Apex Global Management Ltd v (Fi Call Ltd & Ors [2013] EWHC 1652 (Ch)

[2013] EWHC 1652 (Ch)Case No 10850/2011
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Rolls Building,, Royal Courts of Justice,Date 20/06/2013
London, EC4A 1NL.
Before
MR JUSTICE VOS
Between
Apex Global Management LimitedPetitioner(1) Fi Call LimitedRespondents(2) Global Torch LimitedRespondent(3) HRH Prince Abdulaziz bin Mishal bin Abdulaziz Al SaudRespondent(4) Emad Mahmoud Ahmed Abu-AyshihRespondent(5) HRH Prince Mishal bin Abdulaziz Al SaudRespondent
Between:-
Mr John Wardell QC and Ms Rosa Zaffuto (instructed by Irwin Mitchell) for 3 rd, 4 th and 5 th RespondentsMr Robert Howe QC, Mr Daniel Lightman, and Mr Paul Adams (instructed by HowardKennedyFsi) for Apex Global Management Limited, the PetitionerHearing Hearing dates: 21 st, 22 nd and 23 rd May 2013
Judgment

Introduction

[1]This is now the third in a series of disputes surrounding the jurisdiction of the Court to determine a petition presented under section 994 of the Companies Act 2006 (“section 994”) on 12th December 2011 (“Apex’s petition”) by Apex Global Management Limited (“Apex” or the “Petitioner”), a company incorporated in the Seychelles, which is owned and controlled by Mr Faisal Abdel Hafiz Almhairat, a Jordanian businessman (“Mr Almhairat”).[2]On this occasion, the dispute concerns the jurisdiction to join Prince Abdulaziz bin Mishal bin Abdulaziz Al Saud, the 3rd Respondent (“Prince Abdulaziz” or the “3rd Respondent”), Mr Emad Mahmoud Ahmed Abu Ayshih, the 4th Respondent (“Mr Ayshih” or the “4th Respondent”), and Prince Mishal bin Abdulaziz Al Saud, the 5th Respondent (“Prince Mishal” or the “5th Respondent”), as Respondents to Apex’s petition. Prince Mishal is the father of Prince Abdulaziz, and the founder and owner of a substantial business known as the Al Shoula Group, of which Prince Abdulaziz is the CEO. Prince Mishal and Prince Abdulaziz are referred to together as the “Princes”.[3]Global Torch Limited is a company incorporated in the British Virgin Islands (“Global Torch”). The shares in Global Torch are held as to 50% by Prince Abdulaziz, as to 25% by Mr Ayshih, and as to 25% by Mr Yasin Sabha, a Jordanian lawyer. The directors of Global Torch are Prince Abdulaziz and Mr Ayshih. It is suggested by Apex that, despite these shareholdings, the effective economic owner of Global Torch is Prince Abdulaziz (subject to certain additional submissions in relation to the position of Prince Mishal). Global Torch is the 2nd Respondent to Apex’s petition.[4]Apex and Global Torch each hold shares in the 1st Respondent, Fi Call Limited (the “Company”, “Fi Call” or the “1st Respondent”) which was incorporated in England under the Companies Act 2006 (the “2006 Act”).[5]In the briefest of outline, the 3rd to 5th Respondents contend that the permission to serve the Apex petition out of the jurisdiction on them should be set aside. The applications of the 3rd to 5th Respondents dated 15th May 2012 seek orders that:- i) the court had no jurisdiction and/or would not exercise jurisdiction over the 3rd to 5th Respondents; ii) the order granting permission to serve the proceedings outside the jurisdiction on the 3rd to 5th Respondents be discharged; iii) Apex’s petition is of no effect against the 3rd to 5th Respondents; and iv) service of Apex’s petition was of no effect as against the 3rd to 5th Respondents.[6]The grounds of the 3rd to 5th Respondents’ applications are as follows:- i) The order to serve out should not have been made, having regard to CPR Part 6.37(1)(a) and (b), because the Court has no jurisdiction and/or should not exercise any jurisdiction over the 3rd to 5th Respondents as:- a) None of the grounds under paragraph 3.1 of CPR PD 6B is made out; and b) There is no reasonable prospect of success in relation to the pleaded matters against the 3rd to 5th Respondents. ii) There has been material non-disclosure in the application to serve out because:- a) Mr Almhairat’s alleged criminal convictions, previous history of being involved in fraud and forgery in business (particularly in Jordan) and of not acting in good faith were not disclosed; and b) Changes in position adopted by Apex on the key allegations were not disclosed and explained.[7]The formal orders and the formal grounds relied upon by the 3rd to 5th Respondents (which I have just recited) are perhaps rather more complicated than the substance of the applications as argued.[8]First, despite not abandoning the argument that there was material non- disclosure, Mr John Wardell QC, counsel for the 3rd to 5th Respondents, did not argue the point orally. I can say at once that, having read all the original and subsequent evidence, I have no doubt that Mr Wardell was right to adopt this position. There were no proper grounds to allege that service out of the jurisdiction should be set aside on the ground of material non-disclosure.[9]Secondly, Mr Wardell argued that the facts alleged against the 3rd to 5th Respondents were far-fetched, incredible and fanciful, and therefore did not meet the required threshold for service out of the jurisdiction to be permitted.[10]Thirdly, the 3rd to 5th Respondents placed reliance on the contention that, even if the factual threshold (or thresholds) were met, Apex could obtain all the relief it needed or was entitled to against Global Torch, and that it could not therefore ask the court to exercise an exhorbitant jurisdiction by bringing the 3rd to 5th Respondents before it.[11]It is important also to understand at the outset that it was not suggested by the 3rd to 5th Respondents that England and Wales was not the most appropriate forum for the determination of Apex’s petition. This is hardly surprising since Global Torch itself issued its own petition under section 994 on Apex and Mr Almhairat shortly before Apex’s petition was issued (the “Global Torch petition”).[12]Apex relies in its petition on unfairly prejudicial conduct which can be summarised as follows:- i) Prince Abdulaziz’s has retained the post of Chairman of Fi Call whilst refusing to become a de iure director of Fi Call. ii) Prince Abdulaziz and Mr Ayshih have caused (and Global Torch has knowingly permitted) Fi Call to become involved in unlawful activities relating to money-laundering, for the actual or intended benefit of the Princes. iii) The 2nd to 5th Respondents have pursued a campaign of threats and other unlawful conduct against Apex and Mr Almhairat, including attempting to coerce them into(i) paying over US$6.75 million to which they were not entitled, and(ii) giving up Apex’s shares in Fi Call for no consideration, and have destroyed the relationship of trust and confidence between the parties. iv) From around May 2011 onwards Prince Abdulaziz and Mr Ayshih have been hostile to Mr Almhairat and have refused to cooperate with him in the running of Fi Call.[13]The final hearings of both Global Torch’s petition and Apex’s petition have been fixed for hearing in January 2014.

The shape of the hearing and the legal background

[14]It is common ground that three things need to be shown to obtain permission to serve a claim form or a petition out of the jurisdiction:- i) That in relation to a foreign respondent there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. This is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success. ii) That there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context, ‘good arguable case’ connotes that one side has a much better argument than the other. iii) That in all the circumstances England and Wales is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction. These tests come from VTB Capital PLC v. Nutritrek International Corp [2013] 2 WLR 398, per Lord Clarke at paragraph 164 and AK Investment CJSC v. Kyrgyz Mobil Tel Ltd [2012] 1 W.L.R. 1804 (Privy Council) per Lord Collins at paragraph 71. It is also common ground that the second requirement that a good arguable case be shown in respect of the service out gateways does not require that it be shown that there is a good arguable case on the underlying merits against either the anchor defendant or the defendant alleged to be a “necessary or proper party” (see paragraphs 81-86 of Lord Collins’s speech in AK Investmentsupra). The 3rd to 5th Respondents did, however, suggest that it had to be shown that there was a good arguable case that each defendant sought to be served was indeed a necessary or proper party.[15]The scale of this hearing has been a matter of some concern to me. In VTB Capital PLCsupra, Lord Neuberger said the following about forum applications at paragraphs 82–89. It seems to me that what he said was equally applicable to jurisdiction applications of the kind before me:- “82 The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time-consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights. 83 Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds each, and to spend many days in court, on such a hearing. The essentially relevant factors should, in the main at any rate, be capable of being identified relatively simply and, in many respects, uncontroversially. There is little point in going into much detail: when determining such applications, the court can only form preliminary views on most of the relevant legal issues and cannot be anything like certain about which issues and what evidence will eventuate if the matter proceeds to trial. ... 88 In The Spiliada [1987] AC 460 , 465, Lord Templeman expressed the hope that in a dispute over jurisdiction, “the judge will be allowed to study the evidence and refresh his memory of [the principles] in the quiet of his room without expense to the parties; that he will not be referred to other decisions on other facts; and that submissions will be measured in hours and not days.” That was a rather optimistic aspiration, not least when one bears in mind the understandable desire of lawyers to do, and to be seen by their clients to be doing, everything they can to advance their clients’ case, especially where the dispute over jurisdiction may well be determinative of the outcome. 89 However, particularly with the benefit of procedural reforms, which have been introduced, or are in the process of being introduced, following reports from Lord Woolf and Jackson LJ, the judiciary is now encouraged to exercise far greater case management powers than 25 years ago. Accordingly, judges should invoke those powers to ensure that the evidence and argument on service out and stay applications are kept within proportionate bounds and do not get out of hand”.[16]It was possible to keep this jurisdiction hearing to its 3-day estimate, but much of that time was devoted to extensive submissions about the facts, which could sensibly have been much reduced. The central issue in the case is really, as I pointed out on the first morning of the hearing, whether, even if the facts are as alleged by Apex, the 3rd to 5th Respondents are necessary or proper parties to Apex’s section 994 petition on the basis that relief could or should properly be granted against them personally.[17]It will already be apparent that the main shareholders in Fi Call are Apex and Global Torch. Prince Abdulaziz and Mr Ayshih are shareholders and officers of Global Torch, but not shareholders of Fi Call. Apex alleges that Fi Call was a “corporate quasi-partnership between Mr Almhairat/Apex and Prince Abdulaziz/Global Torch” based on their personal relationships. The 3rd to 5th Respondents say, in a nutshell, that Apex agreed to go into business with Global Torch, and cannot look behind Global Torch to its shareholders, and even beyond its shareholders to Prince Mishal. They say, as I have said, that Apex is not entitled to, and there is no need for Apex to obtain any, relief under section 996 of the 2006 Act (“section 996”) against the 3rd to 5th Respondents personally. Orders against Global Torch will suffice.[18]In the course of argument, I suggested to Mr Wardell that his argument might be more compelling if at least Mr Ayshih and Prince Abdulaziz were to undertake to stand behind Global Torch and to satisfy any court orders made against it, since there was no evidence before the court as to its financial standing. Mr Ayshih had offered an undertaking of this kind, but Prince Abdulaziz did not ultimately do so. After the hearing, Mr Ayshih’s solicitors, Irwin Mitchell LLP, wrote to the court offering to fortify his undertaking by the execution of a bank guarantee of £2 million.[19]Mr Daniel Lightman, junior counsel for Apex who argued this aspect of the case, submitted in response to this attempted resolution of the applications, that Global Torch had, in its defence, denied liability for the actions of Prince Abdulaziz and Mr Ayshih, and denied that any relief could be granted against it based on allegations against these individuals. That, he said, made it imperative that the individuals be joined. In response to this, Mr Wardell offered on the 3rd day of the hearing to make the following admission:
“Global Torch accepts that if the Court concludes at the hearing of Apex’s petition that the affairs of Fi Call have been conducted in a manner prejudicial to Apex’s interests as a member of Fi Call within the meaning of [section 994] as a result of any acts or omissions of (1) [Prince Abdulaziz], and/or (2) [Mr Ayshih] and/or (3) [Prince Mishal] the Court can properly grant relief against it under section 996”
.

