BB & ORS. v MOUTAZ AL KHAYYAT & ORS.

The application to strike out is directed to the Claimants’ original Particulars of Claim as supplemented by the Further Information served on 29 October 2021. In the Application Notice, the application to strike out is put on two bases: (a) because the Particulars of Claim disclose no reasonable grounds for bringing the claim; and (b) on the ground that the proceedings are an abuse of process. At the hearing, Ms Brown QC, for the Bank, accepted that on the assumption that the matters pleaded by the Claimant were true they did disclose reasonable grounds for bringing the claims for damages. But she submitted that a case could also be struck out on the “no reasonable grounds” basis if it was evidentially incoherent. That may be so, but in this case the substance of the Bank’s application is better captured by the abuse of process rubric. At the hearing, Ms Brown accepted that and her submissions were directed to striking out the Particulars of Claim as an abuse of process.

The hearing took place in parts, on 1 and 2 March 2022, and then on 29 March 2022. This was because I adjourned the hearing on 2 March 2022 to give the Claimants an opportunity to formulate, file and serve new proposed Amended Particulars of Claim.

During the first part of the hearing the focus of the submissions was the Claimants’ responses to the request for Further Information. The nature of that response is apparent from paragraphs (2) – (4) of the “Introduction” the material parts of which are as follows:

“(2)

For the purposes of this Response, and the answers that follow:

…

(b)

The Claimants have elected to confine their case strictly to the allegations advanced in the (original unamended) Particulars of Claim … The Claimants in this claim will not advance any broader claim such as that advanced by the (different claimants) in Claim No. CL- 2021- 332 (the Hashwah Proceedings). The draft Amended Particulars of Claim in the present proceedings … have been withdrawn in their entirety and will play no part in the case to be advanced.

(c)

… for the avoidance of doubt, the Claimants disavow any assertion made in correspondence or written/oral submissions that seeks to go beyond the scope of the case as originally pleaded. The Claimants accept and aver that they will be bound at trial by the case set out in the original Particulars …

(3)

For the purposes of the present case, the Claimants have elected to confine their allegations against the Defendants to an allegation that they participated in terrorist funding arrangements in their individual (whether that be personal or corporate) capacities, on the factual premise that these were arrangements unauthorised by the Emir of the State of Qatar, which involved dishonest and corrupt misappropriation of funds (including state funds) by individuals acting without the authority (or purported authority) of the State.

(4)

The claimants further confirm, without prejudice to (2) above, that for the sole purpose of answering the Defendants’ forum nonconveniens challenge, they intend to adduce evidence (for which permission has been given) relating to attempts to pervert the course of justice in these proceedings. That evidence (or parts of it) indicates or involves allegations that attempts were made by individuals or entities claiming to be associated with the State of Qatar or on its behalf, to coerce and/or bribe witnesses and intermediaries in these proceedings and to discover the identities of the Claimants. These allegations are strictly relevant and admissible only as regards Defendant’s jurisdictional challenge. They do not form part of the substantive claim to be pursued at trial, which will proceed in accordance with the original particulars.”

Thus, in summary, the Claimants’ position was: (a) that the substantive case was now “confined” to the premise that the moneys used to fund Al Nusra Front had been “misappropriated” from the Qatari state (i.e. the alternative case pleaded in the Hashwah litigation); but (b) for the purposes of responding to the forum non conveniens application, the Claimants would continue to rely on evidence to the effect that there have been attempts to intimidate and bribe witnesses by Qatari state officials because the Qatari state is implicated in the proceedings, such evidence showing that a fair hearing of the claims would not be possible before the Qatari courts.

