh's brother. Ultimately, Mr Hosseinpour signed a contract to purchase a portion of RAK Trans Holding FZ LLZ's shares in HeavyLift. However, he defaulted on the share sale agreement and the shares were therefore not transferred.

83.

After I was asked to help find buyers for the Hotel, I thought of Mr Hosseinpour, Houshang Farsoodeh and Mr Nayebi ("the Potential Buyers") as candidates. I met with Houshang Farsoodeh and Mr Hosseinpour in Dubai (I met with Mr Nayebi later on as he lived in Georgia). I suggested that they consider buying the Hotel as it would allow natural vertical integration with their intended airline business. They confirmed to me that they were interested. We had several follow-up meetings to discuss various aspects of the sale.

84.

I subsequently introduced Mr. Hosseinpour and Houshang Farsoodeh to Dr Massaad in RAK. I then accompanied them on a trip to Tbilisi, Georgia to show them the Hotel and introduce them to various people there, including Gela `ZaZa' Mikadze, the CEO of Ras Al Khaimah Investment Authority Georgia LLC ("RAKIA Georgia"), the company through which RAKIA owned the Hotel. Mr Mikadze showed us the Hotel and provided the Potential Buyers with financial information in relation to it. Mr Hosseinpour, Houshang Farsoodeh and I stayed at the Hotel for two or three days. Mr Nayebi had a home of his own in Georgia, where he stayed during our trip.

85.

After the trip to Georgia, I returned to Dubai with the Potential Buyers. I then went to RAK and met with Dr Massaad. I told Dr Massaad that the Potential Buyers were interested and that I thought that we could move forward with the transaction. He asked me to proceed and said the Sheikh wanted to complete the sale quickly. We also discussed my commission. Dr Massaad said that he would discuss this with the Sheikh and would have his lawyers send me a written agreement.

86.

Dr Massaad suggested that we meet the Potential Buyers the following day for lunch. Accordingly, Mr Hosseinpour and Mr Farsoodeh came to RAK the next day.

87.

We discussed the final details of the sale over lunch and reached a tentative agreement. Dr Massaad then suggested that I take Mr Hosseinpour and Houshang Farsoodeh to see the Sheikh that afternoon at the palace. I then called the Sheikh and he invited us for tea that afternoon. I accompanied Mr Hosseinpour and Houshang Farsoodeh to the palace, where the Sheikh received us warmly and we discussed the proposed terms of the transaction. Sheikh Saud was pleased with the proposed terms of the sale, and he encouraged the parties to move forward with a speedy purchase process. We also discussed other possible transactions, including the sale of the Poti Free Zone. The Sheikh thanked me for my role.”

Mr Azima exhibited photographs taken of a meeting in Istanbul, the metadata for which indicates that four of them were taken on 26 August 2011, and one of them on 28 August 2011.

Mr Azima relied on a number of contemporaneous documents which it was submitted supported his case that he had referred the Potential Buyers to RAKIA, in particular the following:

Mr Azima submitted as follows:

In support of its case that Mr Azima did not introduce the Potential Buyers, RAKIA relied essentially on the contents of a memorandum dated 1 March 2016 drafted by Mr Adams (“the Adams Memorandum”) which reads as follows (emphasis added).

“Dear Mr. Azima,

As you will recall, during the summer of 2011, we made a number of trips to Poti and Tbilisi, Georgia to explore new business opportunities. We looked at the Port in Poti, the Airport in Poti, the Free Zone in Poti, the Airport in Tbilisi, the Tbilisi Mall, and a number of existing and prospective hotel properties.

Among the hotel properties we reviewed was the Sheraton Metechi Palace (SMP") in Tbilisi. We were informed that a group of businessmen from Dubai were already negotiating the purchase of the SMP [the Hotel] and were introduced to them. Mr. Houshang Hosseinpour, who represented the purchasing group, offered you a minority position in the purchasing group and indicated that an offer needed to be made quickly. I instructed our agents to form a BVI company called Eurasia Hotel Holdings Limited for the purposes of making such an offer and the company was organized on the 11^th of October, 2011.

You, Mr. Hosseinpour, and Rd. Hater Massaad (who represented the Sellers of the SMP) were to act as initial directors of EHHL. However, before any activities were undertaken by the company, we determined during our due diligence that Mr. Housseinpour, and his partners, fell below our standards for doing business. Accordingly, we terminated our discussions with them and they proceeded to purchase the SMP without your involvement.

During the same time, we had formed a Georgian airline and had negotiated the purchase of an aircraft to start the airline operations. Since we had initially formed EHHL, the directors were changed, and we had the company renamed as Eurasia Aviation Holdings Limited, specifically to hold the aircraft, and the name change was recorded on the 17th of February.”

RAKIA further relied on:

Mr Azima’s case concerning the Referral Agreement and the payment which he contends was made pursuant to the Referral Agreement was, in summary, as follows:

It was further submitted on behalf of Mr Azima as follows:

RAKIA contends that the Referral Agreement was a sham. In support of this case it submits as follows:

I have concluded that the Referral Agreement did not reflect a genuine agreement with RAKIA and that it was a sham intended to conceal misappropriation of funds by Mr Azima. I reach this conclusion for the following reasons.

Was the payment of $500,000 made by Mr Azima to Dr Massaad a bribe?

The bribery allegation forms part of RAKIA’s case that the Referral Agreement was a sham.

It is common ground that on 18 January 2012 (the same day as the payment of

In support of its case that the payment was a bribe, RAKIA advances the following contentions.

Mr Azima contends that RAKIA’s case is flawed for the following main reasons.

RAKIA’s case that the payment of the $500,000 was a bribe paid to Dr Massaad rests essentially on the inference to be drawn from the fact that the payment was made on the date Mr Azima received a fee authorised by Dr Massaad to which he had no entitlement and the absence of any convincing alternative explanation for the payment.

In my judgment, the explanation put forward by Mr Azima that the payment was in exchange for a 25% interest in the Hawker 800A aircraft does not stand up to scrutiny in the absence of any documentary evidence showing that Dr Massaad had any interest in the aircraft or documentary evidence of the proposed purchase transaction.

The reasons for the various payments subsequently made by Dr Massaad to Mr Azima are unclear. Dr Massaad at no stage made a repayment of the sum of $500,000. He

The lack of any clear explanation for the subsequent payments made by Dr Massaad does not, however, displace the inference to be drawn from the unexplained payment of $500,000 by Mr Azima which I conclude was a bribe.

RAKIA’s case is as follows:

Mr Azima’s response is, in summary, as follows:

Given my finding that the Referral Agreement was not a genuine agreement, the question of whether Mr Azima’s conduct was in breach of that agreement does not arise.

Had the Referral Agreement been genuine, it would have been necessary to determine whether Mr Azima had provided to RAKIA all relevant information relating to the terms on which he was to acquire an interest in Eurasia Hotel Holdings Limited and acted in good faith and with the utmost professional integrity and in the best interests of RAKIA in any transaction with third parties relating to the Hotel transaction.

The unsigned Transfer Agreement indicates that it was envisaged by Mr Azima and the Potential Buyers that he would acquire a 10% interest in Eurasia Hotel Holdings Limited in return for a nominal payment of $10 together with “other good and valuable consideration”. It is unclear what that additional consideration means although emails between Mr Azima and Mr Hosseinpour on 25 November 2011 indicate that the consideration would be funded as to half by cash and half by finance from the other Potential Buyers.

Mr Azima referred to email correspondence with RAKIA’s in-house and external counsel in which it was recognised that Mr Azima was to be a principal on the buyers’ side. However, there is no evidence of any express disclosure of his intended 10% stake in Eurasia Hotel Holdings Limited or of the terms on which that stake would be acquired. In the absence of documentary evidence, I do not accept Mr Azima’s evidence that the Ruler knew and approved of the proposal that Mr Azima would acquire a 10% interest in the Hotel.

In short, if I had found that the Referral Agreement was a genuine agreement, I would have concluded that the failure by Mr Azima to give full disclosure to RAKIA of his intended interest in the Hotel was in breach of Clause 1 of the Referral Agreement.

Did Mr Azima orchestrate a malicious campaing to damage the reputation, standing and internal stability of the Governmetn of RAK?

RAKIA’s pleaded case is that Mr Azima played a central role in “instigating and coordinating a wide-ranging media and public relations campaign which sought to denigrate the reputation of the Ruler and the governing authorities in RAK, including by deceiving institutions and companies in RAK into entering commercial transactions and entities with individuals involved in serious criminality.”

The alleged misconduct was then said in RAKIA’s response to a Part 18 request to have the following aspects:

Mr Azima submitted that the “campaign claim” is hopeless for, amongst others, the following reasons:

RAKIA’s case therefore gives rise to the following issues:

Mr Azima submits that:

In order to make good its case that Mr Azima procured and promoted false stories in the media, it was incumbent on RAKIA to establish that the stories which it was intended to publish about human rights violations were untrue. It has not done so. It appears that Project Clay intended to draw attention to actual cases of detention and illegality, not fabricated cases. The 2014 Amnesty International Report indicates that there were real grounds for concern about detention procedures in RAK. None of RAKIA’s witnesses were in a position to refute the findings in that report.

The facts relating to the Security Assessment as they appear from the documents before the Court were as follows:

Mr Azima accepted in cross-examination that he made comments on this document. In his witness statement, Mr Azima described the portion of the Security Assessment report that appeared to be a proposal for future work as “naïve and ill-conceived”. There is no evidence that he criticised the assessment at the time it was being prepared. In cross-examination he also claimed (for the first time) that he told Mr Modell to “take…out” all the suggestions of illegal and deceptive activity from the Security Assessment. There is no indication in the contemporaneous correspondence that he gave any such instruction. He sent the final version of the report – including what he now claims is objectionable material – to Mr Behre for use by Dr Massaad.