The Companies Act 2006

[20]Section 994 provides as follows:- “(1) A member of a company may apply to the court by petition for an order under this Part on the ground —(a) that the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or(b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial”.[21]Section 996 provides as follows:- “(1) If the court is satisfied that a petition under this Part is well founded, it may make such order as it thinks fit for giving relief in respect of the matters complained of. (2) Without prejudice to the generality of subsection (1), the court’s order may –(a) regulate the conduct of the company's affairs in the future;(b) require the company– (i) to refrain from doing or continuing an act complained of, or (ii) to do an act that the petitioner has complained it has omitted to do;(c) authorise civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct;(d) require the company not to make any, or any specified, alterations in its articles without the leave of the court;(e) provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly”. (i) to refrain from doing or continuing an act complained of, or (ii) to do an act that the petitioner has complained it has omitted to do;

Jurisdictional gateways

[22]Apex relied upon two jurisdictional gateways in paragraph 3.1 of CPR Practice Direction 6B when it applied for permission to serve out as follows:- i) Ground 6 provides as follows (the ‘contract’ gateway):- “A claim is made in respect of a contract where the contract –(a) was made within the jurisdiction;(b) was made by or through an agent trading or residing within the jurisdiction;(c) is governed by English law; or(d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract”. ii) Ground 20 provides as follows (the ‘enactment’ gateway):- “A claim is made – (a) under an enactment which allows proceedings to be brought and those proceedings are not covered by any of the other grounds referred to in this paragraph...”.[23]It is now common ground that the court has discretion to allow a claimant to rely upon a new ground of jurisdiction at this stage and that, in the absence of any prejudice to the defendants, that discretion is likely to be exercised in the claimant’s favour (see NML Capital Ltd v. Republic of Argentina [2011] 2 A.C. 495 per Lord Phillips at paragraphs 65-81, and Lord Collins at paragraphs 131-137, and Alliance Bank JSC v. Aquanta Corp [2012] EWCA Civ 1588 per Tomlinson LJ at paragraphs 54 and 75).[24]Apex now seeks to rely on Ground 3 as follows (the ‘necessary or proper party’ gateway):- “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”.

Shareholdings

[25]Fi Call has a nominal capital of £300 million divided into 180 million A shares of £1 each and 120 million B shares of £1 each. Apex was initially registered as the owner of the A shares and Global Torch was registered as the owner of the B shares.[26]The shares in Fi Call are now held as follows:- i) Apex holds not more than 165,800,680 A shares (55.27% of the shares and 44.57% of voting rights). ii) Global Torch holds not more than 114,646,851 B shares (38.22% of the shares and 49.31% of voting rights). iii) Mr Al Masoud holds at least 4,400,000 A shares and 2,933,333 B shares (2.44% of the shares and 1.99% of voting rights). The 3rd to 5th Respondents suggest that he bought a further 4.6 million A shares and 3,066,666 B shares between May and July 2010. iv) Prince Saud holds 399,660 A shares and 266,440 B shares (0.22% of the shares and 0.18% of voting rights). v) Prince Turki holds 399,660 A shares and 266,440 B shares (0.22% of the shares and 0.18% of voting rights). vi) Mr Abdulrahman Al Shehri (“Mr Al Shehri”) holds at least 9 million A shares and 1,886,966 B shares. Apex contends that Mr Al Shehri purchased a further 4,113,034 A shares on 29th March 2011, and the 3rd to 5th Respondents contend that he purchased an additional 4,113,034 B shares on that date instead.[27]The Articles of Association of Fi Call provided for Prince Abdulaziz to be the Chairman (removable only on death or resignation), for A shares to have one vote, and for B shares to have 1.6 votes. The quorum for board meetings was a Global Torch nominee and Mr Almhairat, or Prince Abdulaziz and Mr Almhairat with Prince Abdulaziz having a casting vote. The only de iure directors of Fi Call since its incorporation have been Mr Almhairat and Mr Ayshih.

Chronological background

[28]In 2006, Nida’a Amman for Telecommunication Services (“Nida’a Amman”), a Jordanian company owned by Mr Almhairat’s sons, developed a Voice over Internet Protocol Application (“VoiP App”) to allow smartphones to make free calls to other users.[29]On 16th September 2009, a joint venture concerning the exploitation of the VoiP App between Mr Almhairat and a Mr Hijazi was terminated, and Mr Almhairat agreed to repay US$7.2 million to Mr Hijazi on or before 16th February 2010.[30]On 24th September 2009, Nida’a Amman and Mr Almhairat assigned the intellectual rights in the VoiP App to Fi Call PLC (the predecessor of Fi Call).[31]On 6th October 2009, Fi Call PLC (by then called Amman Capital PLC) assigned the intellectual property rights to Fi Call for £1.[32]On 23rd October 2009, Fi Call was incorporated in England under the 2006 Act.[33]On 1st November 2009, Prince Abdulaziz entered into a loan facility agreement with Fi Call by which he agreed to lend up to US$20 million to Fi Call (the “loan facility”).[34]On 6th November 2009, Fi Call, Global Torch, Apex and Mr Almhairat entered into a shareholders’ agreement, which was expressed to be governed by English law and whereby the parties submitted to the non-exclusive jurisdiction of the English court (the “Shareholders’ Agreement”). By clause 2.3, the shares allotted to Global Torch were stated to be in consideration of the goodwill and know-how to be provided by Global Torch through its association with Prince Abdulaziz and his personal contacts and ability to attract investments to Fi Call, and the shares allotted to Apex were stated to be in consideration of the goodwill and know-how to be provided by Apex procuring the services of Mr Almhairat and the assignment of intellectual property rights. Clauses 1 and 5 confirmed the position of Prince Abdulaziz as Chairman.[35]On 12th January 2010, Prince Mishal advanced £1 million to Fi Call pursuant to the loan facility granted by Prince Abdulaziz. The 3rd to 5th Respondents contend that this was a loan from Prince Mishal to Prince Abdulaziz[36]In March 2010, according to Mr Ayshih, Mr Almhairat informed Mr Ayshih that HSBC London had requested him to move all his personal and company accounts elsewhere as he was not any longer welcome as a customer of HSBC.[37]On 19th March 2010:- i) Mr Ayshih asked Mr Almhairat to arrange for a US$5 million bankers’ draft financed by Fi Call to be taken to Beirut for a Mr Abdel Razzaq Al-Muheissen (“Mr Razzaq”); ii) Mr Almhairat arranged for US$2,299,975 from his personal account to be paid into Fi Call’s account to fund the bankers’ draft requested; iii) Mr Almhairat allegedly called a Mr Fawzi Al-Marzouq (“Mr Marzouq”) in Jordan to ask him to make enquiries about Mr Razzaq, and Mr Marzouq agreed to contact a Mr Nur Eddin (“Mr Eddin”) in Lebanon.[38]On 20th March 2010:- i) Mr Marzouq allegedly telephoned Mr Almhairat to inform him that he had contacted Mr Eddin in Lebanon, who had said that Mr Razzaq was not a businessman with investments in Lebanon, but was a middleman for Hezbollah; ii) Mr Almhairat emailed Mr Ayshih at 13.53 saying:
“In regard to our conversation; the guy you want to issue the check for him with value of $5,000,000 – I found out he is in relation to the big leader of “Shia’a”
. Are you aware what you are doing!? Don’t tell me again the HRH [Prince Abdulaziz] he knows. How about if the guy he took the money and run away. You know? I am not happy from what are you doing and I am not responsible for money transferred; as you and HRH must debit them back in the company account if something bad happened to the money”. iii) Mr Ayshih responded to Mr Almhairat at 2.57pm saying “I am surprised that you ask, since when do you ask HRH what he is doing; you and I know that every single dollar in [Fi Call] belongs to HRH. If you want to keep a good relation with HRH, don’t ask too much. That guy you talk about does work based on HRH instructions. I prefer to create a new e-mail address does not belong to ficall.com to discuss such a thing like this matter and I consider that I didn’t see this e-mail”.[39]On 21st March 2010 at 18.30, Prince Abdulaziz allegedly telephoned Mr Almhairat. The transcript of this call (which was not transcribed until April 2011 and was not mentioned in Apex’s 9th September 2011 letter before action) is hotly disputed, but the version produced by Apex reads as follows:- “Prince [Abdulaziz]: Hello, Faisal [Mr Almhairat] Faisal: Who is this? Prince: This is Abdulaziz Faisal: Yes, Your Royal Highness Prince: Hello Faisal, How are you? Faisal: Very well, thank you, Your Royal Highness Prince: [Mr Ayshih] has told me about the conversation he had with you. I’m not pleased with it. Faisal: I’m sorry to hear that. Prince: Faisal, I thought you were a smart man and understood your position. There is no need to explain more. Yet, it seems that I should spend my time explaining the position to you. Faisal: I just asked [Mr Ayshih] why he would be dealing with Hezbollah. Prince: Faisal, listen to me carefully. I’ll explain this only once. Faisal: Yes, Your Royal Highness. Prince: We deal with whoever we want to deal with, whether it’s Hezbollah, the mafia or even the Jews. The important thing is that you implement any given order without questioning. Even your king does not raise a question. Who the fuck are you to raise questions about my business? When you work for us, it’s a lifetime commitment. You agreed to obey us and in return you get our protection. Yet, be sure if we remove our protection, you and all your family are dead within a second. There is a single lesson which you should understand. Do as you are instructed. Otherwise, your head will be at my feet without your body. When [Mr Ayshih] tells you something on my behalf obey my orders without questioning. Faisal: But, Your Royal Highness… Prince: Shut-up! I haven’t finished yet. This deal is important and I need to show Hezbollah that we can transfer the money to them smoothly. They have potentially billions which they want to be transferred. My father is interested in this deal and he will be very pleased with us if things go well. My father has placed me in charge of this company and has given his money to manage and I’ll not disappoint him. So don’t disappoint me; if you want to stay alive. Hurry up to Beirut and finish the job”. Faisal: Who is this? Prince: This is Abdulaziz Faisal: Yes, Your Royal Highness Prince: Hello Faisal, How are you? Faisal: Very well, thank you, Your Royal Highness

