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England and Wales High Court (Commercial Court) Decisions
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Cite as:  EWHC 520 (Comm)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| PLANTATION HOLDINGS (FZ) LLC
|- and -
|DUBAI ISLAMIC BANK PJSC
Robert Anderson QC and William Edwards (instructed by Baker & McKenzie LLP) for the Defendant
Hearing dates: 24, 25, 26, 27, 28 and 31 October 2016, 1, 2, 3, 8, 9, 10, 11, 14, 15, 16, 17, 18, 21, 22, 23, 24, 28, 29 and 30 November 2016, and 1, 2, 5, 6, 7, 12, 13 and 14 December 2016
Judgment supplied in draft to the parties: 15 March 2017
Crown Copyright ©
THE HON. MR. JUSTICE PICKEN:
The factual witnesses
" the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth."
In the present case, these observations generally hold good. However, as will appear when I come on to address Mr Bacon's evidence concerning a meeting which according to him took place in Hertfordshire in June 2008, there is at least one instance in this case where the issue is not merely an issue of recollection but is an issue of whether the witness is telling the truth. In short, either Mr Bacon did travel from Dubai to London and onwards to Hertfordshire to the meeting which he says was arranged for June 2008, or he did not: if he did not, the explanation for the evidence which he gave cannot simply be misrecollection.
"I'm strangely, and probably bizarrely, of the opinion that the problems that happened in Dubai had absolutely no reason to happen. Had the authorities not been arresting guys like me, and other guys like me and causing the investing public to worry about the deals they had made, there wouldn't have been a drying up of the liquidity. So there was absolutely no reason for Dubai to have the property crash that it did, if they had left us all alone."
Mr Anderson QC suggested that this is a viewpoint which no rational person could hold. Even if that is right, however, it does not follow that Mr Fitzwilliam should be dismissed as a conspiracy theorist whose evidence should be discounted. Mr Fitzwilliam himself acknowledged, in giving the evidence which he did, that others might regard his view as strange or bizarre. The fact that he did so rather detracts from the submission that he lacks rationality. I repeat that Mr Fitzwilliam is entitled to his opinion. The more so, given what he went through after his arrest. Mr Fitzwilliam is a self-confident man. He is also an optimist. In the circumstances, I am in little doubt that he does indeed believe that, but for his incarceration, he could have made the Project a success notwithstanding the economic downturn. Although, therefore, I reject the suggestion that Mr Fitzwilliam's evidence should be treated as evidence which is given by somebody with a grudge who lacks rationality, I do nonetheless recognise that Mr Fitzwilliam's self-confidence and optimism do need to be borne in mind when considering Mr Fitzwilliam's evidence in relation to the financial viability of the Project at any particular juncture and, in particular, the ability of Plantation to secure the monies required to make the Project a success. These characteristics, combined with Mr Fitzwilliam's lack of experience in a development on the scale of the Plantation Project (still less in Dubai as opposed to his redevelopment of apartment blocks in London), are matters which mean that it would be unwise to accept at face value everything which Mr Fitzwilliam had to say on the progress of the Project and its ability to be a success.
"When I moved to Novati, I took the Plantation project with me. My personal consultancy agreement with Arthur was terminated, and the Plantation project became one of the projects on Novati's 'Deal Flow Report'. Novati would have had a success fee agreement with Plantation, although I cannot now remember the exact terms."
This is clear evidence expressed in unqualified terms, save perhaps for the "would have had" wording of the last sentence. The truth, however, is that no 'success fee agreement' between Plantation and Novati has been unearthed. Moreover, contrary to what Mr Bacon stated in his witness statement, it is quite apparent that, even after he maintained that he had moved to Novati, Mr Bacon was treating the Plantation Project as being a private (and so non-Novati) matter. This is demonstrated by the fact that the consultancy agreement to which Mr Bacon himself referred in his witness statement, which he explained contained terms which "would have been similar" to those which appeared in the consultancy agreement which he stated he entered into when first working on the Project (in late 2007), is an agreement dated 27 September 2008 between, importantly, Mr Fitzwilliam and Plantation, described together as the "Client", and Mr Bacon (described as the "Consultant") in his personal capacity. Indeed, tellingly, after Mr Bacon is identified in this way, the agreement then explicitly states:
"It is noted that Mr Bacon is a Managing Director of Novati Mid-East, SA of Emirates Towers, Sheikh Zayed Road, PO Box 31303, Dubai UAE and a Director of Gryphon Investment Bank of 52 Brook Street, London W1K 5DS, United Kingdom. One or both of these institutions may be involved with transactions with Mr Arthur Fitzwilliam and or Plantation Holdings, but they are not party to this agreement, and any fees due to those or any other entity connected to this transaction are wholly separate to this agreement."
In the circumstances, it is quite impossible to see how Mr Bacon could be right to state in his witness statement that the consultancy agreement which operated after his move to Novati was between Novati and Plantation rather than as between Plantation and Mr Bacon. This agreement is sufficient by itself to make good the point that Mr Bacon cannot have been right in his witness statement to maintain that after his move to Novati, whenever this took place, the Plantation Project was no longer his personal business but became Novati's business. However, there is other documentation which reinforces the conclusion that Mr Bacon was simply not right to state what he did in his witness statement. I have in mind in this respect the fact that on 18 May 2008, and so at a time when he claims to have moved to Novati, Mr Bacon sent Ms Sutherland an email enclosing a draft agreement in respect of something described in the covering email as the "WhiteWater" project. That draft agreement contained marked-up changes to a version which was apparently executed a month earlier on 13 April 2008. Importantly, it was an agreement between Plantation (not apparently Mr Fitzwilliam also) and Mr Bacon (with no mention of Novati). At the same time, Mr Bacon additionally enclosed an invoice on his own personal letterhead (and so again with no mention of Novati) dated 13 May 2008 and addressed to Mr Fitzwilliam at Plantation in respect of "1 Months [sic] advisory fees in advance" with payment details naming Mr Bacon (and not Novati) as the billing party. In addition, the same email also sent a draft agreement, again between Mr Bacon (with no mention of Novati) and Plantation, in respect of something known as the "Holly Bolly Project". That Mr Bacon was operating on his own account in relation to these other projects and the Plantation Project is, in the circumstances, perfectly clear. I reject the suggestion that Novati was involved in any way. This applies whenever Mr Bacon joined Novati, whether in April 2008 or thereabouts, or later on in that year. I incline to the view that it was the latter rather than the former, hence the express reference to Novati in the 27 September 2008 consultancy agreement which does not appear in the earlier draft agreements. It seems to me also that this view is supported by the fact that on 25 May 2008 Mr Bacon sent Ms Sutherland an email entitled "Invoice" in which he stated that he "would appreciate if my May 13th invoice could be settled before the end of the month (May)" and continued:
"Advisory fees are due in advance, my fault entirely as I should have passed you the invoice on the 13th, however now that we are now running WW and Holly Bolly at the same time I am using a significant amount of resource from my office and need to keep the good will of my Partner".
It was in the context of this email that I asked Mr Bacon who his "Partner" was and was told that it was Mr Mallet. This answer makes it all the more unlikely that Mr Bacon had by late May 2008 joined Novati.
Mohamed Al Sharif
The Plantation Project
"The Landlord shall be responsible for the construction of the infrastructure to enable the supply of any service to the boundary of the premises, along with the maintenance and repair of said infrastructure, to a standard commensurate to the reasonable needs and requirements of an up-market development. ".
Clause 4.1.3 goes on to state as follows:
"Should the Tenant assign its obligations under this Clause 4.1.3 to any third party, the Tenant shall remain jointly and severally liable, along with the said third party, to make payments under this Clause 4.1.3."
"The Landlord hereby grants to the Tenant the free right to build on the Premises in furtherance of the Project in accordance with the Plans and Specifications attached hereto as the Second Schedule and the Tenant shall be entitled to exercise any and all ownership rights to and for the buildings that it constructs and may deal with the buildings in accordance with, and subject to, the Parties' respective rights and obligations pursuant to this Lease".
"Subject only to the terms and conditions of this Lease, the Tenant may assign, sublease, rent out, encumbered, pledge, hypothecated or allow the creation of a Leasehold Security Interest over this Lease or the whole or any part of the Premises or the Project or permit the Premises or the Project to be occupied by third parties (collectively, 'Assign') as follows:
a. In respect of any assignment of the whole of this Lease, or of the whole of the Premises or Project (otherwise than by way of a Leasehold Security Instrument), to such third parties as the Landlord shall first approve in writing (such approval not be unreasonably withheld or delayed if, in the Landlord's sole discretion, the proposed third parties acceptable financial status); orb. In respect of any assignment of part of this Lease, or of a part of the Premises or Project, or any assignment by way of Leasehold Security Interest, to such third parties as the Tenant shall in its discretion deem fit,
subject that in each instance (other than the creating of a Leasehold Security Instrument), the party taking the benefit of the assignment has a valid trade licence given the Permitted Use of the Premises or is a resident of the UAE if he is an individual. This last restriction shall not apply in case of either a company or individual leasing one of the residences or residential plots."
Clause 4.10.1(a) is the provision which enabled Mr Fitzwilliam to enter into the Assignment and Assumption Agreement dated 15 December 2004 under which he assigned his interest in the Lease to Plantation. Clause 4.10.1(b) permitted Mr Fitzwilliam or, in the event, Plantation to enter into contracts with purchasers of the villa plots the sales of which were intended to provide funding for the development of the Project.
"In the event that the applicable laws shall at any time in the future allow for the Premises to be owned and full legal title to transfer to foreign natural person or a foreign legal entity then the Landlord shall execute with the Tenant a sale agreement upon mutually agreed terms for the sale of all or part of the Premises."
In due course, by a letter dated 30 July 2007 sent to Plantation, since in the meantime Mr Fitzwilliam had assigned his interest in the lease to Plantation, Dubailand (by then the successor as the Landlord to the DDIA under the Lease) agreed to transfer freehold title, stating as follows:
"We confirm that in accordance with the principle contained in Clause 5.4 of the Agreement, Dubailand LLC will transfer freehold title to the land referred to in the Agreement.
Dubailand LLC will not charge you for the transfer, but is only prepared to do so once construction is complete. You will be required to pay any statutory charges and government fees (including those charged by the Land Department of the Government of Dubai) associated with such a transfer, and comply with any other requirements imposed by any governmental authority."
This was, as Mr Fitzwilliam frankly acknowledged before me, a very attractive deal for him and by extension, for his company, Plantation after the assignment of the Lease to Plantation.
"5.1 The Developer shall pay the Authority ten percent (10%) of the annual sales revenue generated by the component of the Project (as described in the Second Schedule of the Lease) being the hotel.
5.2 The Developer shall pay the authority fifteen percent (15%) of any annual lease generated by the component of the Project (as described in the Second Schedule of the Lease) being the residences and residential plots (assigned in accordance with Clause 4.10 of the Lease).
5.3 The Authority shall sell and transfer the title of any residential plot upon instructions from the Developer, subject to the Authority's approval of the sale agreement. The Developer shall pay the Authority fifty percent (50%) of the selling price of the residence (less the construction value of the residence and any reasonable cost incurred by the Developer in relation to such sale) and fifteen percent (15%) of the selling price of the residential plot as set out in the sale agreement.
5.5 The payments above shall be effected when the components of the Project described above or parts thereof become operational."
"6.1 The Developer shall appoint independent auditors of an international firm approved by the Authority to audit the accounts of the project (the 'Auditors'). The audited accounts shall be prepared no later than one hundred and twenty (120) days from the financial year end.
6.2 The Authority shall have access to the accounts of the project on demand basis only for the purpose of verifying the payments due in accordance with Clause 5."
"The Parties wish to organise under the laws of the United Arab Emirates a one hundred percent foreign owned limited liability company which shall be named Plantation Development Holdings LLC (the 'Company') for the purpose of developing, operating, marketing and selling a mixed use equestrian theme park development on the Property which is more particularly described in Schedule 1 Part 2 (the 'Business'), and each of the Parties will, directly or indirectly, be the initial contributors to the Company".
Clause 2.5 set out details of the agreed share ownership: Mr Fitzwilliam was to hold 70% of the shares in Plantation, whilst Mr Cornelius and Mr Ridley would each hold 15%.
The RSA and the Conditional Assignment entered into in August 2007 on discovery of the fraud committed by Ryan Cornelius and Charles Ridley
"negotiations took place with the defendants and Mr Fitzwilliam with a view to a global settlement under which terms would be agreed for the repayment of the US$501 million outstanding and owing to the Bank ('the Rescheduling Amount'). All parties were represented by English solicitors in those negotiations, Hogan Lovells (Mr Lyons) for the Bank, SJ Berwin (Mr Tim Taylor now QC who also gave evidence at the trial) for the second and third defendants, Clifford Chance (Mr Paul Davies) for Mr Fitzwilliam and Plantation Howes Percival for the fourth defendant and Field Fisher Waterhouse for CCH plc. The negotiations, which entailed detailed discussions in the week of 13 August 2007 between the solicitors as to the drafting of the RSA, culminated in its signature on 19 August 2007. The parties to the RSA were the Bank, CCH Europe ('the Company'), CCH International Plc ('the Parent', the two CCH companies together being referred to as 'the Corporate Guarantors'), the second, third and fourth defendants ('the CCH Individual Guarantors'), Plantation and Mr Fitzwilliam. The RSA was signed on behalf of the Bank by Mr Omair Mooraj."
"During the course of the last 48 hours it has become clear to Mr Fitzwilliam that an allegation of fraud and/or conspiracy may well be brought against him by the Bank.
Mr Fitzwilliam is appalled by the recent disclosure that his company may have received funds intended by the Bank to be applied for another purpose, and is currently considering all legal options against Messrs Ridley and Cornelius, by whom he feels badly let down.
Mr Fitzwilliam is equally appalled by the thought of fraud proceedings being brought against him, but is absolutely confident that he and the Company [Plantation] will be completely exonerated of any wrongdoing. He is quite prepared to defend any such proceedings in any jurisdiction in which they may be brought.
It was in the spirit of openness and cooperation that Mr Fitzwilliam has made an open offer to the Bank to repay any monies that the Company [Plantation] might have received in breach of any agreement made by the Bank with third parties (on the basis that he accepts no legal liability to do so)."
"In settlement of any potential claims against them in respect of the application of the Advances, the CCH Individual Guarantors have agreed to each provide a guarantee and indemnity to the Bank ('the CCH Individual Guarantees') in respect of the Company and the Parent's obligations under the Agency Agreements and this Restructuring Agreement and on the terms described herein."
"In settlement of any potential claims against it (or its directors and officers) in respect of the application of the Advances, Plantation has agreed to provide a guarantee and indemnity to the Bank ('the Third Party Guarantee') in respect of the Company and the Parent's obligations under the Agency Agreements and this Restructuring Agreement and on the terms described herein."
"Earmarked Plantation Proceeds those amounts of Plantation Villa Proceeds that are: (a) Escrow Proceeds; or (b) required by law to be applied for building or other specified purposes
Escrow Proceeds those amounts of Plantation Villa Proceeds required by Law to be retained on escrow, but only for so long as they must remain in escrow or approved in accordance with Law
Event of Default any one of the events mentioned in clause 18.1 (Events)
Guarantors the CCH Corporate Guarantors, the CCH Individual Guarantors and Plantation
Law any federal, state, local or foreign law (including common law and equity), statute, code, ordinance, rule or regulation
Lease the lease agreement in respect of land at Dubailand in the United Arab Emirates dated 25 January 2004 between Arthur Fitzwilliam and Dubai Development and Investment Authority (or as subsequently amended or assigned)
Plantation Enforcement Event breach of the provisions of the following sub-paragraphs of clause 18.1(Events): sub-paragraph (a) and, where such breach is caused by the default of Plantation, sub-paragraphs (c) - (k), in the case of sub-paragraphs (a), (c) - (e) or (h) - (k) subject to the provisos at clause 18.1(a) (Events)
Plantation Project all that project for the development and sale of land at Dubailand in the United Arab Emirates as set out further in the Lease
Plantation Security that security granted by the Bank by Plantation pursuant to clause 8.2 (Security)
Plantation Villa Proceeds the proceeds, when collected, of sale of plots in the residential villa element of the Plantation but excluding: (a) Earmarked Plantation Proceeds and (b) those Plantation Villa Proceeds received in respect of sales of plots made prior to the Effective Date.
Plantation Villa Receivables the instalments due from contracted purchasers of residential villa elements of the Plantation in respect of sales of plots which are entered into after the Effective Date
Repayment Date the last Business Day of each of the periods set out in Schedule 2 (Repayment Schedule)
Rescheduling Amount the aggregate amount from time to time outstanding under this Restructuring Agreement excluding the Profit, and at the date of this Restructuring Agreement being the amount set out in clause 4.1
Standby Loan Facility a standby loan facility of up to US$50 million at any time to be used principally for the building of infrastructure for the Plantation Project in accordance with the master development plan in place for the Plantation Project as at the Effective Date."
4.1 The Rescheduling Amount as at the date of this Restructuring Agreement is US$501,284,616.56 representing all the Advances made by the Bank under the Agency Agreements and profit thereon and whether or not such Advances were applied in accordance with the terms of the Agency Agreements. Additionally, the Bank's costs (recoverable under clause 22.1 from parties other than the Parent) shall form part of the Rescheduling Amount.
Advances due and payable
4.4 All of the Advances shall, notwithstanding any provision of the Agency Agreements but subject to clause 3 (Standstill) be immediately due and payable and, to the extent necessary, the Agency Agreements shall be deemed to have been so varied."
"The Guarantors acknowledge the Rescheduling Amount as being due and payable to the Bank by the Company and the Parent as follows:
(a) the Company in full, including for the avoidance of doubt both the Company Advances and the Parent Advances; and
(b) the Parent, as to an amount of US$50m in respect of Parent Advances only,
and in each case without set-off or deduction in any regard and in accordance with the terms of this Restructuring Agreement."
"In consideration of the various releases set out in clause 12 (Release from liability) the Guarantors:
(a) jointly and severally and as continuing security guarantee the repayment of the Rescheduling Amount on the terms set out herein; and, as an additional and independent obligation; and
(b) jointly and severally indemnify the Bank as principal debtors in respect of any failure or inability to recover the Rescheduling Amount as provided for herein,
provided that the liability of the Parent under this clause 6.1 shall not exceed US$100m and shall reduce by the amount paid by the Parent and/or the Company from proceeds of the CCH Agency Receivables or, in the case of sums paid by the Parent only, from any other source available to the Parent."
Accordingly, Plantation had two obligations: "jointly and severally" with other parties to "guarantee the repayment of the Rescheduling Amount", and "jointly and severally" with other parties to "indemnify the Bank as principal debtors in respect of any failure or inability to recover the Rescheduling Amount as provided for herein".
"7.1 Subject to the provisions of clauses 7.2 and 7.3 the Company and the Parent will repay the Rescheduling Amount to the Bank in instalments on each Repayment Date. The amount that shall be repaid to the Bank on or before each Repayment Date is the amount set out in Schedule 2 (Repayment Schedule) corresponding to such Repayment Date and in the case of the Parent limited to the Parent Advances."
The schedule to which reference is here made, Schedule 2 ("Repayment Schedule"), provides:
|Period (from Effective Date)||Amount||Cumulative Amount|
|Within 120 days||$25 million||$25 million|
|Within 240 days||$25 million||$50 million|
|Within 365 days||$70 million||$120 million|
|Within 2 years||$110 million||$230 million|
|Within 3 years||$270 million||$500 million|
"The Guarantors shall take reasonable steps to procure that all of the following proceeds and any proceeds derived from the following sources (in each case net of any associated transaction costs including without limitation necessary and incidental amounts to third parties) shall be applied forthwith upon receipt and in mandatory prepayment of the Rescheduling Amount:
(d) the Plantation Villa Proceeds so far as they exceed US$150,000 per month provided that such sum has been disbursed or committed to the purposes of the development of Plantation Project; ".
"With the exception of:
(a) amounts retained for the reasonable working capital requirements of the respective projects; and
(b) Earmarked Plantation Proceeds,
on the last Business Day of each calendar month:
(c) Plantation and Arthur Fitzwilliam undertake that all cash received by Plantation in respect of the Plantation Project (save for any cash received in relation to sales made before the date of this Restructuring Agreement);
shall be paid to the Bank to be applied towards the Rescheduling Amount."
"8.1 As security for their respective obligations under this Restructuring Agreement, the Guarantors shall grant security as set out below.
8.2 Plantation shall (and Arthur Fitzwilliam shall procure that Plantation shall) grant to the Bank:
(a) a first ranking charge, by way of conditional assignment, of the Lease. For the avoidance of doubt such security shall not encompass assets of Plantation not forming part of the development contemplated in the Lease; and
(b) a first ranking charge by way of assignment of the benefit of:
(i) the Plantation Villa Receivables;
(ii) the Plantation Villa Proceeds; and
(iii) the Earmarked Plantation Receivables,
(iv) prior to the enforcement of the charge:
(A) Plantation Villa Receivables may be collected in by Plantation in the ordinary course and dealt with in accordance with the terms of this Restructuring Agreement; and
(B) the Earmarked Plantation Proceeds shall be available to be applied for those Earmarked Plantation Proceeds purposes; and
(v) the charge shall not be enforceable against Escrow Proceeds for so long as they are held by Plantation in escrow."
It was pursuant to clause 8 that Plantation entered into the Conditional Assignment to which I refer later.
"11.1 Subject to such consideration, based on due diligence in respect of the Plantation Project, as a commercially reasonable lender would be expected to have (acting consistently with Sharia law), the Bank agrees to make available to Plantation the Standby Loan Facility.
11.2 Any such Standby Loan Facility shall be on commercially reasonable terms (having regard to the requirement that any terms are consistent with Sharia law) to be agreed between the Bank and Plantation and shall include a drawdown ratio such that:
(a) in the first 120 days and up to a maximum of US$l5million after the facility is made available US$1 shall be available for drawdown against each US$1 actually repaid against the Rescheduling Amount; and
(b) thereafter US$1 shall be so available for each US$3 so repaid subject to air overall maximum facility limit of US$50 million.
11.3 The purpose of any such Standby Loan Facility shall be principally to finance the building of infrastructure for the Plantation Project so as to facilitate timely and full repayment of the Rescheduling Amount, and accordingly it shall be an event of default under the Standby Loan Facility (requiring immediate repayment of the Standby Loan Facility) if a Plantation Enforcement Event occurs."
"9.1 In the event that further third party funding becomes available in respect of the Plantation Project (and Plantation shall act as would a commercially reasonable developer in seeking and negotiating any such funding) the Bank shall act as would a commercially reasonable financier (having regard to the requirement that any action is consistent with Sharia law) in such circumstances in deciding whether to allow any security required by such third party to rank ahead in priority of the Bank's security, including giving its cooperation to actions taken pursuant to clause 10 (Further Assurances) in creating sub-leases of the land comprising the Plantation Project.
9.2 In determining the reasonableness of the Bank's response to proposals for refinancing of the Plantation Project, regard shall be had to the following factors:
(a) the amount, terms and purpose of the proposed new funding;
(b) the realisable value of the collateral remaining available to the Bank of satisfaction of any prior secured creditor claims against the Plantation Project shall both before and after any proposed refinancing be not less than the aggregate of $260 million (or the balance outstanding on the Rescheduling Amount if lower) plus the outstanding balance, if any, on the Standby Loan Facility;
(c) the working capital requirements of the Plantation Project and, in particular but not limited to, the amount and timing of any drawdowns on the Standby Loan Facility shall not be materially adversely affected by the proposed refinancing; and
(d) that the purpose of the Standby Loan Facility shall remain achievable in the reasonable opinion of the Bank.
9.3 In responding to any proposed funding and security under clause 9.1 the Bank shall give a written account of its reasons by reference to the factors described in clause 9.2 together with any other factors material in the Bank's decision.
9.4 Any dispute as to whether the actions of the Bank under this clause 9 with those of a commercially reasonable financier should be determined by an independent expert appointed by the president for the time being of the Chartered Institute of bankers ".
"12.1 In consideration of the Third Party Guarantee and the Plantation Security each of the Bank, the Company, the CCH Individual Guarantors and the Parent hereby irrevocably waives and compromises any and all claims, whether existing or future, known or unknown, it has or may have against each of Plantation and Arthur Fitzwilliam arising from or in connection with the Agency Agreements and the transactions contemplated by the Agency Agreements, provided that any claims in respect of Proceeds Assets shall not be waived or compromised unless expressly done so in writing by the Bank.
12.2 Each of the Bank, the Company, the CCH Individual Guarantors and the Parent acknowledges that each of Plantation and Arthur Fitzwilliam have entered into this Restructuring Agreement without any admission of liability with respect to any allegations that monies received by them have been misappropriated from the Bank with their knowledge or complicity."
On the Effective Date each of the Company, the Parent and Plantation covenants on its own behalf that it will:
(a) promptly give notice to the Bank of the occurrence of any Event of Default or any other event which, with the giving of notice or lapse of time or both or the satisfying of other conditions would constitute an Event of Default;
(d) provide the Bank within 180 days after the end of each of its financial years with copies of its annual profit and loss accounts, balance sheet, cash flow statements and annual report, to be audited by auditors acceptable to the Bank and to be certified by an officer of the Company, Parent or Plantation is giving a true and fair view of its financial condition as at the end of the period to which such statements relate;
(e) provide the Bank with such other financial or other information as the Bank may reasonably require from time to time;
(f) obtain, observe and renew all such authorisations consents and licenses which are required in relation to its business; ."
18.1 Each of the following will be an Event of Default:
(a) If any amount payable in respect of a Repayment Date is not paid in the manner and at the time provided in this Restructuring Agreement save that:
(i) there shall not be an Event of Default under this clause 18.1(a) if the amount paid to the Bank in respect of a Repayment Date represents 90% or more of the amount due on such Repayment Date and any such shortfall is paid to the Bank within 3 months after the Repayment Date to which it relates; and
(ii) no Plantation Enforcement Event shall arise consequent upon an Event of Default under this clause 18.1(a) if, during the 240 day period immediately following the Effective Date the amount paid to the Bank in respect of a Repayment Date falling within that period represents 50% or more of the amount due on such Repayment Date and any such shortfall is paid to the Bank within 3 months of the Repayment Date to which it relates;
(d) If any Guarantor fails to perform any of its obligations other than those described in paragraph (c) under this Restructuring Agreement or any of its Security Documents or any other Security Provider fails to perform any of its obligations under any of its Security Documents and, in either case such failure (if capable of remedy in the opinion of the Bank) remains unremedied to the satisfaction of the Bank for 15 Business Days after notice requiring its remedy has been given by the Bank to the relevant Guarantor or the relevant Security Provider;
(e) If any indebtedness of a Guarantor or any other Security Provider becomes due and payable or capable of being declared due and payable prior to its due date or any indebtedness of a Guarantor or any other Security Provider is not paid on its due date;
(f) If a Guarantor or any other Security Provider (without the prior written consent of the Bank) stops payment of its debts or ceases or threatens to cease to carry on its business or is unable to pay its debts as they fall due or is deemed unable to pay its debts or enters into any arrangements with its creditors generally;
(g) If a Guarantor or any other Security Provider becomes insolvent or is in liquidation or administration or subject to any other insolvency procedure in any jurisdiction or a receiver, manager, trustee, custodian or analogous officer is appointed in respect of all or any part of its property, undertaking or asset;
"Without prejudice to any other remedy of the Bank, the Bank may not exercise its rights under the Plantation Security until the occurrence of a Plantation Enforcement Event."
Clause 18.3 states:
"In the event that the Bank, having enforced the Plantation Security, seeks to sell the Lease, the Bank agrees that:
(a) prior to commencing the sales process it will commission a valuation by an independent real estate valuer (the 'Valuer') of international reputation and standards to determine the target market price;
(b) it will provide a copy of its written instructions to the Valuer to Arthur Fitzwilliam within 7 days of the dispatch of those instructions;
(c) Arthur Fitzwilliam may make such reasonable written representations as he deems appropriate to the Valuer;
(d) it will market the Lease for a reasonable period (taking into account such advice as tendered by the Valuer) prior to entering into any sale agreement in respect of the Lease;
(e) it will seek to achieve best value for the sale of the Lease and shall consider all offers received by it (including any offers received from Arthur Fitzwilliam, his affiliate or from affiliates of the Bank);
(f) it will honour all contracts for the sale of villa plots entered into by Plantation and such other material contracts of any nature whatsoever entered into by Plantation prior to the Effective Date of disclosed in schedule seven and, in respect of such contracts entered into after the Effective Date, of which has been notified and agreed to in writing; and
(g) any surplus remaining from the sale proceeds after the Rescheduling Amount has been repaid will be returned to Plantation.
