Commercial Bank of Dubai PSC & Ors v Abdalla Juma Majid Al Sari & Ors

While there is a dispute as to what causes of action fall within the scope of the Claim Form, the case which the Claimants seek to advance against the PCB Defendants is broadly as follows.

First, “statement-based” claims:

Second, against the PCB Defendants, a claim on the basis of the so-called Marex tort: that the Globe DIFC Proceedings and the associated WWFO obtained from the DIFC court were intended to violate the relevant BVI Companies’ claims under the Possession Judgment and the Globe Documents and Sharjah Globe Proceedings were intended to violate the Bank’s enforcement of the Bank Sharjah Judgment.

Third, against Globe, on the basis of malicious prosecution of the Globe DIFC Proceedings brought to enforce the First and Second Globe Appeal Judgments.

Fourth, against the PCB Defendants, for dishonest assistance in the breach of fiduciary duties owed by relevant members of the Al-Sari family to the BVI Companies, the breaches comprising the creation of the Tenancy Agreement and the Globe Documents and/or entering into the transactions embodied in the Globe Documents, if they are genuine.

Fifth, against the PCB Defendants, for unlawful means conspiracy to frustrate enforcement of the Bank and the BVI Companies’ rights through the creation and deployment of the Tenancy Agreement and the Globe Documents (the unlawful means relied upon embracing the other causes of action, entering into a transaction falling within s.423 Insolvency Act 1986, continuing trespass, and contempt of this court, the DIFC Court and breach of UAE criminal law and breach of freezing injunctions granted in this jurisdiction and in the BVI).

Sixth, relief under of s.423 of the Insolvency Act 1986 in respect of the Tenancy Agreement and the Globe Documents.

The Service Out Application raises issues as to whether the Claimants’ can show:

By the time of the hearing, it was common ground that in considering the various merits issues raised, I am concerned with the standard of serious issue to be tried.

The “serious issue to be tried” element involves consideration of:

D10 does not contend that it has not been shown that England and Wales is clearly or distinctly the most appropriate forum for the resolution of the dispute so far as the causes of action advanced against him are concerned (in contrast to the application against him for a WWFO on the Chabra basis).

In relation to the WWFO Application, the issues which arise are:

I propose to consider the issues in the following order:

The following principles were essentially common ground:

It is necessary to say a little more about the exception recognised in House of Spring Gardens to the rule in the Abouloff case:

Reverting to House of Spring Gardens, in that case the claimant obtained judgment against three defendants in the Republic of Ireland from Costello J (“the Costello Judgment”). The defendants appealed to the Supreme Court of Ireland. After the hearing of the appeal, but before judgment, the defendants sought to adduce fresh evidence intended to show that Costello J had been deceived. The Supreme Court allowed the defendants’ motion for a fresh trial, conditional on money being paid to court. However, the condition was never complied with, and the hearing to hand-down the Supreme Court’s judgment was re-listed, and the appeal dismissed.

The claimant brought proceedings in this jurisdiction to enforce the Costello Judgment. In answer, the defendants pleaded that the Costello Judgment had been obtained by fraud and referred to the fact that two of the three defendants had commenced fresh proceedings in Ireland to set aside the Costello Judgment. After a 21 day hearing, Egan J dismissed that set-aside action, although no record of his judgment seems to survive in the Four Courts library. The issue then arose as to whether it remained open to the defendants to pursue their Abouloff entitlement nonetheless to challenge the enforcement of the Costello Judgment in this jurisdiction on the basis of the same allegations of fraud.

The Court of Appeal, Stuart-Smith LJ delivering the leading judgment, held that it was not. The issue is addressed in concise terms (and no reader of this judgment could regard that as anything other than a virtue). He referred to Abouloff, noting that it and other cases to similar effect “were decided at a time when our courts paid scant regard to the jurisprudence of other countries”, but continued:

“In none of these cases was the question, whether the judgment sued upon here was obtained by fraud, litigated in a separate and second action in the foreign jurisdiction. Unless Egan J.’s decision is itself impeached for fraud, it is conclusive of the matter thereby adjudicated upon, namely, whether Costello J.’s judgment was obtained by fraud … Mr. Swift argued that if Mr. Parish’s and Mr. Waldie’s evidence had been tendered before Costello J. and had been rejected, it would still have been open to the defendants, in enforcement proceedings in this country, to set up an allegation, based upon that evidence, to the effect that Mr. Sacks had given perjured evidence and so procured his judgment by fraud. Why, then, should it make any difference that the evidence is adduced, and the issue contested in a second action in Ireland? The answer is that no question of fraud on the part of Mr. Sacks was in issue in the Costello action; it was in the Egan action.”

Stuart-Smith LJ went on to consider the question of whether the defendants’ Abouloff defence was an abuse of process, saying that he had:

“no doubt whatever that, even if the judgment of Egan J. did not create an estoppel, it would be an abuse of process for the Waites to re-litigate the very same issue in the English courts upon which they failed in Ireland, not least because they themselves chose that forum, which was the natural forum in which to challenge the judgment of Costello J. They could, if they had wished, merely have waited for enforcement proceedings to be taken here and then attempt to set up fraud. They did not do so. They cannot try again here to obtain a different verdict.”

The rationale of the House of Spring Gardens exception appears to involve (a) the rejection of the allegations of fraud in a second and separate set of the proceedings; and (b) the voluntary choice of the defendants to commence new proceedings in Ireland to challenge the Costello Judgment on grounds of fraud. The effect of the decision would seem to be that a defendant who raised the relevant fraud by way of defence of the original action would retain their Abouloff entitlement if they stopped there, and a defendant who did not raise the relevant fraud in the original action (as was the case in House of Spring Gardens), but then commenced proceedings in the same jurisdiction to set that judgment aside, would not. The distinguishing feature between those two scenarios would seem to be between:

Quite where that line falls to be drawn between the two will not always be clear, even in common law systems such as England and Wales and the Republic of Ireland. Would an application to adduce fresh evidence of a fraud on an appeal, which was then rejected as not credible, be sufficient to oust the Abouloff entitlement? If the re-trial ordered by the Supreme Court of Ireland had led to same adverse outcome, would that simply have amounted to the defendants’ “one go” in the original jurisdiction, leaving their Abouloff entitlement intact here, or would that have been it? What of motions to reconsider without which no US court proceedings would seem to be complete?

Those issues become more complicated in legal systems such as the UAE, which do not appear to draw the same clear distinction between an appellate challenge to a judgment, and a fresh action to set it aside. As noted above, the UAE legal system provides for applications for reconsideration to be made to the same court where “the adverse party has committed an act of fraud which affects the underlying judgment or ruling” (Article 169(1)) and also “if the judgment or ruling has been based on documents which, after the same is rendered, are acknowledged or turned out to be forged or based on a witness testimony which, after the judgment or ruling, turned out to be a perjury” (Article 169(2)).

I shall assume for the purpose of this application that Article 169(1) is an equivalent of the “separate and second action” to which Stuart-Smith LJ referred, albeit it is clearly arguable that applications of this kind are more integrated into the proceedings originally commenced by the judgment creditor than the common law action to set aside a judgment procured by fraud, and may fall on the “appeal” rather than the “separate and second action” side of the divide.

There is evidence before the court as to the relevant provisions of Sharjah Law. The Claimants have adduced evidence from Mr Ramadan, an independent expert. The PCB Defendants have adduced evidence in the form of four letters from Hadef & Partners, the lawyers acting for the PCB Defendants in the UAE and who have been closely involved in what can fairly be described as bitterly fought litigation. At one stage, the PCB Defendants floated the possibility of retaining an independent expert and sought permission to adduce the evidence of such an expert. Cockerill J held that a draft of the proposed report should be adduced first. No such draft was produced, and no application made. Instead, the PCB Defendants served a second letter from Hadef & Partners.

In total there are three expert reports from Mr Ramadan and three letters from Hadef & Partners. Mr Ramdan’s instructions are before the court, but not Hadef & Partner’s instructions. Mr Ramadan’s reports are lengthy and reasoned documents. The first is 63 pages long and the second is 22 pages (the third is a short document addressing a single point). The reports refer to various UAE court decisions and provisions of Codes and other legislation. The letters from Hadef & Partners are also lengthy and refer to various legal sources including Egyptian decisions.

In Edgeworth Capital v Maud [2015] EWHC 2364 (Comm), Mr Justice Leggatt faced competing evidence of Spanish law on a summary judgment application in the form of letters from the parties’ Spanish lawyers. While regarding one interpretation as prima facie more compelling, he felt unable to resolve the disputed issues of Spanish law on a summary judgment hearing, explaining:

“20.

The points are made by Mr Arden QC on the defendant’s behalf, first, that there is at present before the court no opinion on the meaning of the Spanish provision given by an independent expert. The opinions currently expressed on each side are from individuals who work for the law firms acting for each party. Secondly, the evidence which has been given is not subject to the CPR provisions governing expert reports and the duties imposed on experts under that regime. Those duties include, for example, the duty to draw attention to the range of opinions on an issue, including those which conflict with the expert’s own opinion. Thirdly, there is no full exegesis, and indeed the claimants’ evidence contains no real exegesis at all, of the legal methods which would be used to answer the relevant question of foreign law in the foreign legal system. In particular, there has been no full explanation of the applicable principles of statutory interpretation, the hierarchy of relevant legal sources, the status of decided cases and matters of that sort. Fourthly, I must recognise that the opinion given by the claimants’ lawyer is contradicted by an opposite opinion which is not simply a bare and unreasoned opinion but is one for which reasons have been provided. There has, at this stage, been no testing of the opinions of the witnesses on each side such as would occur through the court process, including a meeting between experts if the case proceeds to trial and, most importantly of course, the process of cross-examination.

21.

I do not say that those difficulties automatically or necessarily would preclude the court from granting summary judgment. There may well be points on which foreign law is so clear and the opinion expressed by one lawyer is so clearly right and that expressed by the lawyer on the other side so obviously wrong that the points can be decided summarily. Indeed, I take the view, although the point is no longer live, that the argument based on article 55 of the Spanish Insolvency Act fell into that category.

22.

However, I am unable to say that the remaining issue in this case is as straightforward as that

…

25.

In these circumstances, strong as I consider on the face of it the claimants’ case on the meaning of article 97.2 to be, I do not feel able to reach the conclusion on the material now before the court, with all the inherent limitations which that material has at this early stage of proceedings, that there is no real prospect of the defendant’s interpretation being accepted. I therefore do not consider that I can take the view that the argument is bound to fail and on that basis grant summary judgment to the claimants.”

I find myself in a similar position in this case, save that the Claimant does have the benefit of a reasoned report from an independent expert. Without the benefit of independent experts on both sides, a joint memorandum and the full exploration of the legal sources which only a trial of some kind could facilitate, I do not feel able fairly to resolve the issues of UAE law which are in dispute on a summary basis. UAE law is an unfamiliar system, and both the legal authorities and the court filings I was referred to are translated from Arabic. The court filings are themselves open to conflicting interpretations, and do not always appear to be internally consistent or reflect a consistent position on the part of each side. These difficulties enhance the caution which the court is enjoined to adopt when determining whether a foreign judgment has preclusive effect in proceedings in this jurisdiction.

For present purposes I am satisfied of the following:

In closing, Ms Allsop placed particular emphasis on the suggestion that it was an abuse of process for the Claimants, having sought to raise the issue of the fraudulent nature of the transaction documents in the Globe Sharjah Proceedings, to raise them now, whether or not it was in fact open to the Claimants to raise the fraud claim in the Globe Sharjah Proceedings as a matter of the applicable procedure, and even if the determination of those issues against them was not a necessary reason for the Claimants’ failure. However, the same uncertainties as to UAE law and the basis and effect of the Sharjah court rulings mean that this issue cannot be summarily determined either. It is clear from Abouloff itself that merely seeking to re-argue fraud allegations raised as a defence in the foreign proceedings cannot be abusive of itself. House of Spring Gardens indicates that there may be some positive form of voluntary engagement with the foreign court going beyond simply seeking to defend the proceedings (at first instance or on appeal) which can engage the abuse of process doctrine. Those circumstances are likely to be rare. As Lord Lowry noted in Shaw v Sloan [1982] NI 393, 397, “[t]he entire corpus of authority in issue estoppel is based on the theory that it is not an abuse of process to relitigate a point where any of the three requirements of the doctrine is missing.” On the state of the evidence, I am unable to conclude that there is no triable issue as to whether the doctrine of abuse of process is engaged here.

In these circumstances, it is not necessary to consider the Claimants’ other arguments as to why it is said that issue estoppel or some other form of preclusion does not arise in this case. This part of the Service Out Application, and the Summary Judgment application on this basis, fail.

The PCB Defendants contend that the Claimants’ claims for deceit, malicious falsehood and at least elements of the unlawful means conspiracy claim are all precluded by JPI. By way of summary:

In Singh v Reading BC [2013] 1 WLR 3052, [20]-[67], Lewison LJ conducted a comprehensive review of the principles governing JPI. He began at [21] by defining “the basic rule” that “no action in defamation could be brought against a witness for anything he said in evidence before a court or tribunal”, nor against the parties, the advocate or the judge. At [23], he identified “two strands of policy underlying the rule”: that those engaged in litigation should be able to speak freely without fear of civil liability; (the “Witness Inhibition Justification”) and the wish to avoid a multiplicity of actions where one court would have to examine whether evidence given before another court was true or not (“the Multiplicity of Actions Justification”).

At [29] and following, he described various unsuccessful attempts to outflank the rule. The first category involved “bringing an action based on a cause of action other than defamation” and the second “bringing an action based, not on what happened in court, but on what happened out of court.”

At [43] and following, Lewison LJ set out a number of successful “inroads into” JPI. The first was the liability of advocates and expert witnesses for negligence (respectively) in the conduct of court proceedings and in relation to an expert report prepared for the purpose of litigation or in relation to expert evidence given in litigation.

Lewison LJ next referred to Darker v Chief Constable of the West Midlands Police [2001] 1 AC 435 in which the House of Lords held that the lower courts had been wrong to strike out an action for conspiracy to injure and for misfeasance in public office based on allegations that the police had fabricated evidence against the claimant. As this case featured prominently in the argument, it is helpful to consider it at rather more length. In Darker the claimants had been indicted for a drugs-related conspiracy, but when significant police misconduct emerged, the judge stayed the proceedings (such that there was no final determination of the charges on their merits). The House of Lords held the claim for misfeasance in public office was not barred by JPI:

Reverting to Singh, at [66] Lewison LJ summarised the principles to be derived from Darker as follows:

“(i)

the core immunity relates to the giving of evidence and its rationale is to ensure that persons who may be witnesses in other cases in the future will not be deterred from giving evidence by fear of being sued for what they say in court;

(ii)

the core immunity also comprises statements of case and other documents placed before the court;

(iii)

that immunity is extended only to that which is necessary in order to prevent the core immunity from being outflanked;

(iv)

whether something is necessary is to be decided by reference to what is practically necessary;

(v)

where the gist of the cause of action is not the allegedly false statement itself, but is based on things that would not form part of the evidence in a judicial inquiry, there is no necessity to extend the immunity (emphasis added);

vi)

in such cases the principle that a wrong should not be without a remedy prevails.”

