Sheikh Mohamed Ali Alhamrani and others v Sheikh Abdullah Ali Alhamrani

In a contract governed by foreign law, expert evidence establishes the foreign rules of construction and any relevant technical meaning. The court itself determines the contract’s meaning. Interpretation proceeds in two stages: first, the text is read as a whole in its factual context to decide whether it is ambiguous; if it is ambiguous, all admissible circumstances may be considered to determine the parties’ objective intention. On appeal, contractual meaning under foreign law is not a primary finding of fact attracting special deference merely because the trial judge saw the witnesses. It is an application of foreign-law interpretative principles to the primary facts, which the appellate court is equally able to perform. A retrial is unnecessary where the appellate court can draw the required inference from the undisputed evidence.

The appellants, six brothers, disputed their brother’s claim that an offer and resulting sale agreement included their shares in Chemtrade Limited, a British Virgin Islands company. The agreement was governed by Saudi Arabian law. The High Court held that Chemtrade was excluded, but the Court of Appeal of the Eastern Caribbean Supreme Court held that it was included and allowed the appeal. The Privy Council considered the proper approach to foreign-law contractual interpretation, the admissibility and role of expert evidence, the appellate court’s approach to the trial judge’s findings, and the construction of the offer in its context.

1. Appeal dismissed. The Board advised that the decision of the Court of Appeal of the Eastern Caribbean Supreme Court should stand. A retrial was unnecessary because the relevant inference could be drawn from the undisputed facts.
2. Under Saudi law, the court must determine the parties’ objective intention. At the first stage it reads the contract as a whole and in its factual matrix to decide whether it is ambiguous. If the meaning is clear, the inquiry ends. If the contract is ambiguous, the court may consider all admissible circumstances, including the parties’ statements and conduct before, at the time of and after the agreement, custom between the parties, inherent probabilities, and relevant admissions. The admissible material is wider than under English law and may include evidence of negotiations.
3. Expert evidence was admissible to identify the foreign rules of construction, relevant questions and evidence, and any foreign technical terms. It was not admissible to determine the meaning of the private contract once those legal principles had been established. That was a matter for the judge and, on appeal, the appellate court.
4. The Court of Appeal was entitled to reconsider the meaning of the offer. Contractual meaning under foreign law was not a primary finding of fact requiring particular restraint merely because the trial judge had heard the witnesses. It involved applying foreign-law principles to primary facts, an exercise which the appellate court was as well placed to undertake.
5. The offer was ambiguous. The February arrangements, the valuation material, and the offer’s reference to the assets valued and to foreign investments formed part of the relevant context. The omission of Chemtrade from the appendix was inconsistent with the broader transaction and the valuation assumptions. On the wider evidence, the objective intention was that Chemtrade/FOMEL should be included.
6. The res judicata argument failed. The earlier Saudi judgments had not adjudicated whether Chemtrade was included in the agreement, and that issue was raised only later. The appeal was therefore dismissed, with costs and the form of order to be addressed by written submissions.

• Privy Council: Appeal dismissed; the Board advised that the decision of the Court of Appeal should stand.
• Court of Appeal of the Eastern Caribbean Supreme Court (British Virgin Islands): On 18 September 2013, the court allowed Sheikh Abdullah’s appeal and held that the offer and sale agreement included the Brothers’ interests in Chemtrade.
• High Court: On 21 December 2012, Bannister J held that Chemtrade was not included in the offer or sale agreement.