Sharad v Alwaleed

7/28/2019 Sharad v Alwaleed

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Day 5 Sharab v HRH Prince Alwaleed 2 July 2013

(+44) 207 404 1400 London EC4A 2DYMerrill Corporation www.merrillcorp.com/mls 8th Floor 165 Fleet Street

1 (Pages 1 to 4)

Page 1

1 Tuesday, 2 July 2013

2 (10.00 am)

3 PRINCE ALWALEED BIN TALAL BIN ABDALAZIZ ALSAUD (continued)

4 Cross-examination by MR FREEDMAN (continued)

5 MR JUSTICE PETER SMITH: Yes.

6 MR FREEDMAN: Yesterday at the beginning of your evidence

7 you corrected paragraph 12 of your witness statement.

8 Let's look at paragraph 12 if we may. It is in the

9 small bundle of witness statements. You will find it

10 behind tab 3 at page 44. Paragraph 12 read:

11 "In or around summer of 2001 I decided that I would

12 sell one of my large aircraft, either the Airbus or the

13 Boeing, as I had recently entered into an agreement to

14 acquire a new large aircraft and did not require three

15 large aircraft ."

16 You corrected that to "an arrangement or

17 a discussion", not "an agreement". Do I take it that

18 the background to your correction is because in the19 course of the last week there was an application that

20 was made to the court in which it was said that

21 paragraph 12 was not consistent with something that you

22 had written to the Libyans?

23 A. The idea of buying a 747 was there since a long time,

24 but on that particular date there was no agreement

25 finalised for sure, that is why I had to correct it, so

Page 2

1 there was a discussion, and arrangements to see which

2 747 we can buy from the world. That is why the

3 correction was made.

4 Q. Were you aware that there had been pointed out to the

5 court a week ago that there was a discrepancy in timing

6 between the agreement referred to in paragraph 12 that

7 was in or around the summer of 2001, or just before

8 then, and what you had told the Libyans. Were you aware

9 of that?

10 A. You have to explain, please.

11 Q. I'm just asking whether you were aware that paragraph 12

12 had caused controversy in the courts a week ago?

13 A. No.

14 Q. Did you know about that or not?15 A. No.

16 Q. You didn't.

17 MR JUSTICE PETER SMITH: I think it is fairer to the Prince,

18 if you put the Libyan thing to him.

19 MR FREEDMAN: I'm going to do that now. But before I do

20 that, I want to put to you the agreement that was

21 actually produced. If you would look at bundle H, would

22 you go behind tab 7 of bundle H and at page 182 is an

23 agreement.

24 A. Which page, please?

25 Q. Page 182 behind tab 7.

Page 3

1 A. 182, yes.

2 Q. Here is an agreement for the acquisition of a Boeing 747

3 aircraft. It is at page 184, we can see it is dated

4 15 June 2002. It is between Boeing and Kingdom Holding

5 Company. There is a purchase price at page 186 of

6 $47.6 million.

7 Is that the agreement that you are referring to?

8 A. This is the purchase agreement of my 747, I believe,

9 yes.

10 MR JUSTICE PETER SMITH: This is the 747 that you owned or

11 the one, the third one, that you were thinking of

12 acquiring?

13 A. Your Lordship, no. This is -- the plane that went to

14 Libya, was 767. This is 747, this is the one that

15 I bought after the Airbus was disposed of.

16 MR FREEDMAN: After the --

17 A. So this 747, that is the plane that I bought after the

18 Airbus was sold. The one that went to Libya was 767.19 MR JUSTICE PETER SMITH: That is my confusion and

20 I apologise for making it even more confusing, but this

21 is the agreement that Mr Freedman will say is

22 inconsistent with paragraph 12. Because the agreement,

23 if anything, that you refer to in paragraph 12 is a year

24 earlier; do you see that? Paragraph 12 you say:

25 "In summer 2001, I decided I would sell one of my

Page 4

1 aircraft as I had recently entered into an agreement."

2 A. That is what I corrected, my Lord.

3 MR JUSTICE PETER SMITH: Is June 2002.

4 A. This the new plane that was bought after the Airbus was

5 sold to the Libyans. At that time, there was no

6 agreement to buy. That is why I made the correction.

7 MR JUSTICE PETER SMITH: That is why Mr Freedman asked you

8 whether or not you made this correction, because his

9 team were seeking an order for production of this

10 document and this document was produced on Friday,

11 wasn't it? Or had you seen it before?

12 MR FREEDMAN: No, it was -- correct, it was produced on

13 Friday.

14 MR JUSTICE PETER SMITH: Pursuant to the order that I made

15 last week, it was produced on Friday.

16 MR FREEDMAN: Yes.

17 A. From my own point of view, this is the agreement of the

18 747 that I bought after the disposable, after we

19 disposed of the Airbus, but the plane that went to Libya

20 is 767, 767.

21 MR JUSTICE PETER SMITH: I think it even pre-dates the sale

22 agreement, doesn't it, of the Airbus? The Airbus

23 was July.

24 MR FREEDMAN: Can I come on to that, my Lord?

25 MR JUSTICE PETER SMITH: My enthusiasm, I apologise.


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2 (Pages 5 to 8)

Page 5

1 MR FREEDMAN: So if you look now at paragraph 12 of your

2 witness statement again at page 44, what you have done

3 is, since the point in time when this document was

4 produced, the document that we have just looked at in

5 bundle H at tab 7, you have corrected in or around

6 summer 2001 you decided you would sell the aircraft

7 because you had recently entered into an agreement to

8 acquire a new large aircraft, and you corrected it to

9 say that you had entered into a discussion or an

10 arrangement to acquire a new large aircraft.

11 A. Correct.

12 Q. This document that we have looked at is correctly

13 dated June 2002, isn't it?

14 A. Correct.

15 Q. But in any event, June 2002, predates, is before,

16 August 2002, which is when you told Mrs Sharab that you

17 would like her to proceed with interesting

18 Colonel Gaddafi in relation to one of your two aircraft;19 correct?

20 A. Yes.

21 Q. If we just consider the chronology after that, what we

22 have is we have an instruction to proceed

23 in August 2002; we have your visit to Libya

24 in April 2003 when you leave the Airbus there, is that

25 correct?

Page 6

1 A. Correct.

2 Q. And we have your agreement to sell the Airbus

3 in July 2003?

4 A. Correct.

5 Q. Correct. That is a year after your agreement to

6 purchase the Boeing 747 that we saw in bundle H at

7 tab 7?

