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  • Swaziland King Private Jet High Court Case December 2015

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    Richard Rooney
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    A court has confirmed that King Mswati III of Swaziland cannot sell or dispose of his private jet until a dispute over his alleged failure to pay a US$3.5 million debt is resolved. The ruling was made in the British Virgin Islands on 23 December 2015after the East Caribbean High Court was told that there might be plans to lease the plane and then lease a second plane for King Mswati’s use. There has been a long-running dispute between Shanmuga Rethenam, who owns a company called SG Air, and the King.

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    A court has confirmed that King Mswati III of Swaziland cannot sell or dispose of his private jet until a dispute over his alleged failure to pay a US$3.5 million debt is resolved. The ruling was made in the British Virgin Islands on 23 December 2015after the East Caribbean High Court was told that there might be plans to lease the plane and then lease a second plane for King Mswati’s use. There has been a long-running dispute between Shanmuga Rethenam, who owns a company called SG Air, and the King.

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    © All Rights Reserved
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    Markieren Sie unangemessene Inhalte
    2K Ansichten44 Seiten

    Swaziland King Private Jet High Court Case December 2015

    Hochgeladen von

    Richard Rooney
    A court has confirmed that King Mswati III of Swaziland cannot sell or dispose of his private jet until a dispute over his alleged failure to pay a US$3.5 million debt is resolved. The ruling was made in the British Virgin Islands on 23 December 2015after the East Caribbean High Court was told that there might be plans to lease the plane and then lease a second plane for King Mswati’s use. There has been a long-running dispute between Shanmuga Rethenam, who owns a company called SG Air, and the King.

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    [EASTERN CARIBBEAN SUPREME COURT ‘TERRITORY OF THE VIRGIN ISLANDS INTHE HIGH COURT OF JUSTICE ‘CLAIM No. BVI HC (COM) 2014/00104 BETWEEN: [1] SGAIRLEASING LIMITED [2] SG.COMMODITIES TRADING LIMITED Respondent/Clalmant AND It] INCHATSAVANE COMPANY (PROPRIETARY) LIMITED [2] HIS MAJESTY KING MSWATI I, KING OF SWAZILAND ‘ApplicantiDefendants Appearances: ‘Mr John Wardell QC and wit him Mr. Robert Nader forthe Claimants Mr Frank E, Walwyn and with him Ms. Jennifer Jarvis forthe Detndants JUDGMENT Freezing Orér obtained without notice - Application fo discharge - Whether appicaton for Freezing Orier properly made without notice fo Defendants ~ Good arguable case — ‘Whether rol risk of dlsspation of assets made out ~ Delay ~ Materia, non-disclosure — Whether the court ought fo decine to accept jurisdiction on prinapes of forum non convenians ~ Whether claim barred by sovereign immunity ~ Whether claim an abuse of process because of prior proceedings in Ontario Canada, Introduction [1] FARARA J [Agl} The Claimants in these proceedings (espectvely, "SR Air and "8G Commodities’) ae both companies incorporated inthe Britsh Virgin stands a 58 4 ‘The Fist Defendant, inchatsavane’) is a company incorporated in Swazland, ‘and the Secand Defendants His Majesty the King of Swaziland (HMI), ‘On 2% September 2016, the Claimant obtained, on an ex prt or without notice basis, 8 worlvide freezing order (the Freezing Order’) unl the retum date, preventing the removal by the Defendants of any of heir commercial property in the BVI and elsewhere up to 2 value of USS7,916,448.2 (lo be reduced to USS4,418.449.82 in the event that and for so long as the USS3,500,000 inthe trust aocount of WeirFoulds LLP are secured by the inurcton). The Freezing (Order also prevented the removal from the trust accoun: at the taw firm of WesFoulds LLP in Canada of the sum of USS3,500,010; disposing of or Sea clara Bure Tobos: 1) i) 13) to and cost overuns in relation tothe arf inthe principal sum of USS9 300,000, and ‘payments to other reciets inthe aggregate sum of USS1,145,059 82. The. ‘second restitution claim is said to arise by vite of a loan of USS',500,000, _ativanced by SG Commoaitis to HMK to facitate his purchase of arwors, The ‘ist resituion cai is founded on the principle of Unjust enichment, hereby the Fst Claimant asserts, at paragraph 9 of te stalsment of claim, that Goderich Aireraft nc, (GAP), which had entered into a witten agreement with the Fist Defendant on 10% May 2040 to make certain modifcatiens tothe interior of the aircraft, ran into financial dfcutes. This putin jeopardy the completion by GAI ofthe agreed upon modifications tothe ara, and hence put at risk the personal investment by HMK of the sum of US$4,500,000 in the aircraft. The aircrafts said to have been used by HMK fr ofl travel, [A pargraph 10 ofthe stalmantof cli the Fis Claimant pleads, thal between 30" Decamber 2010 and 18% Api 2012, GAI encourered certain ine and cost ‘vers in connecon withthe mosicatons 10 the aca. Accordingly, “o ensure that GAI remained solvent and thatthe mocatons to the rat were completed’, SG Air funded payments of USS9,160000 to GAI for the ‘modifications, and USS1,$71, 648.82 o other recent in consecton with he said modifications al forthe benefit onthe Fist Defendant. As regards HMK, paragraph 11() ofthe statement of claim stals:- “HMK subjected $6 Air to ilegimate pressure amcunting to economic: duress to make the payments spectied above in paagraph 10, and SG ‘rad no reasonable alternative but to comply. HMK hreatened impliedly that, 86 Air did not make those payments, the Ngvenya iron ore mine: ‘would bein jeopardy.” ‘The reference tothe ‘Ngwenya ion ore mine’ isa reference toa