Invest Bank P.S.C v Ahmad Mohammed El-Husseini & Ors [2024] EWHC 2976 (Comm)

‘the purpose of a person in entering into a transaction is a matter of the subjective intention of that person: what did he aim to achieve?’

“39. When considering how the claim is advanced it is important to bear in mind the nature of the allegations made. The directors are accused of serious dishonesty in misappropriating assets, and whether or not one views the present claim as actually founded in dishonesty (as opposed to being made in the context of a dishonest transaction) it is nonetheless an accusation of serious wrongdoing – deliberately prejudicing creditors. That requires a clear pleading of a sufficiently cogent case. In Lakatamia Shipping Co Ltd v Nobu Su and others [2021] EWHC 1907 (Comm) Bryan J said: “42. In the present case, Lakatamia alleges two unlawful means conspiracies (the Monaco Conspiracy and Aeroplane Conspiracy). Neither of these requires, or involves, any specific plea of dishonesty as such (nor are fraud claims such as in deceit or the like pleaded) as part of any element of the causes of action. They involve, however, allegations of serious wrongdoing, and as such they must be clearly pleaded (not least so the Defendants know the case they have to face, on the applicable principles), and convincingly proved by cogent evidence (as the passages identified above rightly emphasise). Allegations of participation in an unlawful means conspiracy, whilst not necessarily requiring dishonesty or a fraud to be committed, undoubtably involve what can properly be characterised as “discreditable” conduct. In this regard, and as stated by Moore-Bick LJ in Jafari-Fini v Skillglass Ltd [2007] EWCA Civ 261 at [73] (in a passage cited with approval by Andrew Smith J in Fiona Trust v Privalov [2010] EWHC 3199 (Comm) at [1438] and by me in Bank of Moscow v Kekhman, supra, at [52]), “It is well established that “cogent evidence” is required to justify a finding of fraud or other discreditable conduct”.” 40… Bryan J referred there to evidence and proof. The present application is not concerned with that level of finding, but I agree … that the seriousness of the allegation requires the clear pleading of an apparently sustainable case. The present case is one of inference, and what is required is a clear pleading of the facts which give rise to the inference. As Lord Millett said in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1: “186. The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.”

“For reasons given earlier in this judgment we start here from a position in which, on a prima facie view, the client was seeking to enter into transactions at an undervalue the purpose of which was to prejudice the bank. I regard this purpose as being sufficiently iniquitous for public policy to require that communications between him and his solicitor in relation to the setting up of these transactions be discoverable.”

“The second observation relates to Eustice. Even if the test is correctly dishonesty and not merely iniquity, it does not follow that the actual decision in Eustice was wrong. In the course of an illuminating discussion, the authors of Thanki (ed), The Law of Privilege, ed 3, para 4.48, fn 116, say this: “In so far as the decision confirms that privilege is overridden in proceedings for declarations under section 423 [of the Insolvency Act 1986] there can be no objection. However, the dicta in the case go further in extending the scope of the fraud/ crime exception generally.”

“26.The question of what sort of wrongdoing engages the [iniquity] exception [to privilege] is somewhat vexed. In the circumstances of this case, it is sufficient to observe that devising a scheme to dissipate assets so as to frustrate enforcement of an anticipated judgment of this Court will engage the exception. The following establishes that proposition clearly: a. In O'Rourke v Darbyshire [1920] AC 581 at 613, Lord Sumner held that no privilege applies to documents "brought into existence in the course of or in furtherance of a fraud to which both solicitor and client are parties". He drew a distinction between obtaining advice on prior conduct and "consulting [a lawyer] in order to learn how to plan, execute or stifle an actual fraud". b. Fraud here is not confined to "civil fraud in the narrow sense". It has been applied to "all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery and sham contrivances" and "things which commercial men would say was fraud or which the law treats as contrary to public policy". c. In Barclays Bank v Eustice [1995] 1 WLR 1238, the Court of Appeal held that the purpose of "enter[ing] into transactions at an undervalue the purpose of which was to prejudice the bank" (which fell within the scope of s. 423 of the Insolvency Act 1986) was "sufficiently iniquitous" to engage the exception. The same logic was applied by Munby J (as he then was) to s.37 of the Matrimonial Causes Act 1973 in C v C (Privilege) [2008] 1 FLR 115 at paragraphs 34-35. d. In the present case, the Court of Appeal has previously considered the fraud exception in Z v Z (Legal Professional Privilege: Fraud Exception) [2018] 4 WLR 52. On that appeal, Mr Kerman argued that Haddon-Cave J (as he then was) had wrongly applied an "iniquity" test rather than a "dishonesty" test. The Court of Appeal decided not to resolve the question of the appropriate test, but observed at paragraph 57 that "it is not easy to see why the actual decision in Eustice in relation to section 423 of the Insolvency Act 1986 and in C v C (Privilege) in relation to section 37 of the Matrimonial Causes Act 1973, should be questioned, whatever criticisms there may be of some of the reasoning". e. Both Z v Z and C v C (Privilege) have referred to the long-standing decision in Williams v Quebrada Railway, Land & Copper Co [1895] 2 Ch 751. Williams was a case in which it was alleged that a company had given a charge in favour of its agents in order to defeat a prior floating charge. For arcane reasons, that charge did not fall within the scope of the avoidance legislation at the time. Kekewich J nevertheless held that privilege was not available because "… it is difficult to say that this is not commercial dishonesty. It is, in my opinion, commercial dishonesty of the very worst type; and that is fraud". f. For completeness, it should be noted that the Court of Appeal recently declined to decide whether Eustice remains good law in the light of the subsequent decision of the House of Lords in R (ex p. B) v Derby Magistrates Court [1996] 1 AC 487. It was argued that Eustice involves a retrospective evaluative judgment, contrary to Derby Magistrates. The Court of Appeal held that this was as "an important argument which will no doubt have to be decided one day" [see Curless v Shell International Ltd [2019] EWCA Civ 1710 at paragraphs 54-60]. Nevertheless, Eustice has consistently been applied at first instance and any reconsideration of that case should be left to the Court of Appeal. I observe that, as held in Z v Z, even if the "sufficiently iniquitous" test employed in Eustice might be open to question, the application of the exception to cases of fraud on creditors is difficult to criticise.”