8 A. Correct.

9 Q. Correct. So I want then to go to the document of

10 2 May 2004 which you wrote to the Libyans. Would you go

11 please --

12 MR JUSTICE PETER SMITH: Before you do that, I have

13 scan-read the sale agreement, what is its completion

14 date? Will be delivered -- it is clause 2.1, on 185.

15 MR FREEDMAN: Yes.

16 MR JUSTICE PETER SMITH: 16 September 2002 or any other time

17 that the parties shall agree. When did you take

18 delivery of this Boeing?

19 A. I don't recall, it is in the agreement maybe. I don't

20 recall. You can look at the agreement.

21 MR JUSTICE PETER SMITH: September 2002 it looks like, that

22 is what the agreement says.

23 A. Which paragraph is this, your Lordship?

24 MR JUSTICE PETER SMITH: 2.1 on page 185.

25 A. 185. 2.5?

Page 7

1 MR JUSTICE PETER SMITH: 2.1:

2 "Location and time of delivery:

3 "Used aircraft will be delivered to the buyer in

4 Marana, Arizona to be delivered on or about

5 16 September 2002."

6 A. Yes.

7 MR FREEDMAN: Would you, in bundle D2, go to tab 69 and at

8 pages 255 to 256 is the Arabic of a letter that you sent

9 to Colonel Gaddafi, and in the English it is at

10 pages 253 to 254, and it is 2 May 2004. Correct?

11 A. Please, say that again.

12 Q. So 253 to 254 is the English translation of a letter

13 that you sent to Colonel Gaddafi dated 2 May 2004. Is

14 that right?

15 A. Yes.

16 Q. If you would go to what this letter is about, it is

17 complaining about the A34 aeroplane and the failure to

18 pay all the sum for it, and we can see in the bottom of19 the page a bullet point and the last five lines of that

20 page will read as follows:

21 "We had to buy a B747 aeroplane instead of the A340

22 plane delivered to Libya more than a year ago. I would

23 not have bought the new plane if you had not have an

24 agreement with me personally, and if your

25 representatives had not have signed the aeroplane

Page 8

1 purchase contract, as I paid huge amounts for the new

2 plane."

3 So what you were saying there in that letter was

4 that, once you sold the A34 aeroplane, after that you

5 bought the Boeing 747, and that you would not have

6 bought that, you would not have paid huge amounts for it

7 if you had held on to the Airbus 340, that is what you

8 were saying, isn't it?

9 A. Mm-hmm.

10 Q. That was showing to Colonel Gaddafi that the contract

11 for the purchase of the Boeing 747 came after the

12 contract for the sale of the Airbus 340?

13 A. Yes.

14 Q. Is that correct?15 A. Correct.

16 Q. It was a lie, wasn't it, on your part?

17 A. That was not a lie. Remember, this letter was sent

18 2004. So I had to exert maximum pressure on him to

19 expedite the process of paying the balance of

20 $70 million.

21 Q. But it was a lie.

22 MR JUSTICE PETER SMITH: Let's break it down. It was not

23 accurate, was it? We have seen the documents and you

24 got it the wrong way round.

25 A. Correct, but ...


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3 (Pages 9 to 12)

Page 9

1 MR JUSTICE PETER SMITH: That is either a mistake on your

2 part, which is accidental, or it is a deliberate

3 misleading by you; which is it?

4 A. What do you mean a mistake?

5 MR JUSTICE PETER SMITH: Either you have got the dates the

6 wrong way round, in which case you were mistaken when

7 you told the President that the sale of the Airbus came

8 first, or you wrote that knowing it was untrue. It can

9 only be one of those two, because we know that the

10 letter is factually incorrect, don't we? Which is it?

11 It can only be one of those two.

12 A. I think it could be a mistake.

13 MR JUSTICE PETER SMITH: You think it could be a mistake.

14 A. It could be a mistake.

15 MR JUSTICE PETER SMITH: It is quite a serious mistake to

16 make.

17 A. Yes, I understand, but at that time we were trying to

18 pressure Gaddafi with all of our efforts because he19 reneged on the $50 million and we had to put maximum

20 pressure on him.

21 MR JUSTICE PETER SMITH: This is the second time in the

22 evidence, maybe even the third time, but certainly the

23 second time, where you say things to people on the other

24 side to put pressure on them which are untrue. You did

25 the same in response to Mr Alaeddin's claim for

Page 10

1 remuneration, didn't you? You told him that there was

2 in agreement and you said yesterday that was to twist

3 his arm. This is the same.

4 A. Yes, but then he was repaid completely, your Lordship.

5 MR JUSTICE PETER SMITH: That is probably because your

6 threat didn't work, but you have insisted to me on

7 a number of occasions that you're a man who always tells

8 the truth.

9 A. Correct.

10 MR JUSTICE PETER SMITH: This letter is untruthful. It may

11 be untruthful accidentally, or it may be untruthful

12 deliberately, but you are forced to acknowledge that

13 it is untrue; isn't it?

14 A. Yes.15 MR FREEDMAN: I'm going to suggest to you that it was

16 deliberately untrue and the reason why I make that

17 suggestion, the reasons are as follows: first of all,

18 you couldn't have been mistaken in 2004 as to how many

19 aeroplanes you had the year before in July 2003, when

20 you sold the A340, could you?

21 A. Can you elaborate, please?

22 Q. You could not have been mistaken in May 2004 about how

23 many aeroplanes you owned in July 2003 when you sold the

24 Airbus?

25 A. What is the question?

Page 11

1 Q. You were not -- you remembered in May 2004 how many

2 aeroplanes you had a few months earlier when you sold

3 the Airbus?

4 A. Yes, I had two planes at that time.

5 Q. You knew that at that point in time when you sold the

6 Airbus, you say you had two aeroplanes. What aeroplanes

7 were they?

8 A. I had the Airbus and the 767.

9 Q. And you had the 747?

10 A. Yes, which I bought later on, in June.

11 Q. No, let's go back. June 2002, you bought the

12 Boeing 747. At that point in time you had also the

13 Boeing 767 and you had the Airbus 340?

14 A. Correct.

15 Q. In July of 2003 -- not July 2002; July 2003 -- you still

16 had the Airbus, it was still yours and you had the

17 Boeing 767 and you had the Boeing 747, and you entered

18 into an agreement in July 2003 to sell the Airbus to19 Libya, didn't you?