Mr Azima sought to justify his involvement in these matters on the basis that Mr Modell was retained to “investigate allegations of RAK’s substantial human rights abuses which Dr Massaad was concerned about, particularly absentee trials which he wanted to avoid happening to him”. This description of Mr Modell’s work is not borne out by the Security Assessment which did not propose an investigation into human rights abuses but advocated a media campaign highlighting the absence of fundamental legal rights in RAK as a means of embarrassing the RAK authorities and compelling the UAE authorities “to rein in RAK aggression against the Client.”

There is moreover no evidence that Mr Azima actually carried out any investigation into human rights abuses. Although he claims to have spoken to Mr Al Sadeq when he was in prison and to his wife, Mr Azima does not claim to have investigated whether Mr Al Sadeq’s claims were true or to have commissioned anyone else to do so.

When the allegation of involvement in the campaign was added to the Particulars of Claim by amendment in July 2018 Mr Azima did not seek to defend his role on the basis that he was “investigating human rights” but, rather, denied that he had “any role” in such a campaign.

Mr Azima also engaged in discussions with Mr Modell about using other possible “high risk, high impact” tactics against the “enemy” including possible “Black Bag” methods. Mr Azima admitted during cross-examination that this was a reference to the use of “Illegal operation[s]”.

Mr Azima’s evidence, which I accept, was that the media campaign proposed in the Security Assessment was never put into effect and that no adverse publicity resulted from it. RAKIA has not attempted to prove that there actually was any media campaign or stories (false or otherwise) in the media at all. As Mr Azima said in cross-examination:

“A. That was not my intent. Nothing happened. There's -- no propaganda was made; no article was written to the best of my knowledge. Nothing happened. The campaign never got started.”

In summary, Mr Azima oversaw the commissioning of and payment for the Security Assessment report drafted by Mr Modell which included a plan for drawing attention to human rights’ abuses in RAK as a means of inflicting significant financial and reputational damage against various RAK institutions and companies. Mr Azima provided comments on the Security Assessment but did not object to any of the proposals which it contained. The Security Assessment was not in the event implemented.

In late 2015 and early 2016 RAKIA engaged in discussions with Mr Azima and other individuals with whom he was collaborating regarding a proposed joint venture for the provision of ISR services. The proposed partners for the proposed ISR were RAKIA and Global Defence Services Corporation (“GDS“). GDS was specifically formed for the purpose of the Proposed ISR JV. Mr Azima was a major shareholder and director of GDS which operated from the same office address in Kansas City as Mr Azima’s company ALG Transportation.

RAKIA alleges that Mr Azima was aware that the joint venture proposal submitted by GDS to RAKIA grossly overstated the value of the aircraft that would be acquired by the joint venture SPV, and that, if RAKIA had participated in the joint venture on the terms proposed by Mr Azima, it would have contributed approximately $20 million more than would have been fair to acquire its interest in the joint venture. It alleges that during the course of the discussions and negotiations concerning the Proposed ISR JV in late 2015 and early 2016 Mr Azima made five deliberate false representations to RAKIA and failed to correct other false representations made by the individuals with whom he was collaborating.

Mr Azima submits that:

RAKIA’s case is that Mr Azima misrepresented the value of the aircraft that were to be acquired by the Proposed ISR JV knowing that the valuation was substantially misleading.

The facts are as follows:

Attached to the written proposals were detailed technical specifications for the King Air ISR aircraft and Falcon aircraft. Those specifications showed that all four aircraft were already equipped with ISR technology and systems. The specifications also stated that the “Price/Unit Cost” of each of the King Air aircraft was “$17 million (aircraft + communications equipment modifications)” and that the “Original Unit Acquisition Cost” and “Total Acquisition Cost” of each of the two Falcon aircraft was $9,332,626.

RAKIA’s case is that these references to the “Price/Unit Cost” and “Acquisition Cost” were unambiguous statements concerning the amount that GDS would actually pay to acquire the aircraft, and not (as Mr Azima asserted in his oral evidence) “budgetary number, generic numbers”. RAKIA alleges that the true value of the aircraft was in fact just $6m. It relies on various documents not shown to RAKIA at the time, for example:

Accordingly, rather than being worth a total of $52.6 million, the four King Air and Falcon aircraft were in fact worth a total of just $6 million – about a tenth of what was represented by Mr Azima to RAKIA in the written proposal. At no point during the negotiations did Mr Azima disclose to RAKIA that GDS was planning to acquire the aircraft for just $6 million.

Mr Azima contends, in summary as follows.

In my judgment, the December proposal was clearly representing to RAKIA that the values ascribed to the four aircraft were the acquisition costs and not the value of the aircraft once ISR equipped and operated by SR professionals. Mr Azima’s case that the amounts specified in the December proposal included the cost of ISR equipping is contradicted by contemporaneous documents.

On 25 January 2016, Mr Lepper sent an email to Mr Buchanan which stated as follows:

“Please do not take my directness as disrespect, apologies if it was taken as such. I understand you are under controls of protocol and due diligence. As you will read below and was firmly explained to me, we are as well. We are a licensed weapons dealer with many restrictions and oversight controls. The attachment document officially outlines the required course of action for the TAA and legal guidelines which we must follow. […]”

RAKIA contends as follows.

Mr Azima’s case is in summary as follows:

In my judgment, RAKIA’s case in relation to this alleged misrepresentation is lacking in substance. For the reasons advanced by Mr Azima, I am not satisfied that the statement in the email of 26 January 2016 that “we are a licensed weapons dealer” was made on behalf of Mr Azima, or that it was referring to GDS. I also accept the unchallenged evidence of Mr Azima that it was made clear to Mr Buchanan that it would be necessary for GDS to obtain the necessary authorisiations.

Alleged representation that the Technical Assistance Agreement was produced or approved by the US State Department

Mr Lepper’s email dated 25 January 2016 attached a document which purported on its face to be issued by the Directorate of Trade Controls at the US Department of State (“the TAA Document”). In particular:

RAKIA’s case is as follows:

Mr Azima’s response is as follows:

In my judgment, this complaint lacks substance. The provenance of the TAA Document is unclear but there is no evidence that Mr Azima had any hand in the authoring of that document or the covering email from Mr Lepper. It is not established that Mr Azima was aware that the designation of the TAA Document as official was incorrect. Moreover, given that it is not suggested that the contents of the TAA Document were incorrect, the misrepresentation, such as it was, was in sufficiently material to found a claim pursuant to Clause 3.2 of the Settlement Agreement.

Alleged representation that Mr Lepper was working to obtain the approval of the US Government for GDS’ participation in the Proposed ISR JV

On 11 February 2016, Mr Lepper sent an email to Mr Buchanan in which he stated as follows: “Thank you for your passport documents and I will forward accordingly. In reference to the meeting agenda, I was just informed of the meeting a few days ago myself. I am still working the approval processes from the USG. As you know working with any government entity it may take some time and I will keep you informed of the process.”

RAKIA contends as follows:

Mr Azima’s response was as follows:

In my judgment, the representation made by Mr Lepper was incorrect and may well have been intended to give a misleading impression to RAKIA of the steps taken towards obtaining US Government approval. However, given that those acting on Mr Azima’s side of the negotiations appear to have made clear soon after the email was sent that the process of seeking authorisation had not yet started, I regard the misrepresentation as insufficiently material to found a claim under Clause 3.2 of the Settlement Agreement.

RAKIA alleges that Mr Azima repeatedly represented to RAKIA that the US Government was supportive of the Proposed ISR JV and was interested in becoming a customer of its services.

Mr Azima’s response is, in summary, as follows:

In my judgment, RAKIA has failed to establish that Mr Azima misled it, or permitted it to be misled, with regard to the status of the US Government as a potential client. Some of Mr Azima’s comments may have overstated the level of commitment but the note of the meeting on 16 February 2016 made clear that the US Government was not committed to being a customer.

RAKIA’s case is that by virtue of the six instances of Mr Azima’s misconduct summarised at paragraph 166 above the Good Faith Representation in the Settlement Agreement was false, in that Mr Azima had not at all times acted in good faith and with the utmost professional integrity in his dealings with RAKIA or other RAK entities and that Mr Azima must have known about his own misconduct.

Based on my conclusion that, of the six instances of misconduct, four have been proved as alleged, I am satisfied that the Good Faith Representation was false to Mr Azima’s knowledge.

The remaining two allegations, concerning the planning media campaign and the negotiations for the Proposed ISR JV, were proved in part. Mr Azima contends that his conduct in relation to those two matters, even if proved as alleged, would not have constituted misconduct such as to falsify the Good Faith Representation. Though not necessary for the purposes of my decision, I address these contentions briefly below.

With regard to the media campaign, Mr Azima contends as follows:

I do not accept these contentions. It seems to me that the media campaign, although not aimed primarily at RAKIA or any RAK entity, would, if successful, have been likely to deter foreigners from doing business in RAK and thereby harmed the interests of RAK commercial entities. The activities contemplated by the Security Assessment are not fairly characterised as “efforts to investigate and expose unlawful detention practices.” The activities included the use of “Scams, fraud and deceptive partnerships”, and to “ensconc[e] known criminals…such as Latin American drug cartel figures, in official RAK development or business deals”, in order to “lead RAK authorities to lose large sums of money”, and by plotting to “Orchestrat[e] business deals with disreputable individuals” in order to provide a factual basis for stories about “money laundering in the RAK, tax evasion and even terrorist financing”. Mr Azima’s involvement in the Security Assessment was such that, as he must have known, he had not acted in good faith.

Mr Azima contends that the conduct alleged as regards the ISR JV, even if proved, was not contrary to the Good Faith Representation on the ground that it is common for misunderstandings, ambiguities or inaccuracies to arise in the course of the discussions which later fall away as the discussions continue. In my view, Mr Azima’s misconduct cannot be excused on this basis. The misrepresentations which I have found were made were not in good faith and were intended to result in GDS making a dishonest profit.

I therefore conclude that RAKIA has established that, as Mr Azima must have known, the Good Faith Representation was false.

The evidence establishes that both Mr Buchanan and the Ruler relied on the Good Faith Representation. Whilst the Ruler and Mr Buchanan may have harboured suspicions about Mr Azima, it does not follow that they did not rely on the Good Faith Representation. The fact that a representee harboured suspicions regarding the honesty of a representor does not negate inducement (see Zurich Insurance Co plc v Hayward [2017] AC 142 at [18]-[20] (Lord Clarke) and [67]-[71] (Lord Toulson)).