“Accepting that neither of the agreements was a sham, it remains the case that they were entered into for the purpose of improving the defendants’ position as against the bank. The defendants, or at least their advisers, were well aware of the risks this involves, and in particular were well aware of s 423 ... While anyone would have sympathy for Mr and Mrs Jones, who faced, and now face, eviction from their home and farm in which they have lived and worked for 25 years, it seems to me that the court should not go out of its way to assist people who have entered into artificial transactions to improve their position as against third parties. I emphasise that nothing that Mr and Mrs Jones did was improper or dishonest. They did what their advisors told them, and they were anxious to protect their home and their farming business. However, those who live by the sword die by the sword, and the fact that they lived by a sword which is conceived and manufactured by others does not alter the fact that it is the sword which they used against the bank.”

“B(1)(b) The Tadamun UAE Facility, related guarantees and failure to discharge liabilities 14. At all material times, the shares in Tadamun UAE were held as to 51% by H.H. Sheikh Tahnoon Bin Saeed Shakhboot Al Nahyan (“Sheikh Tahnoon”) and as to 49% by Commodore Offshore Lebanon. It is the Claimant’s understanding that Sheikh Tahnoon’s Thanoon’s shareholding was held by him as nominee for Ahmad. 15. The Claimant and Tadamun UAE entered into a credit facility agreement dated 28 April 2016 with reference ADRC/37/OL/NR/16 (the “Tadamun UAE Facility”) under which: 15.1 Tadamun UAE acknowledged that it was indebted to the Claimant in the sum of AED 44,645,522.02 as of 21 April 2016. 15.2 The Claimant agreed to provide ongoing facilities to Tadamun UAE with an aggregate limit of AED 112,996,000 on the terms set out in the Tadamun UAE Facility including the provision of: (a) a corporate guarantee by Commodore Offshore Lebanon “for AED 55,370,000/ - covering 49% of total limits”; and (b) a personal guarantee by Ahmad “for AED 57,630,000/ - covering 51% of total limits”. 16. On or around 16 May 2016, Ahmad executed a personal guarantee in favour of the Claimant of Tadamun UAE’s liabilities to the Claimant up to a limit of AED 57,630,000 (the “Tadamun UAE Guarantee”). 17. Across the second half of 2016 and through to August 2017 Tadamun UAE was experiencing severe financial difficulties and it ultimately failed to discharge its liabilities under the Tadamun UAE Facility. Tadamun UAE was placed into liquidation on 13 October 2019. Emphasis added 18. Ahmad has not made any payment to the Claimant under the Tadamun UAE Guarantee in respect of the debts owed by Tadamun UAE to the Claimant (nor did Commodore Offshore Lebanon under the guarantee it gave). B(1)(c) The Commodore UAE Facility, related guarantees and failure to discharge liabilities 19. At all material times prior to 19 October 2017, the shares in Commodore UAE were held by Sheikh Tahnoon as to 51%, Commodore Offshore Lebanon as to 34% and Ahmad as to 15% and Joan and Ahmad together as to 49%. It is the Claimant’s understanding that Sheikh Tahnoon’s Thanoon’s shareholding was held by him as nominee for Ahmad. However, on 19 October 2017, Sheikh Tahnoon became the owner of 100% of the shares in Commodore UAE. 20. On 27 July 2015, Ahmad executed a personal guarantee in favour of the Claimant in respect of Commodore UAE’s liabilities to the Claimant up to a limit of AED 180 million (the “Commodore UAE Guarantee”). 21. The Claimant and Commodore UAE entered into a credit facility agreement dated 18 July 2016 with credit facility number ADRC/44/OL/NR/16 (the “Commodore UAE Facility”) under which: 21.1 Commodore UAE acknowledged that it was indebted to the Claimant in the sum of AED 138,540,021.62 as of 13 July 2016. 21.2 The Claimant agreed to provide ongoing facilities to Commodore UAE with an aggregate limit of AED 157,121,000 on the terms set out in the Commodore UAE Facility including that the Commodore UAE Guarantee remain in place. 22. On or around 5 September 2016, the Commodore UAE Facility was amended so as to reduce the limit of one facility provided by the Claimant to Commodore UAE from AED 300,000 to AED 48,000. 23. By May 2017 Commodore UAE had ultimately failed to discharge its liabilities under the Commodore UAE Facility. Commodore UAE was placed into liquidation on 16 May 2018. Emphasis added 24. Ahmad did not make any payment to the Claimant under the Commodore UAE Guarantee in respect of the debts owed by Commodore UAE to the Claimant (nor did Commodore Offshore Lebanon under the guarantee it gave). C. THE CLAIMANT’S CLAIMS IN RELATION TO THE ASSETS TRANSFERRED UNDER THE SCHEME C (1) Other persons making claims against Ahmad in addition to the Claimant C(1)(a) Rheinmetall A.G. 44. Ahmad has been the subject of criminal proceedings in Germany in relation to an alleged misappropriation of least €15m from a German defence contractor, Rheinmetall A.G. (“Rheinmetall”) between 3 February 2015 and 27 December 2016. In connection with this, a Public Prosecutor of Luneburg, Germany, issued a European Arrest Warrant