In these circumstances, the first part of the Bank’s submissions was to the effect that the Further Information served on 29 October was not further information of the Claimants’ pleaded case. As asserted in correspondence in August 2021 the Claimants’ pleaded case (i.e. the Particulars of Claim as originally filed) comprised the contention that the Qatari state was involved in funding the Al Nusra Front. However, the Further Information asserted a different case, that the Qatari State was not involved in the funding arrangements but rather was a victim of those arrangements because Qatari state funds had been misappropriated and diverted to Al Nusra Front (“the misappropriation case”). The Bank submitted that the misappropriation case was advanced on a “false factual premise”. This submission was made by reference to a witness statements already served in these proceedings by the Claimants. In various parts, that evidence contains assertions to the effect that the Qatari state was party to the arrangements to fund Al Nusra Front. The Bank submitted that in light of that evidence, the Claimants could not advance an inconsistent case – i.e., the misappropriation case. To do so was an abuse of process, alternatively the case being advanced was evidentially incoherent and for that reason did not rest on reasonable grounds. On either basis, the case should be struck out.

The second part of the Bank’s submission focused on the apparent inconsistency between the Claimants’ case as explained in the Further Information and the case they intended to advance in response to the forum non conveniens application. The point here was that it appeared that one case would be advanced for the purpose of contending the case should be heard in England (the case that the Qatari state was involved in the funding arrangements), but that a contrary case would then be advanced at the merits hearing (the misappropriation case). This too, submitted the Bank, pointed to the conclusion that the Claimants’ pursuit of their claim entailed an abuse of process.

I accepted the part of the Bank’s submission that the 31 October 2021 Further Information (and the misappropriation case it sets out) was not further detail of the Claimants’ case as pleaded in the Particulars of Claim, but instead detail of a different case, which had not been pleaded. As matters had turned out, the entirely understandable approach taken by Calver J aimed at ensuring clarification of the pleaded case, had not served that purpose. Rather, the Further Information had raised further uncertainty about the factual scope of the Claimants’ case.

I adjourned the hearing to permit the Claimants a final opportunity to provide a clear statement of case, this time in the form of a second attempt at draft Amended Particulars of Claim.

Draft Amended Particulars of Claim were filed on 11 March 2022, together with an Application Notice seeking permission to amend. The objective of the draft Amended Particulars of Claim is captured by the proposed new paragraph 9 which reads as follows:

“9.

The Claimants in these proceedings allege that the Defendants participated in terrorist funding arrangements in their individual (whether that be personal or corporate) capacities. In that regard:

(1)

The Claimants’ claims do not implead the State of Qatar nor any servant, official or agent of the State of Qatar. The Claimants advance no positive case with respect to authorisation of the terrorist funding arrangements by the State of Qatar, which is in any event is immaterial to the cause of action as against the Defendants under Syrian law.

(2)

In the absence of (i) any positive case of state authorisation by the Claimants; and (ii) any responsive assertion or evidence of state authorisation by the Defendants, it is a necessary inference that any funds which flowed from the State of Qatar to the Defendants (and were subsequently transferred to terrorist organisations in Syria) were misappropriated.”

In consequence of this position, a number of passages in the Particulars of Claim are deleted. Some matters are added: the material additions proposed are (a) a new paragraph 48 (which concerns the Second Defendant), (b) a new paragraph 52(2) (on arrangements made by the Bank for cash withdrawal facilities), and (c) a new paragraph 54 (an allegation that two of the Bank’s board members made payments to Al Nusra Front, though not through the Bank’s own systems). In their skeleton argument (dated 25 March 2022) for the resumed hearing, the Claimants stated they would no longer seek to rely on a number of the responses within Further Information dated 29 October 2021. During the hearing I suggested to Mr Emmerson QC (counsel for the Claimants) that other responses within the Further Information would also be overtaken by the proposed Amended Particulars of Claim, in particular by the statement of position at paragraph 9. He agreed. Thus, the Claimants have abandoned their reliance on the following responses: 4(1), 13 – 22, 25, 27, 36, 42 – 43, 47 – 59, 65 – 84, 88 – 89, and 98 – 108.

