A $10m. blue diamond, Guernsey, and a Qatari royal family dispute

A Guernsey company remains responsible for the historic ‘Idol’s Eye’ blue diamond after the UK’s High Court dismissed attempts to force its sale.

The dispute over the ownership of the 17th century diamond involved two branches of the Qatari royal family.

Sheikh Saoud bin Mohammed Ali Al-Thani, Qatar’s minister of culture between 1997 and 2005, was a prolific art collector and bought the diamond in the early 2000s.

In early 2014, shortly before he died, Sheikh Saoud agreed to lend the diamond to his second cousin once removed, Sheikh Hamad bin Abdullah al Thani.

To do so, the diamond was transferred to Elanus, a Guernsey company that was set-up for the loan, who then lent it to another company Qipco, a Qatari private investment company of which Sheikh Hamad is the CEO.

“The diamond has a history dating back to the 17^th century, when it is said to have been discovered in a mine at Golconda in Southern India, though that history is not complete or certain,” said Simon Birt KC in his judgement.

“It is also said to have been owned at one point by the 34^th Ottoman Sultan, Abdul Hamid II, who allegedly kept it as the eye of a secret idol in the Temple of Benghazi. It was acquired by the New York gem dealer, Harry Winston, in 1946, at which time it was probably set in its current setting – a platinum diamond necklace and pendant, itself containing 152 diamonds with a combined estimated total weight of 47.30 carats.”

Sheikh Saoud died in November 2014 at the age of 48.

The court case brought by Qipco centered around whether a right in the loan agreement for it to buy the diamond had been triggered in February 2020.

Elanus is ultimately owned by the Liechtenstein-based Al Thani Foundation, whose beneficiaries are Sheikh Saoud’s widow and three children.

Qipco’s lawyers argued that a 2020 letter sent by the Foundation’s lawyer amounted to an agreement to sell the diamond for $10m, but Elanus said that was sent by mistake.

Elanus was set up by Saffery Champness Management International Limited, which was part of Saffery Group, providing private client and company services. 

The single share in Elanus was held by a corporate nominee shareholder provided by Saffery, namely Rysaffe Nominees (C.I.) Limited, which held that share on trust for the Foundation.

Elanus had two corporate directors – Saffery Director Limited (formerly Saffery Limited) and Rysaffe Director Limited (formerly Champness Limited), both of which were also provided by Saffery. 

The two individuals at Saffery who had principal involvement in the matters being disputed were Lisa-Jayne Vizia (a client director at Saffery, who was also a director of Rysaffe, Saffery Director and Rysaffe Director) and Karin Brehaut (an Administrator at Saffery).

Guernsey lawyers were involved on both sides of the loan arrangement. 

Qipco had Guernsey lawyers who were said to have reviewed the documentation to ensure consistency with Elanus’s Articles and Memorandum, and Saffery engaged the Guernsey lawyers’ Collas Crill LLP to provide Guernsey law advice on the establishment of Elanus and comments on the draft agreements.

The two sides disagreed over how much the Idol’s Eye is worth, with Elanus’ lawyers in the case saying that an expert had valued the diamond at around $27m.

Qipco’s claim failed with the judge finding Elanus did not have a “wish to sell” the diamond, nor did the family and even if they did it could not be attributed to Elanus.