Privacy Settings

Claim No: CA 012/2022

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE COURT OF APPEAL
BEFORE: CHIEF JUSTICE TUN ZAKI AZMI, JUSTICE SIR PETER GROSS, JUSTICE ROBERT FRENCH

BETWEEN

(1) EMIRATES NBD BANK PJSC
(2) AL KHALIJI FRANCE S.A.
(3) HSBC BANK MIDDLE EAST LIMITED
(4) UNITED ARAB BANK PJSC
(5) UNITED BANK LIMITED
(6) NATIONAL BANK OF FUJAIRAH PJSC
(7) COMMERCIAL BANK OF DUBAI PJSC
(8) NOOR BANK PJSC
(9) DUBAI ISLAMIC BANK PJSC

Claimants/Respondents

and

(1) ADVANCED FACILITIES MANAGEMENT LLC
(2) NASSER BUTTI OMAIR YOUSEF ALMHEIRI (PERSONALLY AND TRADING AS NBB GROUP ESTABLISHMENT)
(3) ADVANCED INTERNATIONAL EMPLOYMENT SERVICES LLC
(4) ADVANCED LAUNDRY LLC
(5) ADVANCED ENVIRONMENTAL SERVICES LLC
(6) AL ETIHAD INTERNATIONAL TYPING & TRANSACTION FOLLOWING CENTRE LLC
(7) ADVANCED NATIONAL CONTRACTING LLC
(8) CRUISE EXPRESS RENT A CAR LLC
(9) BIN BUTTI INTERNATIONAL HOLDINGS LLC

Defendants/Appellants

---

---

JUDGMENT OF THE COURT OF APPEAL

---

UPON the Claimants’ claim dated 25 August 2020 (the “Claim”)

AND UPON the Defendants filing and serving a defence and counterclaim dated 9 March 2021 (the “Counterclaim”)

AND UPON the Claimants’ application for immediate judgment on the Claim and the Counterclaim (the “Immediate Judgment Application”)

AND UPON the Order with Reasons of Justice Sir Jeremy Cooke dated 9 May 2022 granting the Immediate Judgment Application (the “Judgment”)

AND UPON the Defendants’ permission to appeal application dated 30 May 2022 filed against the Judgment (the “First PTA”)

AND UPON the Order with Reasons of Justice Sir Jeremy Cooke dated 4 July 2022 refusing the Defendants’ First PTA (the “Refusal Judgment”)

AND UPON the Defendants’ second permission to appeal application dated 25 July 2022 filed against the Judgment (the “Second PTA”)

AND UPON the Order with Reasons of Chief Justice Zaki Azmi granting the Second PTA dated 27 September 2022

AND UPON hearing counsel for the Claimants and Counsel for the Defendants at the appeal hearing held on 22 and 23 February 2023

IT IS HEREBY ORDERED THAT:

1. The Appeal is dismissed.

2. The Defendants shall pay the Claimants’ costs of the Appeal, to be assessed on the standard basis by the Registrar, if not agreed.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 1 May 2023
At: 1pm

SCHEDULE OF REASONS

Introduction

1. Pursuant to permission granted by Chief Justice Zaki Azmi, dated 27 September 2022, following initial refusal by Justice Sir Jeremy Cooke, dated 4 July 2022 (the “Refusal Judgment”), the Appellants/Defendants (the “Defendants”) appeal from the Order with Reasons of Justice Sir Jeremy Cooke, dated 9 May 2022 (the “Judgment” and the “Judge”), granting the Claimants/Respondents (the “Claimants”) Immediate Judgment, together with various ancillary relief.

2. By a further Order with Reasons dated 10 June 2022 (the “Remedies Judgment”), the Judge dealt in more detail with the Remedies to which the Claimants were entitled. It is unnecessary for us to say more of the Remedies Judgment, other than that any need to reconsider that Judgment depends on the outcome of this Appeal.

3. Part 24 of the Rules of the DIFC Courts (“RDC”) deals with “immediate judgment”:

It is well settled (and was not disputed before us) that in this area the DIFC Courts follow the principles established in the English law authorities on summary judgment.

4. The claim arose under Syndicated Facility Agreements concluded on 27 December 2018 (the “Facility”); it involves very substantial sums amounting to approximately AED 1.9 billion including late payment sums and interest. The Application for Immediate Judgment gave rise to the characteristic tension exhibited in such applications: the need to guard against holding a mini-trial on the one hand, while not succumbing to entreaties to put off the evil day, simply in the hope that something will turn up, on the other. In the event, the Claimants succeeded across the board.

5. The Defendants advance 7 Grounds of Appeal:

6. Below, we deal with these Grounds of Appeal in turn, also explaining their interrelationship. Before we do so, however, it is convenient to briefly summarise the factual background and outline the applicable principles of law governing Immediate Judgment. We also at once express our thanks to Mr Fraser KC and his team, for the Defendants, and Mr Montagu-Smith KC and his team, for the Claimants, for their excellent submissions, written and oral.

The Factual Background

7. For present purposes, the narrative conveniently begins in, or around April 2018 when the BBIH Group was facing financial pressures and asked the Eighth Claimant (“Noor Bank”) to arrange substantial finance. It seems that the BBIH Group was seeking around AED 1.7 billion to refinance existing indebtedness and obtain AED 300 million working capital. In the event, on 30 September 2018, Noor Bank agreed with the Second Defendant, Mr Al Mheiri (the “Chairman”), here operating as NBB Group Establishment, an AED 500 million bridge facility (the “Bridge Facility”). Security for the Bridge Facility was provided over a labour camp at Mojumaat (the “Mojumaat Security”), one of the BBIH Group’s most valuable assets. It further appears that Noor Bank intended the syndicate finance under the Facility would repay the Bridge Facility – and that it intended to participate in that syndication for AED 250 million, thereby reducing its exposure from the AED 500 million under the Bridge Facility.

8. At all events, Noor Bank was appointed as arranging bank, as appears from an Initial Mandated Lead Arranger Letter dated 1 August 2018 (the “IMLA Letter”) to which Noor Bank and the Ninth Defendant (“BB Holdings”) were parties. Insofar as relevant, the IMLA Letter provided as follows:

9. As already indicated, a meeting held on 16 December 2018 (the “16 December meeting”) gives rise to one of the Grounds of Appeal. The following features of that meeting were common ground:

10. It was further common ground that the Chairman subsequently provided Noor Bank with the OBN security and Noor Bank participated in the Facility as a lender.

