[2025] EWCA Civ 1211

The respondent, Crescent Gas Corporation Limited (“CGC”), is a creditor of the first appellant, National Iranian Oil Company (“NIOC”). In 2001, CGC entered into a long term gas sales and purchase agreement with NIOC. NIOC failed to supply any gas pursuant to that agreement. CGC commenced arbitration proceedings in July 2009. After extensive delays, the arbitral panel delivered a Partial Award on Remedies on 27 September 2021, ordering NIOC to pay the principal amount of US$2,429,970,000. NIOC has failed to pay any part of the award.

On 15 August 2022, Robin Knowles J granted permission to CGC to enforce the Award and, in November 2022, CGC sought to register an interim charging order against a property in London, called NIOC House, which NIOC had purchased in 1975 and which was registered in the name of NIOC (“NIOCHouse”).

It was at that point that CGC discovered that NIOC had, on 23 August 2022 (within a week of Knowles J’s order of 17 August 2022), effected a transfer of NIOC House (the “Transfer”) into the name of the second appellant, the Retirement, Savings and Welfare Fund of Oil Industry Workers Fund (the “Fund”).

CGC issued this claim for relief under s.423, on the grounds that the Transfer was a transaction at an undervalue entered into by NIOC for the purpose of putting assets beyond the reach of a person who is making, or may at some time make, a claim against it.

NIOC’s and the Fund’s primary defence before the judge was that the Transfer did not fall within s.423 because at all times prior to the Transfer, pursuant to a concept of Iranian law known as “amanat”, the Fund had been the true owner of NIOC House. The argument was that the Fund had entrusted NIOC House to NIOC as an “amin”. It was common ground that an amin has no ownership of property entrusted to it at all, and that an amanat cannot be equated with a trust, because Iranian law does not recognise a division between legal and equitable ownership.

The judge rejected NIOC’s and the Fund’s argument based on Iranian law, concluding that NIOC House had been purchased, not as NIOC and the Fund contended with money that belonged to the Fund, but with money which had been loaned to NIOC by the Fund. Under Iranian law, therefore, NIOC House had always been the property of NIOC. The judge accepted that NIOC and the Fund had operated, at least since 1979, in the belief that NIOC House belonged to the Fund, but concluded they had in this respect been mistaken.

NIOC’s and the Fund’s secondary case before the judge was that on numerous occasions between 2004 and 2020, NIOC had declared a trust of NIOC House in favour of the Fund. Although the Fund had been around since the 1960s, the judge found that it only acquired legal personality on 25 September 2019, and that any purported declaration of trust that pre-dated the Fund acquiring legal personality was of no effect.

He held, however, that in a mortgage granted by NIOC over NIOC House on 25 September 2019 in favour of Bank Melli (the “Mortgage”), the following statement did constitute a declaration of trust:

“The National Iranian Oil Company is the legal owner of the mortgaged property and the Pension Funds, Savings and Staff Welfare of Oil Industry is the sole beneficial owner of the Mortgaged Property.”

The judge recited, at §186 of his judgment, that the mortgage was executed by NIOC acting by its attorney, Naft Trading and Technology Co Ltd, an English incorporated company and a subsidiary of the Fund (“NTT”). It was signed by a Mr Rahgozar, the managing director of NTT and authorised representative of the Fund (see §135(iii) of the judgment) (i) in the name of NIOC, (ii) in the name of NTT and (iii) as the authorised signatory of NTT in the presence of a Mr Bayat as witness.

In a further document dated 9 January 2020, as part of that same transaction, a Certificate of Title was provided by NIOC’s English solicitors, Eversheds, which contained a disclosure to the effect that the legal interest in NIOC House was held by NIOC and the beneficial interest was held by the Fund (the “Certificate of Title”). The Judge also held that the Certificate of Title contained a declaration of trust. I will refer to the Mortgage and the Certificate of Title together as the “Mortgage Documents”.

Notwithstanding his finding that the Mortgage Documents constituted declarations of trust by NIOC, the judge concluded that they were not effective to create an enforceable trust, because they were signed, not by NIOC itself, but by its agent (see §200 of the judgment). That was insufficient, he held, because s.53(1)(b) requires the writing to be signed by the legal owner of the land, and not by an agent on their behalf (see §197 of the judgment).

The judge regarded the present case as involving NIOC (as trustee) and the Fund (as beneficiary) seeking to enforce the trust against a third party (CGC). Since the trust was not manifested and proved by some writing, it was unenforceable (see §212 of the judgment). Accordingly, at §213, he concluded that “at the time of the August Transfer NIOC was the beneficial owner of NIOC House. The trust relied upon by NIOC and the Fund cannot be established.”

He found that NIOC had entered into the Transfer with the purpose of putting assets beyond the reach of CGC, and ordered that NIOC House be transferred with full title guarantee from the Fund to CGC.