The bankruptcy lawyers administering The International Banking Corporation (TIBC) in Bahrain have sued Ahmad Hamad Al Gosaibi and Brothers, the bank's owners, for allegedly defaulting on US$720 million (Dh2.64 billion) in foreign exchange transactions.
Trowers and Hamlins, the London law firm appointed by the Central Bank of Bahrain to run TIBC after it failed last year, filed the claim with a judicial committee in Saudi Arabia.
"These claims form the first in a series of litigation proceedings which will be brought in a variety of jurisdictions around the world against those debtors of TIBC including [the Al Gosaibi group] - the single biggest debtor owing $3.2bn," said Abdullah Mutawi, the Trowers and Hamlins lawyer who is leading the recovery effort.
"These proceedings will ultimately support the process of asset realisation for the benefit of the creditors of TIBC, who include international and local banks owed in the order of $2.6bn. Further claims will be lodged in the coming weeks and months."
The case adds to a growing legal tangle for the Al Gosaibi group, the Saudi family-owned business that defaulted on financial obligations starting last summer. The group has since alleged that it was the victim of a $10bn fraud by Maan al Sanea, a Saudi billionaire who runs another Saudi conglomerate called the Saad Group. Mr al Sanea denies those allegations.
Cases relating to the dispute have been filed in the Cayman Islands, London, New York, Bahrain, Saudi Arabia and the UAE.
A spokesman for Al Gosaibi said the company rejected claims made by Trowers and Hamlins "on every level".
"Trowers and Hamlins' rhetoric simply ignores [the Al Gosaibi group's] multiple offers to enter into a co-operative information sharing agreement ?"said Jim Courtovich, the spokesman for Al Gosaibi, said in a statement to The National.
TIBC was taken over by the Central Bank of Bahrain last August after it ran out of cash and began to default. The central bank also took over Awal Bank, a Bahraini lender owned by the Saad Group that ran into similar trouble.
Charles Russell, another UK firm, was put in charge of Awal. The law firms have been tasked with recovering money due to the two banks and winding them down with the assistance of restructuring specialists.
Trowers and Hamlins said yesterday that in addition to the claim filed on Wednesday against the Al Gosaibi group, it had filed a case in April with the Negotiable Instruments Committee in Saudi Arabia against Saad Trading, a Saad Group subsidiary, for $117m.
Hearings in those cases are scheduled for early next year, the lawyers said.
The $720m claim involving the Al Gosaibi group's foreign exchange deal is being heard by a judicial committee under the Saudi Arabian Monetary Agency.
Mr Mutawi said the claim followed "unsatisfactory responses from [the Al Gosaibi group] and their representatives to questions relating to the assets of TIBC that we have repeatedly asked them".
Charles Russell has already filed claims in Saudi Arabia and Bahrain seeking recovery of assets, according to court documents obtained by The National.
Awal and TIBC have received bankruptcy protection in US courts, where cases have been lodged by creditors.
In a letter to Mr Mutawi dated May 26 obtained by The National, a lawyer for Al Gosaibi said the group was advised not to hand over documents to Trowers and Hamlins because the firm was planning to use them as evidence in cases against Al Gosaibi.
"We could not responsibly advise our clients to proceed in this manner," the letter, from Eric Lewis at the firm of Baach Robinson and Lewis, said.
In the letter, Mr Lewis also advised Trowers to join Al Gosaibi in the fight against Mr al Sanea, asserting that filing lawsuits against the group would be unproductive for creditors to TIBC.
A London-based representative for Mr al Sanea declined to comment.
In Bahrain this week, a judicial panel made an interim ruling in a dispute between Al Gosaibi and Bank Muscat International that loan documents the group alleged were forged were in fact genuine. The Al Gosaibi group plans to appeal the decision.
The group alleges that Mr al Sanea siphoned off about $10bn when he was head of the Money Exchange, a financial services arm.
Mr al Sanea says he is innocent and is fighting to clear his name in courts across the globe.
afitch@thenational.ae
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
SHAITTAN
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MEDIEVIL%20(1998)
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Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
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A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
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England Test squad
Joe Root (captain), Moeen Ali, James Anderson, Jonny Bairstow (wicketkeeper), Stuart Broad, Jos Buttler, Alastair Cook, Sam Curran, Keaton Jennings, Dawid Malan, Jamie Porter, Adil Rashid, Ben Stokes.