"(a) If an Event of Default occurs pursuant to a breach of clause 18.1(a) or (h)-(k) for any reason or pursuant to a breach of clause 18.1(b)-(g) in relation to a failure by Plantation to perform its obligations the Bank may:
(i) by notice to all or any of the Guarantors ('Notified Guarantors"), demand and declare the Rescheduling Amount and all other sums owed by the Notified Guarantors under this Restructuring Agreement to be immediately due and payable by the Notified Guarantors, and the same will become so immediately due and payable by the Notified Guarantors; and/or
(ii) subject to clause 18.2 (Plantation Enforcement Events) take steps to enforce all or any of the Security Documents to which Notified Guarantors are party (without prejudice to such rights as it may already have had to take such steps prior to the occurrence of an Event of Default). ".
"The Restructuring Agreement is subject to the following conditions subsequent that, within 30 days of the date of this Restructuring Agreement:
19.2 The landlord in relation to the Plantation Project consenting to the conditional assignment of the Lease and confirming in writing to the Bank that at the date of giving such consent, there has been no material breach of the Lease by Plantation;
19.5 If any of the Conditions Subsequent are not satisfied within 30 days of the date of the Restructuring Agreement then, notwithstanding any other clause of the Restructuring Agreement, and without prejudice to clause 19.4, the Restructuring Agreement shall be of no force and effect."
"21.1 Unless otherwise required by Law, this Restructuring Agreement shall terminate only upon the occurrence of the later of:
(a) the repayment in full to the Bank of the Rescheduling Amount;
(b) payment to the Bank of the Profit.
21.2 Upon termination pursuant to clause 21.1 the Bank shall be required to surrender and or return guarantees, indemnities, options, property or security granted to it, pursuant to this Restructuring Agreement, by any of the parties or any third party prior to the date of termination.
21.3 Upon the termination of the entire Restructuring Agreement, otherwise than by clause 21.1, (including any termination of the Restructuring Agreement being required by operation of Law, notwithstanding clause 25.2 (Severability), due to invalidity, illegality or unenforceability) the parties shall cease to have any further obligations to each other hereunder, provided always that:
(a) the provisions of the following clauses shall remain in full force and effect: 1 (Definitions), 2 (Interpretation), 4 (Rescheduling Amount), 5 (Acknowledgement of Debt), 6 (Guarantee and Indemnity), 8 (Security), 13 (Proceeds Assets), 22 (Costs), 23 (Payments), 25.1 (Delays), 25.2 (Severability), 25.3 (Confidentiality), 25.4 (Reservation of Rights), 25.5 (Specific Performance), 27 (Governing Law, Jurisdiction and Arbitration);
(b) the Bank shall not be required to surrender, refund or return any:
(i) payments made to it; or
(ii) guarantees, indemnities, options, property or security granted to it,
pursuant to this Restructuring Agreement or otherwise, by any of the parties or any third party prior to the date of termination; and
(c) such termination will be without prejudice to any accrued rights of any party against any other party arising under or reserved notwithstanding this Restructuring Agreement."
(1) The RSA contains an "Entire Agreement" provision, clause 25.6, as follows:
"This Restructuring Agreement (including the schedules and appendices hereto), the Fitzwilliam Cornelius Agreement and the Rescheduling Documents whether in existence at the execution hereof or executed subsequently represents the entire understanding and agreement between the parties with respect to the subject matter hereof and, except as otherwise expressly provided in this Restructuring Agreement, can be amended, supplemented or changed and any provision hereof can be waived only by written instrument making specific reference to this Restructuring Agreement and signed by each party."
(2) Clause 27 provides for the application of English law "save in so far as inconsistent with the principles of Sharia Law" and for the "exclusive jurisdiction of the English Courts with respect to all disputes arising out of or in connection with the terms of this Restructuring Agreement".
The Conditional Assignment
"1.1 Pursuant to a land lease agreement dated 25 January 2004 made between Dubai Development and Investment Authority ('DDIA') and Arthur Panayotis Fitzwilliam ('Mr Fitzwilliam') certain land located at DubailandTM, Dubai, UAE (the 'Premises') has been released by the DDIA to Mr Fitzwilliam (the 'Lease') for the purposes of constructing a polo club and equestrian Centre, together with developing various plots into residential villas and certain other permitted structures (the 'Project').
1.2 Following the execution of the Lease, DDIA have assigned all its rights, title and interest in the lease to Dubai Tourism Development Company LLC by virtue of an assignment and assumption agreement dated 21 November 2004. Furthermore, Mr Fitzwilliam has subsequently assigned all its rights, title and interest in the lease to Plantation by virtue of an assignment and assumption agreement dated 15 December 2004. Dubai Tourism Development Company LLC (as landlord) and Plantation (as tenant) have now acquired their interest in the Lease by such assignment and assumption agreement aforementioned. Dubai Tourism Development Company LLC has since changed its name to Dubai Land LLC and continues to hold registered title to the land that is the subject of the Lease.
1.3 DIB and Plantation, together with other parties have on 19 August 2007 entered into an agreement whereby Plantation assumes certain obligations in respect of sums owing to DIB (the 'DIB Agreement').
1.4 Plantation has agreed to execute this Agreement with the assignment of its interest in the Lease in order to provide DIB with security in respect of its obligations under the DIB Agreement.
1.55 For the purposes of this Agreement, the expression Plantation Enforcement Event means an event of default pursuant to the DIB Agreement that would entitle DIB to exercise its rights to sell the Lease pursuant to, and on the terms set out in, Clause 18.3 of the DIB Agreement."
"In consideration of DIB entering into the DIB Agreement and subject to the terms and conditions of this Agreement and the effect of the provisions of clause 3 hereof, Plantation hereby irrevocably assigns its rights, interest and title under the Lease to DIB. For the avoidance of doubt, the assignment of the Lease shall occur, if, in the reasonable opinion of DIB, a Plantation Enforcement Event has occurred and a notice is served by DIB to DL [Dubailand] pursuant to Clause 2.3."
This is followed by clause 2.3 as follows:
"In consideration of the undertakings of Plantation and DIB to DL [Dubailand] hereunder, DL [Dubailand] hereby consents to and acknowledges the assignment of the lease upon DIB issuing a written notice to DL [Dubailand] certifying that in DIB's opinion a Plantation Enforcement Event has occurred under the DIB Agreement."
Clause 2.5 then states:
"For the avoidance of doubt, the Parties agree that the assignment of the Lease shall only occur upon the occurrence of the event stated in Clause 2.3. DL [Dubailand] and Plantation acknowledge and agree that they will not be entitled to raise any objection to an assignment of the Lease occurring pursuant to the provisions of Clause 2.3."
Post-RSA investigations by DIB and the FAD: October 2007 to April 2008
"the period commencing on the Effective Date and ending upon the later of notification of:
(a) a standstill termination event to the Company and the Parent; and
(b) in accordance with clause 3.5,
provided that the Standstill Period shall automatically end upon the occurrence of any of the events referred to in clauses 18.1(f), (g), (h) or (j) (Events) in respect of the Company or the Parent, regardless of whether any notification is given."
Clause 3 itself then is in the following terms:
"3.1 Subject to the terms of this Restructuring Agreement, the Bank agrees with the Company and the Parent that, during the Standstill Period, it will not:
(a) exercise as against the Company and the Parent any rights which it may have under the Agency Agreements as a consequence of or in relation to any Agency Defaults;
(b) petition for or initiate any insolvency or reorganisation procedure in relation to the Company or the Parent; or
(c) make any claim or demand on the Company or the Parent in an amount such that such claim or demand would cause the Company or the Parent become insolvent on a cash flow or balance sheet basis.
3.2 Upon the expiry of the Standstill Period the Bank will be entitled forthwith and without further notice to any party to this Restructuring Agreement to exercise any and all rights which it may have against the Company or the Parent, subject in either case to such releases arising under clause 12 as have at the time in question become unconditional."
Clause 3.4 then provides:
"During the Standstill Period, each of the Company and the Parent shall allow the Bank to assess the financial position of the CCH Corporate Guarantors who shall provide all assistance as may be reasonably required by the Bank to facilitate prompt and full collection of the CCH Agency Receivables, including but not limited to:
(a) allowing the Bank, its agents, advisers or delegates of access to its books and records upon reasonable terms and on reasonable notice;
(b) keeping the Bank regularly informed as to the progress made in collecting the CCH Agency Receivables;
(c) providing adequate information and written confirmation of authority and beneficial entitlement to enable the Bank to contact and negotiate directly with the party oblige yours in respect CCH Agency Receivables terms for their repayment. The Bank acknowledges that prior to making its first contact with any such third party obligors it will, where practicable, consult and coordinate with the Company and/or the Parent as applicable; and
(d) giving such directions as may be requested in writing by the Bank from time to time that such third party obligors make repayment direct to the Bank at its direction rather than to the Company or to the Parent."
"The Board has resolved as follows:
I. The Board approves in principle the agreement for settlement and restructuring of the financing portfolio with CCH-GMPH and others dated 19/8/2007 and to direct that executive management to submit its report in light of the following directions and instructions:
1. Follow-up and resolve the outstanding dispute between the Bank and Saudi Hollandi Bank and finalise the steps taken by the Bank immediately upon the signature of the settlement agreement, including procedures and meetings, in preparation for incorporating them into the agreement without prejudice to the Bank's rights and pursuant to the terms and conditions of the agency agreement concluded between the two parties.
2. Submit detailed information concerning the real estate projects presented as guarantees for the financing portfolio. An independent real estate valuation of the Pleantation [sic] project must be carried out.
3. Instruct the Auditing and Follow-up Committee of the Board of Directors to conduct an investigation, determine the responsibilities of departments and employees, take required measures, make necessary recommendations, and advise the Board of a summary of its actions.
4. Under the settlement agreement, the financing portfolio shall be subjected to an accounting re-classification with the aid of the Banks' [sic] external auditors, which requires the determination of its impacts on the balance sheet, especially with regards to reserves and disclosure requirements.
II. This Resolution shall be implemented as of today's date and all relevant parties are properly implemented as applicable."
This was what resulted in the setting up of committee which was initially, as Mr Kamal explained, described as the 'Project Stallion Task Force' but which in the middle of 2008 was reconstituted and renamed as simply the 'Task Force'.
"Mr Lyons discussed this with the Bank's then head of the legal department, Mr Al Shamsi, who said that whilst the FAD might be prepared to give assurances, it was highly unlikely they would be in writing. It was arranged for Mr Taylor to meet FAD on 8 February 2008. Prior to the meeting, the FAD made clear that they wanted access to the second and third defendants' documents immediately after the meeting. As Mr Taylor recorded in an email to Mr Lyons after the meeting and confirmed in his oral evidence, the FAD were suspicious of the RSA, which one of them described as a money laundering document. Mr Taylor could not get even a verbal assurance about immunity and there were unsubtle hints about dire consequences if his clients did not provide information to the FAD. He feared they were pursuing an ill-conceived witch hunt against the then chairman of the Bank, Mr Kharbash, who had had a close relationship with Mr Nil senior and about whom there were rumours in Dubai that he was about to be dismissed.
In the light of the fact that Mr Taylor did not receive any assurances from the FAD, [Mr Ridley] continued to refuse to provide any disclosure concerning bribes paid to the Bank's employees. However, as Mr Lyons explains in his witness statement, he and Mr Taylor were conscious that the demand for information by the FAD, if not met, could lead to the arrest of the second and third defendants. Accordingly, during the spring of 2008, there were discussions between them and Howes Percival about a basis upon which [Mr Nil] could provide the necessary disclosure, in return for the Bank releasing CCH International Plc from its guarantee under the RSA. This came to nothing, although I have no doubt [Mr Nil] was well aware that bribes had been paid and to whom, despite his unimpressive denial of this in his oral evidence."
"Whilst USD 60 million had been collected in the first few months after the RSA had been signed very little progress had been made since. Most concerningly, none of the Turkish receivables (totalling around USD 90 million) had been risk covered. It was from the Turkish assets, together with the sale of some of the Bahrain property (but not Marina West), that the first year's recoveries had been expected to come."
The Turkish receivables issue was, as Flaux J explained at , a reference to Mr Cornelius and Mr Nil having warranted in clause 15.12 of the RSA that to the best of their knowledge the value of the CCH Agency Receivables which could be recovered was US$150 million, yet none of the Turkish receivables representing about US$90 million of that figure had been recovered. Flaux J added by reference to certain evidence given by Mr Nil that he regarded his "attempt in cross-examination to suggest that he was only warranting the face value of the receivables as patently untrue" and that clearly "he was warranting what could be recovered".
"The extent to which that warranty would not be complied with emerged at a meeting in Bahrain on 18 March 2008 between [Mr Cornelius, Mr Ridley and Mr Nil], Mr Taylor and Mr Flannery of Howes Percival on the one hand and Mr Al Shamsi, Mr Lyons and Mr Dooley on the other. It became apparent that the Turkish receivables were highly unlikely to be recoverable because most of the debtors were distressed. It was agreed that the performance of the RSA might still be possible with a concerted effort by [Mr Cornelius, Mr Ridley and Mr Nil], but that there was now very little room for error. At that meeting, [Mr Ridley] also gave assurances that further receivables could be collected from Bills Express in Australia. However, in a conference call on 29 April 2008, he disclosed that US$14 million of receivables could not be collected from Bills Express after all, despite the previous assurance. As Mr Lyons says this increased the Bank's concerns about the ability of [Mr Cornelius, Mr Ridley and Mr Nil] to continue to perform under the RSA."
This reflects the evidence given by Mr Lyons before me also. Again that evidence was not challenged. Nor was the following passage in Mr Lyons' witness statement at paragraph 17.8 (and again reflected in Flaux J's judgment at ):
"I recall that in light of these difficulties Mr Taylor and I had discussed the 'near miss' provisions in clause 18.1(a) of the RSA (which gave the debtors three months to cure certain payment defaults). The situation was sufficiently serious that Mr Taylor had already suggested to me that the repayment obligations in the RSA might need to be 'rescheduled' to avoid a default."
I agree with Mr Anderson QC that, in the circumstances, in the light of this unchallenged evidence, any suggestion on the part of Plantation that there was not by March or April 2008 a very real prospect of a payment default under the RSA taking place on 1 October 2008 as having an air of unreality about it.
1. Investigating in the incidents of embezzlement and negligence, and in the financial violations detected by the [FAD] of by the Parties subject to audit, and searching for their reasons ."
The role and responsibility of position of the FAD were explained by Flaux J in his judgment at  to :
"At this juncture it is necessary to outline the role and responsibility of the FAD. It was established by statute, Law no 3 of 2007, replacing an earlier body. As Mr Anderson QC submitted, a key aspect of its remit was the investigation of financial irregularities. Thus, Article 19 of the Law provided:
'The following cases and incidents are considered financial violations that require investigation therein, whether detected by the [FAD] or by the Party subject to audit:
4. Any action, negligence or default that results in the payment of amounts unrightfully from funds subject to audit ...
5. Embezzlement of money under audit, or breach of trust, or fraud for the purpose of embezzlement, stealing or waste.'
Under Article 22, the staff of FAD had extensive rights of access to the documents and staff of an entity the subject of a FAD audit, confirming Mr Al Sharif's evidence that if the FAD asked the Bank for information, the Bank had to provide it:
'The Director General or any employee authorised by him may audit any document, record or papers which he deems necessary for performing the audit duties completely, and he will have the right at any time to contact directly with the employees who work for the Party subject to audit, whether for the purposes of audit or investigation in the financial violations, and he may also get acquaintance with any document, record or papers that might be necessary for the investigation, and keep copies thereof, and interrogate any of the employees who may have relation to the detected financial violation.'
Furthermore, where an investigation by the FAD reveals the commission of a criminal offence, under Article 20(3) the Director-General of the FAD is under a positive duty to report to the Public Prosecutor:
In case investigation in the financial violation has revealed the existence of a penal offence, the Director General should refer the papers to the Public Prosecution for taking whatever action it deems appropriate in this respect.'"
" either in August or in September 2007, we received information from one of our secret sources in the Bank that the Bank had encountered a large fraud resulting to the illicit seizure of a large amount of money approximately '501 million US Dollars'. Based on that information, we started inquisition and investigation procedures and it appeared that such piece of information exists with the Financial Audit Department. Accordingly, we formed a team with the Financial Audit Department to conduct further inquiry in order to reach to the means by which the fraud operation took place and those involved therein."
Asked a little later about timings, he again seemed to suggest that the FAD investigation started "from August 2007" and continued "until we transferred the case to Public Prosecution in May 2008". I suspect, however, that the real investigations must have started in the autumn of 2007 since it is perhaps not insignificant that the FAD only made contact with DIB in early January 2008 and, furthermore, that the FAD was pressing for information in 2008 rather than before. I repeat, however, that I do not consider it right to suggest that the FAD only started looking into matters as late as April or May 2008. What is, in any event, clear is that by the time that the case was transferred by the Police and the FAD to the Public Prosecutor in May 2008, no disclosure having been made by Mr Cornelius, Mr Ridley and Mr Nil of the bribes which had been paid, including importantly who had received those bribes, what Mr Lyons and Mr Taylor QC had thought might happen as a result did happen: Mr Cornelius and Mr Ridley were arrested (as was, indeed, Mr Fitzwilliam subsequently also). This is a topic, I repeat, to which I shall return.
Financial position of the Project, specifically but not limited to June/July 2008
"Plantation will be developed over a twenty seven months period. The project completion date is planned for the 3rd quarter of 2010. The total financing requirement for a phased construction of the project is AED 1908 million and AED 2,622 million is assumed as revenues from pre-sales of luxury villas."
A little later, after referring to the Project as being "promoted by Arthur Fitzwilliam and Ryan Cornelius", the document went on to state:
"Plantation is now approaching lenders to raise AED 100 million as construction loan for the phase I of development of this high-end equestrian mixed-use project in the middle of Dubailand. It is intended that all the following phases of the development will be financed through pre sales of high end luxury villas and apartments."
"Plantation is now approaching lenders to raise construction loans for the development of this high-end the question mixed-use project in the middle of Dubailand."
There was, therefore, in contrast to the Jasper Capital proposal from the year before, no mention of the amount of lending which was being sought. Indeed, later on, the "Term Sheet" page has "TBD" next to the word "Amount". The same page, rather confusingly, has a reference to the loan being for a "3-year term" despite the fact that the Executive Summary went on to state as follows:
"It is intended that the payback period for these loans will be short, i.e. within two years with repayments being generated by the sales of the Land and Villas."
Further on, on a page headed "Current Work-review", this was stated:
"- The Plantation Developers have to date invested AED 50 million into the development of Plantation.
- Plantation has commenced the installation of the roads and infrastructure of Phase 1 and completion date is set for August 2007.
- Plantation has programmed to start construction of 8 villas in October 2007 along with a second polo field.
- Ongoing works are:
- General site excavation to finished levels
- Infrastructure and roads Phase 1
- Height buildup of Phase 2 roads ready for infrastructure to commence in these areas Dec 2007
- Retaining walls to villa plots Phase 1 and 2
- Development of the on-site nursery for the planting of phase 1".
The reference in the first bullet point was, as Ms Sutherland acknowledged when Mr Anderson QC asked her, a reference to the US$18 million which Mr Cornelius and Mr Ridley had invested in the Project using DIB's money.
"Polo & Equestrian
- Horse purchases commenced in April 2006 and currently Plantation owns over 100 horses
- Construction of 3 temporary stable blocks
- Construction of 4th temporary stable block to commenced June 2007
Greening of Plantation Polo Field 1
- Polo Field 1 is currently planted and the 2006/2007 Polo season was played at Plantation. The Plantation Polo Team actively competed against local teams and participated in the Cortina Winter cup in Italy.
- Polo Field 2 scheduled to start October 2007 as part of the Phase 1 Development."
The Jasper Capital proposal had previously stated:
"Polo & Equestrian
- Horse purchases commenced in April 2006 and currently Plantation owns over 100 horses
- Construction of 3 temporary stable blocks
Greening of Plantation Polo Field 1
- Polo Field 1 is currently planted and is expected to complete by October 2006."
Mr Anderson QC referred also to the page headed "Current Work", in which the 2007 proposal stated (with accompanying photographs):
"Greening of Plantation
- Entrance to Plantation showing banking onto the main road to protect the development from road noise.
- Nursery and turf farm established.
- Phase 2 nursery extension finished Sept 2006.
- Purchasing of seed stock for Phase One 80% complete."
The 2006 proposal prepared by Jasper Capital had previously stated (likewise with accompanying photographs):
"Greening of Plantation
- Entrance to Plantation showing banking onto the main road to protect the development from road noise.
- Nursery and turf farm established.
- Phase 2 nursery extension to start April 2006."
The 2007 proposal went on, again under the "Current Work" heading, to state:
- Retaining wall structure for Phase 1 plots around Polo Field 1 & 2. Clearly showing the 4-5 meter elevation.
- Retaining wall for Phase 1 Plots 80% Complete.
- Excavation of Polo Fields Three and Four 65% complete.
- Base height of Phase 2 roads 45% complete.
Roads & Intrastructure Phase 1
- 50% completed, finish date 30 August 2007."
This compared with the 2006 proposal which stated:
- Retaining wall structure for Phase 1 plots around Polo Field 1 & 2. Clearly showing the 4-5 meter elevation."
Ms Sutherland acknowledged, at least as I understood it, that the amount of work carried out between the dates of the two proposals was not as much as had been hoped for. She accepted also, in effect if not in express terms, that when the August 2007 proposal referred to certain work being imminently completed, it was not entirely reliable. That, for example, the roads and infrastructure of Phase 1 were not completed by the end of August 2007, just a few weeks after the proposal was put together, is plain. In short, this and other work was still being carried out, and money was needed. Without the funds which Mr Cornelius and Mr Ridley supplied and without other third party funding, money was necessarily short since villa plot sales were not by this stage sufficient to generate the finance which was needed. In such circumstances, it is not remotely surprising that the US$50 million standby loan facility available in the RSA was attractive to Mr Fitzwilliam (and so to Plantation) since it provided Plantation with a facility which it very much needed without having been able to secure a Construction Loan, without the funding which had to date been available from Mr Cornelius and Mr Ridley, and with insufficient funds coming in from villa plot sales.
He went on:
"We essentially had nothing to do with the repayment to the Bank so had no say as to whether it would be over two, three, or five years, nor about how much was to be repaid each year, nor about what penalties the Bank would extract from Cornelius and Ridley. That was between the Bank and the perpetrators. Plantation's only interest in regard to the repayment terms was that the repayment schedule was not unrealistic as that could threaten Plantation."
He added that the "hoped for US$50m funding from the Bank would assist Plantation relatively cheaply with its cash flow". As he went on to point out, at that stage, August 2007, Plantation's income was "from two sources": sales of villa plots, and what Mr Cornelius and Mr Ridley had provided, namely the US$18 million. The former had not by this stage generated sufficient funds to finance the development. The latter, on any view, was a source of funding which would not continue, hence the "commercial attraction of funding from the Bank". Mr Fitzwilliam was here acknowledging the obvious: that Plantation needed the funding which was on offer from DIB. By this stage, earth levelling and other engineering works were being carried out in order to prepare for the next phase of the project when villa plot owners would set about building their villas. As I have explained, this work, the Phase I work, obviously required a substantial financial outlay. There was no other funding on offer from any other bank or other third party. As Mr Fitzwilliam explained during the course of cross-examination, when what Mr Ridley and Mr Cornelius had done came to light, Plantation "had been merrily working, right, going forward, developing itself" and "now we had bills to pay" meaning that "I needed the money from the bank to cover those bills if I was to continue at the rate that I had been going". He added that, had he "known that no money was coming, I would have shut down the tap for a month, two months, until the revenues that we had coming in from sales already would have come in and replenished the coffers, as it were, allow me to pay the money I had overspent, and then we would have to wait for a bit more money to come in until we could start spending again". Also, although only a standby loan facility subject to limitations in respect of any drawdown (a matter to which I shall return but which was somewhat skated over by Mr Fitzwilliam in the passages from his witness statement to which I have referred), I agree with Mr Anderson QC that the fact that the facility would be coming from a large and well-respected institution must have lent credibility to any efforts which might thereafter have been made by Mr Fitzwilliam and Plantation to obtain finance from elsewhere. It will be recalled in this context that, under clause 9 of the RSA, it was contemplated that it would be open to Plantation to obtain further third party funding, with DIB coming under an obligation to act "as would a commercially reasonable financier" in relation to the granting of security by Plantation to such a lender. In the event, no such third party funding was obtained, but what matters is that it was open to Plantation to seek and obtain such funding if it wished to do so.
"Plantation will be developed over a thirty six months period. ".
Then, on a page headed "Phases", the presentation stated as follows:
"The Plantation Phasing as per Appendix B has been broken into three stages:
- Phase 1a Comprising of villa plots 82 110, Polo Fields 1 and 2. The Roads and Infrastructure are 90% complete, Polo Field 1 is 100% complete and Polo Field 2 will be complete 1 May 2008.
- Phase 1b To be started in conjunction with the Dubai Islamic Bank. Its components are as per Appendix B.
- Phase 2 as per Appendix B.
- Phase 3 As per Appendix B."
Although Appendix B has not apparently survived, what is stated on this page is instructive in relation to the progress which had been made with the Project by March 2008. Otherwise, under "Current Work-review", what had appeared in the August 2007 proposal was repeated except for the second and third bullet points and the addition of the following "Ongoing works":
"- Polo Field 2
- Temporary facilities for the equestrian."
No change was made to the page concerning "Polo & Equestrian" and "Greening of Plantation Polo Field 1". Nor was there any change to the "Current Work" page which dealt with Greening, and banking as well as purchase of seed stock. However, as for the subsequent page which dealt with retaining walls, excavation work and roads and infrastructure Phase I, new percentage completion figures were given, with the page stating as follows:
- Retaining wall structure for Phase 1 plots around Polo Field 1 & 2. Clearly showing the 4-5 meter elevation.
- Retaining wall for Phase 1 Plots 95% Complete.
- Excavation of Polo Fields Three and Four 80% complete.
- Base height of Phase 2 roads 45% complete.
Roads & Intrastructure Phase 1
- 90% completed, finish date 30 August 2007."
It was pointed out to Ms Sutherland by Mr Anderson QC that in relation to roads and infrastructure, in particular, whereas the August 2007 proposal had stated that these were 50% complete and it was expected that they would be finished by 30 August 2007, in fact, some seven months later, in March 2008, the works had still to be completed. Ms Sutherland acknowledged that there "was possibly a delay" in starting those works but, as far as she could remember, once they started they "went to schedule". The March 2008 presentation, like the two earlier proposals, is, therefore, instructive because it illustrates the delays which occurred with the Project. More directly relevant for present purposes, however, is the fact that the proposals are instructive for another reason also: they show that Plantation wanted to obtain loan finance but could not do so. Ms Sutherland confirmed that this was, indeed, the position. The position, quite simply, is that there was no such funding available as at March 2008, and that remained the position in June/July 2008.
"Drawdown shall be subject to the conditions laid down in the rescheduling agreement dated 19 August 2007 and as amended on 02/10/2007, between DIB, CCH (Europe), CCH International plc, Ryan Cornelius, Eren Nil, Charles Ridley, Arthur Fitzwilliam and Plantation Holdings FZ LLC, the funds available for draw down are as follows:
- AED 42.8 Million as on February 2008
- 1/3rd of any amount received above $25 Million thereafter."
This reflected an email exchange between Ms Sutherland and Mr Bitar on 17 March 2008 when Ms Sutherland referred to having "a bundle of invoices that need urgent payment". These added up to AED 4,746,991.35 (including AED 1,822,303.75 in respect of Bait Lahem), and Ms Sutherland explained that she needed "these invoices paid so that work continues on site".
"With respect to the above Banking Facilities Letter accepted by you, we note that a notice of breach has been served on you in respect of the Restructuring and Settlement Agreement dated 19 August 2007 between the Bank, you and others. For this reason, we regret to inform you that the Bank shall not be able to proceed with the above Banking Facility at this time."
