Ahmad Hamad Algosaibi & Brothers’(AHAB) claimants, with foreign judgments, should hear after the Eid al-Adha holiday whether their claims will be accepted, said a company spokesperson.
The Saudi Joint Directorate of Enforcement at the General Court in Al Khobar (JDEK) has issued enforcement orders to claimants with judgments from the Saudi Arabian Monetary Authority (SAMA), but the fate of creditors with foreign judgments remains unclear.
The company spokesperson said that JDEK has asked foreign jurisdictions if there would be reciprocity should they accept judgments from their courts.
So far, AHAB is aware of 26 claimants which were rejected by the Khobar court. There are currently 15 to 16 arbitrations underway in Saudi Arabia, brought forward by the rejected claimants, of which five have received arbitral awards. Only yesterday (21 August) JDEK rejected more claims from lenders relying solely on claim agreement letters with AHAB, which now believes that most of the affected claimants have agreements to arbitrate with the company, said the spokesperson.
Saudi Arabia’s Enforcement Law stipulates that a claimant may get an enforcement order granted from a judgment passed by any Saudi Arabia court or a foreign court deemed of acceptable standard. Article nine of the law includes arbitral awards.
In February and in an unprecedented twist, JDEK told a group of creditors and their counsel that it intends to only accept claims from creditors which have a court judgment, as reported. AHAB had been collecting creditors’ claims and conveying the letters to JDEK. It was assumed that the debtor’s recognition of the claims would suffice, but the development rattled nerves.
Settlement support agreement
Some two-thirds of claimants to AHAB, representing three-quarters of claims by number, have now signed up to the settlement support agreement (SSA), which became effective on 25 July 2017, according to steering committee communication seen by Debtwire. The document, which was sent to claimants, is dated 15 August 2017.
“Satisfaction of the conditions precedent, combined with the requisite majority of Claimants having signed the SSA, will allow clear evidence of wide-ranging support for the proposed settlement to be presented by AHAB to the Joint Directorate of Enforcement at the General Court in Al-Khobar (JDEK) at the appropriate time,” reads the communication. The steerco and its advisors reminded the recipients of the importance of seeking advice from KSA counsels in order to get their claims recognised by JDEK.
AHAB had been bracing itself for an unfavourable ruling in relation to The International Banking Corporation’s (TIBC) claim against the company in Bahrain, as reported.
Bahrain’s court of cassation announced on 6 June its ruling in the TIBC case. The court was meant to issue a final ruling within a month upholding the Bahrain Chamber for Dispute Resolution (BCR) judgment against AHAB, as reported. The Saudi conglomerate is yet to receive news on the matter, and its counsel discovered a couple of weeks ago that TIBC is yet to file a claim with JDEK, said the company spokesperson. AHAB was planning to ask the Saudi court to reject the claim on a number of grounds.
In addition, AHAB has ongoing civil proceedings in KSA against TIBC and there are ongoing criminal investigations with respect to TIBC in Bahrain and KSA, said the company spokesperson.
A source close to the situation told this publication in June that the BCDR issued in 2014 a judgment in favour of TIBC against AHAB in the amount of USD 1.9bn, which the latter appealed by bringing it in front of the court of cassation.
The possibility that JDEK will accept TIBC’s claim could be detrimental to AHAB’s 2 June 2015 proposal. A USD 1.9bn enforcement order against AHAB could shave off 25%-30% of the proposed recoveries, according to the creditor.
Waiting for news from paradise
The debtor is continuing its efforts to recover its assets from an ongoing trial against Al Sanea in the Cayman Islands. AHAB’s proceedings against various offshore shell companies controlled by Saudi businessman Maan Abdul Wahed Al Sanea, came to a head on 18 July last year, when the long-awaited trial kicked off, dubbed as the biggest case in the Caribbean islands’ history.
The written closing arguments have been submitted and the oral closing arguments have been exchanged. AHAB remains confident in its claims against the Cayman defendants and believes that the counterclaim by SICL and Singularis has been defeated.
The company is hoping to hear back from the judge and receive his ruling before Christmas.
Click HERE for Debtwire’s detailed coverage on AHAB.
by Elias Lambrianos in Dubai