Faisal: But, Your Royal Highness…

[40]On 22nd March 2010, Mr Almhairat authorised Fi Call’s bankers to issue a banker’s draft for US$5 million payable to Mr Razzaq.[41]Also on 22nd March 2010, Mr Ayshih allegedly met Mr Almhairat at the Intercontinental Hotel in Beirut, and explained how the US$5 million banker’s draft was to be used to facilitate money launderin’g for Hezbollah.[42]On 23rd March 2010, the US$5 million banker’s draft was debited from Fi Call’s account.[43]On 26th March 2010, the US$5 million banker’s draft was re-credited to Fi Call’s account.[44]Between February and May 2010, Global Torch and Apex entered into share sale agreements with each of Mr Al Masoud, Prince Turki, Prince Saud and Mr Al Shehri.[45]On 30th April 2010, Fi Call Seychelles Ltd. was incorporated in the Seychelles (“Fi Call Seychelles”), with Mr Almhairat and Mr Ayshih as directors.[46]On or about 7th July 2010, Prince Abdulaziz paid US$10 million to Fi Call Seychelles. The 3rd to 5th Respondents contend that this sum was the proceeds of the sale of shares to Mr Al Masoud, and was held for Fi Call. Apex contends that this sum was an investment in Fi Call Seychelles to develop a website entitled FIApps.com.[47]On 22nd February 2011, a minute of a board meeting of Global Torch attended by Prince Abdulaziz and Mr Ayshih records that the board approved “pursuant to its obligations and rights under the [Shareholders Agreement] to give full liberty to [Apex] to dispose of its owned shares in Fi Call at any time, amount or price that [Apex] finds appropriate”. The minute is signed by Prince Abdulaziz and Mr Ayshih and is not said to be a forgery. Indeed after some prevarication in the pleadings, the document is now admitted in Global Torch’s Reply filed in the Global Torch petition.[48]On 24th February 2011, a typed letter of understanding was allegedly entered into between Prince Abdulaziz, Captain Anas bin Abed Al Gani Al Dosari (“Mr Dosari”), and Mr Ayshih concerning the transportation of goods to Amman and the splitting of the proceeds of the value of the goods as to 65% to Mr Dosari and as to 35% to Mr Ayshih. The agreement provided that “[i]t is preferred to deposit the amounts transferred from [Prince Abdulaziz] to all parties internal and external bank accounts”. It is to be noted that this agreement makes no mention of Fi Call.[49]On 26th February 2011, Mr Ayshih allegedly told Mr Almhairat in Dubai that the charter of a jet by Fi Call was to transport Prince Abdulaziz’s camping equipment from Nairobi to Amman.[50]On 26th February 2011, a Royal Jordanian air waybill was issued to Mr Dosari for the transportation of 20 tonnes of “camping and communication equipments and personal stuff” from Nairobi to Amman.[51]On 27th February 2011, a receipt was issued to Fi Call in respect of the payment of US$152,000 to Royal Jordanian for a flight Amman-Nairobi-Amman “paid cash by Mr Mahmoud Oudeh”. This sum was deducted from Fi Call’s bank account on the same day.[52]At 11.10 on 27th February 2011, Mr Dosari emailed Mr Ayshih attaching 5 documents “of the origin of the merchandise, as if it is true” as follows:- i) A certificate of ownership issued by the Ministry of Commerce of the Democratic Republic of the Congo (the “DRC”) to Top Mining SPL Goma-Kivu (“Top Mining”) on 18th January 2011 relating to 5,000 kilograms of gold nuggets. ii) A certificate of origin issued by the Ministry of Mines in the DRC to Top Mining dated 18th January 2011 in respect of 5,000 kilograms of gold nuggets to be transited via Nairobi. iii) An undated analysis certificate issued by the CEEC in respect of 50 cases of 100 kilograms of gold nuggets from Top Mining. iv) An Exploitation Authorisation dated 18th January 2011 issued by the DRC to Top Mining in respect of 20 tonnes of gold nuggets, ruby gemstones, green garnet, malakis, and blue sapphire to be transited through Nairobi from Beni airport (in DRC) valid until 19th January 2012. v) A DRC customs exit statement recording the export by Top Mining in transit to Nairobi from Beni of 5,000 kilograms of gold nuggets, 4,000 kilograms of ruby gemstones, 3,000 kilograms of green garnet, 7,000 kilograms of malakis stone, and 1,000 kilograms of blue sapphire, and the payment of tax of US$492,340. The Respondents’ jewellery expert says that only gold and malachite would be found naturally in the DRC.[53]At 13.51 on 27th February 2011, Mr Dosari emailed Mr Ayshih attaching a purported certificate for the export from the DRC of large quantities of gem stones, one consignment valued at US$140 million. Mr Dosari’s statement denies that he sent this email. The email reads as follows:- “When you receive the shipment documentation that I am sending in a few hours, You are required to solicit H.R.H [Prince Abdulaziz] to sign the attached and yourself as a receiver of the shipment, you must be in Jordan\Amman at my arrival time as I will pass the shipment to you only as it is Mentioned in my attached document, Please have the attached documents printed in H.R.H official letter head and send to my email for my group to acknowledge. I am putting all my trust in you as the agreement happen between us, and god (Allah) is our witness, it is a huge burden that we are encountering and we will inshaa Allah is up to it”.[54]According to a document signed by Muaz Al-Majali of Royal Jordanian entitled “To Whom it May Concern” dated 25th September 2011 “Royal Jordanian/ Air Cargo operated an incidental flight No. RJ 1134/28FB 2011 [on 28th February 2011] to Nairobi upon the request of Business International Transportation Co. in order to transfer a general cargo from Nairobi to Amman”. The document records also that the flight returned to Amman “off cargo as the subject matter shipment was not ready to be consigned and that the flight included nothing except its crew”.[55]On 2nd March 2011, a receipt was issued to Fi Call in respect of the payment of US$50,000 to Royal Jordanian for a flight Amman-Nairobi-Amman “paid by bank transfer”. This sum was deducted from Fi Call’s bank account on the same day.[56]Also on 2nd March 2011, Mr Dosari allegedly emailed Mr Ayshih at 06.29 as follows:- “I am thinking of changing the owner name from my name [to] H.R.H The UN can’t do anything, they are threaten to open OR send the shipment back to Ghana, (examine or shipping to Ghana thing, it is overuse thy cant open!) but they have no right to open, and do have the right for shipping to Ghana Solutions:- 1- We can work in changing the ownership with some contracts agreements to H.R.H name, with his diplomatic immunity, I think we can wobble some people up, and stop the playing around. 2- We can show accepting or actually agree to ship the merchant to Ghana, but keep the shipment in air craft until we get Amman authorizations. 3- We can try if UN accept opening the boxes (and I don’t suppose they want nor can without my authorization) for H.R.H and have them escort the shipment to the airplane under their protection with the release papers after paying the 2 millions. 4- having the above solutions thought off, I think they will accept 10,000 $ to do the work. We have no problem at all, they are using our unfamiliarity with UN rules and play with us, I need you to look them up if you have the time, We can’t give up at first blow……..check the document I send you before and the one attached…”

Solutions:-

[57]This email attached a “safe-keeping receipt” dated 8th February 2011 issued by “Customs Cargo Handlers” in respect of a cargo in 72 metal boxes travelling from Accra, Ghana, via Nairobi, to Amman, of 5,000 kilograms of gold nuggets, 4,000 kilograms of ruby gemstones, 3,000 kilograms of green garnet, 7,000 kilograms of malakis stone, and 1,000 kilograms of blue sapphire.[58]On 2nd March 2011, Mr Almhairat emailed Mr Ayshih at 10.30 saying: “[w]hy you lie to me? You told me that Nairobi flight will transfer camping and personal stuff for [Prince Abdulaziz] and he want it urgent, what I saw in ficall@hotmail.co.uk mail box is very scary. Whatever happened I am not involved…”.[59]Mr Ayshih responded to Mr Almhairat on 2nd March 2011 at 10.52 by saying: “[y]ou are reaching the red line, this is [Prince Abdulaziz’s] business”.[60]On 4th March 2011, Mr Dosari allegedly emailed Mr Ayshih as follows:- “I don’t know if you still want me to keep you inform about the 2B [US$2 billion?] or not, but I will tell a little about what is going on as the Occurrences happen, There is no doubt that what we are doing is against the Law and one can be persecuted, but it’s the glamour and magic of 2B, one cannot grab hold of some one laundering 2B every day, it is the one in a million incidents that any one may come across in one’s life if ever, Those UN Inspectors think they Hit the target Powel’s Eye and a life chance had happened, never mind doing their real profession of confiscating it or tell anyone ells about it, way spoil the fun?, obviously it is not a drug nor explosive, these thing can keel you, but 2B can make a lot of people happy for a long time but only if not to be used for terrorist act which what we garneted by several hi ranking people verifications here in Nairobi, other than that it is ok to let it go at their opinion, to make sure of what they are having, they take it from the Kenyan custom to the UN headquarter and place it in an eare where most of normal humanitarian stuff storage, so to give the impetration to others that it is nothing of importants, They came at later time and toke several boxes and run them through there scanning machine, (not the tampered custom machine at air port), they study the real picture of what inside, and without doubt, it is dollars, now, if you want to open them, you need to forget all you planning of being Rich, it has to go through the correct procedures and do the right peppers, people well be watching you doing your job, What they decide to do is to ask for money in return of looking the other way and let it pass, now the number seemed to be decreasing, I heard it (but only through scanning), and escort it to airport and though custom in to the airplay, but it is not clear payment should be before or after, this is what we are trying to find out, there is some suggesting of having stuff inside before we even pay, there is a possibility of coming down the stairs from the airplane with what they ask for, Just remember, every one want to go home happy, and they trying to work it out with all possibility ways,”[61]On 21st March 2011, Mr Dosari allegedly emailed Mr Ayshih as follows:- “I am still waiting for Kenya airway to release the 158,000 $, as a rule and as it says in there documents that it required 3 months before they refund the pay costs money, but as we have some friend inside we were promised not more than 10 to 15 days, but it seems it is not an adequate time for them, but it is coming no Doubt anyway. In regards to the 2B, I manage to convince the UN inspectors for 1,5 million instead of 2, The deal was is exchange the 2million with a release document from UN, and as guarantee for their safety from anyone trying opening the boxes, they will escort the shipment under UN security to the airplane and loud it inside and grad it until the aircraft is airborne, Now, my deal with them is not to give any money until the aircraft is airborne, and the way we agree is that we maintain the money with a law firm office or establishment and make a counteract not to hand the money to the UN before the aircraft is airborne, also agreed that we choose the lower and the law firm to executing this agreement as you are will peter than me in this field, I have in my hand in Nairobi 500,000 $, you need to carry with you 1 million $ and come to Nairobi, and I want you to do the talking and the paper work and execute the deal, for that I am going when your arrival to Nairobi show you the 500,000 $, and it will be at your control to make the deal with the UN and conclude the deal, Do you think you can do that or willing to do that? No worry, and they are frightened of us more than you imagine, since the shipment in the UN for more than 3 weeks without any UN action, when they should of done the opening part long time age, now they are in a deep trouble, to a point that if a go myself to the UN and ask for my shipment, they will be arrested for bribe, Need your replay asap. Note, my meeting with sidnah tomorrow, with much less what we agree, but, it is yours from the beginning, and this letter to excuse myself from any promises or burden Please reply ASAP”.

Do you think you can do that or willing to do that?

