Al Rajhi Banking & Investment Corporation v Wall Street Journal Europe Sprl

The Claimant corporation in these libel proceedings is Al Rajhi Banking & Investment Corporation, which is said to carry on an international banking business (although the extent of its activities may be an issue in the case). It is incorporated in Saudi Arabia as a Saudi joint stock company, having been formed and licensed as a commercial bank pursuant to a royal decree on 30 June 1987. Its headquarters are in Riyadh and there are more than 350 branches throughout that country. It is controlled by members of the Al Rajhi family, members of which make up the majority of its board of directors and executive committee.

The Chairman, Managing Director and largest stake holder is Sulaiman Abdul Aziz al-Rajhi and one of his brothers, Saleh Abdul Aziz al-Rajhi, has the second largest holding and is also a director. I hope that for convenience, and without discourtesy, I may be permitted to refer to these two gentlemen as "Sulaiman" and "Saleh". Other members of the executive committee include Abdulla Sulaiman al-Rajhi, Salah Ali Aba Al-Khail, Naser Mohammed Al-Subai'y and Mohammed Abdul Aziz Al Rajhi.

The Claimant is obliged to comply with accounting standards issued by the Saudi Arabian Monetary Agency ("SAMA"), which is responsible for regulating and supervising it. It operates in accordance with Islamic principles (e.g. paying no interest on deposits) and has a Shariah Board to review investments and lending schemes.

The Claimant sues in this jurisdiction over the publication on 6 February 2002 of an article in the Wall Street Journal Europe by the Defendant Corporation. It was published on the front page under the headline "Saudi Officials Monitor Certain Bank Accounts: Focus Is On Those With Potential Terrorist Ties" and was continued on page 4 under the heading "Certain Saudi Bank Accounts Are Being Closely Monitored". Complaint is made of certain passages set out in paragraph 4 of the particulars of claim:

The natural and ordinary meanings attributed to these passages are pleaded as follows, namely that:

It is important to note that no individual has sued. In particular, although mentioned by name, Saleh has not himself commenced proceedings. As so often in such cases, it is always necessary to focus on meanings which convey or may convey a defamatory imputation upon the claimant corporation, and bear in mind that proceedings should not in such circumstances be regarded as a vehicle for the vindication or compensation of individuals who have chosen not to bring proceedings. This can mean sometimes that there is an artificial air about such claims, since a corporation can only act through human beings and some defamatory allegations in the corporate context are likely to be capable of reflecting only on human beings while others, even though reflecting on a corporation's trading reputation, may give rise to serious defamatory imputations against identifiable individuals.

These matters were considered in general terms in Multigroup Bulgaria v. Oxford Analytica Limited [2001] EMLR 28. What was said on that occasion was that there are some categories of allegation (e.g. of corrupt business practices) which would normally be taken as reflecting upon one or more human beings rather than upon a corporate entity, but that there could be circumstances in which they had a tendency also to damage a corporate business reputation. The court needs to examine any claim to that effect very carefully in cases where the allegations appear to reflect primarily upon human beings. The relevant test would appear to be that promulgated by Lord Keith in Derbyshire County Council v. Times Newspapers Ltd [1993] AC 534, 547. Examples he gave of allegations having a tendency to damage a corporation's business reputation were:

Also, in Elite Model Management Corp v. BBC, 24 May 2001, unreported, QBD, the court again referred to the need to be alert to the possibility of corporate entities being "put up" to bring claims for libel in respect of allegations truly reflecting upon individuals. Nevertheless, as Lord Keith has made clear, allegations about human activities can damage a company's trading or business reputation as well as that of the individuals concerned. Here, that test may well be fulfilled. Even so, one of the Claimant's less persuasive submissions was that the Defendant cannot justify an allegation about the bank, in proceedings brought only by the bank, through the device of pleading facts about members of the Al Rajhi family – unless it is also alleged that, at the time of the relevant conduct, the individual concerned was acting on behalf of the bank. This seems to me artificial. Disreputable behaviour on the part of those running a corporation, especially if it reflects upon their integrity, can cause people who hear of it to shun and avoid the corporation itself, depending on the circumstances. I would not, for that reason alone, shut out allegations about individual members of the family being involved in the support of terrorism.

