Krishna vs Abu Dhabi Global Market Registration Authority

This case involved a statutory appeal brought by Mr. Hari Krishna against the Abu Dhabi Global Market Registration Authority (RA) regarding a monetary penalty for non-compliance with beneficial ownership regulations.

TLDR:

• Mr. Krishna appealed against a USD 5,000 monetary penalty issued by the RA.
• The court had to determine whether the RA's decision was wrong in law or exceeded its jurisdiction.
• The court dismissed the appeal, upholding the RA's decision.

The claimant, Mr. Hari Krishna, representing a company licensed by the Abu Dhabi Global Market (ADGM), appealed against a decision by the RA to issue a monetary penalty notice (MPN) for failing to comply with sections 2 and 3 of the Beneficial Ownership and Control Regulations 2018 (BOCR). The RA's decision was based on the company's failure to maintain accurate and up-to-date records of its beneficial owners.

The RA had conducted an assessment of the company's compliance with ADGM's commercial legislation, including the BOCR. The company submitted a record of beneficial ownership that was found to be incomplete and inaccurate. The RA issued an MPN requiring the company to pay a USD 5,000 fine.

Three witnesses provided statements and were cross-examined during the hearing: Mr. Ahmed Elnaggar, the company's founder, and two RA employees, Mr. Collin Wu and Ms. Ruqaya Salman. The court found that the primary factual events were not in dispute, and there were no allegations of bad faith or improper commercial activity.

The court examined the statutory framework, including sections 2 and 3 of the BOCR, which require ADGM-licensed entities to maintain accurate records of beneficial owners. The RA argued that the company's record was incomplete and did not reflect all beneficial owners. The company contended that compliance with sections 4 and 5 of the BOCR, which involve submitting records to the Registrar, should suffice for compliance with sections 2 and 3.

The court rejected the company's arguments, finding that the RA was entitled to consider the entirety of the evidence during the assessment period. The court held that the RA had acted within its jurisdiction and had not committed any procedural errors. The RA had provided ample opportunities for the company to clarify discrepancies, but the company failed to do so.

The court also dismissed the company's argument that a true and correct record of beneficial owners had been filed on the RA's online portal. The court found that the RA was justified in issuing the MPN based on the evidence provided during the assessment period.

Ultimately, the court concluded that the RA had acted lawfully and reasonably in issuing the MPN. The appeal was dismissed, and the court ordered that the costs of the proceedings be borne by the defendant.

Legal representatives: Mr. Hari Krishna of Nimble Legal for the claimant, Mr. Patrick Dillon-Malone SC of Clyde & Co LLP for the defendant.

Judicial Panel: Justice William Stone SBS KC

Case Citation Reference: [2023] ADGMCFI 0019