Dispute Resolution analysis: Mr Justice Michael Green has given limited permission to appeal his judgment of 1 November 2022 in which he permitted the Defendant to add an additional counterclaim seeking to set aside an earlier judgment on the basis of fraud.
Ras Al Khaimah Investment Authority v Azima and ors  EWHC 2980 (Ch)
What are the practical implications of this case?
Although the parties agreed that this appeal would not disrupt the case management directions applicable in this case and would not jeopardise the trial listed for May 2024, it adds a further layer to what is already a strikingly protracted piece of litigation. It provides an opportunity for the Court of Appeal to consider what it had intended when remitting a matter back to the lower Court. In particular, whether the Court of Appeal had sought to prevent a an earlier judgment from being challenged on any basis or whether there remained a residual power to apply to set it aside on the basis of fraud. The Court of Appeal is likely to offer useful guidance on this particular aspect of the law on abuse of process and the extent to which, in practical terms, fraud can be said to trump all.
What was the background?
The Claimant, (“RAKIA”) is the Sovereign wealth fund of Ral Al Khaimah, a composite part of the United Arab Emirates. RAKIA issued proceedings against Mr Azima, a US-based businessman involved in the aviation industry, for fraudulent misrepresentation in relation to a settlement agreement compromising various claims pursuant to which RAKIA paid $2.6 million to Mr Azima. Mr Azima denied the claims and alleged by way of defence and counterclaim that his email accounts and data had been unlawfully hacked by RAKIA prior to the settlement meeting and that data had been used against him. Mr Azima argued that the claim should be struck out for abuse of process or the evidence itself should be excluded. RAKIA denied that it was responsible for the hacking and claimed that it only discovered the hacked material when it was published on the internet. At a trial before Andrew Lenon QC (sitting as a Deputy High Court Judge), RAKIA's claim succeeded and the defence and counterclaim based on the allegations of hacking failed. Mr Azima appealed. The Court of Appeal rejected Mr Azima's appeal against RAKIA's claims but, in light of fresh evidence suggesting RAKIA's responsibility for the hacking, allowed the appeal in relation to the counterclaim and remitted the matter to be tried by a different judge of the Chancery Division (now Mr Justice Michael Green). The Order of the Court of Appeal emphasised that the findings of the Deputy Judge on RAKIA's claims had to stand. Mr Azima applied unsuccessfully for permission to appeal from the Supreme Court. That application having failed, and having obtained further fresh evidence, Mr Azima sought and was granted permission to bring an additional counterclaim arguing that the judgment of the Deputy Judge should be set aside based on fraud and to amend his Claim against Additional Parties. At the consequentials hearing following judgment given by Mr Justice Michael Green in 1 November 2022, the Additional Parties sought permission to appeal that decision to the Court of Appeal.
What did the court decide?
As the trial is not listed until May 2024, it was common ground that the timetable would be unaffected by whether or not permission to appeal was granted. The Additional Parties sought permission to appeal on two bases. First, that the Learned Judge lacked jurisdiction to enlarge the proceedings that had been remitted by the Court of Appeal and was wrong to conclude that he had jurisdiction to include the claim to set aside the Deputy Judge's judgment for fraud (the “Jurisdiction Issue”). Second, even if the Learned Judge had jurisdiction, he was wrong to have concluded that the proposed additional counterclaim did not constitute an abuse of process (the “Abuse of Process Issue”). Permission to appeal was given in respect of the Abuse of Process Issue but refused in respect of the Jurisdiction Issue. As had already been set out in some detail in the 1 November 2022 judgment, the Learned Judge concluded that it was open to Mr Azima to bring fresh proceedings to set aside the judgment of the Deputy Judge and the judgments of the appeal courts should not be interpreted as fettering that ability. He concluded that there was no real prospect of an appeal on the Jurisdiction Issue succeeding. On the question of abuse of process, however, the Learned Judge recognised that his judgment involved a certain amount of interpretation of the Court of Appeal's judgment and the extent to which it contemplated the sort of fresh evidence at issue emerging. It was appropriate in those circumstances to permit the Court of Appeal to consider the matter and to interpret its earlier judgment.
- Court: High Court of Justice, Business and Property Courts, Business List
- Judge: Mr Justice Michael Green
- Date of judgment: 22 November 2022
Originally Published by Lexis Nexis
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