“Dishonestly and fraudulently” – High Court freezes assets of UAE sovereign wealth fund

03/07/24

The High Court has made a post-judgment worldwide freezing injunction against RAKIA – the sovereign wealth fund for Ras Al Khaimah, one of the seven of the United Arab Emirates. 

This freezing injunction is a post-script to a long-running saga that was begun by RAKIA in September 2016. 

RAKIA commenced proceedings in the High Court against Mr Farhad Azima, an American businessman, alleging misrepresentation and that he had conspired with its former CEO and others to obtain commission payments.

RAKIA relied on various documents forming part of some 30GB of data hacked from Mr Azima’s emails and computers and placed online on anonymously hosted websites.

Mr Azima denied the claims, alleged that RAKIA had been responsible for the hacking and counterclaimed. RAKIA strenuously denied any involvement in the hacking or knowledge of how it occurred. 

Following a trial in January-February 2020, Mr Andrew Lenon QC (sitting as a Deputy High Court Judge) largely upheld RAKIA’s claims, awarding damages, costs and interest; found that Mr Azima had not proved that RAKIA was responsible for the hacking and dismissed Mr Azima’s counterclaim.  (See news item, here)

Following that judgment, Mr Azima appealed.  In 2021 the Court of Appeal remitted his counterclaim against RAKIA for a further trial but otherwise stated that the findings against Mr Azima were to stand (see news item, here).  

Mr Azima widened the counterclaim by adding additional defendants (including Dechert and its former partner Neil Gerrard, who acted for RAKIA) and gathered further evidence.  These included hundreds of pages of reports prepared for RAKIA which included masses of Mr Azima’s private and confidential data, long before any of his data had been placed online, and which contained evidence undermining RAKIA’s claims against Mr Azima.

In June 2022, as Mr Azima was about to deploy this evidence, RAKIA abandoned its defence of the proceedings and fled the jurisdiction.  It wrote to the Judge advising that it had revoked its instructions to its solicitors to accept service, while also promising to satisfy any order the Court might make. 

On the back of the new evidence, the High Court and the Court of Appeal (over the objections of the remaining defendants) granted Mr Azima permission to bring a further counterclaim against RAKIA, to have the first judgment and the Court of Appeal judgment set aside on the grounds that RAKIA obtained them through fraud (see news items here and here).

Mr Azima settled with Dechert and Mr Gerrard (who agreed to pay £3 million in damages, plus costs per CPR Part 36). 

He also obtained judgment against RAKIA on both counterclaims.  Mr Justice Michael Green awarded damages and costs (collectively totalling over £20 million) and injunctive relief.  Describing the case as “egregious” and “extraordinary”, the Judge also ordered the 2020 judgment and the 2021 Court of Appeal judgments set aside on the grounds of RAKIA’s fraud (see news items here and here).

RAKIA has failed to pay any of the amounts ordered by the Court.  Mr Azima applied for a worldwide freezing injunction, initially granted without notice by Mr Justice Michael Green, who stated:

 “RAKIA has behaved dishonestly and fraudulently, obtaining judgments from this court by fraud and mounting a full scale operation to hack Mr Azima's private and confidential information. Its behaviour throughout the case has been shown to be dishonest and since it has backed out of the proceedings it has failed to pay any of the orders made against it, despite it saying that it will ensure that any judgments entered against it are satisfied.”

At the return date, Mr Justice Zacaroli continued the freezing injunction.

The judgments are available here and here.