Mr Anderson QC suggested in closing that this was the consequence of the failure to provide DIB with an approved Master Plan and also perhaps the failure to furnish personal guarantees and post-dated cheques. That is not the case, as the passage quoted above demonstrates. What matters for present purposes, however, is what would have happened had Plantation sought to drawdown. The answer seems pretty clear: Plantation would not have been entitled to receive any monies, whether as much as US$50 million or at all. I agree with Mr Anderson QC that, in the circumstances, it is not appropriate to view Plantation as having any entitlement to draw on the standby loan facility and so to regard it as having any relevance as a source of credit open to Plantation as at June/July 2008. In truth, leaving aside for the moment the Chescor issue, the position at that time was straightforward: Plantation's only available source of funding was revenue from villa plot sales. The position in relation to these was, however, on analysis, not especially encouraging. Specifically, as I shall now explain, the monies which could be expected to be achieved from villa plot sales were wholly insufficient to meet Plantation's liabilities as at June/July 2008.
"It was bouncing every day; and every day it was bouncing differently from the way we had thought it was going to bounce the day before. Fortunately, every day was bouncing better; the more we did, the better it got, the better it got."
This was Mr Fitzwilliam colourfully referring to the improving conditions as he saw them as 2008 unfolded. The truth, however, is that Mr Fitzwilliam, again perhaps characteristically, appears to have operated on the basis of his instinct as a businessman rather than on the basis of hard data. It is in this respect that Mr Anderson QC's criticisms in relation to the various cost projections which were prepared by Plantation have some resonance. I agree with Mr Anderson QC that, whilst there is no reason to suppose that the building costs projections which were prepared by Plantation's in-house quantity surveying department were anything other than appropriate, the financial projections which dealt with the financing of such building costs and which were prepared by Ms Sutherland and Plantation's project management team, lacked the sophistication which might have been expected in relation to a project the size of the Plantation Project.
|Purchaser||Plot||Contract date||Price (AED)||Paid by March 2008 (AED)|
|Ian & Susan Kelly||110||24/07/2006||10,798,000||1,048,550.00|
|Andrea Lee Williams||27||31/07/2007||14,531,400||4,359,420.00|
It follows that Mr Fitzwilliam's assessment of the situation cannot be right. Indeed, if the receipts for January 2008 are left out of account, the monthly average reduces still further to just US$656,089.
"We are in the process of awarding the shared 132kV substations project works and as such we need all beneficiaries to pay their share in the construction cost in advance enabling Tatweer to award the project.
Hence, you are kindly requested to arrange the payment on before 13 April 2008 as per the attached table and invoice in order to meet the schedule as per the signup sheets. The actual cost will be advised upon completion of the project.
It should be notified that any delay in the payment will have serious impact in delivery of the substation and power supply availability to the project in Phase 1."
The accompanying invoice referred to an amount calculated as 46.71% of the total cost of AED 260,196,512.29, resulting in a demand for AED 124,631,366.96. Mr Fitzwilliam replied to this letter on 14 April 2008. He made the point that Dubailand had previously told Plantation (in a letter which he stated was dated 28 February 2006 but which was in fact dated 26 February 2006 and was sent, as the fax transmission details indicate, on 26 February 2007) that "our cost share would be AED 64.5 million" and questioning why, even allowing for "some price increase over the past years", the price should "have doubled". Mr Anderson QC asked Ms Sutherland why no specific provision had been made for such a cost in the financial projections which she had prepared. She suggested that it was because there was no obligation under the Lease to make any such payment - a reference, in other words, to clause 4.1.3. It was pointed out, however, that this was not a point which was made by Mr Fitzwilliam in his response to Tatweer. His focus was, rather, on the amount payable. As Mr Anderson QC pointed out, Dubailand (and Tatweer) held the whip hand in negotiations since if Plantation wished to have the infrastructure it so obviously needed provided, it was going to be in a very weak bargaining position. Ms Sutherland essentially acknowledged this when she referred to Plantation "being held over a barrel in regards to getting infrastructure put on". As Ms Sutherland put it, "Dubailand was threatening with the non-supply of infrastructure, if it wasn't paid" and so "at this stage we had very little choice". Whether or not Ms Sutherland ought to have included a figure in her financial projections is nonetheless not the critical point at this juncture. Nor is the fact that it appears that it was not until 7 May 2008, as recorded in Mr Bitar's internal progress report the same day, that Mr Fitzwilliam told DIB that "Dubai Land has recently sent him an invoice for AED 120 million for the future construction of the Projects [sic] electrical substation" and that he "met with Dubai Land on May 7 raising an objection to the payment terms and requesting a deffered [sic] payment plan". What matters is that ultimately, after a meeting which apparently took place on 14 May 2008 and the further meeting which took place two weeks later on 28 May 2008, Plantation agreed with Dubailand and Tatweer that it would pay AED 107,109,165.32 as a contribution to the electrical substation, starting with a 30% payment on 30 June 2008 (AED 32,132,749.30) followed by two further 30% payments on 1 December 2008 and 1 June 2009 and a final 10% payment on 1 December 2009. This was set out in an email which Ms Sutherland sent to Mr Khalifa and Mr Bitar at DIB on 28 May 2008. Although Ms Sutherland was inclined to suggest in cross-examination that this was merely a "worst-case scenario" and that Mr Fitzwilliam was hoping to "get changes in the payment schedules", propositions about which I am somewhat doubtful, what is important is that just a month or so later, on 30 June 2008, a substantial liability to Tatweer/Dubailand would accrue.
"23. Without warning Arthur told me that he now wanted to sell a 30% share in Plantation and thereby raise a much higher figure than the initial USD$100m that was being sought."
I interject here to explain that Mr Bacon explained earlier in his witness statement that previously Mr Fitzwilliam's intention was to raise "expansion capital of around US$100m", and that this was what Mr Bacon, initially in his personal capacity and on "a very part-time basis" and subsequently on Novati's behalf after he had moved to that company (a matter which I have previously addressed). With this clarification, I continue setting out the contents of Mr Bacon's witness statement:
"It was clear that the timescale for achieving this was now extremely urgent. Of the twenty investors I had already held negotiations with, there were three or possibly four whom I considered would be interesting and capable of this level of investment within the revised timescale.
24. One of these four potential investors at this high level was a fund affiliated to a corporate finance and consulting group known as Chescor Capital ('Chescor'). Its group chairman and executive director, who effectively owned this fund, was Dr Amin Badr-El-Din. Dr Badr-El-Din was a polo patron and a real estate investor and I considered that his fund would be a natural fit for Plantation. I therefore contacted Stephen Mallet, by then the Chief Investment Officer of Chescor and a former colleague at Alcazar, and as such in charge of its mezzanine fund. A mezzanine fund basically lends money, looking for rates of return that are geared to the underlying performance of the business so it is a blend of debt and equity. Often the mezzanine lender will have the right to convert the debt into equity. Due to the debt element of the investment (and therefore the reduced risk), the time needed to put the investment in places also reduced.
25. I discussed valuations of Plantation with Dr Badr-El-Din. I formally proposed a figure of around US$600m for a 30% equity share. This figure was not the highest that I thought I could achieve for Arthur which was US$2.15bn and Plantation [sic]. However, as a patron, Dr Badr-El-Din brought more to the project than just investment and I thought that he would be the preferred choice of investor. Arthur agreed with my assessment.
26. I had held three meetings with Dr Badr-El-Din in person, the first in Jordan on 12 May 2008 and the following two in Dubai on 19 and 20 May. I had also had considerable contact with his advisers as Dr Badr-El-Din was at the centre of a sophisticated business network. Heads of terms were discussed at these meetings and a figure for US$600m for a 30% equity stake in Plantation was agreed in principal [sic]. This investment was based on a valuation of Plantation in its undeveloped state at US$2bn.
27. Since negotiations with Dr Badr-El-Din were at the heads of terms stage, a further meeting was arranged between the principals of Plantation and Chescor respectively, i.e. Arthur and Dr Badr-El-Din. The meeting was arranged to be held at Dr Amin's residence in Hertfordshire at 8.30 on 9 June 2008 and I had blocked out 2 days for it. I had arrived in the UK on 4 June and had already scheduled pre-meetings with Chescor in preparation for Arthur's arrival. On the previous 2 days, 2 and 3 June, Arthur and I had discussed how we would deal with Chescor. The project name was 'Merchant Bridge'. I recollect vividly attending the meeting with Dr Badr-El-Din and the other principals of Chescor Capital and waiting for Arthur who simply did not turn up. I had no idea where Arthur was and was unable to contact him on his mobile phone. He appeared to have vanished en route. Around 2/3 weeks later, and after I had returned to Dubai, we discovered that he had been arrested en route in Dubai, at the airport."
"On Friday, 6 June 2008 (the first day the weekend in Dubai) I was at the airport to fly to London to arrange the sale of 30% of Plantation for US$600 million to Dr Amin.
I had told the Bank that I was leaving to go to London a couple of days before I was arrested. I had a telephone conversation with Mr Amon Adel Kamal, the most senior person I dealt with at DIB, the day before I was due to fly out. He asked why I signed the RSA, and I explained the moral debt I owed to Mr Cornelius. He said 'it was too much, too much'. At the time I did not know what he meant, though in retrospect it is clear he knew of my impending arrest and/or the Bank's intention to manufacture an event of default in order to seize the security. I am sure the security police would have known of my reasons for going to London and whom I was going to meet. Telephone monitoring is standard practice in Dubai, and the main way of gathering evidence. I had been abroad several times since the arrest warrant had been issued, and so could have been arrested at any time prior to this, at the airport or elsewhere. The Bank knew I was going to be arrested before I did, and the security police knew I was going to do a deal to sell off part of my equity in Plantation."
The reference to an arrest warrant in respect of Mr Fitzwilliam is a matter to which I shall return. The significance of the evidence set out in these passages of Mr Fitzwilliam's witness statement is, however, that Mr Fitzwilliam was here, like Mr Bacon, giving evidence concerning a deal with Chescor which would have entailed payment of US$600 million for a 30% stake in Plantation and which involved a meeting with Dr Badr-El-Din in in the UK in early June 2008. As to what Mr Kamal was told by Mr Fitzwilliam about that meeting, these passages do not state, in terms, that Mr Fitzwilliam told him that he was travelling to this country to finalise a deal involving US$600 million and 30%. This is in contrast to Plantation's pleaded case in which it is specifically stated that Mr Fitzwilliam told Mr Kamal that he was going to be flying to London on 6 June 2008 in order "to sell part of his interest in plantation to raise funds to pay all the monies due under the RSA". It is in contrast also with a witness statement which Mr Fitzwilliam made in the context of the trial before Flaux J since in that witness statement Mr Fitzwilliam stated that he told Mr Kamal more precisely why he was travelling to London. Asked about the matter in cross-examination, Mr Fitzwilliam essentially, although somewhat equivocally, intimated that he told Mr Kamal in express terms the reason why he was travelling. The fact that Mr Fitzwilliam was so equivocal leads me to conclude that he did not, in fact, tell Mr Kamal about the Chescor deal. This conclusion is underlined by the fact that Mr Kamal, who was pressed on the matter by Mr Cakebread during the course of cross-examination, explained that, having left the Task Force some months earlier, any conversations with Mr Fitzwilliam which he might have had in June 2008 would have been very rare and, accordingly, he would therefore have remembered such a conversation had it occurred.
"To the best of my knowledge, Stephen Mallet and Nicholas Bacon were both engaged by Chescor Capital in the Middle East to assist in the development, structuring and placing of a specialist mezzanine finance fund that Chescor Capital was trying to develop sometime around 2008. This was for a relatively short period (I believe about three months). The fund did not get placed and the concept was subsequently abandoned."
What Mr Moore had to say here makes it abundantly clear that Mr Mallet can never have been Chescor's Chief Investment Officer since, if he had been, Mr Moore would have been bound to have said so in what, after all, is an email which was obtained on Plantation's behalf by Plantation's own solicitors. However, the email is also highly instructive in relation to what it says about the Chescor's mezzanine fund never getting placed: quite clearly the fund never became operative, something which, in fact, Mr Bacon himself acknowledged when the point was put to him by Mr Anderson QC since he confirmed that "the fund did not actually launch". I agree with Mr Anderson QC that, if the mezzanine fund had really been on the cusp of entering into the deal which Mr Bacon and Mr Fitzwilliam would have it was about to be concluded at a meeting in Hertfordshire which was to start on 9 June 2008, it is inconceivable that this would not have been mentioned by Mr Moore in his email. Although it seemed very likely that Mr Moore would have had explained to him by David Wyld & Co why he was being asked for assistance, I was told by Mr Cakebread that this was not the case and that no mention of Plantation was made when Mr Moore was asked to assist. Clearly, had Mr Moore been made aware of the context in which he was being approached, the absence of any mention of the proposed Plantation/Chescor deal in Mr Moore's email would have been particularly striking. However, even if Mr Moore was not made aware of the reason for the inquiry, the point remains that his reference to the mezzanine fund not getting placed is at odds with its being about to enter into a deal involving Plantation since, if the mezzanine fund did not get placed, it is difficult to see how it could have been in a position to have agreed in principle to pay US$600 million for a 30% stake in Plantation during discussions with Mr Bacon in advance of the meeting which, according to Mr Bacon and Mr Fitzwilliam, was to take place in Hertfordshire.
"see attached frequent flyer record downloaded from the re activated account. It shows a flight 8-10 June 2008 DXB to LHR amongst others".
Attached was a PDF document described as "mystatement 2 08.26.08.pdf" and sized at 156 KB. Just over 10 minutes later, however, Mr Bacon sent Ms Levy a second email in which he stated that he had "managed to download in a more detailed format" and attached a second PDF document this time sized at 160 KB.
"Scrutiny into the travel history (Skywards) has revealed that no travel was undertaken by the Subject [Nicholas Bacon] during 07-Jun-2008 from Dubai to London Heathrow and 09-Jun-2008 to 11-Jun-2008 London Heathrow to Dubai."
Mr Anderson QC submitted in closing that the attached details demonstrate clearly that Mr Bacon manipulated the Excel spreadsheet which he downloaded from the Emirates Airlines' website, so as to alter the details of flights that he took on 29 and 31 May 2008 (to Heathrow from Dubai, and return) to make them look as though they took place on 8 and 10 June 2008. He then converted the document to a PDF file in order that his changes could not be traced, producing the document he then provided to Ms Levy. This is the point which he put to Mr Bacon when he returned to Court on 1 December 2016 in order to be asked about this matter and for his re-examination to be completed. Mr Bacon denied Mr Anderson QC's allegation. He explained, in particular, that his laptop operated "over our corporate VPN network so file size is important" and that saving in PDF form involves smaller files. Although I do not doubt that that is the general position, nonetheless I am equally in no real doubt that it suited Mr Bacon in the present case to save the download in PDF format because it enabled him to make changes. In short, I found Mr Bacon's denials wholly unconvincing. I accept, without hesitation, the accuracy of the information which has been provided by Dr Al Hashimi. Mr Cakebread highlighted the fact that the Dubai government has an interest in both DIB and Emirates Airlines, hinting at DIB having conspired with senior management at Emirates Airlines to present false documentation. There is, however, no reason to suppose that there has been any such conspiracy. The position seems to me to be clear: entries 135 and 136 in the schedule which he has provided, showing flights taken by Mr Bacon in business class from Dubai to London Heathrow on 29 May 2008 and returning from London Heathrow to Dubai on 31 May 2008, do not appear in the PDF document which Mr Bacon created using the Excel document he downloaded from Emirates Airlines' website. Instead, flights are described as having been taken on 8 June 2008 (Dubai to London Heathrow) and on 10 June 2008 (London Heathrow to Dubai), both in business class. The flight immediately before the 8 June 2010 entry in Mr Bacon's PDF document is given as a flight on 15 May 2008 from Amman to Dubai. That flight appears also in Dr Al Hashimi's schedule. The flight which comes after the 31 May 2008 flight referred to at entry 136 of that schedule is a flight on 9 July 2008 described as having been from London Heathrow to Dubai. That same flight appears in Mr Bacon's PDF schedule. What has plainly happened here is that Mr Bacon has changed the dates for the intervening two flights from Dubai to London Heathrow and returning from London Heathrow to Dubai so that, instead of the flights being shown as having been taken on 29 and 31 May 2008 respectively, they appear as flights which were taken by Mr Bacon on 8 and 10 June 2008. The alterations were, no doubt, easily made in the Excel spreadsheet which Mr Bacon had access to. They are, of course, not able to be identified in a PDF document.
" I adopt, as a general principle, the observations of Mr Justice Millett in Logicrose Ltd v Southend United Football Club Limited (The Times, 5 March 1988) that the object of the rules as to discovery is to secure the fair trial of the action in accordance with the due process of the Court; and that, accordingly, a party is not to be deprived of his right to a proper trial as a penalty for disobedience of those rules - even if such disobedience amounts to contempt for or defiance of the court - if that object is ultimately secured, by (for example) the late production of a document which has been withheld. But where a litigant's conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice, the court is entitled - indeed, I would hold bound - to refuse to allow that litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him. The reason, as it seems to me, is that it is no part of the court's function to proceed to trial if to do so would give rise to a substantial risk of injustice. The function of the court is to do justice between the parties; not to allow its process to be used as a means of achieving injustice. A litigant who has demonstrated that he is determined to pursue proceedings with the object of preventing a fair trial has forfeited his right to take part in a trial. His object is inimical to the process which he purports to invoke."
Mr Anderson QC submitted that I should, as he put it, "bear in mind" these observations. However, since he did not invite me to strike out Plantation's claim, they are of only limited relevance. I prefer, in the circumstances, to deal with the case as advanced by Plantation on its merits.
" Before Arthur left he asked me to prepare my thoughts on a significant equity race through Plantation. I did very little work on this until I met with Tom and Suzzanne [sic] on site on Monday, when we met to discuss Holly Bolly.
During that meeting you asked me [to] execute a significant capital raise (circa USD $ 700M) and the options and likely hood [sic] of raising a fund. Long story short we agreed that we would do this in parallel and discussed that it would be an intensive programme would need to start immediately. I prepared some action points, including the likely cost and time commitment from my side which we agree to. Next, even before we had any formal agreement, but with your knowledge, I gave instructions to form a fund and secure the resources of two full-time members for a month.
They set to work immediately and I also declined two other opportunities to focus on this very large project. This caused some concern with my partner who insisted that I formalise the engagement which I did with you yesterday morning In addition to the preparation work and fund formation we have also conducted a number of interviews, arrange for a candidate to fly to Dubai, arranged investor meetings, prepared a brief and met with EFG-Hermes and gave a detailed briefing to our London placement agent. Whilst the exception of the fund establishment this can be all on-wound, time is very much of the essence as we were looking to get into the market in July and every day was valuable.
Trust me I am completely committed to you all and you have my full attention, however can we please not go off half-cock again, I am in for a tough day."
Indeed, Mr Bacon appears to have drawn up a letter dated 16 June 2008 which specifically set out the terms of an agreement under which he was to act to raise US$700 million.
"The Directors of Plantation Holdings FZ LLC warrants that they are not subject to any criminal proceedings in the United Arab Emirates or any other jurisdiction."
It is instructive that this proposed deal involved, as Mr Bacon acknowledged during the course of cross-examination, effectively half of what, according to him, had been envisaged would be achieved through the Chescor deal. Aside from this, however, it is perfectly obvious that the pre-condition quoted above would represent a considerable difficulty for Mr Bacon and Plantation in seeking to bring the Arbah Capital deal to fruition, even though it is right to acknowledge that Mr Bacon's solution in re-examination was that all that needed to happen was for Mr Fitzwiliam to be removed as a director. Another difficulty was the fact that the term sheet envisaged that 20 villa plots would be released onto the market by 17 December 2008. As Mr Bacon himself pointed out in an email which he sent to Norton Rose on 27 September 2008, "having to commit to 20 villa sakes [sic] by 17/12/08 is a little premature at this stage". In any event, just a month later, on 28 October 2008, Mr Bacon was pressing Ms Sutherland and Mr Woolf to speak to Mr Fitzwilliam in relation to a matter which he described as urgent and which, he confirmed in cross-examination, involved his concern that Arbah Capital were about to pull out of the proposed deal. This, indeed, is why two days later, on 30 October 2008, Mr Bacon sent Ms Sutherland and Mr Woolf his email in which he referred to having spoken to Mr Fitzwilliam and to their agreement that Mr Bacon should travel to Abu Dhabi "to open up more detailed negotiations with the second option", namely with Noor Capital. The proposed deal involving Arbah Capital was, accordingly, short-lived and not a transaction which was ever going to result in investment at any level. It was also, I should mention in passing, a transaction which Mr Bacon was driven to accept during the course of cross-examination he pursued in his personal capacity rather than on behalf of Novati. Mr Bacon insisted, however, that his colleagues at Novati were made aware of what he was doing in relation to Arbah Capital. This is not a matter about which I need to express a concluded view.
Plantation's case on deliberate breach and the arrests in particular
" It has to be appreciated that all of the bodies involved, the FAD, the Bank, public prosecutor, the state police, or reported to the same person, the Sheikh's placement, Al Shaibani. The issue is not whether there might be a document supporting the allegation that the Bank sought my arrest rather than the FAD or the public prosecutor. None of these bodies act independently. They are all part of the same state apparatus reporting to Al Shaibani and ultimately the Emir. In this respect it has to be understood that the stiff sentences handed out to Ridley, Cornelius and the corrupt bank officials reflected the fact that they had stolen from an organ of the state and therefore effectively the Emir himself. That is how things are understood in the Gulf. Seems to be simply fanciful to suggest that the breach notice was 'co-incidentally' served at the same time as I was arrested. It is plain and obvious that they were part of a scheme organised from the highest echelons of the Emirate to punish those who had betrayed Dubai by engaging in the original fraud and then being party to an agreement which sought to provide a smokescreen for the guilty."
During the course of cross-examination, Mr Fitzwilliam added that, as he was being interviewed post-arrest, he was told that "If you sort this with the bank, it will all go away". It is, in short, Mr Fitzwilliam's strongly held opinion that DIB was behind his arrest and that his arrest was part and parcel of a strategy which involved the service of a default notice on 9 June 2008 followed, ultimately, by the taking of the assignment in mid-July 2008. More specifically, Plantation's case is that, after Mr Al Shaibani became DIB's non-executive Chairman in early March 2008, there was a change in DIB's attitude brought about by his taking the view that Mr Fitzwilliam (along with Mr Ridley and Mr Cornelius and others) had defrauded DIB. It is then said that Mr Al Shaibani, through his position in the government of Dubai, was able to bring about the arrest and prosecution of Mr Fitzwilliam (and the others) in order to enable DIB to seize the Project.
"My overall conclusion in relation to the arrests and prosecutions is as follows. The overwhelming weight of the documentary evidence, confirmed by the evidence of Lt. Col. Belhaul to the Public Prosecutor, is that it was the FAD and Dubai State Security (not the Bank) which provided the report and file to the public prosecutor setting out the results of the investigation which the FAD had been conducting since the autumn of 2007. In other words, to the extent that anyone other than the Public Prosecutor's office itself procured the arrests, it was the FAD, not the Bank. In due course, based on the investigation the FAD had conducted, prosecutions of those individuals ensued."
In his witness statement Mr Fitzwilliam criticised this conclusion as having "missed the point". In his submissions, Mr Cakebread similarly criticised Flaux J's conclusion. He made the point, in particular, that Flaux J did not have certain documents before him which were before me. Mr Cakebread additionally highlighted events in the immediate lead-up to Mr Fitzwilliam's arrest which, he suggested, pointed to there having been "heightened activity" within DIB which is consistent with DIB knowing that Mr Fitzwilliam was about to be arrested. These events, suggested Mr Cakebread, particularly when viewed alongside a consideration of what Al Tamimi had been asked by DIB at the time to do, point strongly towards DIB not only procuring Mr Fitzwilliam's arrest but engineering a situation where DIB could take over the Project. Specifically, it was Mr Cakebread's submission that, even if Mr Fitzwilliam did not have the conversation with Mr Kamal in which Mr Fitzwilliam stated that he was going to be travelling to the UK to close the Chescor deal, DIB should be regarded as having knowledge of Mr Fitzwilliam's imminent arrest. Mr Cakebread, furthermore, pointed to subsequent events as demonstrating what Mr Cakebread described as "the close relationship between the Bank, the Diwan and the prosecutor" as well as "the ruthless attitude adopted by the Bank towards [Mr Fitzwilliam], [Ms Sutherland] and Plantation and others which are perceived to be a threat to water have caused damage to it". In this last respect, Mr Cakebread placed particular significance on the evidence which was given by Mr Ilahi.
"I, Mohammad Ibrahim Al-Sheibani, in my capacity as the Chairman of Dubai Islamic Bank PJSC, hereby confirm that the following have been appointed members in the CCH Taskforce:
1. Abdullah Al-Hamli Chair
2. Fahad bin Fahad Member
3. Mohammad Al-Sharif Member
4. Nidhal Al-Shomali Member
Necessary powers to managing, deciding, and entering into agreements concerning the CCH indebtedness recovery case have been vested in the Taskforce. Those powers are as follows:
1. Manage all matters related to the recovery case related to CCH, and do all necessary actions as decided by the Taskforce. This includes negotiating with all related parties, issue instructions to legal consultants, commencing with legal proceedings, negotiating, entering into agreements, incurring and paying legal fees and court and arbitration charges and fees.
2. In relation to Plantation land and project, manage, continue developing, as deemed necessary by the Taskforce, and operate the Project as required, including bearing and paying operation costs and expenses, contracting with other parties as deemed necessary, and deal and negotiate with related entities.
3. Implement, sign, and enter into representation, complete all documents, deeds, agreements, actions and all things on behalf of the Bank, and any other required or preferred matters in relation to any of the powers listed above, and
4. Authorize other employees at the Bank to carry out any of the above powers.
Provided that Taskforce obtains the Bank's Board approval prior to entering into any settlement agreement with any entity in relation to CCH or otherwise assigning any tangible assets (including Plantation Project)."
Mr Cakebread highlighted the references to "the CCH indebtedness recovery case" and to management, continued development and operation of the Project Plantation land and project, manage, continue developing "as deemed necessary" or "required". He contrasted these references with what appeared in the resolution setting up the 'Project Stallion Task Force' dated 6 November 2007. That earlier resolution did not contain such references. Mr Cakebread put to Mr Al Sharif that this document was, indeed, a document which dated from April 2008. Mr Cakebread did, however, inform Mr Al Sharif of the fact that DIB's position was the document came later, specifically in November 2008. Mr Cakebread asked Mr Al Sharif whether the document was "a fair recollection of the task that the Task Force was set in April 2008". Mr Al Sharif's answer was that it was, something which he repeated in answer to a question which I put to him immediately after he gave his first answer. In such circumstances, Mr Cakebread submitted that, whether the document dates from April 2008 or November 2008, the role of the 'Project Stallion Task Force' in April 2008 onwards had changed from the role described in the 6 November 2007 resolution signed by Mr Al Shaibani's predecessor. I agree with Mr Anderson QC, however, that, in the circumstances, given the uncertainty over the dating of the document, Mr Al Sharif's evidence provides only slender support for Mr Cakebread's submission. It is clear to me that Mr Anderson QC must be right when he suggested that the document is a November 2008 document and not a document which came into being in April 2008. Mr Anderson QC was able in this regard to refer to an email dated 25 November 2008 which Mr Shomali sent to his fellow Task Force members and in which he referred to the Word attachment as being "the revised mandate after taking out the power of development", asking for "your views on the same". Although the attachment did not appear in the trial bundles next to this email, it is tolerably clear that the document to which Mr Al Sharif was taken by Mr Cakebread in cross-examination is the attachment to that email. Mr Cakebread submitted that, even if that were the case, there must have been an earlier resolution which had "the power of development" in it, suggesting that that earlier resolution, which has not been disclosed by DIB, would show that the mandate of the Task Force must at an earlier stage have changed in the manner set out in the document which he put to Mr Al Sharif. I do not agree. It seems to me likely that in his email on 25 November 2008 Mr Shomali was referring to a draft resolution which contained the "power of development" rather than to an actual resolution post-dating the original resolution dated 6 November 2007 and pre-dating a later resolution made in late November 2008. There is nothing to indicate that the Task Force was as early as April 2008 set on taking over the Project. On the contrary, DIB was at that stage engaging with Plantation in relation to the US$50 million facility. This is not something which is consistent with a decision having by then been made to take over. The resolution which Mr Cakebread put to Mr Al Sharif is much more consistent with having coming into being after DIB took over physical possession of the Project, which happened on 4 November 2008, than with having pre-dated that event by some six months or so. In any event, I agree with Mr Anderson QC when he submitted in closing that Mr Al Sharif can have had no cause to consider the evolution of the Task Force's mandate over time for many years and, as such, it is doubtful that he can now remember the precise chronology. Accordingly, I place no weight on the answers which Mr Al Sharif gave in this regard. I am quite clear, in short, that when Mr Al Shaibani took over from Dr bin Khirbash in the spring of 2008 there was no change to the remit of the Task Force at that stage, and that the remit only changed towards the end of 2008. Although it is right to acknowledge that no resolution has been produced which records the appointment of new members to the Task Force in about April 2008, including Mr Shomali, which might suggest that the undated resolution relied upon by Mr Cakebread should be treated as dating from that time rather than from November 2008, I consider the likely explanation for this is that either there was no other resolution in about April 2008 at all, on the basis that there was no need for a resolution dealing only with appointment of members of the Task Force, or that there was a resolution which was confined to the appointment of new members and the reason why the resolution which was put by Mr Cakebread to Mr Al Sharif listed the membership of the Task Force was because it made sense to do so given that the Task Force's remit was changing. In my view, it does not follow from the fact that the only resolution listing the new members of the Task Force deals also with the new remit of the Task Force that the resolution must have been made in about April 2008 rather than in November that year.