11. By way of additional background, it appears that Noor Bank had indicated that it would participate (as lender) in the syndication up to AED 250 million without the additional security (and would retain the Mojumaat Security for itself) but such participation would not be sufficient to conclude a successful syndication – as the desired figure of AED 1.750 billion (or AED 1.749 billion, the difference matters not) required an AED 500 million commitment from Noor Bank.

12. By the time of the 16 December meeting, it seems clear to us that the BBIH Group had been pressing Noor Bank with a view to raising working capital, but Noor Bank had not agreed to do so.

13. A matter much in dispute before the Judge and us was whether in addition to the withdrawal threat (which was common ground), Noor Bank’s representatives stated that if Noor Bank was provided with the OBN security, it would try to arrange for up to AED 450 million working capital to be provided from the syndicated banks, but, if those banks (i.e., the First to Seventh Claimants) were not supportive, Noor Bank “guaranteed” to provide AED 100 million by latest March 2019 (the “working capital statement”). The Defendants allege that the working capital statement was made at the 16 December meeting. The Claimants deny that it was and further deny that there was any discussion of working capital at the 16 December meeting.

14. The Facility was concluded on 27 December 2018. In broad outline, the Facility consisted of:

15. As explained and summarised by the Judge:

The Legal Framework

16. There was no dispute as to the applicable legal principles governing Immediate Judgment. In contrast, the question of whether the Judge had correctly applied those principles was very much in dispute and at the heart of the Appeal.

17. Plainly, on this application under RDC R24.1, the legal burden of proof rests on the Claimants.

18. As to the principles, it is unnecessary to go beyond the approach outlined by Lewison J (as he then was) in Easyair v Opal Telecom Limited [2009] EWHC 229 (Ch), at [15] (cited by the Judge at [11]). Dealing with an application by a defendant for summary judgment, Lewison J said this:

Ground I: Agency

19. (A) The Defendants’ pleaded case: As will be seen, the Issue of whether the Claimants could show that there was no realistic prospect of Noor Bank being an agent for the First to Sixth Claimants was central to much of the case and considerable argument was devoted to it. By way of contrast, the Defendants’ pleaded case of agency was notably exiguous, based solely as it was on para. 55 of the Amended Defence and Counterclaim:

20. (B) The Judgment: The Judge dealt with the agency issue at [15] – [29] of the Judgment. He came to clear-cut conclusions, all adverse to the Defendants. The overall tenor of the Judge’s view appears from the following passage (at [15]):

There was no pleaded basis (at [16]) for any allegation of “…actual, usual or ostensible authority”. The Defendants were unable (at [18]) to point to anything “…capable of giving rise to an inference of actual, implied, usual or apparent authority.”

21. Focusing specifically on the IMLA Letter, on which the Defendants had sought to place reliance, the Judge said this (at [19]):

22. There was not “…the slightest evidence…” (at [20]) of ratification by the other Claimants of Noor’s actions at the 16 December meeting, and its taking the OBN security. To establish ratification, the Defendants needed to show (at [21]) “…full knowledge on the part of the other Claimants of unlawful threats made by Noor and the promise/statement relating to the provision of a minimum of AED 100 million as working capital.” There was no such evidence ( ibid).

23. The plea of vicarious liability fared no better (at [22]) and it had been accepted in argument by the Defendants’ counsel that it added nothing to the plea of agency.

24. The Judge then turned to the important ramifications of his conclusions on agency:

In any event (at [25]), with regard to the contracts to which Noor was a party, rescission was barred where it would defeat third party rights acquired without notice of the circumstances entitling the innocent party to rescind.

25. Finally (at [28]), assuming that a claim could be made against Noor [i.e., Noor itself, not the other Claimants] for what was said at the 16 December meeting, it could only operate as a freestanding counterclaim not as a defence, by reason of cl. 26.6.1 of the CTA, which provided as follows:

26. (C) The rival cases in outline: For the Defendants, Mr Fraser KC, on this Issue, as more generally, submitted that the Judge had erred by conducting a mini-trial on the documents; the Judge’s certainty that Noor Bank had not been speaking on behalf of the other Banks at the 16 December meeting, was misplaced. The matter deserved fuller investigation at Trial. It was perfectly possible that Noor Bank had been acting on behalf of the Claimants at the 16 December meeting. Disclosure of communications between Noor Bank and the other Claimants had not yet been given but would be available at Trial.

27. The IMLA Letter did not preclude Noor Bank acting as the Claimants’ agent at the 16 December meeting. To the contrary, the Judge’s conclusion that Noor Bank was (at that meeting) acting as the Defendants’ agent was almost “perverse”. At the 16 December meeting, Noor Bank was making demands of the Defendants for additional security, thus negotiating against the Defendants and seeking concessions from them. The Judge had “staked all” on Noor Bank being appointed as the Defendants’ agent under the IMLA Letter. There were, however, difficulties with the Judge’s analysis. For instance, cl. 14.2 of the IMLA Letter (set out above) recognised that Noor Bank could wear different hats – in accordance with general principles of agency law, which recognised that agents could enjoy dual capacity. The IMLA Letter thus specifically permitted Noor Bank to act as agent for the syndicated banks. Even if in certain respects Noor Bank had been the Defendants’ agent under the IMLA Letter, the situation was not immutable; it was all a question of fact.

28. For the Claimants, Mr Montagu-Smith KC submitted that the Defendants’ appeal on this Issue failed at the outset. The Judge held that the Defendants’ agency case was a bare plea and failed on that ground, but the Defendants had not sought to challenge this conclusion. No primary facts had been advanced by the Defendants in support of their plea; that omission was fatal, as agency was not a fact but a conclusion from the facts. This was not a mere pleading point; no proper basis had been identified by the Defendants for their case on agency.

29. Further and in any event, the Defendants’ case was logically incoherent. The withdrawal threat at the 16 December meeting was made to obtain security for Noor Bank itself – not for the other Claimants and kept secret from them; similarly, the working capital statement (if made) went to Noor Bank’s own individual capacity; as Mr Montagu-Smith KC put it: “…there is actually no case explaining how Noor could have been acting as agent for the other banks in demanding extra security for itself or in promising additional lending from itself…”.

30. The case advanced by the Defendants appeared to be one of implied actual authority. The basis for the implication was said to be that Noor Bank was “spearheading” the negotiation between the Defendants and the (other) Claimants. As arranging bank, Noor Bank had been appointed by the borrowers (the Defendants) “…to go into the market and to find banks to participate in a syndicate.” No specific fact had been alleged going beyond Noor Bank undertaking that role. However, performance of that role lent no support to the argument or implication that Noor Bank was an agent of the (other) Claimants. The Chairman’s subjective belief that Noor Bank was acting as agent for the other Claimants was irrelevant.

