Case Digest: Commercial Bank of Dubai PSC v Al Sari [2024] EWHC 3304 (Comm)

<center>Judgment Date: 19 December 2024</center>

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Summary

The court examined the enforcement of a Sharjah judgment and allegations that the defendants deployed forged documents in English and foreign proceedings. A key issue was whether the judgments of the Sharjah Court of Appeal had a preclusive effect on the claims and whether judicial proceedings immunity (“JPI”) applied. The court refused permission to serve a worldwide freezing order (“WWFO”) out of the jurisdiction on a non-cause of action defendant, finding that the claim did not meet the necessary or proper party gateway under CPR PD 6B para.3.1(3). Furthermore, the court determined that, even if the gateway applied, it would not exercise its discretion to allow service out.

Facts

The Commercial Bank of Dubai obtained a Sharjah judgment in 2016 against members of the Al Sari family for over GBP80 million. In 2018, the bank secured a BVI judgment and took control of BVI companies linked to the Al Sari family, which held substantial properties in England. The BVI companies then initiated proceedings to regain possession of these properties.

In 2019, the seventh defendant (Globe), allegedly controlled by the Al Sari family, sued the BVI companies in Sharjah, claiming amounts assigned to the ninth defendant (D9). The claimants alleged fraud, asserting that the documents used by Globe were fabricated to obstruct the enforcement of the Sharjah and BVI judgments. The Sharjah Court of Appeal ruled in Globe’s favour in 2021, rejecting the claimants’ fraud allegations. In 2023, the BVI companies obtained a possession order for the English properties, with the court ruling that the tenancy agreement relied upon by the Al Saris was fabricated and unauthorised.

The Commercial Bank of Dubai and the BVI companies initiated English proceedings in 2022 to enforce the Sharjah judgment and challenge the defendants' alleged misconduct. The claimants obtained WWFO relief.

The claims against Globe, D9, and the tenth defendant (D10), a director of Globe, included:

Deceit and malicious falsehood—alleging the use of false documents in the Sharjah proceedings.
The Marex tort—claiming a violation of the claimants’ rights to enforce the Sharjah judgment.
Dishonest assistance—alleging breaches of fiduciary duty by the Al Sari family towards the BVI companies.
Unlawful means conspiracy and a claim under Section 423 of the Insolvency Act 1986.

Globe, D9, and D10 contested the claims, arguing that:

The Sharjah Court of Appeal judgments had preclusive effect, barring re-litigation of fraud allegations.
The doctrine of JPI applied, preventing claims based on conduct in prior legal proceedings.

Held

The court ruled as follows:

Preclusive Effect of the Sharjah Judgments: The court held that a judgment debtor may resist enforcement of a foreign judgment on grounds of fraud, even if fraud allegations were previously rejected (Abouloff v Oppenheimer & Co (1882)). However, the right to challenge might be lost if the fraud claim had already been fully litigated (House of Spring Gardens Ltd v Waite (No.2) [1991]). The court found a serious issue to be tried as to whether the fraud claims in the English proceedings had been rejected on the merits in Sharjah. The preclusive effect argument failed.
Judicial Proceedings Immunity (“JPI”): If JPI applied to Globe’s Sharjah proceedings, it would bar claims for deceit, malicious falsehood and related conspiracy allegations. The court considered JPI a mandatory rule of English public policy, applicable irrespective of the lex causae under Rome II Regulation (EC) No 864/2007, Article 16. However, the extent of JPI in Sharjah law was unclear, meaning its applicability remained arguable (Erhard-Jensen Ontological/Phenomenological Initiative Ltd v Rogerson [2024]). The court found that JPI applied to the Sharjah proceedings but noted that if Sharjah law did not recognise JPI, it might not preclude the English claims.
Deceit: The deceit claims were dismissed, as the documents used in Globe’s foreign proceedings were not deployed to induce the claimants to act in a specific way (Hayward v Zurich Insurance Co Plc [2016] UKSC 48).
Serious Issue to Be Tried: The court held that the malicious falsehood claims were arguable. Further legal arguments were required on:
- The Marex tort (obstruction of judgment enforcement).
- Malicious prosecution of Dubai International Financial Centre proceedings.
- The section 423 claim, which was found arguable.
- Whether the tenancy agreement and Globe documents formed part of a wider conspiracy to obstruct enforcement of the Sharjah and BVI judgments.
Service Out Against D10: The court ruled that service out against D10 should not be set aside on discretionary grounds or for lack of full and frank disclosure.
Worldwide Freezing Order (“WWFO”): The court found a real risk of dissipation by D10 and limited the WWFO sum to GBP4.5 million. The WWFO application against D10 as a non-cause of action defendant, based on potential asset control, was found to be outside the scope of CPR PD 6B para.3.1(3) and was denied. Even if the jurisdiction gateway applied, the court would not exercise its discretion to permit service out (Masri v Consolidated Contractors International Co SAL [2009] and AK Investment CJSC v Kyrgyz Mobil Tel Ltd [2011]).

Conclusion

The decision highlights important legal principles in cross-border judgment enforcement, including the preclusive effect of foreign judgments, the scope of judicial proceedings immunity and limitations on WWFOs in the English court. The ruling also highlights the complexities of fraud-based challenges to foreign judgments and the limits of non-cause of action freezing relief in multi-jurisdictional disputes.

Case Law Digest Series

Case Digest: Commercial Bank of Dubai PSC v Al Sari [2024] EWHC 3304 (Comm)

Summary

Facts

Held

Conclusion