|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Kent (aka Joannis Kent)  EWHC 623 (QB) (21 March 2016)
Cite as:  EWHC 623 (QB)
[New search] [Context] [View without highlighting] [Printable RTF version] [Help]
QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan
|- and -
(Also known as Joannis Kent)
Paul Burton (instructed by Davis Law) for the Respondent
Hearing dates: 2 March 2016
Crown Copyright ©
MRS JUSTICE NICOLA DAVIES:
i) £400,000 within 35 days of the date of the court's order;
ii) £250,000 by no later than 35 days after the hearing of the restored CMC;
iii) £350,000 by no later than 2 days before the date fixed for the trial in the action.
Further the defendant claims that if security is not so provided, the claim be struck out and the defendant be entitled to judgment for his costs of the proceedings.
25.13 – (1) The court may make an order for security for costs under rule 25. 12 if –(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make an order; and(b) (i) one or more of the conditions in paragraph (2) applies, or ….
(2) The conditions are –
(a) the claimant is-
(i) resident out of the jurisdiction; but(ii) not resident in a Brussels Contracting State, a State bound by the Lugano Convention or a Regulation State, as defined in section 1 (3) of the Civil Jurisdiction and Judgements Act1982; …
Nasser v. United Bank of Kuwait  1 WLR 1868 CA
"58.The exercise of the discretion conferred by rule 25.13 (1) and (2) (a) (i) and (b) (i) raises, in my judgment, different considerations. That discretion must itself be exercised by the courts in a manner which is not discriminatory. In this context at least, I consider that all personal claimants (or appellants) before the English courts must be regarded as the relevant class. It would be both discriminatory and unjustifiable if the mere fact of residence outside any Brussels/Lugano member state could justify the exercise of discretion to make orders for security for costs with the purpose or effect of protecting defendants or respondents to appeals against risks to which they would be equally subject, in relation to which they would have no protection, if the claim or appeal were being brought by a resident of a Brussels or Lugano State. Potential difficulties or burdens of enforcement in states not party to the Brussels or Lugano Conventions are the rationale for the existence of any discretion. The discretion should be exercised in a manner reflecting its rationale, not so as to put residents outside the Brussels/Lugano sphere at a disadvantage compared with residents within. The distinction in the rules based on considerations of enforcement cannot be used to discriminate against those whose national origin is outside any Brussels and Lugano State on grounds unrelated to enforcement. …
61.Returning to rules 25.15(I) and 25.13(I) and (2)(a) and (b), if the discretion to order security is to be exercised it should therefore be on objectively justified grounds relating to obstacles to or the burden of enforcement in the context of the particular foreign claimant or country concerned.
62. The justification for the discretion under Rules 25.13 (2) (a) and (b) and 25.15 (1) in relation to individuals and companies ordinarily resident abroad is that in some – it may well be many – cases there are likely to be substantial obstacles to, or a substantial extra burden (e.g., of costs or delay) in enforcing an English judgment, significantly greater than there would be as regards a party resident in England or Brussels or Lugano state. …
63. It also follows, I consider, that there can be no inflexible assumption that there will in every case be substantial obstacles to enforcement against a foreign resident claimant in his or her (or in the case of a company its) country of foreign residence or wherever his, her or its assets may be. If the discretion under rule 25.13 (2)(a) or (b) or 25.15 (1) is to be exercised, there must be a proper basis for considering that such obstacles may exist or that enforcements may be encumbered by some extra burden (such as costs or the burden of and irrevocable contingency fee or simply delay).
64. The courts may and should, however, take notice of obvious realities without formal evidence. There are some parts of the world where the natural assumption would be without more that there would not just be substantial obstacles but complete impossibility of enforcement; and there are many cases where the natural assumption would be that enforcement would be cumbersome and involve a substantial extra burden of costs or delay. But in other cases- particularly other common law countries which introduced in relation to English judgments legislation equivalent to Part 1 of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (or Part II of the Administration of Justice Act1920) – it may be incumbent on an applicant to show some basis for concluding that enforcement would face any substantial obstacle for extra burden meriting the protection of an order for security of costs. Even then it seems to me that the court should consider tailoring the order for security to the particular circumstances. If, for example, there is likely at the end of the day to be no obstacle to or difficulty about enforcement, but simply an extra burden in the form of costs (or an irrecoverable contingency fee) or moderate delay, the appropriate course could well be to limit the amount of the security ordered by reference to that potential burden.
