![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales High Court (Chancery Division) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Apex Global Management Ltd & Anor v FI Call Ltd & Ors [2015] EWHC 3269 (Ch) (11 November 2015) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2015/3269.html Cite as: [2015] EWHC 3269 (Ch) |
[New search]
[Context]
[View without highlighting]
[Printable RTF version]
[Help]
![]() ![]() ![]() ![]() ![]() ![]() |
||
CHANCERY DIVISION
COMPANIES COURT
IN THE MATTER OF FI CALL LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
Royal Courts of Justice Strand, London, WC2A 2LL |
||
![]() |
B e f o r e :
____________________
(1) APEX GLOBAL MANAGEMENT LIMITED (2) FAISAL ALMHAIRAT |
Claimants |
|
- and - |
||
(1) FI CALL LIMITED (2) GLOBAL TORCH LIMITED (3) HRH PRINCE ABDULAZIZ BIN MISHAL BIN ABDULAZIZ AL SAUD (4) EMAD MAHMOUD AHMED ABU-AYSHIH (5) HRH PRINCE MISHAL BIN ABDULAZIZ AL SAUD |
Defendants |
____________________
Set Aside Application only) for the Claimants
Justin Fenwick QC, Daniel Saoul and Michael Ryan (instructed by Mishcon de Reya) for the Defendants
Hearing dates: 26 – 30 January 2015
and 23 – 24 April
2015
____________________
Crown Copyright ©
Mr Justice Hildyard :
(1) the petition and counterclaim ("the Counterclaim") brought by the Second Respondent, Global Torch Limited ("Global Torch") seeking (a) the winding-up of Fi Call Limited ("Fi Call Limited") on the just and equitable ground, and (b) an account of monies paid out of Fi Call Limited at the instance of Apex Global Management Limited (singly, "Apex") or Faisal Abdel Hafiz Almhairat (individually "Mr Almhairat" and, together with Apex, "the Apex Parties") and equitable compensation or damages, which the Apex Parties have been debarred from defending;
(2) an application ("the Set Aside application") by the Third Respondent, HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud ("Prince Abdulaziz") to set aside a judgment in default which was entered against him by Norris J on 14 October 2014 and which also debarred him from defending the cross-petition of Apex after he had failed to comply with a provision of the Vos J order requiring him personally to certify compliance with certain disclosure obligations by a Statement of Truth; and
(3) an application by Apex to resurrect its petition ("Apex's application" and "Apex's Petition" respectively) pursuant to section 994 of the Companies Act 2006 in respect of Fi Call Limited, notwithstanding an order providing for it to be struck out which I made on 18 December 2014 (sealed on 19 December 2014) after repeated failures on the part of the Apex Parties to comply with earlier orders.
Parties
i) Apex holds not more than 165,800,680 A shares (55.27% of the shares and 44.57% of voting rights).ii) Global Torch holds not more than 114,646,851 B shares (38.22% of the shares and 49.31% of voting rights).
iii) Mr Al Masoud holds at least 4,400,000 A shares and 2,933,333 B shares (2.44% of the shares and 1.99% of the voting rights). The Third to Fifth Respondents suggest that he bought a further 4.6 million A shares and 3,066,666 B shares between May and July 2010.
iv) Prince Saud holds 399,660 A shares and 266,440 B shares (0.22% of the shares and 0.18% of voting rights).
v) Prince Turki holds 399,660 A shares and 266,440 B shares (0.22% of the shares and 0.18% of voting rights).
vi) Mr Abdulrahman Al Shehri ("Mr Al Shehri") holds at least 9 million A shares and 1,886,966 B shares. Apex contends that Mr Al Shehri purchased a further 4,113,034 A shares on 29th March 2011, and the Third to Fifth Respondents contend that he purchased an additional 4,113,034 B shares on that date instead.
(1) the A shares allotted to Apex were treated as paid up by non-cash consideration in the form of goodwill and property rights in the VoIP App (see below);
(2) the B shares allotted to Global Torch were treated as paid up by non-cash consideration in the form of goodwill and contacts which it was said Prince Abdulaziz brought in through his reputation and his ability to attract further investment.
Overall context
"A brief description of the proceedings will suffice to give the context. Apex Global Management Limited ("Apex") and Global Torch Limited ("Global Torch") (Seychelles and British Virgin Islands companies respectively) set up an English company, Fi Call Limited ("Fi Call"), to develop and market internet telecommunications technology. Mr Almhairat, the second respondent, a Jordanian, is Apex's sole shareholder. Global Torch is owned by Prince Abdulaziz, Mr Abu-Ayshih and a Mr Sabha, who is not a party to these proceedings. The joint venturers have fallen out and have launched cross-petitions under the court's statutory jurisdiction to give relief against the unfairly prejudicial conduct of a company's affairs in sections 994 to 996 of the Companies Act 2006 ("CA 2006"). Both seek share purchase orders as well as pecuniary and declaratory relief. The respondents to Global Torch's petition are Apex and Mr Almairat ("the Apex parties"). The respondents to Apex's petition are Global Torch, Prince Abdulaziz, Mr Abu-Ayshih and HRH Prince Mishal bin Abdulaziz Al Saud ("Prince Mishal") ("the Global Torch parties"). Fi Call is joined as a nominal respondent in both cases.
3. Both joint venturers make allegations of serious misconduct of the affairs of Fi Call. For the purposes of this judgment, only the general flavour is needed. The Apex parties contend that the Global Torch parties have caused Fi Call to be involved in money laundering and of having run a campaign of threats and other unlawful conduct against them. The Global Torch parties have alleged that Mr Almhairat misappropriated monies belonging to Fi Call. The Global Torch parties challenge the authenticity of various emails and conversation tapes, which it says have been forged.
4. The Apex parties say that Global Torch is a corporate vehicle of Prince Abdulaziz. Prince Abdulaziz has also acted as Chairman of Fi Call but he is said not to be a lawfully appointed director of Fi Call. The Apex parties say that Prince Abdulaziz has acted as a de facto and/or shadow director of Fi Call. Mr Abu-Ayshih is an adviser to Prince Abdulaziz and is a director of and a shareholder in Global Torch, and a lawfully appointed director of Fi Call. Prince Mishal is the father of Prince Abdulaziz, and both Princes are members of the House of Saud."
(1) the state of the VoIP App technology, namely that it was fully functional and commercially viable; and
(2) the fact that Mr Almhairat and his existing company, Nida'a Amman, owned the technology and all associated intellectual property and would be transferring it to Fi Call Limited.
