High Court strikes out City firm’s ‘warehoused’ claim

King Fahd: Dispute over property

The High Court has struck out a claim by City firm Bryan Cave Leighton Paisner (BLCP) for abuse of process on the grounds of ‘warehousing’.

His Honour Judge David Cooke said although BLCP did not actually use the word ‘warehouse’ in a letter to the defendant’s solicitors, the phrase “no immediate need to push ahead to trial” carried the same meaning.

HHJ Cooke said warehousing was “more than mere delay which in itself is not an abuse of process”.

He went on: “On the contrary, warehousing is the issuing and maintaining of proceedings with no real intention of carrying them through to trial, save possibly at some unspecified future date of convenience to the claimant.”

The case concerned the transfer of £28m Kenstead Hall in Highgate, London, to Aljawharah Bint Ibrahim Abdulaziz Alibrahim, a widow of the late Saudi King Fahd.

It was owned by the Asturion Foundation, an organisation set up in Liechtenstein to hold assets for members of the Saudi royal family. The foundation claimed the transfer was “void or voidable” because the member of the board who executed it did not have the power or authority to act.

HHJ Cooke said the claim was issued in April 2015, and was immediately followed by an application to register a notice of a pending land action against the property, preventing any dealings with it.

The defendant filed a reply in December 2015. The claimant issued draft amended particulars of claim in March 2016 and the defendants provided a draft amended defence in July 2016.

The judge said the defendant’s solicitors, Simmons & Simmons, “pressed for a decision on the amendments” in November 2016 and the foundation replied that it did intend to amend its claim, but nothing more was heard until August 2017.

Delivering judgment in Asturion Foundation v Alibrahim [2019] EWHC 274 (Ch), HHJ Cooke said he agreed with counsel for Ms Alibrahim that BCLP’s letter on behalf of the foundation in August 2017 saying there was “no immediate need to push ahead with directions for trial” was “a unilateral decision on the part of the Asturion Foundation” amounting to “an abuse of process which entitled the court to strike out the claim”.

The judge went on: “There was a long period of inactivity on the part of the Asturion Foundation as to the conduct of the litigation.

“The claim form and the original particulars of claim were issued as long ago as 10 April 2015, and almost two and a half years later there had been virtually no progress in the conduct of the litigation by the Asturion Foundation.

“It is also to be noted that it took more than 12 months for the Asturion Foundation to provide the information as to whether or not it consented to the defendant’s filing and serving the amended defence.”

HHJ Cooke said BLCP, on behalf of the foundation, failed to provide information on its assets and deal constructively with requests made for security for costs, and “no particulars of the Asturion Foundation’s assets and liabilities have ever been provided”.

Counsel for the foundation argued that it had “always intended” to take the matter to trial and “no complaint could be made” of its conduct of the proceedings until the defendant issued proceedings in Liechtenstein, which amounted to “an attack on the board’s actual right” to launch the proceedings in London.

He said: “There has been no conscious decision to warehouse these proceedings. That decision was not therefore unilateral.

“Instead it is submitted that what delay there has been was a foreseeable reaction to the defendant’s own actions which appear to have been acquiesced in by the defendant.”

HHJ Cooke upheld the decision by Deputy Master Cousins, striking out the Asturion Foundation’s claim on the basis that it amounted to an abuse of process “of the type that has become known as ‘warehousing’”.

He directed the Chief Land Registrar to delete reference to the notice registered against the title of the property.

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