31. Further still, at the time of the 16 December meeting there was as yet no identified body or syndicate for whom Noor Bank could be acting as agent; the syndicate had not yet been constituted; at that time, the other Claimants were no more than potential financiers. Accordingly, for Noor Bank to be the agent of the (other) Claimants, a bilateral authorisation from each of them would have been necessary.

32. It would not be right for this matter to be put off on the basis simply that something might come up at Trial; there was no or no sufficient basis for doing so.

33. (D) Discussion and conclusions: At the outset, we underline that (as already foreshadowed) the legal burden of proof rests on the Claimants, who seek Immediate Judgment, to show that the Defendants have no real prospect of successfully defending the claim: Easyair (supra), at i). That said, it is not and cannot be for the Claimants to conjure up the arguments which the Defendants might advance to resist Immediate Judgment. Instead, an evidential burden rests on the Defendants to raise matters capable of disclosing defences with a real prospect of successfully resisting the claim. To the extent that the Defendants’ contentions do not do so, the Claimants will have satisfied the standard for immediate judgment without more ado. Conversely, to the extent that the Defendants do meet the evidential burden, it is for the Claimants to satisfy us that the potential defence has no real prospect of success. We keep such considerations well in mind throughout.

34. Directing ourselves accordingly, we entertain no real doubt that the Judge was right on this Issue, so that this Ground of Appeal must fail. Our reasons follow.

35. First, we are satisfied that no factual basis has been identified for the Defendants to contend, with any realistic prospect of success, that Noor Bank was acting on behalf of the other Claimants at the 16 December meeting. We agree with the Judge’s forthright conclusions at [15] – [16] of the Judgment, set out above. The Defendants’ (bare) pleading in this regard is plainly deficient, but the difficulty goes beyond a matter of pleadings which might otherwise have been capable of remedial amendment. As Justice Roger Giles concisely expressed it, in Firstrand Property Holding (Middle East) Limited v Damac Park Towers [2014] CFI-030-2014 (2 April 2015), at [26], “Agency is a legal construct, not a fact but a conclusion from facts…”. Here, the Defendants have failed to advance any factual allegation from which the Court could properly conclude or infer that there was an agency relationship between Noor Bank and the other Claimants. This conclusion is itself fatal to Ground I of the Appeal, but we do not leave matters there.

36. Secondly, insofar as the Defendants sought to advance a case of implied actual authority, we are unable to accept that the IMLA Letter furnishes a foundation for them to do so, even arguably. In our judgment, Noor Bank, though not in a fiduciary relationship with the Defendants (IMLA Letter, cl. 11.3(c)(iv)), was plainly engaged by the Defendants to use its best endeavours to put together a syndicated loan. As such and as might ordinarily be expected, Noor Bank was acting as the borrowers’ (i.e., the Defendants’) rather than the lenders’ (i.e., the Claimants’) agent: McKnight & Zakrzewski on the Law of Loan Agreements and Syndicated Lending, at paras. 3.42 and 3.106. Though not immutable that the arranging bank acts for the borrowers rather than lenders, some realistic factual basis must be laid for suggesting otherwise; but none such is capable of being inferred here from the mere fact of Noor Bank acting as arranging bank under the IMLA Letter. That the IMLA Letter permitted Noor Bank to act in more than one capacity (cl. 14.2) does not assist in establishing that it did so.

37. To the extent that Noor Bank, as was common ground, made the withdrawal threat and might thus be described as negotiating against the Defendants, we cannot agree that this feature provides any realistic support for the Defendants’ contention that Noor Bank did so as agent for the other Claimants. We agree with Mr Montagu-Smith KC’s submission that the Defendants’ argument was in this respect logically incoherent – postulating that Noor Bank was acting as agent for the other banks in demanding extra security for itself. In advancing the withdrawal threat, it seems clear to us that Noor Bank was acting for itself rather than for the Defendants; but this conclusion falls well short of giving the Defendants a realistic case that Noor Bank was acting as agent for the other Claimants.

38. We have not overlooked the Defendants’ reliance on passages from Bowstead & Reynolds on Agency (22nd ed.), at paras. 2-028 – 2-031, to support their case of a relationship of agency between Noor Bank and the other Claimants by way of an implied conferral of authority. Thus, at para. 2-028, Bowstead & Reynolds say this:

Para. 2-031 goes on to say the following:

39. In our view, these passages from Bowstead & Reynolds do not advance the Defendants’ case at all. The reason is the complete absence of a factual basis for asserting that the other Claimants have acted or spoken in such a way that Noor Bank would understand itself as having authority from those Claimants to act on their behalf. Noor Bank’s “spearheading negotiations” (as the Defendants put it) with the other Claimants in its endeavour to put together a syndicated loan, was no more than an incident of Noor Bank’s role as an arranging bank and provides no launchpad for an implication or inference of agency on behalf of the other Claimants.

40. Furthermore, there is a straightforward, basic but insuperable factual difficulty with the Defendants’ case in this regard. At the time of the 16 December meeting, there was, as yet, no syndicate. We agree with the Claimants’ submission that as the syndicate had not yet been constituted, for Noor Bank to be the agent of the (other) Claimants, a bilateral authorisation from each of them would have been necessary. There is no evidence whatever of any such bilateral authorisations.

41. We accordingly agree with the Judge’s overall conclusions on the IMLA Letter, at [18] – [19] of the Judgment and reject the Defendants’ contention that they were almost “perverse”. We furthermore agree with the Judge’s dismissal of any suggestion of ratification (at [20] – [21] of the Judgment) and vicarious liability (at [22]), the latter in our view adding nothing to the arguments on agency; no more need be said on these matters.

42. Thirdly, we are not in any way deflected from these conclusions by the Defendants’ criticism of the Judge with regard to the “security agent” issue, relating to the designation of Noor Bank as “security agent” in cl. 1.1(f) of the IMLA Letter. In our view, this criticism goes nowhere. We explain why, as briefly as we can.

43. In the Judgment (at [19]), the Judge said this:

As the Claimants submitted, the fact that the syndicate, when constituted, might appoint Noor Bank as security agent in the future, would not give it authority to negotiate the security package pre-syndication. Moreover, the role of security agent should not be misunderstood: it is no more than to hold and exercise the syndicate’s collective security rights post-syndication; it is not to negotiate the syndication package pre-syndication. Still further, as the Judge (rightly) observed, Noor never became the security agent as that role was, in the event, taken by the First Claimant. The single factual error made by the Judge – which was common ground before us – was that the appointment of the First Claimant could be seen in the draft Facility documents circulated before the 16 December meeting. Such was not the case. But the point is irrelevant. Even the anticipation that Noor Bank would be the security agent in the future, does not at all assist the Defendants in positing an agency relationship between the other Claimants and Noor Bank. We say no more of this point.