The Ruler stated that as far he was concerned the purpose of the Settlement Agreement was to settle the claims brought by Mr Azima and to obtain assurance from him that he had acted in good faith towards RAKIA and RAK more generally. It is implicit in this statement that the Ruler relied on the Good Faith Representation. For reasons set out later in this judgment, I reject Mr Azima’s case that RAKIA knew about the contents of the hacked material and were inducing Mr Azima to enter the Settlement Agreement as a trap.

Loss

The damage sustained by RAKIA as the result of its reliance on the Good Faith Representation is the sum of $2.6 million paid pursuant to the Settlement Agreement.

RAKIA’s case is that Mr Azima’s actions in connection with the intended sale of the Hotel gave rise to a further cause of action, namely the tort of unlawful means conspiracy. It contends that:

Mr Azima’s response, apart from denying the alleged misconduct, is that the conspiracy claim fails on the ground that illicit payments preceded the creation of the Referral Agreement. The Referral Agreement was drafted many months after the illicit payments were made but that is not a valid objection to the claim. RAKIA’s case is not that the Referral Agreement caused the illicit payments to be made but that it is evidence of the earlier conspiracy which was causative of the illicit payments.

In my view, it is to be inferred from the fact that Dr Massaad received a bribe out of the illicit payments (paragraphs 182 – 185 above), and from the involvement of Mr Sadeq in the retrospective drafting of the Referral Agreement (paragraphs 180.2 to 180.17 above) that Mr Azima had agreed at least with Dr Massaad and probably with Mr Al Sadeq as well that the illicit payments would be made.

It follows that Mr Azima is liable to pay the sum of $1,562,500 to RAKIA by way of damages.

There is no dispute that RAKIA’s case against Mr Azima is based on evidence obtained as a result of the hacking of Mr Azima’s confidential emails. Mr Buchanan said that until September 2016, when the hacked material came to light, he had not thought of Mr Azima as implicated in Dr Massaad’s frauds. He then changed his mind after seeing the hacked material. Mr Azima’s case is that the hacking was carried out by RAKIA. RAKIA denies any involvement in the hacking and claims to have obtained the data from publicly available sources innocently.

Mr Azima submits that, if the Court concludes that RAKIA hacked Mr Azima’s emails, it should strike out RAKIA’s claim as an abuse of process on the basis that its process is being used by RAKIA in a manner that would bring the administration of justice into disrepute. In Hunter v Chief Constable of the West Midlands Police

More recent authority has confirmed that the Court has power to strike out a claim which would be an abuse of the Court’s process. In Summers v Fairclough Homes [2012] 1 WLR 2004, Lord Clarke held as follows:

“The language of the CPR supports the existence of a jurisdiction to strike a claim out for abuse of process even where to do so would defeat a substantive claim. The express words of CPR r 3.4(2)(b) give the court power to strike out a statement of case on the ground that it is an abuse of the court's process. It is common ground that deliberately to make a false claim and to adduce false evidence is an abuse of process…“

In addition, CPR 32.1 confers on the Court the power to exclude evidence which would otherwise be admissible to be exercised in light of the overriding objective. The exercise of the discretion involves balancing, on the one hand, the public interest in doing justice on the basis of all available evidence and, on the other hand, the public interest in deterring breaches of the law entailed in the collection of the evidence, taking into account all relevant circumstances. As the Court of Appeal explained in Jones v University of Warwick [2003] EWCA Civ 151 [2003] 1 WLR 954 in which evidence had been obtained unlawfully and in breach of the claimant’s right to privacy (para 28):

“That leaves the issue as to how the court should exercise its discretion in the difficult situation confronting the district judge and Judge Harris. The court must try to give effect to what are here the two conflicting public interests. The weight to be attached to each will vary according to the circumstances. The significance of the evidence will differ as will the gravity of the breach of article 8, according to the facts of the particular case. The decision will depend on all the circumstances.”

Mr Azima’s pleaded case in support of his hacking claim (at paragraph 8J of the Re- Re-Amended Defence and Counterclaim) is as follows.

“(a)

Between autumn 2015 and July 2016 Mr Azima was assisting in the mediation of a dispute between RAKIA and Dr Massaad.

(b)

To the best of Mr Azima’s knowledge, on or around 14 October 2015 Mr Azima received several emails containing malicious internet links which were aimed at him specifically so as to induce him to open the emails. The opening of the emails and the links in them enabled those carrying out the hacking to gain unauthorised access to and steal Mr Azima’s confidential data.

(c)

RAKIA has targeted Mr Azima in the context of its dispute with Dr Massaad. In particular, in around April 2015, the Ruler told Mr Buchanan that he wanted Mr Buchanan and other assistants to "target" Mr Azima. The Ruler directed his associates to bring "charges" against Mr Azima and also to pursue "other channels" for taking action against Mr Azima. The Ruler's associates discussed meeting to "coordinate our attack" on Mr Azima and Dr Massaad. In or around July 2015, the Ruler instructed another of his assistants, Mr Bustami, to "go after" Mr Azima. Further, in the context of his role in assisting in the mediation of the dispute between RAKIA and Dr Massaad, Mr Azima had meetings and discussions with RAKIA's representative, Mr Buchanan, and its counsel, Mr Neil Gerrard, of Dechert LLP. At a meeting on or about 23 July 2016, Mr Gerrard told Mr Azima that if Dr Massaad would not agree to a settlement, Mr Azima would be made "collateral damage" in a war that RAKIA would then wage on Dr Massaad. Mr Azima understood this statement to be a threat.

(d)

The dispute between RAKIA and Dr Massaad was not resolved. RAKIA engaged investigators and public relations consultants (including the now defunct firm, Bell Pottinger) to make inquiries into Mr Azima and to disseminate information about him.

(e)

On around 29 July 2016, Mr Azima learned of a website making allegations against Dr Massaad, similar to those which RAKIA had made in the course of the mediation of its dispute with Dr Massaad. Shortly thereafter, Mr Azima learned of two other websites containing similar allegations against him. The websites contained links to BitTorrent internet sites, where certain materials stolen from Mr Azima were available to download with appropriate software and expertise. At this point, Mr Azima apprehended that his emails and data had been stolen, and so changed his passwords and increased his computer security.

(f)

RAKIA has admitted that it and its lawyers, Dechert LLP, hold a substantial quantity of the data stolen from Mr Azima, including an admission made in September 2016 to holding around 30GB of material. RAKIA denies responsibility for the hacking and theft of data or awareness of the persons responsible. Its explanation for holding these materials, given through its solicitor Mr David Hughes, is that the materials were obtained from internet sites. In proceedings brought by Mr Azima against RAKIA in the United States District Court complaining of the hacking, RAKIA appointed a computing expert. That expert was not able to access the majority of the material hacked from Mr Azima from the internet, and could obtain only a portion of Mr Azima's material, substantially less than 30GB. RAKIA's own computing expert was therefore unable to replicate the process by which RAKIA (through its counsel) claims to have obtained the stolen data.

(g)

Mr Azima has through his Counsel alleged RAKIA's responsibility for the hacking of his data and has quoted in support of this allegation the inability of RAKIA's expert in the US proceedings to access the majority of the stolen material. Following Mr Azima making this complaint, further links to materials stolen from Mr Azima (additional to those limited materials that RAKIA’s expert had been able to access) appeared on several internet sites.

(h)

Mr Azima avers that, to the extent his stolen data has been made available on the internet (and websites and links have been created to facilitate access to those data), this has been done by RAKIA and/or those acting at RAKIA's direction, to cause damage to Mr Azima, to provide a pretext for RAKIA to have possession of the data, or for other improper purposes.

(i)

The materials that have more recently been made available as described in paragraph (g) above do not include certain documents that had been among Mr Azima's data. Mr Azima infers that the persons responsible for publishing the materials on the BitTorrent sites decided to withhold these specific materials for their own reasons. The materials withheld are damaging to RAK's reputation. They include:

(i)

emails concerning an article originally published in October 2009 on a website, TheSmokingGun.com ("TSG"), which reported on the arrest of the Ruler of RAK for sexual assault in a hotel in Minnesota. On 31 July 2018, TSG reported that a denial of service cyber-attack seeking to overwhelm its servers had been made, targeting this specific article with the apparent purpose of seeking to make it unavailable to legitimate visitors. TSG also reported that representatives of the Ruler had previously requested it to remove the article from its website, which it had declined to do; and

(ii)

an article critical of RAK and describing it as a rogue state within the UAE, commissioned by the Ruler's brother, apparently in connection with a power struggle in the RAK ruling family.”

Thus, Mr Azima’s pleaded case in support of his hacking claim relies on the following six main contentions:

Mr Azima’s hacking claim was supplemented in the course of the hearing by the following additional allegations:

RAKIA’s position is, in summary, as follows.

The facts relating to the hacking claim are as follows.

Mr Page and the Project Update

Mr Page’s initial engagement in RAK was between 2008 and 2010 when he undertook surveillance work on the behalf of the Ruler who was at the time the Crown Prince. His remit was to try to ascertain through surveillance what plans Sheikh Khalid, the Ruler’s brother, had to try to destabilise the Crown Prince’s position.

In January 2015, at the instigation of the Ruler, a meeting took place between Mr

A few days later, a meeting took place between the Ruler and Mr Page at which the Ruler asked Mr Page to investigate a rumour that Dr Massaad was working with a member of the royal family to the detriment of the Ruler and the government of RAK.

Subsequently, in or about March 2015, a second meeting took place between Mr Buchanan and Mr Page at which Mr Buchanan told Mr Page that he was involved in investigating wrongdoing by Dr Massaad and the misappropriation of assets. He wanted Mr Page’s assistance in tracing assets, investigating Dr Massaad's involvement with Iran, his links to Hezbollah and Lebanon and his relationship with Viktor Bout (who was serving a sentence in the US for arms trafficking).

