What is the ratio in Williams v Roffey Bros?

Where a party obtains practical benefits from a promise to pay additional money for existing contractual performance, such benefits can constitute sufficient consideration to make the promise legally binding.

What did the court decide in Williams v Roffey Bros?

The Court of Appeal held that Roffey was bound to pay additional sums to Williams because they received practical benefits that constituted sufficient consideration.

Why is Williams v Roffey Bros important for contract law?

It liberalised the doctrine of consideration by recognising practical benefits as sufficient consideration, making contract law more aligned with commercial reality and business practices.

What is the ratio in Williams v Roffey Bros?

Where a party obtains practical benefits from a promise to pay additional money for existing contractual performance, such benefits can constitute sufficient consideration to make the promise legally binding.

What did the court decide in Williams v Roffey Bros?

The Court of Appeal held that Roffey was bound to pay additional sums to Williams because they received practical benefits that constituted sufficient consideration.

Why is Williams v Roffey Bros important for contract law?

It liberalised the doctrine of consideration by recognising practical benefits as sufficient consideration, making contract law more aligned with commercial reality and business practices.

Williams v Roffey Bros [1991] — Practical Benefit Rule

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IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES KING'S BENCH DIVISION COMMERCIAL COURT

Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL 16/01/2026

B e f o r e :

LORD JUSTICE FOXTON ____________________

____________________

Graham Chapman KC and Mark Cullen (instructed by Simmons and Simmons LLP) for the Claimants Ian Quirk KC (instructed by Steptoe International (UK) LLP),) for the Second Defendant Robert Weekes KC, Timothy Lau and Madelaine Clifford (instructed by Jones Day) for the Third to Fifth Defendants Hearing dates: 18, 19, 24 November and 8 and 9 December 2025 Draft judgment to parties: 17 December 2025 ____________________

HTML VERSION OF APPROVED JUDGMENT ____________________

Lord Justice Foxton :

INTRODUCTION

This is a claim about a disputed debt of US$41,446,114 (" the Disputed Debt ") said to be due from the First Defendant (" KESP ") to the Second Claimant (" SAGE ") as assignee and transferee of the First Claimant (" AIML ") or to the Third Claimant (" KPHL ") as assignee and transferee of SAGE.

The alleged debtor, KESP, is not participating in the proceedings, but other defendants variously challenge the existence and amount of the Disputed Debt and SAGE's right to recover it. In particular, it is alleged that the Disputed Debt was assigned to the Third Defendant (" Mashreq "). The Fourth and Fifth Defendants are receivers appointed by Mashreq.

Against that background there are broadly two issues for the court:

i) Is the Disputed Debt due and payable, and, if so, in what amount?

ii) If so, is it due and payable to AIML, SAGE , KPHL or Mashreq?

The court heard a limited amount of evidence:

i) The Claimants called Mr Sybersma, who had been one of the Joint Official Liquidators appointed over AIML by the Cayman Court, and who was a director of KESP from 12 November 2019 to 18 October 2022. He had no involvement in the key events in issue in this case.

ii) Mashreq called Mr Hutchison, one of the receivers appointed by Mashreq over various assets. He also had no involvement in the key events in issue.

iii) Mashreq also called Mr Santosh Kumar, a former employee who was involved in Mashreq's dealings with the Abraaj Group who is referred to in the contemporaneous documents as Mr Nair. He no longer works for Mashreq, and in his evidence could only address issues at a high level of generality, and by way of comments on documents which, in the circumstances, took matters no further than the documents themselves.

The court also had written witness evidence from Mr Ashary, who has been a director of KESP since 2005. I accept that Mr Ashary was not medically fit for cross-examination. Had he been able to attend, it is clear that he would have been confronted with a number of challenging documents, as well as questions about what appeared to be significant changes in his position regarding the Disputed Debt over time. I did not feel able to place much weight on his statement.

Finally, I should record that these proceedings appear to form one front in a much wider commercial war. There were various attempts to invoke aspects of that wider dispute in the course of submissions. I have focussed on the issues raised by the statements of case in these proceedings, to which the evidence was addressed.

THE BACKGROUND

AIML is a Cayman company and was principal investment manager in the Abraaj Group, a private equity group in the Middle East which focussed on investments in emerging markets. The Abraaj Group was founded in or about 2002 by Mr Naqvi who was a key figure in the management of the Abraaj Group.

The holding company of the Abraaj Group is Abraaj Holdings (" AH "), with AIML a wholly-owned subsidiary of AH.

By the end of 2017, the Abraaj Group had asset of US$14 billion in value under management. One of the major lenders of funds to the Abraaj Group was Mashreq.

One of the investments made by the Abraaj Group was in KESP, a Cayman Islands special purpose vehicle company which held various investments in K-Electric Limited, a strategically important energy supply company in Pakistan (" KEL "). By way of further explanation:

i) KESP had three shareholders: IGCF SPV21 Limited (" SPV21 " – the Abraaj Group vehicle); Al Jomaih Power Limited (" AJP ") and Denham Investments Ltd (" Denham "), who each had the right to appoint directors to KESP's board.

ii) Originally AJP and Denham held all the shares in KESP and, for that reason, they are referred to as " the Original Shareholders ".

iii) SPV21 was ultimately owned by the Infrastructure and Growth Capital Fund LP (" IGCF "), an Abraaj Group fund managed by AIML.

iv) SPV21 became entitled to appoint 5 of KESP's ten directors, AJP three and Denham two. One of the directors nominated by AJP to sit on KESP's board of directors is the Second Defendant, Mr Ashary.

v) At some point, SPV21 agreed to allow Mashreq to appoint a director.

The Abraaj Group's investment was made through SPV21, under the terms of a subscription agreement (" the Subscription Agreement ") between KESP, SPV21 and the Original Shareholders dated 15 October 2008, the effect of which was that SPV21 acquired a 50% interest in KESP. In addition to the Subscription Agreement, the shareholders in KESP agreed that either KESP or KEL would enter into a services contract with a member of the Abraaj Group under which a service fee of US$10m would be paid every year. If KESP/KEL did not have sufficient funds from cash operating profits to make the payment in any year, the sum of US$5m from that US$10m could be carried over to a future date.

That agreement was in due course entered into between AIML and KESP on 18 May 2009 in the form of a Consultancy Services Agreement (" CSA "). It will be necessary to return to the terms of the CSA in due course. For present purposes it is sufficient to note the following:

i) It provided for payment of a fee of US$10m for each year from 2008-2012 (i.e. 5 years), but if KEL did not make a cash operating profit, US$5m of each year's fee could be deferred. I will refer to the US$10m as "the Service Fee" , the US$5m as " the non-deferred Service Fee " and the other US$5m as " the deferred Service Fee ".

ii) The CSA was due to expire on 31 December 2012.

Mr Ashary signed the CSA for KESP.

Also on 18 May 2009, KESP entered into an agreement with its three shareholders (" the Equity Conversion Letter ") acknowledging that US$10m was due from KESP to AIML for the calendar year 2008, of which US$5m could be deferred under the CSA. It was agreed that the outstanding amount could be set off against monies SPV21 was obliged to pay under the Subscription Agreement in respect of capital calls, and that the same arrangements could be used to satisfy:

That agreement was signed by Mr Ashary for KESP and AJP.

For each year over the period 2008 to 2011, US$5m of the Service Fee was deferred. So far as the US$20m thus deferred is concerned, on 15 January 2012 it was agreed by the board of KESP that this would be discharged by an equity conversion under the Equity Conversion Letter, and this took place on 28 May 2012.

So far as the 2012 Service Fee is concerned, US$5m was settled in 2015 in circumstances explained below, and the other US$5m deferred.

In addition to the Service Fee, AIML claims an entitlement to expenses from KESP. There are board resolutions of KESP approving various categories of expenses, albeit Mr Ashary has put the Claimants to proof of the amount incurred.

From 2013, Mashreq provided extensive loan facilities to the Abraaj Group, supported by a security package with various elements.

In February 2015, KESP divested 2.5% of its shares in KEL on the Karachi Stock Exchange, in a programme described as "the Accelerated Equity Offering" or " AEO ". The AEO realised approximately US$65m.

On 8 March 2015, the KESP board resolved to settle all of KESP's liabilities "other than the deferred management fee of USD25 million owed to Abraaj" (a reference to deferred Service Fee for each year from 2008 to 2012)). It was also agreed the Service Fees for 2013 to 2016 (it being in contemplation that the CSA would be retrospectively renewed for that period) would be reduced to US$4m a year.

When the proceeds of the AEO were distributed by the KESP board, it was recorded that US$18.6m was payable to AIML, comprising expenses of US$10,618,000 (including the outstanding non-deferred Service Fee of US$5m from 2012) and US$8m being the Service Fee for 2013 and 2014.

On 15 July 2015, KESP and AIML entered into an agreement (" the Side Letter ") extending the CSA (retrospectively) for the period from 1 January 2013 to 31 December 2016. This confirmed a Service Fee of US$10m per year applied to the end of 2012, and that US$5m per year could be deferred until KEL had cash operating profits. It provided for a Service Fee of US$4m a year, without provision for deferral, for the period 2013 to 2016.

In 2016, concern appears to have arisen within Mashreq as to the Abraaj Group's liquidity position. Mashreq's risk manager, Jose Joseph, noted on 22 June 2016 that "they are headed for a liquidity crunch. If we can't get better visibility on exit loans and ability to control proceeds, this is looking like a potential problem".

On 26 June 2016, internal Mashreq correspondence discussed a short-term lending facility for the Abraaj Group. That correspondence attached an Excel document entitled "Copy of Abraaj assets", which recorded a US$37.26m receivable from KESP.

On 24 October 2016, an internal Mashreq document set out an analysis of the Abraaj Group's financial statements for the financial year ending 30 June 2015. It noted that AH's balance sheet recorded receivables from "portfolio companies" which "pertain to shareholder loans given to investee companies to enable them to meet business obligations." One such "loan" identified was a US$37.3m receivable from KESP (" the KESP Receivable "), which appears in note 14 of AIML's financial statements for the year-ending 30 June 2015.

By October 2016, KESP had entered into a Share Purchase Agreement with Shanghai Electric Power Company Limited (" SEP ") to sell KESP's majority stake in KEL for US$1.77bn, albeit subject to a number of conditions precedent (which were never resolved).

Following earlier discussions about a facility, on 3 November 2016 Mr Lakhani of the Abraaj Group asked Mr Nair of Mashreq for an AED 276m short-term loan facility to be repaid within 6 months, "subject to receipt of KE sale proceeds", with an assignment of those proceeds offered as security. The request attached a document entitled "KE_AH_ForMashreqUseOnly.pdf" setting out details of the "AH Gross Cash Proceeds" from such a sale which included an "AH Receivable from KESP" in the sum of US$42m. That does not appear to be a reference to the KESP Receivable, but a separate amount due from SPV21 to AH of US$42m. Note 20 to the 30 June 2016 financial statements (which only became available on 8 December 2016) shows two distinct assets:

i) US$42,151,000 due from SPV21; and

ii) US$32,821,000 due from KESP;

(although the amount of the KESP Receivable there differs from the US$37.03m figure which appears elsewhere, this is likely to reflect a change in the balance over time).

Internal communications within Mashreq at this time discussing security for the proposed facility refer to a statement by Mr Nair of Mashreq on 3 November 2016 that:

The final term sheet for the proposed facility did not refer to the KESP Receivable, with security taking the form of certain personal guarantees and share pledges over companies which ultimately owned KEL shares and a guarantee from AIML.

On 10 November 2016 Mashreq granted an AED 275m loan facility to AH (" the Facility Agreement "). AIML was party to the Facility Agreement as guarantor and I shall refer to AIML's obligation to Mashreq as " the Guarantee ". The Facility Agreement and Guarantee were tabled at an AIML board meeting attended by Mr Naqvi, Mr Abdel-Wadood, Mr Siddique, Mr Rajagopalan and Mr Lakhani on 10 November 2016. The decision was taken to approve AIML entering into the Guarantee and the Facility Agreement (AIML being party to the latter in its capacity as guarantor).

By 23 November 2016, AH was seeking to increase the amount of the Facility Agreement to AED 346m, to which Mashreq agreed. On 29 November 2016, an AIML board attended by Mr Naqvi, Mr Abdel-Wadood, Mr Siddique, Mr Rajagopalan and Mr Lakhani agreed to an amendment to increase the amount of the Facility Agreement and the corresponding liability under the Guarantee, which took effect on 30 November 2016 (" the First Amendment ").

Reference was made by Mr Weekes KC for Mashreq to clause 17.4(a) of the First Amendment, by which AH represented to Mashreq:

By clause 17.22. AH was deemed to have repeated those representations which were "Repeating Representations".

On 5 February 2017, Mashreq was notified of a change of the signature matrix for the Abraaj Group accounts with Mashreq, including those of AIML and AH. Messrs Navqi, Wadood, Dave, Zikar, Azhar, Siddique and Lakhani held signing authority for all group accounts.

Closure of the sale of the sale to SEP had not occurred by 10 May 2017, when the Facility Agreement was due for repayment. In April 2017, AH sought a two-month extension, and there were further discussions between representatives of the Abraaj Group and Mashreq about the terms on which such an extension might be granted. In that context, an internal communication on the Abraaj side on 20 April 2017 between Mr Lakhani, Mr Siddique and Mr Dave (cc Mr Zikar) states:

It will be noted that this statement clearly distinguishes between the KESP Receivable and the SPV21 receivable.

On the Mashreq side, Mr Nair emailed Mr Fatoo on 20 April 2017 and referred to:

On 25 April 2017, Mr Lakhani formally requested an extension of the Facility Agreement by a 2 month period. Within Abraaj, Mr Lakhani, Mr Siddique and Mr Dave exchanged emails about the terms of the extension, including the requirement for additional collateral advanced by Mashreq including "receivable from KESP $33m". An internal Mashreq email of 3 May 2017 noted that "any request for the facility would need to address this risk [cf. the risk of the SEP deal not going ahead] sufficiently including exploring alternate cash sources and availability of additional collateral". It is clear, therefore, that Mashreq was interested in security which might have some value even if the anticipated sale of KEL did not materialise.

In an email of 4 May 2017, Mr Lakhani informed Mr Naqvi:

When discussing options for providing additional collateral, the first identified was:

Mr Naqvi replied that day saying Abraaj should "stick firm for a while and tell them to piss off."

No extension was in place by the time the loan under the Facility Agreement fell due for repayment on 10 May 2017.

On 14 May 2017, Mr Fatoo of Mashreq sent an internal email to Mr Nair attaching a document described as "updated Pre-Call Memo for your meeting today". The attached document was entitled "AH – Balance Sheet Summary". A section headed "receivable from from [sic] funds and their SPV" referred to the US$42.15m SPV 21 receivable, but not the KESP Receivable. Mr Fatoo sent a further email that day providing a breakdown of the US$34,830,000 in similar terms.

Mr Chapman KC suggested that Mr Fatoo's schedule and email did not refer to the KESP Receivable because it was recognised within Mashreq that the KESP Receivable was due to AIML and not AH. I am unable to draw that inference:

i) The Abraaj Consolidated Accounts for the year-ending 30 June 2016, which formed the basis of Mr Fatoo's work, identify three categories of receivables: "due from funds and their SPVS" in the sum of US$334,828,000; "due from partner companies" (i.e. from "the investee companies of the managed funds") in the sum of US57,740,000 and "due from other related parties" in the sum of US$38,229,000. Only the first appears in Mr Fatoo's schedule.

ii) There is no obvious reason for the selection of one of those categories rather than the others, and the suggestion offered by Mr Chapman KC does not seem to work. A loan due from Abraaj Employees 2 SPC Limited is excluded from Mr Fatoo's list, even though repayable to AH (see note 11.1). Further, looking at the AIML Consolidated Accounts for 30 June 2017, it is clear that a number of receivables due to AIML feature in the figure included by Mr Fatoo: the Abraaj Real Estate Fund, ASA LLP and Abraaj Growth Market Health Fund LP. There is nothing, therefore, to suggest that receivables due to AIML and reflected in the consolidated group accounts were being carved out.

iii) I was not referred to any subsequent reference to this schedule, still less to any distinction said to be reflected in it. The following day, Mr Fatoo was copied into an email setting out proposed terms for the extension which referred to "assignment of receivables in the books of Abraaj Holdings from [KESP] … aggregating USD 32.8MM". This drew no response from Mr Fatoo to the effect that it had been excluded from his schedule of the day before because it was not due to AH. Nor did subsequent exchanges about the KESP Receivable, into which Mr Fatoo was copied in.

