Apex Global Management Ltd & Anor v FI Call Ltd & Ors [2013] EWHC 3752 (Ch)

[2013] EWHC 3752 (Ch)

Case No 10850/2011

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

COMPANIES COURT

Venue Royal Courts of Justice, Rolls Building/ 7 Rolls Buildings, Fetter Lane, London EC4A 1NL

Date 29/11/2013

Before

MR JUSTICE MANN

Between

(1) FI CALL LIMITEDRespondents

(2) GLOBAL TORCH LIMITEDRespondent

(3) HRH PRINCE ABDULAZIZ DIN MISHAL BIN ABDULAZIZ AL SAUDRespondent

(4) EMAD MAHMOUD AHMED ABU-AYSHIHRespondent

(5) HRH PRINCE MISHAL BIN ABDUL AZIZ AL SAUDRespondent

Robert Howe QC and Daniel Lightman (instructed by Howard Kennedy FSI) for Petitioners

John Wardell QC and Daniel Saoul (instructed by Irwin Mitchell) for 2 nd Respondent

Daniel Saoul (instructed by Irwin Mitchell) for 3 rd Respondent

Hearing Hearing dates: 11 th& 12 th November 2013

Judgment

Mr Justice Mann :

Introduction

[1]This judgment concerns two applications in proceedings relating to two unfair prejudice petitions in the Companies Court. The proceedings are complex and involve a wide array of allegations. They are listed to be heard together at a five week trial to begin in February and are subject to a tight timetable.

[2]The application made by Prince Abdulaziz (“the Prince”), the third respondent to one of the petitions, was listed first. It was optimistically listed for about half a day. It took a day. Riding on the back of that, the parties on the other side of the record (“the Apex parties”) brought an application to strike out certain parts of the pleadings, and for allied relief. It was obviously intended that this should fill the rest of the day, and it was listed accordingly. That was a hopeless underestimate of an application of its complexity. It took a day by itself, and even then some of the complexities had to be rather skated over. This was an unsatisfactory way of bringing on these matters, albeit that there was a degree of urgency because of a forthcoming PTR and trial.

[3]Before dealing with the applications, it is necessary to set out to some extent the factual and procedural background of this case. The two unfair prejudice petitions were presented in respect of the company Fi Call Ltd ("the company") which was incorporated on 23 October 2009 under the Companies Act 2006 ("the 2006 Act"). The Company's principal shareholders were, at all material times, Global Torch Ltd ("Global Torch") and Apex Global Management Limited ("Apex"). Apex was incorporated in the Seychelles and Global Torch was incorporated in the British Virgin Islands.

[4]On 2 December 2011, Global Torch presented an unfair prejudice petition ("the GT Petition") in relation to the company under section 994 of the 2006 Act and, in the alternative, under section 122(1)(g) of the Insolvency Act 1986. The respondents to the petition were Apex and Mr Almhairat, who I refer to together as “the Apex Parties”. Mr Almhairat is a director of and sole shareholder in Apex, and a de jure director of the company. The principal relief sought in the GT Petition was a share purchase order or, in the alternative, an order to wind up the company. Global Torch made various allegations, including in particular the allegation that the Apex Parties destroyed the relationship between Global Torch and Apex.

[5]On 12 December 2011, Apex presented its own unfair prejudice petition (the “Apex Petition”) in relation to the company under section 994 of the 2006 Act. The respondents to the petition were Global Torch, HRH Prince Abdulaziz bin Mishal bin Abdulaziz Al Saud ("Prince Abdulaziz"), HRH Prince Mishal bin Abdulaziz Al Saud ("Prince Mishal") and Mr Abu-Ayshih, who I will refer to together as "the GT Parties". Prince Abdulaziz is a director of and shareholder in Global Torch. He and Prince Mishal are members of the Saudi Royal Family. The Apex Parties say that Global Torch is a corporate vehicle of Prince Abdulaziz, that Prince Abdulaziz purports to be Chairman of the Board of the company although he is not a de jure director, and that Prince Abdulaziz has acted as a de facto and/or shadow director of the company. Prince Mishal is the father of Prince Abdulaziz and is implicated in a number of respects in the allegations contained in the Apex Petition. Mr Abu-Ayshih is a private advisor to Prince Abdulaziz, a director of and shareholder in Global Torch, and a de jure director of the company. The main relief sought in the Apex Petition was a share purchase order. Apex made various allegations; principally that it had lost trust and confidence in the willingness of the GT Parties to manage the company in a fair and proper manner.

[6]On 12 July 2012, the Apex Parties served Points of Defence in response to the GT Petition, which contained a Counterclaim and "Additional Claims". The Respondents to the Counterclaim and the "Additional Claims" were Global Torch, Prince Abdulaziz, Mr Abu-Ayshih and Mr Al Shehri. The "Additional Claims" included a claim for US$5,984,000 plus interest against Prince Abdulaziz in relation to the proceeds of sale of certain company shares. This claim is central to one of the applications in this case. I shall call it “the $5m claim”. On the same date, Global Torch served Points of Defence in response to the Apex Petition. On 7 September 2012, Apex served Points of Reply in the Apex Petition and on 12 September 2012, Global Torch served Points of Reply in the GT Petition.

[7]At a CMC on 30 July 2013, Vos J ordered, inter alia, that the petitions shall be managed and heard together. He ordered Apex and Global Torch to each serve a single set of pleadings (with Apex to go first) in relation to all of their claims, and set out various other constraints which the new pleadings should adhere to. On 23 August 2013, the Apex Parties served Amended Points of Claim (which included under "Further or alternative claims") the $5m claim against Prince Abdulaziz (including a claim for interest). On 3 October 2013, Global Torch and Mr Ayshih served an amended Defence and Counterclaim and on 1 November 2013, the Apex Parties served an Amended Reply and Defence to Counterclaim. Thus we now have a consolidated set of pleadings in relation to the two petitions.

[8]Since the petitions were originally presented in December 2011, they have been the subject of numerous applications and appeals in the High Court and Court of Appeal. They included an application by Price Abdulaziz and Prince Mishal claiming sovereign immunity under Section 20 of the State Immunity Act 1978, which were dismissed by Vos J on 19 March 2013 and the Court of Appeal on 11 June 2013. There was also a jurisdictional dispute. Such applications also include those by the Apex Parties who, following an "unless order" by Norris J dated 9 September 2013, applied for judgment under CPR 3.5(2) against Prince Abdulaziz in relation to the $5m claim. An order recording Norris J as making it gave judgment for the $5m claim on 15 October 2013.

[9]The applications now before the court are:(1) an application by Prince Abdulaziz dated 25 September 2013 to set aside or stay the judgment made against him by Norris J on 15 October 2013; and

(2) an application by the Apex Parties dated 31 October 2013 to strike out various parts of the Amended Defence and Counterclaim, and related orders. Mr Wardell QC and Mr Saoul appeared for the Global Torch parties (including the Prince); Mr Howe QC and Mr Lightman appeared for the Apex parties.