The original defence was served on 16 August 2002 and various points were taken as to the Claimant's standing to bring the claim and as to the appropriateness of such proceedings being commenced in this jurisdiction. I need say nothing about such matters, since they do not arise for consideration for me at this stage. It is fair to say that the only substantive defence raised at that time was that of qualified privilege but, again, I need say nothing as to its form or merits. On the basis of these defences, the matter has proceeded so far and is due for trial on 21 July 2003.

The matter now comes before the court on the Defendant's application for permission to amend to add a long plea of justification. It is supported by three witness statements of Mark Stephens, the Defendant's solicitor, and by others from Jean-Charles Brisard and Rita Katz. The former is a consultant and expert in the investigation of the financing of terrorism, and apparently has access to classified material. He says that he had been gathering evidence on the Claimant for some years and that it is effectively under suspicion from law enforcement agencies because of its associations or connections.

The latter is also a consultant in the field and is Director for Search for International Terrorist Entities ("SITE") Institute, founded last year. She is retained as an adviser to the United States government on identifying those giving financial support to Al Qaeda. She too says that she is aware of "law enforcement and intelligence interest in the Claimant specifically, and in Suleiman and Saleh al Rajhi ... for several years". She asserts that any responsible law enforcement agencies would wish to keep them under close scrutiny because of the "many connections between them and agencies which fund terrorists and known terrorist sympathisers...". She also claims that her investigations have led her to believe that Saleh's telephone number and contact information were held by Osama Bin Laden's personal assistant for the purpose of seeking donations and to facilitate communications with him.

It is not for me to comment on the strength or quality of such evidence. All I need to address for present purposes is whether the ground has been laid for the admission of a plea of justification and, if so, whether permission should be granted at this stage, the trial being due to begin on 21 July 2003. It is agreed that if the amendment is allowed the trial date will be lost since the time estimate would increase from one week to three. My enquiries show, however, that such a trial hearing could be accommodated in October of this year. There need only be a postponement of just over two months.

One factor that has been addressed in some detail is the delay which has occurred in formulating the proposed defence and in seeking permission. Quite properly, the Defendant's solicitor has explained the steps that have been taken and the difficulties encountered in obtaining evidence. I am quite satisfied that this is not a case that should be decided on the basis of delay. There is nothing that would qualify for the rather quaint term "overreaching" as used by the Court of Appeal in this context in Cropper v. Smith (1884) 26 Ch.D. 700, 710-11. I should concentrate on the merits of the defence. If it is what Lord Denning described as "a loose, ineffective pleading", then permission should be refused for that reason: see Associated Leisure v. Associated Newspapers [1970] 2 Q.B. 450, 455G.

It is well established that the court will be reluctant to refuse permission to add or extend a plea of justification solely for reasons of delay, because it is not in the public interest that claimants should recover damages and thereby achieve a public vindication of reputation which is not deserved: see e.g. Basham v. Gregory, 21 February 1996, unreported, C.A. and MacKenzie v. Business Magazines Limited, 18 January 1996, unreported, C.A.

It has recently been re-affirmed by Brooke L.J. in Chase v. News Group Newspapers Limited [2003] EMLR 218 at [45] that:

One might have expected the Defendant to formulate its defence in accordance with the second or third levels of meaning, as identified in that citation, or perhaps a combination of the two. But that does not seem to be the case. Indeed, Mr Robertson Q.C. appearing for the Defendant eschewed that stance and pitched his case on Category 1. The Defendant wishes to plead and prove matters going beyond mere grounds for suspicion or investigation, and to assert actual associations or ties with certain persons or institutions.

This is an unusual case. For one thing, despite that stance, "suspicions" appear to come into the case at one remove, in the sense that it is the relevant "institutions or persons" with which the Claimant is said to have been associated that are described as "suspected of or with a reputation for links to terrorism or potential terrorist ties". Secondly, even if it were said that the Claimant had associated with actual terrorists (as opposed to those only suspected of having links), the Defendant would face the problem that whether or not "association" is defamatory depends on context and, in particular, upon the nature of the association. The word is not inherently defamatory. Obviously, therefore, whether it is possible to enter a plea of justification depends upon the nature of the defamatory imputation (if any) conveyed by the context. That is because the only point of a defence of justification is to justify one or more defamatory meanings.