against Ahmad on 28 March 2018. That warrant was withdrawn but an indictment was filed by the public prosecutor in May 2019 with and, as at November 2019, the Luneberg District Court had yet to decide on further steps as regards the prosecution. The Claimant’s best understanding as to the progression of the proceedings thereafter is as follows. The Luneberg District Court subsequently dismissed the indictment and an appeal by the prosecutor to the Higher Regional Court of Celle resulted in the case being referred for further investigation in June 2020. The case was then transferred to the Public Prosecutor of Stade, Germany, where it remained ongoing until at least September 2020, when it was formally closed by the Stade office. C(1)(b) Sheikh Tahnoon 45. In 2017 and thereafter Sheikh Tahnoon has considered and pursued legal action to recover substantial sums of money from Ahmad. The minutes of a meeting which the Claimant held with an associate of Sheikh Tahnoon on 5 December 2017 in relation to the Facilities record that the Claimant was informed that the Sheikh: “proceeded with a Legal case, personally, against [Ahmad] & all members of his family claiming an amount of AED 400 Million which [Ahmad] has transferred from different companies’ accounts to his accounts in Lebanon & Switzerland. Case is expected to escalate to Interpol by the end of this year / beginning of 2018”. 46. On 9 January 2019, Sheikh Tahnoon brought proceedings against Ahmad and Mohammed in the Dubai Court of First Instance. It was alleged that there had been a misappropriation of funds by Ahmad abusing a power of attorney to transfer funds from the bank account of a company of Sheikh Tahnoon to various bank accounts belonging to Mohammed for their benefit. The Court’s judgment dated 29 May 2019 records that a court appointed expert had determined Ahmad had removed AED 4.7m (c. £903,000) from the account but that the courts of Abu Dhabi (and not Dubai) had jurisdiction over the matter. C(1)(c) Doha Bank 47. On 11 June 2020, the Abu Dhabi branch of a Qatari bank, Doha Bank, brought a claim against Ahmad in the courts of Lebanon for payment of AED 150,008,595 (c. US$40,846,452) plus interest, pursuant to a personal guarantee which Ahmad have had given in favour of Doha Bank in relation to debts owed to it by Commodore UAE. The claim relies on findings made in previous litigation brought by Doha Bank against Commodore UAE in the courts of Abu Dhabi, which resulted in a final ruling on 31 December 2019 (after two appeals) that Commodore UAE owed the sum claimed by Doha Bank. The Claimant infers that those UAE proceedings were brought in 2018 in respect of debts of Commodore UAE incurred before that time. In the Lebanese proceedings, Doha Bank claims that these debts have not been paid by Commodore UAE and that Ahmad has failed to make payment under the guarantee. … C (5) Section 423 claims: general 106. 90 It is to be inferred that the Transactions were entered into for the purpose of putting The Claimant avers that Ahmad’s purpose in carrying out acts in connection with the various transactions pleaded herein below was to put assets beyond the reach of a person who was making or might at some time make a claim against Ahmad or of to otherwise prejudiceing the interests of such a person in relation to the claim which it was making or might make (“Alleged Purpose”), within the meaning of section 423 of the Insolvency Act 1986 (“1986 Act”). In this regard, the Claimant relies on: (i) paragraphs 17, 23, 44 to 47 above (concerning potential claims against Ahmad) Emphasis added. , and (ii) the facts and matters pleaded in Section C(3) above as to Ahmad’s interests in each of the relevant assets, and (iii) the timing of the acts in connection with the various transactions in respect of those assets (and the timing of the dealings with assets pleaded in Section C(2) above)… 107. 91 Where it is pleaded herein below that Tthe Claimant is a victim of a transaction the Transactions, within the meaning of section 423(5) of the 1986 Act, in that it this includes that the Claimant has been or is capable of being prejudiced by said transaction as follows: 107.1 91.1 The Transactions relevant transaction impacted Ahmad’s ability to discharge his liabilities under the Guarantees and the UAE Judgments; and/or 107.2 91.2 The Transactions have relevant transaction has hindered and/or will hinder the Claimant’s ability to enforce the UAE Judgments and any judgment in debt based on the UAE Judgments, or on the Guarantees, which this or any other Court enters in its favour.” liabilities B(1)(c) The Commodore UAE Facility, related guarantees and failure to discharge liabilities C. THE CLAIMANT’S CLAIMS IN RELATION TO THE ASSETS TRANSFERRED UNDER THE SCHEME C (1) Other persons making claims against Ahmad in addition to the Claimant C(1)(b) Sheikh Tahnoon “proceeded with a Legal case, personally, against [Ahmad] & all members of his family claiming an amount of AED 400 Million which [Ahmad] has transferred from different companies’ accounts to his accounts in Lebanon & Switzerland. Case is expected to escalate to Interpol by the end of this year / beginning of 2018”