Facts relating to the set aside/stay application

[10]The background to the judgment lies in the failure by Prince Abdulaziz to personally sign a disclosure statement relating to electronic sources of documents. The provision of disclosure statements was one of the things that Vos J dealt with at a CMC on 30th and 31st July 2013. He determined that the disclosure statements should be served by the individual (as opposed to corporate) parties personally (and therefore not by an agent). At the hearing before him it was argued that the Prince should not be required to sign his statement personally because there was said to be a “protocol” (the word was first coined in these proceedings by Vos J, and it has stuck even if that is not the original description of the arrangement) under which members of the Saudi Royal Family do not participate in litigation by signing documents or giving evidence. He rejected the submission that that meant the Prince should be treated differently and made an order that he, like other individuals, should sign personally.

[11]On 30 July 2013 Vos J ordered the Prince (at paragraphs 14 and 15 of his order) personally to file and serve those documents by 4pm on 6 and 12 August 2013. He did not do so. On 9 September 2013, Norris J heard an application that he do so, and ordered that unless he complied with paragraphs 14 and 15 of Vos J's order by 4pm on 18 September 2013, his Points of Defence would be struck out and he would be debarred from defending the Apex Petition and the claims in the Amended Points of Claim. Prince Abdulaziz failed to comply with the order, so his Points of Defence were struck out and he was debarred from defending the action. He rejected the suggestion that the Prince should be allowed to comply, or had procured effective compliance, by getting his personal assistant to sign the statement as to the Prince’s knowledge.

[12]The Prince still failed to comply. On 4 October 2013, the Apex Parties wrote to “the Applications Judge” requesting judgment against the Prince pursuant to CPR 3.5(2), in respect of the $5m claim (amounting to US$5,984,000 plus interest). They did not seek to have it entered as an administrative act. As it happened Norris J was the applications judge in that week, so the matter was placed before him. He was concerned that there were other claims that were being made against the Prince in respect of which judgment was not sought and wrote a letter stating that unless the other claims were abandoned then something more than an administrative act was required. He identified the other paragraphs in the prayer which concerned him (paragraphs 1, 2, 6, 7 and 8). That suggestion was adopted and on 14th October the court made an order (sealed on 15th October) recording the abandonment in a recital and giving judgment in the sum sought ($7,734,934.79, being US$5,984,000 million plus interest plus costs). The order bears the name of Norris J.

[13]That sum has not been paid, and that is the order which the Prince now seeks to have set aside or stayed. However, this is not the first challenge to that order that has been mounted. On 30th October 2013 I heard and ruled on an application by the Prince to vary Vos J’s order by removing the requirement for personal signature by the Prince. A successful variation would have been capable of leading to a setting aside of Norris J’s order. I refused that application, holding that in the circumstances the proper way to challenge that order was by an appeal. I am told that an application for permission to appeal out of time has since been launched, but it has not yet been determined.

The application to set aside or stay the judgment entered on 14th September

[14]This judgment was entered under CPR 3.5. Mr Saoul submitted that it should be set aside:(a) As a matter of right, because the conditions for getting such a judgment were not fulfilled; or

(b) set aside as a matter of discretion; or

Setting aside as of right

[15]This right is said to arise out of the provisions of CPR 3.5(2) and CPR 3.6. CPR 3.5 applies where a statement of case has been struck out and enables a party to apply for a form of default judgment. It reads: “3.5(1) This rule applies where –(a) the court makes an order which includes a term that the statement of case of a party shall be struck out if the party does not comply with the order; and

(b) the party against whom the order was made does not comply with it. (2) A party may obtain judgment with costs by filing a request for judgment if – (a) the order referred to in paragraph (1)(a) relates to the whole of a statement of case; and (b) where the party wishing to obtain judgment is the claimant, the claim is for – (i) a specified sum of money; (ii) an amount of money to be decided by the court; (iii) delivery of goods where the claim form gives the defendant the alternative of paying their value; or (iv) any combination of these remedies. … (5) A party must make an application in accordance with Part 23 if he wishes to obtain judgment under this rule in a case to which paragraph (2) does not apply.” (i) a specified sum of money; (ii) an amount of money to be decided by the court; (iii) delivery of goods where the claim form gives the defendant the alternative of paying their value; or (iv) any combination of these remedies.

[16]CPR 3.6 allows for the setting aside of judgments obtained under CPR 3.5. It reads:

“3.6(1) A party against whom the court has entered judgment under rule 3.5 may apply to the court to set the judgment aside. (2) An application under paragraph (1) must be made not more than 14 days after the judgment has been served on the party making the application. (3) If the right to enter judgment had not arisen at the time when judgment was entered, the court must set aside the judgment. (4) If the application to set aside is made for any other reason, rule 3.9 (relief from sanctions) shall apply.”

[17]Thus CPR 3.6 provides two routes for setting aside. The first is mandatory – if there never was a right, in the circumstances, to have the judgment set aside, then the court has no discretion but must set aside. Absent that, the court still has a discretion, but the applicant has to go through the route of applying for relief from sanctions. Mr Saoul seeks to travel down both routes.

[18]Mr Saoul’s first point arises down the first route. His first point is that the claim in this case, in relation to which the Prince’s Defence was struck out and he was debarred from defending, did not fall within paragraph CPR 3.5(2) because it contained more than a claim for money (not comprising any of the other types of claim referred to in the rule) and it still does. The adopted technique of abandoning the other heads did not work because it was done without a formal process (such as discontinuance) and in any event there remain some unabandoned claims.

[19]There is no doubt that the overall claim contained relief going beyond a monetary claim. For reasons that will appear below the Amended Points of Claim contains two prayers. In the prayer which contains the $5m claim there were other claims of a kind not falling within CPR 3.5, as Norris J identified. It contained separate claims against (inter alia) the Prince seeking tracing relief in relation to the $5m and other sums, an inquiry as to what has become of it, and other claims. It contained other relief in a second prayer. It was only the one prayer that was affected by the abandonment. What was left was two paragraphs in the one prayer:

“(4) A declaration that the sums referred to at paragraph 84 above and/or the traceable proceeds of those sums are held by the First Respondent in the manner pleaded at paragraphs 85 to 88 above and are not to be treated as having been transferred to the First Respondent on behalf of the 3rd Respondent or as forming part of a loan from the 3rd Respondent to the First Respondent. (5) A declaration that the First Respondent is liable to account to the first Petitioner/Claimant in respect of the sums referred to at paragraph 86 above and/or the sums referred to at paragraph 84 above and/or the traceable proceeds of those sums and/or to make restitution to the First Petitioner/Claimant for money had and received in the amount of US $5,400,000.”

The monies referred to in those two prayers have nothing to do with the $5m claim.