I could understand it if the Defendant's case was that the Claimant's "association" with various terrorists was such as to give rise to suspicion of "witting" involvement on its part with terrorist activity. But Mr Robertson does not espouse any such case. This is despite the fact that in paragraph 14.5 of his skeleton argument it was apparently suggested that the Defendant wished to justify the Claimant's first meaning – including "reasonable grounds to suspect that the Claimant ...may now knowingly use or allow the use of its bank accounts for the funnelling of funds to terrorist organisations".

Mr Robertson said that it is no part of the Defendant's position to assert "witting" or "knowing" involvement on the Claimant's part in terrorist activity or in financing it. It will be remembered that the article in question actually refers to SAMA monitoring accounts "in a bid to prevent them from being used wittingly or unwittingly for the funnelling of funds to terrorist organisations". One of the difficulties facing Mr Robertson, however, is that to say of a bank that some of its accounts might have been used "unwittingly", or might in the future be so used, is not in itself to make a defamatory allegation about the bank – unless, of course, there was some allegation of negligence or breach of regulations facilitating such use (which does not arise here).

It is fundamental to an application of this kind for the party applying, and for the court, to identify with precision the defamatory sting sought to be justified and then to consider whether the pleaded particulars are capable of so doing. Here there are real difficulties in isolating the case the Claimant has to meet – especially if one applies the salutary adage that a plea of justification ought to state the charge with the particularity of an indictment: Hickinbotham v. Leach (1842) 10 M&W 361. This should not be lightly overlooked, since it is as important a requirement today as in the past that a person is entitled to know clearly the case he has to meet. When the allegation is of serious involvement (in any form and at any level) in the financing of the Al Qaeda terrorism, that principle is an especially valuable safeguard.

Here the Lucas-Box meanings identified in the draft amended defence are pleaded in terms which might be thought lacking in clarity or precision:

Quite apart from the elementary considerations of justice to which I have just referred, there are serious case management issues to be addressed. It has long been recognised that it is important to identify and concentrate upon the so-called "real issues" between the parties. That is perhaps all the more important in a case which is to be tried by jury.

There are no less than 69 sub-paragraphs of particulars set out as supporting the plea by way of justifying one or more of the Lucas-Box meanings. It would be vital when addressing these, or in listening to the evidence adduced to prove them, to know where one is going. There is enormous scope for confusion and prejudice.

Bearing in mind Lord Denning's phrase, it seems to me that there are various candidates for being categorised as "loose and ineffective" in the Lucas-Box meanings – even before one becomes enmeshed in the particulars.

I genuinely do not know what is meant by the phrase "potential terrorist ties". Even if one applies one's mind to "links to terrorism", it is necessary to remember that this nebulous concept only has a legitimate place in a plea of justification if the Claimant's links are such as to redound to its discredit; for example, because the Claimant's association with a terrorist has been brought about knowingly on its part or (say) through negligently allowing itself to be used to facilitate terrorist activity. It would not be defamatory to say of someone merely that he had been providing services or accommodation to Al Qaeda terrorists without any realisation of their role.

The Defendant does not allege any comparable state of mind on the part of the Claimant or its executives. That is why I was expecting the case to be framed along the lines of "grounds to suspect".

Even though that stance is rejected, it is perhaps worth identifying certain principles which are intended to discipline those who seek to justify any defamatory allegation on the basis that the particular claimant is only involved in wrongdoing, if at all, at one or two removes. They need to be stated because the court should always be alert against any form of pleading designed to by-pass those disciplines. These principles can be derived from such recent Court of Appeal authorities as Evans v. Granada Television [1996] E.M.L.R. 429, Stern v. Piper [1997] Q.B. 123, Shah v. Standard Chartered Bank [1999] Q.B. 241, Bennett v. News Group Newspapers [2002] E.M.L.R. 39 and Chase v. News Group Newspapers (cited above):

In the light of these principles, it becomes clear that the Lucas-Box meanings are, as they stand, unacceptable. I take the first meaning. It is not permitted to justify a defamatory allegation against a claimant by alleging that he has been suspected of the material defamatory imputation, or that he has a reputation for it; a fortiori it cannot be acceptable to plead that he is associated with some other person who is so suspected or who has such a reputation. Mr Browne Q.C. appearing for the Claimant, said that one cannot base a defence of justification upon "guilt by association". Mr Robertson responded by saying that there is no such rule, and that Mr Browne was, in effect, making it up as he went along.