(1) Mr Almhairat, as part of the non-cash consideration for the allotment to Apex of shares in Fi Call Limited, to procure the transfer to Fi Call Limited of "various intellectual property rights" from a company called Amman Capital plc (which until a change of name on 16 October 2009 was called Fi Call plc), a company incorporated under the laws of England as a public company (clause 2(3));
(2) the business and affairs of Fi Call Limited to be managed by its Board of Directors (clause 5(1));
(3) the quorum for any Board meeting to be at least one director nominated by Global Torch and one by Mr Almhairat and the Chairman and Mr Almhairat (clause 5(3));
(4) any resolution of such Board to require, in order to be valid, the positive vote of at least one of the directors nominated by Global Torch;
(5) the Chairman at such meetings to have a casting vote;
(6) by clause 5(7), that "No resolution may be passed by the Board having the effect of removing the Chairman from office";
(7) by clause 11(1), that Apex may not transfer or dispose of any interest in its shares in Fi Call Limited except with the prior written consent of Global Torch;
(8) by clause 11(2), that:
"(a) any transfer of shares in the Company to a person who is not a party to the Shareholders' Agreement shall be conditional upon, inter alia, the transferred shares comprising of shares offered by Apex and Global Torch in proportion to the shares held by them respectively pari passu as if their shares constituted one class of share; and
(b) if a transfer of shares would otherwise result in Global Torch losing a simple majority of votes, i.e. a number of votes equal to or greater than 51% of the total votes of shareholders, Apex must vote in favour of a special resolution to adopt new articles of association effecting an increase in the number of votes for each of the B shares held by Global Torch sufficient to give Global Torch a simple majority of votes following completion of the transfer";
(9) by clause 11(3), that:
"The parties shall procure that before any person (other than a person who is already a Shareholder) is registered as a holder of any share in the Company, such person shall enter into a Deed of Adherence in the form set out at Schedule 5 covenanting with the parties to this Agreement from time to time to observe, perform and be bound by all the terms of this Agreement which are capable of applying to such person (other than the provisions of clause 3 hereof) and which have not been performed. The Company shall not register any such person as the holder of any share until such a deed has been executed. Upon being so registered, that person shall be deemed to be a party to this Agreement."
(10) by clause 20(10), that the Shareholders' Agreement "shall be governed by and construed in accordance with English law and the parties hereto irrevocably submit to the non-exclusive jurisdiction of the English courts in respect of any dispute or matter arising out of or connected with the Shareholders' Agreement".
Nature of claims and relief sought
(1) that the Apex Parties have been and/or are conducting the affairs of Fi Call Limited in a manner that is unfairly prejudicial to the interests of its members generally and Global Torch in particular;
(2) that the Apex Parties have misappropriated and must account for funds due or belonging to Fi Call Limited;
(3) that such conduct has been such as to cause Global Torch to lose any and all trust and confidence in the Apex Parties; and
(4) that further or alternatively the circumstances of the Apex Parties' misconduct are such that it is just and equitable that Fi Call Limited be wound up.
(1) Fi Call Limited be wound up;
(2) the Global Torch Parties have permission to apply for the appointment of a liquidator being appointed for that purpose and also to investigate and take steps in respect of the misappropriations from Fi Call Limited of Apex and Mr Almhairat; and that
(3) the Apex Parties do account to Global Torch and to Mr Abu-Ayshih for the very substantial sums which they have misappropriated from them.
Legal parameters
Sections 994 to 996: remedies for unfairly prejudicial conduct
"A member of a company may apply to the court by petition for an order…on the ground:"
(a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or(b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial".
"make such order as it thinks fit for giving relief in respect of the matters complained of".
(1) first, that the matters of which he complains are either actual or proposed acts or omissions of the company or consist of the conduct of the company's affairs;
(2) secondly, that those matters have caused prejudice to his interests as a member of the company; and
(3) thirdly, that the prejudice is unfair.
"The purpose of the jurisdiction is to provide remedies in respect of the way in which the affairs of the company are conducted…The section is not directed to the activities of shareholders amongst themselves, unless those activities translate into acts or omissions of the company or the conduct of its affairs. Relations between shareholders inter se are adequately governed by the law of contract and tort, including where appropriate the ability to enforce personal rights conferred by a company's articles of association."
"The court will not adopt a technical or legalistic approach to what constitutes the affairs of the company but will look at the business realities."
"Prejudice will certainly encompass damage to the financial position of a member. The prejudice may be damage to the value of his shares but may also extend to other financial damage which in the circumstances of the case is bound up with his position as a member. So, for example, removal from participation in the management of a company and the resulting loss of income or profits from the company in the form of remuneration will constitute prejudice in those cases where the members have rights recognised in equity if not at law, to participate in that way. Similarly, damage to the financial position of a member in relation to a debt due to him from the company can in the appropriate circumstances amount to prejudice. The prejudice must be to the petitioner in his capacity as a member but this is not to be strictly confined to damage to the value of his shareholding. Moreover, prejudice need not be financial in character. A disregard of the rights of a member as such, without any financial consequences, may amount to prejudice falling within the section."
"In s 459 Parliament has chosen fairness as the criterion by which the court must decide whether it has jurisdiction to grant relief. It is clear from the legislative history (which I discussed in Re Saul D Harrison & Sons plc [1995] 1 BCLC 14 at 17-20) that it chose this concept to free the court from technical considerations of legal right and to confer a wide power to do what appeared just and equitable. But this does not mean that the court can do whatever the individual judge happens to think fair. The concept of fairness must be applied judicially and the content which it is given by the courts must be based upon rational principles. As Warner J said in Re J E Cade & Son Ltd [1992] BCLC 213 at 227: "The court … has a very wide discretion, but it does not sit under a palm tree." Although fairness is a notion which can be applied to all kinds of activities, its content will depend upon the context in which it is being used. Conduct which is perfectly fair between competing businessmen may not be fair between members of a family. In some sports it may require, at best, observance of the rules, in others ("it's not cricket") it may be unfair in some circumstances to take advantage of them. All is said to be fair in love and war. So the context and background are very important. In the case of s 459, the background has the following two features. First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. Thus the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed. Secondly, company law has developed seamlessly from the law of partnership, which was treated by equity, like the Roman societas, as a contract of good faith. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the exercise of strict legal rights in certain relationships in which it is considered that this would be contrary to good faith. These principles have, with appropriate modification, been carried over into company law. The first of these two features leads to the conclusion that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted. But the second leads to the conclusion that there will be cases in which equitable considerations make it unfair for those conducting the affairs of the company to rely upon their strict legal powers. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith. This approach to the concept of unfairness in s 459 runs parallel to that which your Lordships' House, in Ebrahimi v Westbourne Galleries Ltd [1972] 2 All ER 492, [1973] AC 360, adopted in giving content to the concept of "just and equitable" as a ground for winding-up. After referring to cases on the equitable jurisdiction to require partners to exercise their powers in good faith, Lord Wilberforce said ([1972] 2 All ER 492 at 500, [1973] AC 360 at 379): "The words ['just and equitable'] are a recognition of the fact that a limited company is more than a mere legal entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure. That structure is defined by the Companies Act 1948 and by the articles of association by which shareholders agree to be bound. In most companies and in most contexts, this definition is sufficient and exhaustive, equally so whether the company is large or small. The 'just and equitable' provision does not, as the respondents [the company] suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way." I would apply the same reasoning to the concept of unfairness in s 459. The Law Commission, in its report on Shareholder Remedies (Law Com No 246) (1997) [Cm 3769], BAILII: [1997] EWLC 246, para 4.11, p 43 expresses some concern that defining the content of the unfairness concept in the way I have suggested might unduly limit its scope and that "conduct which would appear to be deserving of a remedy may be left unremedied". In my view, a balance has to be struck between the breadth of the discretion given to the court and the principle of legal certainty. Petitions under s 459 are often lengthy and expensive. It is highly desirable that lawyers should be able to advise their clients whether or not a petition is likely to succeed. Lord Wilberforce, after the passage which I have quoted, said that it would be impossible "and wholly undesirable" to define the circumstances in which the application of equitable principles might make it unjust, or inequitable (or unfair) for a party to insist on legal rights or to exercise them in a particular way. This of course is right. But that does not mean that there are no principles by which those circumstances may be identified. The way in which such equitable principles operate is tolerable well settled and in my view it would be wrong to abandon them in favour of some wholly indefinite notion of fairness."