mining project ‘Swaziand in which @ company, SG ton Ore Mining (PTY) Limited, which seemingly isa related company of the Claimants, had an interest 14) 15) 18) Accordingly, the First Claimant pleads that the monies advarced by SG Air to cover the costs overruns associated with the modifications to the aircraft being cared out by GA, ‘were monies paid by SG Air tothe use of HM, and it would be unjust for HMK, to retain the benefit of those monies, withou: making restituton 16 SG Alc’ it hears stating hat HMK rimsel isnot the registred owner ofthe tier It is registered tothe Fist Defendant, a company wholy owned by HNK. However, itis the Claimant’ pleaded case that the sum of USS9,500,000, which ‘vas payable upon the Frist Defendant's purchase ofthe araft on or about 18% Apfil 2012, was paid from funds in HMK's personal bank account This is said to sive rise to the Inference thatthe Frist Defendant, of which HMK is the sole {rector and shareholder, olds the aircraft upon a bare tust for HK. The fist restitution claim also incudes a secondary unust enrichment claim’, for Certain sums which SG Airis sid to have expended in ting aerate aircrats for use by HMK, Firstly, during the period Apri and May 2011 from a company called Emerald Jets SAL (Emerald in the sum of USDS700,000 paid by SG Air to Emerald on 15% Apri 2011 (of which about $285,000 is sai to have been ‘efunded by Emerald in early June 2012); and about USD$45,000 in legal fees expended in connection with the sald refund. Secondly, ir respect of three payments made to Prestige Jet Rental LLC (Presge’) between May and October 2011, forthe lease of a jet. These sums, paticularised at paragraph 13 ofthe statement of claim, total USDS' 425,000 The second restitution claim rests on an oral agreement sald tohave been entered Ito in late October or early November 2013 between SG Commodities (by its agent Mr. Rethenam) and HMK, whereby, allegedly, it was agreed that SG ommodities would loan HK the sum of USDS1,500,000. The purpose fortis alleged loan, as pleaded, was to faitate HMIK's in his purchase of artwork in ew York. tis SG Commodities case thatthe loan sum was tobe repaid by HMK * See pars12 306 * Se par 2) 606 Se pa 13 7 cc) 19} ‘using monies anticipated by HM tobe received from Southem Aca Resources LUmited ('SARL?), pursuant to a separate agreement between HMK and SARL, “the terms of which included that SARL would pay to HMK USDS0.50 por metric tome of iron ore from the Nawenya mine exported from Swatiand." The loan sum was paid by SG Commodities to HMK in two tranches one of USDS4 milion on or about 30" December 2013, and a second of US$500,000 on or about 14 January 2014, which sums were sent, atthe direction of HMK, to a New York art edler, Metropolitan Fine ts & Antiques Inc. Metropolitan’ [At paragraph 18, itis pleaded that on or about 21 August 20°4 HMK caused all rining actives at the Nowenya mine to cease, and prevented any further exporting of ore fom that mine, Furthermore, I is alleged, tha HK, between Detober 2014 and January 2015, caused the expropriation of SARL's investment 'n 8G lron Ore Mining (PTY) Lite, the censee fo mine ore rom the Ngwenya rine The Second Claimant, SG Commodities, pleads a total fare of consideration under the oral agreement and, accordingly, its entlement to restiuton or repayment by HK of the sum of USDS1.5 milion allegedly baned. As regards, unjust enrichment, itis aso pleaded that HK had subjected S Commeaites to legitimate pressure amounting to economic duress to make tothe payments, and ‘hey had no reasonable ailemative but to comply ‘as HMK treatened impliedly ‘hal, SG Commodies dit not make the payments, the Ngwenya ion ore mine project would be in jeopardy.” The Cans Proceedings Consider It useful to ident certain sabent and uncontradicted facts about the ‘anadian itgation, which are germane to my consideration o the issues before ‘ne, and the question of wheter the Freezing Order ought 0 be continued or discharged "Sepa 16500 1 Seepan 17 SOC (20) ‘These sallent facts are: {a} In January 2015, almost 7 months before the Claimants applied in BVI {for ex pate interim reli pre-commencement ofthe Caim, the Fist {Cian (SG Air) brought an application bebe the Ontario Superior CCout in Canada against Inchatsavane the Fist Defendant), seeking ‘8 non-possessory repace’s lien over the aircraft under an Ontario sfatule, Repair and Storage Liens Act 1900 (the Canadian Proceedings’). SG Ai's application was eventual dismissed on 27% March 2015 oe (On 12 January 2015, in the Ontario Proceedings, $G Air was ‘granted, on an ex parte basis, an interim injunction preventing the ‘recat rom leaving Canada, Ata hearing of opposing mations, one to continue and the ober to discharge the ijurcton, it was set aside by the motions judge, Justice Dow, ofthe Ontato Superior Court, on 1 ‘April 2016, and the arraft ordered released. However, this order was stayed by the judge for a period of seven days pending an appeal from his decision" @ (01 13® May 2015, the Court of Appeal of nario extended the stay of Judge Dow's decision until determination of SG Ais appeal. The Court of appeal also ordered Inchatsavane to pay the sum of US$35, rillon into ts Canadian auyers,’ WeitFoulds LLP, tust account, in ‘exchange for the release of the aircraft ‘ino the possession of Inchtsavane and may bo removed from thi jurisdiction." This sum was paid as ordered. Accordingly, there was, from that date, absolutely no restrictions on the movement ofthe arraft pursuant to any order ofthe Canadian cout, or any ober court for that mater, As i umed out, GA refused o release the aircraft unt they were paid an addtional US$350,000, This caim was eventually setled and the aircraft released, Accordingly, as from the date of settlement of GAI's loan claim; the Fst Defendant was fe to remove the aircraft from Canada, @ ‘The airraft was subsequently removed fron Canada, apparent for ‘maintenance or furher repairs to iis engnes, and its movement "ee Vol 4 Tab 20 Deena’ Acavis Bund Se Vol 1, ab4~ Deen Aas Bundle remained unrestrained uni the BVI Freezing Order obtained ex parte (on 2 September 2085. (e) On 11% June 2015, the Court of Appeal of Ontari dismissed SG Airs appeal. The cout’ reasons for is decison were given on 17* June 2015}. Al paragraph (9 ofits reasons, the cour states "These facts are dispositive of SG Ais len claim. SG Air id not camry out the repairs of modifications at issue. It did not bestow skill, labour or money on the aitcraf. Nor did it effect improvements tothe acrat. Thus, SG Alr does not al within the dass or workers and artisans thats. 