44. Fourthly, the Judge had well in mind the need to consider what evidence might be available at Trial before giving Immediate Judgment: see, for example, his specific reference to this consideration at [93] of the Judgment. The Defendants submit that he erred in this regard, relying in particular on correspondence from Noor Bank’s internal counsel as to the OBN security. Assuming for present purposes in the Defendants’ favour that privilege in such correspondence had been waived by the Claimants, it goes to the consequences of Noor Bank enforcing its pledge over shares pursuant to the OBN security and the question of whether any such recoveries would be for Noor Bank alone or would be held for the benefit pro rata of the syndicate lenders as a whole. The suggestion is then advanced that further correspondence involving Noor Bank’s internal counsel would be “highly relevant” to whether Noor Bank in seeking the OBN security was acting solely on its own behalf, or for the benefit of the Claimants as a whole. We are not persuaded. To begin with, it is a leap too far and altogether speculative to relate the views or thoughts of Noor Bank’s internal counsel to the conferring of authority by the other Claimants on Noor Bank to act on their behalf. Secondly, a feature of Noor Bank’s case – exemplified in the Chairman’s witness statement (at para. 54, relating to a December 2019 meeting) - was that the other Claimants were unaware of the OBN security until well after the 16 December meeting and indeed the entry into the Syndicate Facility Agreements.

45. Against this background, this argument of the Defendants is, with respect, no more than an assertion that “something might turn up”. That is not a sufficient basis for refusing Immediate Judgment. Importantly, Easyair, at vi), which is in any event not to be read as a statute, speaks of “reasonable grounds” for believing that a fuller investigation would add to or alter the evidence available at Trial and so warrant declining Immediate Judgment. For the reasons already set out, such reasonable grounds are absent here.

46. (E) Ramifications: The ramifications of our conclusion on Ground I: Agency, namely, that Noor Bank was not acting as agent for the other Claimants at the 16 December meeting, are both considerable and common ground:

47. The decision on Ground I: Agency does not, however, affect the Defendants’ liberty to pursue:

48. We proceed next to consider Grounds II and following of the Appeal but, in the light of our conclusion on Ground I, we will deal more briefly with some of them than might otherwise have been the case.

Ground II: Affirmation

49. (A) Introduction: In practical terms, our decision on Ground I renders the Issue of Affirmation academic as the Claimants, who made the running on this Issue, do not need it. We deal with it simply for completeness.

50. The Issue arises in this way. If, contrary to our views, there were grounds for rescission or termination of the Facility by the Defendants, the Claimants submitted that any such defences stood no real prospect of success because the Defendants had affirmed its validity and did not question it prior to the Defence and Counterclaim. The Judge (at [30] – [42] of the Judgment) agreed with the Claimants.

51. At [31], the Judge held that any submission that the Defendants had rescinded or terminated the Facility prior to service of the Defence and Counterclaim was “unsustainable”. However, any attempt to rescind or terminate in the Defence and Counterclaim came much too late because (at [32]) “…the notice of acceleration was given on 3 February 2020 with a crystallisation of the right to repayment of the sums loaned under the Facility at that point.” Moreover, on a review of the evidence (at [33] – [42]), it could be seen that “…the Defendants positively affirmed the existence of the Syndicated Facility Agreements in the full knowledge that no working capital had ever been provided, by making payments thereunder, entering into fresh Murabaha Agreements and expressing gratitude for the patience extended by the Claimants in relation to the Facility.” Strikingly, far from complaining about any failure to provide working capital in accordance with any prior statement, representation, collateral agreement or promise, the First Defendant (on 27 March 2019) in a communication to the First Claimant noted by the Judge (at [34]), said that “…we overlooked the working capital requirements of the projects that are assigned to the Syndicate…”.

52. At [41], the Judge addressed the Defendants’ contention that these events did not amount to affirmation because there was a need for an electing party to know of his legal right to choose between the alternatives open to him. The Judge dealt, trenchantly, with this submission as follows:

53. In this regard, in the Refusal Judgment, the Judge observed (at [8]) that, the Defendants’ drawdowns and repayments after the “self-evident” failure to advance working capital, were unequivocal affirmatory acts. No notice of rescission had been given prior to the events of default and the acceleration of the loan. As to the question of knowledge, the Judge said this ( ibid):

54. (B) The rival cases: In broad outline, the Defendants underlined that there was no question of express affirmation, so that any affirmation of the Syndicate Facility Agreements had to be implied from the circumstances. Mr Fraser KC emphasised the observations in the authorities, cautioning against the summary determination of issues of affirmation. Specifically, the Judge had erred in law in conducting a mini-trial in circumstances where the issue of affirmation was sensitive, unclear and required the exploration of evidence at trial. Further, the Judge erred in fact in holding that the Chairman’s witness statement did not state that he was unaware of his right to rescind under English law. Still further, the Judge had erred in law in holding that the state of knowledge of the Chairman was not by itself capable of providing a real prospect of success on the issue of affirmation.

55. In response, the Claimants submitted that the Defendants had not so much quibbled with the affirmative nature of the acts (the drawdowns and repayments) but had essentially focused on the lack of knowledge of the right to rescind. In this regard, the Defendants’ position was not evidenced; the only evidence before the Judge was that contained in the Chairman’s witness statement. The Defendants’ case depended on para. 4 of the Chairman’s witness statement which was, as the Judge pointed out, inadequate to bear the load sought to be placed on it. So far as the Defendants as a Group were concerned, Mr Montagu-Smith KC queried whether there was indeed any real prospect of succeeding at trial on the basis that they lacked knowledge of their right to rescind or terminate. There was, moreover, a logical difficulty: by the time of the Chairman’s witness statement, the Defendants had purported to rescind the Facility, whatever their protestations about their lack of knowledge of their right to do so. As to authority, the cases did not preclude summary judgment in respect of an issue of affirmation; all turned on the facts. The upshot was that even if the Defendants had a right to rescind, they had affirmed the Facility long before they purported to terminate. The Judge had not conducted a mini-trial; nor had he otherwise erred.

56. (C) Discussion and conclusions: In addressing this Issue, we have regard to a variety of conflicting considerations pointing in different directions.