"A section 994 petition is appropriate where, for whatever reasons, the trust and confidence of the parties to a quasi-partnership has broken down."
"this lack of confidence must be grounded on conduct of the directors, not in regard to their private life or affairs, but in regard to the company's business"
Alternative claim for just and equitable winding-up
"A company may be wound up by the court if…the court is of the opinion that it is just and equitable that the company should be wound up."
"If the petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the court, if it is of opinion—
(a) that the petitioners are entitled to relief either by winding up the company or by some other means, and
(b) that in the absence of any other remedy it would be just and equitable that the company should be wound up,
shall make a winding-up order; but this does not apply if the court is also of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy. "
"[104] It is to be noted that Lord Hoffmann did not say that the facts giving rise to the jurisdiction to wind up under the 'just and equitable' jurisdiction were the same as those giving rise to the exercise of the jurisdiction under s 994: he used the word 'parallel'. To the contrary, he expressly approved the statement of Mummery J in Ex p. Estate Acquisition and Development Ltd that the grant of one remedy will not necessarily require proof of conduct which would justify a different remedy. In many, if not most, cases the conduct of the respondent may give rise both to the jurisdiction under s 994 and to that under s 122(1)(g); but there may be cases which satisfy the requirements of one jurisdiction but not the other. In addition, it should be borne in mind that a winding-up may be ordered on the 'just and equitable' ground where no unfair conduct is alleged, as in the cases in which the so-called substratum has gone, as in Re German Date Coffee Co (1882) 20 Ch. D 189 and Re Baku Consolidated Oilfields Ltd [1944] 1 All ER 24.
…
[106] In Re Guidezone Ltd [2000] 2 BCLC 321 at [177]-[180] Jonathan Parker J stated:
' …
180. I accordingly conclude that if the conduct by the majority relied on by Surendra in the instant case is not unfair for the purposes of s 459, it cannot found a case for a winding-up order on the "just and equitable" ground.
[107] Lewison J in the present case at [230] and Warren J at [48] of his judgment in Re Southern Counties Fresh Foods Ltd, [2008]EWHC
2810 (Ch) expressed doubt as to the correctness of the conclusion of Jonathan Parker J. For the reasons I have endeavoured to give above, in my judgment, those doubts were justified: the judgment of Jonathan Parker J on this point should no longer be followed. This is not to say, however, that his decision on the facts of that case was incorrect. On the facts as found by him, it is difficult to see that either the 'just and equitable' ground or the requirements of s.994 (then s.459) were satisfied.
[108] It seems to me that the judge's acceptance, at [231] of his judgment, of [Counsel for Mr Cuddy's] submission that a breakdown of trust and confidence, resulting in deadlock and the inability of the company to conduct its business in the manner initially contemplated, justified an order under s.994 was based on his decision to follow the judgment of Jonathan Parker J in Re Guidezone Ltd. Deadlock and the inability of a company to conduct its business as initially contemplated when the parties trusted and had confidence in each other may be inherent in the breakdown of that trust and confidence, but in my judgment do not without more satisfy the requirements of ss. 994 and 996. Of course, in many cases one party will be able to point to unfairness in the other party's reaction to the deadlock. As Lord Hoffmann said in O'Neill v Phillips [1999] 1 WLR 1092 at 1101, [1999] 2 BCLC 1 at 11:
'For example, there may be some event which puts an end to the basis upon which the parties entered into association with each other, making it unfair that one shareholder should insist upon the continuance of the association. The analogy of contractual frustration suggests itself. The unfairness may arise not from what the parties have positively agreed but from a majority using its legal powers to maintain the association in circumstances to which the minority can reasonably say it did not agree: non haec in foedera veni. It is well recognised that in such a case there would be power to wind up the company on the just and equitable ground (see Virdi v Abbey Leisure Ltd [1990] BCLC 342) and it seems to me that, in the absence of a winding-up, it could equally be said to come within s 459. But this form of unfairness is also based upon established principles and it does not arise in this case.' "
(1) the exclusion of a petitioner from the management of the company where it was understood or agreed that he would not be so excluded (Re Ebrahimi v Westbourne Galleries Ltd, supra);
(2) deadlock in the management of the company, where the directors and/or shareholders refuse to cooperate with one another (Re Yenidje Tobacco Co Ltd [1916] 2 Ch 426); and
(3) where the company's objects or trading purposes can no longer be achieved (Re Perfectair Holdings Ltd [1990] BCLC 423).
"There are allegations and counter-allegations of serious misconduct. A person on the receiving end of such allegations will always be at significant risk of reputational damage. However, if the allegations are false, he will obtain his vindication through the judicial process, if not as a result of interlocutory application, then after a trial."
Three preliminary procedural points
"MR COLLINGS: Yes, my Lord, and of course here I don't trespass in any way on the counterclaim because I am not allowed to do so. But what this hearing --
MR JUSTICE HILDYARD: Can we just get that out of the way first?
MR COLLINGS: Absolutely.
MR JUSTICE HILDYARD: You have made your position clear in your skeleton argument, and the reason for your lighter dress is that you do not wish to make any submissions in that regard, your perception being that the order precludes you from doing so.
MR COLLINGS: Yes, my Lord.
MR JUSTICE HILDYARD: I say nothing about that. That is a matter for you to advise your clients on. You will know, as a matter of obviousness, I hope, that there was a question raised, at least in the case of Thevarajah v Riordan as to whether and, if so, what limited participation was permissible by -- I only mention that so that I should not have kept unduly my own thoughts to myself. That has been taken into account, and the position is as regards the counterclaim that you will wish to say nothing.
MR COLLINGS: My Lord, that is right. In fact that authority was referred to in the Court of Appeal in this very case as part of some submissions made by my learned friend Mr Fenwick, which I think he resiled from in the light of that authority. It is recorded by Lady Justice Arden. But in the circumstances of this case, it does not seem at all appropriate in the light of the debarring order for to us take any part in it and we don't propose to do so."