[20]There are two prayers because the Points of Claim combines two things – the claim in the original Apex petition and its counterclaim in the Global Torch petition. The claims arising out of each are separately pleaded in two separate prayers. Thus the other prayer contains a claim against, inter alia, the Prince for an order that the claimant be bought out of the company at a fair and proper price, with various conditions provided for determining that proper price. There is an alternative claim for compensation in respect of the allegedly unfairly prejudicial conduct and certain claims for accounts.

[21]It is the continued survival of those claims which is said to mean that the claim was never originally, and was not after the abandonment, a claim solely for the payment of money. Accordingly, Mr Saoul says that the conditions for getting the default judgment were not fulfilled.

[22]Whether or not this point succeeds in relation to the two paragraphs in the prayer containing the $5m claim (those paragraphs being those quoted above) depends on the significance of the reference to the Prince (the Third Respondent) in those paragraphs. Mr Saoul says that those words are capable of generating relief binding on him. The essence of Mr Howe’s submissions is that the reference to the Prince is not so as to bind him, but is merely descriptive of the role that he played in the transaction. His identity is, to that extent, incidental. The paragraphs are part of a claim against the First Respondent (Fi Call) only. Accordingly, those two paragraphs do not embody a claim against the Prince and their abandonment was not required to remove all non-money claims against the Prince.

[23]Mr Saoul submitted that that was not right. Without going back into the claim to analyse it he submitted that the Prince was referred to and would apparently be bound by the declarations sought.

[24]If the relevant question is whether or not there is a real claim against the Prince in these paragraphs (and it probably is) then the prayer itself is a little equivocal. One cannot really tell if the mention of the Prince is descriptive or substantive. Going back into the paragraphs cross-referred to in the prayer in question the position becomes clearer. Without setting them out in detail the paragraphs which underlie these parts of the prayer contain the following:(i) Paragraph 84 summarises certain moneys paid by or on behalf of certain people, not including the Prince, as having been paid to the company (FI Call) purportedly in satisfaction of debts owed to Apex and Global torch.

(ii) Paragraph 85 avers that the company accepted the payments on that basis.

(iii) Paragraph 86 claims that Apex was thereby entitled to treat the company as having received parts of those sums as held on its (Apex’s) behalf, and paragraph 87 pleads an election to treat those sums as held for it. Paragraph 88 pleads the entitlement of Apex as a result of the earlier averments (various trust and lien entitlements).

[25]Thus far there is no obvious pleading which suggests a claim to which the Prince is a party or which has anything to do with the $5m transaction. The other payers of the sums of money referred to in paragraph 84 are not further identified in the prayer, and have not been made a party to the present proceedings.

[26]Paragraph 89 then pleads an email sent by a Mr Abu-Ayshih claiming that some of the sums referred to under paragraph 84 were to be treated as part of the Prince’s “shareholder loan” to the company, and pleads that that statement was incorrect. The true situation was that set out in the immediately preceding paragraphs.

[27]Paragraph 89 probably explains why paragraph 5 of the prayer is there. It is designed to plead to that particular allegation in the email. But the important question for me is whether the paragraph and prayer are dealing with an allegation by the Prince, and intending to bind him, or whether the pleading is directed to allegations made by a representative of the company about the source of money and the identity of that source is incidental or descriptive.

[28]Mr Abu-Ayshih is pleaded in paragraph 1.5 as being “the private adviser to [the Prince]”. However, the pleading also pleads him as being a director of the company. Paragraph 89 does not plead in which capacity the statement was made. If it was made in the former capacity, asserting a right on behalf of the Prince, then it would be relevant to join the Prince in the proceedings and seek declaratory relief against him. If it was made in his capacity as director then it would be less relevant and appropriate. It is necessary to construe the prayer accordingly.

[29]In my view the pleading should be construed in the sense that the averment is that Mr Abu-Ayshih was making his statement on behalf of the company. It is because that particular allegation about the source of money was made by Mr Abu-Ayshih that the point is met by the Apex parties and the particular declaration is sought in paragraph 4 of the prayer. Mr Abu-Ayshih is treated as having made an incorrect statement, rather than asserting a right in the Prince. The reference to the Prince is descriptive, and is not because relief is sought against him. This conclusion is supported by the fact that the other alleged payers of the money have not been joined. If the Prince was intended to be referred to as a party in the prayer then it would be for reasons which would have made it appropriate to join the other apparent payers as well; yet they are not joined. Accordingly, I do not think that that prayer contains a claim for relief against the Prince. The practical effects of that conclusion (which are what is important) are reinforced by Mr Howe’s disclaimer in his submissions to the effect that the declarations operated only against the First Respondent (the company). In the face of that it would be impossible now for the claimant to seek to bind the Prince by the declaration if it were granted.

[30]Accordingly there was nothing in those paragraphs which operated against the Prince and nothing to be abandoned before getting a judgment as a result of the debarring order.

[31]Next is the question arising out of the other prayer in the Amended Points of Claim. This undoubtedly does contain claims against the Prince, and undoubtedly has not been abandoned. Mr Saoul says that the existence of this prayer means that the claim was not just a money claim, even after abandonment of the claims that were abandoned, so the administrative default judgment that was sought was not in fact available to the Apex parties. They should have made a Part 23 application as contemplated by CPR 3.5(5) Mr Howe says this is wrong. The other prayer was an entirely different claim for these purposes, and as such could be disregarded, notwithstanding that it appeared in the same Points of Claim as the money claim on which judgment was sought and obtained.

[32]Mr Howe is correct in saying it is a separate prayer arising out of a separate matter. The history of these proceedings has to be taken into account. The first set of proceedings was an unfair prejudice petition brought by Global Torch against Apex and Mr Almhairat. Apex then presented a section 994 petition against Global Torch, the Prince, Mr Abu-Ayshih and Prince Mishal. So there were two cross-petitions. Within the Global Torch petition Apex counterclaimed seeking relief against the Prince for relief including the $5m claim and the matters referred to above. On 30th July 2013 Vos J determined that the pleadings should be simplified and ordered that the Apex parties should start the pleadings from scratch by serving Points of Claim containing all its claims and counterclaims. He did not, however, order the consolidation of the two petitions.

[33]Accordingly the Amended Points of Claim on which the Apex parties obtained their judgment against the Prince contained the equivalent of their petition and their counterclaim in the Global Torch petition. This was reflected in two prayers, the first corresponding to the prayer in their petition, and the second corresponding to their prayer in the counterclaim. The two prayers reflected to conceptually and procedurally different claims.

[34]In the circumstances the non-abandonment of the section 994 claims is an irrelevance for the purposes of the fulfilment of the requirements of CPR 3.5. It is an entirely separate claim in relation to which judgment was not sought. Its existence does not affect what should happen when a defence is struck out in relation to the other claim (prayer).

[35]Accordingly the existence of this prayer does not make the judgment irregular and susceptible to being set side as of right.

