Sheikh Abdullah Ali Alhamrani Appellant v [1] Sheikh Mohamed Ali Alhamrani [2] Sheikh Siraj Ali Alhamrani [3] Sheikh Khalid Ali Alhamrani [4] Sheikh Mohamed Ali Alhamrani (as representative of the late Sheikh Abdulaziz Ali Alhamrani) [5] Sheikh Ahmed Ali Alhamrani [6] Sheikh Fahad Ali Alhamrani Respondents
| Jurisdiction | British Virgin Islands |
| Judge | Mitchell, JA,Justice of Appeal [Ag.],Justice of Appeal,Don Mitchell,Louise E. Blenman,Mario Michel |
| Judgment Date | 18 September 2013 |
| Judgment citation (vLex) | [2013] ECSC J0918-3 |
| Court | Court of Appeal (British Virgin Islands) |
| Docket Number | BVIHCVAP2013/0005 |
| Date | 18 September 2013 |
EASTERN CARIBBEAN SUPREME COURT
IN THE COURT OF APPEAL
The Hon. Mde. Louise E. Blenman Justice of Appeal
The Hon. Mr. Mario Michel Justice of Appeal
The Hon. Mr. Don Mitchell Justice of Appeal [Ag.]
BVIHCVAP2013/0005
(On appeal from the Commercial Division)
Ms. Elizabeth Jones, QC, with her, Mr. Simon Hattan, instructed by Walkers, for the Appellants
Mr. Victor Joffe, QC, with him, Mr. Lynton Tucker and Mr. Phillip Kite, instructed by
Ms. Colleen Farrington of Harneys, for the Respondents
Eckersley and others v Binnie and others (1988) 18 Con LR 1 applied; A/S Tallinna Laevauhisus v Estonian State Steamship Line and Another (1947) 80 Ll L Rep 99 applied; Armagas Ltd v Mundogas SA (The Ocean Frost) [1985] 1 Lloyd's Rep 1 applied.
Civil appeal — Private international law — Sharia law — Saudi Arabian conglomerate — One of the business assets held through a BVI company — All assets held in Sharia shares — Buy/Sell agreement made in Saudi Arabia relating to all jointly held assets — BVI company not included in a list of the jointly held assets valued — Dispute arising whether the shares in the BVI company were included in the sold assets — Expert evidence on Sharia law accepted by judge — Whether judge right to hold agreement was not ambiguous — Judgment of the Saudi Board of Grievances — Whether that judgment final — Whether issue res judicata
The Alhamrani Group is a major conglomerate in the Kingdom of Saudi Arabia. It was inherited from their late father by 7 brothers and 2 sisters in Sharia law shares. Each son got one share and each daughter one half of a son's share. A dispute arose between one of the brothers, Sheikh Abdullah Ali Alhamrani ("Sheikh Abdullah") of the one part, and the remaining six brothers ("the Brothers") of the other part. The Saudi court known as the Board of Grievances proposed a settlement by a process of takharuj, or reconciliation by disassociation. This involved a valuation of the Group's assets by the one most familiar with the workings of the group of companies, and the other having the option of either buying or selling at the proposed valuation, not dissimilar to a Buy/Sell or shotgun agreement.
The Brothers conducted a valuation of all the assets. They presented an Offer Letter for the sale of all the jointly held assets which listed in Appendix 1 all of the companies they claimed had been valued. Sheikh Abdullah opted to buy. The Brothers preferred they be the buyers and placed obstacles in the way of his completion. Eventually, the Saudi Board of Grievances confirmed by Judgment 1080 and by a subsequent Judgment 1220 that the Brothers must hand over the assets to Sheikh Abdullah.
After a period of about one year the Brothers began to make a claim that one of the Group companies, Chemtrade/FOMEL, was not included in the sale. They pointed out that Chemtrade/FOMEL was not included in the list of companies listed as valued in Appendix 1 to the Offer Letter. All the evidence pointed to Chemtrade/FOMEL having been included in the valuation but omitted without explanation from the list. Additionally, for about a year after the sale was enforced by the Saudi Ministry of the Interior, the evidence was the Brothers were of the view that they had sold Chemtrade/FOMEL. They admitted this by their conduct, by their statements and in writing. However, they claimed this admission had been a mistake and that Chemtrade/FOMEL was not included in the sale. By agreement the dispute over the ownership of Chemtrade was litigated in the Commercial Court of the BVI under the principles of Sharia law.