There is no direct record of the discussions between Mashreq and the Abraaj Group which took place on 14 May 2017. However:

i) On 15 May 2017 at 4.15pm, Mr Nair sent an internal email within Mashreq, including to Mr Fatoo, summarising the proposed extension terms. These included "assignment of dividend proceeds from K-Electric due to the following entities" and "assignment of receivables in the books of Abraaj Holdings from [KESP] (1 st level shareholder of KE Electric) aggregating USD32.8MM in favour of Mashreq Bank (assignment agreement/structure to be finalized in consultation with internal and external legal counsel)". There was a condition in essentially the same terms for "receivables in the books of Abraaj Holdings from IGCF SPV 21 Ltd (2 nd level shareholder of KE Electric) aggregating USD 42.1MM". One of the topics raised was how to route what were clearly KEL dividends through to AH, with no similar discussion about the KESP Receivable. The email stated:

ii) At 5.27pm, Mr Fatoo provided a mark up of the term sheet which had clearly been prepared at some earlier stage. That was clearly a preliminary document. The section on security included reference to a personal net worth "Statement of Guarantor (Mr Arif Naqvi)"; "assignment of receivables from K-Electric in favour of Borrower, Guarantor and IGCF (acknowledgement of K-Electric to be explored to perfect security condition)" and "assignment of dividend proceeds from K-Electric in favour of Borrower, Guarantor & IGCF". Mr Chapman KC submitted that the term sheet showed an awareness that the KESP Receivable was due to AIML which he suggested must have been communicated the previous day at the meeting.

iii) However, this is inconsistent with the express reference in the 4.27pm email to what had been communicated the previous day. The term sheet is also wholly ambiguous. The reference to "K-Electric" appears to be a reference to KEL, not KESP, the KESP Receivable and IGCF Receivables are dealt with compendiously, and the reference to "Borrower, Guarantor & IGCF" is also compendious, both when referring to "receivables from K-Electric" and "dividend proceeds from K-Electric". Finally, in the relevant section of the document, Mr Naqvi is also referred to as the Guarantor.

On 17 May 2017, Mr Fatoo of Mashreq asked Mr Lakhani for an illustrative funds flow showing how "a dividend flow can potentially pay off the STL [Short Term Loan] facility". Mr Lakhani's response assumed a US$130m dividend to KESP from which amounts necessary to settle various liabilities of KESP were deducted including US$37m "payables to Abraaj". That is the KESP Receivable in the amount recorded in the Abraaj Group's 2015 year-end financial statements. SPV21's share of the net dividend is stated to be US$50,126,705, from which the US$42.2m SPV21 receivable to Abraaj is deducted.

Mashreq spoke to Abraaj Group representatives on 22 May 2017 in which they discussed what would happen if the Facility could not be repaid through the proceeds of an Exit when during the extended period of the loan, and in which dividends from KEL as an alternative payment source were discussed.

On 25 May 2017, Mashreq gave conditional approval for the extension of the Facility Agreement on terms to be agreed, including "assignment of receivables in the books of Abraaj Holdings from KES Power Ltd aggregating US$37.03MM".

On 25 May 2017, Mr Fatoo emailed Mr Lakhani identifying that a condition precedent to the extension was "assignment of receivables in the books of Abraaj Holdings from KES Power Ltd (1 st level of shareholder of KE Electric) aggregating US$37.03 MM in favour of Mashreq" and also of the SPV21 receivable. Mr Lakhani agreed to those proposals, while objecting to other requests. Internally, Mr Waheed of Mashreq stated that "the other asks are good but not critical".

On 28 May 2017, Mr Dave wrote to Mr Siddique and Mr Lakhani on the Abraaj side with a draft response stating, "KES Power Ltd and IGCF 21 receivables: Agreed", which was passed onto Mr Nair on 28 May 2017.

On 31 May 2017, there was a meeting between Mashreq and Abraaj attended by Mr Dave and Mr Lakhani for Abraaj and at which security was discussed. Mr Lakhani's email about the meeting says, "we offered they can take either KES Power and IGCF 21 receivables or ABOF II, both are not possible".

On 4 and 5 June 3017, there was an exchange between Abraaj's accountant Mr Ammar Azhar, and Mr Lakhani, in which Mr Azhar referred to a "receivable from Kes Power" worth "37,030,000" under the title "Cash in AH". The receivable is referred to in a similar context by Mr Lakhani when discussing the proposed sale of KEL to SEP.

On 7 June 2017, an internal memo was submitted to Mashreq's CEO setting out the terms of the extension, including "assignment of receivables in the books of Abraaj Holdings from [KESP]".

A draft term sheet produced on 13 June 2017 and sent by Mashreq to Abraaj on that date referred to a condition of "Additional Security" comprising, inter alia:

Mr Lakhani's response pushed back on some of the security requirements sought by Mashreq, but not the KESP Receivable, and the term sheet was formally accepted on 20 June 2017.

On or around 22 June 2017, Linklaters LLP (" Linklaters ") became involved for Mashreq, including in the preparation of an English law assignment agreement for the proposed security.

By early July 2017, Freshfields LLP (" Freshfields ") were acting on the Abraaj side. They were sent a copy of the latest term sheet for the purpose of formulating their scope of work. It is apparent that Freshfields were acting for both AH and AIML.

Commenting on the proposed assignment of the KESP Receivable, Freshfields stated:

AIML's consolidated financial statements for the year ended 30 June 2017 (finalised on 4 December 2017) recorded that the KESP Receivable had reached US$37,785,000 by the end of the accounting period. The Abraaj Group's consolidated financial statement for the same period, finalised around 2 October 2017, records the SPV21 receivable at US$42,156,000 and the KESP Receivable at US$37,785,000. On 6 November 2017, KESP confirmed to the Abraaj Group's auditors, KPMG, that KESP owed AIML US$37,785,0000 "at the close of business on June 30, 2017."

Drafts of the proposed assignment agreement were exchanged between the law firms, in which AH was identified as the assignor and Mashreq as the assignee. While the respective law firms discussed the issue of the proposed assignment of any right AH had to the proceeds of the sale of KEL (as AH had no direct ownership of that company) in the course of a telephone call on 11 July 2017, there was no similar discussion in relation to the KESP Receivable, I infer because no issue had been flagged.

The draft of the proposed assignment referred to the KESP Receivable as an "intercompany loan", an expression also applied to certain other receivables which were the subject of the assignment agreement. The drafts were seen by Messrs Zikar, Dave and Lakhani on the Abraaj side, as well as both sets of lawyers.

On 23 July 2017, Mr Naqvi issued a "CEO Certificate" pursuant to a delegated authority conferred on him by the AH board, approving the assignment agreement AH would be entering into in relation to the "intercompany loans" due to AH from KESP.

On 23 July 2017, the AIML board (Mr Naqvi, Mr Wadood and Mr Siddique) formally considered a proposal to enter into an "Amendment Agreement" (" the Second Amendmen t") with AH and Mashreq which would extend the date of the Facility Agreement to 10 September 2017, with AH having an option on terms to extend that date further to 31 December 2018. It was noted that the Second Amendment involved certain obligations by AIML to "upstream" any dividends received from KEL and that AIML would need to confirm the continued validity of the Guarantee. The minutes record consideration being given to the Second Amendment, which itself referred to the Assignment Agreement.

On 23 July 2017, three agreements were signed.

First, the Second Amendment between AH (as borrower), AIML (as guarantor) and Mashreq (as lender). Messrs Dave and Siddique signed the Second Amendment on behalf of both AH and AIML. This identified the conditions precedent to the contract, the representations made, and effected amendments to the Facility Agreement in various respects, including, critically, in relation to the termination date.

Clause 3(a) of the Second Amendment provided:

Taken with clause 17.4(a), this amounted to a representation by AH that it, AIML and each of the Security Providers … "has the power to enter into, perform and delivery and has taken all necessary action to authorise the entry into, performance and delivery of the [the Second Amendment] to which it is a party and the transactions contemplated thereby".

It was suggested that this was of evidential value when considering whether there was an express or implied assignment by AIML to AH of the KESP receivable. As this is only a representation by AH, it provides no real assistance to Mashreq. In any event, AH's representation in respect of AIML was limited to AIML's entering into the Second Amendment which extended the Guarantee (cf "to which it is a party").

Schedule 1 to the Second Amendment identified the conditions precedent to the transaction. These included:

Once again Mashreq sought to argue that this involved a condition precedent that the board of AIML approve the Assignment Agreement even though it was not a party to that agreement, which was said to be of evidential significance on the express/implied AIML-AH assignment issue. I am unable to accept that argument:

i) The condition precedent in Schedule 1(b) of the Second Amendment addresses compendiously the position of the Guarantor (AIML), "each Security Provider" and the Borrower (AH), and, similarly compendiously, "this Agreement", "the Assignment Agreement, the Relevant Deed of Confirmation and/or the relevant ESM Amendment Deed".

ii) The words "as applicable" in Schedule 1(b)(i) recognise that different entities will be parties to different agreements, and that the relevant condition precedent applies, for each entity, to the agreement applicable to it, i.e. those to which it is a party. For AIML, that is the Second Amendment only. That conclusion is reinforced by the words "and/or" (which naturally applies to all of the agreements identified, not merely the last two).

iii) Further, the same sentence provides for "approving the terms" of the four agreements linked by the words "and/or" and "as applicable", and resolving to execute the same four agreements "to which it is a party". That once again reflects the fact that the condition precedent is for each named entity to approve the terms of and then execute the agreement(s) to which it will be a party, not agreements to which it will not be a party.

iv) For this reason, the board minutes of AIML of 23 July 2017 do not evidence any approval of the terms of the Assignment Agreement. That is entirely consistent with the legal advice sought and given by Walkers (Dubai) LLP (" Walkers ") which addressed only AIML's ability to enter into the Second Amendment. There was no opinion addressing AIML's ability to assign the KESP Receivable to AH, as surely would have been provided had such an assignment been executed. By contrast, Walkers did provide such an opinion in relation to AH's ability to enter into the Assignment Agreement.

Second, the Assignment Agreement between AH as assignor (signed by Messrs Dave and Siddique) and Mashreq as assignee. It identified the debt assigned as follows:

Third, the signed Notice of Assignment of Receivables (" the Notice of Assignment ") to which AH and Mashreq were named parties, with provision for KESP to sign and return. This was signed by Messrs Siddique and Hussain on behalf of both AH and KESP. This provided notice of assignment by AH "by way of security of all its right, title and interest from time to time in and to the US$37,030,000 intercompany loan from us to you". It will be noted that the amount given is that of the debt which appeared in the year-end financials for 30 June 2015, rather than the figure as at 30 June 2017 of US$37,783,000. The Assignment Agreement referred to the KESP Receivable as:

On 23 July 2017, Walkers and Linklaters provided legal opinions under Cayman Islands and English law. The Walkers' opinions addressed the authority and capacity of AIML and AH to enter into the Second Amendment and AH to enter into the Assignment Agreement. They made no reference to AIML's and AH's authority and capacity to enter into any assignment of the KESP Receivable by AIML to AH. Nor did the Linklaters' opinion address any such assignment. On the contrary, the opinion "assumed the Security Assets … are beneficially owned by [AH]" (the assumptions reflecting the limited scope of work Linklaters was asked to undertake following negotiations with Mashreq).

There were further extensions to the Facility Agreement on 6 September and 31 December 2017 which extended the maturity date to 31 March 2018 (as to 50%) and 31 December 2018 (as to the balance).

On 18 June 2018, AH and AIML were placed in provisional liquidation by orders of the Grand Court of the Cayman Islands.

On 12 July 2018, Mashreq served a notice on AH accelerating the amounts due under the Facility following an event of default (the appointment of the provisional liquidators) and served a demand notice for the full sum from AH and from AIML as Guarantor.

At some point prior to 12 February 2019, the Joint Provisional Liquidators became aware that Mashreq was asserting a claim to the Disputed Debt and a dispute emerged as to the effect of the Assignment Agreement, and in particular, whether it had been effective to assign the Disputed Debt from AIML to Mashreq. The liquidators appointed over AIML took the position that they had not, arguing (a) that the Assignment Agreement did not concern the Disputed Debt; and (b) even if it did, AH had no power to assign the Disputed Debt, which was owed to AIML.

The liquidations were made official by orders of the Grand Court of the Cayman Islands of 11 September 2019.

On 3 August 2022, AIML sold the majority of the Disputed Debt to SAGE (US$1,139,526 was carved out to reflect an amount owed by AIML to IGCF) together with the sole voting share in SPV21 and its 75.5% shareholding in IGCF GP. SAGE is the wholly-owned subsidiary of AsiaPak Investments Ltd, a private equity firm. An application was prepared to obtain the sanction of the Cayman Court for the sale.

On learning of the SAGE transaction, the corporate groups behind the Original Shareholders offered to buy the rights relating to KESP which were the subject of the SAGE transaction (by a letter from Collas Crill of 26 September 2022). On 30 September 2022, Collas Crill wrote on their behalf stating that the Disputed Debt had correctly been recorded in the accounts of KESP as due to AIML (and that quantum was not in issue).

Mashreq, which had already asserted a claim to the Disputed Debt to Mr Sybersma, was notified of the 3 August 2022 sale and the application to the Cayman Court on 4 August 2022. That hearing was scheduled for 27 September 2022.

On 26 September 2022, Collas Crill for the Original Shareholders wrote to AIML's attorney stating that the interests behind the Original Shareholders intended to make a rival offer for the Disputed Debt (which was eventually made in the amount of 120% of the amount offered by SAGE), and challenging the efficacy of the SAGE transaction on the basis that the requirement of KESP's consent under clause 22 of the CSA had not been satisfied.

AIML's Joint Official Liquidators proceeded with the application for sanction, informing the court of the Collas Crill letter. On 22 October 2022, Hon Justice Segal approved the transaction on the basis that AIML's Joint Official Liquidators satisfy themselves of certain matters. The final terms of the SAGE transaction sold such rights as AIML had, without any warranty of title to the Disputed Debt.

On 21 March 2023, the present proceedings were issued.

At a KESP board meeting on 31 March 2023, Mr Ashary stated:

At the same meeting, Mr Keiran Huchison, present as a director of KP Corporate Director Ltd, but who had been appointed as a receiver over AH assets by Mashreq, stated:

By May 2023, Mr Ashary and the Original Shareholders were supporting Mashreq's contention that it was the assignee of the Disputed Debt. I accept that this change of position was essentially tactical. In these circumstances, I have not placed any reliance on the support given by the Original Shareholders and Mr Ashary to Mashreq's claim, but concentrated on what the contemporaneous exchanges around the time of the purported assignment to Mashreq demonstrate.

On 9 June 2023, the present proceedings were served. The Original Shareholders claim that they sought to convene a board meeting of KESP to determine how to respond, but that these efforts were frustrated by SAGE who also frustrated attempts to appoint solicitors to advise and represent KESP. There is a dispute as to whether or not a resolution was properly passed by the KESP board to appoint solicitors. These events are in dispute and I make no findings about them. In the event, KESP has not participated in these proceedings.

On 31 July 2023, an application was made by those directors appointed to the KESP board by the Original Shareholders to stay these proceedings while a dispute as to who should represent KESP in these proceedings was resolved by the Cayman Islands Court. That application was dismissed by Mr Sean O'Sullivan KC, but he allowed Mr Ashary to join the proceedings for the purpose of defending the claim on behalf of himself and the Original Shareholders ( [2024] EWHC 41 (Comm) ). By orders dated 9 February and 4 March 2024, the Third to Fifth Defendants (" the Mashreq Defendants ") were joined to the proceedings.

On 7 July 2023, SPV21 filed a winding-up petition for KESP in the Grand Court of the Cayman Islands. The Cayman Islands Court of Appeal struck that petition out by a judgment handed down on 12 September 2025 on the basis that it had been brought in breach of contract ( Al Jomaih Power Limited v IGCF SPV 21 Limited [2025] CICA (Civ) 10). I understand this judgment is itself under appeal.

On 13 October 2023, AIML and SAGE applied for default judgment against KESP in these proceedings, but that application was not pursued after the joinder of Mr Ashary.

There are numerous other sets of proceedings in the courts of the Cayman Islands as to the status of a KESP board meeting and who is entitled to represent KESP, which are summarised in Mr O'Sullivan KC's judgment at [33]-[37].

On 28 May 2024, SAGE sold the entirety of its interest in the Disputed Debt to KPHL.

IS THE DISPUTED DEBT DUE AND PAYABLE, AND, IF SO, IN WHAT AMOUNT?

Has the Disputed Debt accrued for payment under the terms of the CSA?

The terms of the CSA

Clause 3.1 of the CSA provides:

Clause 3.2 provides:

Clause 3.3 provides:

"Exit" is defined in clause 11.5 of the Shareholders' Agreement as:

Significantly, the Shareholders' Agreement (dated 15 October 2008) provided for the conclusion of the CSA in clause 6.2, identifying that on completion the shareholders would procure that KESP or KEL would enter into the CSA which would provide for an annual fee of US$10m, US$5m of which could be deferred if KESP or KEL (as the case may be) did not have sufficient funds from its Cash Operating Profit to make the payment. Clause 6.2 provides that:

I am satisfied that the Shareholders' Agreement forms part of the admissible factual matrix when interpreting the CSA, the two agreements having an overlapping subject-matter and being intended to co-exist.

Finally, clause 11 of the CSA addresses termination:

The issue

The issue between the Claimants and Mr Ashary is whether the words "the date of termination hereof" in clause 3.3 of the CSA include termination by expiry of the term under clause 11, or whether it is limited to termination for cause under clause 11.2.

I am satisfied that "the date of termination hereof" includes the date when the CSA expires automatically by the effluxion of its term. That would have been 31 st December 2012 under clause 11.1(a), but in the event that date was extended to 31 December 2016 by the Side Letter. I can see no reason why "the date of termination hereof" in clause 3.3 would not extend to expiry in accordance with the date in clause 11.1(a), and every reason why it should:

i) That interpretation is consistent with the terms of clause 6.2 of the Shareholders Agreement, which forms part of the admissible interpretative matrix. The contrary construction would involve the CSA departing from the terms of the agreement required by the Shareholders Agreement, that the parties had not procured KESP to enter an agreement on the terms which they had promised it would be entered into. I have seen nothing to suggest that there was any intention to do so.

ii) Clause 11.2 provides for termination at an earlier point in time than the clause 11.1 date, but both are equally concerned with when the CSA terminates.

iii) Clause 11.3 clearly applies both to termination under clauses 11.1 and 11.2, treating both as "termination" for the purposes of the CSA, with a saving in both cases by which "the Client shall continue to be obligated pursuant to Clause 3 for amounts due and payable until the date of termination." There is no reason why the reference to termination in clause 3.3 should not similarly embrace both types of termination.

iv) The effect of Mr Ashary's construction is that a payment obligation which had accrued but not yet become payable would become payable if the CSA was terminated before its natural term, but not if it expired at the end of that term. It would mean that termination for AIML's breach or bankruptcy would trigger a payment obligation in its favour which would not otherwise have arisen. That does not seem a very businesslike construction.

v) It is inherently more likely that the CSA provides a mechanism for when deferred Service Fees become payable in all cases, rather than leaving deferred Service Fees outstanding for an indeterminate period of time, even if the CSA itself had long since come to an end.