20 A. Mm-hmm.

21 Q. So you knew a few months later that as at the point when

22 you sold the Airbus, you had had three aeroplanes,

23 didn't you?

24 A. At that time, yes.

25 Q. So the suggestion that it was a mistake in May 2004 that

Page 12

1 you were mistaken and thought you only had two

2 aeroplanes is wrong. It was clearly a lie, wasn't it?

3 A. Yes, but that is the way you interpret it.

4 Q. And it was a lie --

5 MR JUSTICE PETER SMITH: Is that letter dated May

6 or February 2002?

7 MR FREEDMAN: It is May.

8 MR JUSTICE PETER SMITH: Definitely May.

9 A. Which letter, your Lordship?

10 MR JUSTICE PETER SMITH: The one we are looking at, 253.

11 A. To Gaddafi?

12 MR JUSTICE PETER SMITH: Yes, 2004, the one addressed

13 "Brigadier", you promoted him.

14 MR FREEDMAN: Was it February or May?15 A. I think it was 2/5, I think, May, 2 May 2004.

16 MR JUSTICE PETER SMITH: US calendar, month first and day

17 second.

18 MR FREEDMAN: So when you wrote that letter, it is not

19 a matter of interpretation. Either it was a mistake or

20 it was a lie and I'm suggesting to you that you knew

21 perfectly well that at the time when you sold the Airbus

22 you had three aircraft already, including the Airbus.

23 A. You say this is a lie; I say it is a mistake.

24 Q. What is more, it is not just identifying the number of

25 aircraft you have got, but you are developing the point,


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4 (Pages 13 to 16)

Page 13

1 and you develop the point by saying that you wouldn't

2 have bought the new plane if you did not have an

3 agreement in respect of the sale of the Airbus. It is

4 a very deliberate lie, isn't it?

5 A. It is not, it is a mistake.

6 Q. And you said that you paid huge amounts for the new

7 plane.

8 A. 47 is a big number.

9 Q. So if it was a mistake, how did you come to make

10 a mistake like that?

11 A. Mistakes do happen, your Honour.

12 Q. Let's now move on to your damages claim arising out of

13 the failure on the part of the Libyans to pay the

14 balance of $50 million in respect of the Airbus. Will

15 you go with me in bundle D2 to tab 97?

16 A. 97?

17 Q. Yes.

18 A. Yes.19 Q. Now, if you go to page 321 what we have got at 97 is

20 a document at page 320 which is an email of 24 May of

21 2005. It is referring to various costs associated with

22 the A340. If you go to page 321, there is there set out

23 an Airbus A340 cost analysis in the period between

24 8 April 2003, which was roughly when you left the Airbus

25 in Libya --

Page 14

1 A. Yes.

2 Q. -- and 8 January of 2005. Are you able to tell the

3 court what this document is? What is this document?

4 A. I don't recall it.

5 Q. Can I suggest to you that the --

6 A. I think this is the one that was sent to Gaddafi,

7 I think.

8 Q. Yes. Is it right to say that what this document is

9 doing is it is trying build up a claim for damages

10 consequent upon the A340 Airbus not being -- the money

11 not being paid in full for the Airbus?

12 A. Yes.

13 Q. Yes?

14 A. This letter went from Saleh El Ghoul, yes.15 Q. Who is that?

16 A. He is my chief controller at the time.

17 Q. What is happening here that is the Libyans are being

18 told that you have suffered losses almost as high as the

19 money that you have received, the $70 million; yes?

20 A. Yes.

21 Q. And the context is that you are seeking to bring about

22 a cancellation of the contract for the sale of the A340

23 on the basis that you keep either the whole of the

24 $70 million or the majority of the $70 million?

25 A. No, I have to explain here. At that time, Gaddafi sent

Page 15

1 me a few messages. Message number 1 is that he said

2 that he would like to keep -- he would like to pay only

3 $70 million and get the plane back but we also got other

4 messages from somewhere else, through Gaddafi, that he

5 would like to cancel the whole contract and get the

6 money back and release the plane. So really they were

7 playing a lot of nasty games with to us renege on paying

8 the $50 million.

9 Q. The last item in this schedule, and it is at page 321,

10 is:

11 "Damages suffered on B747 project, whole price,

12 centre, time, $8.7 million."

13 So what you were saying there was that, because you

14 had purchased the B747, you had suffered losses of

15 $8.7 million, weren't you?

16 A. That is what this paper says, yes.

17 Q. Yes, and that is a perpetuation a continuation of the

18 lie, namely, that the Boeing 747 was purchased after the19 Airbus?

20 A. It is not a lie. You know, when the Libyans come and

21 try to renege and change the contract with a lot of

22 twisting-arm procedures, we had the right to reply in

23 kind.

24 Q. Does that mean that because they lied, you had a right

25 to lie as well?

Page 16

1 A. We did not lie, we just had to build a case with them to

2 tell them "Either you pay the full amount or we will

3 just keep the plane and keep the money that you paid

4 us".

5 Q. But what you said to me was, you said:

6 "Answer: It is not a lie. You know, when the

7 Libyans come and try to renege, and change the contract

8 with a lot of twisting-arm procedures, we have the right

9 to reply in kind."

10 "In kind" means to reply in the same sort of way,

11 doesn't it?

12 A. Well, unfortunately, with deals with such a government,

13 it was not very straight, you had to -- I didn't write

14 this letter, it was written by Saleh El Ghoul and I gave15 him the right to do -- by the way, Saleh El Ghoul went

16 a few times to Libya.

17 MR JUSTICE PETER SMITH: But this letter was sent with your

18 knowledge presumably?

19 A. I remember seeing this letter, but I told Saleh El Ghoul

20 you have to go --

21 MR JUSTICE PETER SMITH: You saw it before it was sent, are

22 you telling me?

23 A. I'm not sure, frankly speaking, but I told

24 Saleh El Ghoul -- and he went to Libya twice, by the

25 way. He went twice to Libya on my orders, and I told


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5 (Pages 17 to 20)

Page 17

1 him "You have to" -- with Fouad Alaeddin by the way. He

2 went with Fouad Alaeddin to do whatever he can to finish

3 the subject.

4 MR FREEDMAN: You see, in answer to my question, you

5 interrupted yourself. You started off saying:

6 "Answer: Well unfortunately with deals with such

7 a government, it was not very straight, you had to --"

8 Then you corrected yourself --

9 A. No no, no. Look --

10 Q. -- and you changed the answer. Now, the answer that you

11 were about to give was that, if you were dealing with

12 a government that was behaving dishonestly, you, too,

13 had to behave dishonestly.