"We met with Arthur Fitzwilliam on the 7th May where he signed the Facility Advice Letter for the AED 169 million and discuss what is required from Plantation in documentation in order to close the finance transaction.
Arthur has mentioned that Dubai Land has recently sent him an invoice for AED 120 million for the future construction of the Projects electrical substation. He met with Dubai Land on May 7 raising an objection to the payment terms and requesting a deffered [sic] payment plan.
Arthur also mentioned that he is being verbally pressured by Dubai land to continue building the project irrespective to whether the project master plan approval is in place or not. There is a sense of apprehension that the project may be taken away from him if there is slow progress."
Next to these passages somebody (it seems pretty clear Mr Shomali) has written in manuscript "Issue" and then "This can be a way out to take over project". Mr Cakebread described this as "chilling". That by about this time, mid-May 2008, DIB was looking at matters such as villa plot sales, no doubt in conjunction with Al Tamimi, is furthermore confirmed by an email between Mr Bitar and Mr Shomali on 15 May 2008 on which this same handwriting appears, so confirming that it belongs to the recipient of the email, Mr Shomali. Mr Shomali stated, amongst other things, that the "way forward" was that "all sales should go to Escrow Account", tying in with the evidence given by Mr Waugh in cross-examination that DIB was at this stage focusing on the fact that no payments had been made either to it or into any escrow account for the purposes of Law No. 8 of 2007.
"It is in the context of the legitimate concerns of the Bank that the second, third and fourth defendants would not perform or would not be able to perform their obligations to make repayment under the RSA, of which Mr Lyons speaks in his witness statement, that Al Tamini [sic] were instructed by the Bank, as Mr Al Hamrani of that firm described in his evidence, to look for loopholes in the RSA, in the sense of areas where there was default by the other parties. Mr Al Hamrani thought those instructions were in November 2007 but I consider he must be wrong about that and prefer the evidence of his partner Mr Jody Waugh that the firm were instructed in May 2008. Mr Mallin sought to portray this as somehow sinister, supporting a case that the Bank was seeking to get out of the RSA and not honour it. I do not see the instruction of Al Tamini [sic] to look for loopholes in the RSA as in any sense sinister. It is perfectly normal for commercial parties to seek legal advice on ways of extricating themselves from contracts that, for whatever reason, have become disadvantageous, not by breaching the contract but by seeking advice on whether there has been a breach by the other party.
Accordingly, in my judgment, there is nothing untoward in the Bank having sought legal advice as to whether there had been an Event of Default and, if there had, in serving notice to cure the default and then, if the default was not cured, seeking to enforce against security available under the RSA to the extent permissible. Far from that being a breach of the RSA, that is the Bank relying upon the provisions of the RSA intended to give it protection, if there was a default under the RSA by the other parties to it."
I agree with this and also with what Flaux J went on to say at :
" there is no question of the Bank failing to perform its obligations under the RSA prior to the time when it served notices of default. I agree with Mr Anderson QC that the Bank was prepared to and did offer Plantation and Mr Fitzwilliam the Standby Loan Facility and the allegation that there was a repudiatory breach of the RSA by the Bank in failing to lend to Plantation is unsustainable. To begin with, since under clause 11.1 of the RSA, provision of the Standby Loan Facility was always subject to such consideration, based on due diligence of the Plantation Project, as a commercially reasonable lender would be expected to have, there was no obligation on the Bank to lend to Plantation. In fact, pending formal financing being put in place, in February 2008 the Bank agreed to purchase one of the Plantation Villa plots for AED12 million in order to tide Plantation over and make funds available to pay contractors and staff. The Bank was under no contractual obligation to make that purchase."
"There are other matters which also point away from the Bank having procured the arrest of Mr Fitzwilliam. To begin with, if the Bank had really known that he was on the way to London to sell a shareholding in Plantation for US$600 million, the inference that the defendants invite the Court to draw that the Bank then decided to thwart that sale by having Mr Fitzwilliam arrested, apparently so that the Bank could enforce against Plantation, makes absolutely no commercial sense. That is all the more so given that, at the end of May 2008, only days before the arrest, as is clear from the correspondence between Mr Taylor and Al Tamini [sic] confirmed by Mr Taylor's own evidence, the Bank was indicating an unwillingness to talk to the second and third defendants, unless there was a proposal for repayment of the outstanding Rescheduling Amount. If Mr Fitzwilliam's evidence about the US$600 million were true, it is inconceivable that the Bank would not have seized on that whole heartedly, as a means of obtaining complete repayment of the outstanding amount quickly. The Bank would hardly have preferred having Mr Fitzwilliam arrested in order to enforce against Plantation, the sale of which might take some time in circumstances where, since the RSA is governed by English law, any sale proceeds in excess of the outstanding Rescheduling Amount would be payable to Plantation anyway.
Furthermore, as Mr Anderson QC pointed out, internally the Bank was still considering the documentation required to progress the Standby Loan Facility to Plantation as late as 4 June 2008, which is hardly consistent with a desire on the part of the Bank to get out of its obligations under the RSA by having Mr Fitzwilliam arrested. As Mr Anderson QC said and I have already noted, if these arrests were all part of some overall plan on the part of the Bank to get its hands on the ultimate prize of the Plantation land, as the defendants suggest, and the arrest of Mr Fitzwilliam was part of that plan in order to ensure that there was default by Plantation, the Bank would surely have procured his arrest first before the second and third defendants or, at least, before serving the first cure notice, lest he try to leave Dubai without passing through the airport."
"The second defendant [Mr Cornelius] was arrested at Dubai airport on 21 May 2008. Mr Mallin relied upon a Minute of an Investigation dated 23 May 2008 started by Mr Al Zarouni, Assistant Public Prosecutor in the Public Prosecutor's office. This refers to the second defendant's arrest and states that that day they had received a file from the General Directorate of State Security at Police Headquarters relating to three individuals accused of fraud, the second, third and fourth defendants [Mr Cornelius, Mr Ridley and Mr Nil]. The Minute says that, upon reviewing the documents they contained a case report issued by the General Directorate of State Security 'concerning a complaint by [the Bank] for being defrauded by submitting forged papers'."
I interject to say that the Minutes went on to state that after Mr Cornelius was arrested "he stated that he made a deal with the Second Accused, Charles Ridley, to set up fake companies and submit documentation of the said companies in order to obtain funding from Dubai Islamic Bank" and that Mr Cornelius stated that "in 2003, the so-called Arthur told him that he has a project and would like to obtain funding for it, and that he [Mr Cornelius] would get a certain percentage of the project", Mr Cornelius subsequently agreeing "with Arthur that the Second Accused [Mr Ridley] would finance Plantation project, which belongs to the so called Arthur in Dubailand". Mr Cornelius, it would appear, explained that Mr Ridley "stipulated that in order to receive the funding, false invoices should be fabricated". In short, Mr Cornelius and Mr Ridley were 'spilling the beans' after their arrests.
Flaux J went on:
"Mr Mallin submitted that this supported the case that it was the Bank which had orchestrated the arrest of the second defendant [Mr Cornelius]. In my judgment it does nothing of the kind. The file which the Public Prosecutor received is clearly the case file which Lt Col Belhaul said the joint investigation team of the FAD and the police handed to the Public Prosecutor in May 2008 and reading the Minute in full makes that clear. Nothing in the Minute suggests that it was the Bank, as opposed to the FAD and the police, which conducted the investigation or decided to arrest the second defendant. The reference to the case file 'concerning a complaint by the Bank' is consistent with the Bank being the victim of the fraud and therefore, in one sense, the complainant, but it does not begin to demonstrate that the Bank was actively seeking the arrests."
I agree with these conclusions. Mr Cakebread submitted in closing that the Minutes did not identify Mr Fitzwilliam as an accused and did not indicate that he was part of the investigation. The first observation is accurate, but the second seems to me to be somewhat unrealistic: Mr Ridley and Mr Cornelius were plainly implicating Mr Fitzwilliam and, in any event, it is plain and obvious that the authorities were interested in the fraud generally, a fraud which (unwittingly or otherwise) Mr Fitzwilliam and Plantation were inevitably embroiled. For present purposes, however, what matters is that the Minutes demonstrate that the FAD was instrumental in the investigations and, accordingly, the arrests which ensued.
"The Bank placed particular reliance in this regard on a lengthy letter dated 15 June 2008 from Mr Amiri (the Director General of the FAD whom Mr Taylor had met at his meeting with the FAD in February 2008) to Mr Al Zarouni in the Public Prosecutor's office. That letter was headed: 'The use of funds embezzled from the Dubai Islamic Bank to Finance Plantation Holding Project, Dubai Land'. It then went on to describe in detail how pursuant to Law No 3 of 2007 and the FAD audit of the accounts of the Bank it had discovered that the Plantation Project had been funded by the sums embezzled from the Bank in the CCH fraud. In the third numbered paragraph, Mr Amiri says:
'It was found out that CCH-GMBH Company, the Bank's agent, had carried out fictitious operations through fictitious Murabaha through investing the Bank funds in some projects for the agent and by parties related to it and the matter was referred to the Public Prosecution in case no. 12842 of 2008.'
At the end of the letter, Mr Amiri says this:
'Whereas the incident in this respect constitutes a financial violation that falls under the provision of Article 19 of Law No. 3 of 2007 on Establishing the [FAD] and whereas this violation involves a criminal offence, and in accordance with Article 20 of this Law, it was decided to refer the matter to the Esteemed Public Prosecution to take the necessary procedures in accordance with the provision of the law.'
That is an express reference to the obligations imposed on the FAD (and not the Bank) by Law No. 3 of 2007 to investigate financial irregularities, including embezzlement and to report any criminal offence uncovered in such an investigation to the Public Prosecutor. I agree with Mr Anderson QC that that letter, coming as it does from the head of the FAD, makes it clear that it was the FAD and not the Bank which investigated the fraud on the Bank and which reported the part of the alleged perpetrators of the fraud, including Mr Fitzwilliam, to the Public Prosecutor."
Again, I agree with Flaux J about this: it is quite obvious that the FAD was complying with its statutory obligation to report the findings of its investigations to the prosecution authorities. Mr Cakebread's submission in relation to this document was, in my view, unrealistic. He submitted that since the "FAD had not even completed their investigation by 6 June", the date of Mr Fitzwilliam's arrest and nine days before this letter, demonstrates that the FAD "cannot have been responsible for the arrest" of Mr Fitzwilliam. This is not a submission which makes any sense: what matters is that Mr Fitzwilliam was arrested as a result of the investigations which were carried out by the FAD, not whether the FAD had completed those investigations. It is clear from the letter itself that the FAD regarded Mr Fitzwilliam's involvement as suspicious since it went on to refer to the fact that it had been "found out that Mr Arthur Fitzwilliam and one of his employees works as a manager of the company, Suzan [sic], had acquired two plots of land without paying for them till now, with a market value of 67 million Dirham", adding as follows:
"It is worth noting that the value of the estimated profits from the sales of the project lands (110 plots) reach 1.1 billion Dirham according the last evaluation by DTZ Qatar LLC, which estimated the value of the sales at 2.450 million Dirham as on 31/12/2007, although it wasn't found out that Mr Arthur Fitzwilliam had paid any of his personal funds in this project.
It is clear from the aforementioned that Plantation Holding FZ-LLC had funded the project from the funds embezzled from Dubai Islamic Bank, equal to 65 million Dirham, in addition to the members of its Board of Directors committing the above-mentioned instance, which constitute financial violations that include criminal offences."
This is the FAD, in accordance with its statutory responsibilities, telling the prosecution authorities about suspected criminal conduct on the part of, amongst others, Mr Fitzwilliam. Mr Cakebread suggested in closing that this did not mean that DIB, in particular Mr Al Shaibani, was not behind the arrests. His submission was that, since Mr Al Shaibani heads the Ruler's Court and the FAD is a division of that Court, "there is no material difference in the actual mechanics" and that, in any event, it is plain that DIB must have provided information to the FAD to enable the report to have been made to the prosecution authorities. Again, however, I regard these submissions as lacking in reality: DIB was under an obligation to provide the FAD with relevant information, and so the fact that this was done cannot sensibly be relied upon as justifying a contention that it was DIB as opposed to the FAD which was behind the arrests and the prosecutions. As for the role played by Mr Al Shaibani and the suggestion that "the actual mechanics" do not matter, there is no real basis for the submission which Mr Cakebread made. In any event, as I have previously explained, the FAD having embarked upon the investigations which it did, it was inevitable that the findings would be reported by the FAD to the prosecution authorities. There is no evidence to indicate that Mr Al Shaibani or anybody else at DIB effectively took the matter out of the FAD's hands and insisted that the FAD should do what it did.
"The second and third defendants [Mr Cornelius and Mr Ridley] rely upon a number of documents in addition to the Minute of an Investigation to which I have already referred. First, they rely upon a Standing Notice produced by the Directorate General of Criminal Investigation at Dubai Police Headquarters dated 3 June 2008. That states: 'On 02/06/2008, we received a file referred to by the Directorate General of State Security regarding a report of Fraud under a complaint filed by [the Bank]. Attached to the file was a report of investigations conducted by the Public Prosecution Service, the defendants being [the second to fourth defendants [Mr Cornelius, Mr Ridley and Mr Nil], Mr Mooraj, Mr Usmani and his brother]'. It goes on to set out a summary of how the fraud was perpetrated and concludes; 'Accordingly, the facts have been recorded in a Criminal Notice. [The second and third defendants and Mr Mooraj] have been held in custody pending trial, and the search is under way for the others.'
Once again, the second and third defendants [Mr Cornelius and Mr Ridley] rely upon that reference to a complaint filed by the Bank as demonstrating that it was the Bank which was behind the arrests and the prosecutions. As with the Minute of Investigation, it seems to me this is reading far too much into the document. It is clear that the case was referred to the Directorate General of Criminal Investigation not by the Bank but by the Directorate General of State Security who also passed on a report from the Public Prosecutor, no doubt following the matter being referred to the Public Prosecutor by the police and the FAD in May 2008. I suspect that reference to the complaint filed by the Bank is reflecting the fact that it was the Bank which was the victim of the fraud, but even if there was a formal complaint by the Bank, there is simply nothing in this document to suggest that it was that complaint which caused the FAD and the Directorate General of State Security to pass the file to the Public Prosecutor. On the contrary, I suspect whatever the Bank said or did, the FAD was always going to report the fraud to the prosecuting authorities and press for arrests and prosecutions."
This, again, seems to me to be right. Nonetheless, Mr Cakebread highlighted the fact that this document did not refer to Mr Fitzwilliam specifically and that the reference to a complaint having been filed by DIB did not state that that complaint included Mr Fitzwilliam. I am not clear, however, why Mr Cakebread considered that the absence of any mention of Mr Fitzwilliam in the context of the complaint made by DIB assists Plantation's case that it was DIB which was behind Mr Fitzwilliam's arrest three days later. If DIB had not made a complaint concerning Mr Fitzwilliam, it is difficult to see how it can be suggested that it was DIB which procured his arrest.
"Mr Mallin sought to address that point by referring to the fact that there seems to have been a Preventative Detention Order directed to the police to detain Mr Fitzwilliam for the period 9 to 15 April 2008, on charges of fraud and appropriation of others' money, although he was not detained in that period (this apparently tying in with Mr Fitzwilliam's own assertion that he was eventually arrested on an expired warrant). Mr Mallin submitted that this demonstrated that the Bank had sought to have Mr Fitzwilliam arrested in April 2008, in other words before the second and third defendants. In my judgment it demonstrates nothing of the sort. The Preventative Detention Order is issued by the Public Prosecutor's office which ties in with the other evidence that it was the Dubai public authorities and, specifically, the FAD and the Public Prosecutor who were looking to arrest and prosecute Mr Fitzwilliam. Furthermore, the suggestion that the Bank was looking to arrest Mr Fitzwilliam on 9 April 2008 makes no sense at all, given that the letter offering the Standby Loan Facility for the equivalent of US$50 million was issued to Plantation on 13 April 2008."
I completely agree, including with the last point which was made by Flaux J which demonstrates conclusively, to my mind, that at the time when the arrest warrant was issued, in April 2008, DIB's focus was on working with Mr Fitzwilliam and Plantation to make the Project work, and not to try to have Mr Fitzwilliam imprisoned.
"The Dubai Public Prosecution certifies that on 01/06/2008 the Dubai Islamic Bank filed a criminal complaint No. 9588/2008 (Bur Dubai) against Mr Ryan L.C - British national and others. The complaint was registered with the Public Prosecution under number 12842/2008 (Criminal) and it was referred to the Dubai Criminal Court."
It went on to refer to Mr Cornelius's subsequent conviction and the various appeals which ensued, before concluding:
"This certificate was issued based on the request made by the defendant's lawyer to be submitted to whomever is interested without conferring any responsibility upon the Dubai Public Prosecution towards any third-party."
Mr Cakebread submitted that this document demonstrates that DIB was, as he put it, "the complainant" and so that DIB must have procured the various arrests, including that of Mr Fitzwilliam. I do not agree. Nor did Flaux J when he stated as follows at :
"There are a number of problems with placing much, if any, reliance on this document as evidence that it was the Bank which procured the arrest of the second and third defendants. To begin with, as Mr Al Hamrani pointed out in evidence, the Transactors Care Department is the counter section, so that Mr Shareef is in effect a senior clerk and not a member of the prosecution team who would have detailed knowledge of the case. In any event, even taking the certificate at face value, if the Bank filed this criminal complaint on 1 June 2008, that can hardly have led to the arrests which occurred prior to that, on 21 and 27 May 2008. Next, the complaint number 12042/2008 is not a complaint filed by the Bank but the criminal complaint referred by the FAD to the Public Prosecutor, as stated in Mr Amiri's letter."
Flaux J's references to the arrests which occurred on 21 and 27 May 2008 related, of course, to Mr Cornelius and Mr Ridley rather than to Mr Fitzwilliam who was arrested on 6 June 2008. The point concerning the reliability of the certificate, however, applies as much to Mr Fitzwilliam as it does to Mr Cornelius and Mr Ridley.
Flaux J went on to add this in relation to the certificate:
"Finally, after receipt of the certificate, the Bank filed a request at the Transactors Care Department for a copy of the criminal complaint said to have been filed by the Bank, only to receive the puzzling response that there was no such complaint on the Public Prosecutor's file."
This was a reference to an exchange between DIB's Legal Department on 4 September 2013 and Mr Al Zarouni, in which a request was made to be provided with a copy of "the incident report and the request for complaint filing form". The response was that "there are no copies of the complaint filing form available" and so "the request could not be satisfied". Mr Cakebread highlighted that it was not stated that no such complaint had ever been made, merely that a copy of the complaint was unavailable. Whatever the true position, however, seems to me that Mr Cakebread's submissions place too great a reliance on references to a complaint having been made by DIB. As Flaux J put it in his judgment at , reference to DIB having made such a complaint is likely simply to reflect "the fact that it was the Bank which was the victim of the fraud".
"Dubai Public Prosecution certifies that on 01-06-2008, Dubai Islamic Bank lodged crime report no. 9588/2008 Bur Dubai against Arthur Fitzwilliam Panayotis - a British national. The report was registered with Public Prosecution under number 12842/2008 (penal). On 27/04/2011, Dubai Court of First Instance ruled in the presence of the defendant that he was innocent of the charges made against him and dismissed the civil case brought against him on charges of participating in a crime, fraud, taking possession of others' property and falsification of non-official documents. On 26/10/2011, the Appeal Court ruled in the presence of the defendant to accept the appeal in form and dismiss it in content, upholding the ruling that had been appealed against. On 26/12/2011, the Court of Cassation ruled to dismiss it and uphold the contested ruling. The case is still being tried at the Appeal Court, the next hearing being scheduled for 27/11/2012."
Although, as Mr Al Sharif confirmed in cross-examination, there is no reason to doubt the correctness of what was stated in this certificate, despite the fact that it was prepared by somebody (Mr Shareef) who was not himself actively involved in the underlying prosecution, to suggest as Mr Cakebread, in effect, did that Mr Fitzwilliam's arrest on 6 June 2008 was the result of DIB levelling a complaint on 1 June 2008 and had nothing to do with the on-going investigations carried out by the FAD is not a submission which I can accept. As I have explained, an arrest warrant was issued in respect of Mr Fitzwilliam almost 2 months previously, on 9 April 2008. That arrest warrant was, I have found, the consequence of the FAD's investigations rather than anything which was done by DIB. Furthermore, as Mr Anderson QC pointed out in closing, the certificate's reference to the report which was "registered with Public Prosecution" bore the number 12842/2008 which is the same case number to which Mr Amiri referred in his letter to the Public Prosecutor dated 15 June 2008. I agree with Mr Anderson QC, therefore, that the link between Mr Fitzwilliam's prosecution and the activities of the FAD is very clear. Put another way, I do not agree with Mr Cakebread that it is possible to treat the FAD as having no role in Mr Fitzwilliam's arrest. On the contrary, like Flaux J, I am clear that it was the FAD rather than DIB which played the central such role.
"Subject: Fraud against the Dubai Islamic Bank and the accused in this case:
One: Charles Mallory Ridley of British nationality in detention.
Two: Ryan Leslie Cornelius of British nationality in detention.
Three: Arin Nil of Turkish nationality a fugitive.
Four: Arthur Peter Williams [sic] of British nationality in detention.
All these are being held in detention by order of the Assistant Public Prosecutor/Maitre Khaled Al-Zarouni.
Further to the fraud case against the Dubai Islamic bank, we take this opportunity of informing you that the aforesaid individuals (the first, second and third accused) have evidently conspired in a fraud against the Dubai Islamic bank and have expropriated sums of money amounting to 1.8 billion dirhams. We also take this opportunity of informing you that from an investigation carried out into the fourth accused it is evident that he served to conceal, disguise and take possession of some of the amounts obtained from the fraud against the bank and it is evident that the accused enacted to transfer the aforesaid monies obtained from the fraud against the bank to lease a plot of land in the Dubai Land project with an area of 20 million square feet in his name. He was able to take ownership of it after the promulgation of the Freehold Law and thereafter he transferred the ownership of it to the Plantation Holdings FZ LLC company Since 2004 - which was incorporated with the aforesaid individuals. They also pumped approximately 20 million dollars into constructing the infrastructure for the aforesaid land.
Accordingly, we now ask you to carry out the following:
1. To freeze the accounts of the first, second and third accused individuals held at all financial institutions in the State, in addition to any shares, securities, deposits and real estate owned by them.
2. To appoint a judicial receiver over the aforesaid companies which are owned by the accused either wholly or in partnership with others, the accounts of which have been used to transfer and conceal the monies obtained from the fraud against the Dubai's Islamic Bank (money-laundering) and the companies listed in the following table [which included Plantation]
3. Impose precautionary sequestration on the land referred to above in favour of the Dubai Islamic Bank, since it was purchased with monies obtain [sic] from a fraud against the bank, as well as the fact that the fourth individual referred to above sold parts of the aforesaid land and also transferred part of the monies obtained from the sale of those parts of the land to the aforesaid accused outside the State. He also granted to the woman Suzanne Southerland [sic] - of Australian nationality and the man Horth Kalioubi - of Swiss nationality jointly and severally - a general power of attorney to act to dispose of the land and all the related accounts."
Mr Cakebread highlighted how two days later, on 12 June 2008, the Public Prosecutor, Mr Essam Aisa Al-Hamidan, wrote to Dubailand referring to "Criminal lawsuit No. 12842/2008 Criminal Fraud and money-laundering against the Dubai Islamic Bank" and stating as follows:
"The Public Prosecutor take this opportunity of extending to you his Best regards, right after examining the investigation records the aforesaid criminal case, and the letter of the director of the Gen Department of State Security dated 10.06.2008, and the grounds for the request to freeze assets.
The Public Prosecutor has decided to freeze any transaction involving plot of land in the Dubai Land project measuring 30 million square feet and which is owned by the company Plantation Holding FZ LLC which relates to the transfer of the ownership of it by sale or gift or any other disposal which transfers the ownership of it, until further notice. ".
Mr Cakebread submitted that the speed with which this order was obtained suggests that DIB must have been instrumental in its having been sought. I see no basis for this suggestion. The application was made by the Director of the General Department of State Security at Dubai Police General Headquarters, not by DIB. The fact that, as Mr Cakebread observed, the order had the effect of safeguarding DIB's position in circumstances where DIB had been defrauded by Mr Cornelius and Mr Ridley and the monies which had been stolen from DIB had found their way into the Project, does not seem to me to justify the conclusion that it was DIB which was behind the arrests. Mr Cakebread in this context relied on the fact that the following month, when DIB took the steps which it did concerning the assignment of the Lease, Al Tamimi were able to secure the agreement of the Public Prosecutor that the order did not prevent the assignment without any apparent difficulty, relying for these purposes on certain exchanges between Dubailand and Al Tamimi on 15 and 17 July 2008 from which it is clear that such agreement was obtained albeit that the letter from the Public Prosecutor containing such agreement is no longer available. In my view, this does not of itself demonstrate that DIB was the instigator either of the freezing order/attachment or the various arrests. Indeed, it is to be noted that, when the point was raised by Dubailand in its letter dated 15 July 2008, the response of Al Tamimi the same day was to point out that they "did not receive the copies of the letters from the Public Prosecution referred to as enclosures in your letter", which is somewhat surprising if DIB was really the prime mover in relation to the freezing order/attachment, and to make the point that, whilst they noted that the advice received by Dubailand was that the assignment was affected by the freezing order/attachment, nonetheless as far as they were concerned it did not prevent the assignment taking place. In short, the letter from Al Tamimi reads very much as though they, and so DIB also, had nothing to do with the seeking of the freezing order/attachment which was obtained.
"Based on decision of Public Prosecution Dubai, You are required immediately to search for and freeze any accounts or deposits or investments and inform us of any credit facilities or safe deposit boxes, and stop any remittances, in the name of Plantation Holdings FZ-LLC."
Mr Cakebread highlighted an email which Mr Shomali had sent the previous month, on 19 September 2008, to Mr Waugh and Mr Lyons, in which he referred to DIB needing "to have quick instructions from prosecution to attach plantation accounts (with DIB and other banks)". He also referred to an email from Mr Shomali to Mr Al Hamli three days after the notice from the Central Bank, in which Mr Shomali described the prosecution as having "issued the attachment on the bank account for Plantation which we have received already" before going on to say this:
"He is waiting for further instructions from the higher authorities with regards to actions going forward, please help to expedite the process."