[36]Next is Mr Saoul’s submission that abandonment of claims was neither sufficient nor appropriate to reduce the relevant overall claim to one of just a money claim. He submitted that in order to reduce the claim to such an extent there should have been either a discontinuance or an amendment, both of which would have had consequences, and in the absence of which the “abandoned” claims were not satisfactorily disposed of. I reject this submission. To require either of those techniques would introduce a degree of complication and encumbrance that must have been beyond the intention of the draftsman of the rules. The rule is intended to provide a quick and efficient way of getting a judgment when a pleading has been struck out after an “unless” order. That way of disposing of claims beyond the rule would stand in the way of that objective.

[37]Abandonment, a concept well established, is a much simpler and more likely alternative. It is expressly acknowledged and provided for in CPR 12.4(3) in relation to default judgments. Although not expressly permitted by CPR 3.5, in my view it is a permissible way of reducing a claim which is, as pleaded, outside the scope of CPR 3.5 to one which is within it. To hold otherwise would condemn a litigant with the benefit of an “unless” order, and who makes a monetary claim plus some others and who is willing to confine his claim to just the monetary claim, to make a Part 23 application before getting that judgment. That makes little practical sense. To allow abandonment of the “extra” claims makes much more sense, and in my view can properly be done.

[38]All this means that Mr Saoul’s application to have the judgment set aside as of right fails.

[39]If he fails thus far (which he does) Mr Saoul then makes an application on discretionary grounds. He makes his application on a “relief from sanctions” basis notwithstanding that he does not propose to remedy the default which led to the judgment and cannot (short of an appeal) get the original order of Vos J varied to change the thrust of the order itself.

[40]He makes his application relying on the following points:(i) He submits that the evidence shows that the original requirement of Vos J (that the Prince should sign the relevant disclosure statement personally) is no longer required for practical purposes. He has filed and served a witness statement from the Prince’s solicitor which contains the narrative of a conversation between the solicitor (Mr Marshall) and the Prince. The statement says that the solicitor explained to the Prince that he would be treated as being bound by the contents of the statement made in the form in which it is, and it then sets out a series of verbatim questions by the solicitor and answers by the Prince. The questions and answers are designed to give the Prince’s response to the questions which would have to be answered to provide the disclosure statement. Mr Saoul submits that those questions and answers, thus recorded, bind the Prince as much as a personally signed disclosure statement would. There is, in effect, substantial compliance with the order of Vos J, albeit not strict compliance in terms. It was not strictly necessary to comply (or promise to comply) with a previous order in order to get relief from sanctions. Nothing in the present form of CPR 3.9, or in the older form (with the checklist) required that.

(ii) He points out that issues over the $5m over which judgment has been obtained remain issues in the case. They give rise to monetary claims, or monetary forms of claim, against other parties as well as being raised on the unfair prejudice side of the matter. Thus at the trial, which is only some 3 or 4 months off (February next year) the facts will be gone over and a decision reached on whether the underlying factual basis of the claim is accurate and is capable of giving rise to a monetary claim. It would be highly unfortunate (“mad” was the word he used) to allow the judgment to stand in circumstances in which the court might reach determinations which would have the effect of meaning that the claim had no basis. Furthermore, the Prince remains a party to the litigation on the section 994 side.

(iii) Such a state of affairs would contravene CPR 1.4(2)(i) (“Active case management includes … (i) dealing with as many aspects of the case as it can on the same occasion”) and the Senior Courts Act 1981 s 49(2) (“[the] court shall so exercise its jurisdiction … so as to secure that, as far as possible, … all multiplicity of legal proceedings with respect to those matters is avoided.” To allow the judgment to stand when the issues are going to be tried as against others would not be dealing with as many aspects as possible on the same occasion, and there would be a multiplicity of legal proceedings.

(iv) Vos J probably intended that the solicitor should be able to give hearsay evidence. In an earlier judgment on the question of whether the Prince had sovereign immunity

[2013] EWHC 587 (Ch)

at para 59 he said: “I am not sure that providing instructions to solicitors would contravene [the] protocol …”.

(v) While this application, based as it is on factors that would and could have been operative at and since the time Vos J made his order, is being made later than it could in theory, have been made, that was explicable on the footing that the advisers to the Prince have only relatively recently realised the scope and the extent of the problem – they have only recently become aware of how important compliance with the protocol was and that there did not seem to be any way round it. A misunderstanding was no reason to allow this significant $8m judgment to stand when there has been substantive compliance with the order of Vos J requiring personal signature of the disclosure statement. Furthermore, it would be disproportionate to allow the judgment to stand.

(vi) To allow the judgment to stand would contravene the provisions of the Equality Act 2010. He did not take me to the text of the Act but he pointed to an obligation to avoid indirect discrimination on the grounds or race or belief. Race included national origins and the protocol arose out of the Prince’s national origins. It was apparent to me that Mr Saoul was making this submission because he was instructed to.

(vii) Evidence showed that, on the facts, the Prince would have a substantive defence. Evidence from an accountant was relied on as showing that the averments as to the destination of moneys, which were necessary to the claim, could be shown to be false.

(viii) Previous criticisms about the absence of proper evidence from an independent expert as to the real force and genesis of the protocol had been met by a statement (actually a document responding to questions) from a Saudi lawyer.

(ix) These arguments were said to justify setting aside the judgment, or alternatively staying it until after judgment on the other claims. If it were set aside then the Prince would still be debarred from defending in the sense of advancing a positive defence, though he could still challenge the case against him by cross-examining and making submissions. That would be an appropriate position for him to be in, and would prevent the possibility of a substantial judgment being entered when there was actually a defence available. Alternatively a stay would achieve the latter of those things, and would provide a sensible starting point for an application to set aside after the main judgment if the findings in the main judgment demonstrated that the judgment against the Prince was not justified on the facts.

[41]Mr Saoul argued his points with considerable eloquence, but in my view they take him nowhere. Dealing with his individual points sequentially, and briefly, they fail to make the needed impact for the following reasons:(i) It has not been demonstrated that there has been a sufficiently substantive, or an equivalent, level of compliance with the needs of the order of Vos J. While the views of the Prince have been communicated, there is no level playing field with the other individuals who will have had to have provided disclosure statements. They are all vulnerable to cross-examination at the trial, or conceivably cross-examination merely on their statements. They are all more directly vulnerable to contempt or analogous sanctions if what they say is not true. Responsibility for their statements can be brought home more directly to them than to the Prince. Furthermore, this approach amounts in substance to a variation of Vos J’s order (which I have declined to do in my prior judgment in this case) or to a form of appeal (which has not been mounted and which would have to be made to the Court of Appeal and not to a judge of this court). In addition, arguments of this nature were mounted and failed before Norris J. Ms Saoul is seeking to resurrect points that have already been decided.

