Between: Abdulhameed Dhia Jafar Plaintiff v (1) Abraaj Holdings (in official liquidation) (2) GHF General Partner Ltd (in its capacity as general partner of GHF Fund LP (formerly Abraaj Growth Markets Health Fund LP) and GHF Fund (B) LP (formerly Abraaj Growth Markets Health Fund (B) LP)) (3) The GHF Group Ltd (formerly The Abraaj Healthcare Group Ltd) (4) Abraaj General Partner VIII Ltd (in its capacity as general partner of Neoma Private Equity Fund IV LP (formerly known as Abraaj Private Equity Fund IV LP)) Defendants
| Jurisdiction | Cayman Islands |
| Judge | Mr Justice Segal |
| Judgment Date | 02 October 2023 |
| Docket Number | CAUSE NO. FSD 203 OF 2020 (NSJ) |
| Court | Grand Court (Cayman Islands) |
The Hon. Mr Justice Segal
CAUSE NO. FSD 203 OF 2020 (NSJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Security for costs – applications by the Second-Fourth Defendants for additional security — evidence as to whether there was a real risk of non-enforcement in the UAE of a costs order made by this Court and whether it was just to award further security to these Defendants – review of disputed evidence as to UAE law – quantification of the further security
Mr Stephen Atherton KC instructed by Matthew Goucke and Shelley White of Walkers for the Second and Third Defendants
Mr Andrew Ayres KC and Henry Phillips instructed by Ogier for the Fourth Defendant
Lord Falconer and Luka Krsljanin instructed by Sarah McLennan of Forbes Hare for the Plaintiff
By summonses issued in April 2021, the Second and Third Defendants (the GHF Parties) and the Fourth Defendant ( Fund IV who with the GHF Parties I refer to as the Fund Parties) each applied for security for costs against the Plaintiff (the SFC Summonses). The SFC Summonses were heard on 1 and 2 July 2021 (the SFC Hearing) and on 10 August 2021 I handed down my judgment granting the applications (the SFC Judgment). The order giving effect to the SFC Judgment was dated 19 October 2021 (the SFC Order). The background to the security for costs applications can be found in the SFC Judgment (and I use the definitions in the SFC Judgment in this judgment).
Security was ordered up to discovery, with liberty for (i) the Fund Parties to apply for further security to cover the period up to and after the trial and (ii) for all parties to apply for an adjustment to the costs allocated to discovery.
The Plaintiff was ordered to give security for the GHF Parties' costs up to the conclusion of the discovery process in the sum of US$4,147,951.59 (the GHF Parties' Initial Security) comprising (a) 70% of the GHF Parties' recoverable costs and disbursements up to the date of the SFC Hearing being US$1,596,885.36; (b) 70% of the GHF Parties' estimated future recoverable costs to the conclusion of the discovery process being US$1,134.670.95 and (c) estimated future disbursements of US$1,416,395.28, which included a reduction of US$250,000 to the initial amount sought by the GHF Parties in respect of disbursements relating to FFP's forensic advice.
The Plaintiff was ordered to give security for Fund IV's costs up to the conclusion of the discovery process in the sum of US$3,561,319.24 ( Fund IV's Initial Security) comprising (a) US$1,099,733.39 representing 70% of costs already incurred by Fund IV up to 30 June 2021 and (b) US$2,461,585.84, representing 70% of Fund IV's estimated legal costs and 100% of its estimated disbursements from 30 June 2021 up to the completion of discovery.
By a summons dated 3 February 2023 (the GHF Parties Top-Up Summons) and a summons dated 6 February 2023 (the Fund IV Top-Up Summons, together with the GHF Parties Top-Up Summons, the Top-Up Summonses) the GHF Parties and Fund IV respectively applied, pursuant to the liberty to apply that I had previously granted, for further security to cover the costs actually incurred in the discovery stage of the proceedings and the additional estimated costs to be incurred in the further stages in the proceedings.
By the GHF Parties Top-Up Summons, the GHF Parties applied for additional security in the aggregate sum of US$5,470,023.46 (the GHF Parties Additional Security). This comprises further security (a) for the discovery phase in the sum of US$975,531.01 (the GHF Parties' Discovery Security) and (b) for their future recoverable costs to the end of the trial in FSD 203 of 2020 (the Jafar Proceedings) in the sum of US$4,494,492.45 (the Future Security). At the time that the GHF Parties Top-Up Summons was filed this figure represented the GHF Parties' best estimate of their recoverable costs until the conclusion of the trial in the Jafar Proceedings: see Mr Lewis' Thirteenth Affidavit ( Lewis 13) sworn on 3 February 2023 and his Fifteenth Affidavit sworn on 21 June 2023 ( Lewis 15) at [6]. The GHF Parties said that since the swearing of Lewis 13 a considerable period of time had elapsed (Lewis 13 was sworn at a time when the GHF Parties anticipated that the GHF Parties Top-Up Summons would be heard within a short period of time but in fact the hearing of the summons was delayed) and there had been a number of significant developments so that it was necessary and convenient to update the figures contained in Lewis 13 which had been done in Lewis 15.