Subject, therefore, to the estoppel case which Mr Ashary suggests is open to KESP, I am satisfied that the deferred Service Fees became payable when the CSA expired on 31 December 2016.

The Claimants' first alternative argument: the deferred Service fees became payable on the assignment to SAGE

In the alternative to their primary case on construction, the Claimants allege that the deferred Service Fees became payable on its assignment to SAGE, by virtue of the words in clause 3.3 "or the assignment or novation of this Agreement by the Consultant to a third party."

Clause 22 of the CSA provides:

This argument raises a number of sub-issues:

i) First, whether the words "the assignment or novation of this Agreement by the Consultant to a third party, other than a party within the Abraaj Group (as such term is defined under the Shareholders Agreementun)" extend to the assignment of amounts said to be due under the CSA without assignment of the CSA itself.

ii) Second, whether the effect of clause 22 of the CSA is that (in circumstances in which it is common ground that KESP was not asked for consent prior to the SAGE transaction) there has been no assignment for clause 3.3 purposes. That involves five sub-issues:

iii) If the assignment was invalid as between SAGE and KESP, is it nonetheless valid as between AIML and SAGE?

Do the words "the assignment or novation of this Agreement by the Consultant to a third party, other than a party within the Abraaj Group (as such term is defined under the Shareholders Agreement)" extend to the assignment of amounts said to be due under the CSA?

This is a threshold issue for the Claimants, and I am satisfied that they do not cross it.

i) The language of clause 3.3, referring to "the assignment or novation of this Agreement by the Consultant to a third party" presents an obvious contrast with those of clause 22 ("any of its rights and obligations under this Agreement"), and naturally contemplates the substitution of a new contracting party rather than simply the assignment of a debt.

ii) The payment terms of an assigned debt will ordinarily apply to the debt in the hands of the assignee as much as the assignor ( Firma C-Trade SA v Newcastle Protection and Indemnity Association [1991] 2 AC 1, 29). If the rather unusual consequence that the debt would become payable in the hands of the assignee even though it was not payable in the hands of the assignor is to follow, I would expect to find clear language to this effect.

iii) Clause 3.3 appears to contemplate a single event – Accrued Fees being payable "no later than the earlier of the date of a complete Exit or the date of termination hereof or the assignment or novation of this Agreement by the Consultant to a third party". That will be the case where a change in the identity of the contracting party is effected, but not where there is simply the assignment of a debt under the CSA (which may involve an assignment of some of the amount due at a particular point in time, or later amounts becoming due after the assignment).

In addition, the effect of the Claimants' argument is that by the simple act of factoring a debt which is due but not payable, AIML can render the debt immediately payable. That is a commercially improbable outcome.

Does the clause extend to an accrued payment obligation?

It has been noted that when determining the extent to which words of prohibition "have the effect of prohibiting assignment … context is all important" ( Guest and Liew on the Law of Assignment (5 th ), [4-03]). There are cases and contexts in which courts have construed no assignment clauses as not extending to accrued payment rights. However the present wording – "any of its rights or obligations under this Agreement" – is broad, and I am satisfied it applies to an accrued debt claim. The wording is significantly stronger than that held to be sufficient to extend to accrued claims in Linden Gardens Trust Ltd v Lenesta Sludge Ltd [1004] 1 AC 85 ("shall not … assign this contract"), and not dissimilar to the "any part of its rights and benefits" language which was held to extend to accrued debts in Barbados Trust Co Ltd v Bank of Zambia [2007] EWCA Civ 148 , [72].

Does "assignment" in clause 3.3 mean an assignment permitted by clause 22?

On the assumption, contrary to my earlier conclusion, that the reference to an assignment in clause 3.3 extends to the assignment of a payment obligation rather than the agreement as a whole, I am satisfied that clause 3.3 would only apply to an assignment which satisfies the requirements of clause 22. That is a natural consequence of reading the two provisions together, it being commercially unlikely that action taken in breach of the CSA would trigger the payment obligation, or that clause 3.3 would provide for payment to be triggered by an event which clause 22 prohibits from taking place.

The Claimants also submitted that clause 22 would not prevent "a valid assignment between AIML and SAGE", referring to Linden Garden Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 , 108. That is a reference to the following passage in the judgment of Lord Browne-Wilkinson:

It will immediately be apparent that this passage offers no assistance to the Claimants in the immediate context. They must argue for an assignment which does affect the relationship of the creditor and debtor by rendering the debt payable when it would otherwise not be payable. A clause, such as clause 22, which "invalidates the assignment as against the other party to the contract", cannot have such an effect. The fact that, as and when AIML receives payment, it is under an obligation to SAGE to pay the debt over, cannot affect the position as between AIML and KESP.

Is it an implied term of clause 22 that consent cannot be unreasonably withhold?

This is an oft-pleaded issue, but one on which I have not found controlling authority. It is certainly the case that "no assignment" clauses often expressly qualify the consent requirement with a proviso on these lines, and that there is no such express proviso in this case. The ubiquity of express provisos of this kind justifies some caution when considering the Claimants' implied term case. Against that, it is possible to analyse the decision to grant or withhold consent to an assignment as akin to a contractual discretion, engaging Braganza duties, which are frequently held to arise as a matter of implication only (cf Braganza v BP Shipping Ltd [2015] UKSC 17 ).

In Lymington Marna Limited v MacNamara [2007] EWCA Civ 151 , the Court of Appeal was willing to imply what we would now term a Braganza -type obligation into a requirement for consent under a license to the granting of sub-licenses, albeit where the license expressly conferred a right to sub-license which would have been substantially nullified if there was an absolute and uncontrolled right to refuse consent. Further the license in question did involve a consent requirement expressed to be absolute when it came to consenting to assignment of the contract as a whole, with no similar language dealing with consent to sub-licenses. Both those factors were relied upon by Arden LJ ([28], [44]) when addressing a question which she held was to be answered by "interpreting clause 3(k)(ii) in the context of the licence" ([28]).

That decision accords with my instinctive view that there will be cases where it is appropriate to imply a term that where one contracting party's consent to assignment is required, it will not be unreasonably withheld. However, I am not persuaded that such a qualification is to be implied into all contractual consent requirements. There is no particular feature of the CSA alleged to justify such an implication here, and I hold that no such term is to be implied. When I asked why a term was appropriate in this case, Mr Chapman KC pointed to the fact that either KESP or AIML might want to transfer the benefit of the consultancy service on an Exit. However, clause 11.1(b) provides for the CSA to terminate in those circumstances and so no such assignment would be possible.

If so, is it open to AIML to rely on such a term in circumstances in which no prior consent was sought?

In Hendry v Chartsearch Ltd [1998] CLC 1382 , a case concerned with an express "consent not to be unreasonably withheld" provision, the majority of the Court of Appeal held that it was not open to a putative assignor who had not sought consent to argue that it could not have been unreasonably withheld (Evans LJ preferred not to express a concluded view). That decision has been followed at first instance ( CEP Holdings Ltd v Stenia AS [2009] EWHC 2447 (QB) , [37]) and was conceded to be correct in Aviva Investors Ground Rent Group GP Ltd v Shepherd Construction Ltd [2021] EWHC 1921 (TCC) , [18]. There is authority to similar effect in Singapore ( Gravitas International Associates Pte Ltd v Invictus Group Pte Ltd [2022] SGHC 2, [46]) and New South Wales ( Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296, [38]-[41]). I am satisfied that I should follow this principle here, and that there are good reasons for formulating the law on this basis.

The Claimants suggested that Hendry could be distinguished on the basis that in that case, consent had been sought after the assignment in circumstances in which the clause referred to the need for "prior consent". In this case, consent was sought by letter dated 9 March 2023 in the Pre-Action Protocol letter from the Claimants. That sought consent to an assignment of 3 August 2022, not for an assignment to take place in the future. In particular, there was no reference to the fact that there had been an immediate reassignment of the Disputed Debt transferred to SAGE back to AIML as security for the balance of the price, which was paid in April 2024. Even if one could construe the April 2024 transfer as the assignment (given that it simply involved performance of the 3 August 2022 agreement), that was not the assignment for which KESP's consent was sought.

In any event, I am satisfied that clause 22 also requires consent before the assignment is effected, because consent is a condition of the right to assign. Seeking consent to an assignment is one of those many contexts in which there is a fundamental difference between asking for permission, and asking for forgiveness. Asking for KESP's consent to a fait accompli does not, in my assessment, provide a basis for distinguishing Hendry . This could be done in any case, including when consent is sought at trial. It would also raise difficult questions as to the time at which the reasonableness of any decision to refuse consent should be assessed – at the date of the actual post-assignment request, with the benefit of hindsight, at the point of assignment, or, as Mr Chapman KC suggested, some combination of both.

That does not preclude AIML seeking a waiver or seeking consent for a fresh assignment to take place once consent is given (although no such request was made here). In Hendry , Millet LJ stated at p.1394:

Here, there has been no waiver and no further assignment.

If it is, is this a case in which consent would not have been withheld or could not reasonably have been withheld?

Mr Sybersma gave evidence that he had formed the view that the SAGE transaction benefited KESP because it brought significant new investment into KESP. The Claimants contend that those reasons mean that consent could not or would not have been refused by KESP if consent had been sought in advance.

The difficulty for the Claimants' argument, however, is as follows:

i) Even if there was an implied Braganza qualification on KESP's right to refuse consent, it is clear that the issue for the court when faced with an actual refusal to consent is not what decision the court would have reached if it was the decision-maker, but whether the decision reached by the actual decision-maker was irrational in the Wednesbury sense ( Braganza v BP Shipping Ltd [2015] UKSC 17 , leaving aside the debate as to whether considerations of process as well as considerations of outcome are engaged).

ii) It is particularly difficult to apply that test on a hypothetical basis, to consider what decision might have been taken had a request been made which was not in fact made. Is the court to decide as a matter of fact what the decision of the board of KESP would have been, and then ask itself whether that decision would have been Braganza -compliant? Or must the party who contends that the lack of consent does not prevent the assignment taking effect as between creditor and debtor have to show that there was no Braganza -compliant alternative to the decision which it is said would have been made?

iii) Both of those issues are made more difficult where the counterfactual world in which the decision would have been taken is uncertain. In this case, AIML's liquidators were first approached by SAGE in August 2020, and the transaction concluded on 3 August 2022, with notification of the transaction to other KESP stakeholders being given after the event. In response, on 26 September 2022, the interests behind the Original Shareholders made an offer to acquire the subject of the SAGE transaction. That offer was for 120% of the amount of the SAGE offer. Had KESP's consent been sought in advance, it seems to me likely that the Original Shareholder's alternative offer would also have been made earlier and become known to the board of KESP, who are likely to have found themselves being asked for consent in the context of two potential purchasers of the Disputed Debt from AIML. Further, the Original Shareholders had set out reasons why it was said that the SAGE transaction would be harmful to KESP in Collas Crill's letter of 26 September 2022, and it is likely similar arguments would have been deployed at any KESP board meeting at which a request for consent was considered. In addition, issues as to Mashreq's alleged prior assignment are likely to have featured in any KESP board discussion of the issue of consent. It is also apparent from the evidence of Mr Hutchison, who was the representative of KP Corporate Director Ltd on the KESP board, that he saw a potential for friction between the interests behind SAGE and the Original Shareholders, and that there was concern as to whether any sale of the Disputed Debt might trigger litigation against KESP, and whether one potential purchaser might be more likely to pull that trigger.

iv) Against that background, I am unable to find on the balance of probabilities that had consent been sought for the SAGE transaction, it would have been obtained, still less that consenting was the only rational option open to KESP. On the limited information available to me, the enquiry and its outcome are wholly speculative. Further, the difficulties of this kind of enquiry provide considerable support for the view reached by the majority in Hendry on the anterior question of whether this is an appropriate enquiry in the first place.

If the assignment was invalid as between SAGE and KESP, is it nonetheless valid as between AIML and SAGE?

I accept that clause 22 does not prevent the assignment being valid as between AIML and SAGE, and I did not understand this to be disputed: Linden Gardens Trust Ltd v Lenesta Sludge Disposal Ltd , 108 and Hendry , 14.

The Claimants' second alternative argument: the CSA as extended did not suspend the right to receive non-deferred Service Fees for 2015 to 2018

Had it been necessary to do so, I would have upheld this alternative argument, subject to the estoppel argument dealt with below. While the CSA provided for the deferral of half the Service Fee for the years 2008 to 2013, there was no similar provision for the reduced US$4m fee payable from 2014 to 2018, and indeed the Side Letter provided that no part of that reduced fee could be deferred. The fees for 2013 and 2014 have been settled from the AEO proceeds, but those for 2015 and 2016 in the sum of US$8m remain outstanding, and would have been payable even if the claim for deferred Service Fees for the period to 31 December 2012 had, contrary to my findings, failed.

Is AIML estopped from contending that the Disputed Debt is due for payment?

Applicable principles

There was no dispute as to the requirements for establishing an estoppel by convention. These can be taken from Blindley Heath Investments Ltd v Bass [2015] EWCA Civ 1023 , [91]-[92] which approved and elaborated on Briggs J's summary in Revenue and Customs Commissions v Benchdollar Ltd [2009] EWHC 1310 (Ch) , [52]:

i) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them. There is no requirement of expression of accord, with agreement to the assumption (rather than merely a coincidence of view, with both proceeding independently on the same false assumption) capable of being inferred from conduct, or even silence. But, something must be shown to have "crossed the line" sufficient to manifest an assent to the assumption.

ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it.

iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter.

iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties.

v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position.

For a promissory estoppel, there must be an unequivocal promise or representation by one party to a pre-existing relationship to another that they will not enforce their rights arising out of that relationship ( Woodhouse AC Israel Coca Ltd v Nigeria Marketing Co Ltd [1972] AC 741, 755); made with the intention that the party to whom the representation or promise is made would rely on it ( Steria Ltd v Hutchison [2007] ICR 445 , [94]-[95]); and reliance by the recipient of a kind that makes it inequitable for the other party to go back on the promise (ibid).

The alleged representation / promise

I was referred by Mr Quirk KC to a significant volume of internal material on the part of AIML and KESP (which does not meet the requirement of "crossing the line") which was said to support the suggestion that it was understood, promised or represented that the deferred Service Fees would not be payable until an Exit. In addition to its "internal" nature, the other difficulty with this material is that it was wholly equivocal on the issue of whether it was reflecting a practical expectation that the deferred Service Fees would only be paid on an Exit, because KESP would otherwise lack the cash resources to do so, or a shared legal understanding that the debt would not be payable until that eventuality. To take the examples given:

i) A 2011 internal Abraaj Group email attached a spreadsheet saying, "consultancy fee of $$10m p.a.: 50% will be settled immediately and balance 50% deferred and will settled [sic] at exit."

ii) A November 2012 internal Abraaj Group email which records "Abraaj charges consultancy fee of $10m p.a. on KESP wef 2008 and as per contract half of consultancy fee will be deferred and will be paid out of exit proceeds by KESP".

iii) An Abraaj December 2013 position paper referring to the Service Fees and stating, "of the US$10mn per year, US$5 mn was payable in cash, US$ 5 mn was to be accrued for a total of US$ 25 mn to be paid at exit".

iv) A 2013 internal Abraaj Group email says "KESP will directly pay consultancy fee of US$25 million to [AH] at the time of exit".

v) An email chain from March 2015 between the Abraaj Group and the Original Shareholders stated that "on the financial statements there is also $25m being accrued that will be paid on exit", and two further emails sent between the same parties later that month are in similar terms.

vi) An internal Abraaj Group email of June 2016 stating, "the fee is deferred until of [sic] exit of the investment".

vii) A June 2016 email between the Abraaj Group and one of the Original Shareholders referring to liabilities to be paid following an anticipated sale of KEL to SEP.

There are a number of difficulties with Mr Ashary's reliance on these statements:

i) Those made prior to the expiry of the original CSA are correct. Prior to termination, the deferred Service Fees were payable on Exit.

ii) There is nothing to suggest that these statements are normative in an exclusive sense (describing the only circumstances in which the obligation to pay can arise) as opposed to descriptive (recognising when payment is likely to be made as a matter of fact), or a non-exclusive normative statement (describing one set of circumstances in which an obligation to pay will arise, but without reflecting an agreement or understanding that is the only such circumstance). The key question which would arise on Mr Quirk KC's case is never addressed in these exchanges: would the accrued debt never be payable if there was never a complete Exit?

iii) Even after the CSA had expired, its renewal and the continuation of the parties' existing relationship was anticipated.

iv) The communications do not cross the line between AIML and KESP.