The Claimants also addressed the witness evidence filed to date. The Claimants have forsworn reliance on parts of statements that are inconsistent with the misappropriation case: see the Skeleton Argument dated 25 March 2022, at paragraph 8. Lastly on this point, the Claimants accept that the expert evidence already served in connection with the forum non conveniens application will need to be reconsidered. Permission may be sought to rely on further expert evidence: see the Skeleton Argument at paragraphs 9-10.

Notwithstanding these matters, the Bank maintains its application to strike out. The Bank submits the misappropriation case cannot properly be advanced because it is premised on a selective approach to the evidence already available to the Claimants. The Bank submits that if all the evidence available to the Claimants is considered (i.e. all the evidence in the witness statements filed and served to date), not only is it not possible to draw the inference pleaded at paragraph 9(2) of the proposed Amended Particulars of Claim (that funds were misappropriated from the Qatari state) rather, the only inference that could be drawn is in precise contradiction of that misappropriation case (i.e. that the Qatari state actively sought to make its funds available to Al Nusra Front). This being so, the application to amend should be refused and the Claimants’ original Particulars of Claim should be struck out, for the reasons the advanced at the first part of the hearing.

I do not accept that analysis. The issue raised by the Bank comes forward in somewhat unusual circumstances. The Bank is only able to make the submission it does because the course the proceedings have taken to date has prompted the Claimants to file a significant amount of evidence even before any of the Defendants has filed a defence to the claim. It is also true that the Claimants’ position has vacillated, responding in one fashion to the forum non conveniens application, and then retreating in the face of the state immunity application. Be that as it may, I must assess the Bank’s submission in light of all the available evidence.

I consider it is too soon to know if there is necessary inconsistency between the case as put in the proposed Amended Particulars of Claim and the totality of evidence. The case now pleaded is the misappropriation case. The premise of the Bank’s inconsistency submission is that parts of the evidence available to the Claimants are consistent, and only consistent, with the conclusion that the Qatari state participated in the steps taken to fund Al Nusra Front, not that it was a victim of those events. The Bank says the Claimants have selectively discarded the evidence that is consistent only with the conclusion of state involvement. Ms Brown relies on what is said at section 14 (1) of the 1978 Act as to what counts for this purpose as “the state”:

“14 – States entitled to immunities and privileges

(1)

The immunities and privileges conferred by this Part of this Act apply to any foreign or commonwealth State other than the United Kingdom; and references to a state include references to –

(a)

the sovereign or head of that State in his public capacity;

(b)

the government of that State; and

(c)

any department of that government,

but not to any entity (hereafter referred to as a “separate entity”) which is distinct from the executive organs of the government of the State and capable of suing or being sued.”

Whether some or all of the persons concerned, referred to in the evidence which the Claimants no longer seek to rely on are to be taken as actors within the scope of section 14(1) will be a matter of evidence, including evidence as to the authority on which they acted. This evidence will determine whether the conclusion to be drawn from the matters set out in the totality of the Claimants’ evidence is that the Qatari state was “victim” of events or itself a perpetrator. For now, any/all of this is unknown. That being so, there is no necessary inconsistency between the case as now put in the proposed Amended Particulars of Claim and the totality of the evidence to date. The same matters also address the criticism levelled by the Bank that the Claimants’ position in response to the forum non conveniens application is inconsistent with their pleaded substantive case.

In the premises, I grant the Claimants permission to amend the Particulars of Claim to the extent of the draft Amended Particulars of Claim filed with the with the 11 March 2022 Application Notice. The claim can now proceed on the basis of the pleading in that form, and on the basis that the Claimants have abandoned reliance on parts of the Further Information dated 29 October 2021 listed above at paragraph 24 and the parts of the evidence referred to at paragraph 25 above. The Bank’s application to strike out the claim is refused.

Ms Brown accepted that if I granted the Claimants’ application for permission to amend, the present state immunity application would need to be reconsidered and would not be pursued in its present form. That being so, I do not need to decide whether the application as presently formulated raises an arguable case.