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22 December 2021

Charles Russell Speechlys successfully upholds record breaking judgment on appeal in multi-billion dollar fraud trial

The Cayman Islands Court of Appeal yesterday dismissed an appeal against the liquidators of six defendant companies advised by Charles Russell Speechlys LLP in one of the largest fraud cases ever litigated worldwide.

The AwalCos formed part of the business empire of prominent Saudi businessman, Maan Al Sanea. Their liquidations followed one of the biggest corporate collapses of the 2008-09 Global Financial Crisis – and the largest in Saudi Arabian financial history, that of the Ahmad Hamad Algosaibi & Brothers Company, known as “AHAB”.

In May 2018, The Grand Court of the Cayman Islands found in favour of the firm’s clients in the Islands’ longest trial in history lasting just over a year and with circa US$ 9 billion damages claimed. A US$ 330 billion Ponzi scheme – some six times the size of the late Bernie Madoff fraud – being operated by the unsuccessful claimants, AHAB, was also uncovered as a result of factual findings at the heart of the AwalCos’ defence.

AHAB’s appeal, culminating in one of the longest appeal hearings in modern legal history, was heard by the Cayman Islands Court of Appeal in May and June 2019. The Cayman Islands Court of Appeal ruled wholly in our clients’ favour by dismissing AHAB’s appeal against them and upholding the Chief Justice’s decision and factual findings in relation to them of May 2018.

The ruling in AHAB v SICL and Others means that the balance of hundreds of millions of dollars can be freed up from the estates of the liquidated Awalcos and ultimately returned to their creditors.

Stewart Hey, Partner at Charles Russell Speechlys, said:

"The Court of Appeal’s decision draws to a close this 12-year long litigation and means that our clients are one step closer to returning the balance of hundreds of millions of dollars to their creditors. Our clients have been completely vindicated.

"The case is one of the most intricate and high profile pieces of litigation that the firm has ever been involved in – by virtue of the technical and financial complexity; sheer volume of documents in many different formats and multiple languages; geographical span; and the number of parties and legal practitioners involved globally."

The Cayman Islands Court of Appeal, in dismissing the appeal against Charles Russell Speechlys’ clients, upheld the Chief Justice’s decision that, by reason of AHAB’s knowledge and consent, Al Sanea was not in breach of his fiduciary duty owed to AHAB/the Money Exchange.

Charles Russell Speechlys LLP is instructed by Bruce Mackay of RSM Restructuring Advisory LLP, Geoff Carton-Kelly of FRP Advisory Trading Limited, both based in the UK, and Russell Homer and Chris Johnson of Chris Johnson Associates, based in the Cayman Islands. Together, these four individuals constitute the Joint Official Liquidators of six Cayman Islands registered companies, known collectively as the AwalCos, who were among the 15 remaining defendants in the multi billion dollar trial and subsequent appeal.

Throughout the appeal the Charles Russell Speechlys UK legal team worked closely with Cayman Island colleagues, London Counsel (Ben Valentin QC, Harriet Fear Davies and James Hart) and with the Charles Russell Speechlys team in Bahrain.

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