By contrast, after the expiry of the CSA in December 2016, the issue of when the KESP Receivable became payable was addressed in the context of discussions between the Abraaj Group and Mashreq for the extension of the Facility (as I explain below, I am satisfied the KESP Receivable constitutes the Disputed Debt in the amount outstanding in the Abraaj Group's consolidated accounts as available at the time of the assignment). It was recognised by Abraaj that the KESP Receivable was payable and would be paid if KESP received sufficient dividends from KEL to pay it. There was no suggestion in this context that the debt was only payable on a complete Exit. That is something which the Abraaj Group would, in all conscience, have been required to tell Mashreq when offering the KESP Receivable as security for a loan extension, had that been its understanding. Rather than offering an alternative to the assignment of Exit proceeds rejected as insufficient by Mashreq, that would have been to offer the same thing.

Mr Quirk KC also relied upon the following facts:

i) That the non-deferred Service Fees for 2008 to 2011 were not paid until the debt for equity swap on 28 May 2012 with no further payment of non-deferred Service Fees until the application of the AEO in 2015. Once again, however, that does not address the issue of when the non-deferable fees became payable, and proves rather too much for Mr Quirk KC because I did not understand it to be said that this element of the fees was only payable on an Exit. It clearly was not (there having been no Exit when it was discharged by a debt for equity swap). Rather the delay reflected the practical difficulties KESP had in meeting its liabilities to AIML, and a considerable degree of forbearance on AIML's part in relation to the delay.

ii) It is said that no demand for payment under clauses 3.1 was made when the CSA expired at the end of 2012, with the extension of the CSA only being agreed retrospectively in 2015. However, once again that state of affairs reflects the basic equivocality which undermines Mr Quirk KC's estoppel submissions generally – was the absence of a demand because of a shared assumption the debt had not become payable or because it was known KESP did not have the means to pay it? In any event, it is clear that the mutual expectation of AIML and KESP was that the CSA would be renewed, so as not finally to expire at the end of 2012, even if the process of renewing it was approached in a leisurely manner (see [128] below).

The highpoint of Mr Quirk KC's case, at least in terms of material crossing the line, is a discussion minuted at Items 3 and 4 of the minutes for the KESP board meeting of 8 March 2015 (although, in the nature of a board minute, it is wholly unclear who said what):

(underlining added).

Mr Ashary suggests that the statements made at the board meeting reflected in the underlined words amount to an unequivocal representation or promise by AIML, given through SPV21 as its appointed representative at the board meeting, that the deferred Service Fees were only payable when an Exit took place as defined in clause 11.5 of the Shareholders Agreement. However, the language in Mr Ashary's witness statement is equivocal, stating "it was supposed to be understood that any debt of KESP will be paid from the proceeds of share sales, dividend or debt-for-equity conversion", and the suggested meaning goes further than the statement in the board minutes, which refer to an Exit, but not other circumstances of payment.

As I have explained, Mr Ashary was not available for cross-examination due to what I accept is a serious health issue. While I draw no adverse inference from his absence, I have taken the fact that his evidence could not be tested in cross-examination into account when determining what weight I can accord to this evidence, as well as the issues which would have confronted him in cross-examination. My conclusions are as follows:

i) The best evidence of what was said is the board minute itself, and Mr Ashary's witness statement takes matters no further.

ii) The context for the statement was that certain outstanding liabilities were to be settled from the proceeds of the AEO, but the deferred Service Fees were not amongst them. I am satisfied that the primary purpose of the underlined words (which begin with "For the avoidance of doubt") was to make this clear.

iii) I am not persuaded that the words which follow were intended to define (or re-define) the exclusive circumstances in which the US$25m became payable. Rather, they reflected one circumstance in which the US$25m would become payable which was the most likely to occur: "at the time of exit" which it was believed would occur in the near future. That did not mean that, at the same time as the parties were also confirming their intention to renew the CSA "on the same terms", they did not intend the provisions in the CSA for payment on termination (then an unlikely prospect) not to apply. Had that been the intention, the CSA would not have been renewed on the same terms but on different terms, and the Side Letter would have reflected this.

iv) I am not persuaded that SPV21's agreement as a shareholder in KESP to the allocation of funds to meet KESP's debts can be treated as a representation by AIML (SPV21's owner) as to the nature of its rights under the CSA with KESP. The context of the discussion was the internal management of KESP's affairs, and not AIML's contractual relationship with KESP. The parties were addressing shareholder business.

v) Once again the estoppel case seeks to prove rather too much – e.g. it would seem to have the effect that termination for cause under clause 11.2 of the CSA would not trigger a payment obligation, even though Mr Quirk KC does not dispute that that is the effect of the CSA as a matter of contract. The fact that the single sentence relied upon does not address that issue supports the view that it was not intended to be a representation as to AIML's legal rights.

vi) Further, for reasons set out below, I am satisfied that the Disputed Debt is the debt subject to the purported assignment by AH to Mashreq in the amount due as recorded in the consolidated Abraaj Group accounts available at the time of the assignment. In that connection, it is relevant to note that there is no evidence that Mashreq was told that the Disputed Debt was only payable in the event of an Exit. On the contrary, clause 7 of the Assignment Agreement provided that the security would be immediately enforceable once Mashreq served a notice of enforcement. I also accept Mr Sybersma's evidence that neither Mr Ashary nor the Original Shareholders suggested that the deferred Service Fees and the expenses only became payable on an Exit, during his time as a member of the KESP board.

It follows that the estoppel claim (of both species) fails at the first hurdle.

Reliance on the representation

Mr Ashary says that KESP relied upon the representation, promise or common assumption said to have been made at the 8 March 2015 board meeting by entering into the Side Letter and using the AEO to pay other liabilities rather than the deferred Service Fees.

I am not persuaded that the statement recorded in the 8 March 2015 board meeting caused KESP to change its position as Mr Ashary suggests:

i) KESP was benefiting, and continued to benefit, from extensive forbearance as a matter of fact from AIML so far as the Disputed Debt was concerned, and there was no reason to believe that would not continue, whatever AIML's legal rights.

ii) It is apparent from the documents that there was a strong expectation on the part of KESP's shareholders at the time of the 8 March 2015 board meeting that an Exit would take place, providing the cash to meet all liabilities.

iii) In any event, a renewal of the CSA was agreed at the same meeting. It had been in contemplation for some time. It was discussed in a paper prepared by AIML for the KESP board meeting of 4 December 2013 and in a further paper of 7 March 2015. At the 8 March 2015 board meeting, it was agreed to renew the CSA until the end of 2016 on the same terms. Renewal meant that there would be no right to call for payment for the Disputed Debt until a complete Exit or termination of the extended CSA or for cause. The suggestion, therefore, that if Mr Ashary had not been told that the deferred Service Fees were payable on Exit (but had become payable on termination of the CSA on 31 December 2012 unless extended), he would not have supported KESP entering into the Side Letter which would have deferred them until Exit or termination of the renewed CSA on 31 December 2016 is particularly difficult to understand.

In these circumstances, it is not necessary to address the doubly contingent issue of whether it would be inequitable for AIML to go back on the assumed convention, promise or representation.

The "same terms" representation

Mr Quirk KC also argued that a separate representation was made that the reduced management fee of US$4m per year would be subject to the same terms as the US$5m deferred fee, for which purpose he relied on a statement recorded in the KESP board minutes for the meeting of 8 March 2015. This stated:

It is argued that this involved a representation (or common assumption) that the US$4m would not become payable until an Exit.

This argument fails, both because of my conclusion that there was no representation, promise or common assumption to the effect contended for in relation to the deferred Service Fees, but also because the US$4m figure is the counterpart of the US$5m non-deferred Service Fee. The statement relied upon by Mr Quirk KC is expressly linked to the deferred part of the US$10m fee (given the reference to "deferred management fee of USD 25m").

The Expenses Claim

The terms of the CSA

The CSA provided for AIML to provide services as a consultant, the services to be provided being identified in Schedule 1. These included:

i) preparing budgets;

ii) identifying other potential investments, potential funding options and expected benefits;

iii) assist KESP with preparing budgets, proposals and financial reporting and forecasting;

iv) "provide strategy and direction";

v) "human resource planning/recruitment/policy development"; and

vi) "consulting services in any of the daily operations of the Client as may be required".

Turning to the main body of the CSA:

i) Clause 1.2 provided that references to "the Client" included "any of its subsidiaries, affiliates or Associates", and, hence, KEL.

ii) Clause 1.5 provided that AIML was to "employ sufficient resources in terms of staff and otherwise to deliver the Services …".

iii) Clause 3.1 provided for payment of US$10m per annum and that, "unless otherwise agreed in writing, the Consultant shall not be entitled to reimbursement or compensation for any expenses or costs incurred in performing its obligations under this Agreement." It also provided that the parties would use their best endeavours so that within 2 years, AIML would provide the Services direct to KEL.

iv) Clause 12 provided that "in providing the services to the Client hereunder", AIML could employ sub-agents at its own cost and expense.

The structure of the CSA, therefore, is that AIML is to bear the expenses of providing the consultancy services under that contract, save where a particular expense is incurred with KESP's prior written approval.

Turning to the Shareholders Agreement:

i) Clause 6.7 of the Shareholders Agreement provided that the board of KEL would "determine the most efficient tax and legal structure for remunerating the senior executives of KESP".

ii) Clause 8.2 provided that the board of KESP could make capital calls on the Shareholders.

Finally, a letter agreement signed on 18 May 2009 (" the May 2009 Letter "), referring to the CSA and the Shareholders Agreement, provided:

In contrast to the cost of providing consultancy services under the CSA, which was ordinarily to be borne by AIML, where AIML funded the senior manager emoluments of KEL, these were to be reimbursed by KESP, on the basis of supporting documentation.

The chronology

The issue of expenses appears first to have been raised at a KESP board meeting of 12 November 2009. In the minutes, which were clearly prepared after the meeting and with the benefit of information subsequently circulated, reference was made to AIML having incurred expenses of US$3.172m to be discharged under the May 2019 Letter, and which resolved to discharge them on that basis.

In the follow up to the board meeting, the level of expenses incurred was discussed, comprising US$2.954m from 1 October 2008 to 31 October 2009 (i.e. covering a period before signing the CSA), with an estimate of US$0.85m to the end of 2009. In the event, the November and December expenses do not appear to have been referred to at the board meeting (or at least that discussion is not recorded in the board minute), but the board was given an increased figure of expenses of US$3.172m.

On 16 November 2009, Ms Lindsay emailed Mr Gauhar discussing the issue of salaries, referring to clause 6.7 of the Shareholders Agreement and the May 2009 Letter. She stated:

An email from Mr Lakhani to Mr Tareen and Mr Dave of 17 November 2009 states that in addition to the US$2.9m to October 2009, "effective September 2009 we will charge KESP with salaries and expenses in relation to [six individuals] with the difference between paid from [KEL] and the actual salary".

In December 2010, a paper produced on the Abraaj side addressed the expenses incurred since October 2009. It referred to expenses of US$736,809 for November and December 2009, and US$6,091,012 for January to November 2010. The document explained:

On 22 December 2010, Mr Tareen sent an email to Mr Ashary, Mr Lakhani and others referring to these expense claims and seeking approval for a board resolution. Exchanges on the discharge of this claim by conversion into equity continued over the following 13 months, there having been agreement to conversion in principle but discussions about timing were continuing (see e.g. Mr Joshi's email to Mr Lakhani and others of 6 March 2011).

The matter was tabled at a KESP board meeting on 15 January 2012, the minutes of which once again reflect a number of subsequent exchanges. Reference was made to the expenses claims by various parties, including by "Abraaj" being (i) US$737,000 for the period October 2008 to December 2009 (over and above the US$3.17m already approved); US$9,480,000 including US$2,773,000 McKensey expenses for 2010; and US$4,335,000 for 2011. The discussion makes it clear that these expenses were wholly or predominantly concerned with expenses at KEL level (the minutes noting "due to complicated regulations involved at the State Bank of Pakistan level and possible negative media hype, it would be impractical to consider recovery of part or whole of the Expenses or similar future expenses from KESC and therefore such expenses will have to be borne at KESP level"). Reference was also made to the CSA, and the May 2009 Letter, and the fact that "certain fees and expenses payable to AIML or Abraaj are convertible" to equity. The minutes record that "the Expenses be and hereby are approved", with payment taking the form of an allocation of shares to SPV21 (14,522 shares for total expenses of US$14,552,000). It is apparent that detail on the expenses was tabled at the board meeting, and also provided subsequently.

A document prepared by the Abraaj Group at some point subsequent to September 2014 set out expenses "incurred on behalf of KESP" as follows:

i) US$2,434,615 for 2012, comprising various staff costs, "consultancy and other expenses" and "expenses paid by Abraaj";

ii) US$1,593,763 for January to September 2013, comprising the same categories;

producing a total of US$4,028,378.

On 4 December 2013, the Abraaj Group prepared an internal paper for the next board meeting discussing various areas of concern in its ongoing interaction with the Original Shareholders. One topic was expenses. The paper referred to "salary, ancillary expenses and other emoluments of senior management of KESC for last 5 years", "McKinsey Consulting Expenses" and "other consultancy and exit related expenses", and to the Abraaj Group's request for approval of US$4.028m for 2012 and the first 9 months of 2013. The paper referred to concerns expressed by other shareholders that Abraaj was "double dipping" (receiving a management fee under the CSA and reimbursement of expenses), and to the written approval requirement in clause 3.1 of the CSA for the expenses covered by that agreement. The paper suggested that the Abraaj Group could rely on the May 2009 Letter in response.

The issue of expenses was addressed at KESP's 26 January 2014 board meeting in which the Abraaj Group's claim for expenses was approved (both US$4.028m for KESP expenses and a separate claim for expenses concerned with a standby letter of credit of US$1,134,549).

At the KESP board meeting of 8 March 2015, expenses for the period October 2013 to February 2015 were tabled for approval. Abraaj expenses in the sum of US$2,171,736 were approved to be settled from the AEO proceeds. Once again, the minutes reflect exchanges which post-date the meeting, including an email from Mr Hamid of 22 March 2015 which explained the amount of expenses claimed.

The proposed sale of KESP's share in KEL to SEP, which appeared to be in the offing in mid-2016, led to further discussion of AIML's expenses claims. In July 2018, Abraaj provided a breakdown of 2017 expenses totalling US$3,191,771, and for 2016 of US$2,483,975. In response, one of the other shareholders (the AJP) stated in an email of 8 July 2018 that they would "require detailed breakdown of 'Other Expenses' before these are approved by the KESP board". Further information was sent through on 9 July 2018. Queries were raised by AJP in response on 23 July 2018. At the KESP board meeting on 25 July 2018, it was noted that as the Original Shareholders had raised various queries about "Other Expenses", it would not be efficient to address them at the board meeting (which was being conducted by telephone) and that a meeting would take place at Abraaj's offices on 29 July 2018 to discuss them, and report back to the board. That meeting took place. A breakdown of certain 2017 and 2018 fees was sent by Abraaj to AJP on 5 August 2018 together with a response to certain items "agreed during the meeting".

KESP's management accounts for 31 December 2017, signed by directors representing both the Abraaj and the Original Shareholders' interests, recorded a debt to Abraaj of US$7,194,517. This comprised US$3,839,616 payroll costs, US$2,538,729 "legal and professional", US$789,209 "travel and insurance expenses" and US$26,963 "other".

After AIML entered into provisional liquidation, an agreement was reached for each of the shareholders in KESP to contribute to funding its expenses. A call between stakeholders in KESP on 26 December 2018 discussed the issue of expenses, in the course of which reference was made to the fact that AIML was no longer able to fund all of KESP's expenses, and that KESP's shareholders would need to do so pro rata.

A KESP board meeting of 17 January 2019 discussed the ongoing funding of its expenses. There was discussion of pushing KEL salaries down to KEL level. No agreement on KESP's operating budget was reached at the meeting. In the event, interim funding was provided by IGCF, pursuant to the terms of a Payment Framework Deed. In due course, agreement on a 5-month operating budget was reached.

The discussion of KESP's liability to reimburse the payment of expenses continued in the context of the finalisation of its management accounts, in which requests were made for the invoices supporting certain of the expenses claimed. Some adjustments were made. This issue was discussed at a further board meeting on 28 February 2019. One representative (Mr M. Habib Ullah Khan) requested an audit of the expenses. KESP's management accounts were approved "subject to an audit by the [Original Shareholders] of the figures within them". Mr Farooki agreed to this course, and noted "that the accounts should be reviewed and then approved, subject to the [Original Shareholders'] right to have an audit".

The management accounts for KESP for 2018 were discussed at a KESP board meeting on 11 July 2019. The KESP 2018 management accounts were tabled, it being noted that they had been "circulated to the Board" and the accounts and supporting documents shared with Mr Farooki for the Original Shareholders who had approved them. Mr Farooki stated that the Original Shareholders "may wish to review the expenses within the Management Accounts, through an audit at a later date". It was agreed that the management accounts would be approved, "subject to further review by the [Original Shareholders] if required". Those accounts, signed by the Abraaj and Original Shareholders' directors, provided for an amount due to Abraaj of US$8,419,839. This comprised US$4,834,429 payroll costs; US$2,676,050 "legal and professional"; US$881,496 "travel and other expenses" and US$26,963 "other".

It is clear that the issue of a possible "double charge" was aired by Mark Skelton (who had been appointed conflict director of IGCF after AH and AIML entered into provisional liquidation, and who became a director of KESP appointed by SPV21) at a meeting of 17 July 2019, with reference to clause 3.1 of the CSA. An email from Mr Sybersma suggests that Mr Ashary stated that he had "closed his eyes" to this issue on the basis that he was happy with the work being done. AIML's liquidators did not accept the validity of this complaint.

