There have been a number of noteworthy decisions coming out of the Commercial Court case brought by Commercial Bank of Dubai PSC against the Al Sari family and associated companies, including Court of Appeal guidance on the effective service of contempt proceedings. The recent judgment (Commercial Bank of Dubai PSC v Mr Abdalla Juma Majid Al Sari & Others [2025] EWHC 1810 (Comm)), however, provided an opportunity to revisit (or for many, no doubt, to learn of) the rule in House of Spring Gardens v Waite (no 2) [1991] 1 QB 241.
The background to the case involved attempts by the claimant bank to enforce judgment debts against the Al Sari family. This included attempts to enforce against various properties in London owned by the second, third and fourth claimant companies, which were registered in the British Virgin Islands (referred to in the judgment as the BVI Companies). However, the claimant had not been able to realise any value from those properties as a result of a scheme with the aim of thwarting judgment.
The Globe Documents Scheme
The scheme involved the creation of various documents which purported to impose a circa £115m debt on the BVI Companies in favour of Globe Investment Holdings Limited (the seventh defendant) (Globe) (the Globe Documents). Globe brought proceedings in Sharjah, UAE, against the BVI Companies, seeking judgment on the basis of the Globe Documents. The Sharjah Court initially dismissed Globe’s claim, but this was overturned on appeal, and the BVI Companies were ordered to pay Globe AED 585,652,815 (around £115m) (the judgment). Two further appeals which were brought in Sharjah were dismissed. The claimant asked the Commercial Court to assist:
- seeking declaratory relief that the Globe Documents were shams, made without the BVI Companies’ authority and were void and of no effect;
- seeking a finding that the judgment was obtained by fraud, because it was based on the Globe Documents; and
- seeking a finding that the failed attempts to overturn the judgment did not preclude the Bank or the BVI Companies from advancing a claim in fraud in relation to the judgment.
It is this third point which engages the rule in House of Spring Gardens.
The rule in House of Spring Gardens
The rule established in House of Spring Gardens is a principle of estoppel or abuse of process.
The English court will consider a fraud defence to an action to enforce a foreign judgment in England and Wales. This is the case even if fraud was raised as a defence to the original claim and rejected by the court of origin. However, the rule in House of Spring Gardens says that a defendant who did not raise fraud as a defence, but instead unsuccessfully brings separate proceedings in the same jurisdiction to set aside the judgment for fraud, is precluded from raising the same fraud defence to resist enforcement of the judgment in England and Wales.
Application in Commercial Bank of Dubai PSC v Al Sari
In order to determine whether the rule in House of Spring Gardens applied to the claimant’s attempt to set aside the judgment, the court considered the nature of the two further appeals filed in Sharjah as a matter of UAE law, and in particular the effect of the provisions of the civil procedure law.
The conclusion reached was that the UAE procedure engaged by Globe and the BVI Companies to appeal the judgment in Sharjah was not a second and separate action (of the type envisaged in House of Spring Gardens) which determined whether the judgment was obtained by fraud.
The court found that instead the appeals constituted procedural mechanisms for the same court to reconsider its judgment which was very different to a second and separate action before a new court to set aside a judgment for fraud.
The court stated that ‘a judgment which is re-opened by the same tribunal upon petition is not final and enforceable and the petition procedure cannot be regarded as a second and separate action’.
An application to the Federal Supreme Court in Sharjah was dismissed because of a defect in the power of attorney submitted by the BVI Companies. As such that could also not be considered to have been a second and separate action dealing with the allegations of fraud.
The English court granted declarations that the judgment was obtained by fraud and that the documents on which that judgment was based were shams which are void and of no effect. The court being satisfied that the judgment had been obtained by the fraud of the defendants, it also considered whether it should exercise its discretion in order to grant an injunction to restrain Globe from seeking to enforce the judgment. In considering the application for an anti-enforcement injunction, the court noted that this power will only be exercised in exceptional cases. However, in this case the court took into account the various attempts by the defendants to avoid payment of judgment debts, including obtaining unjustified arrest warrants in Sharjah, a worldwide freezing injunction in the Dubai International Financial Centre and an attempted enforcement action in the DIFC which the court found it had no jurisdiction to hear. The judge was wholly satisfied that this was a case in which it should exercise its power to prevent Globe from continually seeking to perpetuate its fraud.
The attempts to engage different courts in various jurisdictions led the English court to conclude that an anti-enforcement injunction would further the principle of comity, by ensuring that the defendants could not mislead any other foreign courts.
While the decision in this matter depends a great deal on the procedural mechanism of the Sharjah courts and appeal systems, it is an interesting reminder of how courts approach foreign judgments where there are allegations of fraud, and the circumstances in which a party might be precluded from raising such complaints.
Mary Young is a committee member of the London Solicitors Litigation Association and a partner at Kingsley Napley
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