Thereafter Mr Page had regular monthly meetings with the Ruler and Mr Buchanan. Sometimes his meetings were with the Ruler alone. Mr Page said that the Ruler “had a habit of compartmentalising things. He would ask me to do certain things, but not involve Jamie Buchanan. So, therefore, I had this Chinese wall between what His Highness wishes me to undertake and what he wishes Mr Buchanan to understand.”

Mr Page made no reference to any written reports in his witness statement, asserting that he does not keep contemporaneous documents “…and my briefings to clients are invariably oral, especially in the Middle East where this is very normal.” The implication that Mr Page did not give written briefings was untrue. In fact, as Mr Page accepted in cross-examination, he regularly provided the Ruler with written update reports to accompany his oral briefings. By the beginning of 2020, Mr Page had provided some thirty update reports, all of which were in the same format. Mr Page was unable satisfactorily to explain his reference to his briefings being

Only one of Mr Page’s written reports was in evidence, namely the Project Update dated 26 March 2015. The evidence of Mr Buchanan and Mr Page was that RAKIA did not keep copies of the other reports because of a “protocol” agreed with Mr Page whereby copies of reports would be returned to Mr Page two weeks after they were produced. The reason why a copy of the Project Update is still available is that Mr Buchanan inadvertently breached the protocol by arranging for the Project Update to be emailed from his office to his private MSN email account so that he could read it at home; the email copy has survived. Prior to the hearing Mr Azima was unaware that the Project Update was provided by Mr Page. The fact that it was provided by Mr Page emerged early in Mr Buchanan’s cross-examination.

Much of the Project Update was redacted on the ground of irrelevance but it included the following unredacted passages relating to Mr Azima:

“In the US, KM's hired a team of advisors managed by Farhad Azima (FA) in order to spread allegations against our client. The main allegations against the client are on human rights issues and in particular the allegation that RAK uses a dedicated facility in RAK where it imprisons and torture political opponents. FA, who might also be responsible for paying the US team, handles all KM's activities in the US. KM’s lawyer in the US, Kirby D. Behre, hired a consultant, who is a former WSJ reporter, named Christopher Cooper, who due to his good contacts. Cooper approached a British reporter named Simon Goodly of The Guardian and briefed him on the RAK torture allegations, in order to raise public opinion against RAK and to harness international civil rights organizations to the subject.

According to our source, FA also hired a private investigator from Northern Virginia name ‘Joseph Aboud', an American - Egyptian who seems to have SIGINT capabilities, and probably managed to get access to the client’s Email traffic. We couldn't verify until now the identity and capabilities of Aboud, but we are working on it.

Our sources have reported that KM’s team suspects that they have an information leak since they noticed some of RAK's actions in the last few months. They believe that the client is having someone monitor their activities either electronically or in other methods.

KM efforts against the client

FA and the US Advisory Team

In continuation to our previous report, we were informed by several new sources that FA is managing KM's efforts in the US and perhaps even paying their bills. At the moment, KM's strategy in the US is to spread human rights violations allegations against the client. In particular the allegations focus on the notion that RAK uses a dedicated facility in RAK where it imprisons and torture political opponents. According to KM, the main figure assisting our client to cover this alleged activity is Niel [sic] Gerard, a partner in Dechert LLP (London) law firm.

Additionally, KM claims that the reach of RAK's No. 1 is also away from RAK, claiming that the client recently got a Jon Doe locked up in the Republic of Georgia upon his request.

Summary. Conclusion and Queries

As we reported above, KM's US team has a certain plan to smear RAK and its ruler with human rights allegations. As far as we know, at this point, they do not have any evidence to back up these allegations, but they started gathering information for a campaign, based on hearsay and testimonies, and started searching for a platform to make it public. The campaign is not public yet, so we will be able to gather intelligence on their progress in order to monitor their activities and attempt to contain or ruin their plans.”

The Project Update shows that the activities of Mr Azima, as an associate of Dr Massaad with responsibility for managing a team of US advisors, were being monitored although Mr Azima was not the initial or main target of RAKIA’s investigation. Mr Page’s evidence was as follows:

“--Farhad Azima's name came out -- completely out of the blue. It was not part of our mandate to look at Farhad Azima. This information came from a confidential source. The confidential source was not even given --because we weren't instructed to look at Farhad Azima He provided what he heard in the marketplace, if that's the expression, my Lord.”

Mr Page’s evidence in cross-examination was that his reports were drawn up by Insight, an Israeli company whose staff are former Israeli intelligence operatives:

“Q. And what do they specialise in?

A. Well, the founder of the company is the former head of the Lebanese desk of Shin Bet and Shin Bet is the Israeli equivalent of MI5. Q. Right.

A. So they specialise in collating information, particularly in the Middle East. They obviously specialise in collating information on Iran, on Hezbollah, on Lebanon, and they were the – the expression I use, my Lord, is the "think tank".

Q.

So would it be fair to say, Mr Page, that in relation to the matters covered by your project updates, you had in fact subcontracted at least some of that work to this Israeli company called Insight? A. That is correct.

Q. And they were, amongst other things, intelligence-gathering specialists?

A. They were specialists at obtaining information from confidential sources and, my Lord, the important thing was to analyse a significant amount of data being recovered from multiple jurisdictions and cross-referencing it, seeing really how it related to Khater Massaad and his links. So, in answer, my short answer is, yes, they were the conduit to receive all the information from my other subcontractors.

…

Q. And they were really -- they were the people, were they, who you enlisted to carry out some of this electronic data-gathering?

A. By which you mean electronic -- I don't understand. By "electronic", you mean open source information on the internet? Q. I mean of any source.

A. Well, they were -- yes, they were using the dark web, open source information on the internet.”

Mr Page also explained that whether or not one of his sources breached legal obligations in providing information was “not for [Mr Page] to consider”:

“Q. In other words, this aggrieved employee would have told you confidential things that he'd learnt when he was working as a security officer for Sheikh Khalid? A. Yes, and it's not for me to question whether he was in breach of any of his employment obligations.

Q.

Or for you to question whether he was breaching any duty of confidentiality presumably, Mr Page?

A: It's -- that was not for me to consider.”

It was submitted on behalf of Mr Azima that RAKIA’s witnesses (Mr Buchanan, Mr Gerrard and the Ruler) deliberately minimised Mr Page’s involvement and the importance of the Project Update in their witness statements. I consider that there was some substance to this criticism.

Mr Buchanan did not mention the Project Update in his witness statement even though he accepted in cross-examination that it was an important document. His explanation for this omission was that when he prepared his witness statement he did not believe that the Project Update had come from Mr Page but had come from some organisation which was introduced to him (Mr Buchanan) briefly but which he advised the Ruler against using. He said that in the month prior to the hearing it became clear to him what the source of the document was, at which point he advised

Mr Gerrard did not mention the Project Update in his witness statement either. His witness statement gives the impression that the first time he came across Mr Page was in August 2016 at the time of the discovery of the hacked material. It transpired in the course of his cross-examination that Mr Gerrard was aware of Mr Page’s work in 2015 and that he was shown the Project Update report in March 2015 when he discussed it with Mr Page. The Project Update was of concern to him because it dealt with the involvement of Simon Goodley, the Guardian journalist, who Mr Gerrard knew was taking a significant interest in RAK related human rights issues and phoning witnesses and junior lawyers on the case.

Mr Azima criticised the assertion in the Ruler’s witness statement that he “never saw” the Project Update as being outright false. Based on Mr Page’s account of the primarily oral briefings of the Ruler, I consider that it is possible that the Ruler had no recollection of seeing the Project Update. It is, however, notable that the Ruler was less forthcoming about the Project Update than he might have been. Mr Azima had suggested in his first witness statement that the Project Update had led the Ruler to target him, pointing out that the author of the Project Update was

“unknown” but that the report had “presumably been produced by or for RAKIA and/or other RAK entities and seen by the Sheikh”. When he came to respond to this part of Mr Azima’s witness statement, the Ruler must have known who produced the report and on whose instructions, even if he did not recollect seeing it, but he did not provide this information and simply dismissed the paragraph in Mr Azima’s witness as erroneous speculation: “This is incorrect. I never saw the report”.

RAKIA’s response to the criticism that the Project Update had not been dealt with more extensively in the witness statements was that it was not a document referred to in Mr Azima’s statements of case; the fact that RAKIA had disclosed the Project Document showed that it was not intent on concealing it or Mr Page’s involvement in its production which was likely to emerge at the hearing. Had RAKIA or Mr Buchanan set out to conceal the authorship of the document, Mr Buchanan would not have voluntarily divulged its authorship to RAKIA’s solicitors or the Court. If Mr Azima’s theory of deliberate concealment were correct, there would be no conceivable advantage to RAKIA of divulging this information at trial.

I do not regard this as a satisfactory explanation, given what I consider to be the clear relevance of the document to the hacking claim (in that it evidences the fact that Mr Azima was the subject of covert surveillance in 2015 being carried out under the supervision of Mr Page who, on RAKIA’s own case, was subsequently responsible for finding the hacked material) and the witnesses’ accounts in cross- examination as to the importance of the document. I recognise nevertheless that the failure to deal more fully with the Project Update may simply be explained on the basis that it was an unhelpful document that was not referred to in Mr Azima’s statements of case rather than on the basis that it was part of a plot to put forward a false case about RAKIA’s role in the hacking. I accept that, if there had been such a plot, it is surprising that the Project Update was disclosed.

Mr Azima also criticised the assertion in Mr Page’s witness statement (under the heading “Knowledge of Farhad Azima”) where he said that he did not come across the name Farhad Azima in 2015 and that the first time he came across his name was in early 2016 at one of his regular catch up meetings with Mr Buchanan. When it was pointed out to him that the Project Update showed that he knew of Mr Azima a year earlier, so that his evidence was plainly wrong, Mr Page’s response was that Mr Azima was just a side issue in the report which covered matters across the globe involving many countries and people.

