Ahmad Hamad Algosaibi and Brothers Company Plaintiff v Saad Investments Company Ltd Maan Al-Sanea and Others Defendants
| Jurisdiction | Cayman Islands |
| Judge | Hon. Anthony Smellie,Chief Justice |
| Judgment Date | 30 April 2010 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE NO. FSD 54 OF 2009 |
| Date | 30 April 2010 |
The Hon. Anthony Smellie, Chief Justice
Mr. Ewan McQuater QC and Mr. David Quest instructed by Mr. Peter Hayden of Mourant for the plaintiff Ahmad Hamad Algosaibi and Brothers Company (�AHAB�)
Mr. T.A.G. Beazley QC and Mr. Brian Kennelly instructed by Mr. Jeremy Walton of Appleby for Mr. AI Sanea
Mr. Stephen Phillips QC instructed by Mr. Jan Golaszewski of Maples and Calder for the 3 rd, 9 th to 12 th and 20 th Defendants (�the Maples Defendants�)
This case, which has been before this Court since July 2009, is now the subject of an application by the second defendant Mr. A1 Sanea by which he challenges the Court's jurisdiction.
At the heart of the dispute are the current generation male Algosaibi partners of AHAB, a longstanding Saudi Arabian family partnership on the one hand, and on the other, Mr. A1 Sanea, the principal of the Saad Group of Companies, which he describes as having originated in the late 1970!s in Kuwait but which came to include many affiliate entities established by Mr. A1 Sanea in 2008 in this jurisdiction. These Cayman entities were, according to Mr. A1 Sanea, established for asset protection and investment purposes. They are held through Awal Trust Company Limited, the shares of which were settled upon a Cayman Islands � STAR� trust by Mr. A1 Sanea. Having decided to relocate from Kuwait to A1 Khobar, Saudi Arabia; Mr. A1 Sanea's principal operating entity there has been Saad Trading and Contracting Company, more lately called Saad Trading and Financial Services Company (�STCC�).
The Saad Group is described as a privately-held diversified conglomerate with specialist divisions in many fields. Amidst the complex and, from Mr. A1 Sanea's point of view inter-related, accounts of the affairs of AHAB and the Saad Group, allegations and counter-allegations of fraud abound. The challenge for the courts of the appropriate forum will be to determine the truth by the unraveling of the complexities of the innumerable financial transactions in question.
Mr. A1 Sanea now disputes the earlier order of this Court which allowed service of the Writ upon him in Saudi Arabia and the central issue presented for determination is whether the courts of the Cayman Islands or the courts or other tribunals of Saudi Arabia are the appropriate forum for the trial of the dispute between himself and the plaintiff AHAB.
AHAB, having brought these proceedings in this jurisdiction, argues strenuously for Cayman as the appropriate forum citing a number of factors to be discussed below which point to that conclusion. This position is taken by AHAB although its operations and the central events of its dispute with Mr. A1 Sanea are based in and took place in Saudi Arabia.
Mr. A1 Sanea argues, with equal insistence, for Saudi Arabia as the appropriate forum, relying on those very factors which connect the dispute to Saudi Arabia but which AHAB would seek to relegate in its arguments for Cayman as the appropriate forum.
In having succeeded in showing �a good arguable case� of fraud (as that expression is recognised in the case law (see Seaconsar Far East Ltd. V Bank Markozi (below) and Derby v Weldon [1990] Ch. 48at 57, the latter in the context of the grant of mareva injunctive relief); implicating the many Cayman Islands Saad corporate defendants, AHAB has obtained orders from no less than three different judges of this Court in support of its action here.
In the first place, Henderson J decided on the ex parte basis, on 24th July 2009, that a worldwide freezing and disclosure order (the �WFO�) should be issued prohibiting the disposal or dealing with assets of Mr. A1 Sanea and the Saad corporate defendants up to the amount allegedly defrauded of USD9.2 billion and requiring the disclosure of information about assets held by them. A receiver was then also appointed over the assets of certain of the Saad corporate defendants; an appointment which has since been superseded by the appointment of liquidators in respect of 17 of those corporate defendants which are now in liquidation before this Court.
