The Representation of the Brunei Investment Agency and Bandone Sdn Bhd

JurisdictionJersey
CourtRoyal Court
JudgeJ. A. Clyde-Smith,Jurats Allo,Morgan
Judgment Date16 September 2008
Neutral Citation[2008] JRC 152
Date16 September 2008

[2008] JRC 152

ROYAL COURT

(Samedi Division)

Before:

J. A. Clyde-Smith, Esq., Commissioner and Jurats Allo and Morgan.

In the Matter of the Representation of the Brunei Investment Agency and Bandone Sdn Bhd

And in the Matter of Karinska Limited and Greencap Limited

Between
The Brunei Investment Agency and Bandone Sdn Bhd
Representors
and
(1) Fidelis Nominees Limited

and

(2) Rostand Nominees Limited

and

(3) Karinska Limited

and

(4) Premier Circle Limited

and

(5) Second Circle Limited

and

(6) Third Circle Limited

and

(7) Greencap Limited

and

(8) Duli Yang Teramat Mulia Paduka Seri Pengiran Digadong Sahibul Mal Pengiran Muda Haji Jefri Bolkiah (known as His Royal Highness Prince Jefri Bolkiah ("Prince Jefri")
Respondents

Advocate K. J. Lawrence for the Representors.

Advocate F. B. Robertson for the Eighth Respondent.

Advocate R. J. Macrae for the First, Second and Third Respondents.

Advocate M. H. D. Taylor for the Fourth, Fifth, Sixth and Seventh Respondents.

Authorities

Lane v Lane [1985-86] JLR 48.

Compass Trustees Limited v McBarnett [2002] JLR 321.

Judgments (Reciprocal Enforcement) (Jersey) Law 1960.

Trusts (Jersey) Law 1984.

IMK Family Trust [2008] JRC 136.

The Conflict of Laws 14th edition, Dicey, Morris and Collins.

The Origin and Development of Jersey law, an Outline Guide by Stéphanie Nicolle.

Ball v King [2006] JRC 171.

Mrs F M v ASL Trustee [2006] JRC 020A.

In the matter of B Trust [2006] JLR 562.

In the matter of H Trust [2006] JLR 280.

In the matter of H Trust [2007] JRC 187.

In the matter of the Turino Retirement Trust [2008] JRC 100.

Schibsby v Westenholz (1870) LR 6 QB 155.

Adam v Cape Industries Plc (1990) Ch 433.

Showlag v Mansour [1994] JLR 113.

ex parte Wimborne [1983] JJ 17.

Sadler v Robins (1808) 1 Camp. 253.

Pro Swing Inc v Elta Golf Inc (2006) SCC 52.

Injunctions and Specific Performance (2nd edition, 1992) Sharpe.

Morguard Investments Limited v De Savoye (1993) S.C.R.10777.

Miller v Gianne and Redwood Hotel Investment Corporation (2007) CILR18.

Mbasogo and another v Logo Limited and others (2007) QB 846.

Attorney General in and for the United Kingdom v Heinemann Publishers Australia Pty Limited (1988) 165 CLR 30n.

Government of the Islamic Republic of Iran v The Barakat Galleries Limited (2008) 1 All ER 1177.

Arab Monetary Fund v Hashim (unreported).

City of Gotha and Federal Republic of Germany v Sotheby's, ( 9 September 1998, unreported).

Grupo Torras SA v Al-Sabah (1999) CLC 1469.

Attorney General of Zambia (for and on behalf of the Republic of Zambia) v Meer Care & Desai (a Firm) (2007) EWHC 952 (Ch).

In the matter of the Esteem Settlement and the No. 52 Trust (Abacus (C.I.) Limited as Trustee [2002] JLR 53.

The King of Two Sicilies v Willcox (1851) 1 Sim (NS) 401.

Colombian Government v Rothschild (1826) 1 Sim 94.

United States of America v Wagner (1867) LR 2 CH App 582.

King of Spain v Hullett (1828) II Bligh (NS) 31.

Emperor of Austria v Day and Kossuth (1861) 3 De GF & J 217.

United States v McCrae (1867) LR 3 Ch App.

King of Italy v de Medici Tornaquinci (1918) 34 TLR 623.

Don Jose Ramos Yzquierdo Y Castaneda v Clydebank Engineering and Shipbuilding Company Limited (1902) AC 524 (HL(Sc)).

Bandone and the Brunei Investment Agency v Sol Properties Inc and others Cause No. 86 of 2008.

Minories Finance Ltd v Ayra Holdings Limited [1994] JLR 149.

European Convention on Human Rights.

Human Rights (Jersey) Law 2000.

COMMISSIONER:
1

In this case, the first representor ("the BIA"), seeks orders for the transfer of shares in two Jersey companies, beneficially owned by the eighth respondent ("Prince Jefri") to the second representor ("Bandone") under principles of comity. The Jersey companies concerned and the nominee shareholders (comprising the first to seventh respondents) rested upon the wisdom of the Court and were released from participating in the hearing.