These exchanges, Mr Cakebread submitted, demonstrate that DIB was in a position where it could, in effect, tell the prosecution authorities what to do. This, he suggested, is further confirmed by an email from a Mr Beaver Chua in DIB's Group Compliance Department to Mr Shomali, in which he referred to having "informed COD to freeze the Escrow accounts" in addition to Plantation's non-escrow account at DIB. Mr Cakebread submitted that this email shows that DIB could even bypass the prosecution authorities when required. I disagree with Mr Cakebread about this. There is nothing to indicate that DIB was able to insist on the prosecution authorities taking particular action. Nor do I read Mr Shomali's request to Mr Al Hamli as suggesting that Mr Al Hamli was in a position to interfere in steps or decisions taken by the prosecution authorities. As for the point concerning "COD", this appears to be a reference to something internal to DIB and so it is not clear to me who it is suggested by Mr Cakebread was bypassed, but, in any event, my reading of the email (along with the thread to which it is a response) is that Mr Chua was, in effect, merely telling Mr Shomali that, as far as he was concerned, the notice from the Central Bank should be treated as applying to the escrow account set up by Plantation for the purposes of Law No. 8 of 2007, and not just the account set up in Plantation's sole name.
"My overall conclusion in relation to the arrests and prosecutions is as follows. The overwhelming weight of the documentary evidence, confirmed by the evidence of Lt. Col. Belhaul to the Public Prosecutor, is that it was the FAD and Dubai State Security (not the Bank) which provided the report and file to the public prosecutor setting out the results of the investigation which the FAD had been conducting since the autumn of 2007. In other words, to the extent that anyone other than the Public Prosecutor's office itself procured the arrests, it was the FAD, not the Bank. In due course, based on the investigation the FAD had conducted, prosecutions of those individuals ensued.
I consider that the most likely explanation for the reference in the documents relied upon by the second and third defendants to a complaint by the Bank is either that the Bank did make a 'complaint' to the FAD about employees accepting bribes (about which it was obliged to inform the FAD under Law No 3 of 2007) or that the reference to a complaint by the Bank is to be explained as the Bank being the victim of the fraud and subsequently the partie civile in the criminal proceedings. ".
"However, whatever the explanation for these references to the Bank making a complaint and even if the Bank did make some form of complaint to the police or the public prosecutor, in my judgment that would not have amounted to the Bank acting in bad faith vis-ΰ-vis the other parties to the RSA. Given that the Bank was under a positive duty under Law No. 3 of 2007 to report any wrongdoing it discovered to the FAD, it cannot be criticised even if, in doing so, it was motivated in part by its own commercial interests. This conclusion essentially flows from or is akin to the principle which Mr Anderson QC relied upon, that no term can be implied into the RSA that the Bank would not report any wrongdoing to the FAD if it was required to do so, since such an implied term would be illegal and contrary to public policy: see by analogy William Cory & Son Ltd v London Corporation  2 KB 476 at 484 per Asquith LJ."
"Both parties to a contract are taken to contract on the footing that they wish the contract to be performed, and accordingly must be taken to have agreed that neither will actively prevent performance. It is possible that the duty does not rest upon the implication of a term, but may be a positive rule of the law of contract that conduct of either the promisor or the promisee, which can be said to amount to himself of his own motion bringing about the impossibility of performance, is itself a breach of the contract. However, since ultimately the rule of law (if such it is) depends upon the intention of the parties, it is submitted that it may properly be categorised as an implied term. The essence of the prevention principle is that the promisee cannot insist upon the performance of an obligation which he has prevented the promisor from performing. The classic formulation of the implied term is that of Cockburn C.J. in Stirling v Maitland (1864) 5 B & S 841:
'I look on the law to be that if a party enters into an arrangement which can only take effect by reason of the continuance of a certain state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances, under which alone that arrangement can be operative.'
This formulation has been applied many times. In Ogdens Ltd v Nelson,  2 KB 287 (affirmed by HL:  A.C. 109) Lord Alverstone C.J. said:
'It is, I think, clearly established as a general proposition that where two persons have entered into a contract, the performance of which on one or both sides is to extend over a period of time, each contracting party is bound to abstain from doing anything which will prevent him from fulfilling the obligations which he has undertaken to discharge.'
However, the limits of the implied term must be recognised. First, the implied term must not be illegal, contrary to public policy, or (in the case of a corporation) ultra vires the contracting party. Thus no term will be implied preventing a public authority from exercising powers vested in it by statute to be exercised for the public good.
Second, the implied term is limited to the active prevention of performance, and probably does not extend to passivity in the face of the action of some third party; nor does it require positive steps to be taken to facilitate performance.
Third, the act complained of must itself be wrongful, either as being a breach of the express or implied terms of the contract, or wrongful independently of the contract (for example tortious).
As with other implied terms, the test of necessity must be satisfied. In Mona Oil Equipment & Supply Co Ltd v Rhodesia Railways Ltd, Devlin J. said:
'In truth, the proposed term, like all other implied terms must be judged by the test whether or not it is necessary for the business efficacy of the contract. The fact that an act, if not prohibited by the contract, is one which would result in a party being robbed of the benefits which otherwise the contract would give him is certainly an important matter to be considered in relation to the business efficacy of the contract, but it is not necessarily the most important, and it is certainly not the only matter.'".
"The first question, therefore, is whether the corporation's act in making by-law No. 2 of 1948 was a breach of the contract at all. I will consider this first in abstraction from cl. 13 of this contract. The claimants argue that it is an implied term of every, or almost every, contract between A and B (and certainly of this contract) that A shall not prevent or disable B from performing the contract and vice versa, and that this was just what the corporation did by the act in question. In general, no doubt, it is true that a term is necessarily implied in any contract whose other terms do not repel the implication, that neither party shall prevent the other from performing it, and that a party so preventing the other is guilty of a breach.
But an act cannot be a breach of a term of the contract - express or implied - (let alone a repudiation) unless the term in question is valid. There can be no breach, if the term in question is illegal, contrary to public policy, or (in the case of a corporation) ultra vires the contracting party, or for some other reason waste paper, because in such a case there is no binding obligation and only a binding obligation can be violated. You cannot break a rope of sand. It starts broken. ".
Accordingly, it is clear that any contractual obligation (indeed, including any express term) not to report a serious fraud to the proper authorities would be contrary to public policy. As Mr Anderson QC submitted, that is all the more the case in relation to DIB in view of the positive obligation which DIB was under by virtue of Law No. 3 of 2007. This is, of course, the very point made by Flaux J in his judgment at  and it seems to me to be unanswerable. I agree, therefore, with Mr Anderson QC, that DIB cannot have been under any implied obligation not to tell the prosecution authorities about wrongdoing which was suspected by DIB. If, therefore, DIB made a complaint concerning Mr Fitzwilliam, whether to the prosecution authorities or to the FAD, and, even if that complaint was the reason why Mr Fitzwilliam was arrested on 6 June 2008, this cannot properly be regarded as having been in breach of any implied obligation to which DIB was subject.
"Q. Right. So I suggest that the fact is, of course, that Mr Shabani, if he thought he was acting properly, and I'm suggesting he would act properly, in the interests of the state, of the Sheikh, of the Government of Dubai, would have the influence at least to have the Public Prosecutor arrest somebody?
A. We are assuming here that -- arresting somebody innocently? I don't think this is
Q. No, let me stop no, I'm not suggesting that for one moment. I'm suggesting that if he considered that there was good reason for it I'm not suggesting he would arbitrarily arrest somebody. I'm suggesting that if he thought there was a good reason for doing so, a justification corruption, for example, fraud he would have the influence to have that happen?"
There is no hint here that Mr Cakebread was suggesting that Mr Al Shaibani acted without reasonable and probable cause nor that he acted with malice. These are, however, necessary ingredients of the tort of malicious prosecution, as is made clear in Clerk & Lindsell on Torts (21st Ed., 2014]) at paragraph 16-09:
"In an action for malicious prosecution the claimant must show first that he was prosecuted by the defendant, that is to say, that the law was set in motion against him by the defendant on a criminal charge; secondly, that the prosecution was determined in his favour; thirdly, that it was without reasonable and probable cause; fourthly, that it was malicious. ".
It follows that, even if Plantation could establish the first necessary ingredient of the tort, namely that it was DIB which "set in motion" Mr Fitzwilliam's arrest and prosecution (as opposed to the prosecution authorities and/or the FAD), the third and fourth ingredients have not been established or even alleged. The result is that, even if DIB played the role which Mr Cakebread suggested in relation to Mr Fitzwilliam's arrest (and the arrest also of Mr Cornelius and Mr Ridley), it is of no legal consequence.
"What is more, even if the bona fides of the Bank in that regard could be impugned, any complaint by the Bank was not causative of the arrest and prosecution of the second and third defendants and Mr Fitzwilliam, which were clearly procured and instigated by the FAD and State Security police. In other words, whatever the Bank said or did, the FAD and the police were going to press for the arrests and prosecution in any event."
I agree with this.
The notice which was served on 9 June 2008 and what followed
"It has come to our client's attention that there are existing and continuing breaches of the RSA in relation to Plantation, including but not limited to:
1. Failure to pay all Plantation Villa Proceeds to DIB pursuant to clause 7.2(d) of the RSA. In this respect we note the following:
(a) all Plantation Villa Proceeds (being all sale proceeds) over US$150,000 per month must be paid to DIB excluding (i) 'Earmarked Plantation Proceeds'; and (ii) proceeds from villas sold prior to 2 October 2007. Earmarked Plantation Proceeds are defined as (i) amounts required by law to be retained on escrow; and (ii) amounts required by law to be applied to building or other specified purposes.
(b) based on the financial information provided by Plantation to DIB:
(i) 10 plots been sold by Plantation to third parties after 2 October 2007, being plots 54, 105, 29, 20, 82, 75, 76, 97, 98 and 108 (RSA plots); and
(ii) the total deposits received in relation to the RSA Plots up to April 2008 is AED 18,595,465.30.
(c) during the period from October 2007 to April 2008 (7 months), plantation was entitled to retain US$150,000 per month, being an aggregate of US$1,050,000 or AED 3,856,650.
Accordingly up to April 2008, in relation to the RSA Plots Plantation was required to deposit the aggregate amount of AED 14,738,815.30 with DIB in repayment of the Rescheduling Amount or to be retained in the escrow account with DIB.
Please note the above calculations do not include deposits received after April 2008 (which have not yet been confirmed) or any sale proceeds received in respect of plot 90 (the date of sale is unclear), and DIB reserves its rights in relation to the same.
2. Failure to register as a developer with the Real Estate Regulatory Authority of Dubai pursuant to Law No. 8 of 2007, as required under clause 16.1(f) of the RSA.
3. Failure to deposit sale proceeds from the Plantation Villas in an escrow account as required under Law No. 8 of 2007.
4. Failure to supply copies of all sale and purchase agreements entered into by Plantation for the Plantation Project and requested by DIB, as required under clause 16.1(e) of the RSA.
Accordingly, DIB hereby formally gives notice to Plantation that it is in breach under the RSA. To the extent that the breaches above remain unremedied to the satisfaction of DIB within 15 business days of the date of this letter, pursuant to clause 18.4(a) of the RSA DIB shall proceed immediately to make demand of Plantation for the outstanding Restructuring Amount under the RSA and shall then take enforcement action against it.
DIB reserves its rights for any other existing or future recent breaches of the RSA."
Earlier the same day, as appears from an email exchange which contains heavy redaction, Mr Waugh had been sent the schedule which Mr Khalifa had sent Mr Shomali on 5 June 2008, namely the schedule originally supplied by Ms Sutherland on 26 March 2008 which Mr Khalifa had worked on to produce the additional calculations which Mr Shomali had asked him to include. Although it is not possible to know what Mr Waugh had to say in response, it is tolerably clear that he must have reverted with his views on the figures with which he had been provided. The GIA Department at DIB also reviewed the figures before the letter was sent by Mr Waugh to Mr Davies at Clifford Chance.
"With respect to the above Banking Facilities Letter accepted by you, we note that a notice of breach has been served on you in respect of the Restructuring and Settlement Agreement dated 19 August 2007 between the Bank, you and others. For this reason, we regret to inform you that the Bank shall not be able to proceed with the above Banking Facility at this time.
The Bank may, in its sole discretion, consider providing the Facility at a future date. However, this will be subject to the above issue being resolved to the complete satisfaction of the Bank, and such other terms and conditions as the Bank may decide."
"In the event, the return date was 10 July 2008, when the matter came before Tomlinson J. The second and third defendants (as claimants in those proceedings 2008 Folio 682) had issued a Claim Form seeking declarations (i) that the notice dated 9 June 2008 had not been properly served (a point on which they lost before Tomlinson J and which has not been pursued before me) and (ii) that there had been no breach of the RSA by them or Plantation entitling the Bank to declare an Event of Default. The Bank resisted the continuation of the injunction, filing witness statements from Mr Lyons and Mr Waugh. In his witness statement, Mr Waugh dealt with the suggestion in the evidence of Ms Caldicott that Plantation had not paid over the Plantation Villa Proceeds because the Bank was in breach of an obligation to lend money pursuant to a letter of intent sent to Mr Fitzwilliam on 19 August 2007. Mr Waugh pointed out that the Bank had in fact made the offer of the Standby Loan Facility in its letter of 19 April 2008 and that the reason no lending was made under that facility was because Plantation failed to comply with the conditions precedent, so that there was no foundation for any suggestion that the Bank was in breach of that agreement. He also pointed out that, even if the Bank were in breach of any lending obligation, that would not afford Plantation with a defence to its obligations under the RSA, including its payment obligations.
Tomlinson J accepted that the second and third defendants' case that the failure of the Bank to advance monies under the Standby Loan Facility prevented performance of Plantation's obligations was unarguable and refused to continue the injunction. In his judgment at  he held as follows:
' it seems to me that the short passage in Ms Caldicott's witness statement, to which I have referred is really a wholly inadequate basis upon which the court could be satisfied that there is an arguable case that the bank has itself broken a contractual obligation to Plantation which has in turn prevented performance by Plantation of its obligations to pay over the sales proceeds as and when they were received it seems to me that there is no serious issue to be tried on the merits on the question of whether or not Plantation is in breach of the underlying agreement in, at any rate, the principal respect alleged;'
He also rejected an application made by Denton Wilde Sapte (recently instructed for Plantation and Mr Fitzwilliam in place of Clifford Chance) for a 14 day adjournment to enable them to take proper instructions given that Mr Fitzwilliam was in prison and it was difficult to contact him. Having heard submissions from counsel then acting for the Bank, he said at  of his judgment: 'I am entirely persuaded that there is no basis upon which I can properly do so, whatever misgivings I may feel about the underlying situation.'"
"We refer to the:
1. Land Lease Agreement (Lease) between Dubai development and investment authority (now Dubai Land LLC) and Arthur Fitzwilliam (now Plantation Holdings FZ LLC) dated 25 January 2004; and
2. Conditional Assignment of Lease between Plantation Holdings FZ LLC and Dubai Land LLC dated 2007.
Pursuant to clause 2.3 of the Conditional Assignment of lease, we hereby notify and certify to you on behalf of DIB that a Plantation Enforcement Event has occurred.
Accordingly we request you to acknowledge the assignment of all of Plantation Holdings FZ LLC's rights, interests and title under the Lease to DIB by signing the acknowledgement below.
We would also kindly request you to:
1. update your records accordingly;
2. provide us with copies of all documents, plans, financials, contracts and other information relating to the Plantation land and project; and
3. cease communication with Plantation Holdings FZ LLC, and provide all other assistance reasonably required by DIB to ensure all sales, marketing and other activities in relation to the Plantation land and project are immediately stopped.
Dubai Land LLC hereby acknowledges the assignment of all of Plantation Holdings FZ LLC's rights, interests, obligations and title under lease to DIB as from the date hereof.
The Acknowledgement was duly thereafter signed by Dubailand on 20 July 2008, after the exchanges to which I have previously referred concerning the freezing order/attachment and after the prosecution authorities had indicated that they did not object to the assignment. On the same day, 20 July 2008, Al Tamini wrote to Plantation referring to the "notice of breach dated 9 June 2008", advising "that the breaches listed in the Notice remain unremedied" and informing Plantation that:
"Pursuant to DIB's rights under the RSA and the Conditional Assignment of lease between Plantation Holdings FZ LLC, DIB and Dubai Land LLC dated 2007, all of Plantation Holdings FZ LLC's rights, interests and title under the Lease have been assigned to DIB (as evidenced by the acknowledgement signed by Dubai Land LLC, copy attached)."
The letter then went on to say this:
"Accordingly, we direct you to immediately:
1. provide us with originals of all documents, plans, financials, contracts and other information relating to the Plantation land and project; and
2. cease (and direct all of your employees and agents to cease) all sales, marketing and other activities in relation to the Plantation land and project.
DIB reserves all of its other rights and remedies under the RSA and at law."
The next day, 21 July 2008, Al Tamimi wrote to the various parties to the RSA (including the lawyers) referring to the letter which had been sent on 9 June 2008, advising "that the breaches listed in the Notice remain unremedied" and demanding and declaring on DIB's behalf accelerated payment of the "Outstanding Restructuring Amount" in the sum of US$440,818,275.65 pursuant to clause 18.4(a)(i) of the RSA informing Plantation.
"Dubai Islamic Bank (DIB) Seeks [sic] to clarify its position regarding a transaction that has resulted in the bank recently taking action to enforce its security over a substantial area of land located in Dubai land. DIB confirms that following enforcement of the security, the bank has assumed ownership of the land which is the site for a premium property development project, known as the Plantation Project, which covers the bank's exposure to the transaction in question. At all times, DIB had strong control of the security, as well as other securities covering the same transaction, and waited on foreclosure as per the legal requirements of the foreclosure process.
In this regard, the bankers acted in the best interest of all its stakeholders and has at all times taken the necessary steps to safeguard those interests.
Whether as a result of this press release or not, soon after this, as he explained in an email to, amongst others, Mr Shomali, Mr Kamal "received a call from a US-based investment group with presence in Dubai expressing interest to invest in Plantation". Mr Kamal went on to say that he considered that "we need to have a decision on whether this project shall be sold or developed", adding that:
"It is important to know whether a gain in addition to the outstanding amount can be realised by us or we are only entitled to the debt amount. In the later [sic] case, we need to be clear on whether the gain that may potentially be realised will be the entitlement of the Government or Arthur. I am sure we all agree that we do not want to work hard to make Arthur rich."
In the event, that investment did not amount to anything. Nor did other expressions of interest which ensued during the course of the coming months, including after DIB had taken physical possession of the Plantation site on 4 November 2008. By this stage, as Mr Ilahi explained in detail in his witness statement, Plantation's debts were very substantial and he had to spend a lot of his time working through the records and files "to get to the bottom of" matters. As demonstrated by an internal memorandum which he prepared for Mr Shomali on 10 January 2009, having worked through the information which he was able to glean and taking into account the various claims made by creditors, he ascertained that "the amount booked in Plantation" was AED 13,739,950.39 whereas the amounts claimed by the various contractors and suppliers who had made claims amounted to as much as AED 44,085,575.09. In addition to this, other liabilities had accrued, Mr Ilahi stating as follows in paragraph 7.37 of his witness statement:
"In addition, I recall that a very substantial sum (approximately AED 300 million, or a little under USD 81.68 million) was being claimed by Dubailand for roads (over AED 49.5 million, or a little under USD 13.5 million), utilities (including water supply, irrigation and sewerage (over AED 136.5 million, or a little over USD 37.16 million) and a power substation (over AED 107 million, were little over USD 29.13 million). I also recall a big claim was made by Dubai Land under its profit share agreement with Plantation. ".
Ultimately, having scaled back the equestrian-related operations and ultimately selling the horses in June 2010, the decision was taken by DIB in about August 2010 to put the Project on hold and wait for a change of circumstances. The Project not having attracted any firm offers from any prospective investors, it remains on hold to this day.
The present proceedings
DIB's entitlement under clause 18.2 of the RSA
"the Plantation Vila Proceeds [i.e. the proceeds, when collected, of sale of plots in the residential villa element of the Plantation but excluding those amounts of Plantation Villa Proceeds that are: (a) Escrow Proceeds [i.e. those amounts of Plantation Villa Proceeds required by Law to be retained in escrow, but only for so long as they must remain in escrow or applied in accordance with Law]; or (b) required by law to be applied for building or other specified purposes] so far as they exceed $150,000 per month provided that such sum has been disbursed or committed to the purposes of the development of the Plantation Project."
Although this can hardly be described as the happiest drafting, I agree with Mr Anderson QC that it is nonetheless tolerably clear that what the parties to the RSA must be taken as having intended is that either sums received in respect of villa plots sales would be paid into an escrow account or they would be paid to DIB inasmuch as they exceeded US$150,000 per month.
"(i) there shall not be an Event of Default under this clause 18.1(a) if the amount paid to the Bank in respect of a Repayment Date represents 90% or more of the amount due on such Repayment Date and any such shortfall is paid to the Bank within 3 months after the Repayment Date to which it relates; and
(ii) no Plantation Enforcement Event shall arise consequent upon an Event of Default under this clause 18.1(a) if, during the 240 day period immediately following the Effective Date the amount paid to the Bank in respect of a Repayment Date falling within that period represents 50% or more of the amount due on such Repayment Date and any such shortfall is paid to the Bank within 3 months of the Repayment Date to which it relates;"
Mr Anderson QC characterised the first of these provisos as, in effect, a 'near miss' provision: almost the entirety of the relevant instalment has been paid and the balance is paid within three months. As for the second proviso, this covers the situation where, within 240 days of the Effective Date (2 October 2007) and so not later than 29 May 2008, 50% or more of the amount due on the relevant Repayment Date has been paid. In that situation, the shortfall can be paid within three months of that Repayment Date.
"Mr Anderson QC submits that this literal construction is uncommercial as it would, in effect entitle Plantation to 'cock a snook' at its obligations under the RSA and fail to pay over to the Bank many millions received as Plantation Villa Proceeds and yet, if the Repayment Schedule were up to date, the Bank could never rely upon a Plantation Enforcement Event. He submits that the words: 'subject to the provisos at clause 18.1(a)' in the definition of Plantation Enforcement Event are intended to prevent the Bank from improperly characterising a payment default under clause 18.1(a) as a default under another sub-clause of clause 18.1 in order to bypass the protection afforded by the provisos to clause 18.1(a)."
Flaux J rejected Mr Anderson QC's argument, saying this in paragraph  and :
"It seems to me there are a number of problems with Mr Anderson's construction. To begin with, it seems to me Mr Mallin is right that the provisos in clause 18.1(a) and the reference to them in the definition of Plantation Enforcement Event are intended as something of a brake on enforcement against the Plantation security which was regarded by the parties as the most valuable security of all under the RSA. There is nothing inherently uncommercial in that. Furthermore, so far as Mr Anderson's point about cocking a snook at the RSA is concerned, the risk of that is more apparent than real, given that the breach of clause 7.2(d) by Plantation is an Event of Default under clause 18.1(d) for the reasons given in the previous section of the judgment. If that default remained unremedied (as it did in the present case), then under clause 18.4(a) the Bank would be entitled to serve a further notice accelerating the debt, the effect of which would be, inter alia, that a Plantation Enforcement Event had then occurred, for the reasons given in the next section of the judgment.
Even if I thought that the natural construction of the definition of Plantation Enforcement Event for which Mr Mallin contends was uncommercial, I do not consider Mr Anderson QC's alternative construction would be viable without rewriting the contract. If the intention had been to protect the counterparties from the Bank relying upon another sub-clause of clause 18.1 to bypass the provisos, one would have expected that to be spelt out in the wording of clause 18.1, not by a side wind in the definition of a Plantation Enforcement Event, when Plantation Enforcement Events are not mentioned in clause 18.1 at all. Whilst it is certainly true, as Mr Mallin accepted, that the meaning of a contractual provision will yield to commercial common sense, it will not do so to the extent of rewriting the contract, which as I say would be what would be required to achieve Mr Anderson's construction."
On this basis, Flaux J's conclusion in paragraph  was this:
"It follows that, at the time when the period of 15 business days for curing the default under clause 18.1(d) expired on or about 3 July 2008, at the time of the hearing before Tomlinson J on 10 and 14 July 2008 and at the time when the Bank served the notice on 20 July 2008 declaring a Plantation Enforcement Event, on the proper construction of the RSA, there was not or at least not yet a Plantation Enforcement Event and the Bank was not entitled to declare one when it did."
"If it becomes unlawful for a Guarantor or any other Security Provider to perform all or any of its obligations under this Restructuring Agreement or any Security Document or any authorisation, approval, consent, licence, exemption, filing, registration or notarisation or other requirement of any governmental, judicial or public body or authority necessary to enable the guarantor or any other security provider to comply with its obligations under this Restructuring Agreement or any Security Document or to carry on its business is not obtained or, having been obtained, is modified, revoked, suspended, withdrawn or withheld or fails to remain in full force and effect;"
Mr Anderson QC drew attention to the fact that a breach of the type contemplated by sub-paragraph (h) is necessarily not tied to any particular date since the time when it becomes unlawful to perform will, unlike a date for payment, not necessarily be readily identifiable. He suggested that the same distinction applies to other sub-paragraphs. In addition, Mr Anderson QC pointed out, the sub-paragraph (a) provisos take as their reference points dates and timings which have nothing to do with the date of a breach falling within the ambit of sub-paragraph (h). In my view, there is considerable force in these submissions. It is far from easy to discern why the sub-paragraph (a) provisos can have any sensible application to other clause 18.1 "Events". Indeed, as Mr Anderson QC went on to point out, the provisos themselves are very specific in their applicability being limited to sub-paragraph (a). This is demonstrated by the opening words of the first proviso (and "there shall not be an Event of Default under this clause 18.1(a) ") as well as the opening words of the second proviso ("no Plantation Enforcement Event shall arise consequent upon an Event of Default under this clause 18.1(a) "). Focusing still on sub-paragraph (h), Mr Anderson QC postulated that in order for the first of the provisos to operate, it would need to be reworded as follows:
"there shall not be
an Event of Defaulta Plantation Enforcement Event under this clause 18.1(a)18.1(h) if the amount paid to the Bank in respect of athe Repayment Date preceding the date such unlawfulness arose or such failure to obtain occurred, or such modification, revocation, suspension, withdrawal, or withholding occurred or such failure to remain in force occurred represents 90% or more of the amount due on such Repayment Date and any such shortfall is paid to the Bank within 3 months after the Repayment Date to which it relates".
Mr Anderson QC submitted that this amount of re-drafting demonstrates that the parties to the RSA cannot have intended the definition of "Plantation Enforcement Event" to make the sub-paragraph (a) provisos applicable to the other sub-paragraphs listed in that definition. The difficulty with this submission, however, is that the definition does just that and in very specific terms. If Mr Anderson QC were right, then, there would be no need for sub-paragraphs (c) to (e) and (h) to (k) to have been mentioned at all. Nor would there have been any need to exclude sub-paragraphs (f) and (g) from the list. Indeed, there would probably have been no need to have had any mention of the sub-paragraph (a) provisos since they would, in any event, obviously apply to sub-paragraph (a) regardless.
"If any representation or warranty made by any Guarantor in this Restructuring Agreement or any Security Documents or any notice delivered under any of them shall prove to have been incorrect in any material respect as of the time made;"
This is essentially the 'cock a snook' submission which Flaux J records Mr Anderson QC as having made before him. I am not clear, however, whether Mr Anderson QC's submission at that stage focused only on scenarios in which "Events of Default" came about because of non-compliance with financial obligations. Certainly, in paragraph  of the judgment, where Flaux J records the 'cock a snook' submission, the example recorded as having been given by Mr Anderson QC was a failure on the part of Plantation to "pay over to the Bank many millions received as Plantation Villa Proceeds". It is not obvious that Mr Anderson QC made a more broadly based submission to Flaux J by reference, as he did before me, to sub-paragraphs (c) and (h). Indeed, another example would seem to me to be sub-paragraph (d) insofar as the relevant failure to perform for the purposes of that provision is, as in the case of alleged Breaches 2 and 4, failures to provide DIB with sales contracts and to register under Law No. 8 of 2007. These, again, are matters which are not financial in nature, yet DIB's ability to rely upon them (through sub-paragraph (d)), if Plantation's argument is right and if Flaux J was right, would depend on the application of the sub-paragraph (a) provisos concerning payment of the Rescheduling Amount.