[62]It is common ground between the parties that a share sale took place on 29th March 2011. According to Apex, it sold 10,282,586 shares to Mr Al Shehri for $16,489,155 pursuant to a written agreement which was subject to English law and non-exclusive English jurisdiction. According to the 3rd to 5th Respondents, Apex sold 6,168,552 A shares to Mr Al Shehri for $10,056,000, and Global Torch sold 4,113,034 B shares for $6,704,000 (totalling $16.76 million) pursuant to a written agreement which was subject to Saudi law and exclusive Saudi jurisdiction. Apex contends that the latter agreement is a forgery, and the 3rd to 5th Respondents contend that the former document is a forgery. The 3rd to 5th Respondents accept that there is a triable issue as to which is the genuine transaction.[63]From 1st April 2011, Fi Call Seychelles’s bank statement at RBS Coutts in Geneva shows a credit balance of $2,792,124.82. This sum is said by the 3rd to 5th Respondents to belong to Fi Call.[64]On 9th April 2011, Prince Abdulaziz allegedly spoke to Mr Almhairat at the Atlantis Hotel in Dubai. Again, the conversation is hotly contested, but the transcript produced by Apex reads as follows:- “[Prince] Abdulaziz: Listen, my father [Prince Mishal] will speak to you about [Fi Call] and he may speak about other activities. I’ve given him a full briefing about you and I’ve told him that you’re a trusted man and you are considered one of us. I told him that you helped move the money for us in Lebanon and I told him about your help in Nairobi. Concerning Nairobi, Emad [Mr Ayshih] has said that you’ve been raising questions once again. It seems that you haven’t understood my last lesson to you over the phone. Listen, carefully to what I’m telling you now. My father will tell [you] everything. Don’t question my father about what he says or I swear you will not leave Dubai alive. We’ll ship your body in pieces back to Jordan after which we will take care of the other members of your damned family. Faisal [Mr Almhairat]: Yes, Your Royal Highness. Abdulaziz: My father likes to talk about his business of which he’s proud. Don’t raise questions [or] provide an opinion. Agree with everything he says. Let me make it clear. My father is my whole life. Everything I do is with his permission and blessing. He’s a great businessman. His biggest achievement is his ability to move money. He moves more money than some of the biggest banks in the world. So, if he speaks about it don’t ask him stupid questions. It’s your privilege to listen to a great teacher who may explain to you how he moves money for important people. Just listen to him. My father has true power. He even deceived the mafia in 2002. The mafia asked him to move money which they sent to him, but he retained the money, because he wanted to show them how powerful he is. He’s proud of this and may tell you this story. If he does so, congratulate him”.[65]Later on 9th April 2011 at 19.10, Mr Almhairat allegedly met Prince Mishal at the Atlantis Hotel, Dubai. The (contested) transcript produced by Apex reads as follows:- “[Prince] Mishal: Hello, Faisal. Sit down beside me. Faisal [Mr Almhairat]: Yes, Your Royal Highness. Mishal: I understand that [Fi Call] is doing well. Faisal: Yes, Your Royal Highness, we’re about to sign a contract with Saudi Telecom. Mishal: That’s good to hear. As you know, I’ve 40 million shares in [Fi Call] and their value will go up now. Faisal: The contract will make huge profits for the company and this will definitely make the company quite profitable. I hope that the contract will be signed soon. Mishal: You should not worry about the contract. [Fi Call] is now our company and Saudi Telecom cannot reject us. Faisal: I’m honoured to be working with Your Royal Highness. Mishal: You know that I went into business and not politics. I’m now a major landowner in the Kingdom. Faisal: This is well-known, Your Royal Highness. Mishal: Look, Faisal, my son says you are a good man, so I want to explain the situation to you. You know that it was on my order that Abdulaziz signed the deal with you. I have business interests in two major sectors: oil and real estate, but I don’t have a stake in the telephone sector. Now, I have a presence, because Saudi Telecom is a major company in Saudi Arabia and this contract will generate profits amounting to hundreds of millions of dollars per annum for our company. This contract will immediately confirm [Fi Call] and could mean that the company is worth a billion dollars. Faisal: With your support, Your Royal Highness, I’m sure we can achieve your wish. Mishal: But, Faisal, we have a small problem. When we enter a business, we always have the majority control of the company. We need to have the majority of shares in [Fi Call]. You can keep a small percentage of the shares in the company as an incentive for you. Yet, I need to transfer the shares to Al Shoula Group. I’ve asked Abdulaziz to deal with this issue. Faisal: Are you saying that Al Shoula Group will buy the company. Mishal: My son will explain this to you. Don’t [worry], because you will still make money and we’ll expand the company into other countries. Faisal: I’m honored that you take such interest in [Fi Call]. Mishal: It was actually upon my order that Abdulaziz went into [Fi Call]. Faisal: Did you know about [Fi Call]? Mishal: Well, I had an idea. You know that I move huge amounts of money for people like our friends the Mubaraks. We’ve been doing this business for years. We can move money for anyone, including the Iranians, because nobody dares to challenge us. Faisal: Yes, Your Royal Highness. Mishal: Although I have very good connections with HSBC, we sometimes need to explain what this money flowing through our personal account and Al Shoula’s account is about. I believed that if I acquired a telecom company, we could use for money laundering and provide an explanation of the flow of cash through our accounts. When Abdulaziz told me about your company I told him to go ahead. I gave him $40 million to enter the company. Faisal: We did receive £1 million from Your Royal Highness into the company’s account with HSBC, but the bank closed this account after the transfer. Mishal: Yes, I know. HSBC are sensitive about my money flowing through their onshore accounts. They prefer that I keep my money in offshore accounts in Switzerland. Faisal: I understand. Mishal: Keep me informed about the company. Abdulaziz is in charge but, as you know, he spends a lot of time with Moroccan bitches. You’re aware that I’ve been building this huge business and I should make sure it is taken care of. Help my son and you’ll get our protection. Faisal: I’m honored, Your Royal Highness”.

Faisal: Did you know about [Fi Call]?

[66]Also on 19th April 2011 at the Armani Hotel in Dubai, it is alleged by Apex that Mr Ayshih demanded that Mr Almhairat pay $6.75 million ($4.25 million to Mr Ayshih and $2.5 million to Prince Abdulaziz) from the proceeds of the share sale to Mr Al Shehri.[67]On 20th April 2011 at 21.10, Prince Abdulaziz allegedly spoke to Mr Almhairat at the Atlantis Hotel in Dubai. The (contested) transcript produced by Apex reads as follows:- “[Prince] Abdulaziz: Emad [Mr Ayshih] told me that AlSheri [Mr Al Shehri] has transferred the money to your account. Faisal [Mr Almhairat]: Yes, Your Royal Highness. Abdulaziz: Now you have enough money to sort out the issue with [Mr] Hijazi. Faisal: Yes, that will be a big relief for me. Prince: My father has explained to you that [Fi Call] will become part of Al Shoula Group. You need to transfer the shares. Faisal: Do you mean that Al Shoula Group will buy my shares? Abdulaziz: Did I say “buy”? I’m saying that you will transfer your shares in the company to whom I tell you to transfer the shares to. Faisal: I don’t understand. Abdulaziz: What do you don’t understand? My orders are not for discussion. You will do what I tell you. You will transfer the shares to my father. How dare you ask for payment. Faisal: But I gave you 40% of my company for nothing. I thought we were partners. Abdulaziz: What do you mean you gave me shares for free. You have the privilege of being in a company with me and my father. People pay us to be in partnership with us. If you say again that you gave me shares for free, you’ll see the other side of my face which you haven’t seen before. Faisal: I’m sorry. I didn’t mean to offend you. Abdulaziz: I don’t care what you mean. You will do exactly as you’re told. If not, I can arrange for you to be placed in a prison cell until you come to your senses. Do not ever dream of embarrassing me in front of my father. You will transfer 40 million shares to my father and 100 million shares to AlSheri. Alsheri will transfer the shares to my father later. Sort this out with Emad”.

Faisal: Do you mean that Al Shoula Group will buy my shares?