Background
2

Prince Jefri is the youngest brother of His Majesty the Sultan and Yang-di Pertuan of Brunei Darussalam ("the Sultan"). In February 2000, the BIA and the government of Brunei Darussalam began proceedings against Prince Jefri in the High Court of Brunei Darussalam, alleging misappropriation and misapplication of more than 15 billion US dollars of State funds by Prince Jefri whilst he had been the Minister of Finance for Brunei Darussalam and chairman of the BIA. These proceedings were compromised in May 2000 on the terms of a settlement agreement ("the Settlement Agreement") dated 12th May 2000 and the proceedings were stayed by a "Tomlin order" dated 13th May 2000 in conventional form.

3

The core terms of the Settlement Agreement were that Prince Jefri was to be relieved of the civil claims against him, any potential criminal proceedings in respect of the alleged misappropriation and misapplication of State funds and that he would effectively be rendered immune from all liabilities owed by him and his family to other third parties as at the date of the Settlement Agreement. In exchange, Prince Jefri was to disclose to the BIA what had become of the BIA's funds and return to the BIA the remainder of those funds and any and all assets acquired with those funds.

4

While some assets were returned by Prince Jefri in 2000 and 2001, he refused to transfer many other assets, including the shares in the Jersey companies, which continue to be beneficially held by him through nominees.

5

In 2004, the BIA applied in Brunei Darussalam for summary enforcement of the Settlement Agreement under the liberty to apply contained in the Tomlin order.

6

On 25th March 2006, the High Court of Brunei Darussalam ordered Prince Jefri to perform his obligations under the Settlement Agreement, including in particular his obligation to transfer the shares in the Jersey companies to the BIA, or at its direction ("the Brunei Judgment"). The BIA has nominated Bandone to receive the shares in the Jersey companies.

7

Prince Jefri's appeal to the Court of Appeal of Brunei was dismissed on 20th May 2006. Two further appeals to the Privy Council were dismissed on 8th November 2007. In the second of its two judgments, the Privy Council made the following observations:-

" The Government and the BIA case is clear and simple. Prince Jefri settled the claims made against him by signing the Settlement Agreement under which he was to restore the assets that he was said to have misappropriated. He has not carried out the obligations he accepted under that Agreement. None of this is, or can be, disputed. The case is a simple one. The complications are introduced by Prince Jefri's search for a means of extricating himself from the obligations he has accepted under the Settlement Agreement and, after careful examination of all the evidence, these complications fall away."

8

Shortly after the decisions of the Privy Council, Prince Jefri did release into the sole custody of the BIA various valuable diamonds, but he has since refused to transfer to the BIA or Bandone any of the other assets which he owns and which he is obliged to transfer pursuant to the terms of the Settlement Agreement.

9

In January 2008, the BIA and Bandone obtained judgment in the High Court of Malaysia ordering the transfer to Bandone of the shares in the ultimate holding company of a US hotel and on 5th June 2007 the BIA and Bandone obtained judgment in the Grand Court of the Cayman Islands substituting Bandone for Prince Jefri as the registered shareholder of the ultimate holding company of a further US hotel. Other proceedings commenced by the BIA and Bandone for the recovery of assets are currently pending in the courts of Singapore, Japan and Malaysia and we are informed that further proceedings for the recovery of assets in other jurisdictions are being prepared.

Representors' case
10

The representors submit that pursuant to the principles of comity recognised by the Court in Lane v Lane [1985-86] JLR 48 and Compass Trustees Limited v McBarnett [2002] JLR 321 and by reference to the principles set down by the Privy Council in Pattni as to the basis on which the common law may recognise and give effect to the in personam rights as validly determined by a foreign court, this Court should recognise the in personam determination of the parties' rights by the courts of Brunei Darussalam as binding upon Prince Jefri and his privies and be prepared to give such relief as may be appropriate to enable the decisions made by the foreign court to be given effect to in Jersey.

11

Prince Jefri, whilst accepting that he is personally bound by the Settlement Agreement, and the Brunei Judgment, says the Court cannot make the orders sought in these proceedings for the following reasons:-

We take the arguments in that order.

  • (i) That in reality, this is an application to enforce a foreign judgment which under the Judgments (Reciprocal Enforcement) (Jersey) Law 1960 ("the 1960 Law"), which Prince Jefri submitted governed the enforcement of all foreign judgments, or at English common law (which should be followed in Jersey) is not permitted in the case of a non money judgment. There is no residual jurisdiction to enforce foreign non money judgments and in particular, the doctrine of comity is not relevant to the question of foreign judgments whether or not they are for a definitive sum. Alternatively any residual jurisdiction is confined to the court's supervisory jurisdiction under Article 51 of the Trusts (Jersey) Law 1984.

  • (ii) To give effect to the Brunei Judgment would be to give extra territorial effect to the public laws of a foreign state.

  • (iii) The Brunei Judgment purports to take effect in rem over matters which are exclusively in the remit of this Court and constitute an exorbitant use of the Brunei court's jurisdiction.

  • (iv) To the extent that the Court has a discretion to give effect to the Brunei Judgment, it should not do so given that (a)...

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