Ras Al Khaimah Investment Authority v Farhad Azima

Whether to split a trial is a case-management decision requiring regard to the efficient, proportionate and practical determination of all genuinely interrelated issues. A split trial should be refused where the proposed dividing line is uncertain, evidence and witnesses would be duplicated, inconsistent findings might result, or an intervening appeal would cause delay.

In a claim to set aside a judgment for fraud, the court ordinarily determines materiality by reference to the findings in the original judgment rather than retrying the underlying allegations. Where a related claim is being tried at the same time and those allegations are relevant to pleaded defences, however, they may need to be examined and tried together.

The proceedings concerned a hacking counterclaim retrial and an additional counterclaim seeking to set aside an earlier judgment on the ground that it had been procured by fraud. The additional defendants relied on allegations of fraudulent conduct previously made and upheld in the original trial, both in resisting the hacking claim and in addressing the materiality of the new evidence on the set-aside claim.

The defendant sought a separate trial of those allegations, leaving the scheduled trial to deal principally with his claims. The court considered whether the issues could properly be separated and whether a second trial would be efficient and proportionate.

1. Application dismissed. There should be no split trial. All issues should be tried together, with provision for the trial estimate to be extended by one week if necessary.
2. On a set-aside claim, the court’s function is ordinarily to decide materiality by reference to the findings in the original judgment. It does not normally retry the underlying allegations unless the judgment is set aside and the original successful party brings a new claim. This principle was treated consistently with the approach in RBS v Highland Partners [2013] 1 CLC 596, including the reference to paragraph 106 of that decision.
3. That did not justify a separate trial here. The additional defendants were entitled to test materiality by considering the documents and findings relied upon in the original judgment and whether the new evidence would have affected them. The allegations were also relevant to the hacking counterclaim defences, including the alleged absence of privacy arising from fraudulent conduct and the clean-hands defence.
4. The issues were therefore too intertwined for a reliable division. A split would create uncertainty about the boundary between legal and factual issues, require witnesses to give evidence twice, risk inconsistent findings, and create practical difficulties if appeals intervened. While the defendant could apply to strike out irrelevant allegations, they remained on the pleadings. The efficient and proportionate course was to determine them in one trial.

The judgment records that permission to appeal had been given from the judge’s earlier judgment of 1 November 2022, which permitted the additional set-aside counterclaim. That appeal was pending before the Court of Appeal. The present decision determined the separate case-management application concerning trial structure.