Three members of Kuwait's wealthy al Khorafi family have vowed to appeal against a decision last week by a Dubai court to strike down claims of negligence and misrepresentation in a US$225 million (Dh826.3m) case against a subsidiary of Switzerland's Bank Sarasin. Raed al Khorafi, along with his wife and mother, sued the DIFC-based Bank Sarasin-Alpen late last year over losses on investments they claim were sold as safe. The al Khorafis say they lost $75m, but are seeking triple damages under DIFC regulations covering contracts and fraud.
Justice Tan Sri Siti Norma Yaakob ruled last week that two of the al Khorafis' four claims - those covering alleged misrepresentation and negligence - lacked adequate evidence for the court to make a ruling. The judge allowed the al Khorafis to proceed on their two other claims, which allege breach of contract and breach of statutory duty. "Although the judge decided that the [al Khorafis'] alternative and subsidiary claims based on alleged misrepresentations and negligence should not proceed, the [al Khorafis] are confident that these will be reinstated following the decision of the court to allow an appeal," the family said.
Representatives of Bank Sarasin declined to comment, citing the ongoing legal proceedings. Mr al Khorafi said he was "pleased" with the ruling last week despite the move to strike out the misrepresentation and negligence claims. The al Khorafis' suit also named Bank Sarasin-Alpen's Swiss parent company, although the parent has yet to be served with court papers or answer the accusations. A representative for the Swiss bank could not be reached for comment.
"We are very pleased with the DIFC Courts' decision," Mr al Khorafi said. "This ruling enables us to seek justice and hold [Bank Sarasin-Alpen] accountable for what we believe to be serious regulatory breaches. We can now move forward and progress our claims against [Bank Sarasin-Alpen] and its parent company Bank Sarasin & Co Limited. We want to hold these parties accountable for actions that have resulted in a significant monetary loss for myself and my family."
The al Khorafis' case is one of the first in the DIFC Courts where investors are seeking relief for losses on allegedly mis-sold investments. Lawyers say more such allegations could be on the way in the aftermath of the financial crisis and the court's decision in the al Khorafi case could affect how the DIFC's young legal system handles such claims. @Email:firstname.lastname@example.org