(ii) The fact that the issues will or may be determined in the main proceedings does not make it in any way inappropriate for the judgment to stand. It is not absolutely clear that the issues will be decided, and if the Prince pays (as he ought to as things stand) then some of the claims against others to recover this money will no longer be sustainable anyway. So far as there is a risk that similar issues will be determined in the action in a way which would have exonerated the Prince had he not had his Defence struck out, then that is what happens (or what is risked) if one of several defendants has an unless order of this kind made against him. To allow him to resist a judgment would be to rob the unless order of its force and to bring about a situation in which there is little point in getting such orders against one of several defendants. That is not a rational approach.

(iii) The provisions relied on in (iii) are completely beside the point. CPR 1.4(2)(i) is a case management consideration, not a requirement which operates in the Prince’s favour in the present circumstances. Section 49(2) is not contravened. To allow the judgment to stand does not promote a multiplicity of proceedings. If anything it is possibly reducing the scope of one set of proceedings. This section is aimed at something entirely different.

(iv) The citation from Vos J ignores its context. He was referring to an absence of evidence on the immunity point, and no more. He was observing the possibility of having hearsay evidence on that point in that context. It has no relevance to later decisions as to who should sign a disclosure statement. If Vos J had thought a hearsay disclosure statement was possible and/or appropriate, he would not have made the order he did.

(v) If the only thing that stood in the way of the application was the lateness with which it was made, point (v) might have been relevant and, to a degree, persuasive. But in the present context it is incidental.

(vi) Reliance on the Equality Act is misplaced. Mr Saoul did not elaborate on how the Act applied by reference to any particular provision. That may well be because it cannot be done. The Prince’s desire to abide by the protocol does not invoke a protected characteristic within section 4, or within any of the expansions of those characteristics in the following sections. The protocol (which is said to be the problem) is not a characteristic of race (section 4), nationality (section 9) or religion or belief (sections 4 and 10). It is a form of self-denying ordinance which seems to be founded in part on the dignity of the Saudi Crown and Royal Family, and on a strategy to protect the Royal Family from frivolous and unmeritorious claims. It is possible to afford respect to both those aims without holding that they are protected by the Act.

(vii) The availability of a defence is, in this context, largely irrelevant. The absence of a defence might point against setting aside, but the presence of one does not operate in its favour in any significant way.

(viii) The evidential position in relation to the existence and effect of the protocol has improved slightly with the evidence of a Saudi lawyer, albeit not in the form of a proper report. However, it still takes the form of a statement with no support from authority, academic article or anything else. Further, as observed above, it presents the protocol as something adopted as a matter of choice on behalf of the Saudi Royal Family as a matter of dignity and a way of minimising claims. As such it is something which obviously influences the members of the Saudi Royal Family, but such choices have their consequences. When I say “choice” I do not ignore what is said about the Prince’s views that he personally has to observe it, or question his good faith when he says that. But at the end of the day the analysis seems to me to be that it is a matter of collective choice and as such is not something to which the English courts has to or should defer. I do not need to consider the effect of the gradual way in which the protocol has emerged in the course of these proceedings. I will merely observe that I could see some force in Mr Howe’s submissions that it emerged in a piecemeal and relatively casual way for something which is as central as it is now said to be.

(ix) To accede to the arguments in (ix) would be to rob unless orders of real force. The arguments would apply to most cases in which they would otherwise be obtained, and even more cases where there are joint defendants. The fact that a trial is relatively close (relied on by Mr Saoul) should make no difference to the logic – it would apply whether it were next month or in two years. A large point of making such an order is to induce a party to comply with court orders. The fact that the party may find himself in the position of having a judgment against him when others may escape is a consequence of the litigant’s choice not to comply with the order. It does not raise an absurdity. The suggestion that the judgment be stayed until after judgment in the main action is merely a disguised and postponed application to set it aside. Unless that were to happen there would be no point in staying. Whether or not it should be set aside should be decided now, not when the result of trial is known. That assumes that there is to be a trial, which cannot in fact be guaranteed. If for some reason there were no trial then one would have to consider what should happen to the stay then. The whole scenario involving a stay is completely unrealistic.

[42]For all those reasons, therefore, I refuse the applications to set aside or stay the judgment entered against the Prince.

Points on the pleadings

[43]Various points were taken by the Apex parties on the pleadings of the other side, arising out of the orders made by Vos J when he directed a fresh set of responsive pleadings rather than allowing a confusing pattern of pleadings in each of two petitions. Some points of dispute have now been dealt with, but three points are said to remain. They acquired their own names in the course of the hearing – they are the proxy point (and allied points), the stale allegations point, and the fiduciary duties point.

The proxy point and allied points

[44]This point has its origins in a previous version of a pleading where it was pleaded:

“While the Fifth Respondent [Prince Mishal] has endorsed the contents of this Defence, he is not hereby submitting to the jurisdiction of this Court and will not take any part at all in the defence of the Apex Petition.”

[45]Prince Mishal has declined to participate in these proceedings in any way. It was submitted that this pleading was inappropriate and Vos J accepted that. When he ordered the fresh sets of pleadings his order provided that the new Defence and Counterclaim of the Global Torch parties:

“shall not include a paragraph which purports to state either that Prince Mishal endorses the contents of the Amended Defence and Counterclaim or the position of Prince Mishal as regards the jurisdiction of the English courts or his participation in these proceedings.”

[46]The Apex parties complain that the pleading that emerged contravened this order and advanced a proxy case for Prince Mishal, and then also contravened the principle underpinning the order by doing the same in relation to Prince Abdulaziz. They submit that the pleading should not be allowed to put forward a case (both by way of defence and by seeking to bring new claims) on behalf of parties who have been debarred from defending (the Prince) or who have elected not to participate (Prince Mishal). A number of paragraphs are said to offend. The Global Torch parties say that the pleadings are doing no such thing. They are making averments which are entirely proper averments for the participating parties to advance. Furthermore, if there be any doubt about the intention or effect of any paragraphs, the doubt is dispelled by the clear statements made in this court to the effect that those parties do not intend to advance or promote the defences or claims of others.

[47]Before deciding the various points I would observe that, save in respect of a clearly improper pleading in respect of which it is worth taking the point (for legitimate purposes going beyond the purely technical, purely tactical or harassing the other side), a certain amount of judgment has to be exercised as to whether it is necessary or appropriate to devote time and resources to dealing with this point at this stage and in this manner. Flouting the order of Vos J would be one thing. Introducing an equivocal pleading which might or might not be capable of supporting a proxy claim (as it has been described in this case) is another when the trial judge would be perfectly capable of controlling the trial to make sure that that did not happen and making sure that only proper findings were made. I bear this in mind in ruling on the complaints that have been made.

[48]Mr Wardell’s first riposte was an over-riding one to the effect that Vos J had said that the sort of pleading which now exists was expressly permitted, and he pointed to passages in the debate in court at pages 247-8 of the transcript for 30th July 2013. I have read those passages and while it is true that Vos J indicated that it was permissible to plead that one or other of the Princes did or did not do a particular act, his remarks were not directed to any particular form of pleading, and the pleading which is now complained about did not actually exist at the time. Accordingly, those remarks do not determine the questions which now arise.