Although I accept that Mr Azima was only one of a large number of characters who were the subject of his investigation, the April and July 2015 emails show that, following the Project Update, the Ruler was concerned about Mr Azima and interested in pursuing him. The Ruler said in his witness statement that in early 2015 he wanted information about Dr Massaad’s organised criminal scheme and, in particular, as to the role Mr Azima had played. It seems most unlikely that he did not discuss Mr Azima with Mr Page, the investigator with whom he was having monthly meetings, in which case it is hard to believe that Mr Page could have completely forgotten about any mention of Mr Azima prior to his meeting with Mr Buchanan in early 2016.

The April and July 2015 emails

On 4 April 2015, Mr Buchanan emailed Mr Handjani as follows:

“HHSS [i.e. the Ruler] had wanted us to target FA [i.e. Mr Azima] – on what basis would we do this?”

It is unclear precisely what prompted this email. Mr Handjani’s evidence, which I accept, was that Mr Azima had called him out of the blue in March 2015 and said that there was a big problem between him and the Ruler in that he was owed $8m by RAK and that, if things were not resolved, they could “get ugly” for everyone. Mr Handjani was also called by Dr Massaad at about this time who asked him to talk to the Ruler and get the Ruler to stop investigating him. Mr Handjani then spoke to the Ruler about both calls.

Mr Buchanan’s evidence was that the Ruler’s instruction to target Mr Azima in April 2015 was prompted in part by Mr Azima’s claim for $8 million, which the Ruler considered to be unfounded, and in part by the information in the Project Update. He said that the reference to “targeting” was a reference to the bringing of criminal charges.

The Ruler’s own evidence as to his state of mind was that he wanted information about the extent of the criminal scheme organised by Dr Massaad and, in particular, as to the role Mr Azima had played and, if he was involved in those schemes, to have criminal charges brought against him. He dismissed the suggestion that the emails were prompted by the Project Update.

The email of 4 April 2015 led to the following exchanges on the same day:

Later that day, Mr Bustami wrote to Mr Handjani and Mr Buchanan as follows:

“I have had few discussions with boss about FA [Mr Azima] and he is adamant that we bring charges against him. He was very happy that you told him that FA is no longer asking for the $8 m.

The boss told me that you have checked with your people and confirmed back to him that the boys with the hotel are no issue now and we should not be intimidated by them and that FA may not be orchestrating this.

He wants me to get you on the case to file some sort of charges against Farhad. He also told me today that you have another channel that you are using with khater [Dr Massaad]. When are you next in town so that me you and Jamie [Mr Buchanan] could hook up and coordinate our attack?”

Mr Handjani’s evidence, which I accept, was that the reference to “going through another channel” was a reference to attempts that were going on at that time to open a dialogue with Dr Massaad.

On 6 April 2015 Mr Handjani wrote to Mr Bustami and Mr Buchanan as follows:

“Subject: Re Farhad Azima

Dear Naser

Thank you for your email. I spoke to the boss and advised him against both using other channels and pressing charges against Farhad for now. I believe both approaches could undermine the work that you and Jamie are doing. I was very clear with him that we should speak with one voice-and for the moment you and Jamie are that voice.

We have to see how Khatter responds with his lawyer. If we start pressing charges with Farhad it would disrupt this process. My humble opinion is that we should not be fighting multiple fires at one time.

We need to keep this circle of information tight and give full weight and support to you and Jamie.

I have advised boss as much as

well. Best,

AAH”

There is no evidence of any steps being taken against Mr Azima between April and July 2015 and the natural inference from this email is that the Ruler was dissuaded from taking any action for the time being. Mr Buchanan’s evidence was that Mr Azima did not feature at all in his discussions with the Ruler in this period.

“Q. What was going on in relation to investigating Mr Azima between the beginning of April 2015 and 19 July 2015? A. Absolutely nothing to my knowledge.

Q. Did you have some monthly meetings with Mr Page over this time?

A. Yes, I would have done.

Q. And would there have been some reports in all likelihood, written reports?

A. Yes, written or verbal, and I can't tell you which they were.

Q. And you would have discussed those with the Ruler?

A. I would have done -- I did.

Q. And is it your evidence that Mr Azima didn't feature at all in any further updates from Mr Page between the beginning of April 2015 and 19 July 2015?

A. I have no recollection of Mr Azima's name or his activities coming on to the radar screen in that period.”

On 19 July 2015, Mr Buchanan wrote to Mr Handjani as follows:

“NB [Naser Bustami] says the Boss wants criminal stuff taken out of letter and to go after FA subject to guidance from AF [Andrew Frank].

Nothing ELSE new from NB - will speak to AF tomorrow and fill you in.”

Mr Handjani replied as follows:

“Talking to the boss now. He wants me to respond to the little guy in an email and to coordinate with you.”

Mr Buchanan’s evidence about this exchange in his witness statement was that he had received a message from Mr Bustami to the effect that the Ruler wanted criminal allegations taken out of a letter to be sent to Dr Massaad’s lawyers. The reference “to go after FA” was a reference to the prospect of some form of criminal proceedings or criminal charges being brought against Mr Azima which were not in the event pursued although in cross-examination, Mr Buchanan said that he did not know what was meant by “going after FA”. “Guidance from AF” was a reference to guidance being sought from Mr Andrew Frank who provided public relations assistance to RAK in the US and whose guidance would be sought in relation to any reputational issues that might arise as a result of criminal charges being brought against Mr Azima as a US citizen. The reference to “the little guy” was a reference to Mr Azima. Mr Buchanan said that the planned coordinating was to do with the HeavyLift claim for compensation about which Mr Azima had emailed Mr Handjani on the same day (19 July 2015). Mr Bustami’s and Mr Handjani’s evidence was to the same effect. On 28 July 2015 Mr Handjani sent a response to Mr Azima explaining that there was nothing he could do beyond putting him in touch with Mr Buchanan.

It is unclear what prompted the Ruler to give the indication or instruction reflected in Mr Buchanan’s email of 19 July. Mr Buchanan was unable to explain what prompted the Ruler to want Mr Azima to be “gone after” at this time. What is clear is that the Ruler’s desire for action to be taken against Mr Azima had not abated since April. The evidence of Mr Buchanan and Mr Handjani was that this desire was prompted in part by annoyance over what the Ruler perceived was an unmeritorious claim for the $8 million but this seems unlikely given that Mr Handjani’s email of 4 April 2015 had made clear that this claim was not being pursued. The Ruler himself does not suggest that the $8 million claim prompted his desire to go after Mr Azima. It is more likely that the Ruler’s hostility towards Mr Azima stemmed from his perception, originating in the Project Update, that Mr Azima was an associate of Dr Massaad who was threatening to cause trouble for him.

There is nothing to indicate that the Ruler was persuaded that it was a bad idea to “go after” Mr Azima or that he changed his mind about doing so. In his witness statement the Ruler does not deal specifically with the July email but says that “as the emails show” he was advised not to consider criminal charges against Mr Azima and accepted that advice. But the emails concerning criminal charges were sent in April, not July. I infer that the Ruler continued to harbour feelings of hostility towards Mr Azima in the period following the July email but it is unclear what, if any, hostile action was taken.

There is no evidence about any guidance being sought or obtained from Mr Frank, as mentioned in the email. There are no records of the Ruler’s discussions with Mr Page at this time. There is no indication that any consideration was given to the hacking of Mr Azima’s email accounts but neither is there any documentary evidence that this was ruled out as a way of “going after” Mr Azima.

There is no specific evidence that RAKIA was planning to take, or took any steps to obtain intelligence about Mr Azima from July 2015 onwards.

Mr Azima’s case is that in October and November 2015, that is to say, some three to four months after the July emails referred to above, his emails were hacked as a result of his opening or clicking on links contained in spear-phishing emails that he received on or around 14 October 2015. The spear-phishing emails were sophisticated and included a malicious email purporting to be sent from Dr Massaad’s personal assistant, Ms Beudjekian.

The parties’ forensic computer experts (“the Experts”) agree that Mr Azima received several “spear phishing” emails in October and November 2015. They also agree on the following:

The Experts do not agree as to whether one of the five emails identified in the report of Mr Tarbell (Mr Azima’s expert) as a spear-phishing email was a spear-phishing email or a non-targeted phishing email; nor do they agree as to whether the spear phishing emails indicate that Mr Azima was being targeted in a systematic campaign by a single attacker.

Whilst it is not possible to say precisely how Mr Azima’s emails were accessed without his authorisation, the indications are that it began at around the time the spear-phishing emails were received. Mr Tarbell examined the records of instances when Mr Azima’s email account, “fa@fa1.us” was accessed in October 2015. That examination indicated that there were multiple instances between 13 and 15 October 2015 during which time the account was accessed from IP addresses that are unfamiliar to Mr Azima. Mr Krone agrees that the access on these dates appears to be suspicious.

Mr Tarbell also found that the emails stored in the “fa@fa1.us” account also included a number of emails in which Mr Azima had recorded passwords for other email accounts. The person who had covertly accessed the “fa@fa1.us” account could therefore have obtained the means of accessing other email accounts used by Mr Azima.

The “authorised connection record” for another of Mr Azima’s email addresses, “fa@farhadazima.com”, indicates that this address was accessed from several

In summary, it is possible that the hacking of Mr Azima’s emails is linked to his receipt of spear-phishing emails in October 2015 but this is not firmly corroborated by the evidence. There is no evidence as to who carried out the hacking.

The View from the Window document

Following the alleged hacking in October/November 2015, on 29 December 2015 a document was prepared on RAKIA’s side which described a “series of investigations” and labelled Mr Azima as a participant in “fraudulent activities”. It was prepared by Andrew Frank, a senior individual at Karv Communications, a PR company working for RAKIA, who had been mentioned in Mr Buchanan’s email of 19 July 2015. It was sent to Mr Gerrard on 4 January 2016.

The document reads as follows:

“View from the window

The window has opened on Ras Al Khaimah through a series of investigations that have unearthed a massive fraud that has taken place in the Emirate, the UAE, and several other countries including the Republic of Georgia, India, Congo and others.

