Loss and liberty: Ridley v Dubai Islamic Bank PJSC

The bread and butter of most commercial litigators are fights about money. London’s civil courts are stuffed with disputes in which companies and individuals join battle to recover their lost or stolen funds. This is a serious business, with the amounts involved often running into the hundreds of millions or even billions of pounds. No quarter is given and none is expected.

But a trial that took place in the Commercial Court last month was about more than money: it was about a man’s liberty.

What happened?

In Charles Ridley v Dubai Islamic Bank PJSC ([2020] EWHC 1213 (Comm) and [2020] EWHC 2088 (Comm) a claim, ostensibly about the interpretation of a settlement agreement, the parties were in the unusual position of arguing, effectively, whether the Claimant ought to be released from prison in Dubai or otherwise remain there, in all probability, for the rest of his life. This is not customary fodder for the Commercial Court.

The Claimant, Mr Ridley, is serving a 20-year sentence in Dubai Central Jail in the United Arab Emirates. He has already served a separate 10-year sentence following a criminal conviction for fraud, but was given an additional 20 years after a request to the Dubai courts from the state-owned Dubai Islamic Bank.

These sentences stem from the misappropriation by Mr Ridley and others of sums advanced by the bank for the purpose of trade finance, but which, in many cases, were used for other, unauthorised investments.

Following the discovery of this, in 2007, the parties settled the dispute by entering into a restructuring and settlement agreement, known as the RSA, under which US $501mi was to be repaid to the bank in instalments.

Mr Ridley, with others, agreed to guarantee these payments, which were also secured by a number of assets – the most significant of which was a lease over real estate in Dubai known as Plantation. In exchange, the bank agreed to waive all claims against Mr Ridley. Importantly, the RSA had an English law and jurisdiction clause, meaning that any dispute about its meaning had to be litigated in London.

In 2008, the Dubai criminal authorities became involved in the case. Mr Ridley was arrested, convicted of fraud and given the maximum 10-year prison sentence. He was also fined, and ordered to give restitution to the bank in same amount, the AED equivalent of US $501m, subsequently reduced to US $440m. It is notable that at the time of his arrest, payments under the RSA were up-to-date.

Why is he still there?

By 2016, Mr Ridley had served his sentence, including a reduction for good behaviour and time added on as a result of the fines against him. He expected to be released and reunited with his family – but, despite this, remained in jail, apparently without justification.

In 2018, the bank made a request under a piece of Dubai legislation known as Law 37 of 2009 (which had been introduced after Mr Ridley’s arrest). This law allows creditors to apply for debtors to be imprisoned for further periods if they have failed to repay the sums they owe.

Following this request, Mr Ridley was incarcerated for a further 20 years. This is in circumstances where it is not seriously suggested that Mr Ridley actually has the funds to repay the debt (or the means to obtain them). It also appeared the bank made little or no effort to realise the security it iwas holding to pay off the sums owed.

What happened next?

As it stands, Mr Ridley is not due to be released until 2038, by which time he will be 80 years old, having spent 30 years in prison.

Mr Ridley’s case (which is denied by the bank) is that the bank’s request under Law 37 was a breach of the RSA, releasing, as it did, from all claims. Mr Ridley seeks an injunction requiring the bank to procure his release from prison. On the basis that the RSA has an English jurisdiction clause, this claim hd to be brought in England.

The stakes could not be higher. If he is not successful in these proceedings (in circumstances where it is clear he has no ability to pay the debt) he may never be released and may never see his family again.

Although the subject matter of the claim is not uncommon for a commercial court to consider, the effect is far from usual. Indeed, Mr Ridley’s position could not be more desperate, not least given the harsh and unforgiving conditions in jail. His access to documents is extremely limited and he must, for the most part, have them read to him over the phone. This makes obtaining instructions challenging. Mr Ridley has no access to the internet and shares four wall-mounted phones with 60 other prisoners in his block. The calls are strictly time limited, and he must re-join a queue to use them (they also often break down). He is not given a table or chair, so he must stand by the phone and listen to try and formulate a reply by memory. Dealing with documents of any length can take days.

The trial

For his five-day trial, Mr Ridley managed to obtain permission from both the English court and the Dubai prison authorities to give evidence and attend trial from jail. The prison authorities had not been expected to give permission, or to provide Mr Ridley with the necessary equipment, but they did so, on the proviso that Mr Ridley did not criticise his conditions in prison.

When Mr Ridley logged on to Microsoft Teams on the first morning of trial, he had not used a computer for 14 years. Despite his professed technical ignorance, Mr Ridley was able to communicate privately with his legal team through the messaging function on Microsoft Teams as he watched the proceedings from jail, albeit with occasional interruptions when the internet dropped. Mr Ridley was also able to appear on camera (the first time many in his legal team had seen him) to give evidence.

Verdict awaited…

LK Law LLP acted for Mr Ridley during the trial, but were only instructed some six weeks before it commenced. Despite the last-minute instruction, the trial ran to time, and very smoothly, including when the witnesses were giving evidence by video from Dubai – in Mr Ridley’s case, from jail. This was in no small part down to the co-operation and transparency of the legal teams in preparing the case.

The court also played its part – and the fact it could grapple effectively with the difficulties presented by the trial, both because of its subject matter and potential logistical pitfalls, shows the civil courts are flexible and resilient, the paradigm of an effective and sophisticated justice system.

Jack Watson of Wilberforce Chambers, instructed by LK Law LLP, appeared at trial on behalf of Mr Ridley. Robert Anderson QC of Blackstone Chambers and William Edwards of 3 Verulam Buildings, instructed by Baker & Mackenzie LLP, appeared on behalf of Dubai Islamic Bank. At the time this article was written, judgment in the case was pending.

Chris Atkinson is a Senior Associate with LK Law LLP: lk.law