By the Fund IV Top-Up Summons, Fund IV now seeks by way of further security the sum of (a) US$1,666,964.69 in respect of costs incurred to date in excess of the existing security and (b) US$4,300,937.40 in respect of estimated future costs to trial. As regards the first element, Fund IV's total incurred fees from the start of the Jafar Proceedings up to 30 April 2023, on the basis of 70% of its legal fees and 100% of its disbursements, amounted to US$5,464,828.05. Of this sum, it had received an interim costs payment from the Plaintiff of US$236,544.13 in relation to the costs order made in Fund IV's favour following the Plaintiff's application for leave to amend his statement of claim (Fund IV being granted its costs of and occasioned by those amendments) and once this interim payment was taken into account the total incurred costs up to 30 April 2023 had exceeded Fund IV's Initial Security of US$3,561,319.24 by US$1,666,964.69. When the Fund IV Top-Up Summons was issued Fund IV had provided in Mr Hayward's Seventh Affidavit ( Hayward 7) sworn on 6 February 2023 evidence as to its incurred costs to the end of December 2022 along with Fund IV's estimates of future costs. Once again, in view of the delay in the hearing of the Fund IV Top-Up Summons and developments since it was issued, Fund IV filed the Sixteenth Affidavit ( Hayward 16) and the Seventeenth Affidavit ( Hayward 17) of Mr Hayward to update its evidence as to incurred and estimate future costs. Hayward 16 was sworn on 19 June 2023 and Hayward 17 was sworn on 21 June 2023.
The hearing of the Top-Up Summonses took place on 28 and 29 June 2023. Once again, the GHF Parties were represented by Mr Atherton KC, Fund IV was represented by Mr Ayres KC and the Plaintiff was represented by Lord Falconer.
The Plaintiff objected to what he regarded as the late filing of the further evidence by the Fund Parties, which he said he had not had sufficient time to consider before the hearing. I considered that the Plaintiff was justified and needed further time to review and respond to this further evidence. Accordingly, I directed that he be permitted to file further written submissions dealing with this further evidence within seven days of the hearing (which he did on 6 July) and that the GHF Parties and Fund IV be permitted to file further submissions in response seven days after that (which they did on 13 July).
I have concluded that the Fund Parties have established that there remains a real risk that a costs order against the Plaintiff would not be enforced in the UAE and that, having regard to the terms of the SFC Order and the basis on which is was made (as explained in the SFC Judgment) and exercising my discretion to order the Plaintiff to provide security for costs, that the Plaintiff should be required to provide further security. I have carefully reviewed the Fund Parties' evidence as to quantum and the Plaintiff's extensive and detailed challenges thereto, and concluded that some but not substantial reductions should be made to the amounts claimed by the Fund Parties. I have explained those reductions in my discussion of the Fund Parties' quantification of their claims, which appears below. I will invite the parties to seek to agree the amounts of the further security to be provided based on the decisions I have set out.
In addition to the question of the proper quantum of the further security claimed by the Fund Parties, the Fund Parties' entitlement to any further security for costs was challenged by the Plaintiff on the basis of what he claimed to be new developments in the UAE since the SFC Judgment. These developments, the Plaintiff argued, showed that there was now no real and serious risk that a costs order against him might not be enforced in the UAE (so that the jurisdictional pre-condition to an order for security for costs was no longer satisfied).
Accordingly, I need first to consider the Plaintiff's opposition based on the change of circumstances and the asserted absence of a real and serious risk that a costs order against him might not be enforced. Since, as I explain below, I have concluded that the Fund Parties have established that such a risk remains, I need to, and shall then, consider the dispute as to quantum.
Directions were made permitting the parties to file expert evidence as to applicable federal UAE law (and the law of the relevant Emirates).
The Plaintiff relied on a report (the Ahnish Report) prepared by Dr Faraj Abdullah Ahnish Saleh Ahnish ( Dr Ahnish). Dr Ahnish is a legal advisor and a UAE national advocate. He is one of the founding partners of Hadef &...
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