I think that is a little unfair to Mr Browne. I believe it is in accordance with principle not to permit justification by mere association. In other words, in order to pass muster, the pleaded association must itself be "guilty". If an association involves knowledge on the claimant's part, by way of (say) co-operating with or aiding and abetting terrorists, then such an association may certainly be pleaded. Here nothing of that sort is alleged.

I turn to the second meaning. It is said that "the aforesaid associations and ties" had made the Claimant the subject of United States law enforcement "interest". It is not clear to me whether "interest" falls short of suspicion, but I apprehend that it does. If so, it will not do. Even if the relevant agencies suspect the Claimant of terrorist involvement, that would not provide a defence in itself. It would only go to establish the truth of a defamatory imputation if there were reasonable grounds to suspect. As I have said, the mere allegation of suspicion is in itself not defamatory.

The third Lucas-Box meaning is that the "interest" of the United States agencies was likely to have been communicated to SAMA or some Saudi authority. Again, the same problem. The fact of communication of "suspicion" or "interest" from one person to another is neither here nor there. The only relevant consideration is whether there exist, objectively judged, reasonable grounds.

Since the Lucas-Box meanings are themselves flawed, there is logically no need to investigate the many sub-paragraphs of particulars. It is conceivable that some of them could be salvaged to support a different and acceptable Lucas-Box meaning or meanings. But I can only deal with the pleading before me.

In the course of argument, Mr Robertson dictated an alternative version which he thought might fare better:

Another unusual feature about this case is the fourth of the Claimant's own pleaded meanings. I raised this point with counsel in argument but neither seemed very interested. It is well known that if a claimant himself attributes a particular defamatory meaning to the words complained of, and it is one which they are capable of bearing, he cannot be heard to deny the defendant an opportunity to justify that meaning: see e.g. Maisel v. Financial Times (1915) 31 TLR 192 and Bookbinder v. Tebbit [1989] 1 WLR 640. Here, the Claimant contends (in its fourth meaning) that the words impute that it has falsely denied that it fell under suspicion, and that it is to be inferred that it was dishonest. It has not been suggested that the words are incapable of bearing that meaning and the Defendant would thus be entitled to justify it. (The meaning continues, rather confusingly, with the additional words "... or subject to central bank monitoring carried on without its knowledge". I am not sure what, if anything, this adds. I propose to ignore it for present purposes.)

Because of the way this fourth meaning has been pleaded by the Claimant, it would appear to open up a route whereby the Defendant could introduce, quite exceptionally, a Lucas-Box meaning which itself involved the mere fact of suspicion on the part of the relevant authorities – but only as part and parcel of establishing that the Claimant's denials were false (i.e. that at the time of the denials it knew that it was the subject of official suspicions, whether reasonable or otherwise.) It is not for me to invent difficulties. There are enough in the case already. Since the Defendant's advisers have not chosen to plead such a Lucas-Box meaning, the Claimant does not have to deal with it.

I have a conceptual difficulty with the Claimant's third pleaded meaning. Unlike its first defamatory meaning, it does not raise "reasonable grounds" but is formulated by reference to the Claimant's being "a suspect associate of terrorists". On the fact of it, this too might open up, in accordance with Maisel, the possibility of a Lucas-Box meaning which by-passes the need to show "reasonable grounds". The answer to this seems to be that the Claimant has pleaded a non-defamatory meaning, in so far as it highlights suspicion only. It would therefore be inappropriate to justify it. The nub of this case seems to be the Claimant's first meaning, which is focused on "reasonable grounds". The third meaning is simply, in my view, otiose.

There are also problems over the Claimant's second meaning, since it refers to a warning by United States law enforcement agencies to prevent "...the unwitting use of the Claimant's accounts" for the purpose of funnelling funds to terrorist organisations. It does not make clear how this reflects on the Claimant. There is more scope for confusion. I need not address it for present purposes, although a clearer focus is going to be needed before trial, so as to enable the jury to concentrate on clear cut issues.