"33 ….The Deputy Judge did not have to ignore how the pleaded claims had been clearly understood in the Defence or in the correspondence. Curiously, at paragraph 16 of his judgment the Deputy Judge recorded that the Defence and Counterclaim had ceased to exist and had been omitted from the bundles before him, notwithstanding that earlier in the same paragraph he had referred to two passages contained in that pleading on which Mr Bailey had relied. Mr Davenport reminded us that the "Glossary" at Section E of Civil Procedure says that the meaning of the expression "Strike Out" is "the court ordering written material to be deleted so that it may no longer be relied upon". The status of the glossary is explained in CPR 2.2(1), which states that it "is a guide to the meaning of certain legal expressions used in the Rules, is not to be taken as giving those expressions any meaning in the Rules which they do not have in the law generally." At paragraph 16 (a) of his judgment the Deputy Judge also referred to the Defence and Counterclaim as having been "erased" and said that "any statement dependent for its vitality on the continued existence of the now erased Defence and Counterclaim cannot be invoked to supply, cure or support any claim not, or inadequately, advanced in the Particulars of Claim." I do not entirely understand the ambit of this approach but I do not agree with the notion that the Defence had for all purposes ceased to exist. What had happened is that the Respondents had been debarred from defending. To that extent the Defence could not be relied upon by the Respondents, but it would be absurd if the document could not be relied upon by the Claimant as indicating the ambit of the dispute. Were that not the case, matters which were never in issue because of admissions in the pleadings would suddenly become contentious, with the extraordinary and perverse effect that the burden on the claimant at trial would be increased. The obverse would equally be true - a defendant may by virtue of being debarred from defending avoid the consequences of his admissions, thereby casting upon the claimant a burden which may, in reliance upon the admission, have become more difficult or even impossible to discharge. I agree with Mr Smith's happy observation that "a defence will have left a lasting legacy on the statements of case as a whole. By virtue of what is said in a defence, the content of any reply, or the decision not to rely upon one, will have been affected. Further, if the defence indicates to a claimant that the parties are in agreement as to what they disagree about, it will impact upon any consideration of whether to amend the particulars of claim to clarify anything that might be said to have been unclear." It might also for example have been necessary to look at the Claimant's Reply and Defence to Counterclaim which would most likely be difficult to follow without resort to the pleading to which it was responsive.
34. It follows that I do not consider that the Deputy Judge was precluded from having regard to the Defence and Counterclaim if that document helped him to understand the ambit of the dispute between the parties."
"…that Mr Almhairat knew that the monies to which [the judgment] relates had in fact been paid at the time either that the claim was issued and/or that he knew this either at the time that Default Judgment was entered…or subsequently but has nevertheless continued to seek to maintain the claim."
"until such time as a High Court Judge directs them to be paid out, whereupon they should be paid out in accordance with the Judge's direction."
"It seems unlikely that, if the contention that the Prince had already paid the $6m is maintained at trial, it will be ruled on by the trial judge unless it is necessary to do so in order to resolve a live issue between the remaining parties, i.e. an issue which will affect the terms of any court order. And, if the contention had to be resolved in order to determine such an issue between the remaining parties, and the trial judge concluded that the $6m had in fact been paid by the Prince, it is conceivable that the Prince would be able to recover the $6m or its equivalent. That is, I must emphasise, mere speculation on my part but it illustrates that the Prince may not be without some hope, albeit of a highly speculative nature, of getting the $6m returned, if he had in fact paid it. To that extent, he is actually better off than if this was the more normal case involving the enforcement of a sanction."
(1) for correction of the order in question (and if necessary a consequential further order of mine made on 9 January2015)
pursuant to CPR Part 40.12 and PD 40B paragraph 4.5;
(2) for a variation of the order(s) pursuant to CPR Part 3.1(7);
(3) for relief from sanction pursuant to CPR Part 3.9 on the basis that Apex's claim against the Princes has been struck out inadvertently and wrongly.
(1) He described the suggestion that this order only bites "as against the Second and Fourth Respondents" (which suggestion is made in the body of the draft order provided by the Apex Parties) as nonsense. There is no such limitation in the Orders made - drafts of which were served on the Apex Parties in advance of the relevant hearings - nor could there be: the Apex Parties' misconduct which resulted in those Orders related to their Petition generally. They sought their adjournment as against all Respondents, and not only as against the Global Torch Parties; resulting in a series of Orders requiring them to substantiate their unlikely assertions, which they refused to comply with.
(2) Indeed if it were not so, the Petition would have come on for trial on 3 November 2014 so far as the Third and Fifth Respondents were concerned and would inevitably have been dismissed at that time since (on the Apex Parties' evidence) they would not have participated, would not have called evidence and would not have instructed lawyers to make submissions on their behalf.
(3) Having secured an adjournment as against all Respondents on conditions which they subsequently refused to fulfil, ultimately resulting in the dismissal of the Apex Petition and the striking out of the Amended Points of Claim in their entirety, there is no scope for arguing that these orders were specific to the Global Torch Parties. The orders sought and made were not so confined and nor would there have been any reason for them to be.
(4) The idea that the Apex Parties should be partially immune from the consequences of their consistent disregard for court orders and contempt generally for the court's process is nothing short of ludicrous and their application should be dismissed as totally without merit and abusive.
Detail of claims in the Counterclaim
(1) Prior to the setting up of Fi Call Limited, the VoIP App was neither operational nor commercially viable, and Mr Almhairat's representations in that regard and as to the ownership of IP rights in the VoIP App were false.
(2) At Mr Almhairat's instigation, the true ownership of the relevant IP rights was concealed through a complex web of corporate structures, assignments and name changes, and to the knowledge of Mr Almhairat and Apex the IP rights were never effectively transferred to Fi Call Limited.
(3) On what Mr Almhairat knew to be the false premises that (a) Fi Call Limited owned the VoIP App and the IP rights to it and (b) Mr Almhairat had negotiated an agreement for the purchase by Fi Call Limited of a software development house apparently incorporated in California, USA but based in India called Octro Inc. ("Octro"), the Global Torch Parties were induced by Mr Almhairat to agree to Fi Call Limited paying some $595,792 to Octro (as it did); yet in truth Octro was never to be acquired by Fi Call Limited, and has since itself claimed to be the independent owner of IP rights in respect of the VoIP App, and that it is owed fees of some $500,000 by Fi Call Limited.
(4) Mr Almhairat and Apex, on the basis of those false premises, induced the Global Torch Parties to introduce valuable contacts who invested in Fi Call Limited under SPAs, but then either failed to account for the monies so invested, or misused the monies invested under the SPAs on payments otherwise than in the best interests of Fi Call Limited, including payments to Octro and others (and also companies associated with Mr Almhairat and members of his family) which resulted in no value or no commensurate value in return to Fi Call Limited.
(5) Mr Almhairat and Apex persuaded some 198,564 subscribers to sign up to Fi Call Limited's services, but failed to account properly or at all for the subscription fees.
(6) Mr Almhairat acted in breach of fiduciary duty, and of his obligations under the Shareholders' Agreement by denying the Global Torch Parties any or any sufficient access to Fi Call Limited's business and other records and by (a) preventing Mr Abu-Ayshih from having access to Fi Call Limited's servers and email accounts and (b) failing to keep and make available to the Global Torch Parties proper books and records in respect of the business of Fi Call Limited.