14 A. Saleh El Ghoul and Fouad Alaeddin were given orders to

15 go to the Libyans and finalise this deal, no matter what

16 they have to do, and clearly they took that path

17 jointly, remember, also, Saleh El Ghoul was a Jordanian

18 also and he was very close to Fouad Alaeddin also,19 Saleh El Ghoul.

20 Q. The position was that you were carefully erecting with

21 him a strategy of setting out as high a claim for

22 consequential losses as you could put forward to the

23 Libyans; isn't that correct?

24 A. I guess that is what Saleh El Ghoul did, with

25 Fouad Alaeddin.

Page 18

1 Q. It was at your instruction, wasn't it?

2 A. It was not my instructions. My instructions to him was

3 to go and finalise this matter as soon as possible with

4 the Libyans, and at that time you had from the Libyans

5 two scenarios: one, to buy the plane $70 million only

6 and confiscate the $50 million; the other option was

7 just to cancel everything and go back to square zero.

8 So we have got two conflicting messages from the

9 Libyans, one from Gaddafi and one from the head of the

10 Afriqiyah Airlines that was supposed to buy the Airbus

11 340.

12 Q. How is it, then, that the same point is made, both in

13 your letter in May 2004 and in this schedule, that the

14 reneging on the Airbus caused you loss in respect of the

15 Boeing 747?

16 A. I mean, as I told you, we had to put pressuring

17 mechanisms on them as much as we can and Saleh El Ghoul

18 was managing the process with Fouad Alaeddin and, at the

19 end of the day, all this pressure that was exerted on

20 them was proven to be successful and they had to pay the

21 $50 million and the matter was settled completely with

22 them.

23 MR JUSTICE PETER SMITH: That is not an answer to

24 Mr Freedman's question. What Mr Freedman is saying is

25 that he cannot understand how you can claim losses in

Page 19

1 respect of the 747 because of Colonel Gaddafi's failure

2 to buy the Airbus and pay the 50 million, because you

3 had already entered into the contract to buy the 747.

4 You were already committed to that. So it follows from

5 that logically that any delay in Colonel Gaddafi will

6 have no impact on that, because you are already

7 committed to buy and you are already committed to run

8 it.

9 A. Correct.

10 MR JUSTICE PETER SMITH: That is the position, isn't it,

11 that is the true position?

12 A. Yes.

13 MR JUSTICE PETER SMITH: That means that all of these

14 calculations which include losses that are attributable

15 to the 747, the largest of which Mr Freedman pointed out

16 to you on page 321, is 8,700,000, that cannot be the

17 result of Colonel Gaddafi's failure to complete, because

18 you were already committed to buying the 747. Do you19 understand that?

20 A. I understand.

21 MR JUSTICE PETER SMITH: That means that this is, to use

22 a neutral phrase, wrong. Now, as I understand what you

23 are telling me, it is that the Libyans were not playing

24 straight and that entitled you equally to come back to

25 them and say things, or have things said on your behalf,

Page 20

1 which you knew were not true, but to create a pressure

2 point countering the Libyans putting pressure on you.

3 Is that the position?

4 A. Our position was -- to Saleh El Ghoul and Fouad Alaeddin

5 is to go to the Libyans, after their efforts failed, to

6 do whatever it takes to finalise this deal and clearly

7 I will confirm that what your Lordship said is correct

8 that they maybe twisted some of the truth with them, to

9 get this thing finalised with them because they reneged

10 and they tried to keep the plane and don't pay the rest

11 of the amount.

12 MR JUSTICE PETER SMITH: I'm not criticising what you did,

13 I just want to know whether you did it knowingly and it

14 appears to me that you must have known --15 A. Yes.

16 MR JUSTICE PETER SMITH: -- that some of the calculations in

17 this letter were untrue, but you allowed it to be sent

18 because that was the only way in which you could put

19 pressure on Gaddafi to deal.

20 A. Let me confirm to you that Saleh El Ghoul and

21 Fouad Alaeddin were authorised to do whatever it takes

22 to finish it, and I can confirm that some of these

23 things I was aware of, that they said that they are

24 going to use tactics with them, similar tactics they

25 used with us.


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6 (Pages 21 to 24)

Page 21

1 MR FREEDMAN: If we can go back to tab 69 to that letter of

2 2 May.


4 Q. Tab 69 of D2. We looked before at page 253, if we look

5 now at page 254, the second page of the letter --

6 A. Yes.

7 Q. -- it starts with two bullet points. Do you see that,

8 page 254?

9 A. 254, yes.

10 Q. It starts with two bullet points and after that it says

11 this:

12 "Therefore, and according to the offer above

13 mentioned, stating to count the received amount to date

14 of US$70 million as a final compensation for what we had

15 afforded, expenses and huge losses during the past year,

16 we hope that Your Excellency will issue orders to the

17 Libyan authorities to execute your desire. Thus items

18 ... both contracts signed pertaining to the aeroplane19 and Touscha which is part thereof, the aeroplane

20 cancelled, and the received amount considered a final

21 satisfying settlement."

22 So it was your strategy to try to obtain

23 $70 million; in other words, to keep the money that had

24 been received and keep the aeroplane?

25 A. Our objective --

Page 22

1 Q. Right?

2 A. No, our objective was to put maximum pressure on Libya

3 and Gaddafi to pay the $50 million. And as a result of

4 these letters and the pressuring mechanisms that took

5 place and as a result of Saleh El Ghoul's and

6 Fouad Alaeddin's private trips to Libya, this resulted

7 in them paying $50 million and settling eventually.

8 Q. We will come to that, but as at the point of the 2 May

9 letter, your strategy was to say "We are going to keep

10 the $70 million because we suffered huge losses"; is

11 that right?

12 A. If that was my real strategy, I could have done it,

13 because the plane was under my name and $70 million was

14 in my possession and, at that time, in Libya, they were15 just coming out of the sanctions, so the leveraging

16 power internationally was very weak. If I wanted to do

17 that, I could have done it, but that was not my

18 objective: the ultimate objective was them to pay

19 $50 million.

20 Q. The letters were consistent with that, because what the

21 letters were doing was they were particularising the

22 losses and showing they were almost $70 million?

