The Estate of Maan Abdul Wahed Al-Sanea, A Bankrupt and a Request for Recognition
| Jurisdiction | Cayman Islands |
| Judge | Justice Kawaley |
| Judgment Date | 28 May 2024 |
| Docket Number | CAUSE NO. FSD 117 OF 2024 (IKJ) |
| Court | Grand Court (Cayman Islands) |
The Hon. Justice Kawaley
CAUSE NO. FSD 117 OF 2024 (IKJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Bankruptcy-foreign bankruptcy proceedings-application for recognition at common law-governing principles
Ms Dunzelle Daker and Ms Raedean Simpson of Ogier (Cayman) LLP, for the Plaintiff
By an Ex Parte Originating Summons dated 16 April 2024, Mr Aiman Meqham Almeqham (the “Applicant”) applied for recognition of his status as bankruptcy trustee of Mr Maan Abdul Wahed Al-Sanea (the “Bankrupt”). The Summons was provisionally listed for 7 May 2024. On 1 May 2024, the Applicant's attorneys requested a hearing on the papers in the interests of proportionality, a request to which I acceded.
The Summons was supported by the Applicant's First Affidavit, sworn on 14 April 2024. The Applicant's counsel also submitted a Skeleton Argument (supported by a Bundle of Authorities), which summarised the evidence and clearly set out the governing legal principles. On 8 May 2024, I granted an Order in the following terms:
“ 1. The Applicant is recognised as the bankruptcy trustee of the assets of the Bankrupt in the Cayman Islands.
2. The Applicant, as the bankruptcy trustee of the assets of the Bankrupt, has the power and authority to act for and on behalf of the Bankrupt – and in the Applicant's own name – in relation to assets, claims and liabilities of the Bankrupt in the Cayman Islands.
3. Paragraph 2 above shall include, without limitation, and without obtaining any further order of the Court:
3.1 The right to participate in any and all proceedings in which the Bankrupt is named as a party, including but not limited to accessing the Court file in case number FSD107 of 2012 (AJEF), and to obtain copies of all documents (including evidence, exhibits, skeleton arguments, orders and judgments) relied upon in such proceedings;
3.2 The right to request and receive and gather in copies of any material or information held by any former service provider to the Bankrupt located within the Cayman Islands; and
3.3 The right to submit claims within any insolvency process within the Cayman Islands or commence proceedings within the Cayman Islands, in each case as if the Applicant himself is acting in the name of and for the Bankrupt.”
As it appears that foreign personal bankruptcy recognition applications are uncommon in the Cayman Islands, I now give reasons for that decision.
On 30 March 2023, the Bankrupt was found guilty on various criminal charges and sentenced to serve 9 years in prison. He was a prominent businessman believed to be of Kuwait origin who has been a national of the Kingdom of Saudi Arabia (“KSA”) for many years. However troubled his business fortunes may have been in recent years, the trials and tribulations faced by his Caymanian companies such as Singularis Holdings Limited (“Singularis”) and Saad Investment Company Ltd (“SICL”) have contributed greatly to the development of cross-border insolvency law both here and elsewhere in the common law world. Singularis and SICL have been in liquidation in the Cayman Islands for more than 10 years.
In 2019, KSA implemented a new Bankruptcy Law and at the Bankrupt's request, the First Chamber of the Dammam Commercial Court on 18 February 2019 appointed one Mr Al-Naeim as trustee of the Financial Restructuring Procedure. The Applicant was appointed in his place on 22 July 2020 upon the death of the incumbent trustee. On 2 March 2022, the KSA Appeal Court rejected the restructuring plan, and appointed the Applicant as bankruptcy trustee responsible liquidating the bankrupt's estate (“Foreign Bankruptcy Order”). A certified translation of a certified copy of the Foreign Appointment Order was exhibited to the Applicant's First Affidavit.
The Judgment pursuant to which the Foreign Bankruptcy Order was made explained the Applicant's functions and powers, according to paragraph 21 of his First Affidavit, as follows:
“ The Circuit deems it fit to appoint the officeholder, Aiman Meqham Almeqham, as the officeholder for the liquidation procedure, as he was the officeholder for the financial restructuring procedure. Accordingly, the Circuit rules with appointing him as the officeholder for the procedure. Based on Article 100 of the Law, as a result of the appointment of the officeholder in the liquidation procedure, the debtor shall cease to manage its activities. The officeholder shall replace the debtor in the management of its activities and in the fulfilment of the debtor's regulatory duties during the procedure. Additionally, based on his appointment .the officeholder becomes the representative of the debtors before all judicial, government authorities, including the executive authorities, in the matters required by the officeholder's work. The officeholder shall also be entitled to file cases on the debtors' behalf, as well as plead and defend in any case to which the debtors are parties, and claim the debtors' rights from third parties. He shall further be entitled to grant third parties power of attorney to act on his behalf in relation to cases and to refer to government and private entities. … In addition to the foregoing, the officeholder shall be entitled to obtain any information or document related to the debtor's real estate assets or investment portfolios, or any information or document from any entity whatsoever. All entities shall provide the officeholder with any information or document without requiring a letter from the court, whenever such information or document is required by the officeholder's work. This in accordance with the Bankruptcy Law's aim to complete the liquidation procedures promptly maximize the bankruptcy assets and protect the rights of the creditors. (emphasis added)”
The KSA not only has a different legal system and language, but also operates under an entirely different calendar. However, it was clear that the Applicant's role as the Bankrupt's Trustee is broadly similar to the role of bankruptcy trustee under Cayman Islands law: (a) assessing claims, (b) gathering in assets, and (c) making distributions to creditors, if possible. Under KSA Bankruptcy Law, the Applicant deposes, foreign and local creditors have equal standing right (i.e. the ranking of debts is not based on the creditor's place of origin). The Applicant had recently turned his attention to substantial loans made by the Bankrupt to SICL and Singularis. This occurred in the context of his being required by the KSA Court to evaluate claims made by the Liquidators of SICL against the Bankrupt's estate. The need for recognition of the Recognition Order flowed from the Applicant's need for proper legal authority to take primarily information gathering steps within the Cayman Islands on behalf of the Bankrupt's estate. The Applicant deposed:
“ 46. As to the question of reciprocal recognition between our two nations, I note that the SICL Liquidators have been permitted to act on behalf of the estate before the KSA Courts and judgments of the KSA Courts are enforceable in in the Cayman Islands. At pages 143 to 145 is a certified copy of a letter dated 4 October 2018 from the then Chief Justice of the Cayman Islands confirming the ability to get reciprocal relief from the Grand Court of the Cayman Islands.”
That letter by the then Chief Justice was seemingly written in response to steps taken by the...
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