KESP management accounts were also prepared for 2019, and signed by the Abraaj and Original Shareholders' directors. These recorded a payable to "Abraaj (AIML)" of US$8,709,638 made up of "payroll related costs" of US$4,834,429; "legal and professional" of US$2,676,050; "travel and other expenses" of US$881,946 and "others" of US$26,963. These were approved at the KESP board meeting of 9 September 2020.

KESP's management accounts for 2020 were considered at KESP's board meeting on 25 March 2021. The board minutes record Mr Malik, the company secretary, stating that "the 2020 Management Accounts had been reviewed in detail by the stakeholders", and it was said that "the expenses were reviewed in depth by all stakeholders with receipts and payments fully documented". The accounts were approved, and are signed by both the Abraaj and Original Shareholders' directors. They record a payable to "Abraaj (AIML)" of US$8,446,114 comprising "AIML funded payroll costs" of US$6,207,104; "AIML funded legal and professional" of US$1,936,116; "AIML Funded Travel and Other Expenses" of US$923,479 and "others" of US$26,963, together with a credit reflecting reimbursement from the Original Shareholders of US$647,547.

Finally, KESP's management accounts for 2021 were considered at a KESP board meeting on 12 May 2022, albeit the minutes do not record approval. The 2021 KESP management accounts are signed by both the Abraaj and Original Shareholders' directors. They record a payable to "Abraaj (AIML)" of US$8,446,114 made up in the same manner as that shown in the 2018 Management Accounts.

The legal arguments

The Claimants' claim for expenses is pleaded on a number of bases:

i) An implied term of the CSA that "if a payment was made by AIML on behalf of KESP in due performance of the CSA, AIML would be entitled to be reimbursed for such payment by KESP".

ii) An implied contract (in respect of the period after the expiry of the CSA) to like effect.

iii) A collateral contract to like effect.

iv) On the basis that KESP expressly or impliedly requested AIML to incur the expenses on its behalf, giving a contractual claim for money paid or for reimbursement.

v) A claim in "restitution for unjust enrichment".

Those various formulations have provoked detailed responses from Mr Ashary, which to a significant extent turn on the central theme that if clause 3.1 of the CSA regulates the circumstances in which expenses can be claimed, no implied term, agreement or restitutionary claim can permit recovery where the requirements of clause 3.1 have not been complied with.

I have concluded that these arguments start from a mistaken premise, in treating the expenses which AIML claims as expenses of providing its consultancy services under the CSA (clause 3.1 being limited to expenses of that type). On the basis of the evidence before me, and the documents to which Mr Cullen helpfully took me in closing submissions, the expenses which AIML asserts are due are not of this type, but essentially the expenses of operating KEL (principally payroll and associated expenses, and costs associated with the attempt to sell KESP's interest in KEL from which all shareholders would benefit). It would be surprising if all of those expenses of operating the joint venture company including its payroll costs and facilitating the Exit which represented the principal purpose of the investment were to fall exclusively on the 50% Abraaj interest unless KESP (and the other shareholders) agreed otherwise. In any event, that argument is inconsistent with clause 6.1 of the Shareholders Agreement and the 18 May 2009 Letter. It is also inconsistent with the manner in which the parties dealt with the expenses. While it is possible that some of the expenses claimed by AIML are of a type caught by clause 3.1 of the CSA, that is certainly not their predominant character, and no attempt has been made to identify any such expenses.

In these circumstances, I am satisfied that there was an agreement between the parties, implicit in the 18 May 2009 Letter and confirmed by their conduct, that where AIML discharged expenses of KESP, it was entitled to recover them from KESP (whether by debt for equity swap or otherwise). The only procedural requirement for such a claim is that set out in the 18 May 2009 Letter itself: that they should be notified to the other KESP shareholders with supporting documentary evidence. On the evidence before me, that has happened in all cases (the supporting material being contained in trial bundle E2, and reference to supporting detail having been provided contemporaneously appearing in other documents). In those circumstances, and given that the Abraaj director had signed off on the expenses in the management accounts, it was incumbent on Mr Ashary to identify which heads of claim were challenged and why.

In any event:

i) So far as expenses discussed at the 28 February 2019 KESP board meeting are concerned, they were approved. KESP has not sought to exercise any right to audit them, and it is now too late to do so. I do not accept Mr Quirk KC's submission that there was no need to check the amount of expenses claimed until payment was imminent. That is not how the parties conducted themselves, and there was an obvious need to raise any issues as to the expenses claimed with reasonable promptness, given the difficulties which might arise in providing further details or investigations long after the event. Nor am I persuaded that only KESP, if an active defendant, could have investigated this issue. It would have required a fairly limited audit of the material of a kind which could be done with forensic accountancy assistance (identifying any absence of supporting invoices, what appear to be excessive rates etc).

ii) That is also true of the expenses approved on the same basis at the 11 July 2019 KESP board meeting.

iii) KESP's management accounts for 2019 were approved at the KESP board meeting of 9 September 2020 and KESP's management accounts for 2020 were approved at KESP's board meeting on 25 March 2021. These record:

iv) KESP's management accounts for 2021 were considered at a KESP board meeting on 12 May 2022, albeit the minutes do not record approval. The 2021 KESP management accounts are signed by both the Abraaj and Original Shareholders' directors. They record a payable to "Abraaj (AIML)" of US$8,446,114 made up in the same manner as that shown in the 2018 Management Accounts.

v) On 30 September 2022 Collas Crill, the lawyers acting for the Original Shareholders, said that quantum of the claim was "not in issue" and Mr Ashary said something similar at the 31 March 2023 board meeting.

Against that background, I do not accept it is open to Mr Ashary simply to put AIML/Mashreq to proof as to the amount of expenses validly due. In circumstances in which the expenses claimed and some supporting material have been available to the Original Shareholders for some time, it is incumbent on them to raise any issues as to their composition or amount. None was raised, whether in the statements of case or at trial. Nor would it be appropriate to provide some further judicial process in which the expenses could be reviewed in a more granular way. This trial was the occasion for Mr Ashary to bring his full case forward ( Boddy v Sinton [2020] EWHC 3015 (QB) , [33]).

Finally, there is no term providing that expenses were only payable on an Exit, nor any basis for an estoppel argument (particularly once it is recognised that the expenses in issue are not incurred under the CSA). The mere fact that it may have been anticipated that payment was unlikely as a matter of fact if the SEP transaction did not go ahead does not affect KESP's obligation to reimburse AIML (any more than a recognition that KESP would never be able to pay would have the effect that no debt was ever due).

Accordingly I am satisfied that KESP's indebtedness to AIML extends to expenses claimed in the sum of US$8,446,114.

IS THE DISPUTED DEBT DUE TO AIML, SAGE OR TO MASHREQ?

Is the KESP Receivable the Disputed Debt?

Clearly if the KESP Receivable purportedly assigned by AH to Mashreq under the Assignment Agreement does not comprise all or part of the same debt as the Disputed Debt in issue in these proceedings, Mashreq's interest ends at this point. The Claimants argue that it does not, pointing to the reference to the KESP Receivable in the Assignment Agreement as an "intercompany loan".

I am satisfied that the KESP Receivable is the same debt as the Disputed Debt in the amount recorded in the Abraaj Group's consolidated accounts available at the date of the assignment:

i) The amount of the KESP Receivable is the amount of the Disputed Debt as recorded in those accounts.

ii) There is no other debt due from KESP to AH or AIML which might have constituted the KESP Receivable. In particular, AH's consolidated financial statements would have reflected debts due from KESP to both AH and AIML. The only receivable recorded is the KESP Receivable, with the same receivable in the same amount appearing in the equivalent "standalone" financial statements of AIML.

iii) The discussion of the KESP Receivable in the context of the 2017 exchanges between the Abraaj Group and Mashreq always refers to the KESP Receivable by reference to figures wholly consistent with the amount of the Disputed Debt.

iv) The reference to an "intercompany loan" does not affect the position. Indeed the lengthy forbearance by AIML in enforcing the KESP Receivable to the benefit of a company of which the Abraaj Group owned 50% has notable elements of inter-company financing / credit provision. It is clear that Mashreq had identified the KESP Receivable as a "shareholder loan" (see Mashreq's financial analysis of 24 November 2016).

v) Any infelicities of drafting do not prevent the court ascertaining the clear meaning and effect of the Assignment Agreement when interpreted by reference to the matters known to the parties when it was concluded ( Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 , 912 and Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 ).

In the sections which follow, references to the KESP Receivable are also to be read as references to the Disputed Debt as recorded in the Abraaj Group's consolidated accounts as available at the date of the purported assignment.

Was there an express assignment of the KESP Receivable from AIML to AH?

Mashreq's first argument in order of presentation is that there was an express (oral or written) assignment of the KESP Receivable by AIML to AH (if written, then in a document which has not emerged through the disclosure process).

In broad terms, the points made in support of that argument were as follows.

First, it is said (correctly) that the Assignment Agreement, Second Amendment and the Notice of Assignment contemplate that the KESP Receivable was due to AH, which can only have been the case if AIML had assigned the KESP Receivable to AH. However, that state of affairs is explained by the (more likely, in the circumstances) probability that the need for an assignment from AIML to AH was overlooked, in circumstances in which those involved in the Second Amendment and associated documents were focussing on the KESP Receivable as recorded in the Abraaj Group's consolidated financial statements.

Second, it is suggested that the AIML board was required to approve the Assignment Agreement as a condition precedent to the Second Amendment. Even if this were the case, it would be of limited assistance in establishing whether there had been an express assignment as a matter of fact. However, the argument is, in my assessment, wrong:

i) I have explained at [66] above why there was no such condition precedent.

ii) So far as the AIML board meeting approving the Second Amendment is concerned, this referred to AIML (described as "the Guarantor") entering into the Second Amendment. It made no reference to the Assignment Agreement or the KESP Receivable, and no draft of the Amendment Agreement is recorded as having been tabled at the meeting. In standard wording, the minutes record the directors approving "the terms of and the transaction contemplated by the Document and any connected document to which the Company is a party".

iii) I am satisfied that the words "to which the Company is party" define the scope of AIML's approval. That is reinforced by the words of paragraph 5(b) which contemplate approval being subject to a power of amendment by AIML's authorised signatories (a provision which only makes sense in respect of documents to which AIML is to be a party).

iv) Even if that is not the case, I am not persuaded that the minutes evidenced approval in fact of a document not placed before the board or even referred to, and to which AIML was not a party, or that this was envisaged by those who prepared the minutes. Had the assignment issues in relation to AIML been identified, this would surely have been addressed more directly and expressly, rather than through opaque boilerplate language of this kind.

Third, the argument noted that the parties and their lawyers had specifically addressed the lack of any direct legal title on AH's part to the KEL dividends and dealt with this. It is suggested that AH's lack of direct legal title to the KESP Receivable would similarly have been addressed. Rather than a point in Mashreq's favour, this points the other way. It is inconceivable if anyone had spotted the need for an AIML-AH assignment of the KESP Receivable it would not have been "papered up" in a formal document, by a process which left some trace in the emails. Yet there is none. Indeed it is inconceivable an assignment would have been effected orally, as opposed to in writing in a form approved and subject to advice from transactional lawyers.

Is AIML estopped from denying that there was a valid assignment of the KESP Receivable to Mashreq?

The types of estoppel relied upon

Mashreq relies on two species of estoppel:

i) If, as it submits, AIML shared what it says was the common assumption of AH and Mashreq that the KESP Receivable was validly assigned to Mashreq so as to create an effective security for Mashreq, it relies on estoppel by convention.

ii) If AIML did not share that assumption, it relies upon an estoppel by acquiescence on the basis of AIML's failure to object that the debt which AH was purporting to assign to Mashreq was owed to it and not AH, with the result that the security being granted to Mashreq was ineffective.

Estoppel by convention

I have briefly summarised the applicable principles relating to the doctrine of estoppel by convention at [120]-[121] above. However, it is helpful at this point to consider a case applying the doctrine in a similar context: Rivertrade Ltd v EMG Finance Ltd [2013] EWHC 3745 (Ch) (Mann J); [2015] EWCA Civ 1285 . In that case:

i) Rivertrade made a loan to Holdings. Holdings purported to provide security for the loan by assigning the benefit of sums due under a contract with Ranhill Berhad (" the Ranhill Contract "). However, Holdings was not a party to the Ranhill Contract: the party entitled to payments under that contract was another company, Finance, which was a wholly owned subsidiary of Holdings and part of the "EMG Group". Another group company, Forburg, claimed to have prior rights in relation to the Ranhill Contract arising from certain debentures. There were a number of common directorships across the group, and one individual, Mr Govindia, "pulled the strings" of all group companies ([27]).

ii) In January 2008, Finance entered into the Ranhill Contract.

iii) In May 2008, Finance assigned all its receivables to Holdings who assigned them to Forburg.

iv) In May 2008, Rivertrade provided a loan to Forburg, who in turn said that they had had assignments of various transaction fees due to Finance via Holdings, and would provide security in relation to certain of those assigned fees.

v) In December 2008, Rivertrade provided a further loan to the EMG Group.

vi) In April 2009, the EMG Group's financial problems deteriorated further, and Mr Govindia approached Rivertrade for a further loan, mentioning the Ranhill Contract as a possible source of security.

vii) That month, Rivertrade advanced further funds in return for what was presented as a security interest in the Ranhill Contract under an agreement with "EMG". Mann J found that all relevant companies in the group were party to this agreement, Mr Govindia having authority to act for them all, including Finance in relation to the assignment.

viii) The attempt to document the terms of the April 2009 advance took place after the advance had been made, being signed by 1 July 2009. There was a loan agreement between Rivertrade and Holdings, which provided that "as security" for the loan, Holdings "hereby assigns to Rivertrade …. [the Ranhill Contract] held in the name of [Finance]". Holdings also signed a letter confirming the assignment of the Ranhill Contract. Mr Govindia was acting for all group companies, including Finance, in entering into this agreement, with the result that Finance became obliged to effect the assignment.

ix) The effect of the June 2009 documents on their face was that Holdings, and not Finance, purported to be the assignor of the Ranhill Contract, and Finance was not a party to any of the transaction documents. In addition, Finance and Holdings had already assigned all of their relevant rights to Forburg in 2008, such that they had nothing to assign, and they had both purported to give prior rights to Forburg over their assets in the form of debentures.

At [189]-[203], Mr Justice Mann considered and rejected various contractual answers to the problems created for Rivertrade by the June 2009 documents. However, he held that an estoppel by convention was made out. At [209]-[210], he found:

The decision was upheld on appeal ( [2015] EWCA Civ 1295 ), Kitchen LJ addressing this point at [50]-[51]:

Estoppel by acquiescence

The parties were content to treat Lord Wilberforce's statement in Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 902-903 as a sufficient statement of the applicable law for the purposes of this case:

The estoppel by convention case

Scene setting

In considering the estoppel by convention case, it is important to note the following facts:

i) The Abraaj Group was essentially managed as a single unit, with the same individuals holding directorships across numerous group companies and holding signatory authority for numerous group company bank accounts. Individuals used "abraaj.com" emails rather than emails specific to an individual group company. That modus operandi in the period under review is reflected in a statement made by Mr Naqvi at a creditors' meeting on 5 November 2018 where:

ii) Mr Naqvi was the dominant figure in the Abraaj Group, and the ultimate decision-maker for all group companies. Key emails were sent to him in draft for approval and he had to sign off on the final terms of the Mashreq lending package.

iii) The individuals who signed the various transactions involved in the Facility Agreement, the First Amendment and the Second Amendment were generally the same for both AIML and AH. Mr Lakhani and Mr Zikar signed the original Facility Agreement for AIML and AH and the Guarantee for AIML. Mr Lakhani (with Mr Siddique) participated in the AIML board meeting which approved the Facility Agreement and Guarantee. Mr Lakhani and Mr Zikar signed the First Amendment for both AH and AIML. Mr Dave and Mr Siddique signed the Second Amendment for both AH and AIML. Mr Naqvi, who was the ultimate decision-maker for the Abraaj group, approved the Second Amendment for AH, and was a member of the AIML board who approved the Second Amendment for AIML. Mr Dave, with Mr Siddique, signed the Assignment Agreement for AH and the Notice of Assignment.

Turning specifically to the position when the Second Amendment was concluded:

i) AH faced an immediate liability to repay the loan under the Facility Agreement and the First Amendment, which was past due, and AIML an immediate liability as guarantor of that loan, unless an extension was agreed by Mashreq.

ii) The directors of AH and AIML, and Mr Naqvi, anticipated that the sale to SEP would complete during the extension period of the loan, if one could be obtained.

iii) All the individuals involved in the negotiations for an extension, who included individuals holding de jure directorships for AH and AIML, knew that it was a condition precedent to any extension that Mashreq received security in the form of an assignment of the KESP Receivable.

iv) Those individuals also knew that the Assignment Agreement between AH and Mashreq had been prepared as the means whereby that security interest was being brought into being, and was being entered into for the purpose of satisfying the condition precedent.

v) The individuals acting for AH and AIML entered into the Second Amendment on the basis that that condition precedent had been satisfied.

Is the common assumption made out?