The evidence and witnesses
(1) Mr Abu-Ayshih, whose evidence concerned the relationship between the parties in general, from the outset to its conclusion;
(2) Mr Sabha, a shareholder in Global Torch. Mr Sabha is a Jordanian lawyer known to Mr Abu-Ayshih since 2004 who was retained by Fi Call Limited's Amman office to advise it on matters of Jordanian law. His evidence concerned the initial period including the representations made by Mr Almhairat, as well as later events including the setting up of Fi Call Seychelles, Mr Almhairat's alleged misconduct in relation to Fi Call Limited (including his failure to attend Board meetings) and other alleged illegitimate conduct on his part, including alleged attempts to bribe Mr Sabha and threats to involve Fi Call Limited in the gambling and sex industries;
(3) Mr Hiasat, who has known Mr Almhairat since 2008. He is a business advisor who provided advisory services to Fi Call Limited until in or around May 2011. His evidence pertained mostly to the negotiations between Fi Call Limited and other telecoms service providers, namely DU and STC, as well as the drafting of a number of SPAs including the agreement in 2011 relating to Mr Al Shehri;
(4) Mr Al-Shihabi, an IT consultant who was first contracted by Mr Almhairat in 2007 and who subsequently provided services to Fi Call Limited's predecessor companies until Mr Almhairat terminated Mr Al-Shihabi's involvement in late 2009. His evidence covered those earlier ventures of Mr Almhairat's, Mr Almhairat's dealings with Octro and the initial introductions between the parties, including Mr Almhairat's representations. Mr Al-Shihabi also attested to Mr Almhairat's dealings with an outgoing investor in another joint venture with Mr Almhairat ("Fi Call No.1, to be discussed below), Mr Mohammad Hijaz, as well as the apparent misuse of his (Mr Al-Shihabi's) personal email account after he parted ways with Mr Almhairat;
(5) Mr Fadiga, a solicitor qualified in England, but originally from West Africa. Mr Fadiga was asked to investigate the legitimacy of certain allegations made by the Apex Parties, namely that Interpol Guinea had raised arrest warrants against Mr Abu-Ayshih and Mr Sabha in respect of alleged money laundering and drug trafficking, the validity and authenticity of which the Global Torch Parties deny;
(6) Mr Austin, a forensic and business investigator retained by the Global Torch Parties to investigate some of the allegations made by the Apex Parties concerning the Nairobi Transactions (as to which, see below) and also alleged Interpol Notices concerning Mr Abu-Ayshih and Mr Sabha;
(7) Mr Al-Farouqi, the President of a telecommunications company known as Teletec which had antecedent business dealings with Mr Almhairat. Mr Al-Farouqi's evidence concerned Mr Almhairat's previous misconduct, which is relied upon both because it is said to be relevant to the relationship of trust and confidence between the parties to the joint venture, and because it is said to be similar fact evidence;
(8) Mr Al Hammad, a former business associate of Mr Almhairat's whom Mr Almhairat accuses of having stolen a memory stick containing recordings of important conversations between the parties, allegations which Mr Al Hammad firmly denies;
(9) Mr Al Shehri, a shareholder in Fi Call Limited whose evidence concerns primarily the terms of a disputed SPA ("the Al Shehri 2011 SPA") between him, Apex and Global Torch which was concluded in 2011, and who confirmed that Global Torch's version of the agreement is the one which he intended to and did enter into;
(10) Mr Al Dossary, a Saudi Arabian commercial pilot who is implicated by the Apex Parties in the Nairobi Transactions, and who has given two statements, as well as documentary evidence, disputing what is said against him; and
(11) Mr Karim, the Managing Director of a company known as HITECH, which provides IT and telecommunications services and solutions, and who like Mr Al-Farouqi has prior experience of business dealings with Mr Almhairat.
(1) their (materially different) version of the Al Shehri 2011 SPA, on which the Apex Parties purport to rely: the genesis of the document and its terms being covered in the statements of Mr Abu-Ayshih, Mr Hiasat and Mr Al Shehri; and
(2) a letter from a Mr Al Majali, an employee of Royal Jordanian Airlines, which concerns the Nairobi Transactions.
Expert Evidence
(1) Mr Sam Narula, to give expert accountancy evidence. His findings are summarised below in relation to Mr Almhairat's alleged misappropriations from Fi Call Limited;
(2) Mr Keith Cottenden, a computer forensic investigator, to give expert IT evidence, especially as to the alleged fabrication of emails purporting to relate to the Nairobi Transactions (see paragraph 160(b) below);
(3) Mr Peter Buckie, to give expert gemmology evidence, in particular as to what gemstones are indigenous to the Democratic Republic of Congo, and what quantity of gold is mined annually there, all in the context of allegations of gem smuggling made by the Apex Parties against the Global Torch Parties referred to under the rubric "the Nairobi Transactions".
(4) Mr David Browne, to give expert handwriting evidence, as to the authenticity (or not) of the signatures on the version of the Al Shehri 2011 SPA adduced by the Apex parties.
The VoIP App and the Business of Fi Call Limited
The arrangements between Mr Almhairat and Octro in respect of the VoIP App
(1) Roughly a month after the execution of the Shareholders' Agreement Mr Almhairat informed Mr Abu-Ayshih that he had negotiated the purchase of Octro by Fi Call Limited.
(2) On this basis Mr Abu-Ayshih was persuaded by Mr Almhairat to approve substantial payments to Octro, which Mr Almhairat represented and Mr Abu-Ayshih believed represented part-payments of the consideration price for the acquisition of that company.
(3) In fact, according to the evidence of Mr Abu-Ayshih and Mr Hiasat, the payments made to Octro were not payments of an agreed acquisition price but payments in respect of (i) licence fees to use technology developed by Octro and/or (ii) fees payable to Octro to develop such technology.
(4) Although Mr Hiasat's evidence is that Mr Almhairat had told him that he had agreed with Mr Saurabh Aggarwal, the owner of Octro, to purchase Octro under an option agreement for US$5m and that fees paid by Fi Call Limited to Octro would be set off against the agreed price under the option, it seems clear that no acquisition was ever made.
(5) In the meantime, Octro had the use and benefit of the product (the VoIP App) and charged Fi Call Limited fees for its development. Mr Narula's evidence was that Fi Call Limited paid Octro some US$595,792; and according to Mr Abu-Ayshih Octro maintains that there is a debt still outstanding to it from Fi Call Limited of about US$500,000.
