Zulfiqur Al-Tanveer Haider v Delma Engineering Projects Company LLC & Ors

At the first, ex parte stage of an application for permission to continue a derivative claim, a prima facie case is shown where the evidence, taken at its reasonable highest and if uncontradicted, would entitle the applicant to relief. The court should not resolve conflicts in evidence or form a concluded view of the merits before the company and defendants are heard.

For a foreign company, CPR rule 19.9C applies the specified Companies Act 2006 permission procedure, but excludes sections 260 and 263. The applicant must nevertheless show a prima facie case under the law of the place of incorporation, an arguable claim against an English defendant sufficient for the jurisdictional gateway, and that England is the appropriate forum. A foreign forum may be unavailable where cogent evidence establishes a real risk of injustice.

The claimant, a 49% shareholder in Delma Engineering Projects Company LLC, sought permission to continue a derivative claim on its behalf against alleged participants in two large frauds. The proposed claim concerned a letter of credit fraud and an authorised transfer fraud. The company was incorporated in the United Arab Emirates, and the claimant relied on UAE law as well as English procedural rules.

The court treated the hearing as the first stage of the permission process. It considered whether the evidence disclosed a prima facie case, whether the relevant UAE and English requirements were met, and whether the UAE was an appropriate forum. The defendants did not appear. The central issue was whether the application should proceed to a contested second-stage hearing.

1. First-stage test. Applying the statutory and procedural scheme, the court held that the claimant had to show a prima facie case, not merely a seriously arguable case. At this ex parte stage, the evidence was to be taken at its reasonable highest and treated as uncontradicted. The court was not required to decide whether it would ultimately accept that evidence. The merits and evidential conflicts were reserved for the second stage.
2. Foreign company and UAE law. CPR rule 19.9C applied the permission procedure in sections 261, 262 and 264 of the Companies Act 2006 to a foreign company, but sections 260 and 263 did not apply. The court nevertheless considered the claimant’s UAE-law case under Article 167 of the Law on Commercial Companies. On the evidence and expert report, there was a prima facie case that a related director or employee had participated in the wrongdoing and that non-related participants could be joined where they had participated with a related party under Article 291 of the Civil Transactions Law.
3. Letter of credit fraud. There was a prima facie case against Falcon Administrative Services, Falcon FZE, Falcon Cayman, Mr Mohanan, Protouch, Mr Ahmed Al Mureikhy, Global Tradelinks, Commodities International and West Trade. There was no sufficient prima facie case against Falcon Europe, Asia Pacific International or the other Al Mureikhy family members. The claimant also showed a prima facie case on limitation, forum and the procedural requirements for proceeding.
4. Authorised transfer fraud. The application failed because there was no evidence that either English Falcon company participated in that fraud, so the jurisdictional second precondition was not satisfied.
5. Forum and order. Although the UAE was prima facie the natural forum, cogent evidence supported a real risk that the claimant would not receive justice there. England and Wales was therefore prima facie the appropriate alternative forum. The letter of credit claim was permitted to proceed to the second stage against the identified defendants; the authorised transfer application was dismissed.