“96. The allegation on which all of the Bank’s claims depend is that [Ahmad] transferred each relevant asset for the purpose of prejudicing the interests of a person “who is making, or may at some time make, a claim against him” (Section 423(3)). The existence of a claim or potential claim by such a person and the debtor’s purpose of prejudicing such a claim are essential elements of Section 423. A claimant invoking Section 423 must therefore plead which claim or potential claim of which person it says the debtor intended to prejudice, at least by class (e.g. claims of future creditors of a risky business the debtor is about to embark upon). … 98. This central allegation is pleaded by the Bank at PoC at [106], where the Bank alleges that D1 acted for the purpose specified in section 423(3), which it defines as “the Alleged Purpose”

“Across the second half of 2016 and through to August 2017 Tadamun was experiencing severe financial difficulties which led to its failure to discharge its liabilities under the Tadamun UAE Facility granted by the Bank.”

“The Claimant relies in its application on its own internal records of its assessments of Tadamun UAE’s financial position. These were considered and addressed in evidence of Mr Mascarenhas but the equivalent material in relation to Commodore UAE was omitted without explanation or any attempt to even explain that very serious omission to the judge at the ex parte hearing. The Claimant knew, or must have known, from its own financial assessments carried out when providing lending and assessing risk from time to time (and the restructuring talks to which Mr Mascarenhas refers at paragraph 77 in which I was not involved) that until Sheikh Tahnoon took over the company in 2017 (in the circumstances I set out below) it had very substantial assets which were more than sufficient to cover all of my alleged liabilities. This is a particularly egregious breach of duty by the Claimant because this completely undermines the allegations made against me to the effect that I and the companies affiliated with me were in financial distress at the time of the impugned asset transfers and had orchestrated those transfers as part of an asset shielding scheme.”

“4(c) It is denied that the Commodore Group was in good financial condition; in this regard, the Claimant relies on the facts and matters pleaded at paragraph 6 below. Tadamun UAE was in severe financial difficulties, and the Claimant was aware of this. The Claimant did not have sufficient information to assess whether the financial condition of Commodore UAE or the overall Commodore Group was good. The Claimant did not have details as to the financial condition of other entities in the Commodore Group. So far as concerns Commodore UAE: (i) The audited financial statements for the year ended 31 December 2015 were not signed off by the auditors until 26 January 2017; (ii) Commodore UAE prepared its financial statements on the basis that significant proportions of its borrowing (used by related parties) were not included in its financial statements; and (iii) The Claimant had only limited information concerning Commodore UAE's lending with banks other than the Claimant. … 6. The 2017 Personal Loan was sought, obtained and utilised in the following circumstances: (a) Tadamun UAE was in severe financial difficulties; as to which [the Re-Re-Re-Re-Re-Amended Particulars of Claim], paragraph 17 is repeated. (b) Commodore UAE was indebted to the following banks (in addition to the Claimant) in 2016: (i) National Bank of Furjairah; (ii) HSBC; (iii) Noor Islamic Bank; (iv) National Bank of Abu Dhabi; (v) Union National Bank; (vi) ARAB Bank; (vii) First Gulf Bank; (viii) Doha Bank; (ix) Abu Dhabi Islamic Bank; (x) Al Hilal Bank; (xi) Dubai Islamic Bank; (xii) Al Khaliji France; and (xiii) BNP Paribas. Save as pleaded at sub-paragraph 6(c) below regarding the overall level of Commodore UAE’s indebtedness and paragraph (d) below regarding Doha Bank, the Claimant did and does not have details of the particulars of that indebtedness with each of (i) to (xiii). (c) Commodore UAE’s indebtedness to the Claimant was a small percentage of its overall indebtedness to other banks in the UAE. As at March 2016, the outstanding debt of Commodore UAE to the Claimant was only 8% of its overall outstanding indebtedness. (d) Commodore UAE’s indebtedness to Doha Bank (subject of the proceedings referred to in [the Re-Re-Re-Re-Re-Amended Particulars of Claim], paragraph 47) arose under facility agreements entered into on 21 January 2014 and by 31 March 2018 was at AED 150,008,595.48 (c. US$40 million). The principal drawn down totalled AED 145,407,555.70). (e) The Claimant’s best understanding is that, across 2016, Ahmad had procured Commodore Netherlands to make, on an urgent basis, transfers of cash to Commodore UAE (and related entities). In this regard, Commodore UAE entered into contractual arrangements with Commodore Netherlands on 18 April 2016 and with Commodore Belgium on 21 December 2016. (f) Ahmad obtained the 2017 Personal Loan instead of Commodore UAE itself obtaining further lending from any of the banks referred to in sub-paragraph 6(b) above. It is to be inferred that those other banks were either unwilling to provide such further lending for the purposes identified in paragraph 3(c) above or Ahmad was unwilling to reveal to them the necessity for lending for such purposes. (g) The Claimant had no security for the Facilities over the fixed or physical assets of Commodore UAE. 7. In the premises, it is to be inferred that Commodore UAE was in significant financial difficulties in January 2017. Further: (a) If Commodore UAE were unable to meet its liabilities to the other banks, then: (i) It would not be able, or would be significantly hindered in its ability, to meet its liabilities to the Claimant under the Commodore UAE Facility and the Claimant would or might claim against Ahmad upon the Commodore UAE Guarantee. (ii) It would not be able, or would be significantly hindered in its ability, to provide financial support to Tadamun UAE and the Claimant would or might claim against Ahmad upon the Tadamun UAE Guarantee. (b) In any event, the Claimant would or might claim against Ahmad upon the Tadamun UAE Guarantee. (c) Therefore, from at least January 2017 onwards, Ahmad had reason to consider, and considered, that the Claimant would or might make claims against him in future.”