The words emphasised in [71(v)] are potentially of significance because the evidence in a judicial enquiry would, on the face of things, embrace documents deployed before the court as well as witness statements and oral testimony. Lord Clyde in Darker, [460]-[461] also refers to “things said or done which would not form part of the evidence to be given.”

In Singh, the claimant wanted to rely on pressure applied by her employer to a co-worker (Mrs Heath) to give adverse evidence against the claimant in employment tribunal proceedings for the purposes of establishing constructive dismissal. That application to amend was made in the very proceedings in which the claimant was seeking to establish the constructive dismissal, such that there was no prior determination to be attacked, and, like Darker, the Multiplicity of Actions Justification for JPI was not “in play”. Applying the principles he had derived from the authorities, at [70]-[71], Lewison LJ held that JPI did not preclude the claimant from running such a case. The claim did not depend on anything Mrs Heath had said or might say in evidence, and the means by which the council procured the statement was a “free-standing act”. At [71], Lewison LJ described the employer’s argument that “the statement … caused the damage” as “fallacious” (reflecting the fact that the statement had had no operative effect in the ongoing litigation). This was not a case in which the instrumentality by which loss was said to have been suffered was by a false statement leading to an erroneous adverse judicial decision which had harmed the claimant.

At this point, it is helpful to address an authority out of chronological sequence: Surzur Overseas Ltd v Koros [1999] CLC 601. In that case, the claimant had obtained a WWFO against the defendant (K). Before judgment, the WWFO was varied by court order to allow K to transfer certain ships to third parties pursuant to what were said to be genuine and arms-length sale contracts. For that purpose, K deployed documents and witness evidence at an interim hearing purporting to evidence the sales, and persuaded Moore-Bick J, over Surzur’s opposition, to amend the WWFO to permit the transfer. After obtaining judgment against K, Surzur brought proceedings alleging that K had entered into collusive transactions with certain third parties, in breach of the WWFO and for the purpose of defeating its judgment and sued the third parties for damages for unlawful means conspiracy.

The Court of Appeal held that the claim was not barred by JPI. Waller LJ characterised the objective of the unlawful means conspiracy as “concealing the assets of [K] and the deception of Surzur or any other interested party into believing that the three vessels had been sold at arm’s length and ‘if necessary to deceive the court in order to persuade it to permit the sale of the three vessels’”. He noted that “going to court was an important step in the causation of damage”. Nonetheless he held that the claim was not precluded by JPI. He held that the authorities established the following propositions:

Finally, I was referred to Takhar v Gracefield Developments Limited [2024] EWHC 1714 (Ch). In that case, the claimant had failed in proceedings to recover property. By a fresh action, she set that judgment aside on the basis that it had been procured by fraud, in the form of a forged will deployed in the case. The claimant then brought a further set of proceedings to recover damages on the basis of, inter alia, the tort of unlawful means conspiracy, the unlawful means being the fraud in procuring the second judgment. After a very careful review of the authorities, and in an obviously careful and considered judgment, HHJ Tindal concluded that the unlawful means conspiracy claim was not barred by JPI.

In that case, HHJ Tindal refers extensively to a (rather less considered) obiter observation of mine in Lakatamia v Tseng Marimoto [2023] EWHC 3023 (Comm), [79] where I had stated:

“I have real doubts as to whether English law recognises a tort of unlawful means conspiracy dishonestly to defend a claim through the production of forged documents in those proceedings. The extension of the tort of malicious prosecution to the initiation of civil proceedings is not without controversy (see the differing views in Willers v Joyce [2016] UKSC 43), and there is no tort of maliciously defending proceedings. Even if it is possible to overcome those difficulties through the tort of unlawful means conspiracy, further issues would arise as to whether the deployment of forged evidence at trial can provide the basis for a private law cause of action, or is a matter to be dealt with under the court’s jurisdiction (through strike-out or committal) or under the criminal law (cf. Marrinan v Vibart [1963] 1 QB 234).”

Lakatamia was a case in which only the claimant appeared, and in which the scope of JPI was not debated before the court, nor any of the relevant authorities considered. This is because of the manner in which the issue arose. The claim for damages for an unlawful means conspiracy to defend or delay Lakatamia’s claims against the defendant’s mother through the deployment of forged documents had been the subject of a default judgment. The issue for me was whether I should accede to the claimant’s submission as to how I should quantify that judgment, in circumstances in which the evidence of loss before the court was unsatisfactory, and in which the court had a discretion as to whether to enter the default judgment in the terms sought at all. It was in that context that I referred to my scepticism about the validity of the underlying cause of action as one of the reasons why I was not persuaded to grant the relief sought. As will be apparent from this judgment, I adhere to that instinctive scepticism. However, my comment in that case can carry no weight when addressing the difficult issues of JPI which were the subject of full argument in Gracefield and before me on this application.

HHJ Tindal noted that forging a document for use in litigation with the intention of misleading the court and its deployment in court proceedings to that end are contempts of court ([526]-[527]), and the crime of forgery under the general criminal law ([528]-[529]). Having concluded that this constituted unlawful means, he held that JPI was not engaged:

There are a number of competing strands in this skein of legal principles, and they are not easy to disentangle. When attempting to do so, I will refer to both of the two justifications for JPI generally put forward: the Witness Inhibition Justification (viz the inhibitive effect which the prospect of civil liability might have on the willingness of those approached to give evidence, whether as part of the preparations for contemplated litigation or for deployment in a court case, to engage) and the Multiplicity of Proceedings Justification (viz the danger that a claim that a prior judgment was procured by fraud could provide a basis for re-litigating an unsuccessful case).

The first strand is the “act/evidence” distinction. I accept that the authorities support a distinction (which has particular force when considering the Witness Inhibition Justification) between unlawful acts which occur when giving (or in preparation for giving) evidence to the court in statement form or orally, and other unlawful acts such as forging a document or planting evidence which may become the subject of evidence in court. However:

The second strand is the risk of relitigation. It is striking how few of the cases cited to the court or otherwise referred to when considering successful exceptions to JPI involve an attempt to re-litigate an otherwise unimpeached decision of a court on the merits of the substantive dispute:

In the tort of malicious prosecution, one of the exceptions to JPI, the risk of re-litigation is avoided by the fact that the cause of action is confined to claims in which the claimant has ultimately succeeded (e.g Byrne v Bank of England [1902] 1 KB 467), or at least that the action has ended without a decision (Clerk & Lindsell on Torts 24th [15-33]).

None of the authorities to which I have been referred address the particular issue presented by the First and Second Globe Appeal Judgments: a claim for loss by an unlawful means conspiracy or other tort to create or deploy forged evidence in legal proceedings, where:

Surzur and Khrapunov involved cases in which a party and a non-party had conspired to take unlawful steps in litigation which made enforcement of the substantive judgment obtained by the claimants more difficult, Khrapunov making it clear that it is no answer to such a claim that the court’s committal powers are also engaged. There are other contexts in which more difficult issues can arise when the same act has the potential to have consequences under the court’s own regime for controlling its own proceedings, and in private law. It was these I had in mind in the second part of my brief obiter observation in Lakatamia quoted at [77] above. Failure to serve a defence within the time permitted by an agreed consent order is unlikely to ground a claim for damages for breach of contract if the defence is effectively served later, and the contract which results in a consent order is unlikely to oust the court’s power to extend time and re-visit the “bargain” (Pannone LLP v Aardvark Digital Ltd [2011] EWCA Civ 803). In Manifest Shipping Co Ltd v Uni-Polaris Insurance Co (The Star Sea) [2003] 1 AC 469, [75]-[76], Lord Hobhouse rejected the argument that an insurer could rely on steps taken in the course of legal proceedings as constituting a breach of the duty uberrimae fidei with a remedy under s.17 of the Marine Insurance Act 1906:

“When a writ is issued the rights of the parties are crystallised. The function of the litigation is to ascertain what those rights are and grant the appropriate remedy. The submission of the defendants in this case is that, notwithstanding this, one party’s conduct of the litigation can not only change that party’s substantive rights but do so retrospectively avoiding the contract ab initio. It cannot be disputed that there are important changes in the parties’ relationship that come about when the litigation starts. There is no longer a community of interest. The parties are in dispute and their interests are opposed. Their relationship and rights are now governed by the rules of procedure and the orders which the court makes on the application of one or other party. The battle lines have been drawn and new remedies are available to the parties. The disclosure of documents and facts are provided for with appropriate sanctions; the orders are discretionary within the parameters laid down by the procedural rules. Certain immunities from disclosure are conferred under the rules of privilege. If a party is not happy with his opponent’s response to his requests he can seek an order from the court. If a judgment has been obtained by perjured evidence remedies are available to the aggrieved party. The situation therefore changes significantly. There is no longer the need for the remedy of avoidance under section 17; other more appropriate remedies are available. The same points have been persuasively made by Callahan AJ sitting in the Supreme Court of Connecticut in Rego v Connecticut Insurance Placement Facility (1991) 593 A 2d 491, 497 .

I recognise that it is possible for something to be done in the litigation which may amount to a contractual act; the delivery of pleadings and similar documents are a form of communication. Such communication can have a contractual significance which can and will still be given effect to. Thus it is possible by a pleading to repudiate a contract or accept a repudiation as terminating the contract. Similarly, a claim or defence may affect the substantive rights of a landlord and tenant inter se. But the acts and omissions of the assured relied upon by the defendants in the present case are not of that character. They are solely relevant as alleged failures to observe good faith under section 17. The section 17 principle is a principle of law and if its rationale no longer applies and if its operation, the conferment of a right of avoidance, ceases to make commercial or legal sense then it should be treated as having been exhausted or at the least superseded by the rules of litigation. It will also very often be the case that by the time the litigation has started the cover has expired or its subject matter has ceased to exist so as to make the continuing relationship of insurer and insured no longer current and the observation of good faith only significant to the litigation.”

At [110], Lord Scott saw “a great deal of force in the argument that the section 17 duty does not apply to conduct in the prosecution of litigation, as to which the Rules of Court that govern litigation constitute the regulatory code.”

Similarly, for a party to litigation who has failed to obtain an order for indemnity costs, or who contends that it has also incurred costs not recoverable under the court’s costs jurisdiction (such as the costs of lawyers not qualified in this jurisdiction) to be able to bring a contract or tort claim to recover those costs from the litigation counterparty based on wrongful conduct in litigation is not a particularly appealing prospect. In this context there may be a difference in some cases between the position of the party to the proceedings, who is directly amenable to the court’s jurisdiction, and the position of a third party. In his dissenting judgment in Willers v Joyce [2018] AC 779, Lord Mance at [124] noted:

“A court awarding costs in a civil action is entitled to have regard to all relevant matters, including the absence of any prospects of success and the state of mind in which it was pursued, when deciding what costs, and whether on an indemnity or standard basis; should be recoverable. To permit litigation about these issues after the close of an unsuccessful action would be to invite or risk re-litigation of issues which were or could have been decided in the first action. And in so far as the costs assessed by a costs judge are not likely to or may not enable full recovery of all costs incurred, the reason is likely to be that the costs incurred were not in the eyes of the law necessary, reasonable or proportionate in the context of the issues. To allow a claim for their recovery in a separate action for malicious pursuit of the original action would in each of these cases run contrary to the general policy of the law regarding costs.”

These concerns are less obviously in play where the claim is brought against a non-party to the court proceedings as a co-conspirator. Where, however, the claim against the party to the litigation would be precluded because it was inconsistent with the court’s powers of control over the litigation, a difficult issue might arise as to whether it is possible to have a claim in conspiracy where loss (or to the extent that some loss) is only recoverable from one conspirator (raising a similar issue to that considered by Diplock LJ in Buttes Gas and Oil Co v Hammer [1975] QB 557, 579-80). These are difficult issues, and it is not necessary to try and answer them finally here. However, they show that there may be policy concerns going beyond the Witness Inhibition and Multiplicity of Proceedings Justifications which are relevant to private law claims arising from events in judicial proceedings.

Finally, there is the exception relied upon in Surzur and Takhar that JPI does not apply to proceedings “brought in relation to some broader objective during the currency of which it may well be that evidence was given” (Surzur, 811-812). That is a challenging, and potentially wide-ranging, exception. What is its scope?

In Surzur Waller LJ attached significance to the fact that “it was not a necessary ingredient [of the conspiracy] that false evidence should be given”, and this would not have been necessary if the submission of the false documents had persuaded the claimants to amend the order by consent.

In Takhar, at [562.2], Judge Tindal found the Krishans’ evidence, statements and their Defence and Counterclaim in the original proceedings were simply part of “a broader objective during the currency of which it may well be that evidence was given.” As I understand this finding, it rests on (i) the fact that the Krishans had been engaged in a long term plan to obtain the Properties from the Claimant in which dishonest statements had been made which they “would have used” to try and trick the Claimants to transfer the Properties prior to the commencement of proceedings; and (ii), the false evidence of the Krishans was “only part of their new scheme” to trick the court in the litigation conspiracy. This involves a rather more complicated fact pattern than that described by Waller LJ, because the forged PSA was only ever deployed in litigation for the purpose of obtaining a court order for sale, albeit different and misleading documents had been deployed by the Krishans prior to the proceedings to induce the Claimant to sell.

I have not found the scope of the “broader objective” exception particularly clear. It appears to be a relevant fact that the conspiracy can achieve its objective other than through the instrumentality of a court judgment (or, perhaps, settlement of court proceedings). The exception may be intended to address cases where the giving of evidence in court is, at best, an incidental aspect of the conspiracy. I am not persuaded that the mere fact that the events in the litigation are but one stage in a longer term conflict is sufficient to invoke the exception. In civil proceedings, this will almost invariably be the case, because litigation inevitably results from some pre-existing dispute which the parties have been unable to resolve.

I now turn to the six sets of proceedings in relation to which JPI is invoked in this case.

