Bank of Beirut S.A.L. & Anor v HRH Prince Adel El-Hashemite & Anor

The Banks established on summary judgment that the First Defendant (the Prince) had no real prospect of successfully defending claims that he had procured registration of limited partnerships by fraud and without authority and that he held no valid irrevocable powers of attorney from the Banks. The court granted declarations, an injunction restraining further misuse of the registrations, an award of damages for unlawful interference with business to be assessed, and an indemnity declaration against the Prince for liabilities incurred by his unauthorised acts.

The court declined to order deletion of the limited partnership entries from the Registrar's register under the Limited Partnerships Act 1907 because s. 8C(4) makes a certificate of registration conclusive evidence that a limited partnership came into existence on the date of registration; the fact that registration was procured by fraud did not permit the court to set aside the statutory certificate in the Registrar's hands. The Registrar had, however, annotated the register to alert third parties and the court left the Registrar free to take administrative steps to inform searchers.

Background and parties: The claimants are three Middle Eastern banks (Bank of Beirut s.a.l.; Banque du Liban; Arab National Bank) who alleged that the First Defendant, who styles himself HRH Prince Adel El-Hashemite, procured registration at Companies House of limited partnerships naming each bank as general partner and the Prince as limited partner. The Banks asserted those registrations were procured by fraud and without any authority from the Banks.

Relief sought: The Banks sought (i) declarations that the limited partnership agreements and registrations were void and procured by fraud, (ii) rectification of the register by deletion of the entries, (iii) an injunction against the Prince, (iv) damages for unlawful interference, and (v) indemnities. The Registrar of Companies was joined and opposed deletion on grounds that statutory certificates of registration under the Limited Partnerships Act 1907 are conclusive under s. 8C(4).

Procedural posture: First instance summary judgment applications were heard. The Prince did not file a defence or witness evidence; he served notices of discontinuance and other lengthy documents but produced no credible account or provenance for the alleged powers of attorney. The Registrar resisted deletion on jurisdictional and statutory-conclusive-evidence grounds, remaining neutral on the factual allegations.

Issues for decision:

• Whether the Prince had any real prospect of establishing irrevocable powers of attorney from the Banks and thus could successfully defend the claims.
• Whether the court should order rectification by deletion of the limited partnership entries from the Registrar's records given s. 8C(4) of the Limited Partnerships Act 1907 which makes a certificate of registration conclusive evidence that a limited partnership came into existence.
• The appropriate remedies and ancillary relief, including damages, injunctions and costs.

Reasoning and subsidiary findings: The court applied the CPR Part 24 test that a defendant must show a real prospect of succeeding to avoid summary judgment. On the factual material before it (including prior judgments and convincing evidence of forgery and inconsistent documentary provenance), the judge found the Prince's account inherently improbable and carrying no real prospect of success. The Prince relied on various alleged arbitral awards and powers of attorney dating back to earlier litigation; the court found compelling evidence of forgery and prior judicial findings that the Prince's papers were suspect. On the Registrar question the judge analysed the 1907 Act and concluded that s. 8C(4) must be given its plain effect: a certificate of registration issued by the Registrar is conclusive evidence of existence as of the registration date. The court held that the statutory provision precluded an order removing the registrations on the basis of fraud where the Registrar had acted bona fide in issuing the certificate. The judge contrasted the Re Calmex supervisory jurisdiction to direct the Registrar with later authorities and concluded the conclusive evidence provision here barred the requested deletion. The Registrar nevertheless annotated the register and made administrative steps to warn third parties; the court declined to micromanage Companies House procedures.

Disposition: Judgment was entered against the Prince: declarations were made that the alleged limited partnership agreements were not deeds of the Banks, that the Prince had no power of attorney, that the LP5 applications were false and fraudulent, and that the Banks are indemnified by the Prince for liabilities incurred by his unauthorised acts; an injunction was granted; damages for unlawful interference were awarded to be assessed; costs were ordered. No order was made compelling the Registrar to delete the partnership entries; the Registrar's annotations remained the permissible administrative remedy under the statute.

At first instance the court granted summary judgment against the First Defendant (the Prince). The court held the Banks had shown the Prince had no real prospect of establishing authority to act for them and therefore succeeded in their substantive claims against him: declarations were made, an injunction granted, damages awarded to be assessed and costs ordered. The court refused to order deletion of the limited partnership entries from the Registrar's records because s. 8C(4) of the Limited Partnerships Act 1907 makes a certificate of registration conclusive evidence that a limited partnership came into existence on the date of registration and that statutory provision prevented the court from directing removal of the registered entries where the Registrar had acted bona fide; the Registrar was however permitted and had annotated the register to inform third parties.