57. First, we keep well in mind the authorities which caution, at least generally, against the summary determination of issues of affirmation. The position in English law appears from Leeds City Council v Barclays Bank [2021] EWHC 363 (Comm); [2021] QB 1027, where Cockerill J said this (at [164] – [170]):

This Court expressed not dissimilar words of caution in Hexagon v DIFC [2020] DIFC CA 003 (10 January 2021), at [14] – [15]. Additionally, it may be noted that there was no appeal on the question of affirmation when Ukraine v Law Debenture Trust [2023] UKSC 11; [2023] 2 WLR 699 was recently before the UK Supreme Court: see, at [14].

58. Secondly, we are concerned that witness statements should not be treated as statutes or construed as such - a course which can only result in witness statements becoming ever more the product of legal drafting and still more remote from the words or knowledge of the witness himself. A generous construction of witness statements should instead be adopted, albeit that even then there will be boundaries beyond which the witness statement cannot be relied upon for the proposition that is sought to be advanced.

59. Here, there was acute focus on para. 4 of the Chairman’s Witness Statement, dated 11 April 2022 (the “Chairman’s Witness Statement”) which said this:

The question is whether, even generously construed, this passage falls short of the evidence required by the Defendants to have a real prospect of success on the affirmation Issue.

60. Thirdly, the Judge powerfully expressed his scepticism as to the Defendants’ (and the Chairman’s) lack of knowledge of a right to rescind. We find it impossible not to share that scepticism.

61. Even so and weighing all these considerations, we do entertain misgivings as to whether this is one of those rare cases where summary determination of the Issue of Affirmation was appropriate. We do not say that the Judge was wrong. But, as the Issue is academic (in the light of our decision on Ground I), so that a decision on this Issue is unnecessary, we prefer not to express any final view.

Ground III: Duress

62. We take this Ground of Appeal very shortly. Even had our decision on Ground I did not precluded the Defendants’ case on duress, we would (with respect) have regarded it as doomed to fail, essentially for the reasons given by the Judge (at [43] - [46] of the Judgment): namely, (1) construction of the IMLA Letter; (2) a realistically insuperable logical fallacy in the case.

63. (1) Construction: To establish a case of duress (putting burden of proof considerations to one side for present purposes), the Defendants needed to show an illegitimate unlawful threat. The only candidate here was the withdrawal threat. However, as observed by the Judge (at [44]), a threat not to enter into contract “…is lawful because there can be no obligation to contract.” Against this background, the Defendants’ pleaded case, helpfully summarised by the Judge ( ibid) was:

64. As to the suggested duty owed by Noor Bank to the other Claimants, the Judge held, briskly, that there could be no duties owed to the Syndicate, which was not yet in existence and that Noor Bank was engaged by the BBIH Group on the terms of the IMLA Letter.

65. As to Noor Bank’s obligations to the Defendants:

That Noor Bank’s participation was required to make the syndicate work, was neither here nor there (at [45]). As the Judge put it ( ibid), “Noor was entitled to insist on a bilateral security provision as a condition of lending which meant that the threat not to participate without such security was lawful.”

66. For completeness:

67. This is a question of the construction of the IMLA Letter, in context. But the relevant context for this conclusion was, realistically, not going to alter. It follows that if the Defendants are wrong on this question, there is no prospect, let alone any real prospect, of their position improving at Trial. The Judge concluded that the Defendants were wrong, and we agree with the Judge. Of itself this point is fatal to the Defendants’ duress case but matters to do not end there.

68. (2) Logical flaw: On the Chairman’s evidence, Noor Bank’s position was that it would derail the syndication if not given the OBN security in place of the Mojumaat security, which would be shared with the other Claimants and therefore result in Noor Bank’s exposure being too high. Furthermore, on the Chairman’s evidence, the working capital statement was predicated on the provision of the OBN security. Accordingly, the Chairman said that he had no choice but to accept Noor Bank’s terms and agree to the provision of the OBN security. However, as the Judge immediately observed (at [43]):

He continued (at [46]):

69. Again, we agree with the Judge. It follows that this Ground of Appeal goes nowhere and has no real prospect of success.

70. We have not overlooked the Defendants’ argument based on Marme v Natwest [2019] EWHC 366 (Comm) but agree with the Judge, for the reasons he gave (at [46]), that it is distinguishable and plainly so.

Ground IV: Misrepresentation

71. This is a further Ground of Appeal replete with difficulty, even had we reached a different conclusion on Ground I. It turns on the working capital statement, allegedly made by (unnamed) representatives of Noor Bank at the 16 December meeting.

72. The foundation of the Defendants’ case appears from paras. 42-43 of the Chairman’s Witness Statement. After recounting that Noor Bank was seeking to reduce its exposure and was unwilling to proceed with the syndication in the proposed amount of AED 500 million, he said this:

Then, crucially:

73. As noted by the Judge (at [48] of the Judgment), the working capital statement was pleaded by the Defendants as a misrepresentation. The Judge was unimpressed.

74. The statement, it was alleged by the Defendants, carried with it an implied representation that Noor Bank had reasonable grounds for making it. The Judge was unable to accept that there was here any representation; the working capital statement was, instead ( ibid), a “promise” to provide a minimum of AED 100 million in working capital.

75. Furthermore (at [49]), there was no room for a case in negligent misrepresentation on the alleged facts. The Defendants accepted:

76. Still further (at [53]), had any statement been made capable of constituting a representation, the absence of any specificity as to the rate of interest, the period of the loan, the exact amount, the time when it would be provided, the terms of repayment and security, insofar as security was not agreed in relation to the OBN assets, meant that the statement “…could not be one upon which the recipient was entitled to rely, because of the need for agreement on the details.” As to “actual reliance”, even on the Defendants’ case, such reliance (at [55]) “…consisted of providing the OBN security and not the entry into the Syndicated Facility Agreements.”

77. The Defendants urged on us that the Judge was wrong. That the working capital statement was a promise, was not fatal to the Defendants’ case on misrepresentation. There was a real prospect of the Defendants showing that a representation as to reasonable grounds was implied in the working capital statement. It was incorrect to say that the only misrepresentation there could be, was a fraudulent misrepresentation; there may have been a disconnect between the syndication team at the 16 December meeting and the credit committee, leading to the genuine (albeit erroneous) belief that credit committee approval for new working capital lines could be obtained. Finally, in his observations that the Defendants could not reasonably have relied on the representation alleged, the Judge was dealing with the promise of working capital rather than the implied representation that Noor Bank had reasonable grounds for making the working capital statement.