First, the reliance on the deployment of the Globe Documents to obtain the First Globe Appeal Judgment and associated judgments in the Globe Sharjah Proceedings. This involves a “core” instance of the application of JPI: a claim for loss caused by the deployment of forged evidence in legal proceedings to recover loss caused through the instrumentality of a court judgment on the merits of a substantive claim said to have been procured by that evidence (and ancillary costs liabilities), which judgment is adverse to the Claimants and has not been set aside. In this context:

It follows that if the principle of JPI applies to the Globe Sharjah Proceedings at all – an issue to which I turn at [100] below – it precludes the claims for deceit and malicious falsehood, and the unlawful means conspiracy claims which depend on those unlawful means, where the claim involves the allegation that the First Globe Appeal Judgment and associated judgments was procured by the deployment of forged documents. For the same reason, it precludes the reliance on the alleged crime under UAE law of deploying forged documents in the Globe Sharjah Proceedings.

Second, the attempt to enforce the First Globe Appeal Judgment and associated judgments in the Globe DIFC and Globe BVI Proceedings. This aspect of the claim was scarcely touched upon in argument, and the effect of a finding that the causes of action directly based on fraud in the First Globe Sharjah Court of Appeal Judgment was precluded by JPI on the Globe DIFC and BVI Proceedings to enforce the First Globe Appeal Judgment was not explored. I would simply note the following:

Accordingly, I am not presently able to conclude that it is clear to the summary judgment standard that the claims relating to events in the Globe DIFC and BVI Proceedings would be precluded by JPI, if the doctrine is applicable to events in those courts.

Finally, the unlawful means conspiracy alleged also relied upon the deployment of the Tenancy Agreement in the DIFC Tenancy Proceedings, the Sharjah Tenancy Proceedings and the defence of the Possession Proceedings. By way of a reminder:

Once again, there was insufficient time at the hearing to engage with the application of JPI to the circumstances of the deployment of the Tenancy Agreement in these various proceedings. However:

The application of JPI to preclude claims in these scenarios is an altogether more ambitious claim, and one which, if it were to succeed, might require a wider re-appraisal of the application of JPI to claims premised on the deployment of forged documents in litigation. A strike out/jurisdiction challenge before a first instance judge, under considerable time constraints, is not the occasion for an exercise of that kind, particularly when there is so much else to do.

At the outset of the hearing, I raised with the parties the question of whether a plea of JPI in answer to a claim brought in the courts of England and Wales was available when the relevant judicial proceedings said to attract the immunity were those of another jurisdiction.

The pleading context in which that question arises is as follows:

I was referred to various authorities which were said to bear on this issue, although only one in my view comes close to being a “bullseye.”

Anderson v Gorrie [1895] 1 QB 668 involved proceedings against a judge of the Supreme Court of a Colony (Trinidad and Tobago) for acts done in a judicial capacity. The Court of Appeal held that the claim was precluded by JPI, but the issue of whether JPI applied to foreign courts was not raised. This is scarcely surprising, as the court was “a Court of Record”, in a jurisdiction subject to English common law (p.670).

Trapp v Mackie [1979] 1 WLR 377 was a Scottish appeal to the House of Lords, where proceedings had been brought in court in respect of evidence given in a local enquiry before a commissioner appointed under statutory powers. At 378, the House of Lords confirmed that JPI was not limited to proceedings in courts of law:

“That absolute privilege attaches to words spoken or written in the course of giving evidence in proceedings in a court of justice is a rule of law, based on public policy, that has been established since earliest times. That the like privilege extends to evidence given before tribunals which, although not courts of justice, nevertheless act in a manner similar to that in which courts of justice act, was established more than a hundred years ago by the decision of this House in Dawkins v. Lord Rokeby (1875) L.R. 7 H.L. 744 …

The kind of tribunal in which the evidence of witnesses is entitled to absolute privilege was described by Lord Atkin in O’Connor v Waldron [1935] AC 76, 81, as a tribunal which ‘has similar attributes to a court of justice or acts in a manner similar to that in which such courts act.’”

At 379-80, Lord Diplock put forward a four-limb test for the application of JPI to tribunals: “first, under what authority the tribunal acts, secondly the nature of the question into which it is its duty to inquire; thirdly the procedure adopted by it in carrying out the inquiry; and fourthly the legal consequences of the conclusion reached by the tribunal as a result of the inquiry”. The first test required a tribunal to be “recognised by law”, this being “a sine qua non; the absolute privilege does not attach to purely domestic tribunals”. While the description “recognised by law” was not necessarily confined to tribunals constituted or recognised by Act of Parliament, it did include such tribunals, and hence applied to the tribunal in that case. Lord Fraser referred to “authorised inquiries before tribunals” or “an authorized inquiry” (in that last context quoting Royal Aquarium Ltd v Parkinson [1892] 1 QB 431, 442).

Trapp v Mackie undoubtedly adopts a predominantly functional approach to the identification of the type of tribunal recognised under domestic law which attracts JPI but does not address the issue of whether JPI can be invoked in domestic courts in respect of claims arising from proceedings before foreign tribunals. Further, the requirement that the tribunal is “recognised by law” indicates that function is not the sole criterion.

Hasselblad (GB) Ltd v Orbinson [1985] QB 475 can be said to engage with the issue more directly, and Mr Cohen KC submits that it constitutes binding authority for the application of JPI to claims concerning foreign court proceedings. Proceedings for defamation were brought in respect of a letter submitted by the defendant to a European Commission investigation. At first instance, Comyn J held that the claim was barred by JPI. In a memorandum requested by the Court of Appeal in which he set out his reasons for that conclusion, he stated that the European Commission was “a court which was in effect one of ours”, and that “we must recognise the new concepts of the EEC”, referring to the Commission as “a body we recognised, supported and whose orders we enforced” (pp.478-79).

The arguments on appeal focussed on the functional test, and did not engage with or challenge Comyn J’s finding of recognition, albeit, in response to a suggestion that it was for a statute such as the International Organisations Act 1968 to provide the immunity sought, the defendant submitted that “the European Community systems were not international but part of our own system” (pp.486-7), noting that prior to the accession of the United Kingdom, Community organs were “foreign institutions” and were addressed by s.3 of the International Organisations Act 1968. The European Commission (who intervened on the appeal) made the same submission (“the European Court and the Commission are institutions of the United Kingdom”).

The Court of Appeal applied the Trapp v Mackie test. Applying the first limb of that test, at 494H, Sir John Donaldson noted “it is conceded, as it must be, that the Commission is recognised by the law of this country.” When the Court of Appeal came to consider the procedure applied by the Commission, it noted at pp.496-97 that it was “wholly dissimilar to that of any court or judicial tribunal operating under the common law system” but that that was “not the test”, stating:

“When in Trapp v. Mackie [1979] 1 W.L.R. 377, 379 Lord Diplock referred to a tribunal acting ‘in a manner similar to courts of justice’ and Lord Fraser of Tullybelton at p. 385G to tribunals having ‘similar attributes’ to courts of justice, I think that they must have had a wider concept in mind which would embrace courts of justice operating both under common law and under civil law procedures.”

Contrary to Mr Cohen KC’s submissions, I do not accept that this passage involves a finding that JPI applies to foreign proceedings (the fact that the proceedings before the Commission were recognised was not in dispute), but a finding that the style of procedure adopted by the recognised tribunal need not be that of the common law system for it to be “acting in a manner similar to courts of justice”. The Court of Appeal held that proceedings before the Commission were not sufficiently similar to those before a court of law to attract JPI (the decision being reached by Commissioners who had not attended the hearing on the basis of advice from member states not directly concerned), being more in the nature of administrative than judicial proceedings. However, a separate public policy was invoked, based on the public interest in ensuring that the Commission as the primary authority of the European Community should not be frustrated in its duties. That public policy arose “since this country is a member of the European Community” (p.500). At p.505, Sir John Donaldson MR also referred to the desirability of avoiding inconsistent decisions between Community institutions and national courts, and while he did not expressly say so, this appears to have been a concern at the possibility of inconsistent decisions within the same legal order.

It follows that I do not accept that Hasselblad provides binding authority in the PCB Defendants’ favour, and there are elements of the reasoning which provide some limited support for the opposite position. In reaching that conclusion, I have not relied on the Claimants’ argument that Hasselblad would not be binding upon me because its conclusion on JPI was one of two reasons for the Court of Appeal’s conclusion (c.f. Membery v The Great Western Railway Company (1889) LR 14 App Cas 179, 187).

Finally, there is Erhard-Jensen Ontological v Rogerson [2024] EAT 135, a decision of Mrs Justice Heather Williams, a judge of co-ordinate jurisdiction, sitting in the EAT. This is a comprehensive and fully reasoned judgment which directly addresses the issue and concludes that JPI is engaged by foreign proceedings. The issue which arose was whether the respondent’s act in commencing arbitration proceedings in Singapore could be relied upon by the claimant as an alleged detriment for the purposes of a claim under s.47B of the Employment Rights Act 1996. The Employment Judge rejected an argument that this was barred by JPI, inter alia because JPI did not apply generally to overseas bodies. Heather Williams J overturned that decision.

In her judgment, Heather Williams J reviewed the relevant authorities:

I accept that as a fully reasoned judgment of a judge of co-ordinate jurisdiction, I should follow that conclusion unless convinced it is wrong. In Lornmead Acquisitions Limited v Kaupthing Bank HF [2011] EWHC 2611 (Comm), 53, Gloster J approved the following passage from Halsbury’s Laws summarising the approach to be taken in the present circumstances:

“98.

Decisions of co-ordinate Courts.

There is no statute or common law rule by which one Court is bound to abide by the decision of another Court of co-ordinate jurisdiction. Where, however, a judge of first instance after consideration has come to a definite decision on a matter arising out of a complicated and difficult enactment, the opinion has been expressed that a second judge of first instance of co-ordinate jurisdiction should follow that decision; and the modern practice is that a judge of first instance will as a matter of judicial comity usually follow the decision of another judge of first instance unless he is convinced that that judgment was wrong. …

It is undesirable that different judges of the same division should speak with different voices.”

It is clear that fraud of the foreign court in foreign court proceedings can be relied upon in this jurisdiction for the purpose of resisting enforcement of a foreign judgment: Dicey, Morris & Collins on the Conflict of Laws (16^th) Rule 53, [14R-134] and [14-141]. That is not, of itself, determinative – JPI co-exists in English law alongside the rule that an English judgment can be set at naught by being set aside in an action for fraud in reliance on events which would have engaged JPI in some other form of claim, so this is a subject where the immediate legal context is important. Further, the judgment creditor’s attempt to engage the English court’s enforcement jurisdiction may be an answer to the comity concerns to which an investigation of this kind might otherwise give rise. However, it does suggest that there are limits to the suggestion that comity alone precludes an action based on loss caused by fraud in foreign proceedings.

The position regarding arbitration is interesting, and not as clear as it might be. I have found no English authority considering whether JPI applies to evidence given by witnesses in domestic or non-domestic arbitration proceedings. The industry of Mr Cohen KC produced an authority of the United States Court of Appeal for the Second Circuit in Rolon v Henneman 517 F.3d 140 (2^nd Cir. 2008) in which Circuit Judge Sotomayer (as she then was) applied the witness immunity rule as formulated by the US Supreme Court in Briscoe v LaHue 460 US 325 to evidence given in arbitration. Sottomayer CJ noted that in Austern v. Chicago Board of Options Exchange, Inc., 898 F.2d 882 (2d Cir. 1990), the Second Circuit had “extended the common law protection of immunity accorded to judges to arbitrators in contractually agreed upon arbitration proceedings” and continued:

“The policy rationale for witness immunity, as articulated by the Supreme Court in Briscoe, applies with equal or near equal force in the arbitral context: ‘[T]he truth finding process is better served if the witness’s testimony is submitted to ‘the crucible of the judicial process so that the factfinder may consider it, after cross-examination, together with the other evidence in the case to determine where the truth lies.’”

In this jurisdiction, there is a very strong public policy in favour of the finality of arbitration awards (domestic and foreign) and the English courts are astute to prevent collateral attacks on such awards other than through the mechanisms permitted by the Arbitration Act 1996 (in respect of arbitrations seated in England and Wales) or by the New York Convention: see, for example, the anti-arbitration and anti-suit injunction jurisdictions and the rationales for them as discussed in Sodzawiczny v Smith [2024] EWHC 231 (Comm). Actions suing witnesses in arbitration for giving false evidence in an arbitration which led to an adverse award are likely to meet a hostile response. However, the position of the arbitrator – the equivalent of the judge in the JPI context – is that there is no absolute privilege, only a qualified one in the absence of bad faith (s.29 of the Arbitration Act 1996). Before the 1996 Act, the position was complex, but the authorities generally favoured qualified immunity (see Mustill and Boyd, Commercial Arbitration 2^nd, 224-230 and Commercial Arbitration: 2001 Companion, 299-300).

It may be that a qualified form of JPI (i.e. qualified by s.29) applies to arbitrations seated in England and Wales, as “recognised”, domestic tribunals, and as a matter of public policy this is applied to foreign arbitration proceedings as well. There is support for such an approach in Westacre Judgments Inc v Jugoimport-SPDR Holding Co Ltd [2000] QB 288, in which the Court of Appeal noted at p.307 that it was “anomalous that enforcement of a foreign judgment can be attacked without any requirement that the evidence must be evidence not available at the trial, and apparently without regard to the question whether the impact of that evidence would be likely to be decisive”. The Court held that foreign awards were not to be treated in the same way as foreign judgments, approving the decision of Mr Justice Colman to that effect at first instance. At p.309, Waller LJ stated:

“I agree with the judge that the principle in the Abouloff case in its extreme formulation should not be extended to arbitration awards but would put the matter a little differently but only in degree. I would suggest that the reason why the Abouloff principle should not be extended to foreign arbitration awards is first that an arbitration award is an award from the tribunal chosen by the parties to decide their dispute; that will very often not be the case either when a domestic or a foreign judgment has been obtained. Second, there is thus a logic in placing foreign arbitration awards into the same category as domestic arbitration awards and not into the same category as foreign judgments.”

It is possible to justify the application of JPI to foreign arbitration proceedings on the same basis.

