Amit Karia obtains judgment, declaratory relief and indemnity costs against Abu Dhabi fraudster

Reference

Date

02 Apr 2020

Court

Facts

Amit Karia represented the Egyptian based Claimant (“M”) in a claim to recover shares in the Second Defendant (“ML Limited”) which were fraudulently acquired by the First Defendant (“G”). ML Limited owned a c.£1.5m flat on the Embankment, which was M’s London holiday home. G was an Abu Dhabi based director of M’s former Mayfair based asset manager (“B Limited”). M alleged that G was merely acting as a nominee or was a fictitious identity created by a shadow director of B Limited (“Mr B”). The Claimant and Mr B had considerable litigation history, to the extent that in respect of other business deals, on M’s prosecution in Egypt, Mr B had been criminally convicted for fraud and sentenced to 3 years imprisonment. The nature of the fraud was quite simple: G produced a purportedly pre-signed stock transfer form transferring all the shares in ML Limited from M to G; and (somehow) obtained ML Limited’s Companies House access codes and used them to effect the changes on ML Limited’s public register of members.

The Defendants’ defence was that the £1m+ provided by M to B Limited to purchase the Embankment flat pursuant to a written property and asset management agreement on his behalf was instead provided pursuant to an oral agreement made in Egypt to provide immigration services to M and his family. Further, that M held the shares in ML Limited on trust for B Limited and said trust structure was merely to facilitate the provision of those immigration services. A plethora of arguments were raised to that defence: this was inconsistent with other claims brought by B Limited against C, the trust structure needed to be in writing to operate in law, the contemporaneous correspondence made clear M was the owner, etc.

Multiple rounds of interim proprietary injunctions were obtained by M to prevent dissipation and damage to Embankment flat, the first obtained days after the fraud was discovered. There were also repeated CPR 18 applications for the Defendants to provide the requisite particulars of their defence.

On 2 April 2020 the court granted M judgment, including declaratory relief as to M’s ownership of the shares in ML Limited and in turn the Embankment flat. Additionally, M was even successful in obtaining indemnity costs and a substantial interim payment on account of the same.

Comment

This was a case where the interim protective relief was crucial to protect the assets pending judgment. It was also a case where there were numerous potential defendants to the claim and complex and particularly serious allegations (e.g. fraud and forgery of documents). All of the same required untangling, weighing up and narrowing down at a very early stage (days after instruction) to formulate a claim that optimised recovery of the Embankment flat and reduced complexity and M’s potential expose to adverse costs by innocent defendants.