7 ofthe Act seeks to protect” () Tis is clearly a ruling on a repairers lien daim made under a particular statute which provides protection to certain casses of \wotkers. The cout of appeal went onto slate a paragraph (10, that the fat that SG Air provided the funds to GAl to aepay or france the costs of repairs to the aera, does nt ater its conclusion regarding the claim for a epaier’ len under the statute, snc the Act does not ‘oxtond a repairer’ in to lenders (@) As regards SG Airs appeal ofthe denial by the motions judge of injunctive rel, the Ontario Court of Appeal saw no merit such a ‘challenge, and they concuded that SG Air had not made out an entitement to “prejudgment injunctive rein a simple deb action. However, the court aso required Inchatsavane's layers to contre to hold the sum of USS25 mifon in their tst account wnt the expiration ofthe time ited for $G Air o seek leave to appeal tothe ‘Supreme Court of Canada'”. That date was 16% September 2015, (h) SG Air did apply within the time for leave to appeal to the Supreme Court of Canada, The determination of ther aplication is pending ‘ands not expected unt 2016." ()_ The US$35 mln remains in Inchatsavane's Canadian lawyers trust account, notwithstanding the 16" September 2015 date having passed. + See Hear Bundle Tab 18, Gee pre pare 2 See pa. "See pra 47 Secu Ada! Shi Foreard Damn les 208 Cxober 2015 9 First Defendant’ Alleged Breaches of the Freezing Order rt) (2 (ea The Cieimants contend that the First Defendant has breached the Freezing Order by moving the arraft ar they became aware ofthe injunction. tis sad, (and to bhis the Fist Defendant has not demurred), that the Fit Defendant flew the sircraft rom Swaziland lo South Afica and back to Swazlend in possible breach af the Freezing Order. Thay also contend thatthe Defendants have refused to Alsclose to the court where he arraft was located prior o 25" September 20151 This was the subject of complaint before Leon J on 14% October 2015, as the lranscipt of the hearing discloses. The leamed judge requiced that both aides (fom the Defendants) ‘should also address the question of where the recat was unknowing to the other party on the 25 Septerber 2015, andifit was not in Swaziland on that date, when it was moved to Swaziand from South Ati Cor whatever locaton; and any explanation forts removal in Ight ofthe injunction of this Court, In purported compliance with ths order, Mr. Sine at paragiaphs 18 and 17 of his First Afidavit fled 20 October 2016 on behalf of he First Defendant, states that the aircraft was in Swazland on 25" September 2016 and was fown to an from South Aca on 1 October 2015, This was aftr the Freezing Order had been served on the Frist Defendant, Again, in purported compiince withthe order of ustce Leon, Mr, Sl offers an explanation at paragraph 17. He avers that on the date the tera was flown to and from South Aca, neither Defendant “understod te freezing Order to probit the Aircraft rom fying to and from South ‘fica, From that day forward, the Aircraft has not moved from is present location ‘at Matsapha Intemational Aiport” Its diffcu to apprehend how either Defendant could have been uncertain as to terms of the Freezing Order relating to the aircraft. That having been said, the ‘grounding’ of the irra by vitue of the injuncton at 2aragraph 4(e) of the: Freezing Order, Is expressly made conditional ypon the courts of the foreign 1 Se pra 36 Caan Selon Argent See pe 98-37 20 (24) (25) jufsicon where the alrrat may be locate, recognising the Freezing Order, In fis instant, that would be the courts of Swaziland, and ono: the alrcraft was moved, the courts of South Alica. There is no evidence before me thatthe courts of ether of these two countries have recognised the BVI Freezing Order. inthis ‘egard, while ths cout has subject mater jurisdiction over the rstuton claims, it oes not have personal jurisdiction over the Defendants, one of which is a company incorporated in Swaziland, and the other, the King of Swaziland, bythe circumstances, it would be @ stained interpretation to conclude that the Defendants or the Fist Defendant breached the Freezing Order by moving the sicraft rom Swaziland to South Mica and return, abet for only one day ora pat thereof, and the explanation given by Mr. Sine at paragraph 17 of his Fst AMfidavt has to be understood in that contest. Accordingly, even if there was a ‘echnical breach by the Fst Defendant of the injuncton at paragraph 4€ ofthe Freezing Order. | do not atach much significance ths allegad breach, In any vent, what has been made clear is that since 1" October 2015 the aircraft remains in, and has not been moved from Swaziland, and that another aircraft sircrafts have been leased forthe use of HMK when on official cute. The Alleged Settlement Agreement This aspect ofthe factual matx arises inthis way. At paragraph 60 of Mr Shan's st Afdavt, he refers to evidence which he gave in the Canarian Proceedings to ‘he effect that he and HIMK “agreed to sete Inchatsavane's lability to SG Al in ‘espect of the cost overuns by paying SG Air USS3.500.000 and how Inchatsavane reneged on is promises” He goes on to site that