Mr Cohen KC relied upon the principles applicable to two other areas of law. The first was the differential treatment in the law governing the privilege against self-incrimination between offences under the law of England and Wales (where the privilege is absolute) and those arising under foreign law (where the privilege is discretionary): Brannigan v Davison [1997] AC 238, 249. However, the “privileged” status given to English criminal law in this context does not, in my view, provide any assistance on the issue of whether there is a mandatory rule of English law that JPI applies where the judicial proceedings in question are those of another jurisdiction. Some territorial limitation will frequently (although I accept not universally) be built into the question of whether English criminal law is engaged. In any event:

Finally, Mr Cohen KC relied upon the approach to legal professional privilege (“LPP”) and “without prejudice” privilege (“WPP”), where English law is applied as the law of the forum when issues as to LPP and WPP arise in the course of English proceedings, regardless of the law applicable where the documents came into existence or which governs the legal relationship pursuant to which they were created (Re RBS (Rights Issue Litigation) [2017] 1 WLR 1991, [174]). Once again, I have not found this analogy instructive:

At the outset, I think it is helpful to determine how JPI is appropriately characterised. There are three possibilities:

I am satisfied that JPI is a mandatory rule of the law of England and Wales for Rome II purposes:

That leads inexorably to the identification of the scope of the rule, and in particular, whether the English rule never extends to foreign proceedings, always does so, or only does so to the extent that there is a similar rule there (“the Modified Rule”). My instinctive reaction favours the Modified Rule:

I accept that the English courts are never likely to countenance the prospect of a foreign judge being sued for actions in their judicial capacity in an English court. That would undermine the commitment to judicial independence, and hence the rule of law, which judicial immunity is often recognised as serving (see for example the IBA Minimum Standards of Judicial Independence 1982 paragraph 43 “A judge shall enjoy immunity from legal actions”). The House of Lords in Jones v Minister of the Interior of the Kingdom of Saudi Arabia [2007] 1 AC 270 accepted that the immunity under the State Immunity Act 1978, in keeping with customary international law, extends to officials, servants or agents of a state (and to like effect, see Propend Finance v Sing 111 ILR 611). Lord Bingham’s reference in Jones at [10] to “servants or agents” of a state would appear broad enough to embrace judges. That conclusion is reinforced by his statement at [12] that a foreign state can claim immunity for any act for which it is responsible under international law in which context he referred to Article 4(1) of the International Law Commission’s Articles on State Responsibility. This states that “the conduct of any state organ shall be considered an act of that state under international law whether the organ exercises legislative, executive, judicial or any other functions” (emphasis added). If necessary, it would be relatively easy to fashion a specific rule of immunity in respect of judicial acts, as was done for the European Commission in Hasselblad. The treatment of advocates (Arthur JS Hall v Simons [2002] 1 AC 615) and expert witnesses (Jones v Kaney [2011] UKSC 13) shows that the participants in the trial process have not always marched in step so far as JPI is concerned.

Mr Cohen KC also argued that JPI should be extended to foreign proceedings to protect the putative witness’s Article 10 ECHR right to freedom of expression. However, not only does this face difficulties because of the territorial limits on the application of the ECHR (Al-Skeini v United Kingdom [2011] 53 EHRR 18), but in any event the relevant limitation is imposed by the law of the place where the evidence is given, to the extent that it has no JPI rule.

For these reasons, I can see a principled case for the Modified Rule. It will also be apparent that I have taken a different view from Heather Williams J on the conclusions to be drawn from Hasselblad and concluded that the position on arbitration (which was the specific context she was faced with) can be justified on a different basis. I have also expressed the view that the comity concerns which very properly animated Heather Williams J’s judgment can be accommodated within the Modified Rule.

In short, approaching this issue without the benefit of prior authority, I would have concluded that the Modified Rule applied. Nonetheless, Mrs Justice Heather William’s judgment is a comprehensive and cogent treatment of the issue, and I can see obvious attractions in a “bright line” rule. In these circumstances, where the issue might to a significant extent depend on judicial policy, I have concluded that I should follow Heather Williams J’s judgment and give permission to appeal on this point to the extent the outcome of this application turns on this issue.

I have only been persuaded that, the territorial issue apart, it is established to the summary judgment standard that JPI is engaged by the claim relating to the Globe Sharjah Proceedings, and not the Globe DIFC and BVI Proceedings and the Possession Proceedings.

The effect of my conclusion at [128] above is that JPI applies. If the Modified Rule applied, it is accepted by the PCB Defendants that it is arguable that there is no relevant JPI in the UAE, on which basis JPI would not have precluded the claims relating to the Globe Sharjah Proceedings.

It is conceded by the Claimants that BVI law does recognise an equivalent JPI principle. So far as the DIFC is concerned, I accept that the DIFC is not an entirely common law based system. Mr Trotter referred me to The Industrial Group Limited v Abdelazim El Shikh El Fadil Hamid [2022] DIFCA CA 005 and CA 006, where the DIFC Court of Appeal held that the torts of malicious prosecution and abuse of process did not form part of the substantive law applied by the DIFC. That conclusion followed from the fact that the DIFC Law of Obligations was a complete code of the torts recognised. Nonetheless, the DIFC Court of Appeal recognised that it had “the inherent jurisdiction of a common law court” ([103]-[104]). I suspect Sir Peter Gross, who formed part of the DIFC Court of Appeal in that case, would be surprised at the suggestion that the DIFC, although a common law court, nonetheless did not apply the common law doctrine of JPI to its proceedings (and a judgment rejecting the existence under DIFC law of one of the recognised exceptions to JPI under English law scarcely provides strong support for the argument that DIFC law does not recognise JPI). In any event, after I raised the issue of the applicability of JPI in foreign proceedings, the Claimants had the opportunity to put in expert evidence. This was done for the UAE, but not the DIFC. That reinforces my conclusion that DIFC law recognises JPI, and I am satisfied it is appropriate to apply the presumption of similarity as to the position of another common law court.

It follows that if I had been persuaded to the summary judgment standard that the claims in relation to the Globe DIFC and BVI Proceedings engaged JPI, there would have been no territorial basis for excluding the operation of JPI even if the Modified Rule had applied.

Mr Cohen KC advanced another preliminary objection that the Claimants had failed to plead claims which Bright J had found to be governed by UAE law by reference to the principles of UAE law.

This objection does not take the PCB Defendants anywhere:

The Claimants do not allege that they were ever induced to believe that the Globe Documents were genuine or that the claims under them were genuine. Whilst that might once have been thought to present a considerable obstacle in the way of a claim of deceit, that ceased to be the case with the decision of the Supreme Court in Zurich Insurance Co plc v Hayward [2017] AC 142. In that case the defendant gave the claimant insurer a dishonest account of the extent of injuries suffered in an injury at work. The insurers suspected that the claim was deliberately exaggerated but entered into a settlement agreement nonetheless. When they acquired evidence of the suspected dishonesty, they brought a claim in deceit and for rescission of the settlement agreement. The claim was rejected by the Court of Appeal on the basis that the insurers had not relied upon the dishonest statements, in the sense of acting on their truth, in settling the claim. The Supreme Court overturned that conclusion.

Lord Clarke, who gave one of the two judgments, confirmed that to make out a claim in deceit, “it must be shown that the defendant made a materially false representation which was intended to, and did, induce the representee to act to its detriment”, but that it was “not necessary, as a matter of law, to prove that the representee believed that the representation was true” ([18]). He referred with approval to the trial’s judge statement that “the question in a case like this is not what view the employer or its insurer takes but what view the court may take in due course.” In any event, this was a case in which the amount of the settlement was much higher than it would have been but for the defendant’s statements ([22]).

At [43], Lord Clarke noted that “as I understand it, it is accepted on behalf of Zurich that, where the representee knows that the representation is false, he cannot succeed. There is some support in the authorities for this view” (referring to Chitty on Contracts, Spencer Bower & Handley on Actionable Misrepresentation and Gipps v Gipps [1978] 1 NSWLR 454 , 460, per Hutley JA). At [44], Lord Clarke left that issue open but suggested that “it seems to me that there may be circumstances in which a representee may know that the representation is false but nevertheless may be held to rely upon the misrepresentation as a matter of fact.”

Lord Toulson agreed with Lord Clarke’s judgment. At [67], he stated that “it is possible for a representor to make a false and fraudulent misrepresentation, with the intention of influencing the representee to act on it to its detriment, without the representee necessarily believing it to be true. If the representor succeeds in his object of influencing the representee to act on the representation to its detriment, there will be the concurrence of fraud and deceit in the representor and resulting damage to the representee. In principle, the representee should therefore be entitled to a remedy in deceit.” At [71], he stated:

“Mr Hayward’s deceitful conduct was intended to influence the mind of the insurers, not necessarily by causing them to believe him, but by causing them to value his litigation claim more highly than it was worth if the true facts had been disclosed, because the value of a claim for insurers’ purposes is that which the court is likely put on it.”

Zurich v Hayward has proved a controversial decision: see Paul S Davies and William Day, “A Mistaken Turn in the Law of Misrepresentation” [2019] LCMLQ 390 and William Day, “Recent Travails in Fraudulent Misrepresentation” [2021] LMCLQ 636. Two first instance decisions (one mine) have suggested that, for a claim in deceit or some species of misstatement tort to succeed , it is still necessary to show that the representee acted as they did because of a perception that a third party might believe that the statement was true (Holyoake v Candy [2017] EWHC 3397 (Ch), [391]-[392] and School Facility Management Ltd v Governing Body of Christ the King College [2020] EWHC 1118 (Comm), [401]). In Zurich, moreover, the statements were made for the purpose of inducing the representee to act on the basis that they were or might be true.

In this case, however, the Claimants cannot allege that the Globe Documents were deployed to induce them to act in a certain way. They were first deployed in proceedings served on a lawyer linked to the Al Saris. Whether genuine or not, Globe clearly had no intention of inducing the Claimants to defend those proceedings, nor the Globe DIFC and Globe BVI Proceedings. On the contrary, they would have been delighted if those proceedings had not been defended.

I do not accept that Zurich arguably establishes a principle of law that a party who makes dishonest statements in or for the purpose of litigation and who foresees that costs will be incurred in defending those proceedings and challenging that statement can be sued by the defendant in deceit, even leaving aside JPI. Nor can I accept that the tort of deceit is constituted by making false statements in litigation which cause loss through the instrumentality of the court decision (which is the position so far as the Globe Sharjah Proceedings are concerned), once again even leaving aside JPI. To the extent that there is a deceit based claim under English law in those circumstances, it is the claim to set aside the judgment thus procured. As the Master of the Rolls noted in Tinkler v Esken [2023] EWCA Civ 655, [12]:

“In modern terms, we can perhaps regard the action to set aside a judgment for fraud as akin to an action for deceit. The only significant differences are that the court, rather than the opposing party to the first action, has to be shown to have been deceived, deliberate dishonesty is required, and materiality rather than simple reliance must be shown. If the elements are made out (misrepresentation or misleading conduct, made or undertaken fraudulently, with reliance for deceit and materiality for an action to set aside a judgment), the contract or the judgment can be rescinded or set aside.”

In this case, the key features of Hayward – the dishonest statement being made to the representee for the purposes of inducing the representee to act in a certain way, and the representee so acting because of the dishonest statement whether they believed it or not – are absent.

In my assessment, this is sufficient to dismiss the deceit claims at this stage in relation to the statements made in the Globe Sharjah, DIFC and BVI Proceedings, in none of which were the Globe Documents deployed for the purpose of inducing the Claimants to act in a particular way, nor in which the Claimants have acted in the manner intended.

The claims having been pleaded by reference to English law under the default rule, that is sufficient to dismiss these claims. The PCB Defendants also advanced a number of alternative arguments as to why the claims would fail under UAE law. Before considering those points, it is helpful to have regard to Bright J’s conclusions as to applicable law on the jurisdiction challenge brought by D7 and D9 at [2023] EWHC 1797 (Comm). He divided the deceit-based claims into two:

No evidence of BVI and DIFC law having been adduced, and both being common law systems which draw heavily on English common law, I am satisfied that it is appropriate to apply the presumption of similarity, with the result those claims are not realistically arguable.

To the extent that the claims are governed by UAE law (which Bright J held was arguably the case for the claims relating to the Globe Sharjah and DIFC Proceedings), Mr Cohen KC suggests there would be two further answers to any attempt to plead a claim under UAE law rather than by relying on the default rule.

First, it is said that a deceit-based claim under UAE law requires the victim to actually be deceived. While the provision quoted by the Claimants’ first report on UAE law, from Professor Dr Nayla Comair-Obeid, would suggest as much, Professor Comair-Obeid’s evidence is that the claims brought in the Particulars of Claim are actionable under UAE law. Mr Ramadan, the Claimants’ current expert, suggests that the broad principles of UAE tort law would treat loss incurred as a result of the forgery of documents and their deployment in legal proceedings recoverable under Articles 282-283 of the UAE Civil Code. While Mr Al Heloo, for the PCB Defendants, is not aware of any judgment for fraud in the UAE courts in these circumstances, he is unable to say that such a claim would be bound to fail. In these circumstances, I am not able to conclude on the evidence that any attempt to plead that the facts currently set out in the Re-Amended Particulars of Claim to support the deceit claims give rise to a claim under UAE law has no real prospect of success on this ground. Nor can I decide whether, as Mr Al Heloo suggests, the claim would fail under UAE law on the basis that D10 was acting as a director.

Second, it is said that the claims are time-barred under UAE law:

An initial point was taken that this cause of action does not appear in the Claim Form. The Claim Form is opaque, pleading that Globe “maliciously … relied on certain of those documents in such proceedings abroad.” However, the cause of action is clearly pleaded in the Particulars of Claim which are attached to, and expressly referred to, in the Claim Form. The documents must be read together: Evans v Cig Mon Cymru Ltd [2008] 1 WLR 2675, [26], [30]-[32] and [35]. Accordingly, this point goes nowhere.

So far as the claim pleaded by reference to English law under the default rule is concerned, the only point taken by Mr Cohen KC with specific reference to this claim is that it is time barred. Section 4A of the Limitation Act 1980 provides for a one year limitation period for claims for malicious falsehood. Section 32A provides that:

“(1)

If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which—

(a)

the operation of section 4A of this Act prejudices the plaintiff or any person whom he represents, and

(b)

any decision of the court under this subsection would prejudice the defendant or any person whom he represents,

the court may direct that that section shall not apply to the action or shall not apply to any specified cause of action to which the action relates.

(2)

In acting under this section the court shall have regard to all the circumstances of the case and in particular to—

(a)

the length of, and the reasons for, the delay on the part of the plaintiff;

(b)

where the reason or one of the reasons for the delay was that all or any of the facts relevant to the cause of action did not become known to the plaintiff until after the end of the period mentioned in section 4A—

(i)

the date on which any such facts did become known to him, and

(ii)

the extent to which he acted promptly and reasonably once he knew whether or not the facts in question might be capable of giving rise to an action; and

(c)

the extent to which, having regard to the delay, relevant evidence is likely—

(i)

to be unavailable, or

(ii)

to be less cogent than if the action had been brought within the period mentioned in section 4A.”