“These matters are not admitted by the Defendants and must therefore be proved by the Bank. They are of course highly relevant to the Bank’s case on D1’s alleged purpose. For the same reason, the broader financial position of al-Tadamun, Commodore UAE and their affiliated companies over 2016-2017 is relevant, as are the reasons for their alleged failure to discharge their alleged liabilities to the Bank. The Bank’s present or former employees can be expected to have significant knowledge of these matters. We accordingly expect the Bank to call all such witnesses, in particular any witnesses who were involved in the management of the Commodore Group companies’ accounts, such as the Commodore Group’s Credit Manager Ms Al Rifai and her manager Mr Al Khoumassi.”

“…the financial situation of the Commodore Group in late 2017 (including its asset position and any ability to borrow against its assets) is clearly relevant to its financial situation in early-to-mid 2017 and prior thereto, and thus to D1’s understanding of and concern about his personal contingent liabilities. This is particularly so given that we understand your client’s case to be that the financial situation of the Group deteriorated in the course of 2017: see, eg, your Re-Re-Re-Amended Particulars of Claim, [17], [23].”

“I infer that the reason why the Bank is seeking to amend in this manner is that its own disclosure has undermined the inferences drawn in its existing Particulars of Claim from the financial situation of the companies. Merely by way of illustration, that disclosure has revealed that: (1) As at 31 December 2016, Commodore UAE (of which Ahmad was the UBO: [JS6/208-222] had positive net assets of AED 189 million [JS6/223-224]. Al-Tadamun had negative net assets and was dependent on shareholder support, but these were only in the much smaller sum of AED 18.47 million.”

“77. It is perhaps convenient to start with general principles about the formulation of issues in adversarial litigation. These are not new and can be summarised by reference to established authority: i) It is fundamental to our adversarial system of justice that the parties should clearly identify the issues that arise in the litigation, so that each has the opportunity of responding to the points raised by the other: see Al-Medeni v Mars UK Ltd [2005] EWCA Civ 1041 at [21] per Dyson LJ; ii) Statements of Case play a critical role in identifying the issues to be determined. That is not to say that a trial judge may not permit a departure from a pleaded case where it is just to do so, although in such a case it is good practice to amend the pleading, even at trial: UK Learning Academy Limited v Secretary of State for Education [2020] EWCA Civ 370 at [47] per David Richards LJ; iii) The function of the judge is to adjudicate upon the issues identified by the parties alone: Al-Medeni ibid; iv) Adherence to the issues that have been identified by the parties (in particular by the pleadings) prevents the trial from becoming a disorderly free-for-all: Dhillon v Barclays Bank [2020] EWCA Civ 619 at [19] per Coulson LJ; v) The task of the courts is to do justice between the parties in relation to the way in which they have framed and prosecuted their respective cases, rather than to carry out some wider inquisitorial function as a searcher after truth: Sainsbury’s Supermarkets Ltd v MasterCard Inc [2020] UKSC 24, at [242].”

“…I reject any suggestion that a pleading is sufficient if the other parties can discern what lies behind it: parties should not have to dig behind what is pleaded to detect what is alleged (particularly where dishonesty or comparable impropriety is alleged); and, perhaps more important, its meaning should be plain to the court as well as other parties.”

“The Bank seeks to counteract this by submitting that what matters is not some objective fact but D1’s state of mind in 2017 and therefore that evidence as to the objective fact is irrelevant - see, for example the Bank’s skeleton at [52], [54(b)], 56(a), 56(b) (what was referred to before me as the “State of Mind Point”). I am satisfied, however, that the Defendants are correct in their submission that the State of Mind Point is a fallacy. It is a fallacy because the objective fact is often relevant evidentially to someone’s perception of it. For example, if someone believes that a claim against him is hopeless, he is less likely to wish to prejudice it than if he believes it to be a strong claim. Thus, it is established by authority (contrary to what the Bank contends) that the objective merits of claims are evidentially relevant to the debtor’s state of mind - see Morina v McAleavey [2023] EWHC 1234 (Ch) [119]-[120]. The Bank also seeks to submit that evidence or disclosure, even if relevant, would be disproportionate, but the litmus test to this is that it cannot be seriously suggested that if the amendments had been pleaded at the outset additional evidence and disclosure, as sought by Joan and Mo, would not be allowed.”

“The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.”

“Parties say they will ask the judge to draw adverse inferences in many circumstances where such a conclusion would be entirely unjustified. Too often the use of the expression is meaningless and is simply used as a substitute for “we will ask the judge to reject your case.”

“Such evidence should identify the medical attendant and give details of his familiarity with the party’s medical condition (detailing all recent consultations), should identify with particularity what the patient's medical condition is and the features of that condition which (in the medical attendant's opinion) prevent participation in the trial process, should provide a reasoned prognosis and should give the court some confidence that what is being expressed is an independent opinion after a proper examination.”

