Two Saudis Princes Face Allegation of "Money Laundering" for Hezbollah

Two prominent Saudi princes believed to be involved in a London-registered company that allegedly facilitated “money laundering” for Hezbollah are at the centre of a major court battle that is about to hit London’s High Court again.

The High Court is gearing up to hear a series of allegations against two Saudi princes who are accused of funding Hezbollah by fraudulent means. London is continuing to attract complex international cases, underlining its place at the top of the litigation table.
It is the story of two Saudi princes, a telecoms company, alleged funds channelled to Hezbollah and a row over the suppression of vital documents in a battle that would rival that of Kazakhstan’s JSC BTA Bank’s dispute with Muktar Ablyazov (6 February 2012).
Two Saudi princes – two of the most prominent Sunni Muslims in the world – face allegations of facilitating money laundering for US-classified terrorist organisation Hezbollah through a business in which they were shareholders.

Prince Mishal Bin Abdulaziz Al Saud

Prince Mishal bin Abdulaziz Al Saud, a former defence minister, brother of King Abdullah and chairman of the country’s influential allegiance council, and his son, Prince Abdulaziz bin Mishal bin Al Saud, are both named as defendants in this snowballing case.
The prince launched the claim back in 2011 when he filed a petition of unfair prejudice against fellow shareholder, Apex Global Management, a company owned by Jordanian businessman Faisal Almhairat.
Apex Global Management and Global Torch Ltd -  both directed by the prince - were the principal shareholders in telecomms company Fi Call. Almhairat agreed with Global Torch to launch the London registered company in 2006.
Almairat’s share was primarily held by his Seychelles-based firm, Apex Global Management, while the princes’ shares were mainly owned through Global Torch, a British Virgin Islands (BVI) company.

Prince Abdulaziz Bin Mishal Bi Al Saud

Global Torch contends that Almhairat had “misappropriated funds from the company, had misconducted the company’s business in various ways, [and] had failed to keep proper books” and should be blamed him for its failure.
Details of the claims and subsequent counter claims were initially kept out of the public eye as the Saudi’s attempted to use their royal connections to claim sovereign immunity.
In March the High Court refused to accept arguments from Clifford Chance that a London trial could damage relations between the UK and Saudi Arabia (21 March 2013).
Almhairat became involved with the princes after his son developed an application enabling smartphones to make free calls to other users under company Nida’s Amman. On 24 September 2009 Nida’s Amman and Almhairat handed the intellectual rights to the app to Fi Call PLC for just a £1.
In November Prince Mishal became the chairman of Fi Call and all the Global Torch shareholders took stakes in the business.
Almhairat became suspicious of Fi Call when HSBC told him he was no longer welcome as a customer in March 2010 and told him to move all his company and personal accounts elsewhere.
Almhairat allegedly informed defendant and Global Torch shareholder Emad Mahmoud Ahmed Abu-Ayshih that his credit had been refused, but later the same month Ayshih asked him to arrange a $5m bankers’ draft financed by Fi Call to be taken to Beirut for a man named Abdel Razzaq.
According to a judgment issued in June, Almhairat allegedly decided to investigate the identity of Razzaq and was told that he was “not a businessman with investments in Lebanon but was a middleman for Hezbollah”.
The High Court was shown the alleged correspondence to Ayshih, in which Almhairat raised concerns over the suspected funding from the princes.
But the court heard that Almhairat had later been contacted by the prince, who, according to an Apex transcript, said: “Mr Ayshih has told me about the conversation he had with you. I’m not pleased with it…We deal with whoever we want to deal with, whether it’s Hexbollah [sic], the mafia, or even the Jews.”
He added: “Be sure if we remove our protection, you and all your family are dead within a second. Do as you are instructed. Otherwise your head will be at my feet without your body.
“…I need to show the Hexbollah that we can transfer the money to them smoothly. They have potentially billions which they want to be transferred. My father is very interested in this deal and he will be very pleased with us if things go well.”
The contentious correspondences submitted to the court has been the subject of intense debate and disagreement between both parties and the princes have fought to keep numerous documents secret.
Although the princes bought the case initially, their desperation to keep the case behind closed doors transformed it into an epic series of battles over jurisdiction, sovereignty and reputation. It pitted the princes against the UK media as well as Almhairat in six hearings over February, March, June and July (16 May 2013).
The Court of Appeal put the final kybosh on the privacy bid in July, holding that details of the allegations should be made public (10 July 2013).
In a case management conference in July, Mr Justice Vos ordered that a copy of all relevant materials should be created and ordered that a statement of truth should be submitted to the court from all parties including Prince Abdulaziz, who refused.
In September Mr Justice Norris reiterated the order made by Vos J and issued a Unless order to support the direction. He stated that unless the prince complied he would be debarred.
Norris J said: “Everyone else will have their cards on the table. The prince will deal through an agent. Everyone else will be exposed to criticism and have their credibility attacked if they are shown to have concealed some relevant account, relevant device, or relevant communication. But the prince says that he should be exempt…some sanction must be applied.”
Despite this, the Prince failed to comply with the order. He was subsequently debarred and ordered to pay $7.7m to Apex Global Torch. He is now looking to quash the order at the CoA. The Prince and his fellow Global Torch shareholders are looking to set aside the Norris J judgment, vary the order of Vos J and seek relief from sanctions. This will be the subject of the next hearing in the coming months.

http://www.thelawyer.com/analysis/market-analysis/practice-areas/litigation-analysis/the-tale-of-two-saudi-princes-in-the-high-court/3014931.article