the said soteement was made orally with HMK when he met with him in person in ‘Swaziland on 4 November 2014, "on which oocasion HMK aio agreed fo repay ‘8G Commodities the USD 1,500,000 forthe artwork.” Further on this issue, Mr. Shan in his Supplemental Afidaut in the Canadian Proceedings, at paragreph 41, avers that atthe 134 November 2014 meeting with u HNIK, they agreed to sete the Arrat overrun issue for USD 5 ion, ‘which ‘settlement was acknowledged in wing by Mr, She.” [271 It's unclear, inthe absence of any further evidence, whether tis wes intended to be a global settlement ofall claims of both SG Air and SG Commacities, The tems, as recounted by Me. Shan in both his Supplemental Afidavit in the Canarian Proceedings and in his Fits Affdait in these proceedings, relates to 8G Airs claim in respect ofthe modifications and cost overruns telated to the ‘cre, although there is also some mention of repayment ofthe sum of USS1.5 rilion allegedly advanced by SG Commodities to HMK for purchase of the arterk, Sufoe it to be said that nether side before me relied os this alleged ‘global sottement as a ground for continuation o discharge ofthe Fraeing Orde. Tho sss [28] The sues for determination have been distiled as folows:- (2) Has a proper case been made out for continuation of the Freezing (Oder, in tha, ave the Claimants established a good arguable case fn the merits and a real risk of dissipation of the assets of the Defendants; (b) Have the Claimants been guity of material non-discosure so as 10 ‘warrant the immediate discharge ofthe Freezing Order, (c)_ Ought he caim be stayed on grounds of forum non cameniens; (@) Ae the Defendants or any of them protected by sovereign immunity in respect of the claim; (6) Isthe claim an abuse of prooess; and (Ifthe Freezing Order isto be continued, should the Claimants be: required to fortify thelr undertaking in damages pending te tia 2 ‘Ought the Freezing Order to be continued or discharged. [29] The applicable principles upon which a court should decide whether to grant oF. continue @ worldwide freezing order are notin dispute. It is accepted thal the {alloirg requirements must be established tothe courts saisfacton:- (1) The claimant must have a good arguable case one mers against the respondent, that is, one whichis “more than barely capable of serous ‘axgument, but not necessarily one wich the judge considers would have a better than fity percent chance of success” Ninimia Maritime Corp v Tave Schiffahrts GmbH 8 Co KG {1983]? Lioy's Rep. 600 at 606. (2) The refusal of the injunction would involve a real sk that any judgment ‘obtained would remain unsatisfied. In short, the claimant must demonstrate that hee isa eal isk of dssipation cf assets the interim injunction isnot granted. {@) Its just and convenint thatthe injunction ought tobe granted aking all the relevant crcumstances into account This later isue, which arses pursuant to the courts powers under section 24 of the Eastem Caribbean Supreme Court (Virgin Islands) Act Cap 80, must be looked at ater afl consideration of all the relevant issues raised by both the (Claimants andthe Defendants Good arguable Case [80] As mentioned above, the claim is for rsitution on the basi that the Claimants, have provided monies tothe Defendants, andthe Defendans have thereby been Lnjustly enriched. These caims relate to fnaning ofthe ccs of mafiations to, the aircraft, the cost overuns, and the monies allegedly expended by SG Air in meeting the cost of allemative air transportation for HME (the fist restuton claim), And for monies allegedly loaned to HMK by SG Comnoaities to faciitate or finance his purchase of certain artworks, (te second resttuon claim). Both claims are permissible under the laws of the BVI, and he BVI courts have: |uisiction in relation to them by vitue of CPR 7.38) since, as alleged, the acts Giving rise to these claims ‘were to the detent ofa person domicile within the juisdicon’ ofthis cout, namely, the Claimant companies. 2 BI (32) (33) (34) Mr, Wardell QC, who appeared for the Ciimants, submited tat this i a clear case of restitution, and that there is really no dspute thatthe Claimants have sats ths fist requirement of @ good arguable case. It is his view that the prinopal point of departure between the pats ison the issue ofrik of dissipation ofasets His points wel made out when one examines the Defendants’ skeleton argument dated 30% October 2015. At paragraph 65, under the rubric The Claimants do not mee! the test fora Freezing Order’, Mr. Walnyn, sts some five bases upon which ‘hey contend thatthe Freezing Order should be set ase. These donot include @ ground thatthe Claimants have fled to make out a good arguable case, within the mearing ofthat expression, as mentoned above. Accorinly, | am driven to the conclusion thatthe Claman have sated tis rst requirement Real Fis of Dissipation of Assets ‘This is a pivotal isue and one in respect of which the pares ae indlsagreement Mr. Wardell QC, for the Claimants, submits that they have made out an covenvhnelming case of isk of dissipation of asses, In attempting to make good on his submission in oral argument, he relied on thee matters, They are (1) The Second Defendant, HK, is an absolute monarch of Swaziland and controls everyting there, including the judy. The implication Is that HMK is ‘untouchable’ in Swaziland, and, oxordingly, i isnot possible forthe Claimants to get justice there. | am not sated, on the evidence before me, of the complete accuracy ofthis descrition or categorization, athough itis clear the HK, as monarch, is most Powertul and welds a great deal of authori and infuence in ‘Swaziland. Additional, it appears that he is protested by sovereign Immunity or immunity from prosecution of any clan brought against him ther. This poston ought to have been known tothe Cisimants and their principals when they elected to