In view of the conclusion I have reached about the Lucas-Box meanings, it is not necessary to address the parties' submissions on the particulars of justification, but I will briefly summarise them. A great deal of work no doubt went into assembling them, and I should not wish it to be thought that anything was not properly considered which might conceivably give rise to genuine concern over the legitimacy of any vindication the Claimant may achieve.

There are introductory paragraphs (8.1-8.10) which identify Osama Bin Laden, Al Qaeda, Hamas and Palestinian Islamic Jihad. Another character introduced is Wadih el-Hage, who is described as Bin Laden's secretary and as having been convicted in the United States for his role in the conspiracy that led to terrorist killings at the United States embassies in Kenya and Tanzania in 1998. So too are mentioned Mohammed Atta and Abdul Aziz Al Omari, two of the hijackers of the aircraft which crashed into the North Tower on 11 September 2001.

There then follows a section (8.11-8.20) which lists so-called "Designated Organisations". On 23 September 2001, the President of the United States signed Executive Order 13224 which "designated" certain individuals and entities perceived as posing a significant risk of committing terrorist acts or providing support. Their assets were then blocked.

There is next a section (8.21-8.35) consisting of a list of "organisations raided and/or reputed to be involved in terrorism". Particular reference is made to Osama Bin Laden's practice of establishing or using "front charities" to provide cover for terrorism and the necessary fund-raising. One of those listed is SAAR (said to be an acronym of Sulaiman's initials). Eventually, one comes to a section (8.36-8.41) devoted to "The Claimant, its executives and the Al Rajhi family". The allegation is made that the family is the biggest donor to the SAAR foundation and the moving force behind the entire network of "more than one hundred intricately linked and mutually supporting organisations" based at its address, No. 555 Grove Street, Herndon, Virginia. In 1998 the SAAR foundation is said to have reported revenues of more than 1.7 billion US dollars.

Finally, there follow sections (8.42-8.69) setting out what are alleged to be the Claimant's "direct links to terrorists and terrorist organisations", its "links to designated organisations", its links "to raided and/or suspected organisations" and to the reaction of SAMA. Reference is made earlier (at sub-paragraph 8.32) to the fact that the offices of the organisations "linked to 555 Grove Street and residences of these top executives were raided by the anti terrorism-financing task force Operation Green Quest on 20 and 21 March 2002 on suspicion of money laundering and ties to terrorist groups".

Against that background, the final inference invited at the conclusion of the particulars of justification (as proposed) is something of an anti-climax:

So framed, it seems to me that the particulars of justification fall foul of the various principles which I have identified. "Suspicion", or the communication of "suspicion" from one person to another, cannot justify a defamatory meaning. The very least that is required is to identify the facts said to give rise to "reasonable grounds for suspicion", objectively judged, in accordance with the exposition of Stuart-Smith L.J. in Evans v. Granada .

Some of the activities relied upon, on the part of United States law enforcement agencies, post-date publication of the words complained of. Mr Robertson seeks to circumvent that problem by arguing that any such raid or designation would have been prompted by earlier conduct, on the part of the relevant suspect, pre-dating publication. The reason why this is fallacious is that the Defendant is not pleading any such earlier conduct but the post-publication events. If the case were pleaded on the basis of "grounds to suspect", the grounds would have to pre-date publication (e.g. the basis for granting a search warrant). That cannot be circumvented by treating subsequent suspicions or raids as being tantamount to actual guilt.

I am naturally conscious of the Defendant's concerns and, in particular, as to how unjust it would be if the Claimant were to obtain a vindication of its reputation through libel proceedings in England if there were evidence available of its direct involvement in supporting or financing terrorist activity, or even if there were reasonable grounds to suspect such involvement. It would not only be contrary to one's intuitive sense of justice, but there might also be positive harm done by allowing such an organisation to continue any such activities while suppressing the true facts.

As I have already said, however, where allegations are made or hinted at in such a gravely serious context, it is all the more important that the case be conducted in accordance with the generally recognised safeguards and principles of law. It should only be permitted to defend such allegations, by way of a plea of justification, if it is possible to demonstrate facts which enable the relevant defendant to set the case into one or other of the three tiers of gravity identified by Brooke L.J. in Chase (as cited above at paragraph 15). Since, for the moment at least, the Defendant rejects any of those potential pleas of justification, I am afraid I must reject this application to amend. There is thus as yet no reason to vacate the trial date.