[68]Between 20th and 27th April 2011, Apex alleges that Mr Ayshih pressurised Mr Almhairat to pay $4.25 million to Mr Ayshih and $2.5 million to Prince Abdulaziz, but Mr Almhairat refused to do so.[69]On 28th April 2011, Mr Adeeb Hiasat, the CFO of Fi Call, emailed Mr Almhairat attaching revised draft share purchase agreements governed by English law and subject to the non-exclusive jurisdiction of the English courts in respect of sales of 40,457,984 A shares by Apex to Prince Mishal for $50 million, and 60 million A shares by Apex to Mr Al Shehri for $99,174,000, with the purchase monies to be paid to Prince Abdulaziz. Apex refused to complete this deal. These documents are not said by the 2nd to 5th Respondents to be forgeries.[70]On 7th May 2011, Mr Almhairat emailed Mr Ayshih asking if he could let him know the status of the Saudi Telecom Contract with Fi Call. As appears from the transcripts above, Apex alleges that Mr Ayshih and the Princes had agreed to use their contacts to set up a lucrative deal between Fi Call and Saudi Telecom to exploit the VoiP App.[71]Later on 7th May 2011, Mr Ayshih responded to Mr Almhairat saying: “[t]he contract is signed but the HRH [Prince Abdulaziz] is very angry and not happy at all, he needs you to transfer $2,500,000 to his account and $4,250,000 to my account, then we can proceed in business”.[72]On 10th May 2011, Mr Faisal Alsaber of Saudi Telecom responded to an enquiry from Mr Almhairat for an update saying: “[a]s explained on the phone and since we got [two] different directions, kindly be informed that we will not be able to reply to any email till we get an official letter from [the chairman of Fi Call][Prince Abdulaziz] naming the authorised person. [T]his is just to keep the privacy of the project”.[73]On 17th May 2011, Mr Almhairat emailed Prince Abdulaziz asking him to replace Mr Ayshih as a director of Fi Call Seychelles for administrative, fiscal and other reasons. The 3rd to 5th Respondents contend that it is incredible that, if the alleged threats had been made so little time before, Mr Almhairat could have sent such an email.[74]On 28th May 2011, Mr Almhairat wrote, as a director of Fi Call Seychelles, to Mr Ayshih in the BVI inviting him to a shareholders’ meeting at 29 Harley Street, London W1G 9QR on 9th June 2011 to discuss the termination of a director. The 3rd to 5th Respondents contend that the letter was wrongly addressed.[75]On 9th June 2011, a general meeting of Fi Call Seychelles attended by Mr Almhairat on behalf of Apex “resolved by a vote representing 60% of the shareholders of the company” to terminate Mr Ayshih’s directorship of that company and to remove him as a signatory to that company’s bank accounts at RBS Coutts Bank.[76]On 25th July 2011, the prosecution authority in Saudi Arabia issued an arrest warrant for the arrest of Mr Almhairat, based on an alleged complaint by Prince Abdulaziz of breach of trust and embezzlement.[77]On 8th August 2011, Interpol issued a Red Notice against Mr Almhairat.[78]On 25th and 26th August 2011, Mr Ayshih allegedly telephoned Mr Almhairat saying that Prince Abdulaziz had taken steps to get the Red Notice issued and that he would get it withdrawn if Mr Almhairat flew to Riyadh to reach a settlement with respect to the monies due to him and Mr Ayshih under the agreement between Apex and Mr Al Shehri dated 29th March 2011.[79]On 9th September 2011, HowardKennedyFsi, solicitors for Apex, wrote an 8-page letter before action on behalf of Apex to Prince Abdulaziz alleging, amongst other things, that US$10 million had been laundered for Hezbollah in Lebanon through his ‘300M’ private account, using Fi Call’s funds to facilitate the transaction by the provision of a US$5 million bankers’ draft.[80]Apex alleges that, in mid-October 2011, a Mr Amer Al Hammad allegedly stole a memory stick containing the alleged recorded conversations (transcribed above) from Mr Almhairat’s home in London. This allegation was first communicated to the Respondents in February 2012.[81]On 2nd December 2011, the Global Torch petition was issued against Apex, Mr Almhairat, and Fi Call seeking an order that Apex, Mr Almhairat or Fi Call should purchase Global Torch’s shares in Fi Call at a price to be determined by the court. Global Torch alleges that the conduct of Apex and Mr Almhairat has “destroyed the relationship between the parties”, so that Global Torch “no longer has confidence in” Apex and Mr Almhairat. In addition, Global Torch claims corporate remedies against Apex and Mr Almhairat to the effect that they account to Fi Call for the sums they have allegedly misappropriated, and that the share register be rectified. The alleged misappropriations include US$6.7 million that should have been paid to Global Torch, monies in Fi Call Seychelles’ bank account, and the failure to repay loans made to Mr Almhairat personally. It is also alleged that Mr Almhairat wrongfully removed Mr Ayshih from Fi Call Seychelles’ board.[82]On 12th December 2011, Apex’s petition was issued under section 994 against the Respondents seeking an order that the 2nd to 5th Respondents should be ordered to purchase Apex’s shares in the Company at a fair and proper valuation. The allegations made in Apex’s Petition are dealt with in more detail below.[83]Apex contends that, at the end of December 2011, Mr Almhairat was forced by the 2nd to 5th Respondents’ actions to dismiss Fi Call’s staff and to close its Amman offices.[84]On 18th January 2012, Mr Faisal al-Shubaki, the Director of Jordan’s General Intelligence Service emailed Jordan’s General Security Directorate saying that “[Prince Abdulaziz] has sent a letter to [King Abdullah II of Jordan] in which he notes that he has been subjected to deception and theft by [Mr Almhairat] as a consequence of differences that arose between them after their partnership in [Fi Call] … [Prince Abdulaziz] has filed a lawsuit in Saudi Arabia in which he accuses [Mr Almhairat] of defrauding him of [US$17 million]. Accordingly, please be so kind as to notify us of the possibility of extraditing [Mr Almhairat] to Jordan”.[85]On 9th February 2012, Apex issued an application notice seeking the Court’s permission to serve Apex’s petition on each of the 2nd to 5th Respondents outside the jurisdiction on the grounds that the Shareholders’ Agreement and the alleged share sale agreement dated 29th March 2011 were governed by English law and jurisdiction and/or that it was brought under an enactment, namely section 994, which allowed it to be brought.[86]On 14th February 2012, Mrs Registrar Barber granted Apex permission on paper under CPR Rule 6.36 to serve Apex’s petition out of the jurisdiction on each of the 2nd to 5th Respondents.[87]On 24th February 2012, Mr Registrar Baister made a further order granting Apex permission under CPR Rule 6.36 to serve Apex’s petition outside the jurisdiction on each of the 2nd to 5th Respondents, and giving those Respondents liberty to apply to vary or set aside that permission under CPR Part 23.10.[88]On 26th March 2012, HowardKennedyFsi wrote to Clifford Chance LLP, then the solicitors for the 2nd to 5th Respondents, saying the following at paragraph 25:- “ … you express the view that it seems to you to be “unnecessary and inappropriate for” the three individual respondents to [Apex’s petition] to be named as respondents to that petition, and invite Apex to remove them as respondents. In order that we can consider that novel suggestion, we require you as soon as practicable to:a. confirm that for the purposes of [Apex’s petition] Global Torch acknowledges that each and every action (and inaction) of Mr Ayshih, Prince Abdulaziz and Prince Mishal is to be treated as an action (or inaction) of Global Torch;b. give full details of Global Torch’s current financial position, providing us with copies of all of its annual and management accounts and giving us full details of all of its assets (stating their value and where and how they are held) and liabilities and potential liabilities;c. provide us with detailed and exhaustive proposals as to how sufficient of Global Torch’s monies and assets to cover the very substantial sum which it will require to have available to it in the event that it is ordered to purchase Apex’s shares in the Company at a fair value will be paid into Court or otherwise held securely by suitable independent third parties pending the determination of these proceedings …”. Clifford Chance LLP gave HowardKennedyFsi no substantive answer to these questions at that time.[89]On 15th May 2012, each of the Princes issued application notices (dated in error 15th May 2011) disputing the jurisdiction of the court on the various grounds mentioned above and asserting that they had “state, sovereign, and/or diplomatic immunity or privilege from jurisdiction of the Courts of the United Kingdom” under section 1 of the State Immunity Act 1978 (“SIA”) and/or by virtue of being a diplomatic agent under the Diplomatic Privileges Act 1964 (“DPA”).[90]On 21st June 2012, the 4th Respondent issued an application notice (dated in error 21st June 2011) seeking an order that the court had no jurisdiction over him, and seeking to set aside the permission to serve him outside the jurisdiction.[91]On 12th July 2012, Global Torch served its defence to Apex’s petition. Global Torch pleaded that relief could not be granted against Global Torch based on the facts relating to the Beirut transaction and the Nairobi transaction described above.[92]On 12th September 2012, Global Torch responded to a Part 18 request in relation to its petition by contending that there were difficulties in taking forward the discussions with Saudi Telecom “due to the breakdown in the relationship between [Global Torch] and [Apex and Mr Almhairat]”.[93]On 9th November 2012, Apex produced a forensic report from Mr Colin Ehren concluding that the email messages from Mr Dosari that he had reviewed were genuine.[94]On 3rd December 2012, Global Torch served a forensic report from Mr Jonathan Munsey concluding that it was not possible to concur with Mr Ehren that the email messages were genuine, but that “[i]t was observed that at face value, the E-Mail messages presented within the expert report could well be genuine”.[95]On 6th December 2012, the 3rd to 5th Respondents issued applications seeking orders that the hearings of their applications then listed for 17th December 2012 should be heard in private.[96]Between the 19th and 21st December 2012, Morgan J heard a number of applications concerning the privacy of these proceedings including an application by the 2nd to 5th Respondents pursuant to CPR rules 39.2(3)(a) and/or (g) that the hearings of certain applications in Apex’s petition be in private, save insofar as pure issues of law in relation to questions of sovereign, state and/or diplomatic immunity were raised.[97]On 11th January 2013, HowardKennedyFsi wrote to Clifford Chance LLP suggesting a variety of methods of obtaining independent evidence as to the authenticity of the disputed emails.[98]On 13th February 2013, Morgan J gave judgment refusing to accede to the applications under CPR rule 39.2 for private court hearings. He said at paragraph 86 that: “[i]f I were able to determine at this interlocutory stage that the Apex parties were knowingly putting forward false claims ... then I would be very concerned ... However, it is wholly unrealistic for the Applicants to submit that I can form that view on the material before me...”.[99]On 27th February 2013, HowardKennedyFsi wrote to Clifford Chance LLP saying that in the light of their failure to respond to the invitation to verify the disputed emails, the attempt to argue that there was no real prospect of Apex’s factual case being accepted at trial was an “expensive and vexatious waste of time”.[100]On 19th March 2013, I gave judgment refusing to accede to the Princes’ application for sovereign immunity. I held that neither Prince Mishal nor Prince Abdulaziz had established that they could properly be regarded as members of King Abdullah’s family forming part of his household, within the proper meaning of section 20(1)(b) of the SIA. In my judgment, I said this about the Princes’ evidence:- “The state of the evidence when the hearing concluded was, as I remarked to counsel, somewhat unsatisfactory. The Princes declined to make any witness statements or even timeously to provide material for their solicitors and advisers to make statements on their behalves. Instead, the evidence was mostly provided by a Ms Carla Santos, Global Torch’s legal adviser, to Mr Iain Roxborough at Clifford Chance. When I enquired why this was the case, Mr Roxborough filed his 13th statement saying that Ms Santos had told him that “as a matter of royal protocol, senior members of the ruling royal family of the Kingdom of Saudi Arabia such as [the Princes] do not directly involve themselves in proceedings and in particular do not give witness statements”. I am not sure that providing instructions to solicitors would contravene such a protocol, and indeed the very final piece of evidence submitted to me (in the form of the 3rd statement of Ms Santos dated 11th March 2013) said, for the first time, that the Princes had “read this statement and all previous statements I have made and confirmed to me that the contents thereof are accurate and true”. For the most part, however, I have had to make do with second or third hand evidence on the Princes’ behalf. There have also been significant problems with the evidence that has been produced ... Moreover, the evidence that they have produced has, to put it at its lowest, evolved”.[101]On 25th April 2013, Irwin Mitchell, now the solicitors for the 2nd to 5th Respondents, wrote saying that Global Torch intended to apply for security for costs.[102]On 10th May 2013, Irwin Mitchell served 4 further witness statements in support of these applications, including that of an expert jeweller.[103]On 15th May 2013, the Court of Appeal dismissed the Princes’ appeal against my ruling on sovereign immunity.[104]On 16th May 2013, the Court of Appeal dismissed the Princes’ appeal against Morgan J’s ruling on privacy.[105]On 26th May 2013, after the hearing before me, the 3rd to 5th Respondents’ solicitors wrote to the court indicating that, since their expert had advised that the value of Fi Call will be negligible, Apex will have suffered no loss, but that Mr Ayshih was prepared nevertheless to “demonstrate goodwill by putting forward his undertaking [to stand behind Global Torch in relation to any order the court may make] and he is willing to fortify it at this stage via the execution of a bank guarantee of £2 million to show how serious he is”. Mr Ayshih said he would be willing to increase or decrease that guarantee following a fair and independent valuation of Fi Call, which could only be done once the assumptions for that valuation have been determined.

The issues

[106]Against that rather complex background, the issues that I have to decide can be simply expressed as follows:- i) Issue 1: Whether, as a matter of law, if the facts alleged were established, relief under section 996 could and should be granted against each of the 3rd, 4th and 5th Respondents? ii) Issue 2: If so, is there a serious issue to be tried as to whether the company affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of Apex within section 994? iii) Issue 3: Are each of the 3rd, 4th and 5th Respondents necessary or proper parties to the claim against Global Torch? iv) Issue 4: Are the claims against each of the 3rd, 4th and 5th Respondents brought under an enactment which allows proceedings to be brought? v) Issue 5: Is there a good arguable case that the claim is brought in respect of a contract where the contract was governed by English law or contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract?

The evidence

[107]There has been a wealth of evidence placed before the court on these applications. It would be impossible for me to summarise it here. The chronology set out above does, however, summarise the salient points and highlight the large number of hotly contested elements.[108]As in the immunity application, the Princes have filed no evidence themselves, though they have at various times given instructions to others to do so on their behalf.[109]Before turning to the two main issues, it is useful to do two things. First, I shall set out some of the more important paragraphs from Apex’s petition to show how Apex seeks to justify its claim for relief under section 996 against the 3rd to 5th Respondents. Secondly, I shall refer briefly to some of the more important authorities that have been referred to by the parties in relation to the circumstances in which non-members can be joined as respondents to section 994 petitions, and in relation to the nature of the relief that can properly be granted in such petitions. I shall deal with these authorities in broadly chronological order.

Apex’s petition

[110]Paragraph 17 of Apex’s petition pleads reliance on the following allegation of an implied term:- “17. There is to be implied into the statutory contract comprised by the 2006 Act and by the Company’s Articles of Association (“the Articles”) by which the shareholders in the Company have agreed to be bound a term that the Company will only carry on business lawfully (“the Implied Term”).[111]The allegations in Apex’s petition against the 3rd to 5th Respondents include the following:- “33. As pleaded below, Prince Abdulaziz and/or Mr Ayshih have acted in breach of their said statutory duties, in particular by causing the Company to carry on business in an unlawful manner, including by using the Company as a conduit for money-laundering and/or other forms of unlawful activity, to the actual and potential detriment of the Company, both financially and in terms of its reputation, for the actual and/or potential profit of Prince Abdulaziz and/or Prince Mishal and/or persons and/or entities connected to them (or either of them). In knowingly permitting Prince Abdulaziz and Mr Ayshih so to act, Global Torch has acted in breach of the Implied Term. … 45. Prince Abdulaziz and/or Mr Ayshih caused the Company to be involved in activities designed to profit Prince Abdulaziz and/or Prince Mishal and/or persons and/or entities connected to them and/or to enable Hezbollah, a terrorist organisation, to pursue or to further its unlawful activities. Prince Abdulaziz and/or Mr Ayshih exposed the Company to a serious risk of reputational damage by causing it to be engaged in such activities. In so acting, Prince Abdulaziz and/or Mr Ayshih acted in breach of their statutory duties to the Company, in particular sections 172 and 175 of the 2006 Act. … 58. Pending disclosure and/or the provision of further information herein, it is to be inferred, on the basis of what Prince Mishal told Mr Almhairat on 9 April 2011 (pleaded at paragraphs 64 and 65 below), that in causing the Company to pay for the charter of the private aircraft Prince Abdulaziz and/or Mr Ayshih(i) caused Company monies to be expended for purposes other than proper purposes of the Company and(ii) caused the Company to be involved in unlawful activities designed to profit Prince Abdulaziz and/or Prince Mishal and/or persons and/or entities connected to them (or either of them) and/or to enable third parties to carry out unlawful activities. Prince Abdulaziz and/or Mr Ayshih exposed the Company to a serious risk of reputational damage by causing it to be engaged in such activities. 59. In so acting, Prince Abdulaziz and/or Mr Ayshih acted in breach of their statutory duties to the Company, in particular sections 172 and 175 of the 2006 Act. 60. In knowingly permitting Prince Abdulaziz and Mr Ayshih so to act, Global Torch has acted in breach of the Implied Term. … 80. The conduct of Prince Abdulaziz, Mr Ayshih, Global Torch and Prince Mishal described in this Petition has caused Apex to lose (and justifiably to lose) any and all remaining trust and confidence in their willingness to manage the Company in a fair and proper manner and to respect its rights as a shareholder. Further, it is averred that in acting as aforesaid, both individually and collectively, they have acted in a manner which equity would regard as contrary to good faith. 81. The aforesaid conduct of Prince Abdulaziz, Mr Ayshih, Global Torch and Prince Mishal has left Apex with no realistic alternative but to seek an order for the purchase of its shares and the realisation of its investment in the Company. 82. It is averred that it is apparent from the facts and matters pleaded above, and in particular the contents of the conversations between Mr Almhairat and Prince Abdulaziz and Prince Mishal referred to hereinabove that Prince Mishal has directed Prince Abdulaziz and Mr Ayshih to cause the Company to carry on activities designed to benefit him and/or persons and/or entities (including the Al Shoula Group) connected to him, including in particular his and/or their money-laundering activities, and accordingly is so connected to the unfairly prejudicial conduct of which Apex complains that it would be just, in the context of the statutory regime contained in sections 994 to 996 of the 2006 Act, to grant a remedy against him in relation to that conduct”.[112]The relief claimed in Apex’s petition is contained in the following paragraphs:- “83. In the premises, Apex seeks an order that Prince Abdulaziz and/or Mr Ayshih and/or Global Torch and/or Prince Mishal and/or the Company do purchase its shares in the Company at a fair and proper valuation to be determined by the Court or as the Court may direct, such valuation to be calculated on the following assumptions, namely:83.1 that Prince Abdulaziz and Mr Ayshih had not acted in breach of their respective statutory duties to the Company, as pleaded above;83.2 that Global Torch had not acted in breach of the Implied Term, as pleaded above;83.3 that Prince Abdulaziz had repaid to the Company together with compound interest thereon the sum of US$ 202,000 which he wrongfully caused the Company to pay for the charter of an aircraft for an unlawful and/or improper purpose;83.4 that Prince Abdulaziz and Prince Mishal had accounted to the Company for all profits which they (or either of them) and/or persons and/or entities connected to them have obtained by reason of or in consequence of the transactions with Mr Razzak and/or Hezbollah and the transportation of the shipment from Nairobi referred to above, together with interest thereon;83.5 that there be added to the notional value of Apex’s shares the US$ 1,271,808 which Mr Almhairat paid between 6 February 2011 and 31 October 2011 from his own resources to meet the Company’s ongoing obligations to its employees and suppliers, together with interest thereon; and83.6 that no minority discount shall be applied to the value otherwise attributable to Apex’s shares in the Company. 84. Further or alternatively, Apex seeks an order that Prince Abdulaziz and/or Mr Ayshih and/or Global Torch and/or Prince Mishal pay it a sum equivalent to the monies which Mr Almhairat is owed by the Company and/or equitable compensation for the unfairly prejudicial conduct pleaded above, together with interest thereon under section 35A of the Senior Courts Act 1981, alternatively in equity, at such a rate and for such period as the Court considers just. 85. Further or alternatively, Apex seeks an order that Prince Abdulaziz and/or Mr Ayshih and/or Global Torch and/or Prince Mishal do account to the Company for(i) such payments or dispositions as they have procured to be made for their benefit or other than for the Company’s proper purpose and(ii) such profits that they and/or persons and/or entities connected to them have made by reason of or in consequence of the said breaches of duty by Prince Abdulaziz and/or Mr Ayshih, together with interest …”.[113]Finally, the prayer in Apex’s petition seeks orders based upon the above pleading.