It is accepted that the primary limitation period has expired. What is said by the Claimants is that there is an arguable basis for concluding that the court would disapply the one year-period, such that the claim against D10 (brought in February 2024) would be within time. The principal reason put forward as to why an extension of time may be granted is that it has been said that it may be “decisive” in any extension application if other claims on the same facts are proceeding anyway: Maccaba v Liechtenstein [2003] EWHC 1325 (QB), [19]-[20], [25] and [29] and Qatar Airways Group QCSC v Middle East News FZ LLC [2020] EWHC 2975 (QB), [247(i)]. I am not able at this stage to conclude that it is not arguable that the Claimants will obtain an extension under s.32A (not least because it would be necessary to see what the Particulars of Claim look like in the light of my other determinations).

What of the limitation position by reference to other applicable laws?

The Claimants alleged that the Globe Documents were created after the entry of the Bank Sharjah and BVI Judgments “intending to violate the Bank’s rights of those judgments by preventing the recovery and/or realisation of the value of the Bridge Properties or the shares in the BVI Companies”. It is alleged that:

It is helpful to consider the claim, and the background to it, in more detail:

The Marex tort first breathed life when Robin Knowles J held it to be arguable in Marex Financial Limited v Sevilleja [2017] EWHC 918 (Comm), [28] that there was a tort of “inducing or procuring another to act in wrongful violation of rights under a judgment.” The allegation in that case was that the respondents, who were company directors of the judgment debtor, had transferred monies out of the judgment debtor’s bank account into their personal control after judgment had been entered. At [24]-[25], Robin Knowles J rejected the distinction “between the inducing and procuring required by the tort, and mere prevention or interference”, holding that “the dissipation and the non-payment were two sides of the same coin. The objective was the wrongful non-payment of the Judgment Debt; on the alleged facts the dissipation was procured in order to procure that objective.” Robin Knowles J referred in this context to Lord Nicholls judgment in OBG Ltd v Allan [2008] 1 AC 1, [178] where he stated:

“There is a crucial difference between cases where the defendant induces a contracting party not to perform his contractual obligations and cases where the defendant prevents a contracting party from carrying out his contractual obligations. In inducement cases the very act of joining with the contracting party and inducing him to break his contract is sufficient to found liability as an accessory. In prevention cases the defendant does not join with the contracting party in a wrong (breach of contract) committed by the latter. There is no question of accessory liability. In prevention cases the defendant acts independently of the contracting party …”

At [26], Robin Knowles J noted that “there is sufficient on the assumed facts and having particular regard to his relationship with and power and control over the Companies to allow the analysis that Mr Sevilleja induced and procured the Companies not to pay the Judgment Debt; and that he actively joined with the Companies to bring about that end through dissipation.”

The first case which entered judgment on the basis of the Marex tort was Lakatamia Shipping Co v Su [2021] EWHC 1907 (Comm) (in which the existence of the tort was not disputed: [124]). It was also common ground in that case that, given that the Marex tort is a development of the tort of inducing a breach of contract, that its elements stood to be identified by analogy with that tort ([125]). On that basis, at [126]-[127], Mr Justice Bryan held that the elements of the Marex tort are:

That decision has been followed in two other first instance decisions in the same litigation and on essentially the same facts, in which the defendants did not appear, and there was no argument as to the existence or elements of the Marex tort (Lakatamia Shipping Co v Tseng [2023] EWHC 3023 (Comm) – a decision of mine – and Lakatamia Shipping Co v Su [2024] EWHC 11749 (Comm)). The tort, and the Lakatamia exposition of its elements, has since been applied by Bryan J in Hotel Portfolio II UK Limited v Marlborough Developments Ltd [2024] EWHC 3075 (Comm), [75]-[80], albeit once again in undefended proceedings. While the Marex tort is established at first instance, there remains scope for argument as to the existence and elements of the tort in a higher court.

Element (iii) – the procurement or inducement of that breach by the defendant – merits further discussion at this point. When discussing accessory liability for breach of contract in Accessory Liability (2015), Professor Paul S Davies analyses the “conduct element” on the part of the accessory (pp.145-156). He identifies the following alternative conduct elements which are of particular relevance to the consideration of the Marex tort.

First, inducement which he notes is “the conduct element most commonly associated with accessory liability in contract law” (p.145). Inducement or procurement generally involve the accessory acting “on the mind” of the contract-breaker. Professor Davies notes that the meaning accorded to the concept of “inducement” in some of the authorities can be wider than that (e.g. Lord Hodge in Global Resources Group Ltd v Mackay[2009] SLT 104, [13] stating “A must induce B to break his contract with C, by persuading, encouraging or assisting him to do so”). Professor Davies suggests that rather than to try and force the concept of assistance into an extended concept of inducement, the law should recognise that there are conduct elements which can establish accessory liability in contract in addition to inducement (pp.149-50).

Second, Professor Davies discusses the concept of prevention which, once again, for some time was treated somewhat unsatisfactorily as a species of inducement, namely “indirect inducement”, a distinction jettisoned in OBG Ltd v Allan [2008] 1 AC 1, [36] and [86]. In ABFA Commodities Trading Limited v Petraco Oil Company SA [2024] EWHC 147 (Comm), [240]-[242], I sought to summarise the legal principles applicable to prevention as follows:

Third, there is the concept of assisting the breach. In Accessory Liability, 150, Professor Davies notes that in Mainstream Properties Ltd v Young [2005] EWCA 861, the Court of Appeal found the conduct element for accessory liability made out where the defendant’s actions had “facilitated” the breach, and that there was support for assistance as a sufficient conduct element in BMTA v Salvadori [1949] Ch 556 and the approval of that case by Jenkins LJ in DC Thomson & Co Ltd v Deakin [1952] Ch 646, 694. Further authority in support of accessory liability on the basis of assistance as distinct from inducement is collected in Philip Sales (as he then was), “The Tort of Conspiracy and Secondary Liability” (1990) 49(3) CLJ 491, 507-509.

How do these conduct elements transpose to the Marex tort?

The Marex tort has generally been invoked in relation to steps taken to frustrate the enforcement of a monetary judgment by the dissipation or encumbrance of assets against which the judgment might be enforced:

What of prevention? Where the complaint is that the defendant has entered into a transaction with the judgment debtor which impedes enforcement (e.g. by purchasing assets which are relatively easy to enforce against for a form of consideration which is more difficult to access or realise), then the same issue will arise as whether entering into a contract with the judgment debtor, the performance of which would impede or prevent a contracting party from complying with an existing contractual obligation, can itself ground accessory liability where the third party’s conduct does not operate on the will of the contracting party. Liability in such a scenario may more readily be established when the means constituting prevention are themselves a legal wrong, and in many cases assistance in the breach will provide a more satisfactory basis for accessory liability, where the assistance was rendered with a view to causing the breach (OBG Ltd v Allan [2008] 1 AC 1, [70]).

Finally, there is accessory liability on the basis that the defendant has assisted breach of the judgment debtor’s obligation. It is suggested that this would generally be the most appropriate conduct element in the Marex tort context, where, unlike many procuring or inducing breach of contract cases, it is the judgment debtor who is the moving spirit behind the efforts taken to frustrate enforcement, rather than the accessory who has set matters in motion.

I will first deal with a preliminary point taken by Mr Cohen KC that there could be no judgment for the purposes of a claim under the Marex tort until the Bank’s Sharjah and BVI Judgments were registered in this jurisdiction. That submission is based on a finding of Mr Simon Colton KC in Lakatamia Shipping Co Ltd v Arnaud Zalbadano [2024] EWHC 1749 (Com), [110(a)]. However, Mr Colton KC was there addressing a defence of justification in relation to acts taken by a Monegasque lawyer acting on the instructions of a client in Monaco, in which context the fact that the English judgment relied upon as the basis of the Marex tort had yet to be registered there was highly relevant. I cannot see that the issue of registration creates a threshold requirement for the bringing of such a claim in this jurisdiction, at least where (as in this case) the judgment is one which could be enforced in this jurisdiction by an action on the judgment.

So far as the issue of applicable law is concerned, Bright J held that the applicable law is the law of the place where the judgment was rendered (at [156]), which I accept is clearly strongly arguable. In this case:

There is also a potential issue as to whether the Marex tort under English law can apply to a foreign judgment (in any cases where the applicable law of the tort is not the applicable law of the judgment). That might be thought to raise a similar issue as to whether the English tort of procuring breach of contract should be capable of applying to a contract governed by some other applicable law. I am not immediately aware of any authority on either scenario, but accept that it is strongly arguable that the English torts extend to interference with legal rights under foreign as well as domestic law. In each case, a legal right has been interfered with.

Against that background, I turn to the different ways in which the Claimants’ Marex tort claim is put.

As to the alleged violation of the Bank’s rights as judgment creditor in respect of the Bank Sharjah and BVI Judgments:

On the Bank’s primary claim that the Globe Documents are forgeries:

So far as the BVI Companies are concerned, I accept that the BVI Companies can point to the deployment of the WWFO granted in the Globe DIFC Proceedings as a step arguably taken to obstruct the enforcement of the Possession Judgment through Mr Gebremedhin. The issue of whether there is an arguable claim against the PCB Defendants in respect of that conduct is considered in the context of the conspiracy claim below.

What of the Marex tort so far as the Bank BVI and Bank Sharjah Judgments are concerned?

As to the position under UAE and BVI law:

As to the arguability of the case on the facts:

This is an issue where the question of applicable law is vital:

In the Claimants’ written opening, the sum total said about the claim for malicious prosecution was:

“Malicious prosecution: UAE law. Although there is no UAE law tort of malicious prosecution specifically so called, such acts would nevertheless give rise to liability.”

In the Claimants’ written “Summary List of Points in Response” served during the hearing, this was expanded to:

“Malicious prosecution

(a)

Applicable law. Damage occurred where the costs were incurred. That is onshore Dubai, where the Bank signed the retainers and paid the fees. UAE law applies.

(b)

No tort. Ds do not maintain the position that malicious prosecution is not actionable in UAE law. Third Hadef Letter makes clear that it is.

(c)

Loss. No reason why Cs should not be entitled to costs as damages. Damages at §59.6 (malicious prosecution in Tenancy/Possession Proceedings) also claimed against PCB Ds under overarching conspiracy.”

It therefore came as something of a surprise to receive a page and a half of single spaced submissions in support of an application for permission to appeal which:

In these circumstances, I have reluctantly come to the conclusion that this is an issue on which there will need to be further oral argument. A serious issue to be tried cannot be established simply because an inadequate hearing estimate has allowed insufficient time for points to be properly explained, argued and responded to. The suggestions that a claim can be brought for the malicious commencement of court proceedings without reasonable and probable cause when no such claim is recognised by the law of the place where the proceedings are commenced, and that a claimant’s unilateral decisions as to where to sign a letter of retainer with its lawyers or as to the bank account from which it pays legal fees can lead to the application of a law which does recognise such a claim, require proper consideration. The implications of the need for a further oral hearing on the May 2025 trial date will need to be explored in due course.

It is accepted that the Al Saris arguably owed fiduciary duties to the BVI Companies as de facto or shadow directors. The Claimants alleged that through their involvement in the Globe Documents, the PCB Defendants dishonestly assisted the breach of those duties.

As to this:

Next, Mr Cohen KC argued that, having obtained judgment on the basis that the Al Saris did not have authority to commit the BVI Companies to the Globe Documents, it is not open to the Claimants to bring a claim on the premise that they did, having regard to the principle of approbation and reprobation as applied in Express Newspapers Plc v News (UK) Ltd [1990] 1 WLR 1320. In particular the DIFC Tenancy Proceedings were successfully defeated on the basis that the Tenancy Agreement had been signed without the BVI Companies’ authority (where I accept it was the basis of the decision). I do not accept any issue as to the status of the Globe Documents was necessarily decided in the Possession Judgment or the DIFC Tenancy Proceedings, which were concerned with the Tenancy Agreement. Even here, the lack of authority to sign the Tenancy Agreement was an alternative basis for HHJ Johns KC’s judgment, the primary basis being that the document was a forgery.

Express Newspapers is an authority which is more often cited than applied, in which the plaintiff obtained judgment for breach of copyright against a rival newspaper who had copied an article, and then sought to resist a claim for breach of copyright in identical circumstances brought by that same newspaper on the basis that a journalistic custom permitted copying stories from other papers. Sir Christopher Floyd in LA Micro Group (UK) Ltd v LA Micro Group Inc [2021] EWCA Civ 1429, explained at [26] that:

“…this form of estoppel by conduct is one which is approached by means of a broad, merits-based assessment, and is not constrained by strict rules (as, for example, issue estoppel). The matters to consider include, but are not limited to, those enumerated by Ginsburg J in the New Hampshire case. It is material to ask the question whether it is apparent that the earlier decision was obtained on the footing of, or because of, the stance taken by the party in the earlier proceedings. Absent that factor, whilst the change of position may affect the credibility of the party or the witness concerned, there will not be an impression that one or other court was misled into giving its decision, so that the administration of justice risks being brought into disrepute.”

In Malik v Malik [2024] EWCA Civ 1323, [36], Zacaroli LJ held that this was ultimately a principle based on abuse of process.

In this case, the Claimants have brought as their primary case the contention that the Globe Documents are forgeries and signed without authority. D7 and D9 – and I suspect in due course D10 – have in answer to that case pleaded that the Globe Documents are genuine and signed with the BVI Companies’ authority and that the Claimants are estopped from contending otherwise. I should take some persuading that, in those circumstances, it was not open to the Claimants to advance an alternative case for relief on the basis that the Globe Documents are genuine and authorised. This conduct is not abusive, and a “broad, merits-based assessment” does not suggest it should be enjoined.

Finally, it is said that if the Globe Documents are genuine, they were created in 2014 and any claim is time barred because it is not alleged that the transactions were hidden from the BVI Companies’ de jure (and honest) directors. However:

Before addressing this issue, it is necessary to explain how the Globe Documents purported to operate:

Section 423 of the Insolvency Act 1986 provides:

“(1)

This section relates to transactions entered into at an undervalue; and a person enters into such a transaction with another person if—

(a)

he makes a gift to the other person or he otherwise enters into a transaction with the other on terms that provide for him to receive no consideration;

(b)

he enters into a transaction with the other in consideration of marriage or the formation of a civil partnership; or

(c)

he enters into a transaction with the other for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by himself.

(2)

Where a person has entered into such a transaction, the court may, if satisfied under the next subsection, make such order as it thinks fit for—

(a)

restoring the position to what it would have been if the transaction had not been entered into, and

(b)

protecting the interests of persons who are victims of the transaction.

(3)

In the case of a person entering into such a transaction, an order shall only be made if the court is satisfied that it was entered into by him for the purpose—

(a)

of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him, or

(b)

of otherwise prejudicing the interests of such a person in relation to the claim which he is making or may make.

…

(5)

In relation to a transaction at an undervalue, references here and below to a victim of the transaction are to a person who is, or is capable of being, prejudiced by it; and in the following two sections the person entering into the transaction is referred to as ‘the debtor’”.