(1) Mr Abu-Ayshih's evidence that Mr Almhairat had represented to him that he had negotiated the purchase of Octro by Fi Call Limited;
(2) Mr Hiasat's evidence that Mr Almhairat had informed him that he had negotiated an agreement to purchase Octro under an option agreement for $5m;
(3) the Initial Operational Projections for Fi Call Limited: in October 2009, Mr Hiasat produced a forecast for the Fi Call Limited business and Mr Almhairat forwarded this to Mr Abu-Ayshih. This forecast, prepared on Mr Almhairat's instructions, included a provision for "Buying Development House in INDIA";
(4) Mr Al-Shihabi's evidence that in August 2009 a Mr Mohammad Al Khrisha of Octro entered a "white-labelling" agreement whereby they would develop the VoIP App technology together and build each other's client bases. In fact, the Octro system, called "Octro Talk" ended up being customised for use by Fi Call Limited. This was of course entirely contrary to what had been envisaged and agreed by the Global Torch Parties at the outset of the joint venture that the parties would work together to develop the VoIP App technology for the benefit of Fi Call Limited;
(5) a Mutual Confidentiality Agreement between Octro and Fi Call Plc dated 4 August 2009 and signed by Mr Saurabh Aggarwal of Octro and Mr Almhairat;
(6) a draft licence agreement between Fi Call Limited and Octro providing for Octro to carry out services for Fi Call Limited in return for a fee calculated by reference to the number of users of the service;
(7) correspondence from Mr Aggarwal of Octro to Mr Abu-Ayshih confirming that Octro had been providing services to Fi Call Limited pursuant to a licence agreement:
a) email of 18 August 2011 in which Mr Aggarwal stated: "Octro has been providing FiCall services since August 2009 under the agreed upon terms. Faisal (cc'ed), a director of FiCall, should have all the details regarding our contract, and execution terms";
b) email of 25 September 2011 in which Mr Aggarwal stated "FiCall has failed to pay the yearly license fee and other fees for professional services rendered … We will be shutting down the license server permanently on October 20th 2011";
(8) an email from Mr Aggarwal to Mr Almhairat of 24 October 2011 explaining the work carried out on the VoIP App: "Repackaging the product, adding new technologies to create a Viber like product";
(9) an email from Mr Aggarwal in which he summarises the effect of Mr Almhairat's dealings in relation to Octro:
"Since we did get the advance money, and since we were protected anyways (since we didn't have to share source code, IP, and were allowed to put in a backdoor license scheme in the clients where by we can shut down the clients in case of any eventuality, and all of this was in the draft agreement) we decided to start work for FiCall"
…
"There were talks between Faisal and me, about FiCall taking over OCtro Inc and thus acquiring its IP and source code several times in between our arrangement.
I was made to believe that FiCall would acquire Octro Inc (With a price range of ~$10 million by the end of 2011) and until that happens, FiCall would continue paying our services. Thus we had offered an extremely competitive licensing rate to FiCall".
It should be noted that this email goes on to say: "As far as I could tell, you were well aware of these arrangements. Since you had introduced me as the CTO for FiCall at meetings with Du, STC and since you were fully aware that I was not an employee at FiCall. I had always believed that HRH and you always knew about the arrangement to acquire Octro".
This email makes clear that the white-labelling exercise which Mr Almhairat brought about had resulted in whatever IP rights which Fi Call Limited might have had being undermined.
(10) an email from Mr Nikolov of Nexcom to Mr Almhairat of 14 July 2011 stating that "You are still wasting money on useless expenses such as … questionable software development work in India";
(11) Mr Abu-Ayshih's evidence that neither he nor any of the Global Torch Parties had any direct contact with Octro and were unaware of the arrangements put in place by Mr Almhairat;
(12) The expert evidence of Mr Sam Narula (an accountant) that Fi Call Limited paid the total sum of $595,792.86 to Octro for apparently nothing in value in return.
The SPAs and the misuse of monies raised
The First Al Masoud SPA
(1) Having agreed to hear the Counterclaim in the absence of Mr Almhairat on its merits (rather than simply on a default basis) the court had taken upon itself the task, from which it should not shirk, of making findings in relation to what Mr Fenwick described as the "core elements of our claim" and the "serious allegations" made against Global Torch by Apex in its own Petition, including Apex's allegation that Prince Abdulaziz had failed to account to Apex for the Al Masoud monies.
(2) Global Torch is entitled in such circumstances to an adjudication by the court of not only all the reasons advanced by Global Torch in support of its prayer for a just and equitable winding-up, but also all the allegations made by Apex in support of its own Petition and its case that it was not its conduct but the conduct of the Global Torch Parties which caused the breakdown which all parties accept has occurred.
(3) To quote from Mr Fenwick's oral submissions, Global Torch itself should also be entitled to seek recovery of the Al Masoud monies
"on its own behalf or on behalf of its shareholder, on the basis that it is not a totally separate wrong divorced from the company. It is part and parcel of the management of this company and its direction, and the way it was being funded and the way in which its funds were being accounted for and allocated, and it is all to do with the affairs of the company, and it is therefore within the wide powers of section 994 to make a declaration…"
(4) If and insofar as it had not pleaded it as a separate claim, Global Torch should be permitted a suggested amendment to plead expressly that
"…HRH Prince Abdulaziz paid the sum of $7,999,943 to the accounts of the Company, of which $5,984,000 represented the amount due to Apex under the Al Masoud SPA, of which payment Apex was aware. Global Torch thus accounted to Apex for the sums due to Apex under the Al Masoud SPA. At the instigation of the Apex Parties, by an order dated 14 October 2013 judgment in default was entered against Prince Abdulaziz in favour of Apex in the sum of $5,984,000 plus interest at 8% per annum in respect of the Apex share of the proceeds of the Al Masoud SPA. Accordingly, Apex has unjustly obtained the double recovery of its share of the proceeds of the Al Masoud SPA"
and to include a claim that Apex and/or Mr Almhairat should account to Global Torch for such monies.
(5) Recovery by Global Torch should thus be enabled (again quoting from Mr Fenwick's oral submissions)
"either by making a declaration under section 994 that the money has been paid and that following from that it should be released; or by finding to the extent that the Court doesn't do that, that the unfairly prejudicial conduct of Apex, in the running of the Company and in failing to account for the monies, has given them the windfall of a double payment for which they should account with interest and that they should do that in the context of the section 994 relief for unfairly prejudicial conduct."
(1) The Counterclaim as it stands (that is, before the proposed amendment) did not mention the Al Masoud monies, still less assert any cause of action or remedy in respect of them: that was a correct reflection of the fact that Global Torch was the only claimant by counterclaim and it had not paid any such monies, nor had it any right itself in respect of them.
(2) It was irrelevant that in its Petition Apex had pleaded not only that Prince Abdulaziz had failed to account for Apex's share of the Al Masoud monies, and held such share or its traceable proceeds on trust for Apex, but also that (a) such failure was unfairly prejudicial to the interests of Fi Call Limited's members and contrary to good faith, and (b) that there should
"be added to the notional value of Apex's shares the sum of US$5,984,000 to which Apex was entitled pursuant to the Al Masoud SPA but which was instead paid to Prince Abdulaziz."
It was irrelevant because Apex's Petition had been dismissed at Global Torch's own behest, and the claim fell away accordingly; and in any event, even if it had been in issue on Apex's Petition, "that would not make it an issue in the Counterclaim, still less an issue on which Global Torch was entitled to seek relief".
(3) Indeed, so Mr Collings submitted, the court is simply not entitled to adjudicate on factual matters pleaded in Apex's own dismissed Petition/claim but not in Global Torch's Counterclaim: the court is functus officio in that respect and it "is simply not open to Global Torch, having obtained that dismissal, to come back to the Court and ask that particular aspects of the Apex Parties' former case against it be made the subject of specific findings of fact".
(4) As to the proposed amendment, Global Torch has no legal standing to pursue the proposed claim as to the state of account or indebtedness between Apex and Prince Abdulaziz: any such claim arises between and may only be pursued by Apex or Prince Abdulaziz. Further, no such claim could be pursued by way of an unfair prejudice petition: it does not relate to the conduct of the affairs of Fi Call Limited; it relates to the relationship between the shareholders inter se: see paragraphs [36] and [39] above.
