What is the nature of the dispute between Sandra Holding and the Al Saleh family that necessitated a USD 45,000,000 freezing order?
The litigation in CFI 092/2021 involves a high-stakes commercial dispute between the Claimants, Sandra Holding Ltd and Nuri Musaed Al Saleh, and four Respondents: Fawzi Musaed Al Saleh, Ahmed Fawzi Al Saleh, Yasmine Fawzi Al Saleh, and Farah El Merabi. The Claimants sought and obtained a freezing injunction to prevent the dissipation of assets, effectively placing a USD 45,000,000 ceiling on the Respondents' ability to dispose of or diminish their global wealth. The order is designed to ensure that if the Claimants succeed in their underlying claim, there will be sufficient assets available to satisfy a judgment.
The scope of the order is expansive, covering not only assets held directly by the Respondents but also those held through nominees, agents, or complex trust structures. The court specifically identified interests in ASPTC (PTC) Limited, the Budhi Trust, and various real estate holdings across Dubai, the United Kingdom, France, and the United States. As noted in the court's order:
Paragraph 4 applies to all the Respondent’s assets, whether or not they are in his own name and whether they are solely or jointly owned and whether the Respondent is interested in them legally, beneficially or otherwise.
The order serves as a protective mechanism, preventing the Respondents from moving or liquidating these assets while the substantive proceedings remain ongoing. Further details regarding the case can be found at the DIFC Courts website.
Which judge presided over the issuance of the freezing injunction in CFI 092/2021?
The freezing order was issued by Justice Sir Jeremy Cooke, sitting in the DIFC Court of First Instance. The order was granted on 10 November 2021 following an application made without notice to the Respondents. The court scheduled a return date for 25 November 2021 to allow the Respondents an opportunity to challenge the injunction.
What arguments were advanced by counsel for the Claimants in the application for a freezing order against Fawzi Musaed Al Saleh?
Matthew Showler and Daniel Smith, representing the Claimants, successfully moved for the freezing order on an ex parte basis. Their arguments focused on the necessity of asset preservation to prevent the potential frustration of a future judgment. By demonstrating to Justice Sir Jeremy Cooke that there was a real risk of dissipation, the Claimants secured an order that restricts the Respondents from dealing with assets up to the value of USD 45,000,000. The legal strategy relied on the court’s inherent jurisdiction to grant interim relief, ensuring that the Respondents could not hide or transfer assets—particularly those held in offshore trusts or international properties—before the court could adjudicate the merits of the underlying dispute.
What was the jurisdictional and doctrinal question Justice Sir Jeremy Cooke had to address regarding the scope of the Respondents' control over assets?
The court had to determine the extent to which a freezing order could reach assets not strictly titled in the Respondents' names, specifically those held through third-party nominees or trust structures like the Budhi Trust. The doctrinal issue centered on the "power of disposal" test. The court needed to establish that the Respondents exercised sufficient control over these assets to justify their inclusion in the freezing injunction. This required the court to define the Respondents' "assets" broadly enough to encompass indirect interests, including those arising from discretionary powers of appointment or instructions given to third-party holders.
How did Justice Sir Jeremy Cooke apply the test for "control" to the Respondents' assets?
Justice Sir Jeremy Cooke adopted a comprehensive definition of "assets" to ensure the efficacy of the injunction. The reasoning was rooted in the principle that a freezing order must be effective against all forms of wealth, regardless of the legal structure used to hold it. The judge explicitly included assets over which the Respondents have the power to dispose or deal as if they were their own, even if held by a third party.
The court’s reasoning is encapsulated in the following provisions:
For the purpose of this Order, the Respondent’s assets include any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were of his own. The Respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with his direct or indirect instructions.
This reasoning ensures that the Respondents cannot circumvent the order by shifting assets into the names of nominees or agents, as the court looks through the corporate or trust veil to the underlying reality of control.
Which specific DIFC Rules (RDC) and legal principles were applied in the granting of the freezing order?
The order was granted under the court's general powers to grant interim relief as provided for in the Rules of the DIFC Courts (RDC). While the order itself is a standard form of interim injunction, it incorporates specific safeguards to ensure compliance with international standards of due process. The court applied the principles governing the grant of a freezing injunction, which requires the applicant to demonstrate a good arguable case and a real risk of dissipation. The order also includes standard exceptions for ordinary living expenses and legal fees, as well as protections for third-party banks, ensuring that the injunction does not unduly interfere with legitimate commercial activities.
How did the court balance the Respondents' right to manage their assets against the Claimants' need for security?
The court utilized a "Unencumbered Value" test to balance the interests of both parties. This allows the Respondents to continue dealing with assets, provided that the total value of their unencumbered assets within the DIFC remains above the USD 45,000,000 threshold. This approach prevents the order from being unnecessarily oppressive while maintaining the security required by the Claimants.
As specified in the order:
(2) If the total Unencumbered Value of the Respondent’s assets in the DIFC does not exceed USD 45,000,000, the Respondent must not remove any of those assets from the DIFC and must not dispose of or deal with any of them.
Furthermore, the order provides flexibility for the Respondents:
If the Respondent has other assets outside the USD 45,000,000, he may dispose of or deal with those assets outside the USD 45,000,000 so long as the total Unencumbered Value of all his assets in the DIFC remains above USD 45,000,000.
What was the final disposition and the specific relief granted by the court?
Justice Sir Jeremy Cooke granted the freezing injunction in the full amount of USD 45,000,000. The order prohibits the Respondents from removing assets from the DIFC or disposing of assets globally up to that value. The order also includes a penal notice, warning that any breach could result in contempt of court, imprisonment, or fines. The Respondents were also granted the right to apply to the court to vary or discharge the order, as noted:
The Respondent has a right to apply to the Court to vary or discharge the Order – see paragraph 12 below.
Additionally, the order includes standard carve-outs for the Respondents' living expenses and legal representation:
(1) This Order does not prohibit the Respondent from spending USD 3,000 a week towards his ordinary living expenses and a reasonable sum on legal advice and representation.
What are the wider implications of this order for practitioners dealing with complex asset-holding structures in the DIFC?
This case highlights the willingness of the DIFC Courts to look beyond the surface of legal ownership when issuing freezing orders. Practitioners must anticipate that the court will apply an expansive interpretation of "assets" to include those held via nominees, agents, or discretionary trusts. The inclusion of specific international properties—ranging from London to Boston—demonstrates the extraterritorial reach the DIFC Courts are prepared to exercise when the Respondents are subject to the court's jurisdiction. Litigants should be prepared to provide detailed financial disclosures and must ensure that any application for a freezing order is supported by clear evidence of the Respondents' control over the assets in question.
Where can I read the full judgment in Sandra Holding v Fawzi Musaed Al Saleh [2021] DIFC CFI 092?
The full text of the freezing order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-092-2021-1-sandra-holding-ltd-2-nuri-musaed-al-saleh-v-1-fawzi-musaed-al-saleh-2-ahmed-fawzi-al-saleh-3-yasmine-fawzi-al-saleh-4-farah-el-merabi. The document is also available via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-092-2021_20211110.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Rules of the DIFC Courts (RDC)