CL-2022-000048 - [2025] EWHC 1810 (Comm)

The ‘fraud, collusion or gross negligence’ of the ‘representative’ must concern conduct in the proceedings. The rationale of Article 169(6) is to protect a non-party against unfairness it may suffer in the proceedingsto which it is not joined.

Again, there are many decisions of the UAE courts which confirm this point. By way of illustration only, in the Federal Supreme Court case 125/19, the court stated as follows:

“The implication of this provision is that the petition for reconsideration constitutes an exceptional remedy against final judgments in the specific cases exhaustively enumerated in said Article, including where a judgment is binding upon a party who was not personally present in the proceedings—whether as an original party, intervenor, or third-party joined—but was deemed legally represented therein by the adjudicated party, and provided that the fraud, collusion, or gross negligence of such representative is proven. It also includes the case where a party was not properly represented in the case.”

By Article 171, the BVI Companies’ and the Bank’s Petition for Reconsideration had to be made to the same court; it might then even be heard by the same judges. Article 171 CPL states:

“1.

The petition shall be prosecuted to the court which issued the decision with a brief deposited in the court case management office according to the usual procedures of the action prosecution.

2.

The brief should include the manifest of the sentence in which the petition was submitted, its date and the petition reasons or it shall be void.

3.

The court to examine the petition may be consisted of the same judges who have issued the decision.”

It follows that I accept Mr. Trotter’s submission that the petition procedure under Article 169 does not constitute a “second and separate action” (of the type envisaged in House of Spring Gardens) which determined whether the First Globe Appeal Judgment was obtained by fraud. Rather, it amounts to a procedural mechanism for the same court to reconsider its judgment, which is fundamentally different to a fresh action before a new court to set aside a judgment for fraud and to vindicate a substantive right. A judgment which is re-opened by the same tribunal upon petition is not final and enforceable and the petition procedure cannot be regarded as a second and separate action.

As I have said, the first petition for reconsideration of the First Globe Appeal Judgment was brought by the BVI Companies and the Bank purportedly under Article 169 CPL. However, in considering the first petition for reconsideration, the Sharjah court giving the Second Globe Appeal Judgment found that the BVI Companies’ petition was “inadmissible”. The reason for that finding was that the criteria set out in article 169(1) and (6) were not satisfied (Footnote: ³⁵). Article 169(1) only applied if the fraud was “not apparent to the opponent throughout the duration of hearing the case” (i.e. it was only subsequently discovered). That was not so here.

The Sharjah Court giving the Second Globe Appeal Judgment also dismissed the Bank’s petition, as a non-party, under Article 169(6), noting that “[the Bank] did not prove that item (6) of Article 169 which permits it to file the appeal, is applicable to this case”. That is because there was no fraud, collusion or gross negligence of the Bank’s representative in the conduct of the proceedings. Accordingly, the Sharjah Court ruled that the petition “may not be filed”.

In short, the Second Globe Appeal Judgment was concerned with a narrower enquiry than whether Globe’s claim was fraudulent, being based upon sham documents. Rather, it was concerned with whether there was an undiscovered fraud post-dating the First Globe Appeal Judgment (there was not) and whether there was fraud, collusion or gross negligence by the non-party’s representative in the conduct of the proceedings (there was not).

In short, I accept Mr. Ramadan’s conclusion that “the Court of Appeal did not decide anything other than that the First Globe Appeal Judgment was not amenable to review by the Bank or the BVI Companies pursuant to Articles 169(1) and (6).”

Since the Second Appeal Judgment was not a second decision as to whether the First Globe Appeal Judgment was procured by fraud, it also follows that first petition for reconsideration cannot be an abuse of process in the Henderson v Henderson or the Hunter sense, and nor can there be any issue estoppel. In Henderson v Henderson (1843) 3 Hare 100, Wigram V-C stated in a celebrated passage of his judgment at 115 as follows:

“… where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points on which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”

There can be no issue estoppel and it cannot be abusive to argue now matters which the BVI Companies and (even less) the Bank could not have argued, and did not argue, before the Sharjah Court which gave the Second Globe Appeal Judgment (because they were limited to the much narrower Article 169(1) and (6) arguments). They cannot be shut out from arguing matters which were not even decided, and nor would that be so as a matter of UAE law: see Ramadan Report at [162].