[49]The point is said to arise at various points in the pleading. The first is paragraph 151 which states:

“The claim as to the liability of Prince Abdulaziz, Mr Abu-Ayshih, Global Torch and Prince Mishal is denied.”

This, of course, makes no sense without the context of the Amended Points of Claim to which it is pleading. However, it is not completely plain to which particular allegation this goes. The specific paragraphs giving rise to claims of liability of the two Princes have all been specifically dealt with elsewhere in the Defence, and no objection is taken to a general denial of Amended Points of Claim paragraph 152 which asserts a liability on the part of Prince Abdulaziz (amongst others) to buy out the petitioner’s shares in the company. However, paragraph 153 of the Amended Points of Claim is not specifically pleaded to. That paragraph seeks an order for an account against the two Princes (amongst others), saying that they should account for certain moneys received by them. The objected to paragraph in the Defence can certainly bite on that, and technically denies a liability which it is neither necessary nor appropriate for the Defence to deny. Mr Wardell submitted that the Amended Points of Claim pleaded acts of one or both of the Princes which are said to be acts of others which are germane to the claim, and to that extent at least he is entitled to deny the primary liability which is said to lead to a secondary liability. It would take too long to try to work out the extent to which that is true. The better, and more straightforward, course is to require the removal of doubt by ruling that paragraph 151 of the Defence shall be amended by adding the introductory words “Insofar as may be necessary for the purposes of the Defence of those for whom this Defence is properly advanced at the trial …” (or similar words), in the absence of which the paragraph will be struck out. Those words would make the position clear and coincide with what Mr Wardell said his clients’ attitude was.

[50]Objection is next taken to paragraphs 152 and 153 which reads:

“Further or alternative claims 152. It is denied that the Apex Parties are entitled to the additional remedies set out in Paragraphs 154 to 160. The Al Masoud SPA 153. Paragraph 155 is denied. It is Apex and Mr Almhairat who are liable to account to the Company in relation to his misappropriation as pleaded below.”

The Al Masoud SPA

[51]Paragraphs 154 to 160 of the Amended Points of Claim contain various claims including the $5m claim. Paragraph 155 advances that claim and a claim to another $10m. The striking out of the Prince’s Defence will have some consequences as to the extent to which this overall Defence and Counterclaim can be advanced at the trial, and by whom, but that is not the basis on which this objection to the Defence paragraphs has been put forward. A full analysis of which parts of paragraphs 154 to 160 of the Amended Points of Claim make allegations which cannot technically be resisted in the absence of either Prince, so as to make such resistance improper either as a proxy defence or an irrelevant matter, is a complex matter which would require a lot of time being spent analysing all the claims. It is far better that this be dealt with by the trial judge who will not allow improper defences to be run, and who will inevitably have a better overall grasp of all the difficult and interlocking claims that are made in these proceedings. I therefore do not propose to make any order in relation to those paragraphs of the Defence.

[52]Paragraph 162 of the Counterclaim contains an allegation that the Apex Parties performed various acts which were destructive of the relationship of trust and confidence between the shareholders in the company. At 162.17 they include:

“162.17 threatened to expose Prince Abdulaziz to severe public embarrassment and distress with the intention of causing him to buy out his shareholding in the Company”

. These threats are developed further at paragraphs 246 and following. I shall not set them out. It is again said that this advances a proxy defence. I disagree that this is necessarily so. All sorts of complaints are made by both sides as to acts which led to the loss of trust and confidence, and this is one of them. As a pleading it cannot be seen to be irrelevant at the trial, and it is not apparent that it is advancing a proxy case for the Prince. If at the trial it is used as a vehicle for that latter purpose then the court will control it. It is also an issue which the trial judge is likely to want to control in any event. However, that is the context in which control is necessary and appropriate. It is neither necessary nor appropriate to strike out this allegation at this stage. The point is also taken that this point does not concern the conduct of the affairs of the company. Again, the proper forum for dealing with that is the trial. It is not appropriate to approach this matter by the intricacies of complex pleadings.

[53]The last paragraph attacked under this head is paragraph 218 which reads:

“On or about 18 August 2010 and 10 January 2011, upon Mr Almhairat’s request, Prince Abdulaziz provided personal loans to Mr Almhairat in the amount of $18,540 and $42,500 respectively. Mr Almhairat has failed to repay these sums to Prince Abdulaziz.”

There is then a prayer which specifically seeks payment of the sums to the company, but, as Mr Lightman correctly observes, no indication is given as to why that particular course is appropriate.

[54]The order of Vos J of 30th July 2013, providing for new rounds of pleadings, expressly provided that:

“ … No new causes of action may be introduced and no new remedies may be sought without a further permission of the Court or the written consent of the party against whom the cause of action is to be advanced or the remedy is to be sought.”

Mr Lightman, who argued this part of the case on behalf of the Apex parties, submitted that paragraph 218 was a new cause of action which had not previously appeared in the pleadings, and no-one had consented to its introduction. This was not contradicted by Mr Wardell for the Global Torch parties. That being the case, I assume Mr Lightman is accurate in his description. That means that this pleading cannot be sustained. Mr Wardell sought to justify it as being part of the unfair conduct allegations, but that is to force upon it a characterisation which it cannot bear. I therefore strike out this paragraph and the appropriate part of the prayer.

Stale allegations

[55]In the original Defence to the Apex petition the Global Torch parties pleaded some historic allegations of wrongdoing by Mr Almhairat in relation to his conduct of the affairs of other enterprises (not connected with the present dispute). This was objected to in the Reply as being irrelevant or of minimal significance and before Vos J there was an application for particulars or alternatively striking out of these allegations. In a judgment of 30th July 2013 Vos J indicated that the material was potentially relevant to the trust and confidence in Mr Almhairat, but it had to be pleaded properly. He said:

“… it should be open to the Global Torch parties, when they revise their pleadings, to plead that, had they known certain things, they would not have entered into the business relationship with Mr Almhairat or the company, that Mr Almhairat was, to put it neutrally, not a good person. However, any allegations which are made of that kind must be fully and properly particularised. It would be quite wrong to make general allegations of the kinds to which I have referred which are contained in para 9.3 of the Global Torch defence and other paragraphs.”

This found expression in his order of the same date:

“7. In the event that Global Torch, Prince Abdulaziz and/or Mr Abu-Ayshih include within their Amended Defence and Counterclaim allegations relating to alleged dishonesty and/or historic conduct of Mr Almhairat (such as those currently pleaded at paragraphs 9, 10, 23.2 and/or 23.3 of Global Torch’s existing Points of Defence), such allegations must be fully and properly particularised.”

[56]As a result of that paragraph 252 of the Amended Defence and Counterclaim pleads:

“252. Since the execution of the Shareholders’ Agreement, the Global Torch Parties have discovered relevant details about Mr Almhairat’s character and previous business dealings which, if they had been disclosed at the time, would have meant that the Global Torch Parties would never have entered into any kind of business relationship with him or Apex.”