Against this background, I am amply satisfied that each of Mashreq, AH and AIML entered into the agreements which gave effect to the loan extension on the basis of a common assumption that the Assignment Agreement created an effective assignment of the KESP Receivable. I accept that the facts in this case are not as strong as those in Rivertrade , where Mann J found that the relevant EMG entities were already parties to the April 2009 loan arrangements before the June 2009 transaction documents were brought into being. However, they are more than strong enough and there are a number of obvious similarities:

i) The granting of effective security over the KESP Receivable was clearly embodied in the Second Amendment, the assignment of the KESP Receivable by way of a security being a condition precedent to the Second Amendment.

ii) The extension of the Facility Agreement by the Second Amendment was one to which all of AH, AIML and Mashreq were parties, and to which both AH and AIML gave their approval (AIML having a significant exposure under the Guarantee if no extension was agreed).

iii) It would be contrary to commonsense and commercial propriety for AH to be offering security as a condition for obtaining the extension while holding back the fact that the security was ineffective because the correct assignor was not AH, but another party to the Second Amendment, its subsidiary AIML.

iv) The individuals representing AIML and AH in the transaction (who were the same individuals) believed that effective security was being granted over the KESP Receivable, because this was the basis of the condition precedent to the Second Amendment coming into effect.

v) That understanding "crossed the line", because AIML and AH at all times conducted themselves on the basis that the condition precedent to the Second Amendment would be, and had been, satisfied by the Assignment Agreement, and the solicitors acting for both of them, Freshfields, acted in the transaction at all times on the basis that AH was in a position to grant effective security over the KESP Receivable and, by the Assignment Agreement, had done so.

vi) The assumption was shared by all the directors of the relevant Abraaj Group companies, who had the objective of promoting the interests of the Abraaj Group by obtaining the extension of time Mashreq was offering, in circumstances in which AH and AIML as its guarantor would be in serious difficulty in repaying the Facility loan which had already fallen due, but anticipated a substantial cash inflow from the sale of KEL during the period of the extension. The assumption that the granting of effective security over the KESP Receivable which was a condition of that extension had been satisfied should be attributed to all the Abraaj Group directors involved "wearing all hats" and to Mr Naqvi "as representative of the entire group."

What of the arguments which the Claimants raise against the estoppel?

i) The fact that AIML's last annual reported report and accounts, prepared in November 2017 in respect of the position as at 30 June 2017, recorded the KESP Receivable as still being due to AIML. That would have been an accurate statement of the position on the accounting date, which preceded the Assignment Agreement, but in any event I cannot see how the internal understanding of the unidentified AIML personnel who prepared those documents after the Second Amendment took effect can affect the common assumption as objectively manifested to Mashreq at the key point when the Second Amendment was executed.

ii) The confirmation by KESP personnel in November 2017 to AIML's auditors that the KESP Receivable was due to AIML on 30 June 2017 does not assist AIML for the same reasons.

iii) It is said that the dealings between Mashreq and the Abraaj Group and the internal dealings within Mashreq do not evidence any common assumption that AH was able to give Mashreq effective security over the KESP Receivable by assigning it, but "a muddle". This ultimately involved reliance on the two documents addressed at [39]-[41] above. However, for the reasons there explained, those documents are wholly equivocal, come at a very early stage in events, and are inconsistent with the terms and effect of the overwhelming majority of communications in the period up to 23 July 2017 when the Second Amendment was executed.

iv) It is said that the argument addressed at [207] and following below as to the amount of the assigned debt tells against any common assumption, reinforcing the alleged equivocality of the parties' dealings. As I explain below, I am satisfied that the answer to that question is relatively straightforward, but in any event I am unable to accept the premise of this argument. Had the legally drafted and formally documented assignment of the KESP Receivable been effected by the "right" assignor, the same issue would have arisen as to the meaning of that document. The common assumption that the security intended to be created by the Assignment Agreement (however construed) would be effective is not undermined by arguments as to the true meaning of the Assignment Agreement on its proper construction.

Reliance

It is not seriously arguable that Mashreq did not rely upon the common assumption that effective security was being granted over the KESP Receivable. It is clear from the Abraaj-Mashreq negotiations that this security was required as a condition of the loan extension, and was specifically sought in circumstances in which the Exit did not go through (see [33], [35], [43] and [45] ("critical")). Further, the signing of the Assignment Agreement was a condition precedent to the Second Amendment. It is no answer to that common assumption that Mashreq was also relying on its lawyers in relation to the efficacy of the transactions, and in any event, the issue raised by the estoppel plea did not form part of Linklaters' mandate.

Would it be inequitable for AIML now to go back on the common assumption?

I did not understand Mr Chapman KC to suggest that if the estoppel by convention plea got this far, it would fail at this final hurdle. It would obviously be wholly inequitable for AIML, having secured the extension of the Facility Agreement for the benefit of the Abraaj Group and itself as Guarantor on the basis of the common assumption, now to deprive Mashreq of the very security which it was commonly assumed Mashreq had obtained as the price of the extension.

Estoppel by acquiescence

Given that I have found that the relevant individuals acting for AIML, and whose knowledge is attributable to AIML, shared the common assumption, this issue does not arise. Had I found that AIML was, through those individuals, aware that the security being granted by AH to Mashreq was ineffective because only AIML, and not AH, could assign the KESP Receivable, I would have found that this was a context in which "a reasonable man, in the position of the 'acquirer' of the [KESP Receivable], would expect the 'owner' acting honestly and responsibly, if he claimed any title in the [KESP Receivable], to take steps to make that claim known to, and discoverable by, the 'acquirer'" and in the face of an omission to do so, "the 'acquirer' could reasonably assume that no such title was claimed." AIML's close relationship to AH, the extensive overlap in directors, Mr Naqvi's position as the ultimate authority in both companies, and AIML's involvement and interest in the Second Amendment, collectively have the effect that it would have been obliged to speak up had it known that AH was purporting to assign its debt, and the security being offered to Mashreq would be ineffective as a result.

The other requirements for an estoppel by acquiescence are satisfied, for the reasons set out in relation to the estoppel by convention case.

Conclusion

For these reasons, I am satisfied that Mashreq's estoppel case succeeds. Indeed, but for the greater focus on the separate legal personality of AIML and AH which their liquidations inevitably engaged, I do not believe that this is a point which would ever have been taken. I rather doubt that AIML's liquidators would have raised it themselves had they had full visibility of the relevant documents when the point first surfaced. In cross-examination, Mr Sybersma was asked what he would have done had he been aware of the Notice of Assignment signed by KESP acknowledging a debt due to AH. In an impressively candid answer, he replied:

I should make it clear that I do not criticise AIML's liquidators in taking this point. There were documents on both the AIML and KESP side which appeared inconsistent with the assignment to Mashreq, Mashreq's claim surfaced relatively late and Mr Ashary, for one, indicated his support for it at a very late stage. Further, with the benefit of hindsight it can be said that AIML's liquidators realised a substantial inflow for the benefit of its creditors by disposing of claims which were worth much less than the sum received for them. In Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank [1982] QB 84, a similarly technical and commercially unappealing argument raised by a company in liquidation was defeated by a plea of estoppel by convention. Robert Goff J observed at p.101:

The case also has some echoes of Lord Denning MR's comment in the same case at p.116 that "this case is complicated beyond measure by the existence of wholly-owned subsidiaries."

Was there an implied assignment?

The law

I was referred to a number of cases addressing the legal test for establishing the existence of an implied assignment.

First, Fisher v Brooker [2009] UKHL 41 . In that case, the issue was whether any copyright which Fisher had in the distinctive organ parts in Procol Harum's "A White Shade of Pale" had been impliedly assigned to Essex, a recording company. It was alleged that such an assignment was to be implied in the following circumstances:

i) Brooker and Reid had composed the song, which Brooker had recorded a demo of, and then immediately assigned "all the copyright" in the song absolutely to Essex on 7 March 1967 in return for royalties payable (only) to Brooker and Reid.

ii) Fisher joined the band after that assignment had taken place, and contributed the organ parts at a recording session in April 1967.

iii) The recording with Fisher was released on 12 May 1967, and all the band members contracted with Essex on 16 May 1967 on terms which allowed Essex to exploit the recording in return for the payment of recording royalties.

iv) The implied assignment argument asserted that in those circumstances, and when it was known that Essex intended to exploit and release the song as recorded by the band including Fisher, it must have been intended that Fisher's copyright in his contribution would be assigned to Essex.

Lord Neuberger at [50] stated:

That argument was rejected for a number of reasons. Prominent amongst those was the absence of any evidence that Fisher knew that there had been a pre-Fisher recording, and copyright assigned in the composition at that point to Essex, as well as the inherent improbability that, unlike Reid and Brooker in respect of their copyright, Fisher would impliedly assign the fruits of his own composition for free.

I do not understand Lord Neuberger to be suggesting that the test for implying the existence of a contract is in all respects the same as that for implying a term into a contract whose existence is established. The latter argument is able to take its colour from the express agreement the parties have made and its purpose, with the requirement of business efficacy being tested in this context, whereas the former implies a legal relationship between the parties which would not otherwise exist. There is a body of law dealing with implied contracts, much of it developed in the context of so-called Brandt v Liverpool contracts when determining when the act of delivering cargo against a bill of lading will give rise to an implied contract between shipowner and receiver on the terms of the bill. After reviewing earlier authority, in Mitsui & Co Ltd v Novorossiysk Shipping Co (The Gudermes) [1993] 1 Lloyd's Rep 311, 320 Staughton LJ approved the statement of law in that case by Hirst J at first instance with the following qualifications:

i) No implied contract can be inferred unless it is necessary to give reality to the transaction, and unless conduct can be identifiably referable to the contract contended for which is inconsistent with there being no such contract.

ii) It is fatal to the implication of such a contract if the parties would or might have acted exactly as they did in the absence of such a contract.

iii) It is not enough to show that the parties have done something more than, or something different from, what they were already bound to do under obligations owed to others. What they do must be consistent only with there being a new contract implied, and inconsistent with there being no such contract.

The Court of Appeal considered the shipping line of cases in a non-shipping context in Baird Textile Holdings Limited v Marks & Spencer Plc [2001] EWCA Civ 274 , holding at [21] that the statements of law in the shipping cases were of general application (see also [62]).

Mashreq argued that the test for implying an equitable assignment is less stringent than contemplated in Fisher v Brooker , because all that is necessary is (in effect) the exercise of the putative assignee's power to assign, rather than a contract between assignor and assignee, with the test being whether a reasonable person observing the conduct of the putative assignor (AIML) would understand them to be exercising the power of equitable assignment:

i) Clearly if the equitable assignment is said to have arisen as a result of an agreement for value between assignor and assignee, then implying the equitable assignment will involve implying a contract.

ii) Where the equitable assignment is said to have arisen on the basis of a communication from the assignor to the assignee manifesting a final and settled intention to transfer the right, so as to constitute the assignor trustee for the assignee ( Guest , [3-13]), I accept no contract is required. Similarly when an equitable assignment arises from a direction to the debtor (ibid). In both cases, though, it is necessary for the assignor's intention to be "plain" ( William Brandt's Sons & Co v Dunlop Rubber Co L:td [1905] AC 454 , 462), or there must be a clear expression of an intention to make an immediate and irrevocable transfer ( Guest , [3-15]).

The outcome of this case does not, in my view, turn on which of these different ways of formulating the test is applicable, and I shall proceed on the basis that the test in [201(ii)] is applicable.

The position on the facts

Applying that test, I am not ultimately persuaded that it would have been appropriate to imply an assignment from AIML to AH of the KESP Receivable. The dealings between those parties are equally consistent with them working on the basis of a common assumption (as I have found) that AH was able to create an effective security for Mashreq by assigning the KESP Receivable, and having overlooked the fact that, although the KESP Receivable was "in AH's books" (being an asset on the consolidated balance sheet) it was due to AIML.

In contrast to the interactions of shipowner and cargo receiver, or supplier and customer in Baird , there was no real direct dealing between AIML and AH which could only be explained by an implied assignment, because they were functioning as a single unit without differentiation, and dealing with Mashreq rather than inter se . The reality is that the implied assignment is not said to be necessary to explain the dealings of AIML and AH, but the contract between AH and Mashreq, and there is no conduct or unilateral act on AIML's part said to constitute the exercise of its power of assignment.

Further:

i) The existence of an implied assignment as a matter of fact would be inconsistent with the matters at [187(i) and (ii)] above. As, on the present hypothesis, we are concerned with whether there had been implied assignment as a matter of fact (rather than what the parties' common assumption was on 25 July 2017 when the Second Amendment was concluded), I am satisfied that events post-dating 25 July 2017 are of evidential relevance.

ii) In this case, there is no AH-AIML conduct equivalent to the reciprocal book entries which formed the basis of the finding of implied assignment in Primary Yield Finance Pty Ltd v Meyer [2012] VSC 595, nor evidence of an intention on the part of the putative assignor to transfer funds and loans as an equity contribution to the putative assignee, with a cash transfer at the same time from assignee to assignor, described as "buy Loan 6527" (as in Business Finance Pty Ltd v Partner Invest Pty Ltd [2022] NSWC 1), these being two cases relied upon by Mashreq.

Postscript

I should record that no attack was made on the efficacy of the assignment to Mashreq by reference to clause 22 of the CSA, and the effect (if any) of Schedule 4 of the Shareholders Agreement concerning KESP, which made "the approval, renewal, modification, termination or any action regarding the [CSA]" a reserved matter.

What was assigned to Mashreq?

Introduction

By the end of the hearing, three possible answers to the question "what was assigned to Mashreq?" had been teased out:

i) Debts in the amount of US$37.03m being the figure which appears in the Assignment Agreement and the Notice of Assignment (" Option 1 ").

ii) Debts in the amount of US$37.785m, being the actual amount of the KESP Receivable at the date of the assignment (" Option 2 ").

iii) Both AIML's existing rights to the Service Fees and reimbursement of expenses at the date of the assignment, and AIML's right to receive reimbursement from KESP of amounts paid by AIML after the date of the Assignment Agreement (" Option 3 "). This produces a claim of US$41,446,114.

It is common ground that the answer to this question turns on the construction of the Assignment Agreement and the Notice of Assignment (on the basis that, as Mr Weekes KC sensibly accepted, the latter document forms part of the admissible factual matrix when interpreting the former). It is also common ground that it was open to the parties to agree an assignment in any of these forms.

The applicable legal principles

While ultimately a question of construction, in my view it is helpful to analyse the legal differences between the three Options with the benefit of prior authority, when considering the issue.

As to the first, Option 3 involves the assignment of amounts which had yet to be "earned" by AIML/AH, in the sense that it had not done that on its part which was necessary for a debt on KESP's part to arise (i.e. incurring the relevant expenses), rather than a debt due but not yet payable. Whether or not any debt would ever accrue would depend on whether the anticipated Exit took place, and if not, whether AIML chose to incur those expenses, and in what amounts, no one having identified an obligation on its part to do so. As Mance LJ noted in Raiffeisen Zentralbank Österreich AG v Five Star Trading LLC [2001] QB 825 , 856, when addressing the status of the assignment of a marine insurance policy pre-casualty:

Option 3, therefore, involves, in effect, a promise to assign the debts as and when they accrue in the future which is enforceable in equity if given for value ( Norman v Federal Commissioner of Taxation [1963] HCA 21): that is to say an assignment of a fundamentally different character to Options 1 and 2. As I explain below, this feature of assignments of the Option 3-type may have implications for the priority rules in the event of successive assignments.

Further, I am satisfied that an assignment "must … clearly identify the property that is the subject of the assignment" (Bridge, Gulliver, Low and McMeel, The Law of Personal Property (3 rd ), [22-019]; Dr Ying Khai Liew, in Guest & Liew on Assignment (5 th ), [1-61]: "The subject-matter of the assignment must be capable of ascertainment and identified with sufficient certainty to establish what is being assigned"). I have found it easier to find clear statements of a principle to that effect in textbooks than in the authorities referred to in the supporting footnotes, but the principle is a sound one. The debtor may find itself facing competing claims from assignor and assignee, as well as the risk that if it pays the latter more than has in fact been assigned, it will remain liable to the former. In Phoenix Group Foundation v Harbour Fund II LP [2023] EWCA Civ 36 , [73], when dealing with assignments of future property, the Court of Appeal accepted my conclusion as trial judge "that the basic requirements of equity in order to give effect to an agreement to assign future property" included that "the future property to be transferred must be described with sufficient clarity in the agreement, so that it can be ascertained whether any particular item of property coming into existence and into the hands of the assignor falls within the scope of the agreement."

I am satisfied that the same principle applies to the scope of an assignment more generally. In the penultimate Commercial Court judgment with which I am involved, it seems fitting to refer to the second such judgment, Care Shipping Corporation v Itex Itagrani Exports SA [1993] 1 QB 1, 15-16, where Steyn J observed:

The terms of the Assignment Agreement and the Notice of Assignment

The Assignment Agreement uses the term "KP Receivables" to define the assigned debt, that term meaning:

"Related Rights" is in turn defined as follows:

Clause 2(a) provides that AH "with full title guarantee and as security for the payment of all Secured Liabilities assigns to the Lender by way of security all of the Receivables". Clause 2(b) provides that, to the extent the Receivables are "not validly and effectively assigned under paragraph (a)", AH "charges in favour of the Lender by way of first fixed charge all of the Receivables".

Clause 5.2 requires service of a notice of assignment in the scheduled form.

Clause 5.4 precludes AIML from exercising "any right to rescind, cancel or terminate any of its rights in relation to any of the Receivables".