(5) It is true that Apex advanced such a claim in its Amended Points of Claim, but that is explained by the fact that, pragmatically but very unusually, Vos J gave directions for the Points of Claim to encompass both the claim in Apex's original unfair prejudice Petition and its counterclaim in the Global Torch petition, notwithstanding that the two claims are (as Mann J described them in his judgment at an earlier stage ([2013]EWHC 3752 (Ch)) "conceptually and procedurally different claims" both maintainable by Apex (the one by Petition, the other at common law and equity).
(6) Further, even if it has jurisdiction to make a monetary award in respect of such a claim made by way of petition, the court should only rarely, if ever, exercise it: see Re Chime Corporation [2004] HKFCA 8.
(7) In any event, the claim could not succeed without the amendment; and the amendment should not be permitted at such a late stage, especially given that Apex had not sought to participate at all on the basis that no claim to the Al Masoud monies was in issue.
(1) It has always been accepted that Prince Abdulaziz received the aggregate consideration payable by Mr Al Masoud under the First Al Masoud SPA in respect of the shares sold to him by Apex and Global Torch, and that such payment discharged Mr Al Masoud's obligations under that SPA.
(2) It has always been accepted that by the terms of the First Al Masoud SPA the consideration monies were expressly agreed to be paid into Fi Call Limited's account, and that such monies were to be received by Fi Call Limited as agent for Apex and Global Torch in their due proportions ($5,984,000 for Apex and $4,016,000 for Global Torch) (though Global Torch also pleaded that the parties had agreed "that at least part of the proceeds of sale of the shares were to be used as working capital for Fi Call Limited").
"Upon completion of the matters referred to in clauses 5.2 to 5.5 above the Purchaser [Mr Al Masoud] shall:
5.6.1 deliver to the A Vendors [Apex] a banker's draft for the amount of the purchase consideration for the A shares; and
5.6.2 deliver to the B Vendors [Global Torch] a banker's draft for the amount of the purchase consideration for the B shares.
5.6.3 The Vendors, the Purchaser, Faisal [Mr Almhairat] and the Company [Fi Call Limited] agree and consent to the purchase consideration for the A and the B Shares purchased to be paid into the Company's Bank Account: [of which details are then set out]…"
Al Masoud Share Option and the consideration monies
(1) Mr Almhairat had contrived unlawfully to remove Mr Abu-Ayshih as a director at a meeting of shareholders for which Mr Abu-Ayshih was given no notice, leaving himself as the only director and "thus allowing him to have a free hand to pursue his fraudulent scheme";
(2) Mr Almhairat's "intention was fraudulent and a manifestation of bad faith on his part, in order to solely access the funds of [Fi Call Seychelles]";
(3) Thus enabled, Mr Almhairat then caused Mr Abu-Ayshih to be removed as a signatory to the Coutts Geneva account and thereafter he withdrew $2.8m from that account (which it is Global Torch's case was held on trust for Fi Call Limited) for his personal use.
The Al Shehri 2011 SPA
(1) An SPA was concluded with Mr Al Shehri in March 2011.
(2) The consideration payable by Mr Al Shehri pursuant to this SPA (the Al Shehri 2011 SPA), a total of approximately $16.7m, was paid by him to Apex. None of that sum has been paid onto Global Torch or Fi Call Limited.
(3) Apex has dissipated all of these monies. This was concluded by Mr Justice Newey when determining the Global Torch Parties' security for costs application and admitted and averred by Mr Almhairat in the course of the application to adjourn the trial.
(1) the true version of the Al Shehri 2011 SPA concluded on 29 March 2011 is that relied upon by the Global Torch Parties;
(2) Apex and Mr Almhairat were and remain obliged to account to Global Torch for the sum of $6,704,000 due to Global Torch under the 29 March 2011 SPA;
(3) in failing so to account to Global Torch, in feigning attempts to do so, and in dissipating monies paid pursuant to the Al Shehri 2011 SPA, the Apex Parties have misappropriated monies due to Global Torch and are liable to make restitution to Global Torch in respect of the sum of US$6.7m plus interest;
(4) the unjustified and unlawful misappropriation of the monies due to Global Torch under the true Al Shehri SPA is another factor weighing in favour of a just and equitable winding-up order being made.
(1) Mr Al Shehri's evidence confirming that:
a) Mr Al Shehri did not sign the false version of the SPA and had not seen it before it was shown to him in this litigation;
b) the true version of the SPA is that which the Global Torch Parties contend for;
(2) a signed declaration by Mr Al Shehri dated 26 November 2011 confirming that the SPA provided for purchase of shares from both Apex and Global Torch, which again is consistent only with the version contended for by Global Torch;
(3) the evidence of Mr Abu-Ayshih confirming the true terms of the SPA and the circumstances of its signing;
(4) the evidence of Mr Hiasat confirming that:
a) he drafted the terms of the SPA on his laptop in accordance with Mr Almhairat's instructions, which provided for the terms contended for by the Global Torch Parties;
b) the purchase price of $16,760,000 was calculated by reference to the fact that payment would be made some three weeks after the signature date and upon the prevailing GBP/USD exchange rate;
c) Mr Almhairat signed the true version of the SPA in his presence;
(5) the failure of the Apex Parties to adduce an original of their version of the Al Shehri 2011 SPA – only a poor-quality fax copy of the agreement has ever been provided;
(6) the failure of the Apex Parties to inspect the original version of the Global Torch Parties' version of the Al Shehri 2011 SPA:
a) the original has been lodged with the Saudi Arabian Police;
b) whilst the Global Torch Parties do not have access to the document, Mr Almhairat, or his representatives, are entitled to copies of it, as well as to inspect it should they wish to do so. The position was confirmed beyond doubt in a formal legal opinion from Dhabaan & Partners, a reputable Saudi law firm affiliated with Eversheds. This was provided to the Apex Parties in February 2014;
c) No written response has ever been received and to the Global Torch Parties' knowledge the Apex Parties have never made any attempt to obtain a copy of or to inspect what the Global Torch Parties have throughout maintained is the true version of the Al Shehri 2011 SPA.
(1) On 19 April 2011, Mr Al Shehri transferred the consideration of $16,760,000 under the SPA to Apex. On 20 April 2011 informed Mr Abu-Ayshih that this had taken place.
(2) In the events that followed, Mr Almhairat feigned to attempt to transfer the Global Torch Share of the proceeds:
a) on 20 April 2011 Mr Almhairat instructed Mr Abu-Ayshih to prepare text message instructions to be sent to RBS Coutts (Apex's bankers) to transfer the monies. Mr Abu-Ayshih did so;
b) however Mr Wynn informed Mr Abu-Ayshih by telephone that the transfer could not be effected by text;
c) at Mr Almhairat's request, written instructions to Coutts were drawn up for transfer of $4,250,000 to Mr Abu-Ayshih and $2,500,000 to Prince Abudulaziz, making up the total payment of $6,750,000. Mr Almhairat emailed them to himself and in turn forwarded them to Mr Wynn at Coutts;
d) however, by email of Mr Almhairat sent to Coutts on 24 April 2011, he countermanded his instructions to transfer funds to the Global Torch Parties and instead gave instructions to Coutts to transfer all the sums in the Apex account to his personal account;
e) it is Mr Hiasat's evidence that Mr Almhairat deliberately failed to execute instructions to Coutts properly so that they would not be accepted by the bank;
f) no transfer to the Global Torch Parties was forthcoming from Coutts.
