Aiman Meqham Almeqham v Maan Bin Abdul Wahed Al-Sanea & Ors

The court considered four linked applications arising from the recognition in England and Wales of Saudi Arabian liquidation proceedings under the Cross Border Insolvency Regulations 2006 (CBIR): a challenge by the offshore defendants to service out of the jurisdiction (the "Jurisdiction Challenge"); the Claimant’s application to continue an asset preservation order (the "APO"); the Claimant’s proposed amendments to the Particulars of Claim; and substituted service on the first defendant. The Claimant sued in respect of 19 English properties in two causes of action: (i) a Trust Claim for declarations that the offshore defendants hold the properties on resulting or constructive trust for Mr Al-Sanea and/or STCFSC; and (ii) an alternative claim under section 423 of the Insolvency Act 1986 that the 2012 transfers were made to put assets beyond creditors’ reach.

• The Trust Claim failed the service-out threshold because the Claimant at present has no proprietary interest in the English properties under English law and recognition under article 17/20 of the CBIR does not itself vest title in the foreign representative; article 21 of the CBIR is the correct route to obtain any entitlement to administer, realise or be vested with rights in immovable property in England. The Trust Claim was struck out for want of standing absent a prior or contemporaneous article 21 application (or a proper article 21 application made in the proceedings).
• The Jurisdiction Challenge failed in respect of the section 423 claim: the court found a serious issue to be tried, an appropriate PD6B gateway (including gateway 11) and that England was the clearly appropriate forum given the subject-matter was English land.
• The APO was continued in support of the section 423 claim (and, if required, to support a prompt article 21 application) because there was a serious issue to be tried on the s.423 claim and the balance of convenience and justice favoured preservation.
• The proposed amendments expanding factual pleading drawn from further materials were permitted; the proposed amendment to cure the absence of any article 21 application could not cure the substantive want of standing and so the Trust Claim was struck out.
• Substituted service on Mr Al-Sanea was permitted given his refusal to accept documents in Saudi prison and practical difficulties of service.

Background and parties. The Claimant is the liquidation trustee appointed in March 2022 by the Saudi Arabian courts in the insolvency proceedings concerning Mr Al-Sanea and Saad Trading, Contracting & Financial Services Co. The Saudi appointments were recognised in England and Wales by orders of 16 February 2024 under the CBIR. The Claimant issued proceedings in England against Mr Al-Sanea and six offshore companies in respect of 19 English properties, advancing a Trust Claim (resulting or constructive trust following alleged shams in 2012) and, alternatively, a claim under section 423 of the Insolvency Act 1986 to vest title in the Claimant.

Procedural posture and applications. Four applications were before the court: (1) an application by D2–D6 to set aside permission to serve out and to dismiss the claims against them (the Jurisdiction Challenge); (2) the Claimant’s application to continue the proprietary injunction/asset preservation order (APO) on the return date; (3) the Claimant’s application to amend the Particulars of Claim; and (4) substituted service on Mr Al-Sanea.

Issues framed by the court. The court addressed: (i) whether there was a serious issue to be tried and a PD6B gateway for service out in respect of each claim and whether England was the clearly appropriate forum; (ii) whether recognition under the CBIR (articles 17 and 20) vested title in the foreign representative or whether an application under article 21 was required to obtain rights in immovables in England; (iii) whether there had been any material non-disclosure on the ex parte application that would require discharge of the service out order or injunction; (iv) whether the APO should continue; (v) whether the proposed amendments were permissible; and (vi) whether substituted service on the imprisoned first defendant should be ordered.

Key legal reasoning. The Deputy High Court Judge concluded that recognition of foreign proceedings under article 17, and the automatic consequences under article 20 (the stay and suspension), do not by themselves vest beneficial title in English land in the foreign representative. Article 21 is the statutory mechanism which, subject to article 22 safeguards, permits the court to entrust administration, realisation or distribution of assets in Great Britain to a foreign representative and thereby to permit the representative to obtain rights in immovables. The Supreme Court’s analysis in Kireeva v Bedzhamov was followed insofar as it identified that the CBIR creates an exception to the immovables rule by permitting article 21 relief, but it does not mean article 20 alone effects vesting.

The court applied the usual permission to serve out test (serious issue to be tried; good arguable case that a PD6B gateway applies; England the clearly appropriate forum). It held that the Trust Claim could not satisfy the first limb because the Claimant had no present proprietary interest and had not made an article 21 application that would confer entitlement; declaratory relief in the common law would be an inappropriate route where article 21 remedies are available and where the article 22 safeguards are designed to protect creditors and other interests. The Trust Claim was therefore struck out. By contrast, the section 423 claim did disclose a serious issue to be tried, including adequate pleading of the 2012 transfers as transactions entered into for the s.423(3) purposes, and had sufficient connection with England because the subject matter is English land; service out was therefore maintained as to that claim.

Other findings. The court allowed factual amendments to the Particulars that fleshed out the pleaded case from additional material, refused amendments that purported to cure the absence of an article 21 application, continued the APO in support of the s.423 Claim (and, if necessary, in support of an immediate article 21 application), and granted substituted service on Mr Al-Sanea given practical difficulty and refusal to accept documents.

Remedial note: The court directed that the Claimant remained free to bring a prompt article 21 application in order to seek entrustment if it wished to revive any claim to rights in the English properties.

This first-instance court set aside leave to serve out in respect of the Trust Claim and struck that claim out because the Claimant had no present proprietary interest in the English properties and recognition under article 17/20 of the CBIR does not itself vest title; article 21 is the appropriate route to obtain rights in immovables and no article 21 order had been obtained. The Jurisdiction Challenge was rejected as to the section 423 claim: the court found a serious issue to be tried, an available PD6B gateway and that England was the clearly appropriate forum, so leave to serve out as to the s.423 claim remains. The asset preservation order was continued in support of the s.423 claim (and to preserve assets pending any immediate article 21 application), the proposed factual amendments were permitted, and substituted service on Mr Al-Sanea was ordered. The reasoning focused on the scope and interplay of articles 20 and 21 of the CBIR and the immovables rule as explained in Kireeva.