"Following the judgment of Tomlinson J lifting the injunction, it is clear that there was an Event of Default under clause 18.1(d) because of the failure of Plantation to comply with its obligations under clause 7.2(d) or remedy that default within 15 business days, so that the Bank was entitled to serve a notice under clause 18.4(a) accelerating the debt and demanding immediate repayment of the full outstanding Rescheduling Amount, which it did on 21 July 2008. Mr Anderson QC submitted, that once it had served that notice and the full outstanding Rescheduling Amount fell due, any brake upon the occurrence of a Plantation Enforcement Event contained in the definition which might previously have been applicable fell away.
Both Mr Mallin and Mr Mills sought to resist that conclusion on the basis that in some way clause 18.1(a) and its provisos remained in force, so far as a Plantation Enforcement Event was concerned, notwithstanding the acceleration of the debt. It seemed to me they had some difficulty in formulating their case as to how the RSA could be construed in that way, which is scarcely surprising since in my judgment that case is untenable. Once there has been acceleration under clause 18.4, the Repayment Schedule in Schedule 2 and clause 18.1(a) necessarily fall away because the Bank is entitled to say the whole outstanding Rescheduling Amount is payable immediately. It follows that the provisos under clause 18.1(a) no longer operate. By definition clause 18.4 only comes into play when there is already an unremedied Event of Default under clause 18.1 and clause 18.4 simply overrides clause 18.1. Mr Mills really recognised this when he said that clauses 18.1 and 18.4 have to be dealt with in sequence.
In the alternative, on the true construction of the RSA, once a notice of acceleration has been served, the 'Repayment Date' in the opening words of clause 18.1(a) is the date of that notice, and the amount due on that date is the whole outstanding Rescheduling Amount. In those circumstances, the defendants cannot rely upon the proviso, because what they had paid was only about 12% of what was due (US$60.4 million as a percentage of US$501 million), nothing like 90%. It follows that the Bank was entitled to rely upon or declare a Plantation Enforcement Event as at the date of that notice, 21 July 2008 and the notice they actually served was only a day early.
Mr Mallin in particular sought to rely upon the words 'subject to clause 18.2 (Plantation Enforcement Events)' in clause 18.4(a)(ii) and clause 18.2 itself in support of the proposition that the brake on enforcement against the Plantation security to which I have referred earlier remained in force even after acceleration. In the present context, it seems to me that argument is misconceived. All the reference to clause 18.2 in clause 18.4(a)(ii) is doing is making it clear that there cannot be enforcement against Plantation unless there is a Plantation Enforcement Event. For example, if there had been a material change in the financial condition of one of the Guarantors other than Plantation which amounted to an Event of Default under clause 18.1(k), entitling the Bank to accelerate the debt under clause 18.4, the Bank could still not enforce against the Plantation security because that default under clause 18.1(k) would not have been caused by any default of Plantation, so there could not be a Plantation Enforcement Event. However, contrary to Mr Mallin's submissions, what the reference to the provision being subject to clause 18.2 is not doing is preserving the provisos in clause 18.1(a) which have necessarily fallen away once the full outstanding Rescheduling Amount is immediately due and payable."
Law No. 8 of 2007
Applicability to the Project
"This Law will apply to Developers who sell Units off-plan in Real Estate Development projects in the Emirate and who receive payments from purchasers or financers towards such Units."
Article 2 defines "Developer" as being:
"Any natural or legal person licensed to engage in the purchase and sale of Real Property for Real Estate Development purposes, and this includes the master developer and the sub-developer."
Article 2 also defines "Real Estate Development" as meaning:
"Projects for the construction of residential or commercial multiple storey buildings or compounds."
As for "Real Property", this is defined as being:
"Anything which is fixed and cannot be moved without damage or alteration of its structure."
The word "Unit" is given this meaning:
"Any designated part of the Real Property that the Developer sells to third parties."
Article 2 contains no definition for the words "off-plan". Mr Alulama and Mr Chaloub have, however, agreed that by this is meant "selling or purchasing of property before the property is built with only the plans available for inspection", and I am content to proceed on the basis that this is, indeed, what the words should be taken as meaning.
"It is not the units that I buy that is being protected, it is the whole of the project. If I can't deliver the project as I have, you know, the plans that were given This is the project that was being registered. Everything in this project is under the escrow law, whether it is a bare plot of land, anything else, whether it is car parks or anything else. Anything that is within this project is going to be considered an off-plan unit. Off-plan not because it is itself off-plan, yes, I agree a bare plot is there, you can sell it immediately. No, off-plan because it is within the whole of the project too."
In answer to Mr Alulama's point concerning the right to use, but not own, common areas, Mr Chaloub said this:
"It doesn't affect the outcome. It is within a project and the project RERA and the authorities in Dubai, they will look at that project. They want that project to be continued, not only one part of the project. they probably gave the RERA the calculation of the whole project, that included the purchase price of the plots of land. This purchase price should go in the escrow account in order for the rest of the project to be complete too, otherwise they take the bare plots of land, the purchase price of the bare plots of land, they don't put it in the project and then the project is not complete because they don't have the finances for it. That law is made to guarantee the completion of the projects."
As he put it a little later, summarising the position:
"The plot money goes into the pot to guarantee the completion of the project."
In my view, this broader approach is to be preferred to the more narrow approach which was favoured by Mr Alulama. I am satisfied, in short, that Law No. 8 of 2007 applied to villa plot sales which were effected by Plantation. It seems to me, indeed, that this accords with the rationale for the introduction of Law No. 8 of 2007 which Mr Alulama explained in his report. The matter needs to be viewed realistically and with common sense. The purchasers of the various villa plots were plainly as deserving of protection as were purchasers of individual apartments in a block. Both sets of purchasers needed to be protected against the risk that the developments were not completed with the consequence that they lost their purchase money. That is the risk which Law No. 8 of 2007 was designed to combat, and it was a risk which was no different for villa plot purchasers than it was for the purchasers of apartments.
"Any disposition that occurs in respect of any Real Property Unit sold off-plan will be entered in the Interim Property Register, and any sale or any other legal disposition the transfers or restricts ownership or any ancillary rights will be void unless entered in that Register."
The term "Real Property" is defined as follows (Mr Chaloub confirming in cross-examination, agreeing with Mr Anderson QC and Mr Alulama that "and/or" is appropriate despite the translation next to his report simply stating "and"):
"The land and/or any fixed structure constructed on it."
This definition, with its reference to "land and any fixed structure constructed on it", replaced an original definition which was in essentially the same terms as that contained in Law No. 8 of 2007 as a result of a change made by Law No. 9 of 2009. Mr Anderson QC relied upon this as demonstrating that it is not possible to derive assistance from Law No. 13 of 2008 in understanding the definition of "Real Property" in Law No. 8 of 2007. I agree with Mr Anderson QC about this. Indeed, if anything, it seems to me that the fact that there was a change to the definition in one of the Laws but not the other, far from supporting Mr Chaloub's view on the "off-plan" issue, tends to support the view held by Mr Alulama. In the final analysis, however, since the two Laws are dealing with different matters, in my view, little assistance is to be derived from looking at Law No. 13 of 2008. Focusing on Law No. 8 of 2007, which is what matters for present purposes, I remain of the view which I have described, namely that Mr Chaloub is right that that Law applied to the villa plot sales which were made by Plantation in this case.
"No, Plantation could not have refused to comply with that determination. Once a developer has been accredited and licensed, it will be subject to Law No. 8 of 2007 and RERA's oversight in respect of the project it is developing. ".
In cross-examination, however, Mr Chaloub agreed with Mr Anderson QC that there is nothing in Law No. 8 of 2007 making RERA's view as to whether the Law is applicable binding. He confirmed that he was not suggesting that RERA's determination is binding and had not stated in his report that this is the case, although in re-examination Mr Chaloub suggested that what he meant when he referred to RERA making a binding determination is that Plantation was obliged to do as RERA told it to do but that this could be challenged in due course. It would appear, notwithstanding the clarification given in re-examination, that, as Mr Anderson QC put it in closing, all that Mr Chaloub was meaning to do in the passage set out above was to make the point that, once a developer is registered with RERA, the developer becomes subject to RERA's oversight. This is not the same thing as saying that RERA's determination that a developer should be registered because Law No. 8 of 2007 is applicable to the project which the developer is undertaking represents a binding determination. In such circumstances, the point made by Plantation falls away, and it is unnecessary, therefore, to address Mr Anderson QC's reliance on any kompetenz-kompetenz point.
"Q. Now, next thing was, there was an ambiguity, was there not, as to whether the escrow law applied to this project ?
A. At our end, I think don't think it was ambiguity. I think the ambiguity was on the side of Mr Arthur [Fitzwilliam]. At our end, the cost was very clear. So long as the developer receives money from receivers, so long as there is construction happening on site for which this money is being used, the escrow rule should apply, so long as the schedules require needed some protection, the escrow should apply. And our view and my view from the beginning has always been that the escrow account - this escrow would prevail and apply to this project.
Q. Well, thank you, Mr Kamal. I think we are at one on that. And in fact it is correct, isn't it, that that was confirmed by RERA at a meeting in October 2007, which was attended certainly by Mr Bitar, maybe not by you. Do you remember?
A. Yes. I have not attended any meeting with the Land Department at the time, for RERA, no.
A. I know Habib maybe went, but
Q. So always clear to you. In fact I think it is right Mr Fitzwilliam is rather keen for it not to apply, because it would avoid the need for the bureaucratic intervention that follows from Law No 8 applying, is that right?
A. I remember there was an argument of this and our stand was it applies and his stand was he doesn't believe so, and we should move. He was pushing hard. We try to do the right thing. We tried to push, but at the same time we don't want to violate the law."
The position is really very clear: as far as DIB and RERA were concerned, but ironically not Mr Fitzwilliam (and Plantation) until he was told by RERA that his view was not accepted and could not prevail, Law No. 8 of 2007 applied to the Project and to Plantation as its developer.
The position in the period from 28 June 2007 to 28 December 2007
The Department [defined as the Land Department] will maintain a register known as the 'Register of Real Estate Developers' in which is entered the names of Developers licensed to engage in the Real Estate Development business in the Emirate. No Developer may engage in such business unless he is recorded in that register and licensed by the Competent Entities in accordance with their relevant requirements.
A Developer may not advertise in local or international media and may not participate in local or international exhibitions to promote the sale of Units or Real Property off-plan, unless he obtains an authorisation in writing from the Department.
Any Developer who wishes to sell Units off-plan must submit to the Department a request to open an Escrow Account.
An Escrow Account will be open to pursuant to a written agreement between the Developer and the Escrow Agent whereby the payments made by off-plan purchases or by the financers of the project are deposited in an account opened with the Escrow Agent in the name of the Real Estate Development project.
1. An Escrow Account will be opened in the name of the project and will be dedicated exclusively to the construction of that Real Estate Development project. No attachment may be imposed on the payments deposited in this account for the benefit of the creditors of the Developer.
2. In the event of multiple projects implemented by the Developer, each project must have a separate Escrow Account.
Without prejudice to any penalties stipulated by any other legislation, a jail sentence and a fine of at least one hundred thousand Dirhams (AED 100,000), or either penalty, will be imposed on any person who:
1. engages in a Real Estate Development activity in the Emirate without a licence;
Developers carrying on business at the date on which this Law comes into force must comply with it within six (6) months from the date on which it is published in the Official Gazette. The Department may extend this period as it deems appropriate."
"During this six-month period, the Developer shall not be held liable under the Escrow Law for any violation pursuant to Article 18. However, the Developer may be held liable under any other laws (depending on the facts) in the event that it, during this six-month period, intentionally applied funds to the detriment of third parties and/or other than in accordance with the Escrow Law, in anticipation of it coming into force."
I agree with Mr Anderson QC that this amounts to an agreement that developers cannot have been under any obligation to apply sales proceeds as provided by Law No. 8 of 2007 in the period starting at the end of June 2007 and ending on 28 December 2007, assuming that no escrow account had been established during this period, unless this entailed a breach of some other legal obligation arising independently of Law No. 8 of 2007.
The position after 28 December 2007
Breaches 1 to 5
Breach 1 (the failure to pay Plantation Villa Proceeds to DIB) and Breach 3 (the failure to deposit proceeds from Plantation villas into an escrow account pursuant to Law No. 8 of 2007)
"Further, in the premises, as the Bank relied upon the application of Regulation No. 8 to the Plantation Project as particularised in paragraphs 43(a)(ii), 43(c), 45-47 below, the Bank is estopped from denying that Regulation No. 8 apply to the Plantation Project and villa plot sale proceeds as particularised in paragraphs 44-48 below."
So, Mr Anderson QC submitted, the estoppel relied upon was directed to the question of whether Law No. 8 of 2007 applied to the Project, and Plantation's case as set out in this paragraph was that DIB could not dispute that it did (as, indeed, I have decided was the case). Paragraph 37, however, as its cross-references illustrate, was followed by paragraphs 44 to 49 which appear under the heading "Estoppel/Waiver". Thus, paragraph 43 states as follows:
"Further, alternatively, if contrary to its primary and alternative cases Plantation was not entitled under the RSA to retain villa plot sales proceeds, the Bank nonetheless waived any obligation on the part of Plantation to pay to it Plantation Villa Proceeds in mandatory prepayment of the Rescheduling Amount. Further, alternatively, the Bank is stopped from relying upon the alleged breach of Clause 7.2(d)."
Particulars are then set out, with paragraph (a) giving details of what Plantation alleged in relation to "Waiver/estoppel in relation to the use and/or payments of villa sales plot proceeds to third parties for the purpose of the Plantation Project", as follows:
"At all material times from on or about the Effective Date, the Bank knew about and/or expressly approved of and/or acquiesced in the use and/or payment of all villa plot sales proceeds by Plantation for the purpose of the Plantation Project prior to June 2008."
This paragraph is followed by what was described as "Particulars of knowledge, approval and acquiescence", as follows (I have not corrected typographical errors):
"(i) Plantation's financial Position and Funding Requirements
Both before and after the effective date, Suzanne Sutherland (Plantation's General Manager) held regular meetings and was in regular contact by email with inter alios Habib Bittar and Nemr Khalifa (the Bank's representatives) about, inter-alia:
a. the drawing up and implementation of budgets and cash flow projections for the funding of the Plantation Project through the use of all villa plot sales proceeds;
b. the provision of a US$50m facility by the Bank to Plantation to augment the villa plot sales proceeds in funding the costs for Phase 1 of the Plantation Project;
c. the control and operation of Plantation's bank accounts.
(ii) The Application of Regulation No. 8 to the Plantation Project & the Villa Plot Sales Proceeds
The Bank required that Plantation comply at all material times with Regulation No. 8 in relation to the Plantation Project, including in particular the use of villa plot sale proceeds, based upon the common assumption that Regulation No. 8 applied to the villa plot sales proceeds. The Bank and Plantation treated RERA's determination that Regulation No. 8 applied to the Plantation Project and the villa plot sales proceeds as determinative and acted on the assumed state of fact that Regulation No. 8 applied to the Plantation Project and in particular the villa plot sales proceeds. Consequently, Suzanne Sutherland held regular meetings and was in regular contact by email with inter alios Habib Bittar, Nemr Khalf and Faisal Masood (the Banks' representatives) about RERA and the obligations of plantation and the plantation project under regulation No. 8, including:
a. its registration requirements,
b. the appointment of an Escrow agent,
c. the opening and operation of the Escrow Account,
d. the preparation and filing of various documents required by RERA such as the registration application form, the RERA audit Form RT/02 and the cash flows and income schedules relating thereto.
(iii) The Bank permitted such payments and/or did not direct Plantation to divert and/or pay any of the villa plot sales proceeds to the Bank as repayments of the Rescheduling Amount when it was aware that villa plot sales proceeds were:
a. paid either into Plantation's HSBC bank accounts or the bank account set up by and held at the Bank;
b. being applied by Plantation for the Plantation Project and/or the Earmarked Plantation Proceed purposes, and would continue to be so applied by Plantation until completion of the Plantation Project."
The pleading goes on to say this:
"(b) Acting in reliance upon the facts and matters set out in sub-paragraph 43(a) above, Plantation did not pay villa plot sales proceeds to the Bank in mandatory prepayment of the Rescheduling Amount.
(c) The Bank relied upon, and continues to rely upon, the application of Regulation No. 8 to Plantation, the Plantation Project and the villa plot sales proceeds as the basis for its Default Notice and perfection of the Conditional Assignment."
It concludes in paragraph 44 as follows:
"In the premises the Bank is estopped, alternatively has waived its rights:
(i) to rely upon its strict legal rights under Clause 7.2(d) (assuming them to be different from those set out in Plantation's primary and alternative cases);
(ii) to demand compliance by Plantation with such obligation;
(iii) to deny that Regulation No. 8 applied to the Plantation Project and in particular the villa plot sales proceeds;
(iv) to deny the Plantation's obligations under Clause 7.2(d) should be construed other than in a manner consistent with the application of regulation No. 8 to Plantation, the Plantation Project and in particular the villa plot sales proceeds."
"45. Further, alternatively, in the premises set out in paragraph 43 above, the Bank and Plantation acted on the assumed state of fact that villa plot sales proceeds were not required to be paid by Plantation to the Bank in mandatory prepayment of the Rescheduling Amount but rather were required to be used by Plantation for its costs until completion of the Plantation Project ("the Assumption"), the Assumption being shared by both Plantation and the Bank and/or made by Plantation and acquiesced in by the Bank.
46. Acting in reliance on the assumption, Plantation did not pay villa plot sales proceeds to the bank in mandatory prepayment of the rescheduling amount but to meet the costs of the Plantation Project.
47. In the premises, it would be unjust or unconscionable for the Bank to deny the truth of the assumption and allege or rely upon the fact that Plantation did not pay villa plot sale proceeds to it as required under clause 7.2(d) and the Bank is estopped by convention, as set out in paragraph 44 above."
This seems to me to underline the appropriateness of the conclusion which I have reached in relation to Mr Anderson QC's pleading objection. That conclusion is, however, further strengthened by what Plantation additionally pleaded when dealing with Breach 3 in paragraphs 71 to 75 of the Amended Particulars of Claim. Specifically, in paragraph 71(a)-(c) Plantation repeated the points made in paragraphs 43(a)(i) and 43(iii) concerning DIB's awareness as to the fact that villa plot sales proceeds were being used for the purposes of the development of the Project and were not being paid into an escrow account set up pursuant to Law No. 8 of 2007. Paragraph 73 is explicit:
"Further, alternatively, in the premises set out in paragraphs 71(a)-(c) above, the Bank and Plantation acted on the assumed state of fact that until any escrow account had been opened and/or was operational Plantation could continue to pay and/or apply villa plot sales proceeds directly towards costs of the Plantation project ('the Escrow Assumption')."
I consider that, in the circumstances, Plantation should be taken to have alleged in the Amended Particulars of Claim that DIB is estopped from relying upon Breaches 1 and 3 because of DIB's awareness of the fact that Plantation was neither paying villa plot sales proceeds directly to DIB or making payments of such monies into an escrow account set up pursuant to Law No. 8 of 2007. That, it should also be noted given that Mr Anderson QC was minded to suggest that the case had for the first time been put in this way only during the course of Mr Cakebread's oral closing submissions, is also how the point was put in Mr Cakebread's and Ms Levy's written opening submissions, paragraph 100 of which stated as follows (with my emphasis):
"There is considerable overlap between this breach [Breach 3] and Breach 1 since in both instances both Plantation and the Bank acted on the common assumption that the proceeds of villa plot sales could be used by Plantation on the development and were not required to be paid to the Bank, or into an Escrow Account, until such account had been opened and/or was operational."
" estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being either shared by them both or made by one and acquiesced in by the other. The effect of an estoppel by convention is to preclude a party from denying the assumed facts or law if it would be unjust to allow him to go back on the assumption ."
"i) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them.
ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it.
iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter.
iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties.
v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position."
"This formulation has been adopted at first instance and by the Court of Appeal in a number of subsequent cases, and is respectfully supported here with the glosses set out below. Although Briggs J applied his analysis to estoppel by convention in a non-contractual context, that is, where the convention is other than as to the meaning of a contract between the parties, in Mitchell v Watkinson  L&TR 22 the Court of Appeal held the 'differences of formulation' between Briggs J's and one applied on a contractual context to be 'more apparent than real, and that in practice there is likely to be little if any material difference in the outcome whichever version of these principles as applied', and in Pearson v Lehman Bros  EWHC 2914 (Ch) and Dixon v Blindley Heath Investments Ltd  4 All ER 490, Briggs J's formulation was applied by the Court of Appeal to rights under contracts. On these authorities, and because there is submitted to be no reason in principle for the criteria for an estoppel by convention (as opposed to the result of their application) to differ according to whether the context is or is not contractual, Briggs J's analysis is here considered and adopted as applicable in both context."
Indeed, in a contractual case, Mears Ltd v Shoreline Housing Partnership Ltd  EWHC 1396 (TCC), (2015) 160 Con LR 157 Akenhead J summarised the applicable principles in much the same way as Briggs J did in the Benchdollar case, saying this at :
"From the cases, one can conclude that the relevant law on estoppel by convention is:
(a) An estoppel by convention can arise when parties to a contract act on an assumed state of facts or law. A concluded agreement is not required but a concluded agreement can be a 'convention'.
(b) The assumption must be shared by them or at least it must be an assumption made by one party and acquiesced in by the other. The assumption must be communicated between the parties in question.
(c) At least the party claiming the benefit of the convention must have relied upon the common assumption, albeit it will almost [be] invariably the case that both parties will have relied upon it. There is nothing prescriptive in the use of 'reliance' in this context: acting upon or being influenced by would do equally well.
(d) A key element of an effective estoppel by convention will be unconscionability or unjustness on the part of the person said to be estopped to assert the true legal or factual position. I am not convinced that 'detrimental reliance' represents an exhaustive or limiting requirement of estoppel by convention although it will almost invariably be the case that where there is detrimental reliance by the party claiming the benefit of the convention it will be unconscionable and unjust on the other party to seek to go behind the convention. In my view, it is enough that the party claiming benefit of the convention has been materially influenced by the convention; in that context, Goff J at first instance in the Texas Bank case described that this is what is needed and Lord Denning talks in these terms.
(e) Whilst estoppel cannot be used as a sword as opposed to a shield, analysis is required to ascertain whether it is being used as a sword. In this context, the position of the party claiming the benefit of the estoppel as claimant or indeed as defendant is not determinative or does not even raise some sort of presumption one way or the other. While a party cannot in terms found a cause of action on an estoppel, it may, as a result of being able to rely on an estoppel, succeed on a cause of action on which, without being able to rely on the estoppel, it would necessarily have failed.
(f) The estoppel by convention can come to an end and will not apply to future dealings once the common assumption is revealed to be erroneous."
"The parties have freedom to agree whatever terms they choose to undertake, and can do so in a document, by word of mouth, or by conduct. The consequence in this context is that in principle the fact that the parties' contract contains a clause such as Article 6.3 does not prevent them from later making a new contract varying the contract by an oral agreement or by conduct."
Moore-Bick LJ and Underhill LJ both agreed, Moore-Bick LJ explaining the position at  and  as follows:
" The governing principle, in my view, is that of party autonomy. The principle of freedom of contract entitles parties to agree whatever terms they choose, subject to certain limits imposed by public policy of the kind to which Beatson LJ refers. The parties are therefore free to include terms regulating the manner in which the contract can be varied, but just as they can create obligations at will, so also can they discharge or vary them, at any rate where to do so would not affect the rights of third parties. If there is an analogy with the position of Parliament, it is in the principle that Parliament cannot bind its successors.
I can see the force of the suggestion that there might well be practical benefits in being able to restrict the manner or form in which an agreement can be varied, but like Underhill LJ I do not think that there is a principled basis on which that can be achieved. A clause such as Article 6.3 in this case may have considerable practical utility, if only because it is likely to raise in an acute form the question whether parties who are said to have varied the contract otherwise than in the prescribed manner really intended to do so. As a matter of principle, however, I do not think that they can effectively tie their hands so as to remove from themselves the power to vary the contract informally, if only because they can agree to dispense with the restriction itself. Nor do I think this need be a matter of concern, given that nothing can be done without the agreement of both parties; and if the parties are in agreement, there is no reason why that agreement should not be effective."
Mr Anderson QC instead submitted that none of the DIB personnel who would have looked at the financial material supplied by Ms Sutherland would have had authority to act in a way which gives rise to the type of estoppel or waiver relied upon by Plantation. Mr Anderson QC added that, since Ms Sutherland acknowledged in the course of her evidence that "it wasn't my remit to be analysing the RSA", the same applies to her. The key decision maker, Mr Anderson QC observed, was not Ms Sutherland but Mr Fitzwilliam. I reject this submission. As far as Ms Sutherland is concerned, it is perfectly clear that, as Plantation's Chief Financial and Operations Officer, she had the requisite authority, actual or ostensible or otherwise, which Mr Anderson QC suggested was absent. The fact that Mr Fitzwilliam was behind her does not rob her of such authority. In any event, I am far from clear that clause 25.6 has the effect suggested by Mr Anderson QC.
Breach 2 (the failure to register as a developer pursuant to Law No. 8 of 2007)
"As the grace period given to the developers to adjust their status in accordance with Law No (8) of 2007 concerning Guarantee Accounts of Real Estate Developments in Dubai has elapsed.
As you have not complied with law during the said period.
Therefore, you are required to attend before Guarantee Accounts division at Real Estate Regulatory Agency within (3) days as of above-noted date.
Failure to attend during the specified period will result in administrative fine being imposed on you, in addition to the necessary legal actions."
That, therefore, Plantation was in breach of its obligation under Article 4 as at the end of 2007 is clear and indisputable. Mr Anderson QC accepted, however, that, in reality, DIB seems, as he put it, to have been "prepared to tolerate that" albeit on the basis that DIB, specifically Mr Bitar who was dealing with Ms Sutherland in relation to the steps which need to be taken in order to progress the standby loan facility, nonetheless wanted Plantation to do what was required to effect registration as soon as possible. The issue, in such circumstances, is whether the registration which was obtained from RERA was sufficient in the sense that it did, indeed, entail registration of Plantation (the company) as opposed to registration of Mr Fitzwilliam (the individual).
The Real Estate Regulatory Agency (Trust Accounts Section) hereby states that Messrs/
ARTHUR FITZWILLIAM (PLANTATION)
Has been registered in the Property Developers Register in the Emirate of Dubai after meeting all the conditions for Property Developers Regulation in accordance with Law No. (8) of 2007."
The following day, 10 March 2008, RERA issued a further certificate, described as a "Certificate of Approval of a Real Estate Project" which adopted a similar approach. That certificate stated as follows (again in translation which might explain some different non-critical descriptions):
"The Real Estate Regulatory Agency (Trust Accounts Department) hereby states that approval has been granted for the following products belonging to:
Messrs/ ARTHUR FITZWILLIAM (PLANTATION)
who are registered in the Register of Real Estate Developers Register in the Emirate under number 572 in accordance with Law No. 8 of 2007. They are licensed to promote and sell on plan the project stated, subject to all the laws and stipulations relating to the business."
This table then followed:
|Project Name||Location||Master Developer|
"Could you please arrange for changing the attached approval with Shk Juma's section at RERA.
There has been a mistake and the approval, which shows Mr Arthur Fitzwilliam as the owner. In fact the project owner is Plantation Holdings FZ (LLC) and Mr Arthur is only the authorised signatory. This needs to be changed on the NOC for escrow account opening."
Ms Sutherland suggested in her witness statement that the first that she knew of this point having been raised was when she received an email from Mr Masood on 28 April 2008, although Mr Bitar stated that "we would have raised this issue with Plantation" and so apparently suggesting that Ms Sutherland had been made aware of it earlier. It does not seem to me that this much matters, although the email on 28 April 2008 does rather suggest that Ms Sutherland had some prior awareness since it does not read as if this is the first time that the issue was being drawn to Ms Sutherland's attention. That email stated as follows:
"Despite our tries, the Land Department has refused to issue an approval for the Plantations [sic] project in the name of Plantations [sic] FZ LLC. This is because the Sales Purchase Agreement/Land Lease agreement with Dubailand is in Arthur Fitzwilliam's name.
Therefore, for now, until we can arrange for a revised agreement on Plantations [sic] FZ LLC's name, an account is to be opened in the name styled as
Escrow A/c-Plantations-Arthur Fitzwilliam
Would appreciate if you could send me the new account opening forms (as attached) showing the Account name in Arthur's name and signed by him."
