Adeem Investment Holding Company KSCH v Najeeb Al-Humaidhi
| Jurisdiction | Jersey |
| Court | Royal Court |
| Judge | Deputy Bailiff |
| Judgment Date | 10 February 2022 |
| Neutral Citation | [2022] JRC 38 |
[2022] JRC 38
ROYAL COURT
(Samedi)
R. J. MacRae, Esq., Deputy Bailiff, and Jurats Crill and Christensen.
Advocate E. B. Drummond for the Plaintiff.
Advocate J. P. Speck for the Defendants.
Rule 6/7 of the Royal Court Rules.
Kuwaiti Pleadings Law 1980.
Campbell v Campbell [2014] (2) JLR 465.
Republic of Brazil v Durant International Corporation [2010] JLR 421.
Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460 at 477G.
Lungowe v Vedanta Resources Plc [2020] AC 1045.
MB and Services Limited and Golovina v United Company Rusal Plc [2020] JRC 034.
VTB Capital plc v Nutritek International Corpn and Others [2013] UKSC 5.
Brunei Investment Agency and Bandone v Fidelis Nominees Limited [2008] JLR 337.
Finance and Economics Committee v Bastion Offshore Trust [1994] JLR 370 at 382.
Supreme Court Practice.
Companies — re summons.
THE
On 12 th and 13 th January 2022 we heard argument in support of the Defendants' summons dated 23 rd July 2021 and reserved our judgment in respect of the relief sought in that summons.
The summons sought, inter alia, orders that: the service of the Plaintiff's Order of Justice dated 23 rd June 2021 on the First Defendant (“Najeeb”) be set aside pursuant to Rule 6/7 of the Royal Court Rules and that the order of the Royal Court dated 30 th June 2021 giving leave to serve the Order of Justice out of the jurisdiction on Najeeb be set aside; the Court declare that in the circumstances of the case, the Court has no jurisdiction over Najeeb in respect of the subject matter of the claim; the Order of Justice be stayed on the grounds of forum non-conveniens. The grounds for those applications are: as regards the claims against Najeeb, the Royal Court does not have jurisdiction to determine the Plaintiff's claims in the Order of Justice because Jersey is not the proper place in which to bring such claims; and as regards the claims against the Second to Fifth Defendants (which we will call, where referred to collectively, as the “Jersey Defendants”) the Court should find that the appropriate forum for those claims is the courts of Kuwait. In default as regards the claims against the Jersey Defendants (and the claims against Najeeb should the Court find that it has jurisdiction to determine the claims against him) a case management stay should be granted staying the proceedings until determination of Kuwaiti civil proceedings, which will decide important issues raised by the Plaintiff's claims in the Order of Justice.
We now summarise:
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(i) the Plaintiff's claims in Jersey:
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(ii) the Plaintiff's claims in Kuwait, and the proceedings in that jurisdiction;
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(iii) the expert evidence regarding the Kuwaiti proceedings;
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(iv) the relevant legal principles;
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(v) the parties' contentions and the court's conclusions on the relevant factors determining the appropriate forum for the proceedings begun by Order of Justice; and
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(vi) the competing arguments and court's decision on the Defendants' ancillary application for a procedural stay of the Plaintiff's claim.
The Plaintiff (“Adeem”) is a Kuwaiti company that operates as an investment holding and investment management company. It is a joint venture between two Kuwaiti families of which Najeeb is a member. Najeeb is a Kuwaiti national living in Kuwait. He was chairman of Adeem from 2007 to 2016. Notwithstanding that he stepped down as chairman in 2016, he continued to control Adeem's major shareholder through a Mr Mahmoud Bushehri until January 2020, when Najeeb lost all control over Adeem. The Jersey Defendants are Jersey companies which today (this has not always been the case) in the order in which they are named in the heading to the action, own 100% of the shares in each in descending order, i.e., Catalonia Investments Limited (“Catalonia”) owns the shares in Nama Investments Limited (“Nama”) which in turn own the shares in Primewagon Holdings Limited (“Primewagon Holdings”) which in turn owns the shares in Primewagon (Jersey) Limited (“Primewagon Jersey”). Catalonia is beneficially owned by Najeeb and members of his close family.