Appeal to the Federal Supreme Court: Both the Bank and the BVI Companies appealed to the Federal Supreme Court. On 28 December 2021, the Federal Supreme Court dismissed the BVI Companies' appeal on account of a defect in the power of attorney submitted on their behalf. That brought the BVI Companies’ petition, based upon Article 169(1), to a conclusion.

However, the Supreme Court held that the Sharjah Court which gave the Second Globe Appeal Judgment had failed properly to consider a particular argument advanced by the Bank, namely that the BVI Companies had failed to disclose that they had been sold to the Bank, and failed to join the Bank. It held that: “… those companies were sold to …[the Bank], in enforcement of such judgements. The defense of the [BVI] companies did [not] refer to this, nor included [i.e. “joined”] in the casefor which a judgement was requested, by way of fraud and collusion, to cause harm to him”. The Second Globe Appeal Judgment had “ruled the inadmissibility of the petitioner’s petition … without any decision thereon…, which renders the judgment insufficient”. Accordingly, it remitted solely that argument on the Bank’s petition for consideration to the “Third Globe Appeal Court”.

In its Third Globe Appeal Judgment, the Third Globe Appeal Court found the Bank’s petition to be inadmissible on a very narrow question. The issue of fraud was not in issue in the Third Globe Appeal Judgment as the court was only considering the disclosure and joinder issues (referred to in the previous paragraph) remitted to the court under Article 169(6). Indeed, that was Globe’s own position. (Footnote: ³⁶) There can be no preclusion in these proceedings as a result.

The BVI Companies applied to intervene in the Bank’s petition, but their application was refused (Footnote: ³⁷) and so for this reason as well, this is not a case like House of Spring Gardens where a party could have joined the second set of proceedings but chose not to do so. Nor is it abusive (in the Hunter sense) for the BVI Companies now to seek to raise the fraud issue which they could not have raised in the Third Globe Appeal Court (as they could not in the Second Globe Appeal proceedings) and which they were not even permitted to join.

Nor can any issue estoppel arise in these circumstances. The BVI Companies are accordingly not bound by the Third Globe Appeal Judgment. No estoppel arises against a non-party as a matter of UAE law and, as Mr. Trotter rightly submitted, the Third Globe Appeal Judgment cannot have a greater preclusive effect in England than it would have in the UAE. I would add that, as Mr. Trotter rightly submitted, as a matter of English law, the BVI Companies are not privies of the Bank merely by reason of the Bank’s indirect shareholding in them.

Finally, in the course of the Bank’s remitted petition, certain documents were filed on behalf of the BVI Companies even though they were no longer parties to the proceedings, and arguments were advanced regarding the underlying fraud pursuant to Article 169(1). It is for that reason that the Third Globe Appeal Judgment adverts in passing to these points. However, as Mr. Ramadan makes clear in his report and I accept, these points were no longer in issue and it was not open to the BVI Companies to raise them. (Footnote: ³⁸) Accordingly the Claimants are right to submit that these fraud arguments plainly cannot be regarded as “necessarily determined” by that judgment in order to found any estoppel. They were not.

Accordingly I accept Mr Ramadan’s evidence that “[The] Third Globe Appeal Judgment was strictly limited to the Court finding that the First Globe Appeal Judgment was not amenable to review by the Bank under Article 169(6) of the CPL only. The Third Globe Appeal Court had no authority to test any fraud under Article 169(1).”

It follows that, focussing on the Bank’s position, the House of Spring Gardens principle is not engaged at all against the Bank, because it was not party (or privy) to the First Globe Appeal Judgment (and accordingly its position is of no relevance to the declaratory relief sought by the Claimants).It is not bound by the Second Globe Appeal Judgment because it successfully appealed against it. The first judgment against the Bank is the Third Globe Appeal Judgment and it is not precluded by that as it was only entitled to petition upon the narrow grounds of Article 169(6), which are much narrower than the issue before this court (Footnote: ³⁹). In any event, the Third Globe Appeal Judgment is the first judgment against the Bank and so were it necessary the Bank could impugn that judgment for fraud under the Abouloff rule (not having commenced any second action so as to trigger the House of Spring Gardens principle).

