Ahmad Hamad Algosaibi and Brothers Company v Saad Investments Company Ltd (in Official Liquidation), Maan Al Sanea and Others

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 28 November 2017
• Court: Grand Court (Cayman Islands)
• Date: 28 November 2017

Grand Court, Financial Services Division

(Smellie, C.J.)

AHMAD HAMAD ALGOSAIBI AND BROTHERS COMPANY

and

SAAD INVESTMENTS COMPANY LIMITED (in official liquidation), MAAN AL SANEA and OTHERS

J. Ramsden, Q.C. and I. Huskisson for the administrator of the International Banking Corporation BSC;

H. Robinson, Q.C. and D. McMahon for AHAB.

Cases cited:

(1) Att. Gen. v. Leveller Magazine Ltd., [1979] A.C. 440; [1979] 1 All E.R. 745, referred to.

(2) Barings plc v. Coopers & Lybrand, [2000] EWCA Civ 148; [2000] 1 W.L.R. 2353; [2000] 3 All E.R 910; [2000] Lloyd’s Rep. Bank 225, followed.

(3) Bermuda Press (Hldgs.) Ltd. v. Supreme Court Registrar, [2015] SC (Bda) 49 Civ, dicta of Kawaley, C.J. considered.

(4) Church of Scientology of California v. D.H.S.S., [1979] 1 W.L.R. 723; [1979] 3 All E.R. 97, referred to.

(5) Classrooms Invs. Inc. v. China Hospitals Inc., 2015 (1) CILR 451, considered.

(6) Credit Suisse Fides Trust S.A. v. Cuoghi, [1998] Q.B. 818; [1997] 3 W.L.R. 871; [1997] 3 All E.R. 724; [1997] CLC 1187, followed.

(7) Derby & Co. Ltd. v. Weldon (No. 2), [1989] 1 All E.R. 1002, referred to.

(8) Dian AO v. Davis Frankel & Mead, [2004] EWHC 2662 (Comm); [2005] 1 W.L.R. 2951; [2005] 1 All E.R. 107, followed.

(9) Dobson v. Hastings, [1992] Ch. 394; [1992] 2 W.L.R. 414; [1992] 2 All E.R. 94, considered.

(10) GIO Personal Inv. Servs. Ltd. v. Liverpool & London S.S. P.&I. Assn. Ltd., [1999] 1 W.L.R. 984, followed.

(11) Grupo Interpres S.A. v. Spain, ECtHR, Applic. No. 32849/96, April 7th, 1997, D.R. 89/150, unreported, considered.

(12) Harman v. Home Secy., [1983] 1 A.C. 280; [1982] 2 W.L.R. 338; [1982] 1 All E.R. 532, referred to.

(13) Hinchcliffe, In re, [1895] 1 Ch. 117; (1895), 64 L.J. Ch. 76; 12 R. 33; 43 W.R. 82; 71 L.T. 532, applied.

(14) Independent Newspapers (Pty) Ltd. v. Intelligence Services Minister, [2008] ZACC 6; (2008), 26 BHRC 284; 2008 (5) S.A. 31 (CC); 2008 (8) BCLR 771 (CC); [2009] 1 L.R.C. 787, dictum of Sachs, J. approved.

(15) Meridian Trust Co. Ltd. v. Batista da Silva, 2017 (1) CILR 370, considered.

(16) Motorola Credit Corp v. Uzan, [2003] EWCA Civ 752; [2002] 2 All E.R. (Comm) 945; [2002] C.P. Rep. 69, considered.

(17) R. v. Howell, [2003] EWCA Crim 486, referred to.

(18) R. (Guardian News & Media Ltd.) v. City of Westminster Mags.’ Ct., [2012] EWCA Civ 420; [2013] Q.B. 618; [2012] 3 W.L.R. 1343; [2012] 3 All E.R. 551; [2012] C.P. Rep. 30; [2012] EMLR 22, applied.

(19) Sasken Communication Technologies Ltd. v. Spreadtrum Communications Inc., 2016 (1) CILR 1, referred to.

(20) Scott (or Morgan) v. Scott, [1913] A.C. 417; (1913), 82 L.J.P. 74; [1911–13] All E.R. Rep. 1, referred to.

(21) SmithKline Beecham Biologicals S.A. v. Connaught Labs. Inc., [1999] EWCA Civ 1781; [1999] 4 All E.R. 498; [2000] F.S.R. 1; (2000), 51 BMLR 91, considered.

(22) Társaság a Szabadságjogokért v. Hungary (2009), 53 EHRR 130; [2009] ECHR 618; on appeal (2011), 53 EHRR 3, referred to.

(23) United States v. Amodeo (1995), 71 F.3d 1044; 24 Media L. Rep. 1203, referred to.

Legislation construed:

Grand Court Law (2015 Revision), s.11A:

“(1) The Court may by order appoint a receiver or grant other interim relief in relation to proceedings which—

(a) have been or are to be commenced in a court outside of the Islands . . .

(2) The Court may, pursuant to this section, grant interim relief of any kind which it has power to grant in proceedings relating to matters within its jurisdiction.”

Grand Court Rules 1995 (Revised), O.38, r.2A: The relevant terms of this rule are set out at para. 72.

O.41, r.9: The relevant terms of this rule are set out at para. 73.