A number of things have been exposed as fact over the past twenty-four months:

-KM was the CEO of RAK Ceramics beginning in 2003, as well as the RK Investment Authority (RAKIA) beginning in 2006 and oversaw a series of investments inside and outside of RAK that are under now intense scrutiny and have exposed wrong-doing

-Gila Mikadze was head of RAKIA's operations in Georgia and created and oversaw numerous corporations that stole money from the Emirate and was used for his own purposes and to bribe former government officials.

-Others committed crimes inside RAK, including the Ruler's Chief legal advisor and the legal advisor to RAKIA (they also happen to be cousins(?))

… -FA, a U.S. citizen, appears to have orchestrated, if not (fully) participated in numerous fraudulent activities.

… -Companies were set up with Iranian nationals”

Mr Azima’s case is that the reference in the document to “FA” (i.e. Mr Azima) appearing “to have orchestrated, if not (fully) participated in numerous fraudulent activities” establishes that RAKIA must by this stage have hacked into Mr Azima’s emails because otherwise Mr Frank would not have not known about what RAKIA alleges in these proceedings to be his “fraudulent activities”.

In support of this case, Mr Azima submits as follows:

“isn’t going to work” because all that was known about Mr Azima was

“suspicions”.

The View from the Window document shows that in late 2015, a negative PR campaign was being planned against Mr Azima alongside Dr Massaad. Mr Azima had not dropped out of the picture. It also suggests that someone had planted in Mr Frank’s mind the idea that Mr Azima had been involved in fraudulent activities. That

Shortly thereafter, the following exchange took place:

“Q. And you would have been aware that Mr Page had been successful in gathering intelligence from within Mr Azima's confidential email archive?

…

Q. I'm putting that to you.

A. Right. No, I wasn't aware.

Q. And that this is the only explanation for why Mr Frank has recorded, based upon what you and Mr Buchanan must have told him, the idea that Mr Azima had been involved in numerous fraudulent activities.

A. My Lord, that's ridiculous. Mr Frank is a clever man, but he's not a lawyer. He will have heard on a regular basis concerns as to gun-running, fraud, etc, etc. What he will not have grasped that we did not have sufficient evidence to proceed. On everything else we had stacks of evidence against -- let's take the first bullet point, Dr Massaad. We had evidence. Indeed he was prosecuted. We had evidence against Mikadze. He was prosecuted. We had evidence of other crimes inside RAK, including the Ruler's chief adviser and the general counsel. They were prosecuted. Let me ditch Farhad Azima for the moment. We had dummy corporations set up in the RAK, UK, Georgia, Cayman Islands, etc. We could have put those in, and so on. Fraudulent bank accounts, possible gunrunning … we did not have any evidence that we could have proceeded against of actual fraud against Farhad Azima. That is just plainly wrong and that's what I told Andrew Frank”

Mr Gerrard’s explanation for the reference in the View from the Window document to Mr Azima’s “orchestrating if not participating” in “numerous fraudulent activities” was confused. At one point he referred to the Project Update, although this had not alleged fraud against Mr Azima. He also referred to information provided to Mr Frank at a meeting attended by Mr Buchanan, although this meeting did not take place until later. His evidence was essentially that Mr Frank was told about suspicions concerning Mr Azima but these suspicions had nothing to do with Mr Azima’s hacked emails.

It is credible, in my view, that suspicions about Mr Azima’s involvement in fraud had arisen because of his association with Dr Massaad rather than because access had been obtained to Mr Azima’s confidential emails. I do not attach great significance to Mr Buchanan’s expression of surprise at the contents of the View from the Window document when it was shown to him in cross-examination accompanied by the suggestion that the document revealed prior knowledge of Mr Azima’s confidential emails.

In my judgment, the references to Mr Azima’s orchestrating, if not participating in, numerous fraudulent activities in the View from the Window document are too vague to establish that RAKIA had obtained access to Mr Azima’s confidential emails by the time this document was prepared. Although the document lists Mr Azima’s apparent orchestration of or participation in fraud as one of a number of established “facts”, I agree with RAKIA’s submission that the document reads like a series of points for a press release or article rather than a carefully sourced analysis. I do not consider that any adverse inferences can be drawn against RAKIA from its failure to call Mr Frank as a witness, given that Mr Azima did not refer to the View from the Window document as part of his pleaded case.

On Mr Azima’s case, RAKIA cynically entered into the Settlement Agreement as a device to trap him into agreeing a duty of good faith and an English jurisdiction clause, which, with its access to the hacked material, would give RAKIA leverage over Mr Azima. It would enable RAKIA to exact retribution for Mr Azima’s failure to take RAKIA’s side in its dispute with Dr Massaad and provide RAKIA with the means of turning Mr Azima against Dr Massaad.

In support of this case, Mr Azima submits as follows:

Mr Azima’s contention that the entering into of the Settlement Agreement is consistent with RAKIA having hacked his emails some five months previously gives rise to an obvious objection. If, as Mr Azima alleges, RAKIA had by the end of 2015 got access to his confidential emails and discovered evidence of what it now contends were his fraudulent activities, it is, on the face of it, inherently unlikely that RAKIA would have been willing to enter into the Settlement Agreement or to make any payment to Mr Azima in settlement of the HeavyLift claim. The fact that RAKIA paid out $2.6 million to Mr Azima under the Settlement Agreement suggests that RAKIA was unaware of the contents of the hacked material.

A possible answer to this objection, advanced by Mr Azima, is that entering into the Settlement Agreement, even at a cost of $2.6 million, made commercial sense for RAKIA because the Good Faith Representation and the jurisdiction clause, coupled with its knowledge of the hacked material, gave RAKIA leverage over Mr Azima, enabling RAKIA to sue, or threaten to sue Mr Azima and thereby maintain pressure on him in the context of RAKIA’s dispute with Dr Massaad. Ultimately, if necessary, it could sue Mr Azima to recover the $2.6 million, as it has done.

Mr Azima’s “leverage” explanation for the Settlement Agreement is not, however, compelling. RAKIA did not need to enter into the Settlement Agreement in order to sue or to threaten to sue Mr Azima on the basis of the hacked emails. It could have sued him or threatened to sue him in relation to the fraudulent misappropriations in connection with the intended hotel sale without Clause 3.2 (though not in an English court). Moreover there is no evidence that RAKIA ever in fact attempted to use the Settlement Agreement or the hacked material to exercise leverage over Mr Azima.

I consider that the letter of recommendation dated 15 February 2016 from Messrs Buchanan and Bustami to the Ruler provides some support for Mr Azima’s “leverage” explanation. It is striking that Messrs Buchanan and Mr Bustami described Clause 3.2 (rather than the full and final settlement provision) as the key clause in the agreement, bearing in mind the “wider objectives”. Mr Azima says that these enigmatic words are a veiled reference to the Ruler’s objectives to pursue Mr Azima. It is possible to read the letter in the way contended for by Mr Azima but it is also possible to read “wider objectives” as referring to the Ruler’s objectives concerning Dr Massaad and the benefit of getting an assurance from Mr Azima that he was acting in good faith in the discussions with Dr Massaad. The Ruler’s evidence

I am not persuaded by the contention advanced on behalf of Mr Azima that there was no meaningful investigation by RAKIA into the HeavyLift compensation claim. Mr Buchanan’s witness statement contains an account of the attempts to obtain information from HeavyLift’s side and the difficulties arising from the absence of documentation. The evidence of Mr Buchanan and Mr Gerrard was that there was an investigation by Dechert and that the documents produced by Dechert are covered by legal professional privilege, which they would be.

I do not regard the absence of formal board approval of the settlement as significant. I accept Mr Buchanan’s explanation that the Settlement Agreement went straight to the Ruler for his approval. The scope of Clause 3.2, extending to RAK entities irrespective of their place of incorporation, is in my view explicable as “belt and braces” drafting rather than denoting knowledge of the hacked material.

In March 2016, RAKIA engaged (through Bell Pottinger) Digitalis to prepare a primarily defensive strategy in order to protect the client’s reputation, as set out in Digitalis’ engagement letter of 21 March 2016. They were also instructed to create two websites to promote publicly available material relating to Dr Massaad and his involvement in frauds.

In his skeleton agreement, Mr Azima identified Digitalis, along with Mr Page and Bell Pottinger, as being part of a team engaged by RAKIA with a view to conducting an aggressive internet and media campaign and with “the capability of obtaining material through hacking”. There was, however, no basis in the evidence for the assertion that either Bell Pottinger or Digitalis had any such capacity. The evidence of Mr Leach, who worked for Bell Pottinger, was that Bell Pottinger prepared a media and communications strategy that was sent to RAKIA but not in the event implemented. Mr Azima did not feature at all as he was not someone they were focused on.

The evidence of Mr King, the Chief Executive Officer of Digitalis, which I accept, was to the effect that prior to 1 November 2016, when they were asked by Dechert to preserve documents relating to the dispute between Mr Azima and RAKIA, they were unfamiliar with the name of Mr Azima and undertook no work in relation to Mr

Mr Azima submitted that the absence of relevant documents in Digitalis’s possession was concerning. Mr King provided a full and clear explanation of his company’s document retention policies. There was no evidence of deliberate

Following execution of the Settlement Agreement in March 2016, Mr Azima continued to engage with RAKIA with a view to brokering a settlement of its dispute with Dr Massaad.

On 16 July 2016, a meeting was held between Mr Azima and three representatives of

Mr Azima’s case is that at this meeting Mr Gerrard threatened him that if Dr Massaad would not agree to a settlement, Mr Azima would be made "collateral damage" in a war that RAKIA would then wage on Dr Massaad, a threat that was put into effect a few weeks later.

Mr Azima’s evidence was as follows:

Dechert’s note of the relevant part of the meeting reads as follows:

“NG noted that Kirby had referred to “mutually assured destruction” but that KM was delusional if he thought that bringing the criminal and civil actions would destroy HHSS. NG noted that HHSS was now engaging with Abu Dhabi and the risk was that, the further this went, the more likely collateral damage would occur. It would be difficult to keep the scope of RAK’s actions within a narrow compass. NG asked FA to inform KM that Dechert has access to the whole of the Dana Jets database, the whole RAK Ceramics database, which included the whole of Sheba Nair’s emails. Essentially, Dechert had all of the client’s documents and were analysing them.”

