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Commercial Court stays billion-dollar fraud claim on forum grounds, and discharges WFO

1st Apr 2022

Abu Dhabi Commercial Bank PJSC v Shetty & Ors [2022] EWHC 529 (Comm)

Frederick Alliott was part of a team of barristers who have succeeded in staying a billion-dollar commercial fraud claim on the grounds of forum non conveniens. In doing so, an application by the claimant bank for the continuation of a worldwide freezing order in the like amount was also successfully resisted.

The proceedings relate to the much-publicised alleged fraud within the NMC group of companies, whose business was the operation of private medical facilities mainly in the UAE. NMC plc, the FTSE-100 listed holding company, had by April 2020 been placed in administration on the application of the claimant, Abu Dhabi Commercial Bank, when the existence and scale of the alleged fraud became apparent.

Fred represented the second and third defendants, being the former principal shareholders of NMC, together with Tim Penny QC, James Sheehan and Sam Goodman.

The Bank had alleged that the defendants conceived or carried into effect a scheme by which false financial statements were created for NMC Plc, which gave a false impression of its financial strength by concealing the losses that it had accumulated within its subsidiaries (said to be between c.US$4.357 billion and US$5.352 billion) as a result of massive dishonest misappropriation. It was alleged that these statements were deployed by or with the encouragement and consent of the defendants as the basis for presentations to the Bank, made for the purpose of inducing the Bank to extend or renew credit facilities to entities within the Group.

On the basis of these allegations, the Bank obtained an ex parte worldwide freezing injunction before Bryan J in December 2020 for US$1 billion, said to be an estimate of the Bank’s losses. At the contested four-day return date over ten months later, the defendants applied for the WFO to be discharged, and for an order setting aside permission to serve the defendants out of the jurisdiction.

In a lengthy judgment handed down today by HHJ Pelling QC, the judge accepted the defendants’ submissions that there was another forum which was clearly and distinctly more appropriate than England, namely Abu Dhabi; and that there were no circumstances by reason of which justice required that the claim be tried in England instead.

The judge further accepted that the Bank had breached its obligations of full and frank disclosure at the ex parte hearing before Bryan J, including in relation to UAE law which (the judge found) was plainly the governing law of the claim.

Fred was instructed by Trevor Mascarenhas of PCB Byrne LLP.

Please view the judgment here.