Relevant authorities

[114]In Re a Company (No. 005287 of 1985) [1986] 1 WLR 281, Hoffmann J considered a strike out application by H, who had been, but was no longer, a member of the company. Hoffmann J declined to strike out the petition against him either insofar as it claimed an account of certain company payments which it was said he had made without authority, or insofar as it claimed an order that he buy the petitioners’ shares. Hoffmann J said this at pages 284C-285B:- “Mr. Briggs points out that these four specific powers [in what is now section 996(2)] all involve orders being made either against the company in respect of its conduct or against other members of the company. He therefore says that section 461 should be construed so as to limit the scope of the relief which may be given to regulating the affairs of the company and its members between themselves. There is no justification, he says, for extending that relief to orders against persons who have ceased to be members. It is accepted that on the facts alleged in the petition, the truth of which, of course, remains to be tried, the petitioners would be able to mount a derivative shareholders' action of the kind exemplified by Wallersteiner v. Moir [1974] 1 W.L.R. 991against H. in order to require him to account for such of the company’s assets as he may have disposed of without authority. But it is said that such an action should be commenced separately by writ and that it would not be proper to seek the equivalent relief within a petition under section 459. Looking at the matter from a practical point of view that does not seem to me to be very convenient. It would mean separate proceedings having to be commenced by writ and separate pleadings delivered in respect of matters which would very substantially overlap, if not duplicate, the issues canvassed in the petition and affidavits under section 459. It would then be necessary for both sets of proceedings to be heard together. I would be reluctant to come to the conclusion that this form of duplication was necessary unless it was clear that the Jurisdiction under sections 459 and 461 did not permit the whole matter to be dealt with upon the petition. It seems to me that although it is true that section 462(2) shows that the normal order under section 461 will be an order against the company or another member, there is no reason why the words of section 461(1) should not be given their full effect and allow the court to give relief in respect of a complaint that the company's affairs have been conducted in a manner unfairly prejudicial to the interests of members, even when this would involve giving relief against a respondent who is no longer a member. For that reason, I am not willing to strike out H. as a party to the petition. The other way in which Mr. Briggs made his submission was to say that at any rate no order could be made under section 461 for requiring H. to purchase the petitioners' shares. Section 461(2)(d), which I have already read, provides for such an order being made against members of the company, but says nothing about the order being made against a non-member. Mr. Kosmin, on the other hand, says that there are cases in which a person may be — for the purposes of giving relief — identified with a company which he controls and that it may be possible to obtain an order to that effect against H., either under the broad Jurisdiction of section 461(1), or by identifying H. with the Gibraltarian company. It is not necessary for me to express any view upon whether that can be done because I do not think it would be right to strike out the paragraph seeking such relief unless I was satisfied that the possibility of obtaining it was perfectly hopeless. I do not feel in a position at the moment to say that, and I do not think it would prejudice H. very greatly if the paragraph seeking that relief were to remain in the petition, given that in the light of the conclusion to which I have already come he will remain as a respondent to the petition in respect of the relief sought under paragraph 2” (emphasis added).[115]In Re a company (No 001761 of 1986) [1987] BCLC 141, Harman J drew a clear distinction between the unfairly prejudicial conduct of the affairs of the company on the one hand and acts of a shareholder carried out in his personal capacity outside the course of a company’s business on the other.[116]In Electric Furnace Company v. Selas Corporation of America[1987] RPC 23,Slade LJ said in the Court of Appeal that:
“[i]t does seem to me that if the court takes the view that service out of the jurisdiction in a particular case is likely in practice to achieve no potential advantage whatever for the plaintiff, this would ordinarily not be a proper case for service out of the jurisdiction within the meaning of O.11 r.4(2)”
. It should be noted, however, that Order 11 rule 4(2) of the RSC was the equivalent of the present CPR Part 6.37(3) to the effect that the court must be satisfied that England and Wales is the proper place in which to bring the claim.[117]In Re Little Olympian Each-Ways Ltd. [1994] 2 BCLC 420, Lindsay J joined a third party, Owners Abroad Group plc (“OAG”) as a respondent to a section 459 petition (the predecessor of section 994), on the basis that it was the ultimate transferee of the company’s business, it having been removed from the company at an alleged undervalue. The petitioner contended that there should be an order requiring OAG to purchase its shares. Lindsay J held that sections 459 and 461 conferred the widest jurisdiction on the court as regards parties against whom relief could be sought, and that in an appropriate case relief could be sought against a non-member, or against a person not involved in the conduct complained of (at least if that person could be affected by the relief sought). This decision was followed in Lowe v. Fahey Developments Ltd [1996] 1 BCLC 262 and Atlas Limited v. Brightview Limited [2004] BCC 542 at paragraphs 53-56.[118]In Legal Costs Negotiators Ltd. [1999] BCC 547, the Court of Appeal considered the purpose of relief being granted under the predecessor of sections 994-6. Peter Gibson LJ (with whom Henry and Roch LJJ agreed) said this at page 551: “Mr Collings stressed the width of the jurisdiction and of the relief which may be granted. That is of course correct, but that is not to say that there are no limitations observable in the statutory language. Thus like the judge I too would lay emphasis on the need to show that it is the affairs of the company which are being or have been conducted in an unfairly prejudicial manner or that it is an act or omission of the company that is or would be so prejudicial. The conduct of a member of his own affairs, for example by requesting a general meeting of the company or seeking answers to an excessive number of questions, is irrelevant. Further, I would emphasise the limit imposed by statute on the relief which may be given under s 461, viz the order is for giving relief in respect of the matters complained of. As Oliver LJ said in Re Bird Precision Bellows Ltd[1985] BCLC 493 at 500, [1986] Ch 658 at 669, the very wide discretion conferred on the court to do what it considered fair and equitable is –'in order to put right and cure for the future the unfair prejudice which the petitioner has suffered at the hands of the other shareholders of the company ...' If the matters complained of have been put right and cured and cannot recur, it is hard to see how the court could properly give relief. Thus in Re Estate Acquisition & Development Ltd [1995] BCC 338 at 352 Ferris J pointed out that where the matter complained of is the failure to provide information to a member, the subsequent provision of information must be a material consideration— 'if only because the natural remedy for a failure to provide information is an order that the information be provided and there can be no purpose in making such an order when the information has in fact been provided before the order is made.' The court on an application to strike out a s 459 petition can look at the realities of the case. It is entitled to take the pragmatic view that the petition should not be allowed to proceed where the likelihood of the trial judge exercising his discretion to grant the claimed relief is so remote that the case can be described as perfectly hopeless (see Re Little Olympian Each-Ways Ltd[1994] 2 BCLC 420 at 429 and 432 per Lindsay J and Re Oriental Gas Co Ltd (4 February 1998, unreported) where Ferris J adopted what Lindsay J said in posing the test whether it is plain and obvious that the relief claimed would never be granted)”.[119]In Chime Corporation Limited (FACV No 6 of 2004), the Hong Kong Court of Final Appeal (the “CFA”) considered the distinction between derivative actions intended to compensate the company for wrongful acts by individual directors or shareholders and the equivalent of a section 994 petition, the purpose of which was to remedy the unfairly prejudicial conduct of the affairs of the company. The CFA held that the purpose of a section 994 petition was not to order the payment of damages or compensation by a shareholder. Lord Scott (with whom the other members of the CFA agreed) held (at paragraphs 47-8 and 61-2) that, although the court did not lack jurisdiction, in the strict sense, to make the orders sought against a director for breach of duty, a derivative action was the proper way in which to remedy such a breach. The essence of the decision was that, where the central claim was an action by the company to be compensated for a director’s breach, a minority shareholder should not use section 994 as a way of circumventing the rule in Foss v. Harbottle (1843) 2 Hare 461. It seems to me that the decision was simply an application of the principle I have described in a particular situation. The facts were very far removed indeed from this case.[120]In Gamlestaden Fastigheter AB v. Baltic Partners Ltd [2008] 1 BCLC 468, the Privy Council, on appeal from Jersey, considered Chimesupra. Lord Scott gave no indication that he thought that the law was different in Hong Kong. He said this at paragraphs 26-28:- “[26] As their Lordships have noted, the relief sought under Gamlestaden’s Representation includes an order that the directors pay damages to Baltic for breach of duty. … [27] The first question to be addressed, therefore, is whether an order for payment of damages to the company whose affairs have allegedly been conducted in an unfairly prejudicial manner can be sought and made in an unfair prejudice application. Another way of putting the question is whether a cause of action allegedly vested in the company can be prosecuted to judgment in an unfair prejudice application. It would, of course, always be essential for the parties allegedly liable on the cause of action to be Respondents to the proceedings. But that is not a problem in the present case. [28] There is nothing in the wide language of art 143(1) to suggest a limitation that would exclude the seeking or making of such an[121]In Re Sunrise Radio Ltd [2010] 1 BCLC 367, HHJ Purle QC held at paragraphs 277-8 that a Mr Jain, who was not a shareholder, was jointly and severally liable to purchase the petitioner’s shares.[122]In Maidment v. Attwood [2012] EWCA Civ 998, the Court of Appeal (Arden LJ, with whom Aikens and Kitchin LJJ agreed) endorsed Gamlestaden and said at paragraph 44 that Parliament clearly intended the courts to adopt a flexible approach to proceedings under section 994. In this context, it will be recalled that section 994(1) was amended to include the interests of “members generally” as well as the interests of “some part of [the] members”, and 996(2)(c) expressly envisages claims being authorised by the company against 3rd parties (and see also paragraphs 85-92 in Burnton LJ’s judgment (with whom Moore-Bick LJ and Blackburne J agreed) in Re Neath Rugby Ltd (No. 2) [2009] 2 BCLC 427).[123]I was referred also to a number of first instance decisions in which a section 994 petition was found to be appropriate where the personal relationship in a quasi-partnership has broken down due to the loss of trust and confidence between the parties for a variety of reasons and in a variety of circumstances: see Rodliffe v. Rodliffe and Home & Office Fire Extinguishers Limited [2012] EWHC 917 at paragraphs 71-2 (where there is also some support for an implied duty of good faith between members), Croly v. Good [2010] EWHC 1 (Ch) at paragraph 91, Holman v. Adams Securities Limited [2010] EWHC 2421 at paragraphs 19-20).[124]In a lengthy judgment in F & C Alternative Investments (Holdings) v. Barthelemy(No 2)[2012] 3 WLR 10, Sales J said at paragraph 1096 that the relevant question was whether the particular respondent was “so connected to the unfairly prejudicial conduct in question that it would be just in the context of the statutory regime contained in sections 994 to 996 to grant a remedy against him in relation to that conduct”.[125]In my judgment, these authorities all speak with one voice. They show that sections 994-6 provide a wide and flexible remedy where the affairs of a company have been conducted in a manner that is unfairly prejudicial to the interests of some or all of its members. A section 994 petition is appropriate where, for whatever reasons, the trust and confidence of the parties to a quasi-partnership has broken down. Relief can be granted to remedy wrongs done to the company, and in such a situation the alleged wrongdoers must be made parties to the petition. Non-members of a company who are alleged to have been responsible for such conduct can be joined as respondents, and, in an appropriate case, such non-members can be made primarily or secondarily liable to buy the petitioners’ shares. Artificial limitations should not be introduced to reduce the effective nature of the remedy introduced by sections 994-6.[126]With that introduction, I turn now to deal with the issues that I need to resolve on these applications.[127]It might be thought that this was a classic case for the use of a section 994 petition. Indeed, Global Torch itself seems to have thought so, since it was the first to present the Global Torch petition.[128]Apex has alleged conduct against each of Global Torch, and the 3rd to 5th Respondents, which it says has led to breakdown in the trust and confidence between it and Mr Almhairat on the one hand, and the 2nd to 5th Respondents on the other hand. If these allegations are made good, it seems obvious to me that, as a matter of jurisdiction, relief could be granted against any or all of the 2nd to 5th Respondents. It is true that none of the 3rd to 5th Respondents is a shareholder in Fi Call, but the authorities clearly show that that does not prevent relief being granted against them. The relief could take the form of orders that they restore money they improperly caused to be paid away by the Company or compensation for damage to the Company caused by their wrongdoing, or an order that they buy Apex’s shares in the Company.[129]To put flesh on those bones, and without in any sense pre-judging the outcome of the eventual trial of Apex’s petition, any or all of the 2nd to 5th Respondents might be found liable to restore to the Company the loss of the US$202,000 paid away for the Nairobi flight, or for the use of the Company’s US$5 million to produce a bankers’ draft for the 3 days in March 2010. Moreover any or all of the 2nd to 5th Respondents might be directed to buy Apex’s shares.[130]I cannot pre-judge who, if unfair prejudice is established, will be found primarily liable for it. To do so will require a trial. It could be Global Torch itself, or, if the contents of the various conversations and emails that I have recorded above are found to be proved, it could be any one or more of the Princes and Mr Ayshih. Prince Mishal is in no different a position here from the others. He is said to have been responsible for the conduct of both Prince Abdulaziz and Mr Ayshih. I know not if that will be established. But if it is, it may be he, who is said to have the ultimate economic interest in the Company’s affairs, who is ordered to buy the shares. At the least, either he or Prince Abdulaziz or Mr Ayshih (or all of them) may be ordered to stand behind an order for share purchase against Global Torch. These are matters that cannot be determined at this stage.[131]What, in my judgment, is reasonably clear, is that, where the most serious allegations of the kind made in this case are in issue, it would be singularly inappropriate to proceed to trial without the main protagonists being joined as parties to the proceedings, unless there was no serious case to be tried (as to which, see the next issue) or some legal inhibition to their joinder. On the authorities I have cited, I can see no such inhibition in this case.[132]It is clear that each of the 3rd to 5th Respondents is alleged to have been responsible for the conduct that destroyed Apex’s trust and confidence in Global Torch. They could, therefore, have relief granted against them under sections 994-6. Whether that will be the result must await the trial.[133]It was suggested that it would be sufficient, if a share purchase order were to be made, to make that order against Global Torch, and that Mr Ayshih could stand behind it in the way I have mentioned, and as elaborated in Irwin Mitchell’s letter dated 28th May 2013. This is not a satisfactory solution. It is at least arguable that Mr Ayshih is not economically independent from Prince Abdulaziz, and that Prince Abdulaziz is not economically independent from Prince Mishal. I cannot know the truth of these relationships at this stage, but all three are out of the jurisdiction, and if they were not all parties, and it turned out that one amongst them was the true wrongdoer, the order might properly be against that one alone. Moreover, whilst it seems unlikely that Fi Call has a great value now, the allegation made by Apex is that it would have had if the 3rd to 5th Respondents had not acted as alleged to deprive it of a profitable contract with Saudi Telecom. If it turned out that the 3rd to 5th Respondents were required to buy Apex’s shares at a valuation based on an assumption that the Saudi Telecom contract had been allowed to come to fruition, the value of Fi Call might be much greater than the £2 million bank guarantee offered by Mr Ayshih. Again, the court cannot judge these matters at this stage.[134]In addition, Global Torch has submitted that it is sufficient for Apex to rely on Global Torch’s acceptance that relief can be granted against it if the conduct of the 3rd to 5th Respondents is found to constitute unfair prejudice. That, in my judgment, helpfully reduces the scope of the argument, by abrogating much of the pleading to the effect that Global Torch was not responsible for the actions of those that stand behind it. But it is not a good reason to deny Apex the right to proceed against the individuals they allege to be responsible for the destruction of the Company’s business and the trust and confidence between the quasi-partners. As I have already said, it may turn out that one or more of the 3rd to 5th Respondents is regarded, after a trial, as primarily responsible for what occurred, so that an order or orders should be made against them alone. It would leave the court with one hand tied behind its back if all the alleged wrongdoers were not parties to the proceedings. It is, perhaps, useful to note that, in my judgment, if they were within the jurisdiction, there would be no question of striking them out.