enter into business dealings wih HK. (2) The Defendants dealings wih the aircrat, both before and after the Freezing Order was obtained, show a wilingness on their pat (ora “ BS (38) least that ofthe Fist Defendant) to avoid orto breach court orders. | wil return fo this below. (@) The Defendants’ witnesses, specially, Mr Leonzra and Mr. Dube, have given false evidence relating, in partoula, to the alleged breaches by the First Defendant ofthe Freezing Order, and their intentions wih regard tothe possible sale or disposal ofthe aircraft. wil also tum this issu in greater depth below. ‘As ragards risk of cssipation of assets, it must be noted that he Fist Defendant has only three known assets. These ae the aircraft is engines and the USS3.5 nillon held inthe trust aocount of WeitFoulds LLC in Ontaro, Canada. Any concem regarding dissipation of the asses ofthe Defendants is focused on these ‘hee assets. Furthermore, as regards the funds ise it seems to be the postion that they remain in the WeiFoul's tust account, and wil remain there until SG Al's ‘pplication fr leave to appeal to the Supreme Court of Canada is determined. This so notwithstanding thatthe time imited by the Ontario Court of Appeal in is order of 17% June 2015 has passed | acoept the evidence a paragraph 9 of Mr. Sihle's Second Afidait fled 20% Oclober 2015 in support ofthe Defendants! application for discharge ofthe Freezing Order, to the effect thet he has instructed ‘he Firs Defendant's Canadian lawyers to continue to hold the $35 milion in their ‘ust account “unt the decision onthe leave to appeal aplication [by SG Ai is released by the Supreme Court of Canada’ Thus a present, here is no order of 4 cout, save and except the Freezing Order, which prevents te First Defendant. “fem moving or causing the removal ofthese funds fom the trust account. Ths, in ‘ry view, gives rise to a real risk of those funds being moved and put out ofthe “each ofthe Claimants should they be successful in ther respective clams inthe VI proceedings. In tis regard, it must be pointed out that these funds are Gee pas @ and 1 oF Mt Shi’ Ft Aida fled 20 Otte 2015 Vo. 1 Deda’ riot ‘Maas = cama 2696 5 Appoaon Bund, Tab 3, pag 7, para 20 1 page 80 -Deledaris’ il of favs 1 presumptively the property of the Fit Dofendant, athough the cource of sad funds has rot been dscosed inthe materials put before me, [87] As regards the aircraft and ts engines, Mr. Wardel's second point, he relies on ‘wo factors which he submis points to a real risk of dissipaton by the Fist Defendant of these asses. Fist he poinis tothe evidence at paragraph 42 ofthe Fst Afidavit of Mr, Shanmuga Rethennam (Me. Sha) fled 25" August 2015 ‘here he states: “The fact thatthe aircraft requied further repairs but was fown cut of Canada anyway, Ilustrates how desperate Inchatsavane and HMK are to move the Aircraft cut ofthe arms’ reach of any court orders directed to it” Reliance was also placed on the evidence at paragraph 8a) of Wr. Shan's Second fidavit fled 28" October 2016 where he avers that Afr the Aircraft was released, HMK tld me to get the Aircraft out of Canada as quicly as possible" [88] Mr, Wardell also pointed me to the document at pages 90 to 95 ofthe Claimant's Bundle This lists the routine maintenance to be done on the aicrafs landing gear and no, 2 engine, which he asserts would have been known befow the aicrafl was removed from Canada. The purpose of tis lest reference is to {emonsrate that Mr. Sile evidence that futher repairs to he aiteraft and is 2ngines were only discovered after the aircraft was taken out of Canada, cannot be correct. Infact, Mr. Shan categorically describes tis statement asa ‘ie,’ and sontends that the work done on the alraft in South Afica was ‘routine ‘aintenance’ of which the Fst Defendant was aware years in advance. [39] In my view, itis beyond doubt that after the injunction obtained in the Canadian Proceedings had been discharged, the stay had been ite, the US$3.5 millon had been pid into the trust account of the First Defendant's Canadian lanyers in 1dr o secure the release ofthe craft pending SG Air's aplication for leave to ¥ Se Gants Bue Tb 10, page 12 2 Se ian Bude Tab 14, ap0 3 BeeeTa it 1 Ses pa 13of Mr Shiels Socnd Atta. Vo! Ta G page I~ Defendants Brit Ants 2 See pa), Mr. Shans Sond Aidit 16 140) , ‘appear being fled (as ordered by the Ontario Court of Appel), and the claim by GAL had been setled, the arrft was fee to be flown cut of Canada. Indeed, hen the aircraft was ordered released, the Canadian court expressly stated that the aircraft canbe taken out of Canada. It matered not whether the arraft was {ue for routine or scheduled maintenance or whether the owner decided, for its ‘own reasons, not to have such maintenance done in Canada. This it was free to do, and | do not consider their actions in taking the arrft out of Canada as a legitimate basis for concluding that there is rel risk of dissipation ofthe First Defendants assets. Accordingly, tis basis has not been estabished by the Claimants. “The second factor relied on to establish a risk of dsscaton In relation tothe aircraft itso, isthe alleged breaches of the Freezing Orler by the Defendants, specitcaly paragraph 4(e), which prohibits the removal o the ara from any jurisdiction in which itis located and which jurisdiction recognises the Freezing (Oder. | have already addressed this above in the section dealing with the Fist Defendants alleged breaches ofthe Freezing Order. (On this aspect, Mr. Wardell took me to paragraph 8. of Mr. Shan's Second Afidait where he references the aircraft being flown from Swaziand to South ‘Affica and back to Swaziand, as indicate of the First Cefendant ‘continuing to demonstrate a pattern of moving the [aircraft to avoid court orders. It is alleged that the First Defendant has refused to dscose where the arraft and is engines were located on 