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Judgments fraudulently obtained by United Arab Emirates sovereign wealth fund set aside

10 April 2024

On 25 March 2024, Burlingtons’ Litigation team successfully secured the setting aside of several judgments obtained against their client, Farhad Azima, by the Ras Al Khaimah Investment Authority (“RAKIA”), the sovereign wealth fund of the UAE Emirate, Ras Al Khaimah.

Mr Azima, an American business executive, was sued by RAKIA in 2016, shortly after approximately 30GB of his data was hacked and released online. After business arrangements between the parties turned sour, RAKIA advanced serious allegations of wrongdoing against Mr Azima. Mr Azima denied the claims, counterclaiming that RAKIA had been responsible for the hacking and publication of his data (the “Hacking Counterclaim”). RAKIA subsequently obtained judgment against Mr Azima following a trial in early 2020 before Deputy Judge Andrew Lenon QC (as he was then) in the Chancery Division of the High Court (the “First Trial”). Deputy Judge Lenon QC found that Mr Azima had not sufficiently established that RAKIA was responsible for the hacking, dismissing the Hacking Counterclaim and ordering Mr Azima to pay damages, costs and interest to RAKIA of some $8.3 million (the “First Trial Payments”).

Mr Azima successfully overturned the dismissal and the Hacking Counterclaim was remitted by the Court of Appeal back to the High Court for retrial. The findings of Deputy Judge Lenon QC were otherwise upheld. The Court of Appeal directed that Mr Azima should pay the First Trial Payments into an escrow account, administered jointly by Mr Azima’s and RAKIA’s solicitors (the “Escrow Monies”), pending resolution of the remitted issues.

In 2021, Mr Azima added Dechert LLP (legal advisers instructed by RAKIA during the relevant period), Neil Gerrard (then a white collar fraud partner at Dechert LLP), James Buchanan (the CEO of Ras Al Khaimah Development LLC, who had conduct of the First Trial proceedings on RAKIA’s behalf) and Stuart Page (an investigator who worked with RAKIA) as additional defendants to the Hacking Counterclaim (the “Additional Defendants”).

The claim against Mr Page was discontinued later that year and Mr Page subsequently provided an affidavit admitting that the evidence advanced by RAKIA in defence of the Hacking Counterclaim at the First Trial had been falsely contrived. The affidavit implicated RAKIA, Dechert LLP, Mr Gerrard and others in a cover-up intended to conceal RAKIA’s involvement in the hacking of Mr Azima’s devices; this included Mr Gerrard allegedly holding a ‘perjury school’ at a luxury Swiss hotel to perfect the evidence RAKIA’s key witnesses would give at the First Trial.

Mr Page also provided evidence that he had engaged a former Israeli intelligence officer to assist with RAKIA’s investigation into Mr Azima and his associates, and that he was aware that the Israeli team used hacking to obtain information relating to the investigation. Mr Page later provided Mr Azima with hundreds of “project update” reports produced by the Israeli team. Pre-dating the publication of Mr Azima’s data and spanning several years after proceedings were commenced, the reports provided detailed information about Mr Azima’s and his associates’ activities and contained a raft of Mr Azima’s private and confidential information, including screenshots of his passport, his home and details of his bank accounts. Mr Page claimed that the reports had been contemporaneously shared with Mr Gerrard, amongst others.

Relying on the new evidence, Mr Azima successfully obtained permission to bring an additional counterclaim seeking to set aside the First Trial judgment on the basis that it had been procured by RAKIA perpetrating a “massive fraud on the Court”, with its witnesses providing perjured evidence at the First Trial and its advisors and investigators attempting to cover up its role in the hacking (the “Rescission Counterclaim”).  The Court of Appeal upheld the decision and the Rescission Counterclaim was listed with the Hacking Counterclaim to be heard at a 10-week trial due to commence in May 2024.

