BANK SARASIN-ALPEN v MR ELIE VIVIEN SASSOON [2023] DIFC CFI 009 — Jurisdiction and service challenges in corporate insolvency (15 September 2023)

What specific claims and parties are at stake in the litigation between Bank Sarasin-Alpen and the Sassoon-led defendants?

The litigation, filed under case number CFI 009/2023, involves a high-stakes dispute arising from the insolvency of Bank Sarasin-Alpen (ME) Limited. The Claimants, represented by the Bank and its liquidator, Shahab Haider, have initiated proceedings against a group of individuals—Mr Elie Vivien Sassoon, Mr Stephane Emile Astruc, and Mr Edmond Carton—alongside corporate entities Bank J Safra Sarasin Limited and Bank J Safra Sarasin Asset Management (Middle East) Limited.

The core of the dispute centers on allegations of serious corporate misconduct. The Claimants seek damages for fraudulent breach of duties, dishonest assistance, knowing receipt, unlawful conspiracy, and fraudulent trading. The litigation is deeply intertwined with the insolvency of the Bank, as the liquidator seeks to recover assets and hold the defendants accountable for the alleged misappropriation of the DIFC-regulated entity's business. As noted in the court's reasoning:

Claims are made for fraudulent trading against each of the Defendants under Article 112 of the DIFC Insolvency Law 2019 so that Article 115 applies to them.

Which judge presided over the jurisdiction and service challenges in CFI 009/2023?

The matter was heard before Justice Sir Jeremy Cooke in the DIFC Court of First Instance. The hearing, which addressed a series of complex applications regarding jurisdiction, service of process, and relief from sanctions, took place on 7 September 2023, with the resulting Order with Reasons issued on 15 September 2023.

What were the primary legal arguments advanced by the Claimants and the Defendants regarding the DIFC Court's jurisdiction?

The Defendants, represented by Clifford Chance, mounted a multi-pronged attack on the Court’s jurisdiction. They sought a stay of proceedings on the grounds of forum non-conveniens and lis alibi pendens, arguing that the DIFC was not the appropriate forum for the dispute. Additionally, the Fourth and Fifth Defendants challenged the validity of the service of the Claim Form, particularly regarding service effected in Switzerland and Singapore.

Conversely, the Claimants, represented by HFW, argued that the DIFC was the natural and appropriate forum given that the entity at the heart of the insolvency was a DIFC-regulated bank. They contended that the alleged fraudulent activities were directed at the DIFC entity and that the governing law of the claims—specifically the DIFC Insolvency Law—necessitated the Court's oversight. The Claimants successfully argued that the "centre of gravity" of the dispute was firmly within the DIFC, necessitating the dismissal of the Defendants' jurisdictional challenges.

What was the central doctrinal question the Court had to resolve regarding the forum non-conveniens challenge?

The Court was tasked with determining whether the DIFC Courts were the appropriate forum for the adjudication of claims involving fraudulent trading and breach of duty against international defendants. This required the application of the forum non-conveniens doctrine, which assesses whether another available forum is clearly more appropriate for the interests of all parties and the ends of justice. The Court had to weigh the connecting factors, such as the location of the regulated entity, the governing law of the alleged wrongs, and the practicalities of international service, to decide if the DIFC should retain the case.

How did Justice Sir Jeremy Cooke apply the Spiliada test to determine the appropriate forum?

Justice Sir Jeremy Cooke applied the established Spiliada test, which requires the court to identify the forum with the most real and substantial connection to the dispute. The judge emphasized that the nature of the claims—specifically those arising under the DIFC Insolvency Law—pointed directly to the DIFC as the logical venue. The judge rejected the Defendants' attempts to move the litigation elsewhere, concluding that the DIFC’s regulatory interest in the insolvency of a local bank outweighed the Defendants' arguments for a stay. As stated in the judgment:

All in all, it is clear to me that the centre of gravity of this dispute is in the DIFC.

The Court further clarified the standard for forum selection, noting:

The question is always which is the most appropriate forum in the interests of the parties and the ends of justice.

Which specific DIFC statutes and RDC rules were central to the Court’s decision?

The Court’s decision relied heavily on the DIFC Insolvency Law 2019, specifically Article 112, which governs fraudulent trading, and Article 115, which outlines the consequences for such conduct. Regarding procedural matters, the Court applied the Rules of the DIFC Courts (RDC), specifically RDC 7.20, 7.21, and 7.22, which dictate the requirements and timeframes for the service of the Claim Form out of the jurisdiction. The Court’s ability to grant an extension of time for service was a critical procedural pivot point in the case.

How did the Court utilize the precedents of Spiliada and Protiviti in its reasoning?

The Court relied on Spiliada v Cansulex [1987] 2 AC 460 as the foundational authority for the forum non-conveniens analysis. This was reinforced by the DIFC Court of Appeal decision in Protiviti Member Firm (Middle East) Limited v Mohammed Been Hammad Abdul-Karim al-Mojil [2016] DIFC CA 003, which explicitly endorsed the Spiliada test for use within the DIFC. By citing these cases, Justice Sir Jeremy Cooke ensured that the Court’s decision remained consistent with both English common law principles and established DIFC jurisprudence regarding the appropriate forum for complex litigation.

What was the final disposition of the Court regarding the jurisdiction applications and the relief from sanctions?

The Court dismissed the Fourth and Fifth Defendants' jurisdiction applications in their entirety. Furthermore, the Court refused the Fifth Defendant’s application for relief from sanctions. In a significant procedural move, the Court granted the Claimants’ application for an extension of time for service, validating the service of the Claim Form on the Fourth Defendant. The Court ordered the Fourth and Fifth Defendants to pay the Claimants’ costs of the jurisdiction applications, summarily assessed at AED 760,000.

Time for service of the Claim Form in the Part 7 Claim on the Fourth Defendant out of the DIFC is retrospectively extended to 9 August 2023.

What are the wider implications of this decision for practitioners handling DIFC insolvency litigation?

This ruling serves as a strong precedent for the DIFC Court’s willingness to assert jurisdiction over entities and individuals involved in the insolvency of DIFC-regulated firms, regardless of the defendants' foreign domicile. Practitioners must anticipate that the Court will prioritize the "centre of gravity" of the dispute—often the location of the regulated entity—over the convenience of foreign defendants. The decision also highlights the necessity of strict compliance with RDC service provisions, as the Court demonstrated a willingness to grant retrospective extensions only when the overall justice of the case demands it, while simultaneously maintaining a firm stance on procedural sanctions.

Where can I read the full judgment in Bank Sarasin-Alpen v Mr Elie Vivien Sassoon [2023] DIFC CFI 009?

The full judgment can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0092023-1-bank-sarasin-alpen-me-limited-2-shahab-haider-his-capacity-liquidator-bank-sarasin-alpen-me-limited-v-1-mr-elie-vi or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-009-2023_20230915.txt

Cases referred to in this judgment:

Legislation referenced:

• DIFC Insolvency Law 2019 (Articles 112, 115)
• Rules of the DIFC Courts (RDC 7.20, 7.21, 7.22)