[57]The following paragraphs give some particulars which are set out in the schedule to this judgment. The Apex parties submit that these allegations are inadequately particularised, and bearing in mind the warning that the parties had from Vos J they should be struck out without further ado, and in particular without giving an opportunity for further particularisation. They had one last chance to get it right, and if they have not done so they should not be given a further last chance.

[58]In support of that submission both Mr Lightman and Mr Howe (who joined the attack on this particular point) went through the various allegations pointing out where further details could be given. They acted in the familiar manner of counsel poring over a pleading and trying to flush out as much detail as possible. That is not quite the correct approach, in my view. What the Global Torch parties were obliged to do was to give proper particulars first time round, not to anticipate every possible request for particulars that expert counsel could contrive. It is probably impossible to produce a request-proof pleading. In assessing the complaints I bear that in mind.

[59]Paragraph 253 tells a story of which a considerable number of further particulars could be sought, but what is actually said is plain enough for present purposes. I do not think that it is inadequately particularised for this round of pleadings.

[60]Paragraph 254.1 is a little light on particulars. However, the thrust of the allegation is made plain. What is not particularised is the precise extent of the misappropriation relied on. Examples are given. The full scope should be put forward if the allegations are to be maintained. I accept that Vos J required a strong degree of particularity first time round, but I consider that enough groundwork has been laid to enable this allegation to go forward provided the further particulars of every wrongly drawn cheque are provided within 7 days. I shall so order.

[61]Paragraph 254.2 seems to me to be adequately particularised. The same is not true of paragraph 254.3. It is a very broad allegation. This allegation may be pursued only to the extent of the 2 documents identified and no further. The words “for example” should be struck out.

[62]Paragraph 254.4 seems to plead a somewhat complex fraud. It is done very shortly and in my view is not adequately particularised. It seems to me that it is likely that a full pursuit of this matter will require a large amount of explanation and a large amount of documents. The manner of the fraud is not set out; nor is its real significance. This is inadequately particularised and cannot be allowed to stand. I shall not give an opportunity for further particularisation. It is necessary to keep these things within bounds.

[63]Paragraph 254.5 seems to me, on its face, to be a sufficiently clear allegation for it to be apparent what is being said without a need for further particulars in order to be able to understand the nature of the case. The same seems to me to be true of paragraphs 254.6 and 254.7. Paragraph 254.8 seems to me to be adequately pleaded as well. It is quite plain what complaint is being made – it is the facts underlying the prison sentence. There will be records of that.

[64]It follows, therefore, that most of the particulars, as such, can stand. However, two further points need to be made. The pleading which introduces them is that these matters have been discovered “Since the execution of the Shareholders’ Agreement…”. What is, or may be, relevant is whether or not they were discovered during the existence of the relationship, or whether they have only been discovered recently as part of the litigation effort. The impact of all this material may differ according to which of those (or possibly a variant of one or other of them) is the case. The actual form of pleading seems to have been sanctioned by Vos J, so I shall not take issue with it. Nonetheless, I shall direct that particulars be given on when, how and in what circumstances each of the matters complained of was discovered by the Global Torch parties (and by which party they were discovered).

[65]The second point flows from the first. The answer to the questions I have just referred to may well reflect the significance which this point should be allowed to have at the trial. Each of the points is capable of giving rise to a mini-trial (or perhaps a maxi-trial) within a trial, further complicating proceedings which are already complicated enough. There will have to be some control in this exercise. There will almost certainly have to be some limits on the disclosure to be given in relation to these issues, and if that is not agreed between the parties then it will have to be dealt with at the PTR in December. The trial judge will also be likely to want to control the impact of this point on the proceedings, but that is a point best dealt with on a subsequent occasion. It strikes me as being a classic example of a case where case management is required in order to keep the whole dispute within reasonable bounds.

[66]Mr Lightman also took a point going to the relevance of these allegations at all. He sought to say that they could not be relevant to the case run by the Global Torch parties because those parties were not alleging or relying on a personal relationship akin to a quasi-partnership, so allegations of trust and confidence were irrelevant. This is a somewhat intricate point, but I’m not convinced by it. What the relationship between the parties was is in issue in these proceedings. In my view it cannot be said at present that these allegations are of no relevance to meeting the claims of the Apex parties or of no relevance to the claim which is actually advanced by the Global Torch parties, so I shall not exclude them on the basis suggested by Mr Lightman. It may be that the trial judge, with a better view of the interlocking claims in this matter, will form the contrary view, and will take the view that on the basis of the pleaded cases these points cannot be relevant. However, that is not a conclusion that I can reach at this stage.

The fiduciary duties point

[67]This point turns on two paragraphs in the Amended Defence and Counterclaim. The context of one of them is paragraph 7 of the Amended Points of Claim. That paragraph pleads a “corporate quasi-partnership” between Mr Almhairat/Apex and Prince Abdulaziz/Global Torch, and relies on a personal relationship between the Prince and Mr Almhairat (and their companies). It does not refer expressly to any duties owed by one to the other.

[68]Paragraph 15 of the Amended Defence and Counterclaim of Global Torch and Mr Abu-Ayshih pleads to paragraph 7 in five subparagraphs. Paragraph 15.3 reads:

“15.3 Whilst the rights and obligations of the Company, Global Torch, Apex and Mr Almhairat are principally set out in the Shareholders’ Agreement and the Articles, it is at admitted and averred that they owed each other fiduciary duties and duties of good faith as well as collectively owing fiduciary duties to the Company.”

This is not a form of pleading which appeared in the earlier version before Vos J before he ordered the combined pleadings.

[69]The allegation is repeated in paragraph 187, which comes within the counterclaim:

“187 Further or in the alternative, as pleaded above, the Company, Global Torch, Apex and Mr Almhairat owed each other fiduciary duties and duties of good faith. In the case of Mr Almhairat, these duties extended to ensuring in his capacity as director of the Company that the Company complied with its obligations under the Shareholders’ Agreement.”

[70]A number of complaints are levelled against these pleadings. It is said that each of these allegations is a new pleading, and in the case of paragraph 187 it is a new cause of action (whose consequences are not apparent). It is further said that these are pleadings of fiduciary duties because they are said to exist between participants (shareholders) whilst there is a denial of a quasi-partnership so far as concerns the participation in the company. It is not explained how the company could owe such duties to anyone, or how Mr Almhairat could owe them to shareholders in the company. Mr Lightman also complained that it was not apparent how these allegations would be deployed. One had to guess at that. It was surmised that the relevance was that the Global Torch parties wished to use the argument to support a claim that any buyout price should have a minority-owned discount applied to it.

[71]Mr Wardell sought to justify the pleading on the footing that it was his clients’ case that the company, whilst not being a quasi-partnership, was a joint-venture in respect of which fiduciary duties could be owed. He also complained that the Apex parties were complaining about the Global Torch parties adopting a position consistent with their own – this was presumably a reference to duties that would arise from a quasi-partnership.