“Although said in relation to commercial litigation, I consider that the observations of Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), paras 15-22 have much to commend them. In particular, his statement at para 22 appears to me to be especially apt: “… the best approach for a judge to adopt … is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”” “… the best approach for a judge to adopt … is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.””

“In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party’s internal documents including e-mails and instant messaging. Those tend to be the documents where a witness’s guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence...”

“Judging Truth from Memory” at [10]: “...determining what happened is not the only task. Commercial litigation often involves an inquiry into a witness’ state of mind. That state of mind may be an essential ingredient of the cause of action, as for example where claims are framed in constructive trust. But more generally, it matters what the witness knew, or believed, or was thinking or intended at a particular point in the narrative of events because that casts light on the events themselves. Fact-finding is concerned not only with what happened, but just as much with why it happened…”

“Was at least one purpose of Ahmad in entering into the relevant transaction the Alleged Purpose in respect of one or more of the following potential claims against him: (a) By the Bank on his personal guarantee in respect of Tadamun? (b) By the Bank on his personal guarantee in respect of Commodore UAE? (c) By Doha Bank on his personal guarantee in respect of Commodore UAE? (d) In respect of the AED 4.7m subject of the claim brought against him in the Dubai Courts in January 2019? (e) In respect of the €15m subject matter of the criminal complaint made against him by Rheinmetall in 2018?”

“[Commodore UAE] is one of the members of MPC Hamburg which owns Ferrostaal Germany. It is important for the client that part of the quotas held in MPC are transferred to one of his companies, preferably Commodore Offshore, Lebanon. Tax consequences need to be understood. Asset protection is important due to the fact that 51 % of [Commodore UAE] is held by a local Namely, Sheikh Tahnoon. . Tax issues have to be analyzed (stamp duty if quotas will be transferred, DBA's etc.)”

“At all material times from at least November 2012 Ahmad had asset protection concerns in relation to Sheikh Tahnoon’s majority shareholding in Commodore UAE and, it is to be inferred, from at the latest December 2016 in relation to Sheikh Tahnoon’s ultimate control of Federal Co.”

“[Ahmad] agreed with Alex that he will finance a Garden Mews in the range of GBP 3.5 mio … The client seeks advice in respect to an appropriate ownership structure and to optimize the tax situation. Asset protection is very important since Alex only recently married and it should be avoided that his wife can benefit in case of a divorce. [Mr Escher] recommended a pre-nup agreement since he was under the impression that the new residential property shall serve as a matrimonial home. Alex however informed that the property shall be considered for investment purpose and most likely be rented. He entered already into a pre-nup agreement in the Lebanon. He could enter into a post-nup agreement. It seemed that he is not so happy to do so. Tax issues were discussed…”

“Included in the Company's trade receivable balance are debtors with a carrying amount of AED 82.45 million (2014: AED 87.1 million) which are past due but not impaired at the end of the reporting period. The management has made certain critical assumptions in assessing the recoverability of certain significant past due trade receivables as at 31 December 2015. In the current market environment, there exists a high degree of uncertainty regarding the full recoverability of such receivables which is not possible to quantify at this time. The Company does not hold any collateral over these balances.”

“Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. For certain categories of financial assets, such as trade and other receivables, assets that are assessed not to be impaired individually are assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Company's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.”

“It is also established in the audited balance sheets, issued by the Auditor of the Defendant Company and its branches for the years 2015 and 2017, that the loss sustained by the Company ha[s] reached AED 948,953,914.”

“Financed projects were progressing satisfactorily till Mr Ahmed El Husseini left the country. Majority of the financed projects were in advanced stages of completion and the Project Liabilities had substantially reduced as compared to the limits granted at the time of original sanction.”

“Yes, consideration will remain outstanding, we shall draft an agreement to satisfy payments over certain amount of years on instalments.”

“[B]y early 2017 it had already been left precariously late to transfer the property from my father to myself and prevent inheritance tax becoming due in the event of his passing. This was the reason for the transfer.”

“The property was transferred to me in June 2017 It was in fact transferred in May 2017. , I had recently become engaged and would be married in April 2018. This was an additional reason for the timing of the transfer.”

“9 Hyde Park Garden Mews shall be used by [Ahmad and Joan] during their stay in London. 18 Hyde Park Square shall be rented once renovated.”

“Q – Let's -- assuming Ahmad rang you now, tomorrow -- yesterday, let's say. He rings you yesterday and he gives you the same instruction. "I want you to urgently transfer beneficial interest in my shares to my wife for asset protection purposes". Do you agree that you would need to ask him why he was intending to transfer those shares? A – Yes. I mean, I would ask and, as I said, I thought -- I'm just not sure whether -- about the details -- about the background related to my telephone call I had back in January 2017.”

‘I hear asset protection all over our industry… it’s a general phrase that has multiple possible uses.’

‘Asset protection is important due to the fact that 51% of Commodore Contracting Abu Dhabi is owned by a local’

“at the beginning of 2017, Ahmad and Sheikh Tahnoon were engaged in discussions about the future of their business relationship (including the ownership of Commodore UAE)”

“A – That was (cut in audio) cash flow problems to help them continuing their work. And that's the reason I took the loan from Invest Bank, and I transferred it from Invest Bank, I believe, to wherever it went. I don't recall... Q – Which… A – ... where, which company. I don't recall which companies, because we run about five (5), six (6) companies, I don't recall really which companies, but definitely companies which is either Federal or Commodore or whatever, one of the companies we were running. And to assist in the cash flow for these companies. Q – Did those companies … you said it included Commodore; did it consider … did it include Tadamun? A – I don’t remember.”

