Khaleefa Butti Omair Yousif Almuhairi & Anor, Re
[2024] EWHC 535 (Ch)
EMIRATES NBD BANK PJSC v RASHED ABDULAZIZ ALMAKHAWI & Anor.
12 May 2023
[2023] EWHC 1113 (Comm)
High Court
A bank won a case against a father and son. The court made the father pay back a large debt and said that the father gave away a house and money to his son to avoid paying his debts. The son's explanations were not believed by the judge.
Key Facts
- •Emirates NBD Bank PJSC (Claimant) sought enforcement of a Dubai judgment against Rashed Abdulaziz Almakhawi (1st Defendant) and Abdulaziz Rashed Abdulaziz Mohammed Almakhawi (2nd Defendant).
- •The Dubai judgment arose from guarantees provided by the 1st Defendant for loans to System Construct Dubai, which went into liquidation.
- •The Bank also sought relief against both Defendants for property and money transfers made by the 1st Defendant to the 2nd Defendant in 2019.
- •These transfers included a London property and sums of money held in a UK bank account.
- •The 1st Defendant argued the Dubai judgment was obtained in breach of natural justice due to reliance on expert reports referencing outdated law.
- •The Defendants argued the transfers were gifts for succession planning, rebutting the presumption of resulting trust and section 423 of the Insolvency Act 1986.
Legal Principles
Enforcement of foreign judgments in England and Wales.
Dicey, Morris & Collins on the Conflict of Laws (16th ed.), Rule 46 and Rule 55.
Natural justice exception to enforcement of foreign judgments.
Dicey, Morris & Collins on the Conflict of Laws (16th ed.), Rule 55.
Resulting trust principles in gratuitous transfers.
Westdeutsche Landesbank Girozentrale v Islington LBC [1996] 2 AC 669; Vandervell v Inland Revenue Commissioners [1967] 2 AC 291; Wood v Watkin [2019] EWHC 1311 (Ch).
Presumption of advancement in parent-child transfers.
Wood v Watkin [2019] EWHC 1311 (Ch).
Transactions defrauding creditors under section 423 of the Insolvency Act 1986.
Insolvency Act 1986, section 423.
Prohibited Purpose under section 423 of the Insolvency Act 1986.
JSC BTA Bank v Ablyazov [2018] EWCA Civ 1176; Inland Revenue Commissioners v Hashmi [2002] EWCA Civ 981; Hill v Spread Trust Co. Ltd [2006] EWCA Civ 542.
Outcomes
The Dubai judgment is enforceable in England and Wales.
The 1st Defendant's claim of a breach of natural justice due to reliance on expert reports with outdated legal references failed. The court found this was not a substantial injustice, especially given the availability of local remedies.
The transfers of the Warren House property and the money were transactions defrauding creditors under section 423 of the Insolvency Act 1986.
The court found that, although succession planning may have been a purpose, a prohibited purpose (to put assets beyond the reach of creditors) was also a purpose for the transfers. This was inferred from the timing of the transfers, the manner in which they were made, and the unsatisfactory evidence from the Defendants.
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