Union Properties PJSC vs Khalifa Hasan Ali Saleh Alhammadi & Others

This case involved Union Properties PJSC and UPP Capital Investment Co. LLC seeking to extend freezing and proprietary injunctions against multiple defendants in a high-value fraud case.

• Union Properties PJSC alleged a fraud involving AED 320,712,867.84.
• Freezing and proprietary orders were initially granted against several defendants.
• The court refused the continuation of these orders on 9 May 2023.
• The decision was influenced by a prospective settlement agreement and insufficient evidence of dissipation risk.

The claimants, Union Properties PJSC (UP) and UPP Capital Investment Co. LLC (UC), initiated proceedings on 14 November 2022 against multiple defendants, alleging a fraud that resulted in the misappropriation of AED 320,712,867.84. The claim centered on the purchase of 391,789,341 units of Participation Notes (P-Notes), with the majority of proceeds allegedly misappropriated.

On 15 November 2022, the claimants applied for freezing orders and proprietary injunctions against all defendants and six other respondents. These applications were supported by affidavits from Mr. Amer Khansaheb, Managing Director of UP. Following an ex parte hearing, freezing and proprietary injunctions were granted against nine defendants and six respondents on 25 November 2022.

The injunctions were extended multiple times, with the last extension set to expire on 9 May 2023. On 4 May 2023, the claimants filed a Continuation Application for further extension, which was heard on 9 May 2023. The court refused the application, causing the freezing and proprietary orders to lapse.

Additionally, the twelfth defendant, Mr. Ahmed Khouri, had filed a Jurisdiction Application challenging the court's jurisdiction and a Discharge Application seeking to discharge the orders against him. Both applications were heard in March 2023, and the court refused the Jurisdiction Application and partially granted the Discharge Application on 24 April 2023.

The court noted that the claimants had entered into a prospective Settlement Agreement to settle some of the claims, which was not disclosed before the judgment of 24 April 2023. The court found this omission material, given the duty of candour owed by applicants for freezing orders.

The court also found the evidence provided by the claimants about the Settlement Agreement unsatisfactory and incomplete. The court emphasized that applicants for freezing orders must provide all relevant information to the court, which the claimants failed to do.

Ultimately, the court concluded that the claimants had not demonstrated a sufficient risk of dissipation to justify the continuation of the freezing orders. The court also found that the proprietary injunctions should not be continued due to insufficient evidence of beneficial ownership or control over the P-Notes by the defendants.

Legal representatives: Mr. Patrick Dillon-Malone SC and Mr. Nils de Wolff instructed by Clyde & Co LLP for the Claimants
Mr. Andrew Mackenzie of DLA Piper Middle East LLP for the Fourth and Sixth Defendants
Mr. Benjamin Joseph instructed by Fichte & Co Legal Consultancy LLC for the Twelfth Defendant

Judicial Panel: Justice Sir Andrew Smith

Case Citation Reference: [2023] ADGMCFI 0011