“Q I would like to know what banks you have accounts with in Lebanon. Can you tell me? A What banks? BLOM Bank… Q Any other bank in Lebanon? A Yes, InvestBank. Your clients. Q How about First National Bank? A Yes, and First National Bank, because I used to have an account with them when we did this -- whatever they call it, the... the Ras Beirut thing. My sons made arrangements with First National Bank as Beirut company. I don't know the full name of the company, really. And that was it. … Q You talked about the transaction with Ras Beirut for the sale of the Medstar building. How much did you receive in consideration for that? A Beg your pardon? Q How much were you paid for the sale of the Beirut -- the --- A Well, --- Q Medstar building? A. --- [inaudible] this -- the deal started with them. It's because InvestBank, I mortgaged -- I mortgaged a plot in Beirut, and I took a loan from InvestBank. And at one time, I knew I couldn't pay the loan and I was afraid that InvestBank will... will liquidate it, or whatever you call it. And my son, my sons, they have their own financial means because they have their own companies, and they work separately, and so they -- I wouldn't say they helped, and I wouldn't say they didn't help. They decided to acquire, and they went to First National Bank and they made the deal with them, and they mortgaged some of their own properties and they took a loan, and they paid me -- they paid me -- they closed the loan, the debt of InvestBank, and they paid me the money, the rest, which I used. That was four and a half years ago.”

“In their statements of case in these proceedings, Ramzy and Joan have confirmed that the pledges over the properties (including the Ras Beirut Pledge) have been discharged. It is to be inferred that the US$15 million paid by Ras Beirut Co to Ahmad will have been used by Ahmad to pay off his indebtedness to First National Bank.”

“I refer to our recent tel con and herewith attach the transfer form for Cardena shares as instructed. May I kindly ask you to sign and return the originals to the below mentioned address. As discussed the tax opinion prepared by a Spanish tax accountants in regard to the transfer of shares in Cardena is still pending.”

“You confirmed to me that the shares in Marquee Holdings had been transferred from the original beneficial owner (Mr A El H) to his wife, Joan. The reasons as to exactly why the client had requested that the transfer take place were not entirely clear but he had referred to asset protection reasons and he had been clear that his instructions to effect the transfer should be implemented immediately.”

“9 Hyde Park Garden Mews shall be gifted to Ziad and 18 Hyde Park Square settled to a trust”

“The new settlement was again discussed in depth and it was decided not to implement the gift of the shares in Marquee. It might be that an agreement needs to be prepared and it is key to liaise with our legal department to make sure that the client is still the owner of the shares. This will allow Ahmed to settle a new trust. [Redacted] It is the explicit wish that Joan can benefit from the properties and also provide us with guidance in regard to a potential sale, dealing with trust issues, etc. The client would like to withdraw from these investments and give up control. Asset protection has priority. Step plan, set up and transfer documents need to be prepared. A further meeting is planned to sign letter of engagement which will allow us to proceed with the reorganization. [Credit Suisse] will close the bank account with Marquee in due course. It is important to maintain a bank account and the client will therefore introduce us to one of his contacts in Beirut. He is banking in Abu Dhabi and Beirut[;] prefers however Beirut also for asset protection reasons.”

“if it had been what you suggest, then Ahmad would certainly not have agreed to bring an unencumbered property i.e. 18 HP. into the legal ownership of a Swiss trust company where every transaction under the Swiss Bankruptcy and Death [sic] Swiss Bankruptcy and Debt Enforcement Act Enforcement Act can be set aside if the transaction was to the detriment -- to the negative impact of a creditor.”

“Financed projects were progressing satisfactorily till Mr Ahmed El Husseini left the country [in April/May 2017]. Majority of the financed projects were in advanced stages of completion and the Project Liabilities had substantially reduced as compared to the limits granted at the time of original sanction.”

“• Borrowing Relationship with IB since October 1985 (over 31 years). • Till recently, the group enjoyed an excellent market reputation and classified as 'Special Category' Contractor • Since inception of the relationship, the Bank's Strategy has been to mainly grant project specific limits for projects awarded by reputed Employers/Main Contractors and where the scope of work was related to the Main Business of the Company. • Some of the major projects completed and handed over by the M/S. Commodore Contracting include the Commercial Building for Shk. Tahnoon Bin Saeed Al Nahyan (CV: AED 52M), Al Nahel Palace Project (CV: AED 37M) amongst several others. • Between 2009 and 2013 M/S. Commodore Contracting did not make any new requests for facilities and all existing financed projects were 100% completed. The relationship was revived in 2014 by financing only the MEP Division for M/S. Commodore Contracting whereas projects financed for M/S. Al Tadamun were related to Installation of Aluminum and Glass Works. • Till 2016 the conduct of the account and progress on the financed projects was entirely satisfactory. Liabilities related to the financed projects were reduced/settled in line with the project progress and related guarantees were promptly returned and cancelled. • Total exposure on the group peaked at AED 234M in 2015 and now stands reduced to the current outstanding level of AED 109M. Financed projects were progressing satisfactorily till Mr Ahmed El Husseini left the country. Majority of the financed projects were in advanced stages of completion and the Project Liabilities had substantially reduced as compared to the limits granted at the time of original sanction. All the above projects under Bank's financing were related to MEP works and were 90-100% completed. • The company was in discussions with the project owners for release of project funds. However, no funds were released since the last quarter of 2017. In Jan'17, IB (through Beirut Branch) had also granted a Term Loan USD 6,000K (AED 22M) in the Personal Account of Mr. Ahmad Husseini in Beirut. This loan was secured by a first degree mortgage on Plot 3486 at Ras Beirut for USD 6,000K (100% Security Coverage). • Proceeds of this BTL were transferred to the account of M/S. Commodore Contracting Co. LLC to settle the group liabilities and improve its liquidity position (staff salaries, project payments etc.) • This loan was to be repaid in 12 months but was prepaid and closed within 6 months (through takeover by another Bank).”