23 A. This was part of the macro pressuring mechanism against

24 Gaddafi and if I wanted to keep the $70 million and the

25 plane, I could have done it very easily.

Page 23

1 MR JUSTICE PETER SMITH: Do you think would it have looked

2 good in the world picture as a whole to find, as soon as

3 Colonel Gaddafi comes out of sanctions, another major

4 country is involved in a dispute with planes being

5 seized and money out and all those kinds of disputes?

6 It wouldn't have looked very good for the Arab world,

7 would it?

8 A. My objective, your Lordship, was only to get my

9 $50 million. When he paid $50 million, everything was

10 released and the plane was registered and I gave the

11 plane to him.

12 MR JUSTICE PETER SMITH: I understand the tactics, because

13 they were very successful. You had a large amount of

14 the purchase price and you were in possession of the

15 plane. You were in a very strong position, weren't you?

16 And that was caused entirely by your taking of the plane

17 when it was in Germany for servicing.

18 A. Exactly, this is the key issue. When we took the19 possession of the plane when it was in maintenance in

20 Germany, this was the turning point whereby the

21 pressuring began working on Gaddafi. Because, for

22 a certain period, he didn't believe that we would take

23 the plane, but when I kept the plane in Libya, the plane

24 was still under my name and registration, so I had a lot

25 of leverage on him. So my objective was not to get

Page 24

1 70 -- to keep the 70 and the plane; my objective was to

2 have him pay the 50 and him get the plane. And that's

3 exactly what happened in the end.

4 MR JUSTICE PETER SMITH: What you did at this stage was to

5 keep the 70 and the plane and you say that was a threat

6 to get the 50?

7 A. Precisely, your Lordship.

8 MR JUSTICE PETER SMITH: At that time, yes.

9 A. And I know these are tactics not used in the west, but

10 with such a country as --

11 MR JUSTICE PETER SMITH: Don't necessarily think that.

12 These kinds of tactics are often indulged in. All of

13 these kinds of things. Possession is often described as

14 nine-tenths of the law and, if you can put yourself in

15 the best position, you can do. It depends how you do

16 it, which is what we are exploring.

17 MR FREEDMAN: Go to bundle D1 now. Put away D2 and go to D1

18 at tab 45, please.

19 A. 45, yes.

20 Q. Here is a letter of 18 May 2003 from you to

21 Colonel Gaddafi. Now, this letter is written between

22 the early April when you have left the Airbus in Libya,

23 and July when the contract of sale is entered into. We

24 know about this letter because this was a letter which

25 was delivered personally by Mrs Sharab. In that letter


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7 (Pages 25 to 28)

Page 25

1 it says the following after a courteous introduction:

2 "With reference to the letter sent according to

3 Mr Ramadan, the contents of which are that you are very

4 surprised about the increase in the price of the

5 aircraft to $135 million and that this price is

6 unacceptable, I would like to inform you of the

7 following: this aircraft was never offered for a price

8 of less than $135 million or any other price at any time

9 whatsoever. Also, it was not originally offered for

10 sale. The aircraft's price of $135 million represents

11 what the aircraft cost us. This includes the various

12 extras and modifications that were made to the aircraft

13 since we bought it. This amount is borrowed from the

14 bank in Switzerland and bank is waiting for the payment

15 to it, this being in accordance with the agreement

16 concluded with Your Excellency. Based on your wish, we

17 have left it with you."

18 I want to explore the truth or otherwise of the19 suggestion that the price -- first of all, that that

20 aircraft had never been offered for sale at a lesser

21 price at any time whatsoever and that the aircraft's

22 price of $135 million represents what the aircraft cost

23 you.

24 You have been asked to produce an agreement under

25 which you acquired that aircraft and that agreement has

Page 26

1 now been provided.

2 Can you be shown bundle H, please? Bundle H.

3 A. Bundle H, please.

4 Q. Would you go in bundle H behind tab 2?

5 This appears to be an agreement of March 2000. It

6 appears to be an agreement between you, as buyer, and

7 Inhoco SDN BHD of Brunei as the seller, and it appears,

8 at page 44, that the seller, at clause 2.1, the bottom

9 of the page, is going to sell and deliver to the buyer

10 and the buyer is going to purchase at a purchase price,

11 which is at page 45, the top of the page, 45:

12 "The purchase price of $95 million shall be

13 satisfied as follows: as to $15 million in cash payable

14 to the seller on delivery and as to $80 million by the15 buyer's obligation to procure the transfer of the shares

16 to the BIA or a wholly-owned subsidiary or other person

17 approved by the buyer."

18 My first question to you is this the agreement,

19 a copy of the agreement under which you purchased the

20 Airbus 340?

21 A. Yes, this is the agreement that was signed between me

22 and BIA, the investment arm of Brunei, Sultan of Brunei,

23 yes.

24 Q. It is really the Sultan of Brunei, isn't it?

25 A. Yes, it is Sultan of Brunei, it is under his approval

Page 27

1 but this is BIA. But, yes, it is Sultan of Brunei's

2 plane, yes.

3 Q. I'm going to ask you some other questions about this

4 agreement, but let's just --

5 MR JUSTICE PETER SMITH: This copy is not signed, is it?

6 MR FREEDMAN: There is a signature on it. We can see that

7 at page 56.

8 A. It is.

9 Q. It is signed by the seller.

10 A. Not signed by me here, your Lordship.

11 MR JUSTICE PETER SMITH: You have the other part. There are

12 two copies. You take one, he takes the other.

13 A. But we did sign it, this is the official one.

14 MR FREEDMAN: Let's work on this basis that it was

15 a contract for the purchase of the Airbus for

16 $95 million; correct?

17 A. Correct.

18 Q. Questions have been asked of you, as to modifications,19 what modifications on the aircraft have taken place.

20 Would you look, please, at bundle F1, please, that

21 is the correspondence bundle.

22 MR JUSTICE PETER SMITH: Can we put the purchase agreement

23 away now?

