Legal update - Court of Appeal upheld a series of related interim orders made against a Saudi Prince in connection with Section 994 unfair prejudice petitions

8 December 2014

In consolidated appeals, the appellant Prince (P) appealed against a series of related interim orders made in the course of proceedings between July and November 2013.


The first respondent company (X) and a company owned by P had decided to set up a third company to develop and market internet telecommunications technology. P and X later fell out and launched cross-petitions under the court's statutory jurisdiction to give relief against the unfairly prejudicial conduct of a company's affairs under the Companies Act 2006 s.994 to s.996.

On July 31, 2013, Vos J ordered that P should personally sign certain statements required to be made in connection with disclosure in the proceedings. P later claimed that, as a member of the Saudi Royal family, he was bound by a protocol under which he was prevented from taking part in litigation personally or from signing court documents. A witness statement was instead served on his behalf and signed by his adviser.

On September 9, 2013, Norris J ordered that P's defence would be struck out unless he complied with Vos’ J’s order. P did not comply. Norris J later entered judgment for X against P for almost $7 million plus costs pursuant to CPR r.3.5(2).

On 29 November 2013, P appealed to Mann J to vary the personal signature order so that he could provide the requisite information in a witness statement signed by his solicitor, but determined that there had been no misstatement of fact or material change of circumstances to justify varying Vos J’s order. Mann J perceived this as a hidden application to set aside the judgment and also dismissed P's applications to stay the judgment pending trial of the petitions and for relief from sanction.

P's case was that all the orders were wrongly made and as a result he made consolidated appeals in relation to the above decisions.The orders made by the three judges were upheld by the Court of Appeal. Lady Justice Arden gave the lead judgment, with which there was unanimous judicial consent. 

Court of Appeal held

  1. In reviewing the personal signature order, the court should not lightly interfere as it was a case management decision. The personal signature order was a bespoke order designed to meet the particular features of the proceedings. If it bore more heavily on P than the other parties, that was because Vos J took the view that severe measures were required and that nothing less would do. Parties who brought their disputes to the court were bound to follow the court's rules and were entitled to expect that everyone else would also be required to follow the rules. A person who was in a privileged position so far as the litigation was concerned in his own country could not simply assume that he would have similar privileges in the English courts. There was no violation of the right to a fair trial under the European Convention on Human Rights 1950 art.6 in those circumstances.
  2. Norris J was conspicuously thorough and fair in the way he approached the unless order application. He had an admirable grasp of Vos J’s reasoning and might have had in mind that, even though an agent would be making a statement on P's behalf, it would be open to P to suggest that the agent had omitted something that he had been told to put in the statement.  For that reason, Norris J’s unless order could not be faulted and he also rightly concluded that some lesser sanction such as a debarring order might prejudice the other parties as P had not given proper disclosure.
  3. Mann J was right to refuse to set aside or stay the judgment. P had failed to comply with a court order and there was no reason why he should be relieved of the consequences.

The Court of Appeal therefore dismissed all of the P’s appeals. As a result, the default judgment currently stands, awaiting Supreme Court judgment. It has been reported that Lord Neuberger, Lord Clarke and Lord Sumption granted permission to appeal to the Supreme Court on the condition that the US$7.7 million judgment sum was paid into the court by the Prince by 15 September 2014.

Appeal to the Supreme Court

On 13 October 2014, Lord Neuberger, Lord Clarke, Lord Sumption, Lord Hughes and Lord Hodge heard the appeal. On 26 November 2014 the appeal was dismissed and the importance of litigants obeying court orders was self-evident. Once a court order was disobeyed, the imposition of a sanction was almost always inevitable if court orders were to continue to enjoy the respect which they ought to have. And, if persistence in the disobedience would lead to an unfair trial, it seemed, at least in the absence of special circumstances, hard to quarrel with a sanction which prevented the party in breach from presenting or resisting the claim. And, if the disobedience continued despite the imposition of a sanction, the enforcement of the sanction was almost inevitable, essentially for the same reasons. The court might in a particular case be persuaded by special factors to reconsider the original order or the imposition or enforcement of the sanction, but there were no such factors here.

By Kristina Morgan, Paralegal, Dispute Resolution

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