(3) Subsequently on 26 April 2011 Mr Almhairat fled Dubai for London.
(4) No transfer of any of the consideration under the true version of the Al Shehri 2011 SPA has been received by the Global Torch Parties.
Alleged Threats/Conversations
(1) allegations which were referred to under the rubric "the Beirut Transactions", to the effect that in March 2010 Prince Abdulaziz coerced Mr Almhairat into assisting Mr Abu-Ayshih with the issuing by Fi Call Limited of a banker's draft in the sum of US$5m in favour of an individual based in Beirut and said by the Apex Parties to be associated with the terrorist organisation Hezbollah;
(2) allegations which were referred to in the pleadings, and earlier in this judgment, as "the Nairobi Transactions", and which were purportedly based on a series of alleged emails and transcripts of alleged conversations in which the transaction was allegedly revealed, to the effect that in late 2010 Mr Abu-Ayshih and Prince Abdulaziz procured Fi Call Limited to charter a flight from Nairobi to Amman for the purposes of covertly exporting an enormous quantity of gold nuggets and gemstones, all said to have been mined in the Democratic Republic of Congo.
(1) breaches by Mr Abu-Ayshih and Prince Abdulaziz of their statutory duties as directors of Fi Call Limited in that they had caused Fi Call Limited to carry on business in an unlawful and disreputable manner, jeopardised its contracts with other customers, and put its business at serious, possibly fatal, risk;
(2) breaches by Global Torch of an implied term in Fi Call Limited's Articles of Association and the Shareholders' Agreement between the members not knowingly to permit Fi Call Limited to carry on business in an unlawful manner;
(3) conduct inevitably destructive of the relationship of trust and confidence between the parties and seriously prejudicial to the economic value of Apex's shareholding in Fi Call Limited.
"The breakdown in trust and confidence has been exacerbated by false and malicious allegations of criminal conduct that the Apex Parties have made about Global Torch and its shareholders."
(1) the emails said to provide the evidence of the Beirut Transactions, the electronic copies of which were never disclosed by the Apex Parties, were fabricated, and the alleged transcripts of conversations revised and manipulated;
(2) similarly, the emails said to evidence the Nairobi Transactions were rather crude forgeries, and furthermore, (a) with the exception of malachite, none of the gemstones said to have been sourced in and exported from the Democratic Republic of Congo are indigenous to that country and (b) the quantity of gold nuggets alleged to have been exported from that country exceeded by some way the total amount of gold produced there in any one year.
Other Accounting and Banking Issues relating to Mr Almhairat
(1) In all the records which Mr Narula was able to scrutinise there are no invoices to customers or any equivalent subscription documents and there is no evidence of any income to Fi Call Limited. This state of affairs is unexplained but inconsistent with Mr Almhairat's representations that Fi Call Limited would inherit a ready-made subscriber base and his assertions during the currency of the parties' relationship, and indeed in the Apex Parties' pleadings, that Fi Call Limited had in the region of 200,000 subscribers.
(2) The Apex Parties' disclosure contains documents suggesting that a Paypal account had been created for Fi Call Limited; but again there is no evidence of any payments to Fi Call Limited through this or of the ultimate destination of any such payments. The Global Torch Parties' attempts to explore these matters and to understand what if any funds were paid by these alleged subscribers to Fi Call Limited (or indeed to the Apex Parties) have so far been unsuccessful.
(3) It appears that 99.9% of the £1m lent to Fi Call Limited by Prince Abdulaziz was withdrawn and used by Mr Almhairat. The available records and evidence provides no clear explanation of how these sums were used. From some of the documents available it seems that these funds may have been used to discharge invoices or tax liabilities relating to Mr Almhairat's previous ventures, and/or that the expenses which they have purportedly been used to settle have been significantly overstated. The document trail is very difficult to penetrate and the limited number of expenses claims provided by the Apex Parties do not cohere with one another. All this has understandably (and indeed, in my view, justifiably) given rise to mistrust and the suspicion that they were not used for Fi Call Limited's proper purposes.
(4) Some $3.32m was spent by Fi Call Limited on what appear to be "media" related matters, including $3.3m to an entity known as "Mediasat" and $123,000 paid to "Interactive Google". It is not clear what these substantial payments relate to.
(5) More than $1m was paid to a company called International Marketing Communications ("IMC"), a corporate group which seems to have included a Dubai company of which Mr Almhairat is a director. The Apex Parties admit that Fi Call Limited agreed to pay IMC $2.7m for "marketing services" but there is no clarity as to what these comprised.
(6) Approximately $1m was paid to Mr Almhairat's company, Nida'a Amman, for reasons which are not evident.
(7) Approximately $300,000 was paid to Mr Almhairat's preferred travel agency, Bawadi Tours, against invoices totalling substantially less. Again, there is no explanation provided for these payments.
(8) Substantial sums were drawn from Fi Call Limited's accounts as petty cash (for unknown purposes). The payment vouchers available do not appear to reconcile with the funds withdrawn.
Preventing the Global Torch Parties from accessing Company Information
Other allegations and complaints
(1) allegations of bribery (and in particular that, according to Mr Sabha's evidence, Mr Almhairat attempted to bribe him to induce his cooperation in the unlawful misappropriation of funds from Fi Call Limited's accounts);
(2) an allegation that Mr Almhairat sought to involve Fi Call Limited in the gambling and sex industries and procure a sale of shares in Fi Call Limited to Israeli companies and to publicise such activities, thereby seeking to publicly embarrass the Princes and procure a payment from them;
(3) an allegation that, in December 2012, Mr Almhairat contrived the notion, and fabricated documents to support it, that Mr Abu-Ayshih and Mr Sabha were the subject of Interpol Red Notices originating from Guinea (West Africa) in connection with money laundering and drug trafficking:
(4) an allegation that Mr Almhairat without consultation or justification enrolled Fi Call Limited in the PROOF scheme operated by Companies House, refused to share the relevant access codes and blocked the Global Torch Parties from making appropriate filing.
Conclusion
(1) Global Torch has fully demonstrated the need for, and I shall order, the winding-up of Fi Call Limited on the just and equitable ground;
(2) Fi Call Limited's share register should be rectified to reflect the exercise by Mr Al Masoud of his option to buy further shares in Fi Call Limited;
(3) the Apex Parties must make restitution in the sum of (alternatively pay damages in the sum of) $6.7m plus interest, being the amount due and owing to Global Torch by Apex pursuant to the Al Shehri 2011 SPA;
(4) in addition the Apex Parties must repay to Fi Call Limited $100,000 (or such greater sum as may on an account be demonstrated to be due) lent to him and not repaid, plus interest.