78. We disagree.

79. Accordingly, Ground IV fails - and would have failed, even had we come to a different conclusion on Ground I.

Ground V: Collateral Contract

80. In essence, Ground V involves an alternative way of looking at the working capital statement, namely a collateral contract to advance a minimum of AED 100 million in working capital by March 2019 at the latest, if the Defendants provided the OBN security. In the light of our decision on Ground I, any such contract could only be with Noor Bank, not the other Claimants.

81. The Judge rejected the Defendants’ case on this Issue on the basis that the bare working capital statement was too uncertain to constitute a binding and enforceable contract: Judgment, at [51] – [53]. Moreover (at [54]), the parties’ subsequent conduct told against the conclusion of a binding collateral contract at the 16 December meeting; thereafter, the Judge observed, the parties exchanged draft agreements and continued to negotiate, “…including draft side letters which made no mention of this point”.

82. The nub of the Defendants’ case before us was that the collateral contract had been part performed by them; within days of the 16 December meeting, the Defendants had provided the OBN security to Noor Bank. On the Defendants’ case, Noor Bank then reneged on their part of the bargain and did not provide the working capital in return. Nothing, in the event, turns on whether part performance had been argued before the Judge and no more need be said of that. As expressed in the Defendants’ skeleton argument, “Where a contract has been part performed but its terms not formally recorded, the Courts are more willing to find that there is certainty of contractual terms.” The Judge had failed to take account of this consideration and had in any event erred in law in holding that the working capital statement was too uncertain to be binding as a collateral contract. The sum, Mr Fraser KC contended (at T1/117) was agreed at AED 100 million; a timetable was at the end of March; there was no need for security, as OBN was the security; the period of loan would be gleaned from the main agreements.

83. With respect to Mr Fraser KC’s attractive advocacy, the Defendants’ case on collateral contract stands no real prospect of success.

84. Put shortly, even assuming in the Defendants’ favour that there was part performance and however sympathetically part performance is considered, in our judgment the working capital statement (if made) remains incurably uncertain.

85. Accordingly, we agree with the conclusion reached by the Judge. Ground V of the Appeal fails.

Ground VI: The Facts of the 16 December Meeting

86. (A) Context: At first blush, Ground VI appeared to loom large in the Appeal. However, it is by now apparent that Ground VI is of no practical importance in the determination of the Appeal. We confine ourselves to summary observations.

87. Our conclusions on Ground I mean that Ground VI could only bite, if at all, on the position of Noor, not on that of the other Claimants. But matters do not end there. Ground VI involves an inquiry whether the Claimants have demonstrated there is no real prospect that the working capital statement was made. However, should the Claimants fail to do so, the point still does not go anywhere. The reason is that our consideration of Ground IV: Misrepresentation and Ground V: Collateral Contract proceeded, in essence, on the assumption (in the Defendants’ favour) that the working capital statement was made. Even on that footing, no defences emerged with a realistic prospect of success. Ground VI is accordingly academic. For Ground VI to have traction, the Defendants needed, at the least, to have a defence with a real prospect of success on either Ground IV or Ground V; for the reasons already given, they do not.

88. (B) The Judgment: While acknowledging “some hesitation” (at [56]), the Judge took a firm view (at [56] – [74]), encapsulated in the following passage (at [56]):

89. The Judge underlined (at [61] – [63]) that prior to the 16 December meeting, as evidenced by the Term Sheet and the contemporaneous exchanges, there had been no agreement to include working capital in the Facility; such debate as there was related to the Defendants’ liberty to raise working capital, bilaterally, outside of the Facility. As to the meeting itself, the Judge found the evidence of Mr Ali, a representative of Noor Bank, not “implausible” (at [56] and [64]); it went to Noor Bank seeking to reduce its exposure and clearly stated that there was no discussion of working capital at that meeting. The Judge further alluded to specific weaknesses in the Chairman’s evidence (at [65]), which need not be recounted here. Tellingly, in the Judge’s view, the contemporaneous exchanges subsequent to the 16 December meeting (at [66] et seq) were consistent with Mr Ali’s evidence, made no mention of any agreement to provide working capital and were inconsistent with the notion of any such agreement.

90. The Judge expressed his conclusions as follows (at [71] – [73]):

91. (C) Discussion and Conclusions: We see much force in the Judge’s reasoning and conclusions. As is clear from Easyair (at [15 iv)]), the Judge was in no way bound to take the Chairman’s evidence at face value, “…particularly if contradicted by contemporaneous documents”.

92. Additionally, in our judgment, the Judge’s view is powerfully reinforced by certain documents emanating from the Defendants in March 2019. Thus, on 24 March 2019, Mr Ejaz (an employee of the Defendants) emailed, inter alia, Mr Vig (the Defendants’ CFO), saying “…we overlooked the working capital requirements…” of projects assigned to the Facility. Mr Vig’s response on the same day (Bundle D/1454) is instructive:

This internal difference of opinion matters not. Whether the working capital requirement was overlooked (see too a statement to like effect on 27 March, at D/1026, noted by the Judge at [34] and referred to above), or whether it was intended to be dealt with bilaterally outside of the Facility, it is plainly inconsistent with working capital being discussed, still less agreed, at the 16 December meeting. Nor is such inconsistency mitigated by the Chairman’s assertion that he was accustomed to concluding deals with a handshake; such a modus operandi would not serve to explain the views expressed in the subsequent documents to which we have referred.

93. Even so, it is a strong thing to resolve a conflict of evidence between the Chairman (described by Mr Fraser KC as a distinguished businessman) and Mr Ali (of Noor Bank) in the manner the Judge did, without a trial. The Judge himself acknowledged some hesitation (at [56]) in coming to his conclusion. As with Ground II: Affirmation (see above), we do not say that the Judge was wrong. However, for the reasons given, a decision on Ground VI is unnecessary and we prefer to express no final conclusion on it.

Ground VII: The Shariah Law Defence

94. (A) Introduction: Ground VII relates only to the provision of Islamic Finance and, therefore, to the claims advanced by Noor Bank and the Seventh and Ninth Claimants. It does not relate to the “conventional” lending by the First to Sixth Claimants. In argument (T2/86), the Claimants submitted that this Ground could logically only go to the profit element of the Islamic Finance (the equivalent of interest in conventional lending), amounting to some AED 130 million; the Claimants may well be right, though on the view we take of this Ground it ultimately does not matter.

