This consent order illustrates the procedural mechanism for parties to seek a targeted variation of a pre-existing freezing injunction to facilitate complex multi-jurisdictional share transactions.
What specific commercial dispute prompted the parties in CFI 016/2016 to seek a variation of the 16 May 2016 order?
The litigation between Rasmala Investments Holdings Limited and Amer Saad Fawzi Al Khayyat concerns a high-stakes commercial dispute involving the restructuring of shareholdings in Madaares PJSC. The underlying proceedings, initiated under case number CFI 016/2016, resulted in an initial order issued by Justice Sir Richard Field on 16 May 2016, which imposed restrictive measures on the Defendant, Amer Saad Fawzi Al Khayyat. These measures effectively froze assets, preventing the Defendant from freely dealing with his shareholdings.
The dispute reached a critical juncture in late 2016 when the parties negotiated a Framework Agreement, dated 19 October 2016, intended to resolve specific aspects of their commercial relationship. To give effect to this agreement, the parties required the DIFC Court’s intervention to lift the constraints imposed by the May order. As noted in the court records:
The Order of Justice Sir Richard Field dated 16 May 2016 against the Defendant is varied for the sole purpose of allowing the Parties to complete the transactions documented in the Framework Agreement dated on or around 19 October 2016 (the "Framework Agreement") between the Defendant, the Claimant (now known as Rasmala Holdings Limited, "Rasmala") and Madaares Sell-Down Vehicle and the related Escrow Agreement dated on or around the same date.
The stakes involved the redemption of shares in the Cayman Islands-incorporated Madaares Sell-Down Vehicle and the subsequent disposal of shares in Madaares PJSC, a UAE-based private joint stock company. The consent order was essential to ensure that the execution of these transactions did not constitute a breach of the earlier freezing injunction.
Which judicial officer presided over the issuance of the consent order in CFI 016/2016?
The consent order dated 10 November 2016 was issued by the Assistant Registrar, Natasha Bakirci, within the DIFC Court of First Instance. While the underlying restrictive order being varied was originally granted by Justice Sir Richard Field on 16 May 2016, the subsequent procedural variation was formalized through the Registrar's office, reflecting the parties' mutual agreement to modify the scope of the original injunction to accommodate the terms of the 19 October 2016 Framework Agreement.
What were the respective legal positions of Rasmala Investments Holdings and Amer Saad Fawzi Al Khayyat regarding the proposed share transactions?
The parties, Rasmala Investments Holdings Limited (the Claimant) and Amer Saad Fawzi Al Khayyat (the Defendant), adopted a collaborative stance by the time the matter reached the 10 November 2016 hearing. Having negotiated the Framework Agreement and a related Escrow Agreement, both sides recognized that the existing freezing order acted as a procedural barrier to the commercial settlement they had reached.
The Claimant, Rasmala, sought to ensure that the disposal of shares in Madaares PJSC and the redemption of shares in Madaares Sell-Down Vehicle occurred in strict accordance with the terms of the Framework Agreement. The Defendant, conversely, sought the court’s permission to act—whether in his personal capacity, as a director, or on behalf of the Madaares Sell-Down Vehicle—without risk of being held in contempt of the 16 May 2016 order. By presenting a consent order, the parties effectively signaled to the Court that the proposed transactions were consistent with the broader resolution of their dispute and that the interests of justice were served by permitting the transfer of shares to specified entities, including Al Mal Capital PSC and other nominees under clause 2.10 of the Framework Agreement.
What was the precise legal question the Court had to address regarding the interplay between the 16 May 2016 order and the new Framework Agreement?
The Court was tasked with determining whether it could, and should, grant a limited variation to an existing freezing injunction to permit specific, defined commercial transactions that would otherwise be prohibited. The legal issue was not a contest of rights, but a procedural necessity: the Court had to ensure that the variation was narrowly tailored to the "sole purpose" of the Framework Agreement.
The doctrinal challenge involved balancing the integrity of the original freezing order—designed to preserve assets for the benefit of the Claimant—against the parties' autonomy to settle their dispute through the agreed-upon share transactions. The Court had to confirm that the proposed disposal of shares in Madaares PJSC to third parties like Ahmad Saad Fawzi Al Khayyat or Al Mal Capital PSC did not undermine the security afforded to the Claimant by the original order. By approving the consent order, the Court effectively validated the Framework Agreement as a permissible exception to the prior restraint.
