RAS AL KHAIMAH INVESTMENT AUTHORITY v FARHAD AZIMA  & ORS.

Once the jurisdictional gateway for security for costs is satisfied, the court must consider whether an order is just in all the circumstances, consistently with the non-discrimination requirements of Articles 6 and 14 of the ECHR. A non-resident claimant who relies on the absence of enforcement obstacles must provide sufficient evidence of the nature, value and location of assets. If the claimant provides no meaningful information, the court may infer a real risk of substantial obstacles to enforcement. Security should be tailored to the risk identified; where there is a real risk of non-enforcement, the starting point is security for the costs of the proceedings as a whole.

Under the disclosure pilot, issues for disclosure are narrower than issues for trial. They must concern key disputed matters on which undisclosed documents are likely to be relevant and important to a fair resolution. Model E disclosure remains exceptional, but may be justified where documentary loss, alleged concealment and the nature of the wrongdoing make train-of-inquiry searches necessary.

RAKIA’s original claims for fraudulent misrepresentation and conspiracy succeeded at trial, while Mr Azima’s hacking counterclaim was dismissed: [2020] EWHC 1327 (Ch). The Court of Appeal dismissed the appeal concerning RAKIA’s claims but, following new evidence, allowed the appeal on the counterclaim and remitted that counterclaim for retrial before a different judge: [2021] EWCA Civ 349.

On remittal, the court determined applications by the counterclaim defendants for security for costs and disputed issues concerning the List of Issues for Disclosure under CPR PD51U. The central questions were whether security should be ordered and, if so, its amount, and which issues justified extended disclosure under Models C, D or E.

1. Security for costs. The condition in CPR 25.13(2)(a) was satisfied because Mr Azima was resident in Missouri, a non-Convention state. The discretion under CPR 25.13(1)(a) was broad, but had to be exercised consistently with the non-discrimination principles identified in Nasser and Danilina.
2. The relevant threshold was a real, non-fanciful risk of substantial obstacles to enforcement. The court could consider enforcement against assets outside the claimant’s country of residence. Mr Azima had provided no reliable evidence of the nature, value or location of his assets. In light of that non-disclosure, his findings of dishonesty and fraud, and the risk of dissipation, the court was entitled to infer a real risk that any costs order would be unenforceable or substantially difficult to enforce.
3. Because the risk was not confined to additional costs or delay in Missouri, security had to be assessed by reference to the proceedings as a whole. The court ordered security equal to 60% of the relevant costs schedules, amounting to £915,000 for RAKIA, £885,567 for Mr Gerrard and Dechert, and £591,854 for Mr Buchanan.
4. Disclosure. Under paragraph 7.3 of CPR PD51U, issues for disclosure were not identical to issues for trial. They had to be key disputed issues for which undisclosed documents were likely to be relevant and important to a fair resolution. Extended disclosure also had to be reasonable and proportionate under paragraph 6.4.
5. Model E disclosure was exceptional. It was ordered for Issue 3(a), concerning steps taken to obtain Mr Azima’s information, because the alleged clandestine conspiracy, possible cover-up, destruction or loss of documents and the need to assemble a documentary mosaic made train-of-inquiry searches sufficiently necessary. The proposed limitation to unlawful steps was rejected because it could exclude documents whose relevance emerged only from their relationship with other material.
6. Issue 3(b), concerning investigations into Dr Massaad, was excluded as insufficiently important and disproportionate. Issues 5, 6, 13 and 24 were included, with the wording substantially sought by Mr Azima. Issues 17 and 18 received Model D rather than Model E disclosure. Issue 19 received Model C disclosure. Issues 27, 28 and 32 were excluded because they were not key issues or were directed principally to witness credibility. Issue 30 was expanded to include Mr Jain and Mr Rey.

1. High Court (ChD): The original trial dismissed Mr Azima’s hacking counterclaim: [2020] EWHC 1327 (Ch).
2. Court of Appeal: The appeal concerning RAKIA’s substantive claims was dismissed, but the appeal on the hacking counterclaim was allowed and that counterclaim was remitted for retrial: [2021] EWCA Civ 349.
3. High Court (Business List): On remittal, Mr Justice Michael Green ordered security for costs and ruled on the disputed disclosure issues.