95. Various provisions of the MMA may be noted at once. Recitals C and D provided as follows:

Shariah is defined in cl. 1.1.2 of the MMA in these terms:

Cl. 4 of the MMA is headed “Murabaha Contract Limitations”. Insofar as relevant it provides:

Cl. 13 of the MMA is a further “waiver provision”, headed “Waiver of defences”. It is in these terms:

Cl. 14 of the MMA dealt with the governing law as follows:

96. For completeness, as the Judge noted (at [85]), the CTA contained a yet further provision, stipulating (at cl. 17.27.2), that each of the Second to Ninth Defendants, represented and warranted that “…it does not have any objections, nor will it raise any objections, as to matters of Shari’ah compliance in respect of or otherwise in relation to any of the provisions of the Islamic Finance Documents.”

97. The Defendants’ case before the Judge, maintained (as we understood it) before us, was that the MMA should be construed as incorporating the Shariah Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (the “AAOIFI Standards”), that the MMA did not comply with those Standards and was therefore a nullity. Furthermore, on the point that the MMA was not compliant with the AAOIFI standards and that issues of Shariah were not as straightforward as held by the Judge, this Court should permit the Defendants to admit the evidence of Mr Ian Edge (the “Edge Report”), as expert evidence. Further still, without any expert evidence before him, the Judge had erred in making findings on the issue of Shariah, contrary to the Registrar’s Direction No. 3 of 2017 (the “Registrar’s Direction”). Any contractual waivers or estoppels with regard to compliance with the AAOIFI Standards were contrary to public policy and of no effect.

98. The arguments before us ranged widely but, as it seems to us, this Ground of Appeal can be straightforwardly dealt with under the following headings:

99. (1) The Registrar’s Direction: The Registrar’s Direction addressed Expert Evidence of Shariah Law in the DIFC Courts and provided as follows:

Although set out in terms of apparent general application, its more limited context is made apparent earlier in the body of the Direction. Under the Trust Law, Law No. 11 of 2005 (the “DIFC Trust Law”), the DIFC Courts may be asked to give “…their opinion, advice and direction about any matter concerning a trust…” and may make orders concerning, inter alia, the execution or administration of a trust and the conduct of the trustees.

100. The Judge (at [76] – [79]) was not persuaded by the Defendants’ contention that, by reason of the Registrar’s Direction, the Court could not reach any decision about Sharia Law without the benefit of expert evidence. There was no such bar.

101. As to the status of the Registrar’s Direction, the Judge said this (at [78]):

102. We entirely agree with the Judge. At most a Registrar’s Direction affords guidance; the Registrar’s Direction (here) does not operate as a legal or procedural bar and any misconceptions in this regard should be dispelled by this Judgment. Further and in any event, the scope of the Registrar’s Direction is limited to the area of trusts and was inapplicable here. These conclusions as to the status and sphere of application of the Registrar’s Direction are sufficient to dispose of the Defendants’ objection to the Judge proceeding in the absence of expert evidence.

103. If once the Registrar’s Direction is put to one side, then there is a wider basis on which the Judge’s decision rested and upon which it should be upheld. As the Judge observed (at [77]):

This decision (at [78]) was not superseded by the Registrar’s Direction.

104. Again, we agree. Moreover, our views are fortified by the more recent decision of this Court in Nest v Deloitte DIFC CA 014/2021, at [69] and following, dealing with foreign law more generally (not simply UAE law, as in Fidel v Felecia) and alluding (at [83]) to the difficulty of attempts to shoehorn foreign law questions into clearcut categories of fact or law. The approach of this Court was to be pragmatic (at [88]) with the intensity and nature of the review of the first instance Judge’s approach varying with the facts and circumstances. Applying this approach, we see no basis whatever for interfering with the decision of the Judge to proceed without expert evidence, notwithstanding the Registrar’s Direction.

105. Equally and as will become apparent, we see no reason to doubt the correctness of the Judge’s further observation (at [79]), that no difficult issues of Shariah law arise requiring expert evidence for their resolution.

106. (2) The admissibility of the Edge Report: The Defendants apply to adduce the Edge Report as expert evidence. Mr Fraser KC realistically and fairly accepts that the Defendants cannot satisfy the first of the Ladd v Marshall [1954] 1 WLR 1489 conditions, namely that the Edge Report could have been adduced with reasonable diligence at first instance. It is said, however, that this was not done because the Defendants relied on the Registrar’s Direction. In any event, the Defendants submit that the Edge Report satisfies the second and third Ladd v Marshall conditions, at 1491: that it would probably have an important influence on the result of the case (though it does not need to be decisive) and must be apparently credible.

107. Even approaching the Ladd v Marshall conditions generously and not slavishly, we have no hesitation in refusing this application. To begin with, we are not persuaded that the Registrar’s Direction was a good reason for not producing the Edge Report. The Defendants were facing an application for Immediate Judgment. It was up to them to deploy their full case – rather than taking a chance that the Judge would be deterred by the Registrar’s Direction from dealing with the Issue of Sharia Law.

108. More than that, with great respect, our reservations as to the Edge Report are such that we are unable to accept that it would have an important (or any) influence on the case or that it is apparently credible. In a nutshell, Mr Edge has so strayed beyond the proper bounds of expert evidence as to irretrievably undermine the credibility of his Report. Thus, in para. 11 of the Report, Mr Edge offered his opinion on the correctness of the Judge’s interpretation of the Registrar’s Direction, a matter manifestly outside Mr Edge’s remit on Sharia Law. So too, in para. 12 of the Report, Mr Edge purported to deal with DIFC conflict of laws provisions and the interpretation of the MMA, a contract governed by English law. It is unnecessary to belabour the point. We decline to admit Mr Edge’s Report into evidence.

109. (3) Incorporation of the AAOIFI Standards: The question whether the AAOIFI Standards were incorporated into the MMA is, at the very least, of obvious importance to the Defendants’ case on this Issue. If not incorporated, subject only to the question of public policy or illegality (see below), that is an end of this Issue – as any breach of those Standards would be irrelevant and any question of nullity of the MMA would not arise.

110. The Judge carefully considered the Defendants’ submissions as to incorporation and emphatically rejected them. Recitals C and D of the MMA (set out above) did not incorporate the AAOIFI Standards into the (Islamic) loan documents; they simply “recite the agreed position”: at [83]. Recital C recited what was to be done under the MMA itself or by way of individual Murabaha contracts which are to be in accordance with the Shariah. Recital D recorded that the parties were satisfied that there was compliance with the Shariah “…and each is therefore estopped by that recital from contending otherwise”. Cl. 13 of the MMA and cl. 17.27.2 (set out above) were to like effect. As a matter of English law, which governed both the MMA and CTA, such waivers were fully effective: at [86].

