x Abu Dhabi, UAEWednesday 26 July 2017

UK court ruling on Al Gosaibi 'unenforceable'

The London court that ordered the Al Gosaibi family of Saudi Arabia to repay US$250 million (Dh918.2m) of debts has been told its judgment is not enforceable in the kingdom.

The London court that ordered the Al Gosaibi family of Saudi Arabia to repay US$250 million (Dh918.2m) of debts has been told its judgment is not enforceable in the kingdom.

Last month, the Al Gosaibi partnership pulled out of a legal action defending itself against claims by five banks including HSBC, and admitted liability for the debts.

But a document filed in the London High Court by a law firm acting for the family partnership, Ahmed Hamed Al Gosaibi and Brothers (AHAB), and seen by The National, disputes the validity of the English court ruling in Saudi Arabia.

Abdulaziz Hamad Al Fahad, the family's lawyer in Riyadh, said in the affidavit: "In order to be enforceable in Saudi Arabia, a foreign judgement must be in all respects consistent with the principles of Saudi public policy, including principles of Sharia. In addition, foreign judgments will only be enforced in Saudi Arabia on the basis of reciprocity. That is, the judgment sought to be enforced must have been rendered in a jurisdiction in which Saudi judgments are reciprocally enforceable."

There is no treaty governing enforcement of judicial judgments between the UK and Saudi Arabia, said Mr Al Fahad in the document.

He also questioned whether the judgment of the London court was compliant with the principles of Sharia law. "The charging of interest [which is broadly defined to include the payment of money for money] is prohibited under Sharia principles and the existence of a claim for interest or related claims for 'commissions' is generally sufficient to invalidate a judgment under Saudi law."

AHAB defended the action on the basis it was not responsible for the loans, which it alleged had arisen from its bitter dispute with Maan Al Sanea, the Saudi businessman.

It claimed Mr Al Sanea had stolen money from AHAB by fraud, forgery and deception, a claim he has consistently denied. He was not a party to the London action.AHAB withdrew its defence and admitted liability when new evidence emerged of the family's dealings with Mr Al Sanea.

The affidavit will increase fears of international banks, which are owed about $12 billion as a result of the dispute, that Saudi banks will take precedence in any settlement to repay the money.

In the document, Mr Al Fahad also reviews the terms of a "high order" issued by a committee appointed by King Abdullah of Saudi Arabia to investigate the affair. "In my view, the clear import of the [committee] is a direction that banks in Saudi Arabia will be permitted priority enforcement against the assets of AHAB and its partners located in Saudi Arabia," he said.

Mr Al Sanea has already settled with most of his Saudi creditors.

A spokesman for the Al Gosaibi family said "we are still trying to seek a negotiated settlement with all the banks."

fkane@thenational.ae