The DIFC Court of First Instance has reaffirmed the strict consequences of procedural non-compliance, dismissing an application for permission to appeal by a debarred defendant who attempted to introduce "new" evidence to challenge a prior finding of fraud.
What was the underlying dispute in Larmag Holding v First Abu Dhabi Bank regarding the transfer of Reditum bonds?
The litigation centers on a high-stakes claim involving the alleged fraudulent misappropriation of financial assets. The Claimant, Larmag Holding B.V., initiated proceedings against multiple defendants, including First Abu Dhabi Bank and Mr. Abdulla Saeed Bakheet Obaid Aljaberi, seeking redress for the loss of significant bond holdings. The core of the dispute involves the movement of these assets into accounts controlled by the Third Defendant.
It was the Claimant’s case at trial that Mr Aljaberi dishonestly and fraudulently induced it to transfer Euro 70 million Reditum bonds (the “Bonds”) to a bank account in his name held by the Second Defendant on terms that Larmag would receive a EUR 20 million pre-payment which was never paid.
The factual matrix established that the bonds were indeed transferred to Mr. Aljaberi’s account. The Claimant argued that this transfer was the result of a fraudulent inducement, while the defense attempted to reframe the transaction as an unrelated commercial arrangement. Further details regarding the case history can be found at the DIFC Courts website.
Which judge presided over the application for permission to appeal in CFI 054/2019?
The application was heard and determined by Justice Sir Richard Field, sitting in the Court of First Instance. The order was issued on 22 November 2022, following the Third Defendant’s failure to comply with the court's earlier directions dated 2 September 2022.
What were the competing positions of Larmag Holding and Mr. Aljaberi regarding the origin of the Reditum bonds?
The Claimant maintained that the transfer of the 70 million Euro bonds was induced by fraud. In contrast, Mr. Aljaberi’s defense relied on a narrative that sought to distance the transaction from the Claimant entirely.
It was Mr Aljaberi’s case at trial that he had had no dealings with the Claimant about a purchase of the transferred Bonds and that he believed that the Bonds in question had been transferred to him by a Mr John Varoujan pursuant to an agreement made in 2016.
Mr. Aljaberi argued that he was a passive recipient of the bonds pursuant to a pre-existing debt agreement with a third party, Mr. John Varoujan. He contended that his lack of direct negotiation with Larmag Holding negated the fraud allegations. The Claimant, however, successfully demonstrated through email evidence and corporate records that Mr. Aljaberi was fully aware of the source of the bonds at the time of the transfer.
What was the specific legal question the Court had to answer regarding the Third Defendant’s application for permission to appeal?
The Court was required to determine whether the Third Defendant, having been debarred from taking further steps in the proceedings due to non-compliance with the September Order, could satisfy the threshold for permission to appeal under the Rules of the DIFC Courts (RDC). Specifically, the Court had to decide if the "new" evidence presented by Mr. Aljaberi—purporting to document a 2016 debt agreement—provided a credible basis to set aside the original Judgment and the subsequent debarment order. The doctrinal issue was whether the applicant could demonstrate a "real prospect of success" for an appeal when the underlying evidence had already been judicially determined to be fabricated.
How did Justice Sir Richard Field apply the test for permission to appeal in light of the Third Defendant’s prior conduct?
Justice Sir Richard Field evaluated the application by scrutinizing the reliability of the documents submitted by Mr. Aljaberi. The Court applied a rigorous assessment of the evidence, noting that the applicant’s credibility had been fundamentally undermined during the trial.
The Court held (see in particular para 173 of the Judgment) that Mr Aljaberi’s evidence that he believed that the Bonds transferred to his account had been transferred by Mr Varoujan was so riddled with inconsistences that he had concocted this evidence.
The Court reasoned that because the trial judge had already determined that the "Varoujan" narrative was a fabrication, the introduction of a document purportedly supporting that same narrative did not constitute a valid ground for appeal. The judge highlighted that the document, an "Agreement to Extend Debt Payment," was inconsistent with the established facts, including Mr. Aljaberi’s own previous admissions and the email correspondence from the Second Defendant. Consequently, the application was deemed to have no prospect of success.
Which RDC rules and prior judicial findings were central to the Court’s decision?
The Court’s decision was primarily governed by RDC 44.19, which sets the standard for granting permission to appeal. The Court also relied heavily on its own previous findings from the Judgment dated 15 August 2021.
The Court noted that the "Agreement to Extend Debt Payment" was the primary document relied upon by the applicant.
The first document relied on by Mr Aljaberi in support of the instant application purports to bear the date 21 November 2016 and is headed “Agreement to Extend Debt Payment”.
By referencing the 15 August 2021 Judgment, the Court established that the applicant had previously provided contradictory testimony, including claiming the agreement was oral, only to later produce a written document. This history of inconsistency was fatal to the current application.
How did the Court distinguish the evidentiary value of the documents presented by Mr. Aljaberi?
The Court systematically dismantled the evidentiary value of the documents presented by the Third Defendant. It noted that the "Agreement to Extend Debt Payment" was contradicted by the fact that the company mentioned in the agreement, Ain Abu Dhabi Investment, had been wound up before the bonds were transferred. Furthermore, the Court pointed to the email evidence from 3 July 2018, which explicitly identified the Claimant as the transferor of the bonds, directly refuting Mr. Aljaberi’s claim that he believed the bonds came from Mr. Varoujan.
It was common ground that these Bonds were indeed transferred to Mr Aljaberi by delivery to his said bank account.
By establishing that the applicant had actual knowledge of the transferor, the Court rendered the new document irrelevant to the question of whether the original Judgment was reached in error.
What was the final outcome and relief granted by the Court in this order?
The Court dismissed the Permission Application in its entirety. The order confirmed that the Third Defendant remained debarred from taking any further steps in the proceedings, as he had failed to meet the requirements for relief from the September Order. No order as to costs was made.
The determination contained herein of Mr Aljaberi’s application for permission to appeal the September is without prejudice to that contention.
The dismissal effectively solidified the status quo, leaving the Third Defendant unable to participate further in the litigation.
What are the wider implications for DIFC practitioners regarding debarment and the introduction of new evidence?
This case serves as a stern reminder that the DIFC Courts will not permit the re-litigation of issues based on evidence that contradicts findings of fact already established at trial. For practitioners, the case highlights that once a party is debarred for non-compliance, the threshold to overturn that status—especially when relying on evidence previously deemed "concocted"—is exceptionally high. Litigants must anticipate that the Court will look beyond the face of "new" documents to assess their consistency with the entire trial record. Failure to maintain consistent evidence throughout proceedings can lead to permanent debarment and the summary dismissal of subsequent appeals.
Where can I read the full judgment in Larmag Holding B.V. v First Abu Dhabi Bank [2022] DIFC CFI 054?
The full text of the Order with Reasons can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0542019-larmag-holding-bv-v-1-first-abu-dhabi-bank-pjsc-2-fab-securities-llc-3-mr-abdulla-saeed-bakheet-obaid-aljaberi-4-mr or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-054-2019_20221122.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Larmag Holding B.V. v First Abu Dhabi Bank | CFI 054/2019 | Judgment of Justice Sir Richard Field dated 15 August 2021 |
Legislation referenced:
- Rules of the DIFC Courts (RDC) 44.19