25% September 2015, in apparent breach of the csclosure provisions in the Freeing Order. Mr Shan refers fo parayraph St of Me, Sile's ‘Second Affdavit® as evincing an intention on the part ol the First Defendant to keep the [acre grounded in Swaziand in order to zvoid it being frozen in another jurisdiction’. Hee, Mr. Sile, at paragraph 50, stales categorical thatthe aieraft acated at Matsapha interational Aipot in Swazland) ‘will ot be fown pending further order of this [BV] Cout, out of respect for the Freezing Order = Sol {Tab page 60 —Deendants Bt of Aas v7 co (43) (44) made hr this proceeding” And et paragraph 51 he reiterates thie postion, and ‘g0es onto say that “HMK has hired an alternative aircraft through Royal Jet LLC’. [presuraby for his official us. Accordingly, on the one hand, the Claimants complain that b move the aircraft from Swaziland to South Aca was @ breach ofthe Freezing Order and, on the ther, they contend thatthe aircraft not being moved from Swaziland to another |urisdcton is, n some way, proof ofan intention by the Defendants to avoid the effect ofthe Freezing Order onthe ara. Ths is both logical and unsustainable. No wonder Mr. Warde di not seek to rely on that bit of paragraph 8 of Me ‘Shan's Second Aida, in oral argument before me. This point, conceming paragraph 51 of Mr. Sie's Second Afidavi is a non-point in my respectal, opinion [As regards the alleged breach of the Freezing Order end the conclusion contended for by Mr. Shan at paragraph 8.c of his Second Afidai, | adopt (without repeating) what | sad at paragraphs 23 and 24 above. Furthermore, the Defendants hav, in obedience tothe order made by Leon Jon 14% October 2018, Aisclosed the location of te arralt on 26” September 2015 andthe reason why it was moved from Swazlend to South Atica™. In al he crcunstances, and for the: reasons given above, | donot consider tis allegation tobe saisfactorly made out a evidence ofa risk of dissipation bythe Defendants oftheir esets, ‘The third factor relied on by the Claimants o establish sk of cisipation of assets, is that there is cogent evidence ofan intention by the Defendants to dispose of the ‘aicraft and is engines, and the airrat has already been ofered for lease on the basi thatits ownership has been changed to Royal Swazi Naional Ainways Corp, > Sen Transp of 14/1115 huang pages 96.37; Pet Mavi of Mh She paras 15 &17-¥o {TaD B page 5B of Deans Aas 18 5] 46} ‘notwithstandng the provsiona of the Froozing Order, in particular paragraph ia" ln suppor of tis submission, | was taken by Mr. Wardel to paragraphs 4 and 10 of Mr. Sile's Second Afidavit At paragraph 4 he stale that the aircraft i not boing used for commercial purposes, but predominantly to transport HMK, the Prime Minister and the Queens of Swaziland. At paragraph 1C, in answer tothe ‘allegation in Mr, Shans First Afidavit thatthe First Defendants tying to sel the ‘ircrft, Mr. Stl claims ths isnot tre, that one ofthe engine is being repaired hich is not expected to be completed until November or December 2018, and ‘here are no plans to sell the arrat. Presumably this was in response to what Vr. Shan said at paragraph 46 of his First Afidavit othe elect at the intention of the First Defendants to loase out the aircraft commercially. There Mr. Shan refers Jo a document, which appears to be a press release, to the ec that the ara will no longer be used by HK for official raves, and would beleased out and the proceeds utilised to cater fr the King's traveling expenses’ in further support ofthis submission, Mr. Wardell also reed on paragraph 5 of Mir. ‘Shan's Second Affidavit where he states categoricaly thatthe aircraft is curently being offered for lease on a commercial bass, in violation cf the terms of the Freezing Order. AL paragraph 7, Mr. Shan seeks to butess this asserton by ‘fering to an extract from the Times of Swaziland dated 24° August 2015 which uote the Prime Minster as saying thatthe Swazi goverment had decided to ease out the aircraft. This exact sat exhibit SR to his First Affidavit There i 8 stated that the aircraft had been impounded in Canada, and the Swazi goverment ‘wil now lok fora plane which wil be exclusively leased for Their Majesties and in the long-term buy (an sree” Apparently this solution was reached by the House of Assembly, after the Prime Minster had informed ‘members that government had decided tease out the pane.” 5 See pan 7 Camants Staleton Argument Exit Stand SR2 Second Aida Me. Shanta Retna (Me, Shan’ Geo poges 5521 #53 Tob 1 iainants Bundle ° See pages 5521853 Te 11 Camnts Eure w (47) 13) (49) Son pes 110 . Shan asserts that any lease ofthe aircraft "would necessarily involve a transfer cf ounership toa Swazi government owned company. He pains t efforts aleady made to lease the aircraft on the basis that its ownership rad already been changed to Royal Swazi National Aiways Corp. [pages 1 to 22 of exhibit SR.2, are documents relating tothe leasing of an sirrat which Is identified therein by the same type, model and serial number 453041 ofthe srerat identified at paragraph 4(d) of the Freesing Order. These documents include alter dated 21% October 2015 (some 16 days before the infor partes heating) on the letterhead of ‘ATGairease,’ and addressed to @ Mr. Tareq Deeb of Fame Jet L.C™: It purports to be a proposal fom ATGairease to lease ‘oul te aicraft as theron identfed. Inthe said document, described as a ‘Letter of Inlen, the proposed ‘lessor’ is slated to be Alr Transport Group Private EquivIATG Air Lease, and the proposed lessee’ as Fame Jet LL. AS part ofthe [roposal therein outined, the aircraft is to be delivered ‘witin 30 days upon receipt of signed Lease agreement and veiicaton of appropiate deposits’. The 'erm ofthe proposed lease is stated as 36 months, andthe document provides for «base rent of US$125,000 per month payable in advance. The delivery location 's