65 I also consider that the mere absence of reciprocal arrangements or legislation providing for enforcement of foreign judgements cannot of itself justify an inference that enforcement will not be possible. …….."
The standard of proof was identified by David Richards J in Rasral Khaimah Investment Authority & ors v. Bestfort Development LLP & ors  EWHC 3197 (CH) at .
"22. Reading the judgement of Mance LJ as a whole, but in particular in the light of the passages cited above, it is clear to me that he was setting the bar at likelihood, rather than a lower test of a real risk. It is, however, fair to make these points. First, it does not appear from the judgment to have been the subject of argument between the parties. Secondly, the word "likely" will not necessarily mean more likely than not. Its meaning will depend on its context; see In Re Harris Simons Constructions Limited  1 WLR 368.
The effect of an order for security for costs in a case where the defendant is pursuing a counterclaim was considered in B.J. Crabtree (Insulations) Limited v. GPT Communication Systems Limited (1990) 59 BLR 43. Bingham LJ (as he then was) stated:
"It is however, necessary, as I think to consider what the effect of an order for security in this case would be if security were not given. It would have the effect, as the defendants acknowledge, of preventing the plaintiffs pursuing their claim. It would, however, leave the defendants free to pursue their counterclaim. The plaintiffs could then defend themselves against the counterclaim although their own claim was stayed. It seems quite clear – and, indeed, was not I think in controversy that in the course of defending the counterclaim all the same matters would be canvassed as would be canvassed if the plaintiffs were to pursue their claim, but on that basis they would defend the claim and advance their own in a somewhat nobbled manner, and would be conducting the litigation (to change the metaphor) with one hand tied behind their back. I have to say this does not appeal to me on the facts of this case as a just or attractive way to oblige a party to conduct its litigation. …. One comes back, I think, at the end of the day to the reflection that this is a rule intended to give a measure of protection to a defendant who is put to the cost of defending himself against a claim made by an impecunious corporate plaintiff. It may in some cases be fair and just to make such an order even though the defendant is himself counterclaiming, but I am persuaded to be wrong to do so here because the costs these defendants are incurring to defend themselves may equally, and perhaps preferably, be regarded as costs necessary to prosecute their counterclaim…"
The Defendant's Application.
1. The defendant would face serious and substantial difficulties in seeking to enforce any costs award in his favour against the claimant having regard to the claimant's status as a senior member of the ruling family of Abu Dhabi and for the position generally with respect to the enforceability in the UAE of judgments of the court of England and Wales.
2. If the court were to ignore the standing of the claimant and concerns about the judicial system in the UAE the expert evidence before the court demonstrates that the likelihood is that a costs order from the courts in England and Wales would not be enforced in the courts in the UAE.
"The justice system in the UAE has developed into an elaborate and complex court system in a relatively short timeframe. Despite commendable progress and achievements the Special Rapporteur is concerned that the challenges and shortcomings she has identified are serious and negatively affect the delivery of justice, the enjoyment of human rights and the public's confidence in the judiciary. …
I Federal Supreme Court
19 The Federal Supreme Court was established by the Constitution and is regulated by Federal Law No 10 of 1973. It is the highest court of the federal justice system and is located in Abu Dhabi. The Court has exclusive jurisdiction over a series of matters, including disputes between the various Emirates or with the Federal Government; the constitutionality of federal and local legislation and regulations; the interpretation of the Constitution and international treaties; offences directly affecting the interests of the federation, in particular crimes in relation to internal and external security; and conflicts of jurisdiction. …..
20 The Supreme Court is composed of a president and four judges, as well as a sufficient number of alternative judges, appointed by decree of the President of the United Arab Emirates after approval by the Cabinet of Ministers and ratification by the Federal Supreme Council which is composed of the rulers of the seven Emirates. ….
III Challenges to the independence and impartiality of the judiciary and the proper administration of justice.
27 Despite the remarkable progress and modernisation that has been achieved in a limited timeframe, the federal justice system of the UAE still faces serious challenges that directly affect the delivery of justice and the realisation of human rights. The independence and impartiality of the judiciary and the transparency and efficiency of the administration of justice can vary between the Emirates and between the local justice systems and the federal system.