In approaching s.423, it is helpful to keep the separate role of the following participants in mind:

In Invest Bank PJSC v El-Husseini and others [2023] EWCA Civ 555, the Court of Appeal held that the Principal for s.423(1) purposes can “enter into a transaction” by causing a company the Principal controls to enter into a transaction with a Counterparty (an appeal to the Supreme Court has been heard and judgment is awaited). That involves the introduction of a new entity in some cases – “the Principal’s Company”. That, in turn, raises the issue in such cases of whether the Consideration Provided “by himself” means the consideration provided by the Principal, or the consideration provided by the Principal’s Company. The wording of s.423(1)(c) would suggest that one is ordinarily concerned with the consideration provided by the parties to the relevant transaction, which in a case involving a Principal’s Company would involve a comparison of the consideration provided by the Principal’s Company with that provided by the Counterparty, such that reference to “consideration provided by himself” would have to be read as “consideration provided by himself or a company which he controls” (cf. Invest Bank, [42]). However, that does not appear to be the basis of the decision in Invest Bank. At [97], the Court approved Mr McGrath KC’s submission that “the relevant transaction was the diminution in the value of [the Principal’s] shares in the company”, such that the inquiry is whether the consideration provided in the form of reduction of the value of the shares was less than the consideration received in return for that reduction in value.

Against that background, I turn to consider the three alternative ways in which, by the end of the hearing, the Claimants were advancing their s.423 case. It is right to record that this case underwent significant revision during the course of the hearing, and Mr Cohen KC found himself facing something of a moving target. To the extent that the opportunity for greater reflection allows Mr Cohen KC to identify further issues with the arguability of the claim, this judgment will not shut Mr Cohen KC out from arguing those points.

First, it is said if the Globe Documents are genuine, the BVI Companies have entered into a transaction (that embodied in the Globe Documents) for no consideration or significantly less than the consideration provided by the BVI Companies. The issue which arises in relation to this formulation is whether it can be said that the purpose of the transaction was “putting assets beyond the reach of a person who is making, or may at some time make, a claim against” the BVI Companies. As to this:

Second, it is said that the Al Sari Defendants entered into the transaction (in the Invest Bank sense) with Globe for consideration which was significantly less than “the BVI Companies assuming (or the Al Sari Defendants causing the BVI Companies to assume) the obligation to pay the debt to Globe.” As to this:

Third, it is said that “the Al Sari Defendants entered into a transaction with MAS and/or Globe, in return for no consideration or significantly less than the consideration provided by the Al Sari Defendants by causing their companies to assume the obligation to pay the debts to Globe.” This appears to be an attempt to run an argument along the lines of that which succeeded in Invest Bank as referred to at [191] above.

At first blush, the argument appears challenging because, on their face, the effect of the Globe Documents appears to have benefited the Al Saris. Indeed, there are a number of assertions by the Claimants to that very effect, for example, contending that “the Globe Documents were uncommercial for every party except the Al Saris” and that “MAS agreed to discharge debts owed by the Al Sari Brothers of over AED 651 million.”

However, the following allegation is also made:

“The Al Saris did not in fact receive any consideration as contemplated by the Globe MOU because (i) no debts owed by them were repaid by [D9], or (ii) as pleaded at Amended Reply §16.4(c), insofar as any such debts were repaid by [D9], they were repaid using funds ultimately sourced from the Al Sari Defendants”

(a plea based on inference, albeit one which I am satisfied is arguable).

This allegation reflects the Claimants’ analysis of documents said by the PCB Defendants to evidence performance of the transactions given effect by the Globe Documents. The Claimants say that that analysis shows that many of the debts paid off were not in fact debts of the Al Saris or guaranteed by them, and that the debts relied upon were not in fact paid off by MAS.

This part of the Claimants’ case is complex, and, to me a least, remains somewhat opaque. It appears to involve an allegation about how the arrangements were performed rather than what was documented (“even if the Globe Documents are valid in that they imposed a debt on the BVI Companies, they were not in fact performed in the way they record”). It is not clear to me whether, and how, that factor is reflected in the proposed amendments (e.g. whether it is said to amount to an implicit variation of the transaction as documented). I do not feel able to determine that this way of putting the case has no real prospect of success at this stage. However, before giving permission to amend this case, I will require to be satisfied that there is a coherent treatment of this topic in the Particulars of Claim as a whole, or at least a clear flagging of which parts of the case are alternatives, and the assumptions on which they depend. The amendment will also need to explain how the “as written” / “as performed” distinction is accommodated within the applicable legal principles.

Finally, Mr Cohen KC suggested that applicable law or jurisdiction issues might arise in relation to the s.423 claims, but did not identify them. This was not an issue which emerged solely because of the “in-hearing” revisions, and for the purposes, for example, of whether the claims fall within gateway (20), I am not persuaded that any new issues emerged during the hearing. No jurisdictional challenge beyond arguability having been advanced at the hearing, I do not believe fairness requires a separate jurisdictional hearing on the refinements to the case.

The first issue which it is necessary to address under the heading is whether the pleaded claim against the PCB Defendants is of a single conspiracy to obstruct enforcement of the Bank Sharjah and BVI Judgments, which embraced the forgery and deployment of both the Tenancy Agreements and Globe Documents, or two separate conspiracies. If the former, then the issue arises as to whether there is an arguable case that the PCB Defendants were parties to such a conspiracy.

I can deal with the first point briefly. Before Mr Justice Bright, an issue arose as to whether the Particulars of Claim involved a claim of one or two conspiracies. Amendments were brought forward before Mr Justice Bright for the express purpose of making it clear that the Claimants’ case was to the former effect, and the Particulars of Claim finalised on that basis.

As to the second, the essential thrust of Mr Cohen KC’s submissions is that there was no arguable basis for alleging that D10 or the other PCB Defendants had any involvement in the alleged forgery and deployment of the Tenancy Agreement. I am satisfied that there is an arguable case that the deployment of the Tenancy Agreement and the Globe Documents formed part of a single conspiracy intended to obstruct the realisation of the value of the Bridge Properties and involving the PCB Defendants:

So far as the unlawful means pleaded are concerned, I have addressed the PCB Defendants’ objections to many of them above. It is necessary to consider the following additional unlawful means relied upon. I should record that the issue of whether entering into a transaction susceptible to the granting of relief under s.423 of the Insolvency Act 1986 could constitute unlawful means was not raised, and I should not be taken as expressing a view on it (cf. Dora v Simper [1999] BCC 836, [4] and Concept Oil Services Limited v En-Gin Group LLP [2013] EWHC 1897 (Comm), [50]).

First, on 17 November 2014, Mr Justice Leggatt granted the Bank a WWFO under s.25 of the Civil Jurisdiction and Judgments Act 1982 in support of the Bank Sharjah Proceedings (“the s.25 Injunction”). The Claimants originally alleged that the unlawful means conspiracy also involved a breach of the s.25 Injunction. As to this:

By way of an unpleaded alternative, reliance was at one point placed on the BVI Chabra freezing injunction made against the BVI Companies on 18 November 2014. This order restrained the BVI Companies from “in any way transferring, disposing of, pledging, charging, diminishing the value of or dealing with” the Bridge Properties. Once again, appropriately construed, I am not persuaded that entering into an economically adverse transaction has that effect, simply because it would generate additional creditors who might wish to claim against those assets but who had no security over them.

Second, contempt under the law of the DIFC for deploying forged documents in the Globe DIFC Proceedings. This received minimal attention at the hearing, and the only answer I understood the PCB Defendants to put forward to it at this stage was JPI. I have held that it is arguable that JPI is not engaged in relation to the Globe DIFC Proceedings, because no issue of re-litigation arises.

Finally, it is said that there were unlawful means in the breach of Article 266 of the UAE Criminal Code by reason of the deployment of forged documents in the Globe Sharjah Proceedings. I am satisfied that claim is defeated by JPI, if JPI applies to foreign proceedings, just as an unlawful means conspiracy relying on contempt in the form of the deployment in English court proceedings of forged documents or untruthful evidence would, in equivalent circumstances, be barred by JPI.

So far as the question of applicable law is concerned:

If the merits threshold is overcome, D10 did not suggest that no proper case for service out had been established. It was suggested, however, that the court might nonetheless decide it was not appropriate to exercise its discretion to permit service out on D10, either because the claims against him only barely passed the serious issue to be tried test, or because, properly analysed, the arguable quantum of any claim against D10 is so low that the game was not worth the candle.

I deal with the issue of quantum below in the context of the WWFO application. For present purposes, I can state that I am not persuaded at this hearing that any claims pleaded do not give rise to appreciable claims in damages such that permission to serve should be refused on that basis, nor that it is appropriate in this context to undertake some further merits evaluation of those claims which have passed the merits threshold. In circumstances in which the same claims are proceeding in this jurisdiction against D7 and D9, I am satisfied that permission to serve out was appropriately given for those claims which disclose a serious issue to be tried so far as D10 is concerned.

Finally, so far as permission to serve out is concerned, Mr Cohen KC submits that the Claimants failed to comply with their duty of full and frank disclosure when making the application for permission to serve out to Mrs Justice Dias. I was referred to the summary of the principles relating to the duty of full and frank disclosure in Libya Investment Authority v JP Morgan Markets Limited [2019] EWHC 1452 (Comm), [92]-[98]. Briefly:

In this case, the application for permission to serve proceedings out of the jurisdiction on D10 was made after there had been a substantial inter partes hearing of D7 and D9’s challenge to jurisdiction in respect of the same claims, heard over two days with a reserved judgment. The application to serve on D10 was made at a CMC at which D7 and D9 were represented by solicitors, and D7, D9 and D10 (the director of D7 and D9) have common representation at this hearing. In those circumstances, it was reasonable for the Claimants to proceed largely on the basis that the relevant issues had been raised and considered in that hearing, save in so far as D10’s particular position raised further issues.

The skeleton argument provided to the court flagged the issue of the UAE limitation period (where the position of D10 might be different); res judicata (which had not even been argued before Bright J) and the fact that the claims had been pleaded by reference to English law. I am not persuaded, against the background I have summarised, that the Claimants were required to do more on the issue of res judicata or to flag that D10 as a director of D7 and D9 might be a privy to the issue estoppel D7 and D9 had not seen fit to raise. Nor is the failure to identify possible merits arguments which D7 and D9 had not seen fit to argue sufficient to warrant setting service out aside.

Nor am I persuaded that it was necessary to do more to address the issue of the authenticity of the Globe Documents, which clearly raises an arguable issue which the PCB Defendants did not seek to address before Bright J or before me. I accept that it would have been appropriate to say something in the skeleton about documents said to evidence performance of the Globe Documents and that this was not done because the Claimants’ legal team had not appreciated the significance of those documents at that point. However, there remain a series of curious and unexplained features of the Globe Documents, and Dias J could only have concluded that there was a triable issue on this question. In short, there is nothing here which comes close to rendering it proportionate to set the permission to serve out aside on this basis.

The WWFO application against D10 falls to be approached on two bases:

Both applications require the Claimants to persuade the court that there is a real risk that judgment will go unsatisfied by reason of the unjustified dissipation of assets unless D10 is restrained by court order from doing so. I consider that issue first.

I can deal with this issue relatively shortly:

The principal points taken by Mr Cohen KC in response are:

I am not persuaded by these points:

As to the second point, I would not wish to give any encouragement to the suggestion that a freezing order application brought on timely notice is destined to fail for that reason. That would place applications which respected the principle that a party is ordinarily entitled to be heard before any order is made against them at a significant forensic disadvantage.

Mr Cohen KC has mounted a considerable attack on the Claimants’ attempts to quantify the monetary value of their claims against D10. Those criticisms were well made and have, to some extent, been answered by evidence filed at a late stage in the form of Mr Richards’ seventh affidavit on 10 November 2024:

The material filed by the Claimants quantifies the legal costs claimed as £2,783,914.68, comprising the costs of the receivership of the BVI Companies, the costs of the Globe Sharjah Proceedings, costs relating to the Tenancy Agreement, the costs of the DIFC Tenancy Proceedings, the Possession Proceedings and the Sharjah Proceedings, the costs of advice relating to the Globe Document and of the DIFC Globe Proceedings and the BVI Globe Proceedings. As to the points taken:

Some £300,000 is claimed for amounts paid to third parties pursuant to undertakings given in the delivery up and imaging orders made by Calver J. Whether recoverable as damages, or a costs order made against D10 in these proceedings, they are appropriately reflected in the “Maximum Sum” of the Conduct WWFO.

Second, there is lost management time and disbursements said to have been incurred by reason of the wrongful conduct. That totals £229,000 odd. It is not possible to go behind that figure at this stage, and I am satisfied it is appropriately reflected in the Maximum Sum.

Third, there is the claim for loss caused by delay in selling the Bridge Properties:

An issue may at some point arise as to who is entitled to recover what loss. I accept that UAE law recognises a principle of reflective loss, such that a shareholder cannot recover for loss suffered in that capacity where the company has a cause of action for the relevant loss. The shareholder would not be barred by the principle from pursuing a cause of action for a separate loss of its own which the company could not recover. The losses set out in the preceding paragraph would appear to be those of the BVI Companies. However, as both the Bank and the BVI Companies are claimants, this issue may not matter. In any event, I reach no conclusion on this issue now, as the reflective loss issue was not explored at the hearing.

What, however, of the alternative claims premised on the Globe Documents creating a genuine transaction in breach of duty?

First, the BVI companies say that if the Globe Documents are genuine, then they have been exposed to a liability of AED 582,652,815 – over £128m –of debt to which they should not have been exposed. As to this:

Second, the Bank suggests that if the Globe Documents are genuine, they will wipe out the value of the BVI Companies, such that a figure of £8m or £6.6m (competing figures for the value of the Bridge Properties) will be the measure of the Bank’s loss (the PCB Defendants not pursuing an argument based on the reflective loss rule at the hearing). While the difference between the sum claimed on this basis and the Bank’s primary claim is not as stark as that just considered, the concerns I expressed in the preceding paragraph still apply. Once again, for the same reasons, I am not persuaded it would be just and convenient to make a Conduct WWFO in respect of the amount claimed in this part of the Claimants’ claims.

On this basis, I am satisfied that, subject to the effect of my rulings (which will have to be determined after this judgment is handed down) and the “reflective loss” issue, the Conduct WWFO should, at least until the further hearing, have a “Maximum Sum” of £4,500,000 (reflecting some rounding and some allowance for interest). I note from the transcripts now available that is actually less than the £4.1m figure which Mr Peto KC submitted was the amount being sought.

