Abu Dhabi Commercial Bank PJSC v Shetty & Ors

The claimant, Abu Dhabi Commercial Bank (ADCB), alleged a large-scale fraud within the NMC group and sought continuation of a Worldwide Freezing Order, permission to rely on an additional PD6B gateway (paragraph 3.1(9)(a)) and permission to amend. The defendants applied to set aside permission to serve out of the jurisdiction and to discharge the WFO. The judge applied the established tests for service out: (i) a serious issue to be tried on the merits, (ii) a good arguable case that the claim passes through a PD6B gateway, and (iii) that England is clearly the appropriate forum.

Key legal points: the court held there was a real issue to be tried on the pleaded deceit and unlawful means allegations; service on the first defendant by reference to s.1140 Companies Act 2006 was valid and he therefore could be an anchor defendant; the Statute of Frauds (Amendment) Act 1828 s.6 raised a potentially important procedural issue but was not shown to be demonstrably decisive at this interlocutory stage; Rome II Article 4 pointed to UAE law as the governing law; and unlawful means conspiracy as a cause of action was not recognised under UAE law.

Disposition: although ADCB crossed the first jurisdictional hurdles (including limited success on tort gateways in respect of the Accounts Representations), the court concluded that Abu Dhabi was the clearly more appropriate forum. The court accepted undertakings given by the defendants and stayed these proceedings (with liberty to apply to lift the stay) rather than dismissing them. The judge did not determine the continuation of the WFO.

Background and parties:

• ADCB sued six defendants, senior figures and shareholders associated with NMC plc and its group, alleging they knowingly caused false financial statements to be published and used those representations to induce ADCB to extend credit to group companies. ADCB sought continuation of a Worldwide Freezing Order and permission to rely on an additional PD6B gateway and to amend its pleadings. Defendants applied to set aside permission to serve out of the jurisdiction and to discharge the WFO.

Relief sought:

• Continuation of the WFO until judgment or further order; permission to rely on PD6B paragraph 3.1(9)(a) as an alternate tort gateway; leave to amend particulars of claim; defendants sought to set aside permission to serve out and to discharge the WFO.

Issues framed by the court:

• whether there was a serious issue to be tried against each defendant under the summary judgment threshold;
• whether the claim passed through a PD6B gateway (primarily the necessary or proper party gateway relying on s.1140 Companies Act 2006 and alternatively paragraph 3.1(9) (a)/(b));
• whether England was the clearly appropriate forum (forum conveniens);
• which law governed the tort claims under Rome II (Article 4), and the effect of Statute of Frauds (Amendment) Act 1828 s.6 on deceit claims;
• whether unlawful means conspiracy was available under the applicable law and whether pleading of UAE law was adequate.

Court’s reasoning:

• The judge accepted the claimant’s factual averments for interlocutory purposes unless demonstrably untrue, and found there was a serious issue to be tried on the pleaded deceit and unlawful-means allegations (including implied representations described as the SFA, CFA, Compliance Certificate and Accounts Representations), and that intent and falsity were pleaded sufficiently to create triable issues on those points.
• On service, the judge held that s.1140 Companies Act 2006 permitted service at a UK registered address even where the director was not resident in the jurisdiction, so the first defendant could be an anchor defendant for the necessary or proper party gateway.
• The defendants’ contention that s.6 of the 1828 Act operated as a complete bar to the deceit claims was considered significant but ultimately not determinative at this interlocutory stage; the court declined to decide the point finally because it depended on factual findings more appropriate to trial.
• Applying Rome II Article 4, the judge concluded that the damage occurred in the UAE (where the bank administered the lending and where funds were drawn down), and that, on the facts pleaded, the dispute was governed by UAE law. Under UAE law conspiracy as a separate cause of action was not recognised; liability had to be analysed under UAE Civil Code provisions (Articles 282–291, 285 etc.). ADCB’s Schedule setting out principles of UAE law, read with the particulars, was sufficient at this stage to show a realistically arguable case under UAE law.
• On gateways, the court found ADCB had satisfied the necessary or proper party gateway (s.1140 anchor) and had established a plausible evidential basis for passing through the tort gateways in respect of the Accounts Representations (including limited reliance on paragraph 3.1(9)(a)/(b) for two principal facilities), but not for other alleged representations unconnected to England.
• On forum conveniens the judge gave primary weight to the facts that ADCB and the defendants were habitually resident/centrally administered in the UAE, the loans were made and drawn down in the UAE, most witnesses and documents were in Abu Dhabi and UAE law governed the dispute. The judge found Abu Dhabi plainly the more appropriate forum. The judge accepted undertakings by defendants to submit to the Abu Dhabi courts and ordered a stay with liberty to ADCB to apply to lift it.

Other findings and procedural observations:

• The judge observed that ADCB should have addressed the s.6 issue earlier in the without-notice application; he would have made an adverse costs order had he concluded the forum remained England. He did not determine the continuation of the WFO at this hearing.

First instance: Proceedings stayed (not dismissed) and defendants' territorial challenges upheld on forum grounds. Although ADCB had established a real issue to be tried, valid service on the first defendant under s.1140 Companies Act 2006 and had met parts of the PD6B gateway tests (notably in respect of the Accounts Representations), the court concluded that Abu Dhabi was the clearly more appropriate forum under the Spiliada principles and Rome II Article 4. The court accepted undertakings from the defendants and ordered a stay with liberty for ADCB to apply to lift the stay. The judge did not determine continuation of the Worldwide Freezing Order and noted omission in ADCB’s original without-notice disclosure (in particular the significance of s.6 of the 1828 Act).