"Q. Who decides how a project is registered, you or RERA?
A. RERA, definitely.
Q. Right. Who decides what name is used for the developer, you or RERA?
A. RERA will is the one who will choose.
Q. Right. You were present at the meeting in October with RERA. You were there when they said it would be registered the name of Arthur Fitzwilliam Plantation. Your dispute, if you have it, is with them, not Plantation, isn't it?
A. My dispute is basically: how my going to fund if it is going to be in the name of Arthur Fitzwilliam? That's my dispute. So basically there was an issue regarding actual ownership and registration of escrow account.
Q. That is not true, is it? Let's just analyse that. Number one, everybody knew, you knew, Plantation knew, RERA knew, that the lease had been assigned to Plantation, yes?
A. My Lord, that doesn't mean that you, you know, it is a proper registered lease.
Q. It is not for you to decide. It is for RERA, isn't it?
A. RERA - no, the courts will decide. Not RERA.
Q. You told me a few minutes ago
A. Every - sorry, for interrupting.
Q. that you had to comply with RERA's requirements. Is that only if you agree with them?
A. Even if I don't agree with them.
Q. Right. They required to be registered in the name they chose: Arthur Fitzwilliam Plantation.
A. And that is what happened. Arthur Fitzwilliam Plantation.
Q. Your boss, Mr Kamal, said he considered that the registration was in joint names: Plantation and Arthur Fitzwilliam. Which looks about right, doesn't it?
A. Plantation Arthur Fitzwilliam, it is not Plantation LLC, a free zone. It is Plantation - it's the name of the project.
Q. So RERA got it wrong.
A. RERA got it wrong?
A. RERA just mentioned the name of a project. So was the project, the project is supposed to be
Q. That is not right
A. The owner of the project is supposed to be Plantation LLC, and the name of the project is Plantation, so
Q. RERA required registration in the name Arthur Fitzwilliam Plantation.
Q. Are you saying they got it wrong, to require that?
A. That is what they determined, so basically, you know, that is their right.
A. Whatever documentation they had in front of them, they had to make a decision, and their decision was Arthur Fitzwilliam Plantation. What does it signify? I don't know.
Q. So they were content that the developer would be entered on the register as Arthur Fitzwilliam Plantation.
A. Yes, that is exactly what they have issued in their statement.
Q. They also were content and required, because they chose it, that the escrow account would be in the name Arthur Fitzwilliam Plantation.
Q. Right. Was it open to you or to Mr Fitzwilliam to say 'No, no, it will be done differently', and ignore them?
A. Ignore them? No, of course not."
This exchange seems to me to encapsulate the reality that, whatever Mr Anderson QC might now say, in practical terms, Plantation had done what it needed to do as regards RERA in terms of registration. RERA was aware of the position in relation to Mr Fitzwilliam and Plantation. RERA chose to reflect this in the way that the certificates described the developer as "Arthur Fitzwilliam (Plantation)". This may not formally be accurate, but it is what RERA chose to do. It is not Plantation's fault that RERA made that choice. The truth is that RERA plainly regarded Plantation as having done what was required by Article 4 of Law No. 8 of 2007, and the only concern was that expressed by DIB, specifically by Mr Masood. Indeed, the point having been raised with RERA, no change to the certificates was apparently considered necessary or appropriate by RERA, so underlining the fact that, as far as RERA was concerned, Plantation had done enough to comply with the Law.
"Q. So they [Plantation] are in breach of the law because they didn't challenge the law as it was applied?
A. I didn't say that.
Q. Were they in breach of the law?
A. Yes, if the actual developer conducting the development activities isthe company, then that should have been the entity that is considered.
Q. So by complying with the direction of the regulator they were in breach of the law?
A. Sorry, can you repeat that?
Q. By complying with the direction of the regulator, they were in breach of the law; is that your evidence?
A. Yes, because, you know, the facts were different than what was - the facts as I understand it are that the actual developer as this company and they should have been the one registered.
Q. It doesn't sound quite right either, does it, to say that Plantation is in breach of the law by complying with RERA's direction?
A. But Plantation should have challenged, and it didn't.
Q. I see. And they are in breach of the law by not challenging the regulator's decision?
A. I think yes, because if they are going to conduct development activity in Dubai and were not registered itself as a developer, it would be in breach.
Q. Yes. RERA had refused to register it in the name of Plantation Holdings FZ LLC
A. I don't
Q. and it had been registered in the name Arthur Fitzwilliam (Plantation).
Q. One of the bank's witnesses said he didn't have a problem Mr Kamal, its executive vice president. He didn't have a problem with this, he said, because it was a joint registration: 'I regarded this as registering in both names'.
A. Mm-hm. That could be his view.
Q. He is just a senior employee of the bank, I mean, I'm not suggesting that he is necessarily right.
Q. But would you think that was a reasonable point of view?
A. Look, I wasn't with them at that relevant point of time. I cannot, you know, imagine what the discussions were that were taking place at the time. But it sounds like a reasonable - say, a layman would say, if you ask me.
Q. I'm quite puzzled by it, you see. It seems to me you are saying Plantation should have taken the view that they should challenge this and couldn't continue without doing so?
A. Yes, if they were the developer."
This evidence was, in my view, wholly unrealistic. DIB had raised with RERA the correct identity of the Developer for Article 4 purposes. RERA had refused to change the certificates in this regard. There is, in such circumstances, no reason to think that, had Plantation raised the issue with RERA as well, there would have been any different outcome. Mr Alulama's view that Plantation should have raised the matter itself, therefore, makes little sense.
Breach 4 (the failure to supply copies of all sale and purchase agreements entered into by Plantation as requested by DIB)
"You already have these, we have sent them to the bank at least twice before. If you can't locate then let me know."
No response was received to this email prior to the letter which was sent on 9 June 2008. Mr Anderson QC suggested in closing that that letter was, in effect, a response to Ms Sutherland's email, bearing in mind that it called upon Plantation to remedy the various defaults which were identified (including in relation to clause 16.1(e) within 15 days. Mr Anderson QC was, in a sense, right about this but only, in my view, in a technical sense. I am quite clear that Ms Sutherland's email called for a specific response if it really was going to be suggested a few days later that Plantation had failed to comply with a request for information made by DIB. The fact that Mr Khalifa did not revert to Ms Sutherland to say that, notwithstanding what she was telling him about DIB having been sent copies of the sales contracts "at least twice before", he required them to be sent again, whether because he could not locate them or for any other reason, is curious. I reject the suggestion, in particular, that Ms Sutherland was in her email refusing to comply with the request which Mr Khalifa had made. I do not consider that she was doing anything of the sort. She was merely putting the ball back into Mr Khalifa's court, inviting him, if necessary, to come back to her. The fact that Ms Sutherland did not send copies of the sale contracts between 5 June 2008 and 9 June 2008 is readily explained by Mr Khalifa's silence in response to her email. In the circumstances, it is nothing to the point that Ms Sutherland might have been able to dig out the relevant sales contracts and send them to Mr Khalifa in relatively short order, as Mr Anderson QC suggested, since I am clear that as far as she was concerned, having not heard back from Mr Khalifa in response to her very prompt email, Mr Khalifa had managed to locate copies of sales contracts which Plantation had previously supplied to DIB.
Breach 5 (the insolvency/payment breaches)
"A company is deemed unable to pay its debts [ ] (e) if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due."
He submitted that this demonstrates a clear linkage, and that, accordingly, in considering clause 18.1(f), it is appropriate to have regard to how section 123(1)(e) is approached. Specifically, Mr Anderson QC highlighted how for the purposes of this statutory provision the non-payment of an undisputed debt gives rise to an inference of inability to pay, even if the company in question has a surplus of assets over liabilities (see Cornhill Insurance plc v Improvement Services Ltd  1 WLR 114), and an inability to pay debts as they fall due encompasses more than what has fallen due by a particular point in time, but extends to cover "debts falling due from time to time in the reasonably near future" (see BNY Corporate Trustee Services Ltd v Eurosail-UK 2007-3BL plc  UKSC 28,  1 WLR 1408 at  per Lord Walker)
"51. It is clear from that brief review of the Australian decisions that in an environment shorn of any balance sheet test for insolvency, cash flow or commercial insolvency is not to be ascertained by a slavish focus only on debts due as at the relevant date. Such a blinkered review will, in some cases, fail to see that a momentary inability to pay is only the result of a temporary lack of liquidity soon to be remedied, and in other cases fail to see that due to an endemic shortage of working capital a company is on any commercial view insolvent, even though it may continue to pay its debts for the next few days, weeks or even months before an inevitable failure.
52. Furthermore, the common sense requirement not to ignore the relevant future was found to be implicit in the Australian cases in the simple phrase 'as they become due'.
53. Returning to the English legislation, it is, in my view, critical to note that when separating out balance sheet insolvency from commercial insolvency in 1985 the legislature did not merely remove the requirement to include contingent and prospective liabilities in framing s.123(1)(e) out of its predecessor, but added what in Australia have always been regarded as the key words of futurity, namely the phrase 'as they fall due'. In that context 'fall due' is, in my judgment, synonymous with 'become due'.
54. Mr. Trower submitted that the existence of the balance sheet test in s.123(2) makes an Australian type of approach to the commercial insolvency test unnecessary, because a company will always be balance sheet insolvent in circumstances where a review of future debts shows that it is commercially insolvent. I disagree. First, I can see no good reason why the developed understanding in Australia of the nature of the exercise required by the phrase 'unable to pay debts as they become (or fall) due' should not be recognised when the same phrase is, for the first time, deliberately inserted into the English insolvency test. The Australian approach makes commercial sense, whereas the blinkered approach of ignoring the future does not.
55. Secondly, a company may not always be balance sheet insolvent where an Australian style test for commercial insolvency is satisfied, as in this example: The company has £1,000 ready cash and a very valuable but very illiquid asset worth £250,000 which cannot be sold for two years. It has present debts of £500, but a future debt of £100,000 due in six months. On any commercial view the company clearly cannot pay its debts as they fall due, but it is, or would be, balance sheet solvent.
56. In my judgment, the effect of the alterations to the insolvency test made in 1985 and now found in s.123 of the 1986 Act was to replace in the commercial solvency test now in s.123(1)(e), one futurity requirement, namely to include contingent and prospective liabilities, with another more flexible and fact sensitive requirement encapsulated in the new phrase 'as they fall due'.
57. In the case of a company which is still trading, and where there is therefore a high degree of uncertainty as to the profile of its future cash flow, an appreciation that s.123(1)(e) permits a review of the future will often make little difference. In many, if not most, cases the alternative balance sheet test will afford a petitioner for winding up a convenient alternative means of proof of a deemed insolvency."
"56. Despite a premature reliance on the failure to pay margin, is MCA entitled to justify the liquidation on the basis of Clause 16.1.14 of the Customer Agreement to the effect that closing out FCO's position was permitted if MCA were to 'reasonably consider it necessary or desirable for our own protection'?
57. The first point taken by FCO is that, on the basis that MCA did not rely on (or even have in mind) Clause 16.1.14 in embarking on the liquidation, it cannot now rely on the clause. This, it was said, was further exemplified by the threshold to Clause 17 to the effect that the entitlement to liquidate in such event was 'at [MCA's] discretion'.
58. I am unable to accept this submission. The discretion relates to the various options available to MCA in the event of default. There is no question that MCA exercised its purported discretion to liquidate FCO's position under Clause 17.1. This could be effected with or without notice. The issue is whether MCA was entitled to exercise that discretion. The justification advanced by MCA was non-payment of margin. No such default had occurred. But there is nothing to inhibit reliance on any other event of default.
59. The context of MCA's decision is very striking:
i) On 16 January, ICE had ordered each clearing member to reduce FCO's position.
ii) MF Global's obligation in this regard was in turn MCA's obligation.
iii) Compliance with ICE directives was of itself reasonably necessary or desirable from MCA's perspective.
iv) Yet by the end of 17 January no reduction had been made.
v) MCA learned from the letter of 16 January forwarded to them that:
a) FCO had significantly exceeded its permitted limits.
b) FCO had refused to rectify the position despite ICE demands.
c) FCO had on the contrary increased its short position.
vi) In the meantime it had emerged that FCO had no less than 9 other brokers all required to reduce FCO's position (albeit on an unknown scale).
vii) By the time of the meeting on 17 January (and indeed during the meeting) it was apparent that some brokers were already embarking on the process of closing the excess positions.
viii) Mr Garcia was somewhat coy during the meeting as regards his willingness to pay margin calls, a feature enhanced by the indication from the back office of FCO that any margin payment would have to await the outcome of 17 January meeting.
60. Mr Jenkins dealt with the position in the course of his evidence. He described the ICE instruction as 'unprecedented'. The basis upon which ICE had issued the instruction was not challenged or even commented on by FCO. The mark to market accounting of the FCO position had a deficit as at 17 January of $13 million and a value at risk of $19 million. Indeed the margin due to MCA at the close of business on 17 January was calculated at $27 million.
61. Against that background, I accept that MCA considered that liquidation of FCO's position was highly desirable if not necessary and had reasonable grounds for so concluding."
Importantly, David Steel J was here dealing with a situation where, as he decided, MCA did actually consider that liquidation of FCO's position was at least (highly) "desirable" within the meaning of clause 16.1.14 and did so "reasonably" again within the meaning of that provision. David Steel J was not, therefore, dealing with a situation where at the time that it took the action which it did MCA did not have in mind such matters.
"In summary, I conclude that though non-payment of margin did not constitute an Event of Default at the time when Sucden began the liquidation on 18 January 2008, there were other subsisting Events of Default under both clause 46.1(e) and (k) of the TOB. By clause 47.1 therefore, Sucden was entitled to without prior notice to close out Fluxo-Cane's various transactions, which is what it proceeded to do. On the facts as I find them to be, this is not a case in which the claimant is seeking retrospectively to rely on an Event of Default upon which it did not rely at the time. Despite the fact that neither point is mentioned in the letter of default, I am satisfied that in taking the action that it did, Sucden had in mind both Mr Garcia's repudiatory statement of 18 January 2008, and the necessity to protect itself. I am satisfied on the facts that the situation demanded such action. Essentially the same conclusion was reached in ED & F Man at . In that case also, the justification advanced by the brokers at the time was non-payment of margin, but no such default had occurred: 'But', as David Steel J said, 'there is nothing to inhibit reliance on any other event of default'. The same applies in this case."
Mr Cakebread highlighted the fact that in this passage Blair J made it clear that he considered that, if a party is to be permitted to rely upon something which it has not mentioned to its contractual counterpart when alleging default, it is necessary that that party should nonetheless have had in mind and relied upon that something, albeit that it was not mentioned. Mr Anderson QC drew attention, however, to the wording of clause 46.1(k) which was in similar terms to clause 16.1.14 in the ED&F Man case ("we consider it necessary or desirable for our own protection/any action is taken or event occurs which we consider might have a material adverse effect upon your ability to perform [of] your obligations under this Agreement") as well as the language used in clause 47.1 of the relevant agreement in the Sucden case, which was in the following terms:
"Default: On an Event of Default or at any time after we have determined in our absolute discretion, that you have not performed (or may not be able or willing in the future to perform) any of your obligations to us, we shall be entitled without prior notice to you:
(c) to close out, replace or reverse any transactions, buy, sell, borrow or lend or enter into any other transaction or take, or refrain from taking, such other action at such time or times and in such manner as at our sole discretion, we consider necessary or appropriate to cover, reduce or eliminate our loss or liability under or in respect of any of your contracts, positions or commitments; ".
Mr Anderson QC submitted that these provisions, with their requirements for what might be described as 'contemporaneous consciousness' and at all events subjective knowledge, explain why both David Steel J and Blair J approach matters on the basis that it is necessary that a party has in mind and relied upon the relevant event of default even though that party did not mention it expressly.
"One party to a contract may, by reason of the other's breach, be entitled to treat himself as discharged from his liability further to perform his own unperformed obligations under the contract and from his obligation to accept performance by the other party if made or tendered. The expression 'discharge by breach' is commonly employed to describe the situation where he is entitled to, and does, exercise that right. Nevertheless, the expression is not wholly accurate, at least without further explanation. In the first place, not every breach of contract has this effect. Discharge from liability is not necessarily coincident with a right to sue for damages. The rule is usually stated as follows: '[a]ny breach of contract gives rise to a cause of action; not every breach gives a discharge from liability'. Thus the main question discussed in this chapter is whether a party who admittedly has a claim for damages is also relieved from further performance by the other party's breach. Secondly, although sometimes the innocent party is referred to as 'rescinding' the contract and the contract as being 'terminated' by the breach, it is clear that the contract is not rescinded ab initio nor is it extinguished by the breach. The innocent party, or, in some cases, both parties, are excused from further performance of their primary obligations under the contract; but there is then substituted for the primary obligations of the party in default a secondary obligation to pay monetary compensation for his non-performance. Thirdly, the innocent party is not ordinarily bound to treat himself as discharged: if the contract is still executory, he may elect instead to treat it as continuing. He may also waive his right of discharge, accept the defective performance of the other party, and content himself with damages, which are his remedy in any event."
"For the avoidance of doubt, the assignment of the Lease shall occur, if, in the reasonable opinion of DIB, a Plantation Enforcement Event has occurred and a notice is served by DIB to DTDC [Dubailand] pursuant to Clause 2.3."
Mr Cakebread submitted that, given the requirement that DIB should have a "reasonable opinion" that a Plantation Enforcement Event has occurred, it is not open to DIB to rely upon Breach 5 unless it can show that at the time, namely in mid-July 2008 when it wrote to Dubailand giving notice of Breaches 1 to 4, DIB also held the "reasonable opinion" that there were additionally breaches of clauses 18.1(e)-(g).
"164. Second, nothing was actually said or done by the second defendant [Mr Cornelius] or Plantation at that stage by way of acceptance of a repudiatory breach. Mr Mallin relied upon the decision of the House of Lords in Vitol SA v Norelf Limited  AC 800 and in particular a passage in the speech of Lord Steyn at 811-12:
'It is now possible to turn directly to the first issue posed, namely whether non-performance of an obligation is ever as a matter of law capable of constituting an act of acceptance. On this aspect I found the judgment of Phillips J. entirely convincing. One cannot generalise on the point. It all depends on the particular contractual relationship and the particular circumstances of the case. But, like Phillips J., I am satisfied that a failure to perform may sometimes signify to a repudiating party an election by the aggrieved party to treat the contract as at an end. Postulate the case where an employer at the end of a day tells a contractor that he, the employer, is repudiating the contract and that the contractor need not return the next day. The contractor does not return the next day or at all. It seems to me that the contractor's failure to return may, in the absence of any other explanation, convey a decision to treat the contract as at an end. Another example may be an overseas sale providing for shipment on a named ship in a given month. The seller is obliged to obtain an export licence. The buyer repudiates the contract before loading starts. To the knowledge of the buyer the seller does not apply for an export licence with the result that the transaction cannot proceed. In such circumstances it may well be that an ordinary businessman, circumstanced as the parties were, would conclude that the seller was treating the contract as at an end. Taking the present case as illustrative, it is important to bear in mind that the tender of a bill of lading is the pre-condition to payment of the price. Why should an arbitrator not be able to infer that when, in the days and weeks following loading and the sailing of the vessel, the seller failed to tender a bill of lading to the buyer he clearly conveyed to a trader that he was treating the contract as at an end?'
165. Mr Mallin relied on that passage in support of his submission that a continuing failure to perform may be sufficiently unequivocal to constitute acceptance of a repudiation, in other words that, in an appropriate case, an acceptance of a repudiatory breach may be spelt out from inactivity or acquiescence. I accept that is a possibility in an appropriate case but, as Mr Mallin himself accepts, generally inactivity or acquiescence will not amount to acceptance. It all depends on the circumstances. The essential difference between Vitol and the present case is that, in that case and the examples Lord Steyn gives, after the repudiatory breach, if the contract was still on foot, it was incumbent on the innocent party to perform a positive obligation under the contract, there the tender of the bill of lading by the seller.
166. In the present case, in so far as there were obligations imposed on the defendants and Plantation by the RSA, they were not fresh obligations arising after the alleged repudiatory breach, but obligations (for example to pay over the Plantation Villa Proceeds) of which the defendants were already in breach. A continuing failure to perform, such as in the present case, is necessarily equivocal, as is made clear in the passage in Lord Steyn's speech (at 812) immediately following the passage on which Mr Mallin relied:
'In my view therefore the passage from the judgment of Kerr L.J. in the Golodetz case  2 Lloyd's Rep. 277, 286, if it was intended to enunciate a general and absolute rule, goes too far. It will be recalled, however, that Kerr L.J. spoke of a continuing failure to perform. One can readily accept that a continuing failure to perform, i.e. a breach commencing before the repudiation and continuing thereafter, would necessarily be equivocal.'
Furthermore, no response was required from the second defendant [Mr Cornelius] under the RSA to the Bank relying upon a Plantation Enforcement Event, so that acceptance of a repudiatory breach cannot be spelt out from the second defendant's inactivity and silence."
"Third, even if the argument that the effect of acceleration on 21 July 2008 was that there was now a Plantation Enforcement Event were wrong, there clearly was a Plantation Enforcement Event on 2 October 2008, the next Repayment Date under Schedule 2, for the reasons already given above. If there had been a repudiatory breach prior to 2 October 2008, it had not been accepted and would have ceased to have any effect on 2 October 2008, because on any view the Bank was then entitled to rely upon a Plantation Enforcement Event."
"99. It seems to me that an affirmation of a repudiatory actual breach may differ from an affirmation of a merely anticipatory repudiatory breach in that the former breach is complete at the time it occurs whereas the latter breach looks to the future. An affirmation of an actual breach may therefore be said to leave nothing outstanding for the future, in that the worst has already occurred, whereas an affirmation of an anticipatory breach still leaves the future open. Prima facie an election or waiver looks to the past, even if it is possible, in a very clear case, to waive one's rights for the future too. Two views might therefore be taken as to the effect of an affirmation of an anticipatory breach. One is that it is a waiver for the future as well: that was what Colman J decided and Mr Glennie submitted. The other is that the affirmation prima facie relates only to the past, leaving open the question of a continuing or renewed anticipatory breach. It seems to me that the latter view is to be preferred, and is inherent in the decision in Safehaven v. Spingbok and in the decision already taken in relation to this case. That would still leave open of course the question of how one tells whether an anticipatory breach is a continuing one, and the correct way of viewing silence. Professor Treitel highlights the undesirability of subverting considerations of substance or policy to the accidents of negotiation (at 26). I wonder whether each case does not in truth have to be decided on its own facts. However, substance and principle suggest that silence should not in this context be too readily regarded as equivocal; and that against the background of an earlier anticipatory repudiation it should not take much further to prove continuing repudiatory conduct.
100. It also occurs to me that even in the case of an actual repudiatory breach, where the breach is of a continuing nature, such as a failure to pay or to deliver, an affirmation at one stage is not necessarily an irrevocable affirmation for all time in the future. If it were otherwise, the law could not have developed the doctrine of Rickards v. Oppenhaim."
Mr Cakebread submitted that DIB's breach continued after July 2008 when it perfected the assignment, his point apparently being that ever since this happened Plantation has, as a result of the assignment, continued to be prevented from developing the Project. So, Mr Cakebread submitted, even if Plantation is to be regarded as having failed to accept DIB's initial repudiatory breach in July 2008, indeed as having affirmed the RSA at that time, there is no justification for a conclusion that Plantation affirmed the RSA "for all time in the future".
"We refer to the Restructuring Agreement dated 19 August 2007 (the 'RSA') between (among others) Dubai Islamic Bank PJSC ('DIB'), Plantation Holdings FZ-LLC ('Plantation') and Mr Arthur Fitzwilliam ('Mr Fitzwilliam').
By letter dated 21 July 2008, addressed to Plantation and others, Al Tamimi & Co, acting on behalf of DIB, served a notice under Clause 18.4(a)(i) of the RSA (the 'Demand Notice') demanding payment by Plantation and those others of certain sums
In serving such notice, DIB relied upon certain alleged breaches of the RSA by Plantation. Plantation has denied such breaches. In relation to one of them, it contends in the alternative that DIB waived the breach.
Based on the alleged breaches of the RSA, DIB has, by way of enforcement of its security, taken an assignment of the lease between Plantation and Dubai Tourism and Development Company over a parcel of real property located within the Dubailand Development situated to the south of Emirates Road, which has been designated for the development of a world-class equestrian facility incorporating a mix of residential, retail, boutique office, hotel and equestrian-related uses (the 'Asset'). Plantation has contended that DIB was not entitled to enforce its security in this way.
Without prejudice to Plantation's contentions regarding breach of the RSA and DIB's enforcement of its security, this letter gives formal notice that Plantation intends to discharge the demand made of Plantation in the Demand Notice are set out below.
Plantation has secured through a consortium of KSA and Bahrain-based investors (the 'Consortium') an investment commitment of US$600 mn (the 'Investment') into the project known as 'Plantation' (the 'Project'). It is proposed that the proceeds of the investment be allocated and applied as follows:
1) the Outstanding Rescheduling Amount, the DIB Legal Costs and the Additional Recoverable Legal Costs be paid to DIB in full and final settlement are set out below (the 'Settlement Sum'); and
2) the balance of the Investment be used to complete outstanding infrastructure works and allow the Project to proceed to planned completion in 2010.
The proposal is that the Consortium will acquire 60% of the issued share capital of a newly-incorporated BVI company ('Plantation NewCo'), the balance of 40% being issued to Mr Fitzwilliam.
This letter is written on an open basis. Plantation reserves the right to refer to, and rely upon, the contents of this letter in the event that DIB takes any step to dispose of the Asset."
It is doubtful, to put it mildly, that there was available to Plantation any such investment, but what matters for present purposes is that, again, this is a communication which is only consistent with Plantation not having by this time, mid-October 2008, decided to treat the RSA as at an end. The fact that the letter was marked as being 'subject to contract' is nothing to the point since this does not make it 'without prejudice'.
"Unless otherwise required by Law, this Restructuring Agreement shall terminate only upon the occurrence of the later of:
(a) the repayment in full to the Bank of the Rescheduling Amount;
(b) payment to the Bank of the Profit."
Mr Anderson QC submitted that the words "Unless otherwise required by Law" cover the situation where there is some rule of law which provides for mandatory termination, as opposed to a situation where termination is not mandatory but depends on either both parties to the contract agreeing that it should terminate or, as in the case of repudiatory breach, one of the parties (the innocent party) making a decision to accept the other party's repudiation of the contract with the result that the contract is brought to an end. Mr Anderson QC's submission was, in effect, therefore, that the parties to the RSA should be taken as having agreed that there would be no right to bring the RSA to an end in the event that there was a repudiatory breach.
" Whenever one party to a contract is given the right to terminate it in the event of a breach by the other it is necessary to examine carefully what the parties were intending to achieve and in particular what importance they intended to attach to the underlying obligation and the nature of the breach. The answer will turn on the language of the clause in question understood in the context of the contract as a whole and its commercial background. Sometimes, as in Lockland Builders v Rickwood, the parties will have intended to give a remedy of a limited nature for breaches of a certain kind; in other cases the terms of the contract may reflect an intention to treat the breach as going to the root of the contract with the usual consequences, however important or unimportant it might otherwise appear to be. Inevitably, therefore, there can be no hard and fast rule."
Moore-Bick LJ went on at  to say this:
"Mr. Dunning submitted that since that decision the approach of the courts to the construction of exclusion clauses has developed in favour of a greater willingness to give them the meaning which the words used would naturally bear. I would accept that, but I would not accept his suggestion that as the law stands today there are two competing approaches struggling for supremacy: one requiring clear express words, the other favouring the natural meaning of the words used. It is important to remember that any clause in a contract must be construed in the context in which one finds it, both the immediate context of the other terms and the wider context of the transaction as a whole. The court is unlikely to be satisfied that a party to a contract has abandoned valuable rights arising by operation of law unless the terms of the contract make it sufficiently clear that that was intended. The more valuable the right, the clearer the language will need to be."
In my view, the language used in clause 21.1 is not clear enough to justify a conclusion that the parties to the RSA agreed that there would be no entitlement to bring the RSA to an end by one party choosing to treat the other party's breach of contract as being repudiatory. If they had truly intended to reach such an agreement, I would have expected it to have been expressly, and clearly, laid out in the RSA. This, on any view, was not done, as demonstrated by Mr Anderson QC having to read into the introductory language of clause 21.1 a meaning which is not explicit.