[135]In conclusion on this issue, it seems to me clear from the authorities that I have mentioned that, as a matter of law, if the facts alleged were established, relief under section 996 could (and should in various factual circumstances alleged) be granted against one or more of the 3rd, 4th and 5th Respondents. That relief could either take the form of a requirement that they compensate the Company for damage caused to it by their alleged wrongdoing, or an order that one or more of them buy Apex’s shares in Fi Call. It is by no means obvious at this stage (and again without pre-judging any of the issues that will need to be tried) that such relief will be granted only against Global Torch or that relief against Global Torch alone would be sufficient to ensure that Apex’s rights were properly vindicated.[136]It is important not to undertake a mini-trial on jurisdiction applications of this kind. In a case like this where voluminous evidence and exhibits have been filed on each side, it is easy for the parties to achieve their objective of drawing the court into expressing opinions on issues of fact at an inappropriate stage in the judicial process. I propose entirely to reject such temptations.[137]Mr Wardell opened his submissions by contending that, since it was obvious that Mr Almhairat had been guilty of serious wrongdoing and had behaved in breach of his fiduciary duties to Fi Call, he should not be believed when he alleged wrongdoing against the 3rd to 5th Respondents, or contended that there was a reasonable prospect of success on the Apex petition. Mr Wardell continued by saying that a borderline case should certainly not be served on the Princes. As it seems to me, however, the fact that wrongdoing is alleged by all parties does not help me resolve the question of whether there is a serious issue to be tried on Apex’s petition. It is just as possible that all parties have behaved improperly, as one or none.[138]I have to concentrate on a proper evaluation of the allegations made against the 3rd to 5th Respondents in the Apex petition to see whether they can be regarded as amounting, on the present evidence, to a serious case to be tried. I have to decide whether there is a serious case to be tried as to whether the company affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of Apex. I entirely accept that some of the allegations that are made seem extraordinary, but that alone makes it more, not less, difficult for me to determine where the truth lies without hearing evidence and seeing the entirety of the available documentation after proper disclosure has been provided.[139]The disputed transcripts of the conversations that Mr Almhairat is alleged to have had with Prince Abdulaziz and Prince Mishal, and the disputed emails are important. If they are an accurate record of real conversations and communications on the dates alleged, as is at least possible, they provide support for the involvement of each of Mr Ayshih, Prince Abdulaziz and Prince Mishal in the improper use of the Company’s name and assets. Such use would, arguably, constitute unfairly prejudicial conduct within section 994.[140]There are also, in my judgment, certain basic allegations that require some explanation, and therefore amount to a serious case to be tried. First, it is clear that US$5 million belonging to the Company was used to fund the bankers’ draft between 22nd and 25th March 2010, which was apparently required for some purpose in Lebanon. There is no real explanation as to who Mr Razzaq may have been or what the money was for. The two competing stories are undocumented, but Apex’s case is a possibility. That is enough for these purposes. The court cannot decide at this stage whether it is likely or unlikely that the Respondents would wish to assist Hezbollah. Such issues require a full evidential picture to be obtained.[141]As for the Nairobi transaction, again it is tolerably clear that the sum of US$202,000 was paid out of the Company’s account in February and March 2011. It is impossible to be certain where the truth lies in relation to the explanations offered by the parties for this transaction. The crucial documents are all alleged to be forged, and the stories on both sides are, at the least surprising, albeit for different reasons. It would be wholly inappropriate for the court to attempt to determine what occurred at this stage. All that can be said is that the Company’s money was used, and there is a serious case to be tried as to whether it was for a proper purpose.[142]In the case of each of these two transactions, there is sufficient evidence to show a serious case to be tried against each of the 3rd to 5th Respondents in relation to the transactions. If the conversation with Prince Mishal of 9th April 2011 is taken at face value (which cannot be established at this stage), it shows his involvement in the use of Fi Call for the alleged unlawful activities. Prince Abdulaziz and Mr Ayshih are, of course, even more closely linked to the transactions if the emails and transcripts are to be believed (which again cannot now be decided).[143]Importantly also, if the transcripts were to be proved to be accurate, they would provide support for conduct by each of the 3rd to 5th Respondents designed to extort Apex’s shares in the Company from it without payment. That kind of conduct would be bound to destroy the trust and confidence of one shareholder (Apex) in the other (Global Torch). It is impossible to say at this stage who would prove to be primarily responsible for such conduct, but it is at least arguable on the evidence that I have seen that Prince Mishal is, as has always been said, the ultimate owner of the interest in Global Torch with Prince Abdulaziz acting on his behalf in all practical respects. The email of the 28th April 2011 and its attachments provides some support for these allegations. It requires an explanation.[144]Likewise, Mr Ayshih’s email of 7th May 2011 provides support for the attempted extortion of large sums from Mr Almhairat and Apex. If Apex’s version of the agreement of 29th March 2011 proves to be genuine (about which again no determination can now be made), the email threatening not to proceed with the Saudi Telecom deal unless US$2,500,000 was transferred to Prince Abdulaziz’s account and US$4,250,000 was transferred to Mr Ayshih’s account would have been likely to destroy the trust and confidence between the shareholders, and the trust of both Apex and Mr Almhairat in both the Princes and Mr Ayshih, and through them in Global Torch.[145]In these circumstances, I am not able to accede to Mr Wardell’s submission that the claims against the 3rd to 5th Respondents are far-fetched, incredible and fanciful. They may, of course, be found at trial to be one or more of these things, either in whole or in part, but at this stage, the allegations raise a serious case to be tried and are supported by documents and materials that, if believed, evidence them.[146]Mr Wardell also sought to point to the unlikelihood of the veracity of Apex’s allegations by reference to the times at which they were made, and other features said to damage their credibility, many of which I have alluded to in the chronology above. Mr Wardell asked me to pay particular attention to the evidence of Mr Ayshih rebutting all the claims. I have taken all these points into account, but they do not, in the end, persuade me that they are sufficient to mean that there is no serious case to be tried.[147]It appears from the terms of the Shareholders’ Agreement that Fi Call was in the nature of a quasi-partnership with the primary parties being Mr Almhairat and Prince Abdulaziz. The personal relations between each of these persons and their associates was crucial to the business enterprise they were seeking to undertake. It seems unquestionable that that trust has broken down, as Global Torch has itself alleged in its own petition. It will be for the court hearing the two petitions to determine how that occurred and who was responsible and what relief is appropriate as a result under section 996. As I have already indicated, as a matter of law, relief of various kinds could, in theory, be granted against any or all of the 3rd to 5th Respondents. There is no sufficient assurance for Apex that any relief granted against Global Torch will satisfactorily vindicate Apex’s entitlement.[148]For these reasons, I have concluded that there is indeed a serious issue to be tried as to whether the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of Apex within section 994.[149]For the reasons I have already given, relief could be granted against each or any of the 3rd to 5th Respondents, if the facts alleged by Apex are made good at trial. This is crucial to the decision under this gateway.[150]Mr Wardell has submitted that, since the principal relief sought against the 3rd to 5th Respondents is the same as that sought against Global Torch, it is inappropriate to allow service out under this head. He relies on Electric Furnacesupra as showing that the court will not allow service out if it will achieve no practical advantage for the petitioner. In my judgment, it is reasonably clear that Apex may well obtain a real advantage by joining each of the 3rd to 5th Respondents. As I have explained above, they may be shown to be responsible for the alleged wrongdoing in different measures, and relief against Global Torch may not be sufficient, or a judgment may not be satisfied by it or by Mr Ayshih.[151]In these circumstances, it seems to me that the requirements of the ‘necessary or proper party’ gateway are satisfied in this case in respect of each of the 3rd to 5th Respondents:- i) A claim is made in Apex’s petition against Global Torch, which has been served on it otherwise than in reliance on the ‘necessary or proper party’ gateway. For good reason, it has not been suggested by the 3rd to 5th Respondents that this requirement has not been satisfied; it appears that service out was obtained against Global Torch only under the ‘enactment’ gateway. And, of course, Global Torch has unsurprisingly not contested jurisdiction, having itself presented the Global Torch petition before Apex’s petition was issued. ii) There is a real issue between Apex and Global Torch which it is reasonable for the court to try. iii) Apex wishes to serve the claim form on each of the 3rd to 5th Respondents. iv) Each of the 3rd to 5th Respondents is, in my judgment, both a necessary and a proper party to the claim. There is, in my judgment, for the reasons given under issue 1 above, if such needs to be shown, a good arguable case that each of the 3rd to 5th Defendants is a necessary or proper party.[152]This gateway may no longer matter in the light of my decision on the previous issue. Nonetheless, I should state some of my conclusions on the point. The ‘enactment’ gateway applies where:- i) an enactment allows proceedings to be brought, and ii) those proceedings are not covered by any of the other grounds referred to in paragraph 3.1 of Practice Direction 6B.[153]Mr Wardell submits that:- i) the Companies Act 2006 should not be regarded as being within the scope of the enactment gateway, since it was not one of the specific statutes listed under the old RSC Order 11, or even under the original CPR Part 6.20(18) which applied when “a claim is made under any enactment specified in the relevant practice direction”; ii) where the proceedings are even theoretically covered by any other gateway, then the question is only whether they satisfy the requirements of that other gateway; and iii) it needs to be shown under this gateway that there is a good arguable case that an order under section 996 should be made against each of the 3rd to 5th Respondents.[154]In AES Ust-Kamenororsk Hydropwer Plant LLP v. Ust-Kamenororsk Hydropwer Plant JSC [2012] 1 WLR 920, the Court of Appeal recently considered the ‘enactment’ gateway, holding that it did not apply because the claim under section 37 of the Senior Courts Act 1981 for an anti-suit injunction was within the provisions for service out of arbitration claims under CPR part 62.5(1)(c). Rix LJ continued at paragraph 126 of his judgment by observing that “although the words of paragraph 3.1(20) appear to have deliberately eschewed the former rule’s particularity and opted for a catch-all provision, there must be a serious argument that section 37 of the 1981 Act is not an enactment “which allows proceedings to be brought” but more simply provides for a particular remedy within proceedings whose legal basis is found elsewhere”. Wilson LJ disagreed on this point at paragraph 192 and held that it was “patently correct” rather than just a “serious argument” that section 37 was not an enactment that allowed proceedings to be brought, and Stanley Burnton LJ agreed with Wilson LJ on that point at paragraph 207.[155]In my judgment, section 994 is quite different from section 37. It does actually provide that:
“[a] member of a company may apply to the court by petition for an order under this Part”, and section 996 provides that “[i]f the court is satisfied that a petition under this Part is well founded, it may make such order as it thinks fit”
. These words do, it seems to me, mean that the claims against the 3rd to 5th Respondents for relief under section 996 are “claims made under an enactment which allows proceedings to be brought” within the meaning of paragraph 3.1(20) of Practice Direction 6B to the CPR.[156]Mr Wardell was wrong, therefore, to submit that the ‘enactment’ gateway is now limited to the statutes listed under previous rules. As Rix LJ said in AESsupra, the new rule has done away with the previous particularity. Mr Wardell was also wrong, in my judgment, to argue that section 994 only envisages claims by one member against another. It is, as the authorities I have cited show, perfectly possible to seek and obtain relief under section 996 against a non-member in a proper case.[157]These conclusions do not lead to any surprising jurisdictional result, at least so far as English companies are concerned, since petitions will only be brought against those that have become mixed up in the affairs of an English company where the proceedings are not covered by any of the other gateways. Thus, in this case, if the ‘necessary or proper party’ gateway had not been available, Apex could have relied upon the ‘enactment’ gateway. It was, it will be recalled, common ground, that a good arguable case did not need to be shown under the ‘enactment’ gateway.[158]Mr Wardell’s second point that, where the proceedings are even theoretically covered by any other gateway, the concluding words of paragraph 3.1(20) prevent it becoming engaged, is not relevant here, because the ‘necessary or proper party’ gateway was applicable in this case. It seems to me that although the words in paragraph 3.1(20): “and those proceedings are not covered by any of the other grounds referred to in this paragraph” are somewhat unspecific, it would be surprising if they ruled out the application of the ‘enactment’ gateway wherever any argument could be mounted under another gateway. It may, however, be better to leave this question open to be considered in a case where it really matters.[159]As for Mr Wardell’s third point, I have already held that, if it needs to be shown, there is a good arguable case that that an order under section 996 should be made against each of the 3rd to 5th Respondents. In these circumstances, I need not decide whether it is right in law to contend that a good arguable case needs to be shown under the ‘enactment’ gateway. Indeed, I understood in the course of oral argument that the point was not pursued. But then Mr Wardell put forward his comments on my draft judgment indicating that it was. In Seaconsar Far East Ltd. v. Bank Markazi Jomhouri Islami Iran [1994] 1 A.C. 438, Lord Goff said at page 454E that the jurisdiction of the court was established under the paragraphs of Order 11 Rule 1(1) that then referred to statutory provisions, once the claim was shown to have been made under that statute. The separate question as to the merits referred to by Lord Goff required only a serious case to be tried to be established.[160]In the circumstances, I conclude on this issue, as I have said, that the claims against each of the 3rd, 4th and 5th Respondents would, had the ‘necessary or proper party’ gateway not been available, have been brought under an enactment which allows proceedings to be brought.[161]Again, this issue does not now need to be determined. The 3rd to 5th Respondents’ primary submission is that the contract gateway cannot apply where the persons sought to be sued are not even arguably a party to the contracts relied upon. Mr Wardell referred to paragraph 64 of Rix LJ’s recent judgment in Global 5000 v. Wadhawan[2012] EWCA Civ 13, where he said: “... it would also be highly anomalous that jurisdiction could be obtained against a defendant not within the jurisdiction by reference to a contract to which he was not a party”, and to paragraphs 69-71 of Tomlinson LJ’s judgment in Alliance Bank JSC v. Aquanta Corporation and Others[2012] EWCA Civ 1588 where he said:“[f]or my part I see great force in the argument that it is implicit in the rule that the contract upon which reliance is placed must be one to which the intended defendant is party” (see also Longmore LJ at paragraphs 18-20 in Greene Wood & McClean LLP v. Templeton Insurance Ltd[2009] 1 W.L.R. 2013 where he said:“[t]o say that, for a claim to be “in respect of a contract”, it must be “in respect of a contract between the intended claimant and the intended defendant” is to add words to the rule which are not there”).[162]Little time was spent in oral argument on this head, partly because of the acknowledged importance of the ‘necessary or proper party’ gateway, and partly because Mr Howe accepted that the authorities I have mentioned constituted some impediment to his argument. Whilst it is clear that both the Shareholders’ Agreement and Apex’s version of the 29th March 2011 share sale agreement were governed by English law and jurisdiction, I am not at all sure that there is a good arguable case that the claims in Apex’s petition against the 3rd to 5th Respondents can properly be said to be “in respect of” Apex’s version of the 29th March 2011 agreement. However wide the scope of the words “in respect of”, that agreement is really only a part of the story that has given rise to the claims in the petition, and the claims would be unlikely to fall within the gateway. Apex may have a marginally better case in relation to the Shareholders’ Agreement, since it alleges that the 3rd to 5th Respondents were responsible for conduct that violated an implied term of that agreement to the effect that the Company’s business would be carried on lawfully. Again, I prefer not finally to decide either of these issues when it is unnecessary to do so. The ‘necessary or proper’ gateway is sufficient to allow the claims to be brought against the 3rd to 5th Respondents.