In June 2022, around the time that Mr Page shared the first tranche of project update reports, RAKIA wrote a letter to the Court advising that it intended to play no further part in the proceedings and was apparently the victim of “unscrupulous third-party advisers”. RAKIA claimed that it would take all necessary steps to satisfy any judgment entered against it.

The introduction of the Rescission Counterclaim required RAKIA to put forward a defence to the new allegations, which it failed to do. RAKIA also failed to comply with various court orders, including to provide disclosure in the proceedings. Consequently, in August 2023, RAKIA’s defence to the Hacking Counterclaim was struck out and Mr Azima obtained judgment in default. However, Mr Justice Michael Green declined to grant default judgment on the Rescission Counterclaim, despite RAKIA’s failure to file a defence, on the basis that such a decision may prejudice the Additional Defendants at trial. The Judge did order that RAKIA pay Mr Azima’s costs of the Hacking Counterclaim on the indemnity basis (allowing for a greater recovery of costs than would usually be the case - a marker of the Court’s disapproval of RAKIA’s conduct). The Judge granted Mr Azima an interim payment of 75% of his costs, some £8.4 million, together with his costs of the application.

RAKIA failed to satisfy the interim payment or the application costs award, in breach of the court order and contrary to the assurances it provided to the Court in its letter in June 2022. Accordingly, Mr Azima applied to the Court of Appeal for release of the Escrow Monies which was granted in December 2023. The Court of Appeal awarded Mr Azima costs of his application on the indemnity basis.  

After settling his claims against Dechert LLP, Mr Gerrard and Mr Buchanan in late 2023/early 2024, Mr Azima renewed his application for default judgment on the Rescission Counterclaim on the basis that there had been a material change in circumstances, being that the Additional Defendants could not be prejudiced by the decision. Mr Azima also sought determination of his remedies, costs and interest in relation to the Hacking Counterclaim.

On 25 March 2024, Mr Justice Michael Green granted Mr Azima default judgment on the Rescission Counterclaim, holding that RAKIA’s conduct was “an egregious case” that “has had the somewhat extraordinary consequence that they obtained judgments by fraud from both first instance and the Court of Appeal”.  

The Court made a number of awards, including £200,000 for non-pecuniary damages (one of the highest sums ever awarded for emotional distress by the English courts) and £100,000 in exemplary damages (also one of the highest awards ever made). The high sums awarded reflect the scale of the invasion of Mr Azima’s privacy and the severity of the claim that RAKIA, a state body, had engaged in state-sponsored hacking and conspiracy to obtain a judgment through fraud.

Mr Azima was also awarded an injunction, requiring RAKIA to take steps to remove Mr Azima’s hacked data from the internet and to deliver up any copies of the hacked data which remained in the possession of RAKIA or its agents. The injunction was accompanied by a penal notice against RAKIA and certain of its officers, meaning that disregard of the order could lead to contempt of court proceedings, a fine, asset seizure and imprisonment. Mr Justice Michael Green also set aside two First Trial interim orders paid by Mr Azima on the basis that RAKIA’s denial of the hacking underpinned both awards. Various other costs orders were made, including the granting of Mr Azima’s costs of both the First Trial and the Rescission Counterclaim on the indemnity basis, with interest. While the Court directed that the extent of these costs would be subject to detailed assessment, RAKIA was ordered to make interim payments at 75% of Mr Azima’s costs within 14 days, totalling some £5.8 million. The awards RAKIA has been ordered to pay to Mr Azima exceed £17 million, with further costs subject to detailed assessment.

This brought to an end a near decade-long legal battle for Mr Azima in the UK, who will now focus on enforcing the Court’s awards against RAKIA and his ongoing RICO and other US proceedings against various alleged co-conspirators engaged in the hacking and publication of his data.

This article is provided by Burlingtons for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. If you would like to discuss any of the matters covered in this article, please contact Dominic Holden, Alexa Pearson or Oliver Subhedar or write to us using the contact form below.

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Oliver Subhedar
Senior Associate Solicitor
Dominic Holden
Partner, Head of Litigation
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