Case Update: Sheikh Mohamed Bin Issa Al Jaber & anr v Sheikh Walid Bin Ibrahim Al Ibrahim & anr
Sir Ross Cranston recently delivered two judgments in this matter, in which Zaiwalla & Co act for the Claimant.
The dispute between the parties concerns a transfer of US$ 30 million made in 2002. The Claimant’s case is that this was a loan to the Defendants to enable them to start up the Arabic TV Channel Al-Arabiya. The Defendants accept the money was received but contend that the transfer related to earlier consultancy services provided by the Second Defendant.
The First Defendant launched two applications in December 2018, an application for Security for Costs, on the ground that the Claimant had taken steps in relation to his assets that would make it difficult to enforce an Order for costs, and an application for inspection of documents, under CPR 31.14.
Security for Costs: CPR 25.13(2)(g)
In the security for costs application, the judge rejected the First Defendant’s argument that past behaviour in relation to enforcement proceedings could be a springboard to an application under ground (g) of CPR r.25.13(2). The test was backward looking, in that the defendant had to show steps taken by the Claimant which would make enforcement difficult. A predisposition to take steps in relation to assets was not sufficient. The court also rejected arguments that the Claimant’s corporate arrangements, which involved overseas companies in the BVI and Channel Islands, was sufficient to meet the test. The Claimant had given explanations of the position and such arrangements were not unusual among the very wealthy. Drawing an inference of the sort referred to in Dubai Islamic Bank v PSI Energy Holding Co  EWCA Civ 761, at , was not appropriate. Likewise, the disposition of certain assets to the Claimant’s children.
Moreover the court observed that the Claimant owned property in the jurisdiction sufficient to meet any cost order. The Defendant’s application for Security for Costs was accordingly refused.
The judgment can be read here
The Right to Inspect: CPR 31.14 or CPR PD 51U para.21?
The judgment on the Defendant’s application for inspection of documents is notable primarily for its application of the new practice direction CPR PD51U, which came into force in January 2019 by way of a pilot scheme in the Commercial Court. The pilot scheme represents a momentous change to the normal rules of disclosure.
The question posed in the application was whether the pilot scheme would apply to existing applications for disclosure made prior to January 2019, where no order had yet been made. The First Defendant argued that notwithstanding the revocation of the existing rule, CPR r. 31.14, the First Defendant’s right to inspection had crystallised at the time he made the relevant requests, in 2018. The court observed that this was better characterised as an inchoate right which would crystallise upon an order of the court. The court gave three reasons to reject the First Defendant’s argument: Firstly, the words of paragraphs 1.2, 1.7 and 1.9 indicated that PD 51U should apply from the commencement date, 1 January 2019; secondly, the judgment of Sir Geoffrey Vos in UTB v Sheffield United Limited  EWHC 914 (Ch) provided a strong steer that the pilot scheme applied to all proceedings in the Commercial Court, from the commencement date; and thirdly for policy reasons, a pilot scheme was more likely to produce results, positive or negative, if it applied to all proceedings as of the commencement date.
The judgment can be read here