"Upon the termination of the entire Restructuring Agreement, otherwise than by clause 21.1, (including any termination of the Restructuring Agreement being required by operation of Law, notwithstanding clause 25.2 (Severability), due to invalidity, illegality or unenforceability) the parties shall cease to have any further obligations to each other hereunder, provided always that:
(a) the provisions of the following clauses shall remain in full force and effect: 1 (Definitions), 2 (Interpretation), 4 (Rescheduling Amount), 5 (Acknowledgement of Debt), 6 (Guarantee and Indemnity), 8 (Security), 13 (Proceeds Assets), 22 (Costs), 23 (Payments), 25.1 (Delays), 25.2 (Severability), 25.3 (Confidentiality), 25.4 (Reservation of Rights), 25.5 (Specific Performance), 27 (Governing Law, Jurisdiction and Arbitration); ".
Mr Anderson QC submitted that this provision makes it clear that certain core obligations, including those owed by Plantation, survive termination including as a result of the acceptance by the innocent party of the other party's repudiatory breach. Mr Cakebread, on the other hand, submitted that this cannot be right since, if it were, it would apply to all types of repudiatory breach including cases where the breach was deliberate. In my view, however, clause 21.3 is clear. There is no ambiguity about the position. The parties agreed what they agreed. It is not open to me to re-fashion that agreement yet that is what Mr Cakebread's submission would essentially require. At  Flaux J went on to say this:
" Clause 21.3(a) makes it clear that, in that event, the defendants' obligations to repay both as guarantors and as primary obligors remain in full effect: hence clauses 4, 5 and 6 remain in full force and effect. On the other hand provisions which limit or circumscribe those obligations in any way such as clause 3, the standstill provision, do not survive."
I agree. I agree also with what he said in the next paragraph:
"Mr Mallin sought to argue in his closing submissions that somehow there was no obligation on the defendants to repay because one of the provisions which did not survive on termination was clause 7, the Repayment provision. However, in my judgment, that provision is about repayment in instalments and payment over of asset proceeds such as Plantation Villa Proceeds, whilst the RSA is up and running. Once that provision and the standstill provision in clause 3 have fallen away as they do upon termination, what is left is an unqualified obligation under clause 4.4 that all of the Advances (i.e. the Rescheduling Amount as the opening words of clause 4.1 make clear) are immediately due and payable. It follows that, even if the RSA had terminated, the defendants remain fully liable to repay the outstanding Rescheduling Amount."
It follows that, even though I have not accepted Mr Anderson QC's argument in relation to clause 21.1 and assuming that Plantation did accept DIB's repudiatory breach in advance of 1 October 2008, this did not relieve Plantation of its obligations under the RSA.
"The charterers further submit that even if, as a general rule, damages for breach of contract (or tort, often treated as falling within the same rule) are assessed as at the date of the breach or the tort, the court has shown itself willing to depart from this rule where it judges it necessary or just to do so in order to give effect to the compensatory principle. I accept that this is so."
Lord Bingham, who along with Lord Walker dissented from the majority, went on to consider situations in which courts have departed from the general rule, noting that none of the cases involved the accepted repudiation of a commercial contract such as a charterparty.
"29. My Lords, the answer to the question at issue must depend on principles of the law of contract. It is true that the context in this case is a charterparty, a commercial contract. But the contractual principles of the common law relating to the assessment of damages are no different for charterparties, or for commercial contracts in general, than for contracts which do not bear that description. The fundamental principle governing the quantum of damages for breach of contract is long established and not in dispute. The damages should compensate the victim of the breach for the loss of his contractual bargain. The principle was succinctly stated by Parke B in Robinson v Harman (1848) 1 Exch 850 , 855 and remains as valid now as it was then:
'The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.'
If the contract is a contract for performance over a period, whether for the performance of personal services, or for supply of goods, or, as here, a time charter, the assessment of damages for breach must proceed on the same principle, namely, the victim of the breach should be placed, so far as damages can do it, in the position he would have been in had the contract been performed.
30. If a contract for performance over a period has come to an end by reason of a repudiatory breach but might, if it had remained on foot, have terminated early on the occurrence of a particular event, the chance of that event happening must, it is agreed, be taken into account in an assessment of the damages payable for the breach. And if it is certain that the event will happen, the damages must be assessed on that footing. In The Mihalis Angelos  1 QB 164 , 210, Megaw LJ referred to events 'predestined to happen'. He said that
'if it can be shown that those events were, at the date of acceptance of the repudiation, predestined to happen, then the damages which [the claimant] can recover are not more than the true value, if any, of the rights which he has lost, having regard to those predestined events.'
Another way of putting the point being made by Megaw LJ is that the claimant is entitled to the benefit, expressed in money, of the contractual rights he has lost, but not to the benefit of more valuable contractual rights than those he has lost. In Wertheim v Chicoutimi Pulp Co  AC 301 , 307, Lord Atkinson referred to
'the general intention of the law that, in giving damages for breach of contract, the party complaining should, so far as it can be done by money, be placed in the same position as he would have been in if the contract had been performed'
and, in relation to a claim by a purchaser for damages for late delivery of goods where the purchaser had, after the late delivery, sold the goods for a higher price than that prevailing in the market on the date of delivery, observed, at p 308, that
'the loss he sustains must be measured by that price, unless he is, against all justice, to be permitted to make a profit by the breach of contract, be compensated for a loss he never suffered, and be put, as far as money can do it, not in the same position in which he would have been if the contract had been performed, but in a much better position.'
31. The result contended for by the appellant in the present case is, to my mind, similar to that contemplated by Lord Atkinson in the passage last cited. If the charterparty had not been repudiated and had remained on foot, it would have been terminated by the charterers in or shortly after March 2003 when the Second Gulf War triggered the clause 33 termination option. But the owners are claiming damages up to 6 December 2005 on the footing, now known to be false, that the charterparty would have continued until then. It is contended that because the charterers' repudiation and its acceptance by the owners preceded the March 2003 event, the rule requiring damages for breach of contract to be assessed at the date of breach requires that event to be ignored.
32. That contention, in my opinion, attributes to the assessment of damages at the date of breach rule an inflexibility which is inconsistent both with principle and with the authorities. The underlying principle is that the victim of a breach of contract is entitled to damages representing the value of the contractual benefit to which he was entitled but of which he has been deprived. He is entitled to be put in the same position, so far as money can do it, as if the contract had been performed. The assessment at the date of breach rule can usually achieve that result. But not always. In Miliangos v George Frank (Textiles) Ltd  AC 443, 468469 Lord Wilberforce referred to 'the general rule' that damages for breach of contract are assessed as at the date of breach but went on to observe that
'It is for the courts, or for arbitrators, to work out a solution in each case best adapted to giving the injured plaintiff that amount in damages which will most fairly compensate him for the wrong which he has suffered'
and, when considering the date at which a foreign money obligation should be converted into sterling, chose the date that 'gets nearest to securing to the creditor exactly what he bargained for'. If a money award of damages for breach of contract provides to the creditor a lesser or a greater benefit than the creditor bargained for, the award fails, in either case, to provide a just result."
Lord Scott went on at  and  to address Lord Bingham's dissenting view:
"37. My noble and learned friend, Lord Bingham, in what has been rightly described as a strong dissent, has referred, in para 9, to the overriding compensatory principle that the injured party is entitled to such damages as will put him in the same financial position as if the contract had been performed. On the facts of the present case, however, the contract contained clause 33 and would not have required any performance by the charterers after March 2003. It should follow that, in principle, the owners, the injured party, are not entitled to any damages in respect of the period thereafter. As at the date of the owners' acceptance of the charterers' repudiation of the charterparty, the proposition that what at that date the owners had lost was a charterparty with slightly less than four years to run requires qualification. The charterparty contained clause 33. The owners had lost a charterparty which contained a provision that would enable the charterers to terminate the charterparty if a certain event happened. The event did happen. It happened before the damages had been assessed. It was accepted in argument before your Lordships that the owners' charterparty rights would not, in practice, have been marketable for a capital sum. The contractual benefit of the charterparty to the owners, the benefit of which they were deprived by the repudiatory breach, was the right to receive the hire rate during the currency of the charterparty. The termination of the charterparty under clause 33 would necessarily have brought to an end that right.
38. The arguments of the owners offend the compensatory principle. They are seeking compensation exceeding the value of the contractual benefits of which they were deprived. Their case requires the assessor to speculate about what might happen over the period 17 December 2001 to 6 December 2005 regarding the occurrence of a clause 33 event and to shut his eyes to the actual happening of a clause 33 event in March 2003. The argued justification for thus offending the compensatory principle is that priority should be given to the so-called principle of certainty. My Lords, there is, in my opinion, no such principle. Certainty is a desideratum and a very important one, particularly in commercial contracts. But it is not a principle and must give way to principle. Otherwise incoherence of principle is the likely result. The achievement of certainty in relation to commercial contracts depends, I would suggest, on firm and settled principles of the law of contract rather than on the tailoring of principle in order to frustrate tactics of delay to which many litigants in many areas of litigation are wont to resort. Be that as it may, the compensatory principle that must underlie awards of contractual damages is, in my opinion, clear and requires the appeal in the case to be dismissed. ".
"In trover the rule is, that the plaintiff is entitled to damages equal to the value of the article converted at the time of the conversion. There is no reason why this rule should not be applied to trover for bills of exchange. The damage is, therefore, in this case, must be coordinated by the amount of the principal and interest due upon the bills of exchange at the time of the demand and refusal to deliver them up."
Next, Mr Cakebread took me to the following passage in McGregor on Damages (19th Ed., 2014) at paragraph 22.010:
"There are, however, authorities, and over a very long period, where the concurrent liability is for breach of contract and in the tort of conversion. Here it is thought that a claimant should be entitled to tortious damages where these are higher than the contractual. This is because the two claims are not for the same type of default, as with negligence, but with different types of default, the one being the breaking of a contract concerning goods, the other being the conversion of those goods. The cases have concerned, as defendant, a seller or a carrier of goods who has so dealt with them as to be liable in conversion to the other contracting party. Actions of conversion have been brought where a seller of goods has, after the property has passed to the buyer, refused to deliver them or has resold them to a third party, and where a carrier of goods has delivered them on their arrival to the wrong person, has improperly sold them in transit or has made a short delivery to the claimant. In such cases the market value of the goods at the time and place of due delivery, which is the normal contractual measure, will generally be the measure for conversion, since the latter measure also looks to market value and since the time and place of conversion is generally the time and place at which the goods should have been delivered. There are, however, two possible variants that could arise. (1) In the first place the goods may have been sold by the claimant to a third party at a price higher than the market value at due delivery and the claimant, without a market available to him in which he could buy equivalent goods, has been unable to carry out this contract. In the absence of knowledge of this contract, the defendant seller or carrier would not generally be liable to the claimant for his loss of profit in an action for breach of contract."
"As to the deposited shares, in the circumstances of the case the company never had any right to deal with them. If the transaction had been originally honest, the company would only have had a special property which, on the facts of the case, even had the transaction been honest throughout, would not have given them the right to dispose of the shares, for there never had been default. But on the actual facts of a mandate accepted for the express purpose of being fraudulently misused by the agent, the agents never had the right to claim or to hold security, still less to dispose of it. Their disposal of the deposited shares amounted to nothing short of conversion, and the client on each occasion on which the shares were sold had vested in him a right to damages for conversion which would be measured by the value of the shares at the date of the conversion. How, then, is his position affected by the fact that, not knowing of the conversion, he received from the wrongdoer, and has retained, the very goods converted or their equivalent? It appears to their Lordships that the only effect is that he must give credit for the value of what he has received at the time he received it, and that the damages are reduced by this amount.
It does not require argument to show that the amount by which the damages are reduced must be the value of the goods when returned. In the result, therefore, the plaintiff appears to be entitled to retain the sum for which he recovered judgment under the order of Kerwin J. It is objected that this will be to put him in a better position than if he had not been defrauded at all, and this appears to have influenced the decision of the majority of the Court of Appeal in Ontario. All that this amounts to is to recognize that fraudulent brokers have often sounder judgment than their clients as to the future course of markets. If the shares had been converted and not returned, there can be no question that the client would have been entitled to receive the proceeds of the conversion though he himself had planned to hold and thought he had succeeded in holding the shares until a time when the value was nothing. Fortunately for the commercial community the law has many effective forms of relief against dishonest agents, and no injustice is done if the principal benefits, as he occasionally may, by the superior astuteness of an unjust steward in carrying out a fraud."
Mr Cakebread submitted that this case demonstrates that it is possible to have a claim in conversion "under a contract", so supporting his overarching submission, he suggested, that in the present case it would be appropriate to award Plantation damages assessed on a tortious (conversion) basis rather than a contractual basis to compensate for what he described as DIB's wrongful conversion of the Lease in mid-July 2008.
"Both the Brandeis case  Q.B. 864 and the Peel River case (1886) 55 L.T. 689 were concerned with damages caused by temporary deprivation of possession and use of property. A different consideration will apply when the property is irreversibly converted and the plaintiff loses that property. The plaintiff loses the value of the property at the date of conversion and the general rule is that the measure of damages is the value thus lost. To depart from that rule in the present case would be inconsistent with Solloway v. McLaughlin  AC 247. Mr. Evans-Lombe submitted that in that case Lord Atkin was only concerned to deprive the defendant of a profit. But Lord Atkin's judgment is inconsistent with this submission. Mr. Evans-Lombe also sought to argue that the effect of Solloway v. McLaughlin has in some way been modified by the Torts (Interference with Goods) Act 1977, joined with the decision in the Brandeis case  Q.B. 864. Their Lordships do not consider that the decision in Solloway v. McLaughlin can be affected by the Brandeis case or by the Act of 1977 which only came into force after the Brandeis case had been decided."
It was Mr Cakebread's submission that this case provides further support for his argument that the right approach in the present case is to award Plantation damages on a conversion basis and not by reference to contractual principles.
"The only estates in land which are capable of subsisting or of being conveyed or created law are
(a) An estate in fee simple absolute in possession;
(b) A term of years absolute."
It is confirmed also by certain extracts from Megarry & Wade, The Law of Real Property (8th Ed., 2012). Specifically, in paragraph 17-001 the authors confirm in effect, that a lease is, indeed, a "term of years" when they state:
"A lease is a bilateral contract which, as a general rule, confers an estate in the land capable of binding third parties. The contract is one 'for the exclusive possession and profit of land for some determinate period'. The estate so created, whatever its duration, may be referred to as a leasehold, a tenancy or a term of years. ".
That a lease is an interest in land is further confirmed by this statement at the start of paragraph 17-003:
"Leases therefore came into common use long before they obtained full protection as interests in land; they appear frequently from the early 13th century onwards. ".
This follows an earlier chapter 1, in which, under the heading "Meaning of 'Real Property'", this is stated:
" Originally leases were treated as personal business arrangements under which one party allowed the other the use of his land for a rent. Such personal contracts did not create rights in the land itself which could attract feudal status. Leases helped to supply a useful form of investment at a time when there was little other.
Leaseholds are still, therefore, personalty in law. However, having been recognised so long as interests in land and not only contractual rights, they have been classed under the paradoxical heading of 'chattels real'. 'Chattels' indicates their personal nature, 'real' shows their connection with the land."
This, in turn, is followed by chapter 3 and paragraph 3-009 where the authors describe the nature of leases in this way:
"At first, the three estates of freehold were the sole estates recognised by law. The only other lawful right to the possession of land was known as a tenancy at will, under which the tenant could be ejected at any time, and which therefore gave him no estate at all. Terms of years grew up outside this system of estates. Originally they were regarded not as property (as object of ownership) but as personal contracts binding only on the parties. The leaseholder was not fully protected against other persons until the end of the 15th century, and the nature of the remedy (the action of ejectment) marked off leaseholds from the other estates. When they became fully protected by the law of property they became estates, but it was too late for them to be classified with the others."
It is clear, in the circumstances, that this first objection by Mr Anderson QC to Mr Cakebread's conversion-based damages case is valid. The consequence is that Mr Cakebread's reliance on the conversion authorities to which he took me during the course of his closing submissions in an effort to avoid the application of the approach described in The 'Golden Victory' goes nowhere.
"Damages, including aggravated and/or exemplary damages, for:
a. Breach of contract
b. Usurpation (ghasb) and/or trespass
c. Breach of the Defendant's obligations as purported enforcer of its security".
I was informed by Mr Anderson QC, without demur from Mr Cakebread, that the references to "usurpation (ghasb)" are references to a Dubai law concept akin to trespass but, in any event, involving something which is non-contractual. It was not in dispute between Mr Anderson QC and Mr Cakebread that, as such, Dubai law was the applicable law. That, indeed, is how Flaux J appears to have approached matters since in his ex tempore judgment which resulted in the order he had this to say at  (when dealing with claims sought to be made which were under or incidental to the Conditional Assignment) and at  (when dealing with other tort-type claims):
"So far as a claim is formulated in the particulars of claim as depending upon obligations arising as a matter of Dubai law, either under or incidental to the conditional assignment, it seems to me those relate to a contract governed by Dubai law which is the subject of the exclusive jurisdiction of the Dubai Courts and there is therefore no proper basis for or no gateway under the Practice Direction through which those claims can come before this court.
Insofar as the claims are framed are some species of trespass committed in Dubai, again that is a claim where the loss and damages [sic] is not suffered here nor does it result from an act committed within the jurisdiction. Therefore that does not fall within the tort gateway in Practice Direction 6B para 3.1(9)."
In short, it is not permissible for Mr Cakebread now to seek to side-step the consequences of The 'Golden Victory' approach by relying upon a conversion case which Flaux J expressly disallowed Plantation from bringing forward.
"The point may be reduced to a small compass when you come to look at it. I do not think there is any difference of opinion as to its being a general rule that, where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation. That must be qualified by a great many things which may arisesuch, for instance, as by the consideration whether the damage has been maliciously done, or whether it has been done with full knowledge that the person doing it was doing wrong. There could be no doubt that there you would say that everything would be taken into view that would go most against the wilful wrongdoermany things which you would properly allow in favour of an innocent mistaken trespasser would be disallowed as against a wilful and intentional trespasser on the ground that he must not qualify his own wrong, and various things of that sort. But in such a case as the present, where it is agreed that the Defenders, without any fault whatever on their part, have innocently, and, being ignorant, with as little negligence or carelessness as possible, taken this coal, believing it to be their own, when in fact it belonged to the Pursuer, then comes the question, - how are we to get at the sum of money which will compensate them?"
Mr Anderson QC placed particular reliance on the last sentence and the formulation of the question as being "how are we to get at the sum of money which will compensate them?". This, he submitted, demonstrates that the compensatory principle applies just as much to tortious claims as it does to contractual claims.
"In considering any award of damages in an action in tort it is necessary to bear in mind the general principle which was re-stated by Brandon LJ in Brandeis Goldschmidt & Co. v. Western Transport [l9811 QB 864 at page 870:
'Damages in tort are awarded by way of monetary compensation for loss or losses which a plaintiff has actually sustained, and the measure of damages awarded on this basis may vary infinitely according to the individual circumstances of any particular case.'
In Brandeis the Court of Appeal substituted an award of £5 nominal damages in an action in detinue where the goods had been recovered and the plaintiffs had failed to show that they had suffered any quantifiable loss by reason of an adverse interference with their business operations. At the same time it is necessary to bear in mind that where the goods are irreversibly converted and are not recovered the general rule is that the measure of damages is the value of the goods at the time of conversion. This general rule has been recently reaffirmed by the Privy Council in BBMB Ltd. v EDA Holdings Ltd. [l9901 1 WLR 409."
Having so summarised the common law position, Neill LJ then went on to consider the position under the Torts (Interference with Goods) Act 1977 under which the plaintiff company brought its came. So, too, did Nicholls LJ (as he then was) after, first, analysing the common law position, including certain observations made by Diplock LJ (as he then was) in General and Finance Facilities Ltd. v Cooks Cars (Romford) Ltd [l963] 1 WLR 644. He explained, in particular, at page 141j that:
"In my view the key lies in appreciating that when the Act was passed in 1977 there was no absolute rule governing the date as at which damages were to be assessed in conversion or the value of goods were to be assessed in detinue."
He went on to refer to the following passage in the judgment of Evershed J (as he then was) when giving the judgment of the Court of Appeal in Rosenthal v Alderton and Sons Ltd [l946] KB 374 at page 377:
"In an action of detinue the value of the goods claimed but not returned ought, in our judgment, to be assessed as at the date of the judgment or verdict. A successful plaintiff in an action of detinue was, under the old practice, entitled to judgment for the re-delivery of the goods or, in case they were not returned, to their value together with damages and costs; and such value was either assessed by the jury at the trial or by the sheriff upon an inquest Unless the alternative methods of assessing value were liable to produce substantially different results, the time at which the value was in each case to be determined, must have been the date of the verdict."
Nicholls LJ explained at page 142c-f as follows:
"However, I do not think that either Diplock LJ or Evershed J were intending to do more than state a general rule. Neither of them is to be taken as envisaging that in detinue the value of the goods was always to be assessed, whatever the circumstances, at the date of judgment. Such a rigid, inflexible approach would accord ill with the compensatory objective underlying awards of damages. Whatever may or may not have the been the practice in past centuries, I cannot think by the mid-twentieth century the old forms of action, in ruling us from their graves, still retained sufficient vigour to compel an award of damages in a sum assessed as at the date of judgment if, in the particular circumstances and applying ordinary principles of causation and mitigation, the loss to the plaintiff fairly to be attributed to the non-return of his goods was a lesser sum. Indeed, in the Rosenthal case itself Evershed J envisaged (at page 379) that although a bailee who has parted with the goods is estopped from so asserting in answer to a claim in detinue for delivery up, yet if the bailor knew of the conversion at the time he might not be able to rely on a claim in detinue for the current value of the goods. That flexible approach was adopted by the Court of Appeal in Sachs v Miklos [l948] KB 23. Lord Goddard CJ (at page 39) stated that, in assessing damages for detinue or for conversion, the damages are not necessarily and in all cases the value of the goods at the date of judgment: 'The question is what is the plaintiff's loss, what damages he has suffered, by the wrongful act of the defendants.' There the court held that if the plaintiff, who had a cause of action against the defendant bailee in detinue as well as in conversion, knew or ought to have known that the furniture was going to be sold by the bailee, he could not recover the rise in price of the furniture after the date when it was sold."
Then, after referring both to the Brandeis case and to the BBMB Finance case, as well as to the 18th Report (Conversion and Detinue) of the Law Reform Committee published in 1971 which resulted in the 1977 Act, and noting that Lord Diplock was a member of that committee, Nicholls LJ again made it clear at page 143h-j "that there is no absolute rule regarding the date as at which the goods are to be valued" and that the damages payable should be "by reference to the value" of the relevant goods (in that case, the two cars) "at such date as will fairly compensate the plaintiff for its loss".
"Both experts agreed that the most appropriate approaches to undertaking valuations of development lands of the residual and comparable approach and it was agreed that in many instances (especially in a market lacking transparency such as Dubai) due to the lack of appropriate comparable is the residual approach is often the most widely adopted."
Mr Townsend explained in his first report, uncontroversially, in paragraph 7.6.3 that the residual approach "relies upon a combination of comparison (largely to derive the gross development value) and an estimate of costs (to make deductions from the gross development figure, and so arrive at the residual figure), and requires the valuer to make a number of assumptions". As Mr Townsend explained in paragraph 7.6.5, and as Mr Bradley himself acknowledged during the course of cross-examination, one of those assumptions is "the existence of both a willing seller and a willing buyer". The same point was made in paragraph 4.10 of the Joint Statement in which Mr Bradley and Mr Townsend said this:
"Both experts agreed that the opinion of market value provided does make an assumption that there is a potential purchaser at that date who is willing and able to acquire the land."
As Mr Townsend went on to make clear in the paragraph 7.6.5, and as Mr Bradley also recognised in cross-examination:
" the fact that a valuer can produce an assessment of 'market value' for a particular property is a particular time does not mean that there was, or is, in fact a market whether at that price (or at some other price) for the property in question."
" based on the current master-plan and the ground lease that this market would be very limited and any disposal would require a considerable period of marketing ".
This reflected what Mr Townsend had stated in his report in paragraphs 9.10, 9.11, 9.12, 9.17 and 9.19, as follows:
"9.10 I do not believe (based on the proposed use, the proposed master-plan, or the location of the Plantation project) that any special purchase of the entire project existed at the 2008 dates, or that one exists today. I should explain that a 'special purchaser' is an investor who has a reason to acquire the assets that are normal willing buyer does not have. For example, a special purchaser may be an adjoining landowner or investor with a specific requirement for the proposed sector. Based on my knowledge of the Dubai market, I do not believe that such a purchaser existed or exists in the case of the Plantation Project.
9.11 In my opinion, identifying even a potential purchaser for the whole of the Plantation project (with a view to that purchaser developing it in line with the existing Master Plan) at any of the four days requested would have been/is exceedingly difficult. I had discussed the matter with my agency colleagues at CBRE who have specialised in the disposal of land and buildings in Dubai since 2006. Their assessment is in line with my own opinion that, at these dates, there was and is very limited demand, not just for the Plantation project but for large developments within Dubai and Dubai Land generally.
9.12 At all the four valuation days there was a very limited group of investors who would have the financial resources to acquire land in the range of the Market Value, noting that any investor that acquired such a project would then have to spend the infrastructure monies to service the land to facilitate the plot sales. Investors with resources of this scale can secure large land parcels and potentially more attractive locations to develop assets more in line with market demand - one such example is Damac which acquired the now Akoya schemes. Not only was this land parcel acquired by Damac at a discount, the payment terms were very advantageous by being spread over a period of several years as opposed to a single initial capital payment on sale date. I simply do not believe that the Plantation project was always attractive to the very limited number of investors willing to purchase at this level. In addition to the issue of financial resources, there was also the question of the availability of investors with a willingness to take on a large scale projects [sic] and I would, again, can it in this respect, there would have been and remain a very limited demand across all the four dates.
9.17 In short, based on my market knowledge and experience, I have difficulty in identifying any likely purchasers either of the three dates in 2008 or now. Other than the Damac purchase mentioned above paragraph 9.12, there is no evidence of such purchases.
9.19 Putting to one side the apparent lack of potential purchaser, any attempt to dispose of the Plantation project would both back in 2008, and now, require a significant period of highly bespoke and aggressive marketing. This would (of course) need to be considered with a suitable budgeted in my view the potential marketing periods to attempt to generate interest would be in the region of the following: June/July 2008 9-15 months marketing ".
When asked about this in cross-examination, Mr Townsend explained that "in my opinion I would find it very difficult to support the premise that there was a purchaser at that time".
"4.13 Both experts agreed, notwithstanding, the market conditions that out with Dubai there were examples of large prominent families, developers (public and private) and quasi-sovereigns that have been and continue to acquire large land parcels for development both with or without master-plan in-situ.
[Mr Bradley] cited a number of examples in Qatar, predominantly in Lusail, in KSA and also in Egypt. [Mr Townsend] agreed having also been involved in a number of these projects there was continuing involvement in these alternative geographies."
5.1 As stated in 4.13, both experts agreed that there was still market activity in the large development side of the market and both agreed that there has been continuing transactional evidence in Qatar, Egypt and KSA.
[Mr Bradley] opines that this activity potentially means that there would be a market (albeit on the right terms) to consider a potential acquisition of the land in Dubai."
In his report, however, Mr Bradley did not address the question of whether a purchaser (and so a market) existed as at June/July 2008, although when he was asked about this in cross-examination by Mr Anderson QC he was somewhat reluctant, at least at first, to acknowledge that this was the case. He then went on to pick up on a part of Mr Townsend's report where he listed certain benchmark-type transactions in Dubai over the relevant period. Mr Bradley explained that he knew about one of those transactions "extremely well" and that it was a "dual transaction, which occurred at that time between a private party in Dubai and Dubailand, and was a cash purchase for the freehold interest of the property". He went on to suggest that, although he had not dealt with such matters in his report, he had information available to him which suggested that there was a market in June/July 2008. Mr Anderson QC then put to him the various efforts which Mr Bacon made, including with Arbah Capital later in 2008, making the point that no purchaser could be found. Mr Bradley's response to this was to suggest that the marketing efforts made by Mr Bacon seemed to be "highly limited".