Dubai Islamic Bank v Charles Ridley

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Matthew John Thompson
• Judgment Date: 07 June 2016
• Neutral Citation: [2016] JRC 102
• Date: 07 June 2016

[2016] JRC 102

ROYAL COURT

(Samedi)

Before:

Advocate Matthew John Thompson, Master of the Royal Court.

Between

Dubai Islamic Bank

Plaintiff

and

Charles Ridley

Defendant

Cititrust (Jersey) Limited

Party Cited

Advocate D. R. Wilson for the Plaintiff.

Advocate J. C. Turnbull for the Defendant.

Authorities

Royal Court Rules 2004, as amended.

Dicey, Morris & Collins, The Conflict of Laws, 14 ^th and 15 ^th Editions.

Corefocus Consultancy Limited v Cronk [2013] JRC 194 .

Dubai Islamic Bank PJSC v PSI Energy Holding Company BSC [2013] EWHC 3186 (Comm) .

Dubai Islamic Bank PJSC v PSI Energy Holding Company BSC [2013] EWHC 3781 (Comm) .

Dubai Islamic Bank PJSC v PSI Energy Holding Company BSC [2011] EWHC 2718 (Comm) .

Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd (formerly Contour Aerospace Ltd) [2013] UKSC 46 and [2014] A.C. 160.

Lapidus v Le Blancq [2013] 2 JLR 308 .

Haden-Taylor v Canopius [2015] (1) JLR 224 .

Re Esteem Settlement [2002] JLR 53 .

Re the S Trust [2011] JLR 375 .

Halpern v Halpern [2008] QB 195 .

The Al Wahab [1984] A.C. 50 .

Deutsche Schachtbau-und Tiefbohrgesellschaft mbH v Ras Al-Khaimah National Oil Co [1987] 3 WLR 1023 .

Islamic Investment Co Isa v Transorient Shipping Ltd (The Nour) [1999] 1 Lloyd's Rep 1 .

Musawi v Re International UK Limited [2007] EWHC 2981 .

Harding v Wealands [2007] 2 A.C. 1 .

Beximco Pharmaceuticals Ltd v Shamil Bank of Bahrain EC [2004] EWCA Civ 19 ; [2004] 1 WLR 1784 per Potter LJ at [54]–[55].

Halpern v Halpern [2007] EWCA Civ 291 ; [2008] QB 195 per Waller LJ at [29].

Federal Republic of Brazil and another v Durant International Corpn and another [2015] 3 W.L.R. 599 .

House of Spring Gardens Ltd v Waite & Ors [1991] 1 Q.B. 241 .

Westdeutsche Landesbank v Islington [1996] A.C. 669 .

Shalson v Russo [2003] WHC 1637 .

Boys v Chaplin [1971] A.C. 356 .

MacMillan Inc v Bishopsgate Investment Trust Plc (No.3) [1996] 1 W.L.R. 387 .

Nolan v Minerva Trust and Others [2014] JRC 078A .

Strike out — application by the plaintiff to strike out parts of defendant's amended answer — Conflicts of Laws — restitution and Tracing claims and Pauline Action — proper law of the contract, Estoppel — chose jugee — course of action estoppel, issue estoppel, abuse of process. Pauline Action.

CONTENTS OF THE JUDGMENT

		Paras
1.	Introduction	1–4
2.	Background	5–34
3.	Procedural developments in respect of the plaintiff's summons	35–42
4.	The issues	43–45
5.	Sharia Law and the tracing claim	46–84
6.	Incorporation	85–88
7.	An aid to construction	89–99
8.	Estoppel	100–114
9.	The Agency Agreement governed by German Law	115
10.	The claim in fraud	116–140
11.	The Pauline Action	141–165
12.	The claim of deceit	166–172
13.	Conclusion	173–174

THE MASTER:

Introduction

1 This judgment represents my decision in respect of an application by the plaintiff to strike out parts of the defendant's amended answer under Rule 6/13 of the Royal Court Rules 2004, as amended (“the Rules”). In the alternative the plaintiff seeks summary judgment against the defendant in respect of the same paragraphs of the amended answer.

2 Whilst the summons also sought to invoke Rule 7/8 of the Rules which permits the Royal Court to determine any question of law or construction at any stage, the questions of law the plaintiff sought to invoke were in respect of the same paragraphs of the defendant's amended answer which the plaintiff also sought to strike out and/or sought a summary judgment. I informed the parties that I did not possess jurisdiction under Rule 7/8 of the Rules to decide questions of law because Rule 7/8 is one of the provisions listed in Schedule 1 to the Rules where references to the Royal Court do not include references to the Judicial Greffier. As Master I am a delegate of the Judicial Greffier and therefore do not possess any power under Rule 7/8.