The Bank has obtained judgment in this jurisdiction by way of an action brought to enforce the Bank Sharjah Judgment. At the same time as those enforcement proceedings were commenced, the Bank obtained WWFO relief against the Al Saris. The NCAD WWFO now sought against D10 is said to be in support of that judgment, and to be ancillary to that WWFO, its premise being that it can be shown to the requisite standard of arguability that D10 may be holding assets which are or are capable of being made amenable to enforcement of the Bank Sharjah Judgment.

When a freezing order or ancillary relief is sought against an NCAD, the applicant must provide an evidential basis for the allegation that the NCAD is holding assets against which the judgment sought against the cause of action defendant (the “CAD”) can be enforced. In JSC BTA Bank v Ablyazov (No 11) [2015] 1 WLR 1287, [68], Christopher Clarke LJ observed of the test to be applied:

“[I]t is not necessary to decide which of the two formulations (good arguable case/good reason to suppose) is the most appropriate one. The former is derived from TSB Private Bank International SA v Chabra [1992] 1 WLR 231 and the latter from SCF Finance Co Ltd v Masri [1985] 1WLR 876. It was not submitted to us that, for the purposes of the present case, there was any significant difference between them and certainly none which it is now necessary to explore. Nor is it necessary to decide whether, given that Lapointec and Limia are the applicants for an order, it is sufficient for the bank to show that there is a real prospect of success in defeating that claim, i e the test under CPR 24.2 or the extent to which, if at all, there is any practical distinction between that and the other two tests.”

As noted in Grant and Mumford’s Civil Fraud: Law, Practice and Procedure (2018), [28-165]-[28-166], when a so-called Chabra injunction is sought, it is “generally important that the injunction should be as specific as possible in identifying those assets of the principal defendant which are said to be in the third party’s possession and control.” However, the text continues, “in an appropriate case, such as where the principal defendant has paid over monies or assets to the third party which are no longer identifiable in the latter’s hands … a ‘maximum sum’ order in relation to that third party’s general assets (fixed by reference to the value of the substantive claim against the principal defendant, as opposed to the value of particular assets still held by the third party) may be made”. Three authorities are cited in support of that proposition.

The first is the decision in Chabra itself, [1992] 1 WLR 231. That was a case in which an injunction was obtained against a company on the basis that it was 100% owned and controlled by the CAD, and that the injunction was (in effect) necessary to prevent the CAD diminishing the value of his asset (the shareholding in the NCAD) by transactions at the NCAD level. However, that was not the basis on which the case was reasoned. Rather, Mummery J was satisfied of “a good arguable case that there are assets, apparently vested in the company, which may be beneficially the property of Mr. Chabra and therefore available to satisfy the plaintiff’s claims against him if established at trial” and “that it is arguable that the company was, in fact, at relevant times the alter ego of Mr. Chabra and that its assets, or at least some of its assets, may be available to meet the plaintiff’s claims against him if established.” The “maximum sum” of the injunction against the NCAD is not clear (the “maximum sum” of the order against Mr Chabra himself was £500,000, the claim being for £1.5m).

The second is Yukong Line Ltd v Rendsburg [2001] 2 Lloyd’s Rep 114. This was a case in which an identified sum of money had been transferred by the NCAD from the CAD (a company he controlled) to another company the NCAD also controlled. The “maximum sum” of the Chabra order was the value of the assets thus transferred. Potter LJ held at [44]:

“Although it is plain that the court’s Chabra-type of jurisdiction will only be exercised where there are grounds to believe that a co-defendant is in possession or control of assets to which the principal defendant is beneficially entitled, it does not seem to me that the jurisdiction is limited to cases where such assets can be specifically identified in the hands of the co-defendant. Once the court is satisfied that there are such assets in the possession or control of the co-defendant, the jurisdiction exists to make a freezing order as ancillary and incidental to the claim against the principal defendant, although there is no direct cause of action against the co-defendant. Since the purpose of granting such an injunction against the co-defendant is to preserve the assets of the principal defendant so as to be available to meet a judgment against him, the form of order made against the co-defendant should be as specific as the circumstances permit in respect of the principal defendant’s assets of which he has possession or control. Thus, generally, the form of injunction will be tailored to that purpose and should be no wider than is necessary to achieve it. However, subject to that requirement, if a co-defendant is mixed up in an attempt to make the principal defendant judgment-proof and the assets or their proceeds are not readily identifiable in his hands it is open to the court, where it is just and convenient to do so, to make an order which catches the co-defendant’s general assets up to the amount of the principal defendant’s assets of which he appears to have possession and control.”

Finally, Parbulk II AS v PT Humpuss Intermoda Transportasi YBK [2011] EWHC 3143 (Comm). In that case, the NCAD was the 100% owner of the award debtor (CAD 1) and a subsidiary of a judgment debtor (CAD 2). The proceeds of various payments received by CAD 1 had been transferred to the NCAD, and the evidence “demonstrated substantial intra-group transfers of funds from [CAD 1] to [NCAD], strongly suggesting that [NCAD] was involved in assisting [CAD 1] in rendering itself judgment-proof.” The “maximum sum” in the order was the amount of the NCAD’s debts to CAD 1 and CAD 2, as appeared from the evidence, subject to a limit of the liability of CAD 1 and CAD 2 under the award and judgment respectively ([59]). Significantly, Gloster J did not consider it appropriate to make a freezing order in the full amount of the claim against the CADs ([60]-[63]) for the following reasons:

Before considering where those authorities lead, I will first address the issue of whether there is a good arguable case or good reason to suppose that D10 holds or controls assets which might be amenable to execution of the judgment against the Al Saris (there is no meaningful distinction in the formulation used on the facts of this case):

While freezing injunctions are a context in which we have learned never to say “never”, it is noticeable that in two of the three cases cited by Grant and Mumford, the freezing order was subject to a limit by reference to the amount of specific transfers from the CAD to the NCAD rather than simply the sum claimed against the CAD, and the third was one in which the NCAD was itself an asset of the CAD, and the “maximum sum” of the freezing order is not specifically discussed. The present application shares neither of those attributes. We are reminded that Chabra relief is exceptional and must be exercised with caution (PJSC Vseukrainskyi Aktsionernyi Bank v Maksimov [2013] EWHC 422 (Comm), [71]).

I have concluded that, if proceedings for the NCAD WWFO can be served out of the jurisdiction on D10, the appropriate order would be one which applied to the shares in any company held by D10 (where the evidence suggests there is good reason to suppose he may hold assets of this kind on behalf of the Al Saris) but which does not go further at this stage. That order would be subject to a maximum sum of the outstanding judgment against the Al Saris.

That order, together with the Conduct WWFO and the disclosure order in the Conduct WWFO would be sufficient in the first instance, and fairly balance the competing interests of the parties.

That leads to the final, significant, point of principle in this case. Can the application for an NCAD WWFO be served on D10 out of the jurisdiction? The Claimants say that it can under Practice Direction 6B paragraph 3.1(3):

“A claim is made against a person (‘the defendant’) on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and –

(a)

there is between the claimant and the defendant a real issue which it is reasonable for the court to try; and

(b)

the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.”

In the course of argument, I referred the parties to a suggestion I had floated in a talk on freezing injunctions (“The Big Freeze: The Rise and Rise of the Mareva Injunction”, a talk given to the Manchester Business & Property Courts Forum on 30 October 2024). In that talk, I noted that it has been held that paragraph 3.1(2) of Practice Direction 6B – “a claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction” – does not to apply to freezing injunctions: Owners of the Cargo Lately Laden on Board the Siskina v Distos Compania Naviera SA [1979] AC 210; Mercedes-Benz AG v Leiduck [1986] AC 284 and, in circumspect terms, Broad Idea International Ltd v Convoy Collateral Ltd [2023] AC 389, [108], [121], [215], [221].

I suggested:

“While para. 3.1(2) may not be available, what about para. 3.1(20) which provides a service out gateway for claims brought under any enactment which allows proceedings to be brought?

a.

In Orexim Trading v Mahavir Port [2018] EWCA Civ 1660, the Court of Appeal suggested that the first question which arises in this context is whether there is a relevant territorial limit on the operation of the statute. If there is not, then presumptively it should be possible to serve the proceedings out of the jurisdiction. On that basis, it was held that a claim under s.423 of the Insolvency Act 1986 could, in principle, be served out of the jurisdiction through this gateway.

b.

In Gorbachev v Guriev [2023] EWCA Civ 327. the Court of Appeal held that a claim for third party disclosure under s.34 of the Senior Courts Act 1981 could be served out of the jurisdiction through the same gateway, on the basis that a claim for relief under the Senior Courts Act 1981 was brought ‘under’ any enactment.”

c.

In Broad Idea, [12]. [20], [40] and [118]. it was noted that the statutory power to grant injunctions is conferred by s.37(1) of the Senior Courts Ac1 1981.

d.

It would seem to follow that, unbeknown to Lord Diplock in The Siskina and the Privy Council in Mercedes Benz and Broad Idea, there was a basis for serving a freestanding application for freezing order relief out of the jurisdiction all along – just under a different gateway.”

(That last paragraph pays insufficient regard to amendments of the “enactment” gateway over time, but as a statement of the current position, it remains relevant).

Mr Trotter sought to adopt that suggestion during the hearing. However, the PCB Defendants had already had to cope with a significant number of new points in a hearing which was heavily time constrained, and I concluded I should limit my consideration to the gateway on the basis of which permission to serve out had been obtained.

In C Inc v L [2001] CLC 1054, a Chabra order had been made against the NCAD, who had been joined to the proceedings for that purpose. That application was made after the claimant had already obtained judgment in default against the CAD. The claimant also obtained a post-judgment freezing order against the CAD who had sworn an affidavit of assets suggesting that she had no assets of her own and was dependent on the NCAD (her husband) and held certain shares on trust for him. That prompted an application to bring a claim that the CAD had assumed the relevant liabilities as agent for her husband and was entitled to an indemnity from him, and for a freezing order against the NCAD and the appointment of a receiver over the CAD’s assets, including the alleged right of indemnity. The hearing was conducted on the basis that the CAD had no assets of her own but did have a right to an indemnity from the NCAD, and the NCAD was not holding assets on behalf of the CAD.

Aikens J held that the English court had the “legal power” to grant an injunction against the NCAD, on the basis of the claimant’s substantive right (the default judgment) against the CAD, because there was a “necessary link” between the two (the judgment against the CAD bringing into existence the CAD’s right of indemnity against the NCAD). He also held that the court had power to join the NCAD to the proceedings under CPR 19.2 even though judgment had been entered against the CAD, because the proceedings did not come to an end with the entry of the default judgment. At [84]-[85], he accepted that it was necessary for joinder that there was an outstanding dispute between the claimant and the CAD, but held that there was such a dispute namely “a dispute between the claimant and Mrs L as to how that judgment is to be satisfied. Mrs L has not paid the debt found owing by her. She says she has no assets and will not pay it. Her refusal or inability to pay is disputed by the claimant which is trying to use the court’s procedures to get payment. So in my view there are matters in dispute in the proceedings.”

Significantly, Aikens J did not regard the fact of joinder under CPR 19.2 as, of itself, determinative of the availability of the “necessary or proper party” gateway – which on Mr Trotter’s argument, it should have been. Aikens J reasoned as follows:

The novel feature of C Inc v L is the fact that the criteria for the application of necessary or proper party gateway were applied by reference to a post-judgment procedural application involving a dispute between the claimant and the CAD which it was desirable to determine against the NCAD, rather than a pre-judgment substantive claim. Aikens J reached the conclusion that this was permissible on the following basis:

In Belletti v Morici [2009] EWHC 2316 (Comm), proceedings were commenced in Italy (which led to a judgment there) and a freezing order in support of those proceedings was obtained in this jurisdiction under s.25 of the CJJA 1982. An attempt was made to join the relatives of the judgment debtor to the English proceedings who were alleged to have assisted in breach of the English freezing injunction, and to obtain relief against them. This failed. At [36]-[37], Flaux J held:

The next case is also a decision of Flaux J, Linsen International v Humpuss Sea Transport [2011] EWHC 2339 (Comm). The claimant commenced an arbitration against CAD 1 and obtained awards which were converted into judgments under s.66 of the Arbitration Act 1996, and also obtained a court judgment on guarantees against CAD 2. A WWFO was obtained on a without notice application against the NCAD, a company in the same group as CAD1 and CAD2. At [161]-[166], Flaux J held that the “necessary or proper party” gateway could not be relied upon to serve the application on the NCAD out of the jurisdiction:

In JSC BTA Bank v Ablyazov [2013] EWHC 1869 (Comm), a receivership order had been made in respect of assets out of the jurisdiction on 6 August 2010 and a WWFO extending to those assets on 23 November 2012. An NCAD applied to set that those orders aside, on the basis that after they were made, the assets had been the subject of a bona fide sale and the NCAD was now the beneficial owner of them. It also submitted that if the claimant wished to continue to enjoy the benefit of the receivership and freezing orders in relation to the assets which the NCAD claimed to own, it would need to show that there was jurisdiction to serve the applications for that relief out of the jurisdiction on the NCAD. The NCAD submitted that there was no power to grant permission to serve the application for a Chabra injunction out of the jurisdiction now that judgment had been entered against the CAD. The Claimant’s primary argument relied upon the fact that the CAD had owned the relevant assets when the orders were made, and that it was the NCAD which had come before the court to vary that order. In the alternative, it was said that the necessary or proper party gateway was available because (at [30]):

“There were several sets of proceedings that continued against Mr Ablyazov in which judgement had not yet been obtained and even in those actions where judgement had been entered against Mr Ablyazov, there was an issue between the Bank and Mr Ablyazov as to whether the Receivership and Freezing Orders ought to be continued in respect of the Dregon Land shares on the basis of Mr Ablyazov’s beneficial ownership therein, as to which the applicants were necessary and proper parties.”

The issue is dealt with briefly by Field J who agreed with the claimant’s primary argument, but in the alternative stated (at [33]):

“I accept Mr Smith’s alternative submission based on C Inc plc v L that the court has jurisdiction to make a Chabra order against the applicants under paragraph 3.1(3) of CPR PD 6B. In my judgement, the Bank’s claim that the Dregon Land shares belong beneficially to Mr Ablyazov and not Lapointec and Limia is a classic Chabra claim and there is an issue between the Bank and Mr Ablyazov (who was served within the jurisdiction) as to whether he retains beneficial ownership of the Dregon Land shares which it is reasonable for the court to try and the applicants in my view are necessary and proper parties to that claim.”

The Judge directed a trial of the issue of whether the CAD had a beneficial interest in the relevant asset. In that case, the CAD had ceased to engage in the proceedings (he was on the run and in contempt of court) but could nevertheless have been bound into any determination of the issue of beneficial interest.