“There was a time when Medstar did try to make a transfer of US$15 million to Mistar. However, the banks involved rejected the transfer and so the transfer never completed. The reasons for that intended transfer are no longer important … [FNB] was unable to apply the funds to Mistar’s account.”

“We authorise you to debit our account with yourselves value 170517 for USD 14,999,958 as we are unable to apply.”

“First National Bank S.A.L hereby confirms that there was no transfer of US$15 million, or any similar sum, from the account of Medstar Holding S.A.L at Byblos Bank S.A.L to the account of Mistar Investment Group Holding S.A.L at First National Bank on 17 May 2017, or at all. We understand that an attempt to initiate such a transfer to the account of Mistar Investment Group Holding S.A.L at First National Bank was made on or around 17 May 2017 but the transfer was never completed as the funds were rejected by First National Bank and were never received into the account of Mistar Investment Group Holding S.A.L at First National Bank.”

“141. The Bank alleges that there was, on 17 May 2017, a failed attempt to transfer $15m from the Byblos Bank account of Medstar Holding SAL to the First National Bank account of Mistar Investment Group Holding SAL. The Bank says that Medstar was at the time owned and controlled by Ahmad and that Mistar was owned and controlled by Ds3-4 (see PoC at [8A]). FNB have in fact confirmed that there was no transfer of $15 million or any similar sum between the two accounts, whether on 17 May 2017 or at all. 142. The Bank applied for leave to amend to plead an inference that Ahmad nevertheless had intended to, and at some point eventually did, transfer this money to D2-5 (but not Joan) in equal shares. The Bank’s current Medstar claim is therefore that over one or more unspecified dates after 17 May 2017, $3.75m was transferred to each of Mo, D3, D4 and D5 or to companies in which each had a financial interest. Giving leave to amend on 13 May 2022, Andrew Baker J held, [101], that he was “just persuaded, on balance, to consider that there is a serious issue to be tried to that effect rather than pure speculation by the Bank”

“That was... when I came to Lebanon, mid two thousand and seventeen (2017). I needed lots of money at that time when I came here, because I was in some financial difficulty. You know, I had thousands of employees, and when Sheikh Tahnoun took over the companies, lots of them -- I'm not talking thousands here, but lots of the employees, especially the white collar employees who worked for us for ten and fifteen and twenty years, Sheikh Tahnoun did -- when he took over and flipped the agreement upside down and took over the company and registered it in his name, he never paid them indemnities; he never paid them this, and I found it was obligation on me, for many reasons, that I had to compensate many of them. So that was the reason why I sold. I needed to sell at that time, otherwise it would have been all still with me if I not needed the money.”

“4. Real Property a) The Wife is hereby granted full ownership of the real estate company Cardena Finance and Holdings Ltd incorporated in the British Virgin Islands. The Husband undertakes to sign any document that is necessary for the transfer of the ownership of the said company to the Wife or any person the wife designates. The Husband shall hand all the company's documents to the Wife and shall notify such transfer of ownership to all concerned persons and authorities upon the Wife's first request. b) The Wife is hereby granted 50% of the real estate companies in Canada [3043428 Canada Inc and 27592856 Quebec Inc] respectively registered under the numbers 1145883287 and 1140623688. The Husband undertakes to sign any document that is necessary for the transfer of 50% of ownership of the said companies to the Wife or any person the wife designates. The Husband shall notify such transfer of ownership to all concerned persons and authorities upon the Wife's first request. c) The Wife is hereby granted any real estate property the Husband owns directly or indirectly in the United Kingdom. … 11. Entire Agreement The Agreement constitutes the entire agreement between the parties and contains all the agreements between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, either oral or in writing between the parties hereto with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless in writing and signed by both parties.”

“The prominently agreed assignments of property rights on the Son's real property from the Father to the Mother are carried out as part of the restructuring and distribution of assets arising from marriage. Therefore, no quid pro quo, in particular a payment, is agreed on.”

“As usual I have NOT been kept in the loop by Raas and due to current suspicions I suggest to hold off on his request until suspicions are cleared or verified!”

“Given that Mr Ahmad El Husseini is married to Joan Eva Henry in accordance with Islamic law (Sharia) and is the owner of the apartment according to the title deed, it follows that Mr Ahmad El Husseini is the sole owner of the apartment according to the laws in force, in particular according to the Islamic law governing his marital status.”

“… by at the latest the beginning of 2017, Alexander and Ziad had become concerned that Mr. Ozcan was not acting in Ahmad’s interests in relation to the Commodore Netherlands business, and that generally he was courting Sheikh Tahnoon’s favour. It is to be inferred that they shared these concerns with Ahmad, Mohammed and Ramzy before the date on which the shares in [Global Green] were transferred to the sons.”