24 MR FREEDMAN: I think so, yes, but we will come back to it.

25 F1/261?

Page 28


2 Q. 261.

3 A. Yes.

4 Q. This is a letter which was written by Hogan Lovells,

5 your solicitors to the solicitors for Mrs Sharab on

6 15 March. In the last paragraph on that page "It is our

7 view", it says the following --

8 A. 261?

9 Q. Page 261, do you see the paragraph beginning "It is our

10 view" and the third line says:

11 "However, it is common ground that the aircraft was

12 [and it talks about the configuration] ... and the only

13 relevant price is that at which the aircraft was in fact

14 sold. Our expert witness requested only certain limited15 information about the aircraft and we passed on the

16 following information, as per our understanding, about

17 the configuration, about when it was originally

18 delivered, that the defendant purchased the aircraft

19 in March 2000 from an affiliate of the Brunei Investment

20 Authority for the stated price of $95 million and the

21 interior fit-out was done by the prior owner who

22 contracted with Raytheon Systems. The defendant is

23 unaware of how much this fit-out cost, but it is noted

24 that the interior was very extravagant. We are not

25 aware of how much our client spent on the aircraft while


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8 (Pages 29 to 32)

Page 29

1 he owned it."

2 So the interior fit-out had all been done before you

3 purchased it; correct?

4 A. Correct.

5 Q. Put away that bundle and go to bundle F2 at page 552.

6 A. 552?

7 Q. Yes.

8 A. Yes.

9 Q. What we can see there is a response to some

10 correspondence from Hogan Lovells to the solicitors for

11 Mrs Sharab and, at page 553, the point numbered 5 -- so

12 near the top of the page, the point numbered 5:

13 "We confirm that no substantial modifications that

14 go to value, consistent with the explanations in your

15 letter of 28 March 2013, were made to the Airbus while

16 it was owned by our client between March 2000 and

17 August 2006."

18 So that is correct, isn't it?19 A. That is correct.

20 Q. We can see from there that there were no substantial

21 sums spent on modifications to the aircraft whilst that

22 was owned by you; correct?

23 So if we then go back to the letter in bundle D1

24 that we were looking at in D1 at tab 45, it follows from

25 that that when you said that "The aircraft price of

Page 30

1 $135 million represented what the aircraft cost us,

2 including extras and modifications that were made to the

3 aircraft since we bought it", that was untrue, wasn't

4 it?

5 A. We bought it at 95, your Lordship and the objective was

6 to maximise our sale price. So when you said 135, you

7 had to give some justifications. So, yes. And

8 actually, not only that, we have done zero modifications

9 on it, not only minor modifications, we have done no

10 modifications whatsoever.

11 Q. So it was not true when you said it cost $135 million,

12 including modifications?

13 A. When I sell the plane, I have the right to sell it at

14 any price I want.15 Q. What you don't have the right to do is to lie about the

16 original cost of the aeroplane --

17 A. I didn't lie.

18 Q. -- to the prospective purchaser. You don't have that

19 right, do you?

20 A. It is my business to put any price I want. It is my

21 plane, I have the right to sell it for any price I want.

22 Q. You are a man who jealously guards his reputation, so

23 much so it is right, isn't it, that you have issued

24 proceedings about your reputation against Forbes in this

25 country?

Page 31

1 A. Sure, sure.

2 Q. That is because you jealously guard your reputation?

3 A. Yes.

4 Q. Is it the case that you regard it as something that is

5 available to you, if you wish to do it, to lie about the

6 original cost of an aircraft in order to get a better

7 price from the buyer?

8 A. We didn't lie, we just put justifications for the

9 increase in price.

10 Q. What is the justification of saying that it cost

11 $135 million, if in fact it cost $95 million?

12 A. I could have bought it for $10, I have the right to sell

13 it for whatever price I need to sell it for.

14 Q. What is the justification -- I will ask the question

15 again -- of saying that it cost $135 million, if in fact

16 it cost $95 million?

17 A. I mean, what I buy it for is my discretion. The

18 important thing is not this. The value of this plane19 was not 135, or 159, this plane costs Prince Jefri who

20 was corrupt at that time, $250 million plus so at

21 $135 million, that is a still a bargain for the Libyans.

22 Q. You see, it might be said that it is corrupt to say to

23 a buyer that you have paid $135 million for an aeroplane

24 when you know that you only paid $95 million. How do

25 you react to that suggestion that that is corrupt?

Page 32

1 A. I react by saying the value of this plane is

2 $250 million, that is what the -- that is what Brunei

3 began with, by saying that is the value of the plane,

4 and we were able to bargain them down to $95 million,

5 because they were very eager to invest in Saudi Arabia

6 and to invest in the Kingdom Centre that we have over

7 there, which is a high-rise tower that was completed

8 a few years ago, and the ownership of the Brunei became

9 confirmed just a few months ago.

10 Q. You are avoiding the question deliberately, aren't you?

11 A. I'm not. Please, you ask and I will reply openly.

12 Q. The question is: how do you justify saying that an

13 aircraft cost you $135 million, when you know it cost

14 you $95 million?15 A. Okay, you have to compare not 95 to 135, but 135 to 250,

16 which is the real value of the plane.

17 Q. That is not what your letter says, the letter doesn't

18 talk about the real value, the letter is very specific,

19 it says:

20 "The aircraft's price of $135 million represents

21 what the aircraft cost us."

22 A. Because the counterparty would not really care much

23 about how much I paid for it, they care much about what

24 is the real value of this whole thing, how much it cost.

25 Q. If that is the case, why did you bother saying how much


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9 (Pages 33 to 36)

Page 33

1 the aircraft had cost you?

2 A. That is a tactic used with the Libyans.

3 Q. Do you mean it is a lie used with the Libyans?

4 A. It is not a lie. It is a tactic. It is not a lie. You

5 can call it a lie; I call it a tactic.

6 MR JUSTICE PETER SMITH: Sorry, this aircraft was never

7 offered for less than 135 million. You then say "The

8 aircraft's price of $135 million, represents what the

9 aircraft cost us".

10 But it didn't, it cost you 95.

11 A. Correct.

12 MR JUSTICE PETER SMITH: So when you say it cost 135, that

13 is untrue.

14 A. If you tell him 95, he is going to say "Why am I paying

15 95?".

16 MR JUSTICE PETER SMITH: Of course.

17 A. He is going to say "I pay 95 only", because they wanted

18 to pay the same price that I bought it for, while the19 value is $250 million, your Lordship.

20 MR JUSTICE PETER SMITH: You are quite right, but the value

21 is something that you didn't state. You didn't tell him

22 "You are going to get a bargain, if you pay me 135,

23 because the aircraft is worth 250 million", what you

24 actually do is you tell him a lie, you tell him the

25 aircraft has cost you 135 when it didn't.

Page 34

1 A. It Libyans would not have understand what this value

2 mean. They only understand how much you paid for it.

