Almazeedi v Penner& Anor (Cayman Islands) [2018] UKPC 3
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**Almazeedi v Penner and another (Cayman Islands) [2018] UKPC 3** concerned an appeal to the Privy Council from the Court of Appeal of the Cayman Islands in which the appellant, Mr Almazeedi, challenged the independence of a judge of the Grand Court Financial Services Division on grounds of apparent bias. The Board allowed the appeal in part, holding that the judge ought not to have sat in the proceedings from 25 January 2012 onwards without disclosing his concurrent judicial appointment in Qatar.
Mr Almazeedi was the controlling shareholder and sole director of BTU Power Company and its manager. A winding-up petition was presented in November 2011 by preference shareholders holding the entire economic interest in BTU, predominantly Qatari state-connected entities, namely the Qatar Investment Authority, the Supreme Council for Economic Affairs and Investment of Qatar, the Qatar Foundation Fund, the Qatar National Bank (50% owned by QIA), Broog Trading Company (the Emir’s investment vehicle), and Dubai Islamic Bank. The petition was supported by an affidavit from QIA’s senior legal adviser making numerous serious allegations of misconduct against Mr Almazeedi. Mr Almazeedi contested winding-up and applied to validate a proposed asset-swap transaction, which the petitioners opposed. The proceedings were allocated to Cresswell J, a retired High Court judge of England and Wales who had been appointed in 2009 as an additional judge of the Financial Services Division sitting ad hoc. In late 2011, though not sworn in until May 2012, Cresswell J had also been appointed a Supplementary Judge of the Qatar International Court and Dispute Resolution Centre (re-named from the Qatar Civil and Commercial Court).
The factual background involved a protracted dispute dating to 2006–2008 between Mr Almazeedi and a former director, Mr Hayat, concerning alleged undisclosed interests and diverted placement fees to executives of QIA and QNB. Mr Almazeedi alleged in a letter dated 17 October 2009 addressed to the board of QNB and exhibited in his sixth affidavit (sworn 25 January 2012) that the then chief executive officer of QNB, Mr Ali Al-Emadi, had personally threatened him in November 2007, demanding withdrawal of proceedings against Mr Hayat, and had supported Mr Hayat on grounds of personal ties. The QNB chairman, Mr Youssef Hussain Kamal (who was also at that time Qatar’s Minister of Finance and Mr Al-Emadi’s father-in-law), responded by a letter dated 5 November 2009 rejecting the complaints and reserving the right to take legal action against any wrongful allegations. Mr Almazeedi’s sixth affidavit also alleged that QIA’s legal adviser had threatened him during a flight to Miami in December 2011, stating that resistance to the winding-up order amounted to standing up “against the state of Qatar”.
Cresswell J refused validation of the asset-swap on 22 December 2011. On 25 January 2012, Mr Almazeedi, whilst maintaining the view that winding-up was not in BTU’s best interests, consented to the winding-up order given unanimous support from the preference shareholders. On 26 January 2012 the judge indicated that he would make the order, and on 20 February 2012 he gave a ten-page judgment recording that the relationship between the preference shareholders and Mr Almazeedi had irretrievably broken down, that the unanimous support of the relevant class justified the just and equitable basis, and that untested and denied allegations against Mr Almazeedi need not and would not be addressed. The winding-up order appointed the respondents as joint official liquidators with power to investigate and pursue potential claims against Mr Almazeedi and the Manager. On 26 June 2013 Mr Al-Emadi succeeded Mr Kamal as Qatar’s Minister of Finance and as chairman of QNB. Cresswell J continued to preside over winding-up proceedings until September 2014, including rejecting proofs of debt lodged by Mr Almazeedi and related entities, ordering indemnity costs against Mr Almazeedi from 5 November 2013, and dismissing an appeal by BTU Industries Holdings (USA) Inc for failure to provide security for costs.
In June 2014 Mr Almazeedi discovered the judge’s appointment to the Qatar court. In November 2014 he applied to set aside the order of 10 September 2014 and appealed to the Court of Appeal against all orders made by Cresswell J. The Court of Appeal (Mottley, Rix and Newman JJA) rejected the challenge as to the period up to 26 June 2013, but accepted it as to the period thereafter. The court reasoned that Mr Al-Emadi’s appointment as Minister of Finance on that date was critical, because the Minister had a role in the appointment and renewal of judges under Schedule 6 to Qatar Law No 7 of 2005 as amended and determined their terms and conditions. The court held that the combination of Mr Al-Emadi’s threats in 2007, the December 2011 statement by QIA’s legal adviser, his role in QNB and as Minister with power over judicial appointments created a situation after 26 June 2013 in which a fair-minded and informed observer would conclude that there was a real possibility of unconscious bias. The court observed, however, that it was entirely exceptional for a senior government minister with power over judicial appointments to be personally involved in litigation being conducted overseas by a judge who also sat in that minister’s country. The court also stated that although the test was not whether the judge ought to have disclosed his Qatar appointment, he clearly ought to have done so to avoid later challenges.