In his judgment dated 31 st August 2021, the Master described the Order of Justice as “not easy to follow”. We agree and during the course of the hearing we needed to repeat the Master's request in that judgment for various diagrams and structure charts, which were provided to us. In any event, the Order of Justice and other documentation allows us to summarise the claims as follows. Adeem had a significant shareholding in a Kuwaiti investment company called The Investment Dar Company KSCC (“TID”) which in 2007 purchased a substantial holding in Aston Martin UK. The details of the shareholding do not matter for the purpose of this judgment. Whilst chairman of Adeem, Najeeb became a shareholder in another Kuwait company called Al-Offok United Real Estate Co. KSCC (“Al-Offok”). The shares in Al-Offok were purchased by Adeem through a subsidiary. Najeeb was registered as the 99% shareholder of Al-Offok and Mr Bushehri registered as the owner of the remaining 1% of the shares. A key dispute relates to what is called the “Najeeb declaration”, which was executed in Arabic, on Adeem's account no later than July 2012, in which Najeeb declared that he was holding the 99% shareholding in Al-Offok as nominee for Adeem. Mr Bushehri made a similar declaration in relation to his 1% shareholding. The validity and effect of these declarations are a matter of Kuwaiti law. Adeem makes various allegations about the effect of those declarations which we will consider when we turn to the Kuwaiti proceedings. A proportion of the Aston Martin UK shares which Adeem acquired from TID were to be held in Jersey companies beneficially owned by Al-Offok on its behalf. Al-Offok owned 85% of the shares in another Kuwaiti company called International Oasis Holdings Co. KSCC (“International Oasis”), with the balance of the shares being owned by a Jersey company called Al Boom Holding Company (Jersey) Limited. In 2017 Al-Offok acquired Al Boom's interests in International Oasis and at all material times Najeeb was chairman of the Board of Directors of International Oasis and is pleaded as “its controlling mind and will”.
Initially, International Oasis owned 100% of the shares in Primewagon Holdings and in April 2013 various other Jersey and English companies were incorporated, though it is not necessary to particularise these for the purpose of this judgment. Until March 2017, substantial and valuable shareholdings in Aston Martin UK were owned by Primewagon Jersey. Primewagon Jersey in turn owned Primewagon UK Limited, a company incorporated in England and Wales, which also held a valuable shareholding in Aston Martin from June 2017. In July 2018, certain Aston Martin shares were made subject to a planned initial public offering on the London Stock Exchange. In September 2018 a reorganisation took place affecting the holdings of Aston Martin UK shares by Primewagon Jersey and Primewagon UK: the Aston Martin UK shares were converted into shares in Aston Martin Lagonda Global Holdings Limited (“Aston Martin plc”, the holding company which was floated on the LSE the following month). As a consequence of the initial public offering in October 2018, approximately 40% of the Aston Martin plc shares to which we were referred were sold, resulting in very substantial receipts of moneys into what was described as the “Primewagon structure”.
The Order of Justice says that by June 2018 at the latest, Najeeb hatched a “plan” whereby he would transfer assets beneficially owned by Adeem into structures beneficially owned by him and/or his immediate family. This led Najeeb to transfer companies including the Fourth and Fifth Defendants to a new company, namely Nama, which was incorporated in Jersey in August 2018 and which was chaired and solely owned beneficially by Najeeb. On 10 th September 2018 International Oasis transferred its shares in Primewagon Holdings (and thereby Primewagon Jersey) to Nama for a consideration of £2. At this time Catalonia was also 100% owned by Najeeb and during mid to late 2018 and early 2019, substantial cash transfers totalling approximately $150 million were made, (principally after the IPO) from Primewagon Holdings and Primewagon Jersey to Catalonia. It is said that there was “ no commercial justification for any of these payments and they were made at the instigation and direction of Najeeb and pursuant to the Plan”. In October 2020, Primewagon Jersey also transferred a substantial number of shares in Aston Martin to Catalonia's portfolio held in London, again it is said at the instigation of Najeeb. In December 2020, Catalonia received further shares in Aston Martin and Najeeb transferred 100% of the shares in Nama to Catalonia, again pursuant to the Plan.
The Order of Justice pleads a number of duties owed by Najeeb to the Adeem; all said to be owed under Kuwaiti Civil Code, particularly Article 61, Article 62, Article 707 and Article 227. Various transactions, including the transfer of the shares in Primewagon Holdings to Nama described as the “Nama transfer”, the transfer of Primewagon Jersey shares in Aston Martin plc to Catalonia in October 2020 called the “Catalonia transfer”, the December 2020 transfer of 100% of the shares in Nama to Catalonia “the December 2020 transfer”, and the payments made both to Najeeb personally (and his wife and associates) and Catalonia described as the “Wrongful Payments” are said to have been carried out in breach of Najeeb's duties to Adeem pursuant to various provisions of Kuwaiti law. The claims...
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