A. Legal uncertainty
28 The federal system of the United Arab Emirates is complex and can be difficult to understand, in particular for non nationals, who constitute the majority of the population. During a visit, the Special Rapporteur was told that because of the complex superposition of federal and local laws, it is sometimes difficult for the public to know where the boundaries lie between the federal and local justice systems. There also appears to be a lack of consistency between the applications of federal laws between the Emirates. The Special Rapporteur is concerned about reports that it is difficult for people to know which legal provisions are applicable to them depending on where they are in the Federation, and that laws are sometimes applied in an arbitrary manner, that creates ambiguity and mistrust with both law enforcement authorities and the justice system. …
B. Independent and impartiality of the judiciary.
1 Separation of powers and interference in the independence of the judiciary.
30 The Special Rapporteur regrets that the principle of the separation of powers is not explicitly guaranteed in the Constitution. Together with the rule of law the separation of powers opens the way to an administration of justice that provided guarantees of independence and impartiality. There should be a clear demarcation in the respective competencies of the different branches of power. …
31 In that context, it is important to note that in the UAE, the legislative branch is not clearly separated from the executive. …
32 The administrative and financial supervision of the courts is a competence currently exercised by the Ministry of Justice. The composition of the Supreme Council of the Federal Judiciary is problematic, and out of a total of seven members only three are judges. The other members are the Attorney General and three representatives of the executive. …
33 While any direct interference in the work of judges or threat against their independence is extremely difficult to document, reports and allegations of pressure exerted by members of the executive, prosecutors and other state agents, in particular members of the State security apparatus are of serious concern to the Special Rapporteur. She is especially concerned that the judicial system remains under the de-facto control of the executive branch of government. …
2 Selection and appointment of judges
35 The president and judges of the Federal Supreme Court are appointed by presidential decree after approval by the Cabinet and ratification by the Federal Supreme Council. Other Federal judges are appointed by Presidential decree upon the proposal of the Minister of Justice. Appointments and nominations by the highest representatives of the executive branch can have a strong influence on judge's attitudes and behaviour. The Special Rapporteur is concerned that the current mechanism for appointing judges lacks transparency and may expose them to undue political pressure….
3 Impartiality Public Perception and Confidence
37 The Special Rapporteur is concerned at reported incidences in which judges appear to have lacked impartiality and shown bias, especially with regard to non nationals of the UAE. Among foreigners residing in the UAE there seems to be an exception that the domestic courts cannot be trusted and more specifically that judges do not treat nationals in the same way as non-nationals. …
D. Accountability and disciplinary measures
46 Another shortcoming affecting the defendants and impartiality of the judiciary is the absence of a written code of conduct for the judges, as currently only a draft exists. The judiciary in Abu Dhabi has a code of judicial conduct containing 10 fundamental rules and principles. Lack of a code of conduct to all judiciaries in the UAE could prove problematic and lead to discrepancies between the Emirates and between the federal and local justice systems. ….
E. Fair trial, due process and administration of justice.
48 The Special Rapporteur is extremely concerned at the serious allegations of violations of due process and fair trial guarantees made during her visit, especially during her visit to State security related offences. The consequences that such violations might have on people's lives or respect their human rights cannot be over emphasised."
i) There is no bi-lateral or multi-lateral convention that provides a route for the recognition and enforcement of an English court judgment or order in the UAE courts. In the absence of such conventions the UAE courts apply the local procedural law, in particular Article 235 of the Civil Procedures Code ("the CPC"). Article 235 states:"1- An order may be made for the enforcement in the UAE of judgments and orders made in a foreign country on the same conditions laid down in the law of that country for the execution of judgments and orders in the UAE.2- An order for execution shall be applied for before the court of first instance within the jurisdiction of which it is sought to enforce, under the usual procedures for bringing a claim, and an execution order may not be made until after the following matters have been verified:a - that the courts of the UAE had no jurisdiction to try the dispute in which the order or judgment was made an that the foreign courts which issued it did have jurisdiction thereover in accordance with the rules governing international judicial jurisdiction laid down in their law:b - that the judgment or order was issued by a court having jurisdiction in accordance with the law of the country in which it was issued:c - that the parties to the action in which the foreign judgment was issued were summoned to attend and were correctly represented:d - that the judgment or order has acquired the force of res judicata in accordance with the law of the court that issued it, ande - that it does not conflict with a judgment or order already made by a court in the UAE and contains nothing that conflicts with morals or public order in the UAE."
