Gulf International Bank BSC v Aldwood

Where a defendant is domiciled in a Member State, jurisdiction under Article 4(1) of the Recast Regulation is mandatory, subject only to exceptions contained in the Regulation itself. The court cannot use a parallel domestic discretion to stay proceedings in favour of a non-Member State court. Articles 33 and 34 provide the relevant limited mechanisms for stays involving third-State proceedings.

An asymmetrical jurisdiction clause submitting the defendant to one jurisdiction while permitting the bank to sue in any competent court is not exclusive. A freezing order requires a good arguable case, a real risk of dissipation supported by solid evidence, and justice and convenience. A defendant’s relocation, offshore structures, or imperfect conduct does not alone establish that risk.

Gulf International Bank BSC claimed approximately SAR137.5 million from Sheik Badr Fahad Ibrahim Aldwood under a personal guarantee governed by Saudi Arabian law. The guarantee submitted disputes to the SAMA Committee on a non-exclusive basis and preserved the bank’s right to proceed in any other competent court.

Mr Aldwood, domiciled in England, sought to set aside service, or alternatively stay the proceedings in favour of Saudi Arabia, and discharge a worldwide freezing order. The central issues were whether Article 4(1) of Regulation 1215/2012 permitted a domestic stay based on The El Amria principles, whether the jurisdiction clause was exclusive, and whether there was a real risk of dissipation.

1. Jurisdiction. The court had jurisdiction under Article 4(1) of the Recast Regulation because Mr Aldwood was domiciled in England and the claim was civil and commercial. The provision is mandatory. Under Owusu v Jackson C-281/02 [2005] QB 801, a Member State court cannot invoke a domestic discretionary stay to decline jurisdiction in favour of a non-Member State court. Articles 33 and 34 now provide the Regulation’s mechanisms for stays involving third-State proceedings. The stay application was therefore dismissed.
2. Jurisdiction clause. Clause 16 was asymmetrical, not exclusive. It required Mr Aldwood to submit to the SAMA Committee but expressly allowed the bank to proceed in any competent court. The English court was competent because of Article 4(1). Even if a domestic discretion had existed, the court would have granted a stay only if the clause were exclusive and strong reasons were absent.
3. Freezing order. The bank showed a good arguable case, but failed to provide solid evidence of a current real risk that Mr Aldwood would unjustifiably dissipate assets. Relocation from Saudi Arabia, failure to provide a new address, offshore arrangements, asset ownership, and alleged deficiencies in responding to the order did not establish dissipation. The assessment is objective and concerns the current risk, not the claimant’s belief or delay.
4. The worldwide freezing order was discharged. The bank’s application to continue or reinstate it was dismissed.