The Judge’s decision to order a trial was appealed (JSC BTA Bank v Ablyazov [2014] EWCA Civ 602). The Court of Appeal agreed that the claimant had not been required to obtain permission to serve out when it became apparent, after the injunction had been granted, that there had been a purported transfer of the assets. Once the NCAD had applied for a variation, it was for the court to determine how the matters in dispute should be resolved. However, the Court of Appeal held that the order for this issue to be tried did not permit the claimant to seek alternative substantive relief against the NCAD, for which jurisdiction would have to be established in the ordinary way. At [80], Christopher Clarke LJ stated:

“The approach argued for by the applicants would have strange consequences. The supposed requirement that there be an issue between the claimant and the defendant to the resolution of which another person is a necessary or proper party is, in this context, inappropriate. A claimant may obtain an order restraining a defendant from disposing of an asset abroad which he accepts is his and should come within the order. Someone in the country in question may then claim that, whatever the defendant says, the asset belongs to him. The court should not be disabled from making freezing orders against a defendant who is within its jurisdiction, which may impact on third parties, because there is no dispute by the defendant that the asset is his. Nor should that position change when the foreign claimant applies for the asset to be released from the order.”

Christopher Clarke LJ went on to consider whether paragraph 3.1(3) of Practice Direction 6B gave the court jurisdiction to determine the alternative claim which the claimant wished to bring based on alleged collusion between the CAD and NCAD to evade the freezing order. At [91]-[95], he identified two possible routes to the conclusion that it did:

Finally on the specific subject of Chabra injunctions, there is Cruz City Mauritius Holdings v Unitech Ltd [2014] EWHC 3704 (Comm) [70]-[81]. In that case the claimant had obtained an arbitration award against the CAD and sought to serve an application on an NCAD out of the jurisdiction in aid of enforcement of the award. Males J held that because there was no substantive claim against the CAD in the English court proceedings, the necessary or proper party gateway was not available:

There are two cases which do not directly relate to the issue I have to decide but inform the analysis.

The first is Masri v Consolidated Contractors International (UK) Ltd [2009] UKHL 43. A judgment creditor had obtained judgment in English proceedings against a company. It sought to serve a notice under CPR 71.2 for the examination of one of the judgment debtor’s officers out of the jurisdiction. The Court of Appeal had held that the CPR 71.2 application could be served out of the jurisdiction under CR r 6.30(2) which provided:

“Unless paragraph (3) applies, where the permission of the court is required for a claim form to be served out of the jurisdiction the permission of the court must also be obtained for service out of the jurisdiction of any other document to be served in the proceedings.”

The House of Lords held that a CPR 71 order could not be served out of the jurisdiction under CPR r.6.20 and r.6.30. Lord Mance delivered the judgment:

In 2008, by Civil Procedure (Amendment) Rules 2008 (SI 2008/2178), CPR r 6.39 was introduced. In its current iteration, this provides:

“Service of application notice on a non-party to the proceedings

6.39

(1)

Where an application notice is to be served out of the jurisdiction on a person who is not a party to the proceedings rules 6.35 and 6.37(5)(a)(i), (ii) and (iii) do not apply.

(2)

Where an application is served out of the jurisdiction on a person who is not a party to the proceedings, that person may make an application to the court under Part 11 as if that person were a defendant, but rule 11(2) does not apply.”

The second case not concerned with Chabra relief is Gorbachev v Guriev [2022] EWHC 1907 (Comm); [2022] EWCA Civ 1270. In that case, the claimant sought permission to serve an application under s.34 of the Senior Courts Act 1981 on a non-party out of the jurisdiction for the purpose of obtaining a document for use in a trial.

At first instance, Jacobs J noted that CPR 6.39 “implicitly applies the ordinary rules for service out of the jurisdiction to cases where an application notice is to be served out of the jurisdiction on a non-party” ([24]). The principal argument in that case was whether an application under s.34 of the Senior Courts Act 1981 constituted a “claim” within Practice Direction 6B para. 3.1(20) (“a claim is made … under an enactment”). Jacobs J held that the concept of a claim extended to an application for third party disclosure under CPR 3.17, given the width of the definition of “claim” in CPR 6.2. He also held that s.34 of the SCA 1981 was “an enactment” for gateway (20) purposes which allowed a claim to be brought against persons outside the jurisdiction. Jacobs J also offered tentative support for the view that the necessary or proper gateway was available as well, because an application had been issued against an NCAD in the jurisdiction in respect of the same document ([100]). On that approach, the “common issue” would not have been between the claimant and a party against whom substantive relief was sought and a non-party, but between two NCADs who were respondents to applications for procedural orders, neither of whom was a substantive defendant.

That (if I may respectfully say so, impressive) judgment was upheld by the Court of Appeal. The court rejected the suggestion “that the word ‘claim’ in paragraph 3.1 of Practice Direction 6B refers to a claim to enforce a substantive as distinct from a procedural right” ([33]-[34]). The Court of Appeal did not consider the possible application of the “necessary or proper party” gateway.

Finally, I was also referred to two commentaries on this issue:

A number of issues emerge from the various authorities, which fall to be read against a backdrop of ongoing changes to the CPR.

The first is whether CPR 3.1(3) requires substantive proceedings to have been commenced against “the defendant” for the purposes of that rule (whether or not at the date of the application to serve out, those proceedings are pre- or-post-judgment). There is very strong support for the view that it does, both from Gee and from Grant and Mumford, and, in the authorities, from Belletti v Morici, [36]; Linsen International, [161] and Cruz City, [751]. CPR 6.39 would support the view that there remains such a requirement in any case in which that rule is relied upon – the reference to “a person who is not a party to the proceedings” pre-supposes that there are proceedings. While, as noted at [263], Jacobs J was willing to contemplate the possibility that it might be enough in a case involving substantive proceedings against a CAD, for gateway (20) to apply when “the defendant” for the purpose of the gateway was an NCAD, and an application made to join another NCAD, this appears to be against the weight of the authorities, although a principled argument can be advanced in its favour.

What of the position here, however, where the “substantive proceedings” are brought to enforce a judgment? Or a case where the “substantive proceedings” are an action brought on an arbitration award? In Linsen International v Humpuss Sea Transport the entry of arbitration awards as judgments under s.66 of the Arbitration Act 1996 (which is generally treated as a shortened form of the action on the award: see Coastal States Trading (UK) Ltd v Mebro Mineraloelhandelsgesellschaft GmbH [1986] 1 Lloyd’s Rep 46, 467) was not identified as a basis for the application of the necessary or proper party gateway. However, there seems no reason in principle why it should not be. Gateway (3), unlike gateways (4A) and (16A), is not limited in its operation to cases where other particular gateways can also be invoked, and where there are issues arising for determination in relation to a defendant in, say, proceedings served out of the jurisdiction under gateway (10) (“a claim is made to enforce any judgment or arbitral award”) to which a third party is a necessary or proper party, there seems to be no reason in principle why gateway (3) could not be invoked. The limiting factor is likely to be the existence of such an issue.

The second and third questions are closely related: whether the claim against the party to be served must itself be a substantive claim and whether “the real issue which it is reasonable for the court to try”, to which the party to be served must be a “necessary or proper party”, must itself be substantive in nature:

The fourth question is whether there must be a “live” issue to be determined as between the claimant and the anchor defendant, to which the party to be joined is a necessary or proper party, or whether it suffices that the party to be joined satisfied the CPR 19.2 criteria and the proceedings have not come to a final end (e.g. because, although judgment has been obtained, it is still being enforced).

The argument advanced by Mr Trotter was, in summary terms, as follows:

Persuasively as it was put, I am unable to accept this argument.

First, in my assessment it fails to accord sufficient weight to the principle underlying the “necessary or proper party” gateway. As Lord Collins noted in AK Investments CJSC v Kyrgyz Mobil Tel Ltd, [73]:

“The necessary or proper party head of jurisdiction is anomalous, in that, by contrast with the other heads, it is not founded upon any territorial connection between the claim, the subject matter of the relevant action and the jurisdiction of the English courts: Tyne Improvement Comrs v Armement Anversois SA (The Brabo) [1949] AC 326, 338, per Lord Porter. Piggott, Foreign Judgments and Jurisdiction, 3rd ed (1910), Pt III, p 238, said: ‘This is perhaps the most important of the sub-rules, for it throws the net of jurisdiction over a wider area; and the principle of considering the nature of the cause of action which pervades the whole subject, appears here to be ignored.’ Consequently, as Lloyd LJ said in Golden Ocean Assurance Ltd v Martin (The Goldean Mariner) [1990] 2 Lloyd’s Rep 215, 222:

‘I agree … that caution must always be exercised in bringing foreign defendants within our jurisdiction under Ord 11, r 1(1)(c). It must never become the practice to bring foreign defendants here as a matter of course, on the ground that the only alternative requires more than one suit in more than one different jurisdiction.’”

When seeking to identify the principles which underpin the various service out gateways, I suggested that gateways (3), (4) and (4A) were concerned with “the efficient trial of disputes: …. by ensuring that related claims are tried together so as to avoid a multiplicity of proceedings and the risk of inconsistent findings” (“The Jurisdictional Gateways: Some (Very) Modest Proposals” [2022] LMCLC 70, 79). To keep gateway (3) within sensible bounds, it seems to me that for the gateway to apply, there must be some common factual enquiry or determination involving the anchor defendant and the party to be joined, and that is not enough that obtaining information from the NCAD may assist the enforcement of the judgment obtained against the CAD. The contrary interpretation, particularly in the context of interim applications, would run contrary to the spirit, at least, of the decision in Masri. If there is to be a general power to serve proceedings out of the jurisdiction to assist the enforcement of an English judgment debt, that is a matter for the Rules Committee.

Put another way, the criteria of “necessary or proper party” cannot be applied in the abstract, but by reference to the “real issue which it is reasonable for the court to try” against the anchor defendant. If that interpretation of gateway (3) is no longer available, at least at first instance, then the absence of any common issue to be investigated and determined at a hearing involving both the anchor defendant and the NCAD would be a factor strongly weighing against the grant of permission at the discretionary stage.

Further, in my view, Mr Trotter’s approach would be too all-encompassing. It would seem to mean that service out would be possible in all Chabra cases, where the NCAD is usually joined (cf TSB Private Bank v Chabra [1992] 1 WLR 231, 238). NCAD’s who are the subject of costs orders under s.51 of the Senior Courts Act 1981 are usually joined to the proceedings (Symphony Group Plc v Hodgson [1994] QB 179, 193) which would suggest that the “necessary or proper party” gateway is always, in principle, available for such applications. However, in National Justice Compania Naviera S.A. v Prudential Assurance Co. Ltd. (No. 2) [1999] 2 Lloyd’s Rep 621, 627-28, Rix LJ stated:

“there might at first blush always seem to be O. 11 jurisdiction under sub-r. (1)(c) – ‘necessary or proper party.’ Since, however, the joinder is only for the purpose of costs and not in respect of any substantive cause of action, it is not at all clear to me that such use of O. 11 is within the rationale of The Siskina, [1979] A.C. 210 or Mercedes-Benz A.G. v. Leiduck, [1996] A.C. 284. Moreover, R.S.C., O. 11, r. 4(1)(d) requires that in the case of sub-r. (1)(c) the applicant must provide evidence of grounds for the belief -

. . .that there is between the claimant and the person on whom a claim form has been served a real issue which the claimant may reasonably ask the court to try.

That may work in the (unusual) case where the non-party has been joined for the purpose of costs at a stage in the proceedings before trial. Once, however, judgment with costs has been given against the party served within the jurisdiction, it is by no means clear to me how any applicant could bring himself within r. 4(1)(d), for there is no longer any issue, not even one regarding costs, for trial involving that party.”

On appeal, the Court of Appeal found that service out had to be effected pursuant to the court’s inherent jurisdiction ([2000] 1 Lloyd’s Rep 129) and a specific gateway – gateway (18) – was subsequently introduced.

Further, it is noteworthy that in C Inc v L, Aikens J did not regard the issue of joinder as determinative of the issue of jurisdiction: see [248] above.

In my view, the principle which best fits with the cases, and best reconciles the application of Part 6B to applications as well as claims and to applications for procedural as well as substantive relief (given CPR 6.39 and Gorbachev v Guriev), while maintaining the spirit of a gateway which allows considerations of efficient dispute management to override the usual requirement for some form of territorial nexus before proceedings can be served out of the jurisdiction, is that there needs to be an issue arising as between the claimant and an anchor defendant, even if in a procedural context, which also arises as between the claimant and the NCAD and which will be the subject of investigation and determination for both at the same hearing:

The following further factors also need to be considered:

Applying these principles to the present proceedings, I am not satisfied that the application for the NCAD WWFO can be served out of the jurisdiction under gateway (3), and in any event I am not satisfied that it would be appropriate for the court to exercise its discretion to permit service out on this basis:

If, contrary to my determination in the preceding paragraph, the NCAD WWFO application could be brought within the letter of gateway (3), I am not satisfied that it would be appropriate for the court to exercise its discretion to grant permission to serve the application out of the jurisdiction, essentially for the reasons I have given in [281]. The links between this case and the English court are limited, the Chabra-relief being sought in relation to a “meta-judgment” against a now non-engaging judgment debtor, in circumstances in which there is no evidence of any realistic ongoing enforcement activity in this jurisdiction, and in which the real purpose of the application is to obtain information about assets elsewhere.

Subject to the issues raised and dealt with above, I did not understand there to be any independent opposition to the application for permission to amend in the final iteration placed before the court. The draft will now need to address my findings in this judgment, including where I have indicated greater clarity is required, and incorporate the case on loss put forward in affidavit evidence. If there remain any outstanding objections to that final version, they will have to be dealt with at the consequentials hearing. That includes those matters referred to in PCB’s email of 15 August 2024, to the extent that they remain live.

However, both parties accepted that any amendment should be on terms which preserve the parties’ existing limitation arguments for trial (both whether the amendments introduce any new causes of action and if so, whether they arose out of the same, or substantially the same, facts and matters as are already in issue). To the extent that the amendments introduce new causes of action which do not benefit from “relation back”, the parties are asked to agree that they will be treated as having been commenced for limitation purposes on the date the relevant draft was provided to the PCB Defendants.

That concludes the issues raised by this interim applications hearing to the extent they can fairly be decided at this point. The parties will need to work out the cumulative effect of my findings so far and are asked to seek to narrow any consequential issues.

There will need to be a further hearing of two days to address the outstanding points. The parties are asked to arrange for transcripts to be made of that hearing.

Neither party should regard the fact of the further hearing as an opportunity to adduce further evidence. Its sole purpose is to provide the time which was not available at this hearing for sufficient oral submissions on certain points.