Permission given to challenge a judgment allegedly procured through pervasive fraud and dishonesty (Ras Al Khaimah Investment Authority v Azima and ors)

09 Nov 2022

Dispute Resolution analysis: The High Court has given permission to bring a counterclaim challenging an earlier judgment following trial procured through pervasive fraud and dishonesty. Protracted litigation involving cross allegations of fraudulent misrepresentation, hacking and dishonesty has now been expanded.

Ras Al Khaimah Investment Authority v Azima and ors [2022] EWHC 2727 (Ch)

What are the practical implications of this case?

This decision expands the scope of what is already a protracted piece of litigation involving the Sovereign Wealth Fund of Ras Al Khaimah. Permission has now been giving to the Defendant, Mr Azima, to bring a new counterclaim, alleging that an earlier judgment following trial should be set aside on the basis that the witnesses for the Sovereign Wealth Fund committed a pervasive fraud on the Court itself. This is already a set of proceedings in which allegations of fraudulent misrepresentation and hacking were at issue. The Judgment also offers guidance on two relatively unusual issues. First, the relevant test for setting aside a judgment on the grounds of fraud. The decision in Takhar v Gracefield Developments Limited [2020] A.C. 450 was applied. Second, it analyses the scope of the jurisdiction held by the High Court when a matter is remitted for decision by the Court of Appeal. This decision suggests that the High Court will be slow to conclude in such circumstances that the Order of the Court of Appeal has substantially restricted its jurisdiction to determine a claim or issue in respect of which it would otherwise have jurisdiction.

What was the background?

The Claimant, (“RAKIA”) is the Sovereign wealth fund of Ral Al Khaimah, a composite part of the United Arab Emirates. RAKIA issued proceedings against Mr Azima, a US-based businessman involved in the aviation industry, for fraudulent misrepresentation in relation to a settlement agreement compromising various claims pursuant to which RAKIA paid $2.6 million to Mr Azima. Mr Azima denied the claims and alleged by way of defence and counterclaim that his email accounts and data had been unlawfully hacked by RAKIA prior to the settlement meeting and that data had been used against him. Mr Azima argued that the claim should be struck out for abuse of process or the evidence itself should be excluded. RAKIA denied that it was responsible for the hacking and claimed that it only discovered the hacked material when it was published on the internet. At a trial before Andrew Lenon QC (sitting as a Deputy High Court Judge), RAKIA’s claim succeeded and the defence and counterclaim based on the allegations of hacking failed. Mr Azima appealed. The Court of Appeal rejected Mr Azima’s appeal against RAKIA’s claims but, in light of fresh evidence suggesting RAKIA’s responsibility for the hacking, allowed the appeal in relation to the counterclaim and remitted the matter to be tried by a different judge of the Chancery Division (now Mr Justice Michael Green). The Order of the Court of Appeal emphasised that the findings of the Deputy Judge on RAKIA’s claims had to stand. Mr Azima applied unsuccessfully for permission to appeal from the Supreme Court. That application having failed, and having obtained further fresh evidence, he seeks to bring an additional counterclaim arguing that the judgment of the Deputy Judge should be set aside based on fraud and to amend his Claim against Additional Parties.

What did the court decide?

RAKIA itself dis-instructed its solicitors and took no part in the applications before the Court. The Additional Parties objected to the bringing of a new counterclaim against RAKIA on various bases. First, they argued that the Judge did not have jurisdiction to allow the additional counterclaim to be brought. They argued that the terms of the Court of Appeal Order expressly limited the matters which were remitted back for consideration. The Judge disagreed. Mr Azima was seeking to bring, in effect, a new claim, arguing for the first time that the judgment of the Deputy Judge had been obtained on the basis of fraud. The Court of Appeal Order had not, in his view, stripped the High Court of the jurisdiction to hear that claim and it did constitute an alternative effective remedy so as to rule out an application to the Court of Appeal under CPR r. 52.30. Second, they argued that the applications constituted an abuse of process either seeking to litigate matters which had already been considered and decided against him by the Court of Appeal and possibly the Supreme Court and/or constituted a collateral attack on the judgment of the Court of Appeal. This argument was also rejected. Mr Azima had made no unequivocal election which would preclude him from bringing a fresh action based on significant new evidence. Third, the Additional Defendants disputed that Mr Azima had a real prospect of satisfying the Materiality Condition, namely showing that the alleged fraud had a sufficient bearing on the judgment of the Deputy Judge. This argument was also rejected. The Court of Appeal had anticipated the possibility that some of RAKIA’s witnesses might have been dishonest. However, the fresh evidence suggested instead that there had been pervasive dishonesty among RAKIA’s witnesses. For all these reasons, permission was given to bring this additional counterclaim against RAKIA. The applications to make amendments to his existing counterclaims and other consequential matters were adjourned off to a later hearing (if not resolved in advance).

Case details

  • Court: High Court of Justice, Business and Property Courts, Business List
  • Judge: Mr Justice Michael Green
  • Date of judgment: 1 November 2022

Article by Phillip Patterson – first published by LexisNexis


Phillip Patterson

Call: 2008


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