So far as the BVI Companies’ position is concerned, the House of Spring Gardens principle is not engaged against them: the Second Globe Appeal Judgment was not given in a second and separate action; it was concerned with the much narrower Article 169(1) issue; and they were not parties to the Third Globe Appeal Judgment.

In the circumstances, the Bank and the BVI Companies are not precluded from alleging and proving that the First Globe Appeal Judgment was obtained by fraud.

In the light of my findings, I do not consider that it is necessary to go on to consider the Claimants’ further arguments that (i) if the Second/Third Globe Appeal Judgments really did resolve the fraud which the Claimants now allege, they did so without any judicial determination of the facts and in a manner contrary to English conceptions of substantial justice; and (ii) in any event, there are special circumstances, given developments since those judgments, which mean it is not abusive to (re)litigate the issue of whether the First Globe Appeal Judgment was obtained by fraud.

The principles governing the court’s jurisdiction to grant declarations were summarised by Aikens LJ in Rolls-Royce PLC v Unite the Union [2010] 1 WLR 318 (CA) at §120 as follows:

“(1)

the power of the court to grant declaratory relief is discretionary.

(2)

There must, in general, be a real and present dispute between the parties before the court as to the existence or extent of a legal right between them. However, the claimant does not need to have a present cause of action against the defendant.

(3)

Each party must, in general, be affected by the court's determination of the issues concerning the legal right in question.

(4)

The fact that the claimant is not a party to the relevant contract in respect of which a declaration is sought is not fatal to an application for a declaration, provided that it is directly affected by the issue.

(5)

The court will be prepared to give declaratory relief in respect of a "friendly action" or where there is an "academic question" if all parties so wish, even on "private law" issues. This may particularly be so if it is a "test case", or it may affect a significant number of other cases, and it is in the public interest to decide the issue concerned.

(6)

However, the court must be satisfied that all sides of the argument will be fully and properly put. It must therefore ensure that all those affected are either before it or will have their arguments put before the court.

(7)

In all cases, assuming that the other tests are satisfied, the court must ask: is this the most effective way of resolving the issues raised. In answering that question it must consider the other options of resolving this issue.”

In the present case, there is a real and present dispute between the parties as to enforceability of the First Globe Appeal Judgment. The affected parties are joined to the litigation and have had the opportunity to put their arguments. Each party will be affected by the court's determination of the issues concerning the enforceability of the First Globe Appeal Judgment.

I am fully satisfied that all sides of the argument have been fully and properly put, and in so far as the Defendants have any arguable defences to the claim, the Claimants have very fairly put them before the court. I consider the relief which is sought to bethe most effective way of resolving the issues raised.

In all the circumstances, I find that the Claimants are entitled to the declarations which they seek that (i) the First Globe Appeal Judgment was obtained by fraud; and (ii) the Tenancy Agreement, Addendum and Globe Documents are shams, were made without authority and are void and of no effect. Both sets of documents were backdated and created for the purpose of harming the Claimants.

The Claimants also seek an injunction to restrain Globe from taking any step (including in the BVI Globe proceedings) to enforce the First Globe Appeal Judgment (Footnote: ⁴⁰).

The Court has a broad discretion to grant injunctions under section 37 of the Senior Courts Act 1981. The Claimants here ask the Court to grant an anti-enforcement injunction generally rather than one which is confined to these proceedings.

In Ellerman Lines Ltd v Read [1928] 2 KB 144 at 152-153 per Scrutton LJ, the learned judge stated as follows:

“The English Courts have therefore clearly jurisdiction to restrain a person who is subject to the English jurisdiction from taking Proceedings in a foreign Court in breach of contract and in fraud. But Mr. Wilfrid Lewis took the point that while an injunction can be granted to restrain the institution or continuation of proceedings in a foreign Court there is no power, after the foreign Court has given judgment, to grant an injunction restraining the person who has obtained it from reaping its fruits. If there is no authority for this it is time that we made one, for I cannot conceive that if an English Court finds a British subject taking proceedings in breach of his contract in a foreign Court, supporting those proceedings, and obtaining a judgment, by fraudulent lies, it is powerless to interfere to restrain him from seeking to enforce that judgment. I am quite clear that such an injunction can be and in this case ought to be granted...”

