RAFED ABDEL MOHSEN BADER AL KHORAFI v BANK SARASIN ALPEN [2019] DIFC CA 010 — Abuse of process and the finality of litigation (28 January 2019)

Did the 2016 proceedings brought by Rafed Abdel Mohsen Bader Al Khorafi against Bank Sarasin Alpen constitute an abuse of process given the prior 2009 litigation?

The dispute centers on the Claimant’s attempt to initiate a second set of proceedings in 2016, alleging deceit and negligence regarding financial products sold in 2007, despite having already engaged in extensive litigation against the Bank starting in 2009 (CFI 026/2009). The Bank argued that these new claims were an attempt to re-litigate matters that were, or should have been, addressed in the original 2009 proceedings. The Court of Appeal had to determine whether allowing the 2016 claim to proceed would undermine the principle of finality in litigation.

The Court noted the history of the parties' legal battles, emphasizing that the Claimant had ample opportunity to raise these specific allegations of deceit and negligence during the earlier proceedings. As the Court observed:

In the judgment of the Court of Appeal dated 5 January 2012 dealing with the jurisdiction issue relating to the position of the Bank and its reliance upon the exclusive jurisdiction clause found in the Trust Agreements and Deeds of Pledge, the Court had cause to analyse the Re-Amended Points of Claim in the 2009 Proceedings and the claims made against the Bank therein, in the context of the relationship between the Claimant and the Bank.

The Court ultimately concluded that the 2016 proceedings were an abuse of process, as they sought to introduce claims that were essentially part of the same factual matrix already adjudicated. Read the full judgment here.

Which judges presided over the Court of Appeal hearing for Rafed Abdel Mohsen Bader Al Khorafi v Bank Sarasin Alpen [2018] DIFC CA 010?

The appeal was heard by a panel consisting of Justice Sir Jeremy Cooke, Justice Judith Prakash, and H.E. Justice Shamlan Al Sawalehi. The hearing took place on 25–26 November 2018, with the final judgment delivered on 28 January 2019.

What were the specific legal arguments advanced by Rafed Abdel Mohsen Bader Al Khorafi and Bank Sarasin Alpen regarding the strike-out application?

The Claimant argued that the 2016 proceedings were necessary because the full extent of the Bank's alleged misconduct only became apparent during the cross-examination of Mr. Walia in the 2009 proceedings. Counsel for the Claimant, Mr. Ewan McQuater and Ms. Camilla Bingham, contended that the new evidence justified a separate action.

Conversely, the Bank, represented by Mr. Orland Fraser QC, Mr. Alastair Thomson, and Mr. Andrew Rose, argued that the claims were a textbook example of an abuse of process. They maintained that the Claimant was attempting to circumvent the finality of the 2009 judgment by "splitting" his case. The Bank asserted that the Claimant had every opportunity to investigate and plead these matters years earlier, and that allowing the 2016 claim would impose an unfair burden on the Bank and the Court.

What was the precise doctrinal issue the Court of Appeal had to resolve regarding the application of RDC 4.16(2)?

The Court had to determine whether the first-instance judge, Deputy Chief Justice Sir David Steel, erred in his application of the "broad merits-based assessment" required when evaluating an application to strike out proceedings for abuse of process under RDC 4.16(2). The doctrinal issue was whether the Claimant’s failure to bring the deceit and negligence claims in the 2009 proceedings, despite having the necessary information, triggered the rule against abuse of process, thereby necessitating the dismissal of the 2016 claim.

How did Justice Sir Jeremy Cooke apply the Henderson v Henderson doctrine to the facts of the Al Khorafi case?

Justice Sir Jeremy Cooke applied the Henderson v Henderson doctrine by assessing whether the Claimant had acted in a way that was vexatious or oppressive by bringing a second action. The Court emphasized that the rule is not merely about res judicata (where a matter has been decided), but about the broader principle that a party must bring their whole case forward in a single set of proceedings.

The Court found that the Claimant’s attempt to justify the delay by citing the 2013 cross-examination was insufficient. The Court noted:

The Claimant did not become aware of the full facts until the cross examination of Mr Walia during the trial in the 2009 Proceedings in May and July 2013”

By failing to amend the 2009 proceedings effectively or by waiting until 2016 to file a new claim, the Claimant had failed to meet the standard of diligence required by the DIFC Courts. The Court concluded that the 2016 claim was an attempt to re-litigate issues that were inextricably linked to the 2009 proceedings, and thus, it was an abuse of process.

Which DIFC statutes and RDC rules were central to the Court of Appeal's decision?

The Court relied heavily on RDC 4.16(2), which provides the Court with the power to strike out a statement of case if it appears to be an abuse of the court's process. Additionally, the Court referenced Article 65(2)(b) of the Regulatory Law, which had been a point of contention in the earlier 2009 proceedings regarding the Bank's liability for financial services. The Court also looked back at the findings in AL KHORAFI v BANK SARASIN-ALPEN [2011] DIFC CA 026 — Permission to appeal granted (24 May 2011), which established the initial context for the liability for mis-selling and regulatory breaches.

How did the Court of Appeal utilize English precedents like Aldi Stores Ltd v WSP Group plc and Stuart v Goldberg Linde?

The Court used Aldi Stores Ltd v WSP Group plc [2008] 1 WLR 748 to define the appellate court's role in reviewing strike-out decisions. It established that while the decision is not purely discretionary, an appellate court should be reluctant to interfere unless the judge erred in principle or reached an "impermissible" conclusion. Similarly, Stuart v Goldberg Linde [2008] 1 WLR 823 was cited to reinforce the narrow margin of appreciation an appellate court has when reviewing a "broad merits-based assessment." The Court also referenced Johnson v Gore Wood [2002] 2 AC 1 to emphasize that the Henderson v Henderson rule is a matter of public policy, intended to protect the court and the parties from the burden of unnecessary, repetitive litigation.

What was the final disposition and the specific orders made by the Court of Appeal?

The Court of Appeal allowed the Bank's appeal, overturning the decision of Deputy Chief Justice Sir David Steel. The Court ordered that the Claim Form issued on 6 April 2016 (as amended) and the Particulars of Claim dated 9 January 2017 be struck out in their entirety. Furthermore, the Court ordered the Claimants to pay the Bank’s costs in the 2016 proceedings, with the specific amount to be agreed upon by the parties or determined by the Court if an agreement could not be reached.

What are the wider implications of this ruling for practitioners litigating in the DIFC?

This judgment serves as a stern reminder that the DIFC Courts will strictly enforce the rule against abuse of process to ensure the finality of litigation. Practitioners must ensure that all potential causes of action arising from a specific set of facts are included in the initial pleadings. The Court’s decision clarifies that "splitting" a case—even if new evidence is discovered during the course of a trial—is generally impermissible if that evidence could have been pursued with reasonable diligence earlier. Litigants must anticipate that the Court will prioritize the efficient use of judicial resources and the protection of defendants from the "oppressive" nature of successive, related lawsuits.

Where can I read the full judgment in Rafed Abdel Mohsen Bader Al Khorafi v Bank Sarasin Alpen [2018] DIFC CA 010?

The full judgment is available on the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-appeal/rafed-abdel-mohsen-bader-al-khorafi-v-bank-sarasin-alpen-me-limited-2018-dif-20190128. A copy is also archived via CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-appeal/DIFC_COA_Rafed_Abdel_Mohsen_Bader_Al_Khorafi_v_Bank_Sarasin_Alpen_ME_Limited_2018_DIF_20190128.txt.

Cases referred to in this judgment:

Legislation referenced:

• Regulatory Law, Article 65(2)(b)
• RDC 4.16(2)