Saudi fraud trial ends this week after a year in Cayman court

After more than a year of evidence, the biggest trial in Cayman Islands history, a multibillion-dollar fraud case investigating the collapse of a Saudi business empire, is expected to come to an end this week.

With thousands of pages of transcripts, bank documents and witness testimony to consider, it will still be months before Chief Justice Anthony Smellie delivers his decision.

Whatever the result, lawyers in the case say Cayman’s courts have acquitted themselves well in a trial that put unprecedented logistic and technological demands on the system.

The economic impact of the trial for Cayman’s legal and financial services sector is likely to be huge.

Simon Charlton, CEO of the Ahmad Hamad Algosaibi and Brothers company, estimates almost $1 billion will have been spent all over the world on lawyers, accountants and professional advisers before all the issues are resolved. The cost of the Cayman trial alone could run to tens of millions of dollars, he said.

The trial revolves around the hotly contested claim from the Saudi family conglomerate that it was the victim of a $9.1 billion fraud.

It alleges that Maan Al Sanea, who married into the family and managed its financial services businesses, engaged in massive unauthorized borrowing, siphoning off proceeds to his own companies, many of them registered in the Cayman Islands, and triggering the collapse of the entire business empire. The claims are contested by Al Sanea, as well as by the liquidators of the Cayman Islands-registered companies.

AHAB is seeking compensation from Al Sanea’s network of companies to pay off its own creditors. The legal teams will complete their closing remarks on Tuesday, just over a year since the opening of the case on July 18 last year.

Lawyers and executives involved in the litigation, which was initially expected to take seven months, say it is believed to be the longestrunning and highest value proceedings ever held in Cayman.

Mr. Charlton added, “I am not aware of any other trial that has been this long or this complex. It took seven years to get to trial, and then a year for the trial. If that is not unique, it is very rare.”

The courtroom was substantially remodeled, fitted out with scores of computer monitors and lined with shelves to accommodate an unprecedented number of documents used as exhibits.

More than 40 lawyers and accountants have been involved in a trial that has traversed some of the most complex areas of law: fraud, forgery, proprietary tracing, unjust enrichment, conspiracy and cross-border conflicts, according to a joint statement from the legal teams involved.

AHAB is represented by Mourant Ozannes, and Saad Investments Company Limited (In Official Liquidation) and 15 other defendants are represented by Walkers, Harneys and HSM Chambers.

In the statement, in response to questions from the Cayman Compass, lawyers on all sides praised the Cayman Islands’ courts handling of the complex case.

“Whilst the world will have to wait for the written judgment of the Chief Justice to find out the verdict of the trial, it is clear that the case has proved, yet again, that the Cayman Islands is a first-class offshore jurisdiction for the conduct of complex, valuable, large scale litigation,” the statement noted.

“Whatever the outcome of the trial, the case demonstrates beyond doubt that the Cayman Islands remains at the forefront of offshore jurisdictions for high value, complex, cross-border litigation.”

The conclusion of the trial is far from the end of the matter.

With thousands of pages of transcripts, bank documents and witness testimony to parse, Chief Justice Anthony Smellie is expected to take several months to consider his judgment. After that, an appeal is likely.

Mr. Charlton said, “There has been a lot of evidence and I can only imagine the size of the task facing the chief Justice to go through it all and write a judgment. I think that, given the amounts involved, appeals would be likely, although obviously the parties would need to see the judgment and reasoning before making decisions about that.”

Mr. Charlton said the cost of the collapse of AHAB could run to a billion dollars.

“That is across multiple countries, obviously. We must have had in excess of 100 pieces of litigation all over the world, although this is the biggest one by far. I know what we have spent and when we extrapolate that out to include the other parties it is certainly north of $500 million and could be as much as a billion.”

Even as the litigation continues and the fees mount, an out of court settlement remains possible.

“I have for a long time said that there is a finite pool of assets that are being fought over and, as time and the legal proceedings progress, that pool diminishes in real terms and in time value of money,” Mr. Charlton added.

Whatever the result, he believes Cayman’s court system has acquitted itself well.

In their statement, the legal teams also praised the court and its staff.

“Any member of the public who has ventured into Courtroom 5 during the last year will have seen in action the use of cutting edge technology, with row upon row of desks each set up with laptops and evidence presentation screens showing transcripts of the proceedings rolling in real-time and displaying, within seconds of reference, documents from a database of nearly 250,000 pages,” the statement read.

“The Grand Court’s staff has been highly accommodating to all those involved in the trial. These accommodations have varied from allowing the parties to reconfigure the courtroom structurally to meet the requirements of the plaintiff’s and defendants’ teams, to sitting long and irregular hours to facilitate ever changing requirements of the trial and in particular, at times, an eight-hour time difference between the Cayman Islands and Saudi Arabia.”

News source: Cayman Compass

Support Terms of Use Privacy Policy