Allegations
against former defence minister and his son emerge in papers obtained by
Guardian
The Guardian, Owen Bowcott and Ian Black, Thursday 16 May 2013
 |
| Appeal court judges agreed to the release of documents in the dispute between the Saudi princes and a Jordanian former business partner. Photograph: Graham Turner for the Guardian |
Two
prominent Saudi princes are involved in a London-registered company that
supposedly facilitated "money laundering" for Hezbollah in Lebanon
and helped smuggle precious stones out of Congo, according to contested
allegations in court documents obtained by the Guardian.
The claims
emerge from court papers that lawyers for the Saudis have spent a year trying
to suppress, including resorting to threats that relations with Britain would
be damaged if they were revealed.
Lawyers for
the two princes – 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 –
dismiss the claims as fabrications, "extortion" and
"blackmail".
They
contend that their former partner, a Jordanian, Faisal Almhairat,
"misappropriated" money from accounts, denied them access to company
books, shut down the shared business and "interfered with the
negotiations" on telecommunications deals. Almhairat, in turn, disputes
their claims.
In the
context of Middle East politics, the suggestion that two prominent Sunni
Muslims from the Saudi royal family have been surreptitiously dealing for
profit with Hezbollah, a Shia force supported by Iran, is extremely damaging.
Hezbollah is designated by the United States as a terrorist organisation.
The
Guardian and Financial Times originally requested to see the court documents –
filed as part of a commercial dispute between Almhairat and the Saudis – in
spring 2012. On Thursday, the court of appeal finally agreed to the immediate
release of the statements of case.
Among other
allegations is the claim that at the "instigation" of Prince
Abdulaziz, Saudi police issued an arrest warrant for Almhairat and asked
Interpol to issue a Red Notice sanctioning the extradition of the Saudis' former
business partner to Saudi Arabia.
The case
revolves around a catastrophic breakdown in relations between Almhairat and the
Saudis. They were business partners in a London registered telecommunications
company, FI Call Ltd, whose capital value was £300m.
Fi Call was
developing a software application for smartphones that would allow users to
make free phone calls. The Saudis' shares were mainly held through Global Torch
Ltd, a British Virgin Islands company that the princes are said by Almhairat to
control. Almhairat's shares are held by his Seychelles-based firm Apex Global
Management.
The
dispute, which erupted over allegedly misappropriated money and the sale of
$6.7m (£4.3m) worth of shares, has "thrown up a nuclear mushroom
cloud" of litigation, according to Mr Justice Morgan, who gave judgment at
an early stage in the litigation.
The case
raises questions about whether the transparency of British justice can be
upheld at a time when the Ministry of Justice is eagerly inviting wealthy,
international claimants to resolve their disputes in London's commercial
courts.
The legal
dispute was initiated by Global Torch but a counter-petition by Almhairat
forced the two Saudi princes to become involved in the case. The princes then
tried unsuccessfully to extract themselves from the proceedings by claiming
"sovereign immunity". Prince Mishal is aged 86 and said to be in
frail health.
A further,
preliminary hearing is due to take place next week at the Rolls Building in
central London where commercial disputes are tried. That argument will focus on
an application by the princes that the UK courts do not have jurisdiction to
involve them in the counter-claim launched by Apex and Almhairat.
The full
trial, if it goes ahead, is due to be heard in January next year. On Thursday
three judges in the court of appeal, Lord Justice Kay, Lord Justice Richards
and Lord Justice Briggs, lifted a stay on reporting court submissions. They are
due to give their reasoning at a later date.
None of the
factual issues have yet been resolved by the court. The allegations are
fiercely contested on both sides. At one point in a court document, lawyers for
Almhairat remark: "Each side maintains that the other is lying about
almost everything."
During the
appeal court hearing, Guy Vassall-Adams, counsel for the Guardian and Financial
Times, said: "Global Torch has chosen to bring proceedings in this
jurisdiction. This is an open justice jurisdiction.
"They
[the Saudis] have to accept that these damaging allegations will be heard in
open court in the usual way. The protection they are entitled to is a judgment
delivered in public which will refute unfounded allegations. That's how a legal
system works in a democracy under the rule of law."
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