3 They are not sophisticated like UK-based people.

4 MR JUSTICE PETER SMITH: If I sold this pen to you and

5 I said, although it looks an ordinary pen, it is

6 actually filled with platinum inside and is worth

7 a million dollars, but I will give it to you as

8 a special price of 750,000", and you pay the 750,000 on

9 the basis of my statement that it is filled with

10 platinum. If you then open it and you find it is full

11 of ink and only worth 50 cents, you would be very upset,

12 wouldn't you?

13 A. Not if I have done my homework and my due diligence. If

14 I have done my due diligence, I would not be upset.

15 MR JUSTICE PETER SMITH: Sometimes, when you buy something,

16 you rely upon what people tell you they're selling. In

17 an area where people are honest with each other, you

18 take a man at his word.

19 A. But, your Lordship, the value of this plane was

20 250 million, and Prince Jefri paid for that

21 $250 million, and I know exactly the design of it.

22 MR JUSTICE PETER SMITH: Prince Jefri could probably afford

23 to take that hit, because he wasn't spending his own

24 money. We know all of that.

25 But I come back to this fundamental question: if

Page 35

1 I tell you something, and you rely on what I say as

2 being the truth of the situation and it turns out that

3 it is not truthful, you would be very upset about it,

4 would you not?

5 A. But not if I have done my due diligence. You can put

6 any value you want on it. If I have done my homework

7 and my due diligence and I take responsibility for

8 that -- and they have done their homework also, the

9 Libyans, and they said "That's good. That's a price we

10 accept", at 120, eventually, obviously, not 135.

11 MR JUSTICE PETER SMITH: I think, Your Highness, when you

12 speak to your lawyers after this case, you might be

13 disappointed and you might want to consider the way that

14 you enter into contracts, if that is the way you go,

15 because you cannot, as a seller, say things which are

16 untrue to induce a contract and expect the contract to

17 survive.

18 A. This is not a normal -- you are dealing with the19 Libyans, who are really -- you know, it was -- it was

20 not very straightforward and they were deliberately not

21 honouring their commitments. I understand what you are

22 saying, your Lordship. I understand this very well.

23 But to the Libyans, when they come and they renege, and

24 they come and say "We are going to go down from 120 to

25 70", and when they say "We will cancel everything", you

Page 36

1 know, they just reneged. And Saleh El Ghoul and

2 Fouad Alaeddin were authorised just to go and to do

3 whatever they can to finalise this deal and, eventually,

4 we got the 50, and they got the plane.

5 MR JUSTICE PETER SMITH: Just because they behave badly, it

6 doesn't justify you behaving badly, does it? You have

7 your reputation that you want to maintain and you don't

8 go their levels, you don't stoop to them. What you

9 should do is you play honest. What you say to him is

10 "Yes, we paid 95, but the plane was worth 250.

11 Therefore, it is not unreasonable, whatever price

12 I paid, to charge you 135. You are still getting

13 a bargain, because that is $115 million below what it is

14 worth", and then all the cards are on the table and you15 are playing honest broker.

16 But what you tell him, untruthfully, is that the

17 plane cost you 135, when it actually cost you 40 million

18 less than that and it is untrue.

19 A. But it is none of his business, your Lordship, to know

20 how much I paid for it.

21 MR JUSTICE PETER SMITH: Then why did you tell him?

22 A. Because they wanted the justification for the value of

23 the plane and, if you tell them the value, they don't

24 understand the value, because they say it has been

25 depreciated, it has been used by Prince Jefri and used


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10 (Pages 37 to 40)

Page 37

1 by the Sultan of Brunei, and they would say "No, 251

2 back to -- from the 251 to whatever you want to pay for

3 it".

4 MR FREEDMAN: You have heard the line of questions from his

5 Lordship and you've heard my questions.

6 A. I do.

7 Q. Did you do anything wrong when you wrote "The aircraft's

8 price of $135 represents what the aircraft cost us"?

9 A. In normal circumstances, this would not happen, this

10 does not happen.

11 Q. Did you do anything wrong? Do you recognise that you

12 didn't tell the truth?

13 A. In normal circumstances, this shouldn't happen, for

14 sure.

15 Q. Do you recognise that you didn't tell the truth?

16 A. You have to see the -- what led to that.

17 Q. Do you recognise that you didn't tell the truth?

18 A. We recognised that we were dealing with a rogue state19 and we had to act in kind.

20 Q. Did you recognise that you weren't telling the truth?

21 A. We were not understanding -- we were just strengthening

22 our bargaining position with them right now at that

23 time.

24 Q. Does the truth then depend on context always?

25 A. No, we are always truthful, but this is a very unique

Page 38

1 situation and unique case whereby the Libyans were

2 involved and they are not straight. So Saleh El Ghoul

3 and Fouad Alaeddin were authorised to do whatever they

4 could to finalise it.

5 Q. And it wasn't truthful to say that extras and

6 modifications had been made to the aircraft since you

7 bought it, because, as you said, there were zero

8 modifications?

9 A. I told you, not my modifications. We have done zero

10 modifications.

11 Q. Zero modifications.

12 A. I'm confirming that to you: not minor; zero

13 modifications were done. The main reason for buying the

14 plane was it needed no modifications whatsoever, so I'm15 confirming that.

16 Q. The second sentence was a lie as well?

17 A. You call it a lie; I call it a tactic used by

18 Saleh El Ghoul and Fouad Alaeddin.

19 Q. Would you go tab 50 of bundle D1, the same bundle,

20 tab 50?

21 A. Okay.

22 Q. Here is another letter from you to Colonel Gaddafi,

23 22 August 2003. If you go halfway down the page, do you

24 see the words:

25 "This aeroplane is unique of its kind."

Page 39

1 A. Just a minute. Yes.

2 Q. "This aeroplane is unique of its kind and cannot be

3 compared with other aeroplanes. It cost its original

4 owner more than $250 million. If I had not wished you

5 to have it and if I had not thought that it suited your

6 needs, I would never have sold it, especially at less

7 than half of its original cost."

8 But you knew, when you wrote that, didn't you, that

9 you had acquired it for much less than half of its

10 original cost?

11 A. Yes, but I'm saying that the value of this plane is

12 $250 million.

13 Q. Let's examine what it really did cost you, let's go back

14 to bundle H, please.

15 A. H, yes.

16 Q. Let's go back to that agreement of March 2000 between

17 you and Brunei. It is behind tab 2. Would you go to

18 page 45?19 A. Yes.