Conclusions

[163]For the reasons I have sought to give, I have formed the clear view that the Registrar was right to permit Apex’s petition to be served out of the jurisdiction on each of the 3rd to 5th Respondents.[164]The resolution of the issues before me brings the jurisdictional challenges made by the 3rd to 5th Respondents to an end. I hope that the parties can now concentrate on bringing the Global Torch petition and the Apex’s petition to an effective final hearing at the trial which is already fixed for January 2014. I will hear counsel on the appropriate form of order, any ancillary directions that are required and as to costs.

order

the court “may make such order as it thinks fit for giving relief in respect of the matters complained of”. The point was raised and considered by the Hong Kong Court of Final Appeal (the CFA) in re Chime Corp Ltd (2004) 7 HKCFAR 546. An unfair prejudice application had been made in respect of Chime and one of the issues was whether the court had power on such an application to make an order for the payment of damages or compensation to the company. The CFA held that the court did have power to make such an order (see the judgment given by Lord Scott of Foscote at paras 39 to 49, concurred in by the other members of the court, and the cases there cited). No reason has been advanced to their Lordships on this appeal why the decision in Chime should not be followed. Accordingly, no objection to Gamlestaden’s prayer in its art 141 application for an order that the directors pay damages to Baltic for breach of duty can be taken at this strike-out stage”.

Cited in 16 later judgments

and 7 more of the most senior