In the end, it decided to suspend, or ‘stay’, proceedings in Jersey until proceedings in the Gulf state have concluded.
This ruling was made recently by Deputy Bailiff Robert MacRae, who was sitting with Jurats Collette Crill and Robert Christensen.
The plaintiff in the case is Adeem Investment Holding Company, a company which used to be controlled by Najeeb Al-Humaidhi, a Kuwaiti national, who is the principal defendant, along with several companies ultimately beneficially owned by him and members of his close family.
These include a company called Primewagon Jersey.
Adeem had a significant shareholding in a Kuwaiti investment company called The Investment Dar Company which in 2007 purchased a significant holding in Aston Martin UK.
Until March 2017, this shareholding was owned by Primewagon Jersey, which in turn owned Primewagon UK Limited, which also held a valuable shareholding in Aston Martin from June 2017.
In July 2018, certain Aston Martin shares were made subject to a planned initial public offering on the London Stock Exchange.
Pictured: Deputy Bailiff Robert MacRae ruled that the case should be heard in Kuwait rather than Jersey.
In September of that year, a reorganisation took place affecting the holdings of Aston Martin UK shares by Primewagon Jersey and Primewagon UK: the Aston Martin UK shares were converted into shares in Aston Martin plc, the holding company which was floated on the LSE the following month.
As a consequence of the initial public offering in October 2018, approximately 40% of the Aston Martin plc shares to which we were referred were sold, resulting in very substantial receipts of moneys into what was described as the “Primewagon structure”.
The Order of Justice before the Royal Court said that by June 2018 at the latest, Najeeb hatched a “plan” whereby he would transfer assets beneficially owned by Adeem into Jersey-based structures beneficially owned by him and/or his immediate family.
Adeem claim that Najeeb’s actions in relation to the transfers and payments were fraudulent and should be declared null and void and set aside.
There are further additional or alternative claims made by Adeem in the Jersey Order of Justice, such as claims for damages, equitable compensation and for the repayment of various sums by Najeeb and the Jersey-based defendant companies.
Each and every claim in the Order of Justice is made under Kuwaiti law and there are no allegations of Jersey law duties or breaches of Jersey law obligations.
Najeeb has not filed an official Answer to the Order of Justice as he is disputing the jurisdiction of the Royal Court.
However, the Jersey-based defendants – the companies including Primewagon – did file an Answer last year contesting the claims of Adeem.
Adeem issued proceedings in Kuwait before issuing them in Jersey. Najeeb and the Jersey defendants argued that elements of the Jersey proceedings could not succeed unless they succeeded in the Kuwaiti court.
The Royal Court heard expert evidence regarding the Kuwaiti proceedings from a legal expert who said he could “not see any reason whatsoever which would prevent [Adeem] from obtaining justice in Kuwait”.
He went on to explain that the Kuwaiti court would have jurisdiction over the Jersey-based defendants because of the allegations of Kuwaiti law and because Najeeb is domiciled in the country.
The Royal Court concluded that, as Najeeb had complied with the procedure for disputing jurisdiction as set out in the Royal Court Rules, the burden was on Adeem to show that Jersey is “clearly the natural and appropriate forum for the trial of this case”.
This they failed to do, with the Court judging: “On balance, we find that this is a case where the centre of gravity is Kuwait.”
It added: “The dispute relates predominately to events which originated in Kuwait or were the launch pad or springboard for the same.
“The majority of key witnesses live in Kuwait or the vicinity, and importantly Adeem has chosen to advance its claims in Jersey exclusively by reference to issues of Kuwaiti law upon which this Court has no experience and would require to be assisted by expert evidence which may well conflict as to the meaning and effect of those principles.
“The real connection with Jersey is the fact of the Jersey defendants being incorporated here. There is only one potential witness residing in Jersey whose evidence may not be critical, and there are no issues of Jersey law to be determined.”
Accordingly, the Court decided to grant the relief sought by the defendants. In particular, it said it would:
order that the service of Adeem’s Order of Justice on Najeeb is set aside;
declare that the Court has no jurisdiction over Najeeb in respect of the subject matter of this claim;
declare that Kuwait is the proper place for Adeem to bring its claims against the Jersey defendants and stay the proceedings against those defendants.
After Aston Martin’s 2018 float, its share price nosedived after the float amid uncertainties over Brexit and a slump in the sale of luxury cars in China.
It was rescued by investors led by Canadian billionaire Lawrence Stroll in 2020, who injected cash and forged closer links with carmaker Daimler to help the company through the turbulent period.
The luxury carmaker reported a £76.5m operating loss for 2021, compared with a loss of almost £323m a year earlier.
Sales to dealers climbed by 82% during the year, after it was able to return to more normal operations following 2020’s covid restrictions.
According to media reports in August 2019, Najeed, who was a non-executive director of Aston Martin at the time, sold £18.2m worth of shares in a single day through the Jersey-based Primewagon.
This was on top of a £29.5m share offload two months earlier, which represented 10% of his holding in total.
City analysts at the time said the sale was “unhelpful” at a time when Aston Martin executives were fighting to retain investor confIdence.
The media reported that Najeeb, a civil engineer by training, became a billionaire from the float when he sold £332m of stock. It added that he is from one of the country’s oldest merchant families, whose wealth can be traced back to the 1700s when Kuwait was a prosperous trading hub.