This note suggests that the reference to collateral damage was in response to Mr Azima’s lawyer’s reference to the possibility of “mutually assured destruction” and to the possibility that the greater the engagement with Abu Dhabi (i.e. the UAE authorities) the more likely it was that collateral damage would occur. In his witness statement, Mr Gerrard confirmed what was recorded in the note, saying that he had wanted to convey to Mr Azima that the Ruler was already engaging with the criminal authorities in the UAE and that, once criminal proceedings were started, there was a greater risk of collateral damage for Dr Massaad and any of his associates. As he put it in cross-examination: “The evidence as it was mounting was clearly going to move, we anticipated, from fraud to more federal-type offences and that wouldn’t be for us to determine.” He meant that once litigation is started or a prosecutor takes over, these things get a life of their own. He was not thinking about anything other than the usual effects of litigation or criminal proceedings.

In his witness statement, Mr Buchanan said as follows: “The meeting was a tense one because it was during a critical stage of the negotiations with Dr Massaad but that Mr Gerrard was firm, focused and professional. Mr Azima raised his voice at times, Mr

In their oral evidence, Mr Buchanan and Mr Gerrard denied that any demand was made that Mr Azima “change sides”, pointing out that this would, from RAKIA’s perspective, have been pointless. As Mr Gerrard put it:

“A. At no stage did I ask Farhad Azima -- I think you said change sides or whatever it was. That would be faintly ridiculous. He told us many times it was difficult enough talking to Dr Massaad without thinking he had changed sides for RAKIA. We recognised he was in Dr Massaad's camp, that's okay, and I think he was trying to mediate on behalf of Dr Massaad, but unfortunately, as I say, he and we failed.”

Mr Buchanan made the same point: “We absolutely did not wish Mr Azima to take

In my judgment, it is unlikely that Mr Gerrard would have demanded that Mr Azima

I accept that Mr Azima appears to have been troubled by what passed at the meeting and that he told Mr Buchanan that what Mr Gerrard said amounted to extortion and blackmail (as appears from Mr Buchanan’s email of 23 July 2016). I can well believe that Mr Gerrard conducted the meeting in a forceful and even aggressive way. At the same time, I bear in mind that, after learning of the BitTorrent sites accessing the hacked material, Mr Azima did not immediately perceive RAKIA and the Ruler to be responsible for the hacking.

After denying that there was any extortion or blackmail, Mr Buchanan’s email of 23 July 2016 continued as follows:

“To be absolutely clear, Neil did not demand money nor anything else from you in return for anything whatsoever. Neil has previously challenged you as to whether you have always acted in the best interests of HH. He did so again at our last meeting. I personally don't see the problem. You have signed an agreement confirming that you have never acted against the interests of HH. All he did was raised [sic] questions as to HeavyLift. In a previous meeting he asked you about Eurasia Hotel Holdings.”

Mr Azima submitted as follows:

I do not consider that the references to HeavyLift and Eurasia Hotel Holdings necessarily support the inference that Mr Gerrard knew about the hacked material. As with the View from the Window document, these references are insufficiently specific to denote knowledge of the hacked material and they can be explained by reference to other sources of information, as Mr Gerrard did. Mr Azima expressly confirmed that no one on RAKIA’s side had threatened to use the hacked material

It was put to Mr Buchanan in cross-examination that his failure to hand over the notes of the meeting on 16 July 2016 to Mr Azima was because of concern that the meeting notes evidenced threats. The disclosed meeting notes do not disclose threats and do not support Mr Azima’s version of events. I accept Mr Buchanan’s evidence that he did not send the notes to Mr Azima when they were first requested because he was busy on other matters and that subsequently he was advised by Mr Gerrard not to send them because it was felt that the negotiations with Dr Massaad had broken down.

Following the 16 July 2016 meeting, the next day Mr Buchanan sent an email to Mr

Within days of the websites concerning Dr Massaad appearing, a series of other websites also appeared attacking Mr Azima. One set of websites was activated on 7 and 8 August 2016. These were blogging websites denigrating Mr Azima as a “fraud” and a “scammer”. The author of the blogging website with the headline “Farhad Azima Exposed Again” (the “Exposed” blog) was listed by the username of “crimeboard”. That individual initially allowed his or her location to be shown, which indicated that he or she was in the UAE. This may have been a blunder; the location reporting was subsequently disabled. The blogging website with the headline

“Farhad Azima Scammer” (“the Scammer blog”) also referred to Mr Azima’s connections with Mr Adams and Dr Massaad: “Click the link to find Azima’s involvement with some big personality’s [sic] including his close associates like Ray Adams & Dr. Khater Massaad.”

The blogging websites provided links to BitTorrent websites on which Mr Azima’s personal data had been uploaded and/or cached. A BitTorrent website is a site from which a computer user can access a BitTorrent network, that is to say a group of computers using the BitTorrent protocol which enables them to share anonymously data or “torrents” downloaded simultaneously from different computers in the group. Over the course of August and September 2016, three caches of Mr Azima’s data emerged, the first appearing on or about 4 August 2016, the second on or about 30 August 2016 and the third on or about 8 September 2016. The hacked data included email communications up to August 2016 suggesting that the hackers had access to Mr Azima’s email accounts throughout the period from October 2015 to August 2016.

Mr Azima contends that the proximity in time between (i) the breakdown in the negotiations with Dr Massaad and RAKIA and the consequential appearance of the websites attacking Dr Massaad (which RAKIA admits to arranging through Digitalis) and (ii) the websites with links to the hacked material, cannot realistically be a coincidence but is a clear indication that the Ruler or RAKIA were behind both attacks.

RAKIA contends that there is no connection between the Massaad websites and the appearance of the blogging websites with links to the hacked material and that it is inherently unlikely that sophisticated hackers (which is what the hackers would be, if

In my judgment, if the hackers were acting on the instructions of the Ruler or RAKIA, it is unlikely that they would have timed the publication of the hacked material to coincide with the end of the “ceasefire” and the posting of the anti-Dr Massaad websites. It is more probable in my view that the two incidents, while close in time, were not in fact related. The posting of the Massaad websites was a deliberate PR campaign instructed by the RAKIA; the other was the unrelated act of hackers.

RAKIA has sought to explain how it became aware of the hacked material on the

RAKIA’s pleaded case, and the case it advanced in its witness statements concerning its discovery of the hacked material, is, in summary, as follows:

Mr Page deals in his witness statement with Mr Halabi’s involvement as follows:

Mr Page’s evidence in cross-examination was different from his witness statement in that he claimed that he passed on the information that he had received from Mr Halabi on a single occasion and that was the end of his involvement.

“A… I passed on the information -- as I said, this was not a mandate from Mr Buchanan. This was, "Please have a look". I found it. I passed it on. That was the end of my involvement in that particular exercise, which again was not a mandate. It was just, "Can you do this?"

Q. So after you had passed on this information t Mr Buchanan and Mr Gerrard for the first time – after you'd initially passed it on -- that was the end of you contacting them in that regard?

A. Other than that I am aware, because I am aware, that they hired a specialist -- computer forensic specialist to download the material. Other than that, I'm not aware of -- and I am aware, my Lord, that Decherts have reviewed, interrogated the information, but other than that, I'm not aware of anything else.

Q. But as far as you're concerned, Mr Halabi gave you the information, the two links, you then passed it on on the phone to Messrs Buchanan and Gerrard or one or both of them; is that right? A. Yes, that's correct, my Lord.

Q. And you didn't pass on any further links to either those gentlemen subsequently?

A. My Lord, I run at that time a company turning over - I am the chairman of a company turning over £27 million a year. I am running complex contracts in hostile environments. This was a favour for Mr Buchanan. It was not -- I didn't keep -- it was literally, "Can you do it?" I passed the information on and that was it. I don't recall, I could not possibly recall, four years -- nearly four years down the road or something, my Lord -- four years after the event, what exactly was said and what I said and who I said because I run a very big organisation. I'm the chairman of the group.”

Mr Halabi’s evidence in his witness statement was as follows:

Mr Halabi’s evidence in cross-examination was also to the effect that he spoke to Mr Page on a single occasion:

“Q. So can his Lordship take it that the only occasion when you spoke to Mr Page to tell him that you had found some interesting information of the sort that he had asked you to look out for was this call in August 2016? A. In this matter, yes.

Q. So you had not spoken to Mr Page about any other interesting material that you'd found before the August 3 call?

RAKIA’s case concerning the discovery of the blogging websites raises a number of questions.

RAKIA’s case as to the transmission of information from Mr Halabi to Mr Page and from Mr Page to Mr Gerrard and Mr Buchanan is not directly evidenced by any documents (the relevant communications are said to have made by a now deleted WhatsApp message and by phone). There is some contemporaneous documentation consisting of emails emanating from Mr Gerrard, Mr Buchanan and NTi. This is inconsistent with Mr Page’s and Mr Halabi’s evidence.

There are further discrepancies between the evidence of Mr Page and the documents. On 16 August 2016 Mr Buchanan emailed Mr Frank and Mr Handjani, copied to Mr Gerrard, as follows.

“Good morning. I have been informed by Stuart last night that there is an internet site that is carrying a huge amount of material relating to FA - I will get you the link later. I have asked Neil to have a team start reviewing the material as a matter of urgency. At this time, I have no idea whether this relates to us or whether it is of value in respect of our ongoing dispute with KM. More importantly, I cannot tell you whether there is anything on the site about which we should have any concern. Clearly, it would be very interesting to know who is behind this action - Stuart tells me it is UAE based. We will speak later. Jamie”

This email raises further questions.

RAKIA’s account of how it discovered the hacked material is unsatisfactory.