Finally, the Notice of Assignment, both as executed and (without figures or reference to the specific debt) in the draft scheduled to the Assignment Agreement, provided as follows:

i) Clause 2 gave notice of assignment of AH's "right, title and interest from time to time in and to the US$37,030,000 intercompany loan from us to you ('the Receivables') including all rights or claims in relation to the Receivables".

ii) Clause 9(a) provided that KESP was to pay "all moneys in respect of the Receivables as directed by or pursuant to this notice of assignment".

iii) Clause 9(e) asked KESP to confirm "you owe US$37,030,000 ('the Debt Amount' to the Assignor in respect of the Receivables".

iv) Clause 9(f) asked KESP to confirm "you will pay up to the Debt Amount into the debt service reserve account held with the Lender … within one day of receipt of a dividend from K-Electric Ltd …"

Analysis

Mr Weekes KC submitted that any right to reimbursement in respect of expenses met by AIML after the 23 July 2017 falls within the rights assigned, either because it forms part of the definition of "KP Receivables" or it is a "Related Right".

Considering first the Assignment Agreement:

i) The fact that the definition gives a specific figure – US$37,000,000 – points in favour of Option 1, as does the fact that the debt is defined as a receivable, language naturally redolent of an accrued payment right, rather than a contractual right to indemnity arising on the occurrence of the contingency that indemnifiable expenses are incurred in the future.

ii) The only language said to point towards Option 3 is the words "from time to time" and "at the date of this Deed". However, the former do not concern the amount of the debt, but "the Assignor's right, title and interest" in the debt. The latter provides a quantification of the debt, and allows for it to be reduced by satisfaction, in circumstances in which the Notice of Assignment expressly contemplates that KESP may pay as per AH's direction prior to receiving notice from Mashreq (clause 3).

iii) I do not accept that the words "any other assets deriving from or relating to that Security Asset" extend to a claim for expenses incurred by AIML after the date of assignment, simply because AIML had a claim for different expenses it had incurred at an earlier point in time. That stretches the language "relating to" too far (cf. Arbuthnott v Fagan [1995] CLC 1396, 1403). That is also true of the reliance on the words "receivables relating to the intercompany loans by the Assignor to KES Power Ltd" in the definition of KP Receivables.

iv) The conclusion that the Assignment Agreement only assigns debts in accordance with Option 1 is strongly supported by the terms of the Notice of Assignment, and in particular clauses 2, 9(e) and 9(f).

v) That conclusion is also strongly supported by the factual matrix. Mashreq was only ever aware of a receivable in AH's books of account, i.e. a sum presently due, and that is all it sought assignment of. It had no knowledge of the CSA, that expenses formed part of the debt, of any possibility of ongoing expenses funding by AIML or any consequential right to reimbursement by AIML (contrary to the submission made in Mashreq's written closing). The suggestion that, through vaguely worded boilerplate language used for all the assigned receivables, it acquired a promise to assign further debts as and when they arose through AIML's future expenditure is inherently improbable.

vi) Nor is there anything to suggest that the parties contemplated assigning some higher figure if that happened to be the balance at the date the assignment finally took effect, albeit I accept that the words "aggregating in total to US$37,030,000 at the date of this Deed" offer at least some limited support for Option 2.

I have reached the conclusion that the right answer to the posed question is Option 1 by applying conventional contractual principles, but those conclusions (particularly my rejection of Option 2) are reinforced by the application of the principle of construction referred to in [212]-[213] above.

Of what assignment was KESP given notice?

If I had concluded that the Assignment Agreement extended beyond Option 1, I would have concluded that the Notice of Assignment only extended to US$37,030,000 given the provisions of that document. I would note in any event that a notice of assignment given before a debt arises does not appear to be effective for the purposes of the priority rule in Dearle v Hall in relation to debts coming into existence after the notice has been given: Johnstone v Cox (1880) 16 Ch D 571 affirmed (1881) 19 Ch D 17; Re Dallas [1904] 2 Ch 385 . However, I did not have the benefit of argument on this point and reach no final decision on it.

IS THE DISPUTED DEBT TIME-BARRED?

It is necessary in this regard to consider separately the position of the Claimants and Mashreq, and, for each of those parties, the claim for deferred Service Fees and Expenses.

The position of the Claimants

The claim for deferred Service Fees

This is straightforward. In closing submissions, Mr Quirk KC did not maintain a limitation defence against any claim by the Claimants, but as judgment on the merits is sought against KESP, who are not participating at the trial as a result of disputes within the KESP board, I have considered the issue. The deferred Service Fees fell due on termination, on 1 January 2017, with the statutory limitation period expiring 6 years' later on 31 December 2022. The Claim Form was issued on 21 March 2023, but there was a standstill agreement which stopped time running for a 90—day period from 23 December 2022. The proceedings were, therefore, commenced in time.

By way of further explanation:

i) On 23 December 2022, AIML, SAGE and KESP entered into a Standstill Agreement in respect of AIML's claims against KESP in respect of the Disputed Debt for a period of three months (" the Standstill Agreement "):

ii) The Standstill Agreement defined "the Dispute" as a dispute "about whether any sums are due and payable by KESP to the Claimants (or any of them or any assignees thereof) arising out of or in any way connected with the CSA, the Side Letter or for the period following the expiry of the extended term."

iii) I am satisfied that this includes the claim for Expenses. Even though I have found the Expenses are not payable under CSA, it is clear from the Recital (C) to the Standstill Agreement that this phrase was intended to embrace AIML's claim "to have provided the Services and made payments and/or incurred expenses on behalf of KESP during the currency of the CSA, the Side Letter as well as following the expiry of the term of the CSA and the Side Letter"; and from Recital (D) that the phrase was intended to extend to amounts acknowledged by KESP in its management accounts which plainly included the Expenses, and that AIML claimed the expenses had been incurred on KEL's behalf "in connection with its relationship with KESP arising out of the CSA, the Side Letter, and the period from 31 December 2016."

iv) The 90-day period stops the running of time before the limitation period had expired, and these proceedings were issued within the 30 day period.

The claim for Expenses

The Expenses claimed are those for 2016 to 2020:

i) Information relating to the 2016 and 2017 expenses appears to have first been provided in July 2018. It was not suggested that KESP could have been sued for non-payment of expenses of which it had not been notified, and in any event that would not be consistent with the terms of the May 2009 Letter and the parties' practice of submitting the expenses claimed to the KESP board. KESP was entitled to a reasonable opportunity to approve those expenses before it would come under a liability to pay them.

ii) Even assuming time ran from when the information was first provided in July 2018, the claim is not time-barred (with the position being a fortiori for expenses which were notified subsequently).

iii) Accordingly, none of the claims are time-barred, even without regard to the Standstill Agreement or any acknowledgments.

The position of Mashreq

Mashreq brought its claim against KESP on 16 April 2024. Mr Quirk KC for Mr Ashary did not pursue a limitation defence against Mashreq in closing. That raises a rather difficult issue:

i) Limitation is a procedural bar which depends on the defendant raising the issue before the claimant is required to prove the claim is not time-barred.

ii) KESP has not served a defence, but that reflects the disputed deadlock on the KESP board and the fact that no lawyers were appointed to defend the claim.

iii) The Original Shareholders sought to stay these proceedings while the issues relating to KESP's board were resolved in proceedings in the Cayman Islands. That application was refused, but Mr Ashary was joined to the proceedings, to allow him to raise the points which KESP would have taken.

iv) Mr Ashary did originally suggest that the claims of both AIML and Mashreq were time barred. The former was abandoned when AIML deployed the Standstill Agreement. The latter was abandoned at the same time, but for reasons which are more difficult to discern, and may reflect the tactical alliances in the case.

In these circumstances, I have decided I should consider whether any claim by Mashreq is time-barred, but to do so relatively briefly, having only received written argument on the point.

The claim for deferred Service Fees

The claim for deferred Service Fees would be time-barred even if the Standstill Agreement applied to Mashreq unless (i) time began to run at a later point in time for Mashreq than for AIML or (ii) Mashreq benefits from an acknowledgment under ss.29(5) and 30 of the Limitation Act 1980. I will address these issues in reverse order.

Can Mashreq rely on ss.29 and 30 of the Limitation Act 1980?

Section 29(5) of the Limitation Act 1980 provides:

Section 30 (1)(a) requires the acknowledgement to be "in writing and signed by the person make it", and s.30(2)(b) requires the acknowledgements:

Mashreq relies (inter alia) on the acknowledgement of the Disputed Debt in KESP's management accounts for the year-ending 31 December 2020 which were approved at the KESP board meeting on 25 March 2020 when Mr Hutchison, Mashreq's board appointee, was present.

i) The claim for deferred Service Fees was not time-barred on either date. If an acknowledgement can be established, a 6 year period will run from the relevant date (and Mashreq's proceedings will be in time) (cf the issue discussed in Consolidated Agencies v Betram Ltd [1965] AC 470 and In Re Gee & Co (Woolwich) [1975] Ch 52).

ii) The accounts were signed by two directors, one appointed by Abraaj and one by the Original Shareholders. They had authority to acknowledge the Disputed Debt as did the KESP board when approving the accounts. I am satisfied that this constitutes an acknowledgement for s.29 purposes (applying Jones v Bellgrove Properties Ld [1948] 2 KB 700) and that it was communicated to Mashreq through Mr Hutchison. The fact that Mr Hutchison was present at the meeting as a Mashreq-appointed director does not affect the position (cf Jones where the party benefiting from the acknowledgement was present at the meeting at which the balance sheet was approved in his capacity as shareholder). In any event, Mashreq received a copy of the management accounts (cf Re Compania de Electricidad de la Provincia de Buenos Aires Ltd [1980] Ch 146, 194).

iii) Accordingly I am satisfied that Mashreq's claim is not time-barred.

The alternative argument:

I will deal with this fallback argument particularly briefly.

i) Mashreq submitted that time began to run when it served an acceleration notice on AH on 12 July 2018 and/notice on KESP on 24 July 2018. This argument relies on the fact that under clause 7.1(a) of the Assignment Agreement, and clause 21.19(a)(iii) of the Facility Agreement, Mashreq was entitled to enforce the security following the occurrence of an Event of Default and after delivery of an enforcement notice.

ii) That alone would not, in my view, affect the running of time on the debt due from KESP. Indeed agreements to which KESP is not a party cannot interrupt the running of the limitation period (which had begun to run on 1 January 2017 following the termination of the CSA).

iii) To the extent that Mashreq relies on the Notice of Assignment, this provides at clause 3 that "until you receive written instructions from the Lender to the contrary, all monies payable by you to the Assignor in respect of the Receivables shall be paid to the account notified to you by the Assignor" and clause 5 that the assignor "shall remain entitled to exercise its rights, powers and discretions in respect of the Receivables" with certain limited exceptions.

iv) Once again, I do not think that language interrupts the running of time so far as KESP is concerned. Clause 3 expressly contemplates monies may be payable before any notice is given by Mashreq, which necessarily involves time running for limitation purposes. I do not accept the displacement of the assignor following an event of default, and the giving of instructions by Mashreq, starts a second limitation period in respect of the same debt.

Had it been necessary for Mashreq to rely on time not starting to run until 24 July 2018 following the service of a notice following an Event of Default, I would have held its claim was time-barred.

The claim for Expenses

The claim for Expenses, which accrued no earlier than July 2018, has been brought in time.

THE ADDITIONAL CLAIMS

That brings me to Mashreq's additional claims against KESP. These now only arise on a contingent basis. While Mashreq's CPR Part 20 Claim Form was framed more widely, only two claims were advanced at trial:

i) KESP is under a contractual liability to pay the KESP Receivable as defined to Mashreq.

ii) Alternatively KESP is liable to Mashreq for money had and received, the Notice of Assignment amounting to an acknowledgment for the purposes of a doctrine of acknowledgement developed at common law.

These claims raised a number of interesting legal issues, albeit on a contingent basis. Mashreq's submissions were impressively advanced by Ms Clifford.

The debt claim under the Notice of Assignment

The terms of the assignment

It is first necessary to set out the terms of the Notice of Assignment:

i) It was stated to be from Mashreqbank and AH (defined as "the Assignor").

ii) Paragraph 2 gives notice of the assignment and paragraphs 3, 4 and 5 set out the consequences of the assignment.

iii) Paragraphs 6 and 7 give what purports to be both an irrevocable authority and "instruction" to give information as requested by Mashreq. The terms of these provisions suggest that the instruction is given by AH ("you are instructed … to send to the Lender and us ….").

iv) Paragraph 8 provides "this notice of assignment and any non-contractual obligations arising out of it" are governed by English law. The same clause states that the English courts have exclusive jurisdiction in respect of disputes "arising out of or in connection with notice of assignment or any non-contractual obligation arising out of or in connection with this assignment". There is no reference to contractual obligations.

v) Paragraph 9 seeks "acknowledgment of receipt of this notice" (a wholly innocuous step) but also asks KESP to "confirm that":

Was there consideration for the independent debt obligation alleged?

The legal and commercial context

The following propositions are trite law, and I have taken them and the supporting references from Mashreq's closing:

i) Consideration can take the form of detriment to the promisee or a benefit to the promisor ( Chitty on Contracts (36 th ), [6-003]).

ii) The court will not weigh the adequacy of consideration, but the consideration must have "some value in the eyes of the law" ( Hill v Haines [2008] Ch 412 , [79]).

iii) Consideration can take the form of mutual promises ( Chitty , [6-008]).

iv) The consideration for entering into one contract may be entry into a related or linked agreement as part of a wider transaction ( Taqa Bratani Limited v Fujairah Oil and Gas UK LLC [2024] EWHC 3146 (Comm) , [233]).

At first sight, it seems surprising to be debating the issue of whether a formally drafted and signed document produced in a business context is unenforceable for want of consideration. There are numerous robust judicial statements to the effect that courts will not be slow in finding consideration in respect of dealings between commercial entities. In Woodhouse AC Israel Coca Ltd v Nigerian Produce Marketing Co Ltd [1972] AC 741, 757-758, Lord Hailsham LC famously stated:

More recently, Gloster J stated in Raiffeisen Zentralbank Österreich AG v China Marine Bunker (Petrochina) Co Ltd [2006] EWHC 212 (Comm), [31] that "in a commercial transaction the courts will be loath to find that an agreement which gives every impression of being a contractual undertaking fails for want of consideration." That was a case in which the promise in issue was to a collecting bank, and the Judge referred to "the recognised financial role of the bank in the transaction in making funds available" ([31]), emphasis added). Indeed, with undertakings which serve a well-known and recognised function in commercial transactions, the court may be willing to enforce an undertaking (very frequently some form of independent payment obligation in connection with an underlying sale or commercial transaction) even when no consideration is present. Professor Peel regards Gloster J's decision as such a case ( Treitel on the Law of Contract (16 th , 2025), [3-159].

The present case, however, presents a very different context. On the premise on which this part of Mashreq's case falls to be approached, KESP remains liable to AIML in respect of the KESP Receivable, but by virtue of the Notice of Assignment, signed by the Abraaj appointed directors of KESP without notice to or approval of the Original Shareholders' appointed directors, KESP is also liable to pay US$37,030,000 to Mashreq. The principal commercial activity (the Facility Agreement, the Second Amendment and Assignment Agreement) involved dealings between the Abraaj Group and Mashreq in relation to finance provided by the latter to the former, and were negotiated without any involvement on KESP's part, save for a very limited involvement addressing how dividends received from KESP would be dealt with in the unlikely event they were received. There was no suggestion that the Abraaj executives involved in those negotiations who happened also to be Abraaj-appointed KESP directors were acting in the latter capacity (and no advice was obtained at the time as to their power to commit KESP). Neither the Second Amendment, the Assignment Agreement nor the Notice of Assignment were discussed with the Original Shareholders' directors of KESP, and no lawyers were instructed to act on KESP's behalf and protect its interests. Had they been committing KESP to a potential US$37.03m additional liability for the purposes of obtaining funding for the Abraaj Group, an issue of a potential conflict of interest would have required consideration, but there was none.

The Notice of Assignment in this case had as its most obvious purpose the unilateral act of notification of a s.136 Law of Property Act 1925 assignment, which would change the identity of the person KESP would have to pay to discharge its debt, but not otherwise affect its substantive obligations. The language of that document – the giving of "notice", the request for "acknowledgment" and "confirmation", the request for KESP to sign "the acknowledgement" – are not redolent of the assumption of a separate US$37.03m debt obligation with a life independent of the debt purportedly assigned, and to the extent that it had this effect, the Notice of Assignment might be thought to constitute a distinct drafting overreach, and something of a wolf in sheep's clothing.

A similar issue, but with some differences in the wording of the notice, came before Mr Justice Butcher in Sumitomo Mitsui Banking Corporation Europe Ltd v Euler Hermes Europe SA (NV) [2019] EWHC 2250 (Comm) . In that case:

i) RRS was the project company in a public/private construction project and retained the contractor.

ii) ICL was the contractor, who provided RRS with a performance bond and a retention bond, both issued by EH.

iii) RRS entered into a borrower debenture with SMBCE as security trustee, by which it assigned the performance and retention bonds to SMBCE and gave it a power of attorney. RRS sent a notice of assignment to EH who signed a copy.

iv) The project was not completed as required, and SMBCE served demands under both sets of bonds and brought proceedings against EH.

v) EH argued that there had been no valid assignment. SMBCE argued that in those circumstances, it had an alternative direct claim against EH under the terms of the notice of assignment which EH had signed. It is that last issue with which I am concerned.