3 That does not mean that in the context of a strike out application, I cannot consider questions of law. I explored this issue in Corefocus Consultancy Limited v Cronk [2013] JRC 194 at paragraphs 15 to 18 as follows:-

“15. Mr Goulborn did raise a preliminary point that I could not construe the agreement at the heart of the plaintiff's application for summary judgment under the Rule 7/1 of the Royal Court Rules. He contended that I had no power to do so and referred me to paragraph 14/1/16 of the Rules of The Supreme Court (1999 Edition) as follows:-

“ Application of Order 14 – the scope of 0.14 proceedings is determined by the rules and the Court has no wider powers than those conferred by the rules nor any additional statutory power to act outside and beyond the rules or a residual or inherent jurisdiction to grant relief where it is just to do so (see per Neill L.J. in C.E. Heath Plc. v. Ceram Holding co. [1988] 1 W.L.R. 1219 at 1228 ; [1989] 1 All E. R. 203at 210. Parker L.J. made clear inHome and Overseas Insurance Co. Ltd v. Mentor Insurance Co. (U.K.) Ltd (In Liquidation) [1990] 1 W.L.R. 153, 158, that the purpose of 0.14 is to enable a plaintiff to obtain a quick judgment where there is plainly no defence to the claim. If the defendant's only suggested defence is a point of law and the court can see atonce that the point is misconceived (or, if arguable, can be shown shortly to be plainly unsustainable) the plaintiff is entitled to judgment. 0.14 proceedings should not be allowed to become a means for obtaining, in effect, an immediate trial of the action, which will be the case if the court lends itself to determining points of law or construction that may take hours or even days and the citation of many authorities before the court is in a position to arrive at a final decision. It is only if an arguable question of law or construction is short and depends on few documents that 0.14 procedure is apposite ( Balli Trading v. Afalona Shipping, The Coral [1993] 1 Lloyd's Rep. 1, (CA). See alsoCrown House Engineering Ltd v. Amec Products Ltd (1989) 48 B.L.R. 32. On the other hand, if a suitable question of law or construction arises which can finally determine the whole action, an application under 0.14A should be made, preferably in the same summons, or where appropriate, orally in the course of hearing the 0.14 summons.

A respondent to a summons under 0. 14 or 0.14A where an appointment of half a day or more has been fixed, who wishes to contend such application is an abuse, should attend on the assigned master to request an early appointment to determine such contention. The person attending must be sufficiently briefed to be able to explain the basis thereof to the Master.”

16. Mr Goulborn contended that any question of construction of an agreement that arose was a matter to be dealt with under Rule 7/8 of the Rules. He stated that there was no such application before me .

17. In relation to these objections, I agree that Rule 7 just like Order 14 in England should not be allowed to become a means of obtaining an immediate trial of an action and that I should not lend myself to determine points of law or construction that may take hours or even days before I am able to arrive at a final decision .

18. However, I consider that if an argument advanced by a party is misconceived or plainly unsustainable or the question is short and only depends on a few documents that I do have power under Rule 7/1 decide the issue.”

4 I have adopted the same approach in relation to the plaintiff's applications.

Background

5 Before addressing the details of the issues before me it is appropriate to set out the background to these proceedings. In doing so it is right to record that there is significant disagreement between the parties on what has gone before and its effect. This part of my judgment is therefore intended only to set the scene in respect of the plaintiff's applications and should not be taken to be definitive findings of fact in respect of what has occurred previously, unless otherwise indicated in this judgment. I have also endeavoured as far as possible to indicate areas of disagreement both in this summary and more generally in this judgment.

6 The present proceedings follow on from proceedings brought by the plaintiff in England in 2010 (the ‘English Proceedings’). In the English Proceedings the plaintiff claimed as a debt $432 million from five defendants including the defendant in the present proceedings. The defendant in the present proceedings was the third defendant in the English Proceedings. In addition the plaintiff claimed that certain shares held by another defendant (PSI Energy Holding Company BSC, a Bahraini company (“PSI”)) were in equity the plaintiff's property.

7 The claims in the English Proceedings were brought on the basis of a restructuring agreement dated 19 ^th August, 2007, (“the RSA”).

8 The RSA is lengthy and therefore I only intend to refer to certain provisions for the purposes of this decision. The material parts are:-

“1. Definitions

In the Restructuring Agreement, except where a different interpretation is necessary in the context.

“ Proceeds Asset

any asset with a realisable market value of $10,000 (or any other currency), whether held by the CCH Corporate Guarantors, the CCH individual Guarantors or otherwise, materially funded by the Advances whether directly or indirectly and whether or not in accordance with the terms of the Agency Agreements.”

9 The Agency Agreements are those defined in Schedule 1 to the RSA. I refer to the relevant terms of the Agency Agreements later in this judgment.

10 ‘Advances’ is defined as meaning funds advanced under the Agency Agreements. The definition of ‘CCH individual guarantors’ included the defendant to the present proceedings.

11 Clause 12.4 of...