stated as Johannesburg, South ica ar some other pont in southem Aca to be mutualy agreed. Paragraph 12 ofthe Letter of Intent stpulas that a depos of |JS$100,000 is required ‘upon its execution’ Final, the Letter of Intent is sid to be govemed by the laws of the State of New York, and contemplates futher negotiations between the pate leading to signed lease docurents rsrucivly, the Leter of Intent doesnot mention the Freezing Order or tha he 2irrafis sujet to an injunction in BUI preventing its sae or disposal, However, ‘he copy produced has only been signed by or on behal of oe party, namely ho intended lessor. The offer o lease the aircraft, set out in tho Let of Intent, is xpressly sated fo expe on Friday, October 23, 2015 andis subject to prior 2 7] oy lease, sal or withdrawl of the aicraft fom offer’ At page 9 Is @ copy of a photograph ofthe aircraft, the subject matter ofthe Letter of Intent ‘Apages 25 and 26 of exhibit SR. is what appears to be a document sting out ‘he basic tems and condtions under which the aircraft could be leased commercial. Again the type, model and serial number corresponds with those at peragragh 4(¢) of the Freezing Order. These documents identity the lessor as Royal Swazi National Aways Comp’ represented by Salomon Dube, its ‘placement agent as Amol Leonora, andthe lessee as Avi Aiton Capital or its ‘signs, The date onthe document is 4° October 2016, some 33 days before the ‘eter partes hearing, Both Mr, Solomon Dube and Mr. Amol Leonora have provided affidavits in tis mater on behalf of the Defendants, At paragraph 4 of his afidavt, Me. Dube offers an explanation ofthe documents. He states thal they are ‘misleaing’ and ot proof thatthe aircraft has been offered for lease for commercial purposes. Furthermore, he states that he has no authority fom the Fist Defendant giving either the Swaziland Chil Aviation Authority or the Royal Swaci National Airways “the mandate to ofr the said ara for lease for commercial purposes or for any aurpse and neither of them have received any such autho rom Mr, Leonora. Finally, he staes that he saw the ‘Letter of Intent forthe frst ine, when Mr. Sle showed him the document as an exhibit fo Mr. Shans aida, He denies that there has been any transfer of the ownership of the ait from the First Defendant tothe Swazi Goverment, He also avers, at paragraph 7, that having, 2s il were, confonted Mr, Leonora about including his name for signature on the ooument on behalf ofthe lessor, Mr. Leonora “apologised to ne and advised me that he was not are of how the document of intent to lease had been made part ofthese procaedings because this was only a dra document he had prepared to ‘resent as an unsolicited proposal to the Government of Swaziland.” Gee Val 6 Tabs GH - Bl of Dulondants Advis a ro) (54) (55) Mr, Leonora, who describes himsef as chairman and CEO of Ar Transport Group Private Equty IncATG Ar Lease of Alana, Georgia, USA (te intended lessor nder the Letter of Intend), in addressing this issue at paragiaph 4 of his First -Mfdavi, states that his company isin the business of leasng and trading of commercial aircraft, and during business discussions with Mr, Shan, they {discussed the lease proposal and lter of inten, but he didnot authorise Mr. Shan 'o use the documents in these court proveedings. He mains thatthe lease proposal is just ‘raf tem sheet prepared for presentaton tothe Government of ‘Swaziland Yor an opportunity to provide leasing services.” He too describes the eis 2s ‘misleading, and denied they were proof thatthe alrraft has been offered for lease for commercial purposes. Finally, he says tha his company has ot been given a mandate to lease the acral {is Mr, Wardel's submission that the Defendants have, by vite of these documents, breached paragraph 4( of the Freezing Order and aren contempt of ‘his cout He subi, further, that these documents are conclusive proof of risk of Aissipaton of assets, \r. Walwyn, in addressing me on the issue of rik of dissipation of asses, pointed 19 paragraph 34 ofthe Claimants’ skeleton argument, He submited, in reliance on ‘he decision of the Engish Court of Appeal in - Thane Investments Lid and others v Tomlinson and others [2003] EWCA Civ 1272, thatthe Claimants ‘ust demonstrate risk of dissipation by sold evidence. At paragraph [21] of Thane, Gibson LJ, cing with approval @ passage fom the judgment of Neuberger Jin the court below, opines: itis important that there should be solid evidence ‘xiduced tothe cout ofthe likelihood of disipation™ ‘And at paragraph [28] Gibson L states “Me, BlacketOrd submited that it has now become the practice for pert to bing x part applications socking a reczrg order by pointing * See Tab 15 0elntany unde of Autores 2 (58) (57) (59 to some dishonesty, and tha, he says is sufcient enable this court to ‘make @ freezing order. | have to say tha, if that has become the practice, then the practice shouldbe reconsidered. It's approxvate in each case for the cout to soutnise wih care whether what is alleged to have been the dshonesty ofthe person against whom the order is sought in itself really justiios the inference that that person has asses hich he is likely 10 issipao unless rested” [At paragragh 24 ofthe Cisimants' skeleton argument, they identify two events 2s demonstrable of risk of dissipation. The fist is thatthe Cefendants moved the eral rom Toronto, Canada twice to avoid order being enforced against it. The fist occasion is said to have occured in 2012. | am sated that this is not a matter which | ought {0 teke Into account at ll in de'ermining whether, in ‘September 2015, there was a real risk of dissipation of assets concerning the rat In fac, ths aspect was not lied on by Mr. Warde inhi oral submissions before me, ‘The second such incident cited at paragraph 3, related to the removal of the ater rom Canada ater the injunction in Ontario retaining