The notices of assignment in that case were prepared in the name of and sent by RRS to EH. They were headed "Notice of Assignment and Acknowledgement of Receipt" and provided in part as follows:

i) They gave notice of the assignment made by RRS to SMBCE.

ii) They gave instructions and authority to EH as to where payment should be made (an SMBCE account or as SMBCE directed).

iii) They contained similar provisions to paragraphs 4 and 5 of the Notice of Assignment here, concerning the continuing responsibility of RRS and the lack of responsibility of SMBCE under the bonds, and that EH was not to vary or waive the rights under the bonds.

iv) There was a provision in similar terms to clause 6 of the Notice of Assignment here, stating that EH "shall furnish or disclose to the Security Trustee in addition to ourselves all notices, matters or things required under the Document to be furnished and disclosed to ourselves"

v) It continued in terms similar to clause 9:

It will be noted that the principal differences between the notice in Sumitomo and that in issue here is:

i) The Notice of Assignment here was from AH and Mashreq (i.e. putative assignor and assignee) rather than just the assignor.

ii) The statement in the Notice of Assignment in this case that "you owe US$37,030,000 … to the Assignor in respect of the Receivables" had no equivalent in Sumitomo .

iii) The dividend provision in this case.

Butcher J rejected the argument that the notice of assignment in Sumitomo was a valid contract:

i) At [49], he noted that the document was between EH and RRS, and so RRS must have provided consideration for the contract. He said, "it is very difficult to see how anything of value in the eyes of the law, whether by way of benefit to EH or detriment to RRS, was provided."

ii) At [52], he noted that the consideration argument was not simply a technical point because:

Like Mr Justice Butcher in Sumitomo , reading the Notice of Assignment as a whole, it is clear to me that it was not intended to provide benefits to KESP, but was rather intended (in relevant part) to impose requirements on KESP and to lay down or indicate the limits to its rights. I am also satisfied that is not a document which represented a negotiation with KESP and thus was not seeking to embody matters which KESP wanted or had bargained for.

This is a context in which I am satisfied that the court should have no hesitation in carefully scrutinising whether the requirements of the doctrine of consideration are met, not least because any difficulties in doing so will reveal much about the true nature of the arrangement. Here, at least, there remains life in the consideration dog as a valuable tool in commercial law.

Was Mashreq's promise to extend the maturity date of the Facility Agreement consideration for the obligation alleged?

Mashreq's first argument is that Mashreq provided consideration in the form of detriment by not demanding repayment under the Facility Agreement from AH and AIML and extending the date for repayment under the Facility Letter. Mashreq relies in this context on the decision of HHJ Hodge KC in Signature Hotel Living Ltd v Sulyok [2020] EWHC 257 (Ch) . That was a case in which the Judge found, with respect wholly uncontroversially, that the making of a loan could constitute consideration for a contract of guarantee between the guarantor and the lender, the Judge observing at [35]:

In that case, of course, the obvious and inherent purpose of the guarantee (and of the guarantor) was to ensure the loan would be advanced, such that the making of the loan can properly be characterised as a detriment resulting from or assumed in exchange for the guarantor's promise: a quid pro quo.

In the present case it would, in my view, mischaracterise Mashreq's dealings with the Abraaj Group to treat them as involving a detriment assumed in return for or in exchange for promises by KESP. KESP was essentially a stranger to those negotiations and the arrangements they concerned (cf [243] above), its role limited to signing the Notice of Assignment relating to a pre-existing debt at the end of the process. The forbearance as between the Abraaj Group and KESP did not involve "something of value" given to KESP in return for its promise, nor anything asked for nor expected from KESP's perspective. If Mashreq did forebear in enforcing a debt against AH, it was not at KESP's express or implied request (cf Chitty , [6-060] and Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424,456-57).

The mere fact, if it be the case, that Mashreq may have acted to its detriment after receiving KESP's promise is not sufficient (that may provide a necessary ingredient of a promissory estoppel plea where that doctrine is engaged, but not of itself consideration). As McPherson J noted in Rothwells Limited v Nommack (No 100) Pty Limited [1990] 2 QDR 85, 88:

Second, it is said that KESP received "practical benefit" from Mashreq's agreement to extend the repayment date under the Facility Letter. That expression refers to a type of consideration found to exist between parties to an existing contract, when one party agrees to accept a reduced performance from the other, who is otherwise at risk of being unable to render any performance at all: most famously in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 and MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553 . In the present context, by contrast, "practical benefit" is relied upon to bring into being a binding contract between two parties who had not previously been in a contractual relationship. Further, the practical benefit relied upon is not the continuing provision of services by Mashreq to KESP (there never had and never were any such services), but an indirect benefit said to flow from the continuing funding of the wider Abraaj Group for general purposes.

As to the two examples of alleged practical benefit given:

i) It is said that the effect of the Notice of Assignment is that KESP only became liable to pay the KESP Receivable following an Event of Default. I have already rejected the argument that the Notice of Assignment affected KESP's liability ([234]). All the Notice of Assignment did is identify a point in time at which KESP would only be able to obtain a discharge for the KESP Receivable by paying as per Mashreq's instructions rather than AH's. In any event, this point falls to be approached on the assumption that KESP remained liable to AIML which liability was unaffected by the Notice of Assignment.

ii) It is said that if there had been no extension AH would have defaulted, Mashreq could have enforced the AIML guarantee, AIML would have been rendered insolvent, and thus KESP received the practical benefit of being able to continue to receive services from AIML when it would not otherwise have done so. Whether or not there was in fact any benefit of the kind suggested is wholly speculative, and I am unable to make any findings in this regard. The "indirect benefit" scenario contemplated is very different from the "practical benefit" in play in the variation case in which the party said to have benefited receives some part of what they had contracted for directly from the party seeking to enforce the promise. Still less is the benefit alleged one in some way sought, bargained for or received "in exchange" by KESP, or even one which can be supposed to have been in KESP's reasonable contemplation, still less part of its purpose, when signing the Notice of Assignment.

Finally, it is said that consideration was provided in the form of the mutual promise in clause 8 of the Notice of Assignment that the Notice was governed by English law and subject to the exclusive jurisdiction of the English courts:

i) The choice of law and jurisdiction clauses are in the nature of ancillary obligations with an independent life (cf Banca Intesa Sanpaolo SpA v Comune di Venezia [2022[ EWHC 2586 (Comm), [361], [391]). I am not persuaded that ancillary provisions of this kind can render the wider arrangement to which they are ancillary binding when they would not otherwise be. On the contrary, an important part of their function is to provide a process and framework by which disputes as to whether the wider arrangement involves a binding contract are to be resolved.

ii) The argument also assumes that clause 8 does indeed represent a binding agreement between Mashreq and KESP. I note that it appears in a paragraph which involves "assertion", and not in clause 9 which at least asked KESP to "confirm" certain matters, and KESP is only asked to "acknowledge receipt" and confirm those specific matters not including clause 8. While I do not decide the point on this basis, it serves to illustrate the obscurity of the Notice of Assignment.

What obligations did the Notice of Assignment of Receivables purport to impose on Mashreq and in whose favour?

If the Notice of Agreement had involved binding promises by KESP, the further issue would have arisen as to whether the particular paragraphs relied upon by Mashreq involve such promises, and, if so, to whom.

As I understand it, Mashreq relies on (i) KESP, by its signature, "confirm[ing]" that it owes "US$37,030,000 to the Assignor" and (ii) that confirming it would "pay all moneys in respect of the Receivables as directed by or pursuant to this notice of assignment".

The former language, in this specific context (the presentation of a document drafted as part of a transaction between the Abraaj Group to KESP whose most obvious purpose was the giving of notice) is more fairly read as a representation. No representation based-claim has been pursued, and in those circumstances it is not necessary to explore the issues of reliance, causation, loss and contributory negligence which might otherwise have arisen.

I accept the latter language is promissory in nature, given the future tense in which it is expressed, and that it involves a promise to Mashreq. Mr Quirk KC suggested that there was no intention to create legal relations. If, however, the hurdle of consideration had been overcome, I would not have felt able to conclude that this apparently promissory language in the Notice of Assignment signed by KESP was deprived of legal effect on that basis, particularly given the presumption in a commercial context in favour of agreements being intended to have legal effect ( Edwards v Skyways Ltd [1964] 1 WLR 349, 355).

A question would have remained as to what happens where there was no KESP-AH debt, and therefore no "moneys in respect of the Receivables". My initial view is that there was no obligation to pay a debt which did not in fact exist, but having heard no argument on the point, I shall refrain from reaching a final view. Nor did I hear argument on what other consequences might flow from the non-existence of a KESP-AH debt.

The money had and received claim

The final issue for consideration takes us into the common law's shop of curiosities. I can take the relevant legal background from the following passage in Goff & Jones on Unjust Enrichment (10 th ), [6-133]:

The core application of this doctrine was stated by Blackburn J in Griffin v Weatherby (1868) LR 3 QB 753, 759-59 as follows:

What I shall describe as the "principle of acknowledgment" developed at a time when it was not possible to assign rights in action at common law so as to allow the assignee to bring an action in its own way, but only (generally by way of specific enforcement of a promise for value to assign such a right) in equity, with a rule of practice requiring the joinder of the assignor to proceedings. The common law rule reflected an analysis of rights as personal rights incapable of assignment, and a concern about maintenance and champerty ( Guest , [13-08]) as well as difficulties in conceiving of the transfer without delivery (or livery of seisin) of intangibles (SJ Bailey, "Assignments of Debts in England from the Twelfth to the Twentieth Century" (1932) LQR 547, 551). The principle of acknowledgement, therefore, represented an anomalous exception to an anomalous common law rule, which was largely rendered redundant by statutory intervention (s.25(6) of the Judicature Act 1873 and now s.136 of the Law of Property Act 1925).

The particular issue which arises in this case is whether any such principle extends not merely to cases where the defendant holds a fund to the order of a third party, but where the defendant owes a debt to the third party.

I should state at the outset that I am satisfied that, whatever the correct statement of the law, Mashreq's claim by reference to the principle of acknowledgement must fail. If the principle of acknowledgement extends to a debt, it cannot assist in this case when the debt said to have been acknowledged (a debt from KESP to AH) never existed and could never have been enforced by AH against KESP. But having heard argument on the ambit of the principle of acknowledgement, I set out my conclusion on this issue below.

Various explanations have been offered for the legal basis of the principle of acknowledgment:

i) The decisions originally involved the action for money had and received to the claimant's use, the count being available both where money is paid to the defendant for the specific purpose of paying it to the claimant, and where the defendant is the third party's banker or fundholder and the third party instructs the defendant to pay the claimant. The development of the principle is the subject of a scholarly article by Mr Derek Davies, founding Law Fellow at St Catherine's College Oxford (see JD Davies, "A Forgotten Chapter in Quasi-Contract" (1959) 75 LQR 220) and by Little J in Dellas v Kourtessis [1962] VR 456. As Mr Davies' notes, the confusing case law either offered no rationalisation of the principle, or explanations ranging from conventional contractual liability, an element in a tripartite novation, an entitlement to an equitable assignment, an analogy with trover, or the defendant constituting themselves the claimant's agent.

ii) The position where A receives money from B on terms it be paid to C was later subsumed within the law(s) of restitution, with Professor Birks (controversially) treating the principle of acknowledgement as an example of a more general theory of "interceptive subtraction" in which there is said to be a claim in unjust enrichment in respect of a benefit received or retained by the defendant on the basis that, had matters proceeded as they should have, the benefit would have reached the claimant ( Goff and Jones: The Law of Unjust Enrichment (10 th ), [6.124]-[6.136]).

iii) In some commentaries (e.g. Bowstead & Reynolds on Agency (23 rd ) [9-113]), the principle is said to be akin to the doctrine of attornment at common law, which allowed delivery of goods to be effected without their physical movement by the person in possession acting on an instruction from the person with a right to possession to hold the goods to the order of someone else (to whom the possessor was said to "attorn"), which had the effect that the right to possession passed from the person giving the instruction to the person in whose favour the holder attorned (F Pollock and R Wright, An Essay on Possession in the Common Law (1888), 72). That explanation, or at least its attendant language, appears in a small number of cases (e.g. Howell v Batt (1833) 5 B. & Ad. 504, 507 (Parke J) and Fleet v Perrins (1868) LR 3 QB 536, 542 (Blackburn J)).

In chronological terms, the first case I was referred to which considers the principle is Israel v Douglas (1789) 1 H Bl 239. The headnote of the report is expressed in wide terms supportive of Mashreq's case:

However, the judgments reveal a more divided analysis:

i) Gould J, who supported that broad view, stated:

ii) Wilson J, by contrast, said of a claim for money had and received:

In Taylor v Higgins (1802) East 171, Lawrence J also disagreed with Gould J's analysis in Israel , stating:

In Wharton v Walker (1825) 4 B. & C. 163, Bayley J said of the application before him:

In Liversidge v Broadbent (1859) 4 H & 603, Baron Martin treated Israel v Douglas as a case in which there was consideration for the defendant's promise, and Baron Watson noted "the correctness of that decision [ Israel v Douglas ] has been doubted in several subsequent cases". An attempt to apply the principle of acknowledgement to a debt rather than a fund was rejected.

As Davies notes, by this point a clear distinction had emerged between:

i) Cases of a bank or fundholder, where a principle of acknowledgement operates ( Griffin v Weatherby ).

ii) Debt cases, where consideration for a promise by the debtor to pay the claimant is required ( Liversidge v Broadbent ).

In Davies' words (p.228):

That brings me to Shamia v Joory [1958] QB 448. The defendant owed £1,300 to Y. Y requested the defendant to pay £500 of that sum to his brother (by way of a gift from Y) which the defendant agreed to do. The brother sued to recover the £500 as money had and received. He succeeded on the basis of the principle of acknowledgement, Barry J rejecting the argument that the principle only applied where the defendant was holding a fund for the third party rather than being the third party's debtor:

Liversidge v Broadbent was not cited in Shamia , nor the other judgments critical of Gould J's broad statement of the principle in Israel v Douglas . For that reason, I do not accept the submission that I should follow the decision. It has also been heavily criticised both in commonwealth authority and academic commentary.

So far as the former is concerned:

i) A judgment of the Court of Appeal of Trinidad and Tobago, presided over by the leading Trinidadian jurist Chief Justice Hugh Wooding, declined to follow Shamia in Ramcharan v Arima Bus Service Co Ltd (1966) 10 WIR 375. Chief Justice Wooding held Shamia as having been wrongly decided both because the instruction from Y was by way of gift, and because of Barry J's suggestion that there was no difference between a fund and a debt. Chief Justice Wooding referred to Barry J having "jumped both of the hurdles" which stood between the principle stated in Griffith v Weatherby and the facts of the case before him. On the latter point, he stated at p.384:

ii) In Rothwells Limited v Nommack (No 100) Pty Limited [1990] 2 QdR 85, 90-91, McPherson J refused to follow Shamia , stating:

iii) I see force in those criticisms.

As to the latter, to Chitty (36 th ), [23-069], Goff and Jones (10 th ) [6-133], Bowstead & Reynolds (23 rd ), [9-113], Guest , [1-80] and Mr Davies, one can add Goode and Gullifer on Legal Problems of Credit and Security (7 th ) footnote 311, Professor Goode, "The Right to Trace and its Impact on Commercial Transactions" (1976) 92 LRQ 360, 387 -88 and Professor Robert Stevens, The Laws of Restitution (2023) p.53 who states:

Footnote 127 to that statement provides:

Further:

i) Even in relation to a fund, the principle of acknowledgement is anomalous, and how the principle operates along the various types of assignment and the attendant priority rules is not clear (see e.g. Chitty [23-095], "difficult to rationalise"; Guest & Liew , [1-80] "having regard to the remedies at present afforded by assignment and novation, there is less need for any principle of acknowledgment in modern law").

ii) Even if Barry J were right about the difficulties of distinguishing between a fund and a debt in this context (and for support for this view see Bridge et al, The Law of Personal Property (3 rd ), [25-017]), the common law should be developed to reduce anomalies, not to compound them by using one as the foundation for another. As Bowstead & Reynolds note, at [9-113], it is only the distinction between a debt and a fund "that prevents the rule from subverting many of the fundamental principles of contract law".

iii) None of the rationales for the principle cohere well with its application to debt. There cannot be said to be an unjust enrichment of the debtor if (as here) it remains liable to the creditor; it is difficult to conceive of the debtor holding its own debt as agent for either the creditor or the claimant; and, even if it is conceptually possible to grant a charge over one's debts ( Re Bank of Credit and Commerce International (No 8) [1998] AC 214 ), I struggle to see how one can "attorn" in respect of a liability, without at the same time identifying a mechanism for extinguishing the original liability of the attorning party). The position of a fundholder (even a non-proprietary fund), has at least some resemblance to a party in possession of goods attorning on the instruction of the party with the right to possession to another, but for debts, the attornment analogy is particularly stretched.

iv) The laws of equitable and statutory assignment provide well-defined regimes for the transfer of debts, of wide application. There is no need to stretch established doctrines of private law to permit this process.

It follows that I am satisfied that Shamia is wrongly decided, and I should refuse to follow it. On this basis, the second way in which Mashreq puts its Additional Claim also fails.

Limitation on the Additional Claim

I did not hear argument on the limitation issues concerning the Additional Claims, which have failed for other reasons. Had they been live, it would have been necessary to consider the issue of limitation, and the implications of the fact that the debt "acknowledged" was one owed to AIML, not a separate and independent liability to Mashreq under the Notice of Assignment, which is the basis of the Additional Claims.

CONCLUSION

For these reasons:

i) Mashreq's claim against KESP succeeds in the sum of US$37,030,000 plus interest, being the assignment of the KESP Receivable.

ii) Mashreq's claim to the remainder of the Disputed Debt fails.

iii) Mashreq's Additional Claims fail.

iv) AIML's claim against KESP succeeds in the sum of US$4,416,114 plus interest.

v) The other claims brought by the Claimants fail.

The parties are asked to draw up an order reflecting these conclusions.

I would like to thank the parties for the quality of their case presentation and their efficient conduct of the case.

Williams v Roffey Bros

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