Article 235 (1) identifies the importance of the principle of reciprocity. Its application by the UAE courts is said to be well illustrated by the ruling of the Dubai Cour de Cassation in case number 269/2005 which provides that the foreign law of the originating state in which the judgment was issued must be presented to the local court of the enforcing state in order to confirm the existence of reciprocal treatment in the provisions of enforcing foreign judgments in the originating foreign state and the conditions of enforcing foreign judgements in the UAE. In that case the court stated that " a judgment creditor who wishes to rely on the provisions of the foreign country must present a translated version of such law to the local court in the UAE". The UAE court refused to enforce the UK judgment as it was not able to determine whether the local UK laws adopt certain enforcement provisions of foreign judgments to the ones applied in the UAE.
On this point Dr Al Mulla states "it is notable that is not sufficient for the parties seeking to enforce the foreign judgment or order to show that the foreign court where the judgment or order was made would enforce any UAE court judgment, the UAE courts would need to review all relevant foreign laws in that respect to be satisfied that the foreign court would enforce a UAE judgement or order by applying similar or less restrictive conditions to the ones set out at Article 235 of the CPC." Dr Al Mulla is not aware of any case where it has been established to the satisfaction of the UAE courts that reciprocity exists between the UAE and the English court so as to permit enforcement of UK judgments in the UAE courts. He is aware of several UAE court cases where the courts have refused the endorsement of English judgments/awards on the basis of the lack of reciprocity between the English courts and the UAE courts. In a footnote he identifies the relevant judgments.
iii) As to Article 235 (2) Dr Al Mulla states the main impediment to enforcement is that the UAE courts do not recognise a foreign judgment in circumstances where they would otherwise have jurisdiction over the matter within the meaning of Article 235 (2)(a) of the CPC. In this context the jurisdiction of the UAE courts is governed by Article 20 of the CPC, pursuant to which the UAE courts have jurisdiction to hear all actions brought against UAE nationals or foreigners having an address or place of residence in the UAE. Dr Al Mulla cites the ruling of the Dubai Cour de Cassation judgment no.114 of 1993 in which the court refused to enforce a foreign money judgment issued by a court in Hong Kong holding that the UAE court could not enforce the judgment in circumstances where it would have had jurisdiction over the subject matter. The defendants were residents of the UAE, under UAE law the resident status conferred jurisdiction on the Dubai court.
In this case it is the opinion of Dr Al Mulla that even if the UAE courts do not have jurisdiction to determine the pending substantive issue before these courts it is very likely that the UAE courts would hold that they do have jurisdiction to determine an application for a costs judgment or order against the claimant in respect of his claims in the English proceedings by strict application of Article 20 and 22 of the CPC. He concludes that there is a significant risk that the UAE courts would hold that they have jurisdiction over any claim against the claimant in the English proceedings including any claim for costs and on that basis alone would refuse to recognise or enforce any costs order pursuant to Article 235 (2a) of the CPC.
iv) Public Policy
In the UAE the term public order is synonymous with what Dr Al Mulla states western jurisdictions refers to as "public policy". The UAE definition of public policy is widely defined by Article 3 of the Federal law number 5 for 1985 on Civil Transactions law in the following terms:"Are considered of Public Policy, rules relating to personal status such as marriage, inheritance, dissent, and rules concerning governance. Freedom of commerce, trading in wealth, rules of personal property and provision of foundations on which society is based in a way that they do not violate final decisions and major principles of Islamic Shari'a."
Dr Al Mulla states that there is a general lack of guidance, no coherent practice, nor development of a consensus on the rules and principles that constitute the body of public policy in the UEA. The discretion to determine the context and meaning of public policy remains with the UAE courts on a case by case basis.
v) Finally, in his report Dr Al Mulla details the considerable procedural difficulties which the defendant would have to follow in order to obtain the payment of a substantial amount of costs including the time which would be taken in order to execute any enforcement order against the claimant's assets.
i) The lack of a bi-lateral convention;
ii) The difficulty/impossibility in establishing reciprocity because of evidential difficulties;
iii) The likelihood of the UAE court asserting jurisdiction over the subject matter of the defendant's claim;
iv) The availability of an incoherent public policy exemption which would permit the courts to prevent enforcement.
Points ii to iv are susceptible to the standing of the claimant within the UAE. By reason of these difficulties it is the defendant's case that he is likely to be deprived of the ability to recover any costs from the claimant.
The Claimant's Response.