Atkin LJ agreed saying, at p 155:

“The principle on which an English court acts in granting injunctions is not that it seeks to assume jurisdiction over the foreign court, or that it arrogates to itself some superiority which entitles it to dictate to the foreign court, or that it seeks to criticize the foreign court or its procedure; the English court has regard to the personal attitude of the person who has obtained the foreign judgment. If the English court finds that a person subject to its jurisdiction has committed a breach of covenant, or has acted in breach of some fiduciary duty or has in any way violated the principles of equity and conscience, and that it would be inequitable on his part to seek to enforce a judgment obtained in breach of such obligations, it will restrain him, not by issuing an edict to the foreign court, but by saying that he is in conscience bound not to enforce that judgment.”

Eve J also agreed saying, at p 158:

“The foreign proceedings here were instituted and prosecuted in clear breach of the contract, and the judgment was ultimately obtained by a deliberate and flagrant misrepresentation. The appellants in those circumstances are entitled to all protection which this court can extend to them.”

Whilst it has been said that this power will only be exercised in exceptional cases: Masri v Consolidated Constructors [2009] QB 503 at [94] per Lawrence Collins LJ (as he then was), citing Ellerman, in Bank St Petersburg v Arkhangelsky [2014] 1 WLR 4360 at [36]-[38] Longmore LJ discussed Ellerman and concluded as follows:

“36.

Mr Marshall emphasised the exceptional nature of an anti-enforcement injunction as opposed to an anti-suit injunction. He said that the only example in the decided cases was the much stronger case of Ellerman Lines Ltd v Read …

37.

The principle so laid down [in Ellerman] was restated in Masri v Consolidated Constructors International (UK) Ltd … para 94, per Lawrence Collins LJ albeit in the context of enjoining Yemeni proceedings inconsistent with an English judgment in proceedings in which the defendant had submitted to the jurisdiction.

38 Mr Marshall was correct to say that Ellerman Lines Ltd v Read [1928] 2 KB 144 was a stronger case but only to the extent there that the English trial had already taken place so that there was a finding that the Turkish judgment had been procured by fraud. Here the trial has not yet taken place and the allegations of fraud are only allegations. But an interim injunction had been granted in Ellerman’s case to protect the position pending trial: see pp 146—147. So here it seems to me that an injunction against continuing existing enforcement proceedings or initiating new enforcement proceedings should be granted.”

In the present case I have found that the foreign judgment (the First Globe Appeal Judgment) was obtained by the fraud of the Defendants. The Court has power to prevent a person subject to its jurisdiction from taking action on such a judgment and I am fully satisfied in this case that I should do so in the exercise of my discretion.

The parties had proceeded on the basis that these proceedings will determine the issue in the BVI; Globe’s application for a freezing order has been adjourned against undertakings given by the BVI Companies, pending determination of these proceedings (Footnote: ⁴¹). However, Globe has now disengaged from these proceedings and the Claimants are understandably concerned, in view of the Defendants’ conduct - which includes obtaining unjustified arrest warrants in Sharjah; a worldwide freezing order in the DIFC; an attempted enforcement claim in January 2025 for AED 582m in Dubai which the Dubai Court of First Instance held it had no jurisdiction to hear; and very recently further proceedings in Sharjah - that such an injunction against Globe, operating in personam, is necessary to prevent it from continually seeking to perpetuate its fraud. I consider that such an injunction is undoubtedly necessary and that granting it will in fact further the principle of comity, by ensuring that another foreign court is not misled by these Defendants, rather than infringing it.

In all the circumstances I grant the relief sought by the Claimants. I invite the Claimants’ counsel to put before the court a draft order for its consideration in light of the terms of this Judgment.