[72]In my view this pleading is unsatisfactory. So far as paragraph 15.3 refers to rights and obligations, it is not actually responding to any matching averment in paragraph 7 of the Amended Particulars of Claim to which it purports to be responding. It is also unsatisfactory in referring to rights which are “principally” set out in the Shareholders’ Agreement, without indicating where else they are to be found. This paragraph is not an admission of something averred by the Apex parties, and cannot be justified as such. If it is to be a material part of the case of the Global Torch parties, then its basis must be made clear, as must be its significance. I agree that one is left wondering where this allegation is said to go.

[73]Much the same is true of paragraph 187. It refers back to something “as pleaded above”, which is presumably a reference back to paragraph 15.3. However, again the source of these duties is not apparent, and they cannot be said to be duties which correspond to those which would necessarily flow from a “quasi-partnership”. It may be that the first sentence of paragraph 187 is simply there to justify the second sentence, and it is the second sentence which is significant. However, that is not apparent. Accordingly, it is not apparent whether or not this allegation is seeking to plead a new cause of action, contrary to the direction given by Vos J.

[74]These points need to be addressed, but they do not need to be addressed by striking out the paragraphs. Indeed, in other circumstances I might well have taken the view that the matter could wait until trial and it was not worth getting exercised about it at this pre-trial stage. There are serious dangers in allowing the parties to debate analytical pleading points which are no doubt of some intellectual entertainment for the lawyers but which do not really advance the case, looking at the matter realistically. That is especially likely to be the case in complex unfair prejudice petitions such as the present. However, in this instance I think that a greater degree of clarity as to the position of the Global Torch parties needs to be introduced, and it is worth generating some particulars in order to see exactly where this point goes. In relation to each of the two paragraphs, the Global Torch parties should be required to provide particulars of the following:(i) where the rights and obligations of the four persons identified in paragraph 15.3 are said to derive from other than from the Shareholders’ Agreement;

(ii) all facts and matters relied on in support of the allegation that the fiduciary duties and duties of good faith arise; and

(iii) the significance and effect of the averments on the case of the parties both in relation to their Defence and their Counterclaim.

[75]I do not thereby mean to be prescribing the actual wording of the particulars. The precise wording can be the subject of further discussion if necessary, but I should say that I do not propose to allow an extended debate on the topic and do not propose to allow this to be the occasion on which the Apex parties can indulge in another hefty dig at the pleaded case of the Global Torch parties.

[76]Accordingly I decline to strike out either of those paragraphs, but whether they survive until trial may depend on the particulars to be provided. The particulars should be provided within 7 days. Schedule EXTRACTS FROM THE AMENDED DEFENCE AND COUNTERCLAIM OF THE GLOBAL TORCH PARTIES

Schedule

[253]Mr Abdul Karim, the Managing Director of HITECH Iraq, was engaged in a commercial relationship with Mr Almhairat through a vehicle owned or controlled by him named Zahran Call (“Zahran”). In 2002 Mr Karim was the Baghdad office manager of DalyaSat Telecom (“Dalya”), an Iraqi company, engaged in a telecommunications industry. In 2004 Dalya and Zahran entered into an exclusivity agreement whereby Dalya would be licensed to market and distribute VoIP technology in Iraq. The technology was to be supplied by Zahran in return for which Dalya would pay Zahran $100,000. The phone cards and pin numbers supplied by Zahran, which allegedly permitted the VoIP technology to work were found by users not to work. After complaints that the technology failed Dalya discovered that Zahran had unilaterally blocked all the PIN numbers provided by them with each card despite having been paid by Dalya in accordance with the exclusivity agreement. In addition Mr Karim discovered that Mr Almhairat was in an identical “exclusive” relationship with a competitor business. The financial outlay made and lost by Dalya was relatively small, $25,000, but the reputational damage, and the economic damage consequent upon that, caused by Mr Almhairat’s duplicitous behaviour was, in Mr Karim’s estimation, considerable and took years to recover from.

[254]In 2005 Teletec and Mr Almhairat set up a business in Jordan, called Qamar Telecommunications (“Qamar”). The intention of the joint enterprise was that Qamar would sell minutes of international telephone calls at a rate below that provided by the government. The business was owned as to fifty per cent by Teletec and fifty per cent by Mr Almhairat. Teletec provided Qamar with all its capital, local goodwill, all its business and technical plans and expertise. Mr Almhairat provided his services. Mr Almhairat was appointed general manager with limited rights to disperse company monies. It is the Global Torch Parties’ case that in the course of acting as general manager of Qamar, Mr Almhairat:254.1 misappropriated company monies by using such monies to meet personal obligations to his lawyers accountants and others. Qamar had a company bank account. A separate account with a spending limit of JD5,000 per item of expenditure was established for general company expenses. Mr Almhairat was able to authorise expenditure on this account up to the limit. Mr Almhairat issued a number of cheques falling just under the JD5,000 limit over a period of several months and caused Qamar to spend approximately JD150,000 in this way. Many of these cheques were in fact issued in payment of Mr Almhairat’s personal debts rather than company expenses. For instance, Mr Almhairat issued company cheques to pay sums of money to his own lawyer, Fawzi Al-Marzouq, and his personal accountant, Mr Elayyan. He issued two cheques for Mr Elayyan on 26 June 2011 for JD715 and JD2000 respectively. He issued three cheques to Mr Al-Marzouq during June 2005 for JD2,700, JD3000, and JD3000 respectively. Mr Almhairat even issued two cheques made out to himself during June 2005, for JD2000 each.

254.2 Used Qamar’s own letterhead to forge a document purporting to remove Mr Al-Farouqi as a director of the company. He then circulated this document to various Jordanian authorities, including the Telecommunications Regulation Commission in Jordan, which they accepted.

254.3 Falsified official records of company business, some of which were filed with the Jordanian authorities, for personal gain. For example, on two occasions (one of which was in about mid 2005), he modified board minutes inaccurately after meetings, amending or deleting clauses which imposed restrictions upon his authority.

254.4 Pursuant to a request dated about 17 July 2005, he obtained a licence from the Jordanian authorities to operate his own business, Nida’a Amman, by deceiving the Jordanian authorities into believing they were granting the licence to Qamar.

254.5 In about mid-July 2005 appropriated to his own use servers belonging to Qamar, paid for by Teletec, by illegally transferring ownership to Nida’a Amman.

254.6 Without authority closed down the business premises for Qamar and removed from them its business books and records.

254.7 Re-opened the company premises under his own name which was then occupied and traded from despite the fact that the rent for the premises had been paid by Qamar.

254.8 In other disputes relating to Mr Almhairat’s improper behaviour he, Mr Almhairat, has been found guilty by the Amman Penal First Instance Court in Verdict Number 2047/2006 on 26 December 2006 of crimes relating to forgery and fraud for which he was sentence to 1 year in prison.