Prince Abdulaziz v Apex Global Management Ltd & Anor [2014] UKSC 64

Prince Abdulaziz failed to personally sign disclosure statements as ordered by the court, citing a Saudi royal protocol. After an unless order, judgment was entered against him for $6m. The Supreme Court dismissed his appeal, upholding case management decisions.

Facts

The case arose from a failed joint venture between Apex Global Management Ltd (owned by Mr Almhairat) and Global Torch Ltd (owned by Prince Abdulaziz and others), which together established Fi Call Ltd. Following a breakdown in relations, cross-petitions under section 994 of the Companies Act 2006 were issued in December 2011, involving grave allegations including money-laundering, misappropriation, and terrorism financing. Apex claimed approximately $6m owing from the Prince, which he denied on the basis he had discharged it by payments into Fi Call accounts.

At a Case Management Conference in July 2013, Vos J ordered (paras 14 and 15 of his Order) that all parties, save Fi Call, personally sign statements of truth concerning disclosure of servers, electronic devices and email accounts. The Prince declined to sign personally, relying on an alleged Saudi Arabian protocol prohibiting Royal Family members from personal involvement in litigation. Mr Abu-Ayshih signed on his behalf. Following non-compliance, Norris J made an unless order in September 2013, and on continued non-compliance, entered judgment against the Prince for $6m plus interest. Mann J refused to vary Vos J’s order and refused relief from sanctions. The Court of Appeal upheld all decisions.

Issues

The Supreme Court had to determine whether the case management decisions requiring personal signing of disclosure statements, the imposition of an unless order, and the entry of judgment against the Prince, could be challenged on grounds of: (i) general disproportionality; (ii) the fact that a trial would proceed in any event on related issues; and (iii) the alleged strength of the Prince’s defence on the merits.

Arguments

Appellant (the Prince)

Mr Fenwick QC argued that Vos J erred in treating personal signing as the usual order; that preventing the Prince from contesting a $6m liability for failure to sign a document, when his solicitor was prepared to sign it, was disproportionate; that the underlying merits of the Prince’s defence (that the $6m had already been paid) were very strong and should be considered; and that the same issue would in any event be litigated at trial in connection with credibility issues.

Respondents (Apex Parties)

The respondents contended that the orders were routine case management directions properly made, that non-compliance justified the sanctions imposed, and that permitting the Prince a privilege denied to other parties would create unfairness and jeopardise the level playing field.

Judgment

Lord Neuberger (with whom Lord Sumption, Lord Hughes and Lord Hodge agreed) dismissed the appeal. He held, tentatively, that personal signing of disclosure statements reflected the normal practice, supported by CPR 31.10(6) and (7) and PD31A. More fundamentally, the essential question was whether Vos J’s direction was one he could properly have given as a case management decision, which appellate courts should not disturb unless “plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree” (per Lewison LJ in Broughton v Kop Football (Cayman) Ltd).

Given the gravity of the allegations, the doubts as to the existence, status and reach of the alleged Saudi protocol, and the fact that all other parties were required to sign personally, Vos J’s decision fell well within the permissible margin. Norris J had correctly identified the risk that overall fairness would be jeopardised if the Prince “dealt through an agent” while everyone else put their cards on the table. Mann J’s decisions were similarly unassailable.

Disproportionality

Lord Neuberger emphasised the importance of obeying court orders: once disobeyed, sanctions are almost always inevitable if court orders are to retain respect. The Prince had two clear opportunities to comply, the order was in standard terms, and he had failed to provide a convincing explanation. The reforms embodied in the CPR and following Sir Rupert Jackson’s report aimed to ensure procedural orders reflected both the litigation and the wider administration of justice. Cropper v Smith (1884) had been overtaken by the CPR.

Strength of Defence

Lord Neuberger held that the strength of a party’s case on the ultimate merits is generally irrelevant to case management decisions, with a possible exception where a party’s case is strong enough to warrant summary judgment. Even assuming that exception, the Prince’s case was not unassailable: payments were not made on the correct dates or into the accounts specified, and the respondents’ alternative explanation (a $20m loan agreement) was not fanciful. Hildyard J had described the Apex case as “frail” but had declined summary judgment.

Trial Point

The fact that the issue might arise again at trial was an inherent feature of default judgments and did not justify setting aside the sanction.

Dissent

Lord Clarke dissented, considering that justice required allowing the Prince to challenge the $6m claim, on terms that monies secured by his solicitors’ undertaking be available to the respondents if they succeeded. He considered the underlying merits should not be disregarded, and that Hildyard J would have granted summary relief but for the imminence of trial. He also observed that no one had suggested a fair trial was no longer possible due to the Prince’s breach.

Implications

The decision reinforces the strict approach to compliance with court orders under the CPR, consistent with the Woolf and Jackson reforms. It confirms that appellate courts, including the Supreme Court, should be highly reluctant to interfere with case management decisions of first instance judges, which lie within a “generous ambit” of reasonable decision-making. The Supreme Court should be “very diffident” about interfering with guidance from the Court of Appeal on case management and CPR application.

The judgment establishes that the ultimate merits of a case are generally irrelevant to case management decisions and sanctions, with a narrow possible exception only where a case is strong enough to warrant summary judgment. Conditional orders (typically for payment into court) do not fall within that exception.

The decision is significant for practitioners in demonstrating that culturally-based or personal reasons for non-compliance with procedural orders (such as the alleged Saudi royal protocol here) will rarely justify departure from standard procedural requirements, particularly where doing so would create unfairness between parties. Lord Neuberger expressly stated that nothing in the judgment was intended to impinge on Mitchell v News Group Newspapers Ltd or Denton v TH White Ltd. The Court also indicated that developments after its decision could properly be raised before a first instance judge for reconsideration.

Verdict: The appeal was dismissed. The Supreme Court (Lord Clarke dissenting) upheld the Court of Appeal’s decision affirming the case management orders of Vos J, Norris J and Mann J, and the entry of judgment against the Prince for $6m plus interest. Monies held by the Prince’s solicitors were to continue to be held pending direction from a High Court Judge.

Source: Prince Abdulaziz v Apex Global Management Ltd & Anor [2014] UKSC 64