How did the DIFC Court justify the variation of the freezing order in the context of the 19 October 2016 Framework Agreement?
The Court’s reasoning was grounded in the principle of party autonomy and the efficacy of settlement agreements in commercial litigation. By adopting the terms agreed upon by the parties, the Court exercised its inherent jurisdiction to manage its own orders to prevent them from becoming an obstacle to the parties' commercial objectives. The Assistant Registrar’s order explicitly delineated the scope of the permitted activities, ensuring that the Defendant’s actions remained strictly within the bounds of the Framework Agreement.
The reasoning process focused on the specific mechanics of the share transactions, as evidenced by the following provision:
In this respect alone, the Defendant shall be allowed to whether by himself, for and on behalf of Madaares Sell-Down Vehicle, any of its shareholders or otherwise howsoever (1) redeem his or any other shareholder's shares in Madaares Sell-Down Vehicle, a company incorporated under the laws of the Cayman Islands; and (2) sell or otherwise dispose of all or any of the shares held by Madaares Sell-Down Vehicle in Madaares PJSC (a private joint stock company incorporated under the laws of the UAE) to Mr. Ahmad Saad Fawzi Al Khayyat and/or Al Mal Capital PSC and/or to any person nominated pursuant to clause 2.10 of the Framework Agreement.
By specifying that the variation was "in this respect alone," the Court maintained the overarching force of the 16 May 2016 order while providing the necessary legal clearance for the specific transactions required to execute the settlement.
Which specific DIFC statutes and procedural rules governed the issuance of this consent order?
The issuance of the consent order was governed by the Rules of the DIFC Courts (RDC), specifically those pertaining to the variation of orders and the recording of settlements. While the order does not cite specific RDC sections, it relies on the Court’s general power to vary its own orders under the RDC framework to facilitate the resolution of disputes. The underlying freezing order, granted by Justice Sir Richard Field, was issued pursuant to the Court’s jurisdiction under the DIFC Courts Law (Dubai Law No. 10 of 2004) and the Rules of the DIFC Courts, which empower the Court to grant interim remedies, including freezing injunctions, to preserve assets.
What role did the Framework Agreement and the Escrow Agreement play in the Court's decision-making process?
The Framework Agreement and the related Escrow Agreement served as the evidentiary basis for the variation. The Court treated these documents as the definitive roadmap for the parties' conduct. By referencing these agreements directly in the order, the Court incorporated their terms by reference, effectively making compliance with the Framework Agreement a condition of the variation. This approach allowed the Court to avoid drafting complex, bespoke conditions, instead relying on the commercial terms already negotiated by the parties. The Escrow Agreement, in particular, provided the necessary security mechanism to ensure that the proceeds of the share transactions were handled in a manner that protected the Claimant's interests, thereby justifying the relaxation of the freezing order.
What was the final disposition of the matter, and how were costs allocated between the parties?
The Court granted the application for variation in its entirety as requested by the parties. The order permitted the Defendant to proceed with the redemption of shares in Madaares Sell-Down Vehicle and the disposal of shares in Madaares PJSC to the designated parties, notwithstanding the restrictions of the 16 May 2016 order. Regarding the costs of the application, the Court ordered that each party shall bear its own costs, reflecting the consensual nature of the application and the mutual benefit derived from the settlement.
What are the practical implications for practitioners seeking to vary freezing orders in the DIFC?
This case serves as a template for practitioners navigating the intersection of freezing injunctions and commercial settlements. It demonstrates that the DIFC Court is willing to facilitate the implementation of settlement agreements by granting targeted, specific variations to existing orders, provided that the parties can demonstrate that the proposed transactions are clearly defined and do not prejudice the underlying purpose of the injunction. Practitioners should ensure that any proposed variation is drafted with extreme precision, explicitly referencing the specific agreements and transactions to be exempted, and should be prepared to provide the Court with clear evidence that the settlement terms are robust enough to protect the Claimant's interests in the absence of the original, broader restraint.
Where can I read the full judgment in Rasmala Investments Holdings Limited v Amer Saad Fawzi Al Khayyat [CFI 016/2016]?
The full text of the consent order can be accessed via the DIFC Courts website at: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0162016-rasmala-investments-holdings-limited-v-amer-saad-fawzi-al-khayyat-1 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-016-2016_20161110.txt
Legislation referenced:
- Dubai Law No. 10 of 2004 (DIFC Courts Law)
- Rules of the DIFC Courts (RDC)