O.63, rr. 2–3; rr. 7–8: The relevant terms of these rules are set out at para. 74.

Practice Direction cited:

Practice Direction No. 1/2015, Applications for Sealing Orders and for Inspection of Court Files in Civil Proceedings: GCR Order 63, r.3.

Civil Procedure — discovery — third party inspection — not appropriate to grant third party’s unreasonably wide application for inspection inter alia of all discovery made by party, for potential use in litigation hostile to party’s interests — fishing expedition not purpose of open justice principle — third party granted access to witness statements and affidavits on court file directed to stand as evidence in trial (but not attachments) in which reference made to third party, and skeleton opening and closing submissions — not granted disclosure of party’s discovery, which could be put to unfair use in overseas proceedings

A third party sought inspection of documents disclosed or filed in proceedings between the plaintiff, “AHAB,” and the defendants, “the Saad Group.”

AHAB brought an action in the Grand Court against the defendants (members of the Saad Group of companies) to recover the proceeds of an alleged massive fraud committed against its Money Exchange branch by Mr. Maan Al Sanea, the principal of the Saad Group, in Saudi Arabia.

The International Banking Corporation BSC (“TIBC”) was a wholesale bank established in Bahrain in 2003. It had been placed into administration in 2009 and an external administrator appointed. TIBC had obtained judgment against AHAB in Bahrain and was a significant creditor. As AHAB was a partnership registered in Saudi Arabia, TIBC sought to enforce its judgment against AHAB in that jurisdiction.

In 2010, TIBC commenced proceedings against AHAB in Saudi Arabia concerning a series of foreign exchange transactions pursuant to which TIBC had paid sums to AHAB but had not received the payments due. In its defence, AHAB pleaded inter alia that it was the victim of a fraud by Mr. Al Sanea which involved TIBC. Those proceedings were ongoing. In 2014, TIBC commenced proceedings against AHAB in Bahrain seeking damages in respect of a series of loan payments. AHAB defended the proceedings on similar grounds. In 2016, judgment was entered against AHAB and the subsequent appeal failed. In connection with those proceedings, in 2015, TIBC applied to the High Court in London seeking to take copies of a number of documents that had been disclosed by AHAB and referred to in court in a number of proceedings that had been brought against AHAB by certain banks, which was granted.

In 2016, AHAB commenced proceedings against TIBC in Saudi Arabia claiming a substantial sum. It alleged inter alia that Mr. Al Sanea owned 25% of the Money Exchange and had abused his position to conspire with TIBC, and that TIBC had transferred proceeds of fraud, directly or indirectly, to Mr. Al Sanea and the Saad Group. Those proceedings were ongoing and TIBC indicated that it was considering further claims against AHAB. It was submitted that there were live questions as to the knowledge and involvement of AHAB in the business conducted by TIBC, the Money Exchange, Mr. Al Sanea and various entities within the Saad Group and the large scale fraud that was alleged to have been carried out by Mr. Al Sanea conspiring with others including TIBC.

TIBC made the following applications in the present proceedings: (a) An application under GCR O.63, r.3 and Practice Direction No. 1 of 2015 to inspect and take copies of documents that either appeared or should appear on the court file. (b) An application under GCR O.38, r.2A(12) for leave to inspect and take copies of any witness statements, together with any documents attached to them, that had been directed to stand as evidence-in-chief. (c) An application under the principle of open justice for disclosure of all other documents read by the judge during the course of the trial of the action, including copies of all written submissions (skeletons, openings or closings) and any written documents attached to them; all pleadings and witness statements (together with any documents attached to them) that had been directed to stand as evidence-in-chief; those parts of the trial bundles containing discovery given by AHAB; and all transcripts made of the proceedings in open court.

The administrator submitted that TIBC sought access to contemporaneous documents and other evidence that were relevant to its efforts to establish the truth in respect of arguments raised by AHAB in its prosecution and defence of significant and high-value claims. It was claimed that there was a very real prospect that it would suffer serious prejudice and injustice if it were unable to see the relevant documents. Further, the applications should be granted in the interests of comity between courts in different jurisdictions who had before them a party in common (AHAB) and were asked to deal with actions that raised the same issues of fact. The administrator also sought to rely on what was described as the analogy between the principle of open justice and the grant of relief under s.11A of the Grand Court Law (which vested a statutory jurisdiction for the making of freezing and ancillary disclosure orders in aid of foreign proceedings where it was shown that there was a good arguable case and a risk of dissipation of assets).

AHAB agreed that the administrator should have access to the unsealed documents on the court file, subject to a written undertaking that they would not be used for any purpose other than in the context of the ongoing proceedings between them. AHAB objected to the inspection and copying of any sealed documents on the court file. AHAB also agreed conditionally to provide copies of witness statements and attached documents directed to stand as evidence-in-chief, subject to a more restrictive undertaking by TIBC that such documents should not be used in any proceedings for the enforcement of the Bahraini judgment. AHAB did not, however, agree to supply those parts of the vast trial bundles containing discovery given by it, which it considered to be an unreasonable burden. AHAB also objected to providing all transcripts made of proceedings in open court.

Held, ruling as follows:

(1) Grand Court Rules O.38, r.2A, O.41, r.9 and O.63, when read together, defined the nature and...