On 28 th July 2009, Henderson J. further ordered that the plaintiff AHAB be granted leave to serve its writ out of the jurisdiction upon Mr. A1 Sanea by personal service upon him at any place outside the jurisdiction. This order was granted pursuant to Grand Court Rules Order 11.1. (1) (c) on the basis that Mr. A1 Sanea was �a necessary and proper party� to the action brought as of right by AHAB against the 17 corporate defendants in this jurisdiction, the place of their incorporation. Personal service not having been effected, a further order was made by Anderson (Actg) J. on 24 th August 2009, allowing substituted service upon Mr. A1 Sanea, by delivery of a sealed copy of the Writ (together with a sealed copy of that order itself) to either an adult at Mr. A1 Sanea's usual place of abode in A1 Khobar, Saudi Arabia or at the offices of STCC in A1 Khobar, Mr. A1 Sanea's principal place of business. That order also required advertisement of a notice of the Writ scheduled to the order, in the regional �AL Watan� newspaper which is published in the A1 Khobar region of Saudi Arabia.
Service upon Mr. A1 Sanea was also deemed by Justice Anderson's order to be effective upon the expiry of three working days after delivery of the documents to the offices of STCC.
Despite these developments, Mr. A1 Sanea has continued to challenge the jurisdiction of this Court, disputing the efficacy of the service of the Writ upon him as not being in conformity with Saudi Arabian law and asserting his arguments of forum non conveniens against the trial of the dispute between AHAB and himself in the Cayman Islands.
Despite the subsequent findings also of Justice Henderson (on 17 November 2009) and of Justice Anderson and myself in separate written rulings (respectively on 15 March and 19 April 2010) of a good arguable case of fraud to justify the WFO obtained by AHAB in this jurisdiction, Mr. A1 Sanea also asserts that those orders were improperly obtained and should be discharged.
Mr. A1 Sanea's participation in these proceedings has thus been, on the basis of his challenge to jurisdiction, under protest. He has throughout asserted that his participation is not to be taken as submission by him to the jurisdiction of this Court.
That is the procedural background to these proceedings against which Mr. A1 Sanea now applies to set aside (i) the order for service out against him (�the jurisdictional challenge�); (ii) the WFO and (iii) the order for service upon him by way of substituted service in Saudi Arabia.
The third issue is the subject of conclusions reached by Justice Anderson in his ruling of 15th March 2010, in rejecting Mr. A1 Sanea's arguments to similar effect. I therefore regard that issue as decided and see no basis for revisiting it here. I should also add, in deference to the arguments raised before me in this regard, that I see no basis for concern that the method of service actually employed involved, in any way, an interference with the sovereignty of the Saudi State. Nor is there, in my view, any reason to apprehend that Mr. A1 Sanea has been prejudiced by the method of substituted service employed. There was cogent evidence, on which the Court relied, that Mr. A1 Sanea was seeking to avoid personal service.
The other two issues were argued before me in great detail over the course of a number of days by counsel for Mr. A1 Sanea, for some of his defendant companies not yet in liquidation (referred to as �the Maples' Defendants�) and by counsel for AHAB. The arguments on his behalf were allowed notwithstanding the fact that Mr. Al Sanea had earlier (by the judgment of Justice Anderson on 15th March 2010) been found to be in contemptuous breach of the WFO by his dealings with certain of the assets which were restrained by it. No objection was taken to Mr. Al Sanea's standing to bring these applications and to make these arguments, his contemptuous behaviour notwithstanding. On the state of the modem authorities, Mr. McQuater QC for AHAB conceded that Mr. Al Sanea is not precluded from making the present applications. (See, in particular dictum of Saville LJ from Artlev AG v JSC Almazv Morrie-Sakha (below)).
I will proceed to deal with Mr. Al Sanea's application even while avoiding any attempt at an inquiry into the merits of the underlying allegations of fraud notwithstanding the volumes of evidence filed in this application on both sides.
No fewer than three judges here and two in England in ancillary proceedings (ie: Justices Flaux and Simon in the Commercial Court) have found that AHAB has shown a good arguable case as pleaded against Mr. Al Sanea and against the Saad corporate defendants. This finding has not been challenged by the liquidators of the 17 defendant companies in liquidation.
That being so, I consider it is necessary only for me to concentrate on the main issues in dispute now, beginning with the appropriateness of the Cayman Islands as the forum for the trial of the claims. That fraud on a massive scale involving Cayman Corporate defendants has arguably been perpetrated by Mr. Al Sanea does not necessarily determine that Cayman is the most appropriate forum for the trial of those allegations. Similarly, the fact � as I decided in the judgment of 19 April 2010 � that the prosecution of AHAB's claim against the 17 defendant companies in liquidation may proceed in Cayman, does not pre-empt the present issue of what is the most appropriate forum for the trial of the complex allegations of fraud...
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