RAKIA did not attempt to reconcile all these discrepancies. It accepted that its account of how it discovered the links to the hacked material was “messy and unclear” but contended that the reason it was “messy and unclear” was because it was true; if it had been intent on deception, it would have been relatively straightforward for RAKIA to devise a mechanism, such as a simple Google alert, for “discovering” the links (which were publicly available and discovered more or less at the same time by Mr Azima and his associates). As against this point, it was reasonably submitted on behalf of Mr Azima that an explanation along the lines of a simple Google alert would not have distanced RAKIA from the “discovery” in the way that Mr Page’s account, involving Mr Halabi, did. RAKIA also submitted if that, if they were sophisticated plotters, they would not have disclosed, or would have concocted more efficiently, the documents which were said to be inconsistent with the witness evidence, such as Mr Buchanan’s email with its erroneous reference to a “call last night”.

In my judgment, it is not enough for RAKIA to say that, because it is messy and unclear, its evidence as to how it discovered the hacked material should be accepted as true. There is no obvious reason why a truthful account of how it came across the evidence could not have been clear and coherent.

I conclude from the unexplained contradictions, inconsistences and implausible elements that RAKIA’s case that Mr Page discovered the blogging websites linked to the BitTorrent sites innocently via Mr Halabi and another unidentified informer

It does not of course necessarily follow from this conclusion that RAKIA was responsible for the hacking. As RAKIA pointed out, there would be variety of explanations for Mr Page’s failure to give a true account of the discovery. He may, for example, have wanted to conceal his sources of information, even though they were not the hackers, for reasons of confidentiality.

Mr Azima submits that RAKIA’s responsibility for the hacking should be inferred from the fact that, apart from RAKIA no other party in any jurisdiction has sought to use any of Mr Azima’s stolen material in any proceedings or indicated that it was able to access the stolen data using the BitTorrent sites.

RAKIA’s response to that argument is that Mr Azima appears to have been the subject of long term interest by Iran who perceived him as an enemy of the Iranian Government and who actively sought to acquire information and intelligence about him by targeting his communications and the communications of his close associates. In particular:

Mr Azima’s response to the theory that the Iranian state may be responsible for the hacking is, in short, as follows.

In my judgment, the evidence of the possible involvement of Iran in the hacking, while falling far short of showing that Iran had any responsibility for the hacking, does at least displace any inference that RAKIA must have been responsible for carrying out the hacking because no other party conceivably had the means or the motivation to do so.

The inability of RAKIA’s IT expert to download all the internet data in April 2017

Mr Azima relies on the fact that in proceedings in the United States brought by Mr Azima, RAKIA appointed an IT expert who “could obtain only a portion of Mr Azima’s material” from the internet in April 2017. Mr Azima contends that, “RAKIA’s own computing expert was therefore unable to replicate the process by which RAKIA claims…to have obtained the stolen data” and this therefore supports his case that RAKIA was responsible for the hacking.

RAKIA submits that there is no merit in this argument on the following grounds:

For the reasons advanced by RAKIA, I agree that the inability of RAKIA’s computing US expert to download the hacked material does not provide any support for Mr Azima’s case that RAKIA was responsible for the hacking.

Mr Azima contends that certain materials that had been within Mr Azima’s emails were not included among the hacked materials on the BitTorrent sites. Those include materials that would be damaging to RAK, including the so-called Smoking Gun report about the arrest of the Ruler for sexual assault.

The Experts have not been able to confirm whether the materials in question would have been available to the hackers. The evidence of Mr Krone, RAKIA’s expert,

RAKIA also points out that on 12 September 2019 RAKIA made a request for further information asking how many documents in total had allegedly been withheld from the hacked data on the BitTorrent sites and whether Mr Azima had taken any steps to identify documents that were allegedly withheld and which were not damaging to the reputation of RAK or RAKIA. Mr Azima refused to answer those questions on the grounds that the information requested was not needed or was privileged. RAKIA submits that it is to be inferred that either Mr Azima has failed to examine whether any documents not damaging to RAKIA/RAK were withheld from the hacked materials on the BitTorrent sites or Mr Azima has examined that issue and has concluded that the category of withheld documents does include documents which are not damaging to RAKIA/RAK.

I accept that Mr Azima’s failure to provide clarification as to which documents were withheld from the materials available on the BitTorrent sites means that no weight can be placed on his argument that documents allegedly missing from the hacked material on the BitTorrent sites show that RAKIA must have been responsible for the hacking.

It is submitted for Mr Azima that, in assessing the inherent likelihood of Mr Page arranging for committing the hacking, I should take into account what is alleged to be his track record of involvement with other instances of hacking and illegal information gathering, as follows.

These cases highlight the fact that Mr Page operates in a world of covert surveillance in which agents acquire confidential information unlawfully and that Mr Page has dealings with such agents. It would be a reasonable inference to draw from these incidents that Mr Page has access to agents with the capacity to hack emails. However these other incidents do not establish that Mr Page ever personally carried out or authorised the unlawful obtaining of confidential information and therefore do not affect my assessment of the inherent likelihood of Mr Page acting unlawfully in this case. Mr Azima also relied on the level of Mr Page’s remuneration of between $100,000 and $300,000 per month as being “consistent with Mr Page obtaining information by illicit means and of seeking a premium for such nefarious activity.” Mr Page was certainly generously remunerated but I do not consider that his rate of remuneration can sensibly be taken as a sign of illicit activity.

The serious allegations made against Mr Gerrard in proceedings brought by Eurasian Natural Resources Corporation (“ENRC”) against the Serious Fraud Office (the “SFO”) in which it is alleged that Mr Gerrard leaked information covered by ENRC’s confidentiality and privilege to journalists and to the SFO, in breach of his fiduciary duties and his retainer with ENRC and set to overcharge ENRC, are no more than unproven allegations denied by Mr Gerrard and are similarly of no assistance in the present case.

For Mr Azima it was alleged that RAKIA’s conduct of litigation has been highly improper, showing that RAKIA (and on occasion its lawyers) were willing to break the rules in pursuit of its own ends.

The circumstances of these other incidents do not, in my view establish that RAKIA had a highly improper attitude to litigation and do not shed any useful light on the issue of whether RAKIA was responsible for the hacking of Mr Azima’s emails in the present case.

Email hacking, or the gaining of authorised access to a person’s email account, is self-evidently a serious wrongdoing, a violation of privacy and a criminal offence under the Computer Misuse Act 1990.

Mr Azima invites me to find, on the balance of probabilities, not only that Mr Page, acting on the instructions or with the connivance of the Ruler, arranged for Mr

It is trite law that cogent evidence is required to justify a finding of discreditable conduct and that “the cogency of the evidence relied upon must be commensurate with the seriousness of the conduct alleged”. This is because of the inherent improbability of people committing serious wrongdoing. Most people are not serious wrongdoers and, even if capable of serious wrongdoing, are likely to be deterred by the fear of detection. Thus as Andrew Smith J stated in Fiona Trust v Privalov [2010] EWHC 3199 (Comm) at 1438:

The forensic evidence established that the hacking of Mr Azima’s emails could have taken place in October 2015 but it is common ground that it is impossible from the forensic evidence to identify the hackers. Mr Azima’s case that Mr Page engaged agents to carry out the hacking therefore depends on inferences to be drawn from a series of pieces of circumstantial evidence, what Counsel for Mr Azima referred to as “a few but very powerful forensic pointers”.

I consider that the following facts and matters support the inference that the hacking of Mr Azima’s emails was carried out by Mr Page acting on the instructions of the Ruler:

As against these considerations, there are a number of significant features of Mr

I was not persuaded that the View from the Window document or the meeting on 16 July 2016 support Mr Azima’s hacking claim. They do not, in my view, show that Mr

I accept that the hypothesis advanced on behalf of Mr Azima that Mr Page, acting with the express or implied authority of the Ruler, arranged for Mr Azima’s emails to be hacked, that the Settlement Agreement was entered for tactical reasons and that it was decided to deploy the hacked material in August 2016 once the ceasefire with Dr Massaad was over, is not impossible. It would provide an explanation for the fact that the hacked material came to light when it did and for RAKIA’s failure to provide a convincing account of its innocent discovery of the hacked material. It is equally not impossible that Mr Page arranged for Mr Azima’s emails to be hacked without the knowledge of Mr Gerrard or Mr Buchanan or the Ruler’s advisers so that the instigation of these proceedings did not entail a conspiracy between them, even though the witnesses may have harboured suspicions about Mr Page’s role.

It is, however, not enough for Mr Azima to advance a case that is not impossible. Based on all of the documentary and witness evidence, I was not satisfied on the balance of probabilities that RAKIA was responsible for the hacking of Mr Azima’s emails. The facts supporting the inference that RAKIA was responsible for the hacking are far from conclusive and the improbable features of Mr Azima’s case can only be explained away on the basis of speculative assumptions for which there is no sufficiently firm evidence.

Given my conclusion, based on all the evidence, that it has not been proved that RAKIA was responsible for the hacking of Mr Azima’s emails, the issues which would have arisen upon a finding that RAKIA’s case was based on illicitly obtained evidence fall away.

Had I upheld the hacking claim, it would have been necessary to decide whether to admit or exclude the illicitly obtained evidence or to strike out RAKIA’s claim entirely as I was invited to do by Mr Azima. As the Court of Appeal noted in Jones v Warwick¸ the decision would have depended on all the circumstances, including my findings of fact in connection with the hacking.

If I had found that RAKIA had hacked Mr Azima’s emails, I would not necessarily have excluded the illicitly obtained evidence as, without it, RAKIA would have been unable to prove its claims and Mr Azima would have been left with the benefit of his seriously fraudulent conduct. If, however, I had found that, as alleged by Mr Azima, not only had RAKIA hacked Mr Azima’s emails and used them as the evidential basis of this case, but also that its witnesses had conspired to put forward a fabricated case concerning RAKIA’s lack of involvement in the hacking, there would have been strong grounds to strike the proceedings out as an abuse of process, as envisaged in Summers v Fairclough Homes Ltd.

Mr Azima is liable to pay RAKIA the sums of $2,600,000 and $1,562,500 making a total of $4,162,500.

I will give directions for the service of submissions on interest and costs.