The Saudi law experts called by the parties agreed on the principles which Saudi law uses to interpret the intention of parties to a Saudi contract. The court seeks to ascertain the objective intention of the parties and will first consider the text of the written instrument. The court is not looking for the subjective intention of the parties, but infers intention from all the surrounding circumstances. In considering the text of the agreement, the court will (a) take into consideration the background context of the agreement; (b) consider the agreement as a whole, not just the words used in isolation; and (c) look to find a meaning which takes into account all the words used. If the intention of the parties is still not clear, i.e., the contract is ambiguous, the court will go to a second stage. Here, it will weigh all the evidence, both before and after the contract was entered into, in order to help in ascertaining the intention of the parties. In Saudi law, where the contract is found to be ambiguous, extrinsic evidence is admissible to prove the intention of the parties. In this context, an acknowledgment made by a party against interest carries weight.
The judge accepted the evidence of the expert witness called by the Brothers that Judgment 1080, which incorporated the list of companies in Appendix 1 of the Offer Letter, resolved all disputes about the specifics of the companies and assets in Saudi Arabia as listed in the Appendices and with a price put against them. While the Brothers had originally agreed to the process of takharuj which would have included all the jointly held assets, what they had offered was something different, the assets of the Group with the omission of Chemtrade/FOMEL. Sheikh Abdullah had accepted that offer and could not now claim ownership of Chemtrade/FOMEL.
Held: dismissing the cross-appeal of the Brothers and allowing the appeal of Sheikh Abdullah, that:
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1. The process of takharuj mediated by the Saudi Board of Grievances involved the Brothers valuing all the jointly held assets and offering them to Sheikh Abdullah at a price at which he could either buy or sell. On Sheikh Abdullah opting to buy and depositing the agreed purchase price a binding contract was entered into.
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2. The preponderance of the evidence was that the contract was intended to reconcile the siblings by providing a clean break, with no assets continuing in joint ownership or partnership. That Chemtrade/FOMEL was intended by the Brothers to be included in this process of sale was evident not only from the context of the process of takharuj but also from their admissions both by their conduct, in oral statements, and in writing to that effect, and continuing for a period of a year before they began to claim the opposite.
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3. Once an ambiguity in a Sharia law contract is recognised, the court must seek to ascertain the intention of the parties, admitting extrinsic evidence of actions and statements made by the parties subsequent to the contract, and accepting evidence of acknowledgments made by one party after the contract as proof of the original intention.
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4. In the weighing up exercise the court was inexorably drawn to the conclusion that the testimony of the brothers that Chemtrade/FOMEL was not included in the sale was false. The court below fell into error in accepting the testimony of the expert for the Brothers, particularly his mistaken interpretation of the agreement for takharuj and his conclusion that the contract, and the judgments which upheld it, was a freestanding agreement which did not include Chemtrade/FOMEL, and was not part of a seamless process of takharuj which did include Chemtrade/FOMEL.
Mitchell, JA [AG.]: Sheikh Ali Mohamed Alhamrani ("Sheikh Ali") founded an industrial empire in the Kingdom of Saudi Arabia ("KSA"). After his death in 1976 his children inherited his estate in Sharia shares, i.e., one-eighth for each of his seven sons, and a half that, or one-sixteenth, for each of his two daughters ("the Sisters"). 1 Their mother died in July 2006. 2 Sheikh Ali's estate consisted of holdings in several companies, trusts, joint ventures, real estate and personal property in Saudi Arabia and elsewhere. The principal companies of the conglomerate whose names reoccur throughout the trial include the Alhamrani United Company ("AUC"); the Alhamrani Industrial Group Company Limited ("AIG"); the Alhamrani Fuchs Petroleum Saudi Arabia ("AFPSA"); the BVI company, Chemtrade Limited ("Chemtrade"); and another BVI company, the Fuchs Oil Middle East Limited ("FOMEL"). A substantial part of the family's assets are held in what they call 'the Foreign Investments'. These companies and other entities are known as 'the Alhamrani Group.' The expression 'Foreign Investments' is a reference to family assets and investments held by certain Jersey Trusts.
This dispute 3 involved a relatively small part of the total siblings' inheritance, i.e., their shares in Chemtrade. Chemtrade did no more than hold the Alhamrani Group's share in FOMEL. FOMEL is a joint venture company between Fuchs Petrolub AG ("Fuchs") and the Alhamrani Group, each holding 50% in FOMEL. Fuchs is a well-known German company with formidable expertise in the matter of lubricants. The structure to which Chemtrade was connected was somewhat complicated. FOMEL was held in equal shares by the Alhamrani family, through Chemtrade, and Fuchs. It was an export company, and as such it was advantageous for it to be physically located in the Jebel Ali Free Zone in Sharjah, UAE. It did not pay either KSA income tax or the religious impost similar to tithes
known in KSA as 'Zakat.' By a trade mark licence between Fuchs and FOMEL the latter was permitted to market Fuchs branded products manufactured by AFPSA, but only elsewhere than in KSA.AFPSA was held by the Alhamrani Group through AUC and AIG holding 68% and Fuchs holding the remaining 32%. APFSA, and its lubrication plant, was situated...
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