its removal had been ease the alreratt on ‘commercial terms, are both troubling and recent inte. The queston is whether they represent ‘soli’ evidence of arsk of dissipation of asets by the Defendants creer of them. tis corect that nelther ofthe Defendants are partes to or sated to be intended paries tothe Letter of Intent or any leasing proposal involving the arrat, As regards the identity ofthe aircraft isl, it seems clear that these documents are refering tothe same aircraft specited al paragraph 4(4) of the Freezing Order. In my judgment, | wil Mave to tat with some cain, the veracity ofthese documents 2 poof ofan intention on the pat of he Cefendant to lease the aitcat in breach ofthe Freetng Order. The documens do nat make lnk between th intended Yess’ and eter ofthe Dende, exept othe extent that | am being asked by the Claimants to inf tha be reference in the document to the Roya Swe Nationa Aways Corp’ an agency ofthe Swat goverment, a& an intended Tessa’ ofthe aircraft, is to be constued as a reference t MK and ences an inten reste the oars ofthe art fromthe Fist Defendant othe Government of Swanandinbasch of paragraph 4{8) of the Freeing Order. Theis cain na doc eidene of ts, and ro ‘vidence upon which i maybe infeed that HK behind ary nterded leas of the aicrat by the Royal Swazi Natonal Arways Cop, except the afitait ‘evidence by Mr. Shan othe tet ht HMK is an able monarch of Swazkand In contrast to these documents, are the statements inthe Defendants’ affidavits the effect thatthe aircraft remains atthe airport in Swazland, has been and wil se pages 25 nd 26 of exit “SR.2" to Mr. han’ Second Affidavit a (63) (64) (651 remain grounded out of respect forthe BVI Freezing Order, that alternative means ‘fair transportation has been secured for HMK, that there has been no transfer of Loumership of the arraft to an agency of the Swazi government, and there is no. resent ntnton todo so oo lease out the aircraft Having careful considered this as allegation of risk of dissipation of assets and breach of he Freezing Order relied on at paragraph 36 of he Claimants’ skeleton argument, | am not satisfed that these leasing documents, by themselves, establish thatthe Freezing Order has been breached by the Defendants or ether of them, The breach of an injunction, while it may provide, in certain circumstances, cogent evidence of rsk of dissipation oF assets, is a mater ‘materially diferent from a consideration of whether these documents, ether by themselves or in conjunction wth other admissible evidence, evince a real risk of issiption ofthe assets ofthe Defendants. As regards the Letter of Intent, twas never fully executed, as fer as the court has been made eware, and there is no ‘evidence that the formal lease was evety entered into. Futhermore, there is no evidence that the aircraft has actualy been leased commercially or that it has been moved ffom the airport in Swaziland since it retumed from Johannesburg, South Afica on October 2018, This brings me tothe extract fom the Times of Swazland. There it is reported that the Prime Minister of Swaziland infomed members of the Swazi Pariament, inter ala, that it was no longer safe for ther Majesties to travel n the aircraft and, therefore, the aircraft ‘would be leased out and the proceeds be utlized to cater to [HMKS} travel expenses while aso foking at leasing or tuyng aja for [HNIC ‘The athentoty of tis document and the reported staoments of the Prime Minister of Swaziland have not been challenged bythe Defendants. In my view, these statements evince a clear intention to lease out the alcraf, either by the Defendants or by the Goverment of Swazland. The only mater hich seems tobe standing inthe way of this decision beirg put into eect, i the: BVI Freezing Order. | am therefore satisfied that if the Freezing Order is not Fry 7 continued in elaion 1o the aircraft and its engines, ther isa real risk thatthe aieraft wil ether be leased out or disposed of by the Fist De'endant in fufiment ofthe stated objectives ofthe Government of Swaziland, which ncudes HMK. The ‘fect of his would be to make the First Defendant judgment proof as there wil be no assets or no assets of sufcient value owed by the Defendants to satty ‘any judgment wich the Claimants may obtain in tis mater, shoul they be sucoessfulin ther respective claims, Material Non-Disclosure Have the Claimants been gully of material non-icosur in making the ex pane ‘application fr the Freezing Order? This fs ground 9 he Defendants’ Applicaton fied 20% October 2015 to discharge the Freezing Onder, aid is addressed at paragraphs 66 to 75 of the Osfendants' skeleton argument. Essentaly, the allegation i that the Claimants fled to disclose evidence whic was fied inthe Ontario Proceedings. They refer specifically to () the conplee afidavits of ‘Shanmuga Rethenam swom 8° January and 11® February 2015; (i) the transcript ofthe crss-examination of Mr. Shan on both of his fdas; i) he afd of Ajay Singh suom 234 February 2015 and 9" March 2015; (h) he aida of Sle Dlamini sworn 8° Api 2015; and) he complete st of orders and reasons for decisions ofthe Ontario cours, The genesis of each of hese afidavis are briefly summarised at paragraph 73 ofthe Defendants’ skeleton argument, and the ecisons of the cours in the Canadian Proceedings have already been summarised above “The principles applicable to the duty of full and frank disclosure ate wel sete. ‘They ae authoritatively stated in Brink’s Mat Ltd v Eleombe and Others {1988}, 41WLR 1380, and are accurately summarized at paragraph 69 of the Defendants” ‘skeleton argument. A party proceoting ex parte- (1) Has a duty to make full and frank disclosure of ll material facts, (2) This duty ests not ust withthe appbcant but also ath his lawyers, (3) Matera facts are those which its mater forthe judge to know in

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