On appeal and cross-appeal, the respondents contended that Mr Almazeedi had no standing to challenge the judge’s independence because the petition was brought by holders of the entire economic interest in BTU and Mr Almazeedi was not a party, and because the court-supervised liquidation was a matter between the court and the liquidators. The Board rejected this. It held that it would be unreal not to regard the Qatari preference shareholders and Mr Almazeedi as at loggerheads up to the winding-up order, given the serious allegations advanced against him in support of winding-up and the indication that these would be investigated and pursued. After the order, the liquidators were in effect the petitioners’ chosen means for obtaining value and pursuing claims against Mr Almazeedi, and his proofs of debt were also in issue. The Board also rejected the contention that any flaw in the judge’s independence could be overlooked because his judicial activity was relatively uncontroversial. It cited Millar v Dickson [2001] UKPC D4 and Porter v Magill [2001] UKHL 67 for the principle that the right to an independent and impartial tribunal is absolute and fundamental, incapable of being compromised even if no actual prejudice resulted. Impartiality must be judged from the moment the judge becomes seized of the case and stands apart from questions about the character or effect of any decisions taken.
The Board, comprising Lord Mance (with whom Lord Wilson, Lord Hughes and Lord Lloyd-Jones agreed) and Lord Sumption (dissenting), considered the characteristics of the fair-minded and informed observer as explained in Helow v Secretary of State for the Home Department [2008] UKHL 62. That observer reserves judgment, is not unduly sensitive or suspicious, is not complacent, knows that justice must be seen to be done and will not shrink from the conclusion that associations may make impartial judgment difficult, and will inform themselves and see matters in their overall social, political and geographical context. The Board rejected the Court of Appeal’s distinction between the periods before and after 26 June 2013. It held that the Court of Appeal was wrong to treat the prior period differently, given that Mr Kamal and Mr Al-Emadi were very closely related, appeared to have had mutually supportive collaboration in almost every sense, and that Mr Kamal’s letter of 5 November 2009 categorically dismissed complaints against Mr Al-Emadi. Mr Kamal’s positions as Minister of Finance and chair of QNB were public knowledge, as was his closeness to Mr Al-Emadi, and would be known to the fair-minded and informed observer even if the judge’s familiarity with Qatar did not extend that far.
The Board identified the key factors as being that the proceedings concerned disputes involving Mr Al-Emadi and Mr Kamal, who were so closely connected as to make it unrealistic to distinguish their respective attitudes; that the disputes took place against a background of personal threats, including Mr Longmate’s threat in December 2011 associating resistance with a challenge to the state of Qatar; and that first Mr Kamal and then Mr Al-Emadi was concerned, to an opaque extent, in aspects of the arrangements by which the judge was becoming a part-time judge of the relatively new Qatar court. With some reluctance, the Board concluded that the Court of Appeal was right that the judge should not have sat without disclosure of his position after 26 June 2013, but wrong to treat the prior period differently. At least absent disclosure, a fair-minded and informed observer would regard the judge as unsuitable to hear the proceedings from 25 January 2012 onwards. The Board emphasised that disclosure itself serves as the sign of transparency which dispels concern, and that an alternative would have been to ask the Chief Justice to deploy another member of the Grand Court, to which there appeared no obstacle.
Lord Sumption, dissenting, would have dismissed the appeal. He emphasised that the fair-minded and informed observer has a high threshold to meet, is not credulous or naive, does not rely on a first impression, and applies robust common sense. He noted the presumption that judges will carry out their judicial oath, particularly experienced judges like Sir Peter Cresswell, and that the Qatar court was established to attract international business with judges described as totally impartial and independent, taking a judicial oath to administer justice without fear or favour. Lord Sumption observed that any overt government action against a judge of that court on account of an adverse decision would be in the highest degree unlikely, would immediately destroy the court’s international reputation, and would be hardly conceivable given that other judges of distinction had lent their reputations to the institution. Sir Peter Cresswell had never in fact sat on any case in Qatar and there was no allegation of anything he had done to raise doubts about his independence. The case rested entirely on the hypothetical possibility that he might be influenced, possibly unconsciously, by the risk that if he made adverse decisions his appointment might not be renewed after five years or his terms might be adversely affected. Lord Sumption considered this suggestion to lie at the outer extreme of implausibility. He further held that the case was even weaker as regards the period before Mr Al-Emadi became Finance Minister, when Mr Kamal held that post, because Mr Almazeedi had not portrayed Mr Kamal in his evidence as sharing the animus attributed to Mr Al-Emadi, and the Court of Appeal had regarded the date of Mr Al-Emadi’s appointment as critical and the previous situation as irrelevant.
In short, the Board allowed the appeal and dismissed the cross-appeal, holding that all proceedings before Cresswell J from 25 January 2012 to September 2014 should be set aside on the ground that he ought to have disclosed his concurrent judicial appointment in Qatar or stood down, and that absent such disclosure a fair-minded and informed observer would conclude there was a real possibility of unconscious bias arising from the involvement of persons closely connected with the Qatar judiciary in the disputes before him.
Magill v Porter & Weeks [2001] UKHL 67
Yiacoub and Another [2014] UKPC 22
Helow v Secretary of State for the Home Department and Another [2008] UKHL 62
Helow v Secretary of State for the Home Department [2008] 1 WLR 2416
Millar v Dickson 2002 SC (PC) 30, [2002] 1 WLR 1615, [2002] 3 All ER 1041, 2001 Scot (D) 34/7
Porter v Magill [2002] 2 AC 357, [2001] UKHL 67