111. Having regard to the definition of Shariah in the MMA (set out above), there was no reference to the AAOIFI Standards, so that it could not be said they were incorporated in it: at [87]. The Judge then (ibid) made the following observation:

Accordingly (at [88]), as a matter of English law, the defences based on the alleged breaches of the Shariah could not run.

112. The essence of Mr Fraser KC ’s submissions before us on the question of incorporation was that where a contract states that it is governed by or operates in accordance with a set of regulatory rules, this may, on a true construction, constitute an incorporation of such regulatory rules. In this regard, he relied on Target Rich v Forex [2020] EWHC 1544 (Comm), esp., at [94]. Here, it was contended, as the Defendants were operating as regulated financial institutions in the (onshore) UAE, they were bound from 1 September 2018 to comply with the AAOIFI Standards when providing Islamic finance. At the least, the question of incorporation should be dealt with at trial.

113. We are not at all persuaded.

114. First, the governing law of the MMA is English law (as set out above). The question of incorporation is therefore governed by English law.

115. Secondly, there are no words of incorporation in the MMA. The Recitals (and cl. 13) do not contain any wording of incorporation.

116. Thirdly, even if we entertained doubts about the absence of any wording of incorporation (which we do not), there is nothing to suggest that the AAOIFI Standards were incorporated. It is noteworthy that the definition of Shariah in the MMA (see above) makes no mention of the AAOIFI Standards.

117. Fourthly, even assuming in the Defendants’ favour that the regulatory position is as submitted by Mr Fraser KC, the decision in Target Rich v Forex (supra) does not advance the Defendants’ case. At [95], in a passage with which we agree, the learned Deputy Judge said this:

118. Fifthly, for the reason given by the Judge (at [87] and set out above), the suggested incorporation would be strikingly uncommercial. The Court is asked to strain to incorporate AAOIFI Standards into the MMA, on the hypothesis that their incorporation would result in the nullity of the Islamic Facility. In our judgment, that is unreal.

119. Sixthly, it follows, if the AAOIFI Standards were not incorporated in the MMA, that there is an end to the Defendants’ suggested Shariah law defence – any breach of those Standards would be irrelevant – subject only to the public policy and illegality contentions (addressed below). Equally, again subject to any questions of public policy and illegality, as a matter of English law, the various waiver and estoppel provisions (set out above) are to be given full effect. The Defendants are to be held to their agreement, in the MMA and CTA, that the Islamic Finance agreements comply with the Shariah and that they will not raise any objections as to matters of Shariah compliance.

120. (4) Breach, public policy and illegality: Reduced to its essentials, the Defendants’ case under this heading required the following conclusions: the MMA breached para. 3/2 of Standard 30 of the AAOIFI Standards; in consequence and regardless of incorporation of the AAOIFI Standards into the MMA, the Islamic Finance component of the Facility was unlawful and void; moreover, it was contrary to public policy and/or unlawful to enforce the various waiver provisions in the MMA and CTA. This was, accordingly, a free-standing case of illegality. A variety of other arguments were pursued by both parties, but it is unnecessary to take time over them.

121. With respect to Mr Fraser KC’s always attractive advocacy, this case contains several leaps too far and stands no real prospect of disclosing a defence. Our reasons follow.

122. Breach: The essential foundation for this part of the Defendants’ case is that the MMA was in breach of the AAOIFI Standards. If there is no real prospect of demonstrating such a breach, then no public policy or illegality questions arise.

123. Para. 3/2 of Standard 30 of the AAOIFI Standards is in these terms:

124. The Defendants contended that, contrary to this Standard, the Islamic Facility to be advanced under the MMA was to be used for the benefit of conventional banks to discharge liabilities under interest-based loans. The Judge (at [92.2]) rejected this contention:

125. For our part, we find the Judge’s explanation of Standard 30 entirely persuasive. The Defendants’ case on appeal, hinges, as we understood it, on the Edge Report. As we have declined to admit the Edge Report into evidence, that is (again) the end of the matter.

126. However, even if, de bene esse, we had regard to the Edge Report, the Defendants’ case is not advanced. Para. 15 of the Edge Report deals with this point. It contains nothing but the assertion that the Judge was in error and reliance upon a “diminishing Murabaha”, which this MMA was not. The Edge Report thus has no persuasive value and does not begin to disclose a defence with a real prospect of success.

127. Accordingly, for this reason too – namely, that there is no arguable breach of the AAOIFI Standards – we are persuaded that the Defendants’ Shariah law defence is doomed to fail and that the public policy and illegality arguments simply do not get off the ground.

128. Public policy and illegality: Though unnecessary to do so in the light of our conclusions thus far, in deference to the arguments advanced, we very briefly express our views on public policy and illegality.

129. At the outset, we underline that the MMA is governed by English Law – not by UAE law or Shariah law. In consequence, the hurdle faced by the Defendants (even at the Immediate Judgment stage) is insuperable. The relevant test was set out by Phillips J (as he then was) in Lemenda Trading v African Middle East Petroleum Co. Ltd. [1988] QB 448, at p.461:

130. With respect, a financing facility which does not comply with the AAOIFI Standards, important as those standards are, is not contrary to any head of English public policy, even assuming that it is contrary to the public policy of the UAE. It follows that this argument too does not get off the ground, even arguably. Further, no reasoned case has been advanced before us as to why any breach of public policy (if such breach there was) would arguably result in the nullity of the Islamic Financing component of the Facility, or any part of it.

131. The Defendants’ case on illegality fares no better. The test here is as set out in Dicey, Morris & Collins on the Conflict of Laws (15th ed.), at para. 32-191:

With respect to the Defendants’ contentions, that is not this case, even arguably. In the upshot, Mr Fraser KC was left clutching at straws, contending that there was here “unconscious illegality rather than deliberate”. This facet of the argument too is doomed. There is no reason why the waiver (or estoppel) clauses in the MMA should not be enforced and they are fatal to the suggested defence. So too, there is no case with any real prospect of success that the MMA infringed cl. 4(e) thereof by reason of illegality. Further elaboration is unnecessary.

Conclusion

132. The Judge approached the application for Immediate Judgment robustly. Some Judges might have been deterred from seeing it through; the Judge was not. In the event, we have concluded that the Judge’s decision on Grounds I, III, IV, V and VII are well-founded and should be upheld. Accordingly, the Appeal is dismissed. As already explained, on Grounds II and VI – the most factually sensitive – it is unnecessary to reach a conclusion and we do not do so.

133. Inevitably, the Claimants should be awarded their costs of the Appeal on a standard basis. These should be determined by the Registrar, if not agreed.