20 Q. At 3.1(b), or 3.1(a), $15 million has been paid in cash

21 and $80 million is being paid by transfer of shares.

22 The shares are referred to in the definitions, which, if

23 you go back to page 43, just over halfway down the page,

24 it means:

25 "Shares in the Real Estate Construction and

Page 40

1 Development Limited sufficient to give the holder a 13.5

2 economic interest in the Trade Centre Company."

3 A. Yes.

4 Q. Then if we go in the document we see that there are

5 various representations that are made. There is the

6 seller's representations at clause 4 and over the page,

7 at page 46, there are the buyer's representations. Do

8 you see that?

9 A. Yes, yes.

10 Q. 4.2, the buyer's representations and warranties are

11 important, because here the buyer is the seller, or is

12 in effect procuring the sale of shares in a company

13 under your control; correct?

14 A. Correct.15 Q. It is frequently the case, as you know, when there are

16 purchasers of shares in companies other than publicly

17 quoted companies, that there are very extensive

18 representations and warranties that are made. You are

19 familiar with that, are you?

20 A. Sure, sure.

21 Q. Yes?

22 A. Yes.

23 Q. This company was not a publicly quoted company, was it?

24 A. It was not.

25 Q. And yet here the representations and warranties are


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11 (Pages 41 to 44)

Page 41

1 minimal, aren't they?

2 A. I think if I recall well, there is a signed agreement,

3 your Lordship, between me and them guaranteeing the

4 $80 million value at the time of transfer, if I recall

5 well, I remember that.

6 Q. What there was, was that in default -- I think you are

7 referring to a document at tab 3?

8 A. Yes, that is the one I think, yes.

9 Q. The sale was $95 million?

10 A. That is the one, yes.

11 Q. Then there would be the transfer of the shares, but if

12 the transfer of the shares didn't materialise, then you

13 would pay $80 million?

14 A. Correct, this is correct.

15 Q. But the sale of the shares did materialise, didn't it?

16 A. Actually it was transferred just now, I mean last year,

17 actually, imminently, just now.

18 Q. What was transferred just now?19 A. The shares, they became owners formally in the company.

20 Q. They became formally owners last year?

21 A. Yes, they were owners then, but they wanted to -- they

22 kept the shares under our name, they did not really ask

23 it to be changed under their name. Only recently they

24 change and they sold it.

25 Q. How would the purchaser know that the value of the

Page 42

1 shares was $80 million?

2 A. Can you ...

3 Q. How would the purchaser of the shares know, how would

4 Brunei know that they were acquiring $80 million worth

5 of shares?

6 A. Very straight, because they have done their homework and

7 due diligence. They have done it. And they came and

8 said "We accept that". They wanted to invest in

9 Saudi Arabia.

10 Q. There is no evidence here about any due diligence, is

11 there?

12 A. Maybe you have to approach them. They have done due

13 diligence.

14 Q. What we have asked for is documents that were produced

15 in relation to the value of the shares, and that has

16 been refused to us.

17 What documents were provided to them so as to

18 satisfy them that they were acquiring $80 million worth

19 of shares?

20 A. At that time when we offered them, we agreed on

21 $95 million, I accepted the 95 on condition that we pay

22 a certain amount, $50 million, then the rest in shares

23 of the company. So I think they have done, they came

24 and spent some time I think in the centre, I don't know

25 what they have done, but at the end they said "Yes, we

Page 43

1 accept it", but they asked that -- with this condition

2 that you said on page number 3, that if the arrangement

3 to transfer the shares does not materialise, then I pay

4 $80 million.

5 Q. But that depended on you, because if you transferred the

6 shares, then that clause didn't kick in, did it?

7 A. No, but it is their discussion. Actually, they kept the

8 shares under my name, they did not change them until

9 last year.

10 Q. We asked for audited accounts in relation to the company

11 in the years 2000 and 2001. Those have not been

12 produced to us. What would those audited accounts show

13 in relation to the company as at 2000?

14 A. Frankly speaking, at that time, I don't recall at all

15 what -- I don't remember what are the income statement

16 balance sheets at that time, but the Sultan of Brunei

17 and the BIA had access to the books and they accepted

18 the 95 very willingly.19 Q. In 2000, March 2000, this was just a construction

20 project, wasn't it?

21 A. Oh, yes, but it had some accounts and the projects

22 began.

23 Q. But it was just a construction project, because when was

24 it that the building went up?

25 A. But you see, all the money was in the --

Page 44

1 Q. When did the building go up?

2 A. I don't know when it began. 2001, it began and maybe

3 2000 -- it was completed a decade, a -- more than

4 a decade ago, so I would say it was completed 2002, so

5 it began some years before that.

6 Q. So it was a building project at that point?

7 A. Sure, it was almost completed, and --

8 Q. There is no evidence that this cost you $80 million, is

9 there, to hand over those shares?

10 A. It is not for me to decide that. They decided how much.

11 They accepted the price I gave them, and I gave them

12 guarantees that, if they don't get the $80 million,

13 I pay for them. They have done their homework. I can't

14 do their homework.15 Q. The limited information that we have been given, if you

16 go tab 8 of this bundle, bundle H, tab 8, towards the

17 end of that bundle -- you are near the beginning of the

18 bundle. If you go to tab 8.

19 A. Just a minute, please. I have to -- this agreement was

20 2000 and I think the project was completed in 2002, so

21 it was almost completed. This project was five years.

22 So just a year or two years before completion, they

23 invested in me, invested in the project, and at the time

24 remember that we had pre-sales agreement, we had

25 pre-rents, and so we had some financial statements began


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12 (Pages 45 to 48)

Page 45

1 even before the completion of the project.

2 Q. What would those financial statements have shown that

3 would show to a purchaser that it was worth $80 million,

4 that?

5 A. I don't have them right now, obviously, but the BIA came

6 to Saudi Arabia and evaluated the project, and they

7 spent, I think, some time in Saudi Arabia and then said

8 "Okay, we accept that price" and they put one condition

9 only, that if the $80 million doesn't materialise, I pay

10 it for them.

11 Q. Can you help us with tab 8 of that bundle, please,

12 page 202?

13 A. 202?

14 Q. Yes, it is a document of 26 June 2004, Real Estate

15 Construction, shareholders' resolution to amend the

16 company's memorandum of association introducing the

17 shareholder and increasing company capital?

18 A. Yes, yes.19 Q. We can see there is reference to the previous

20 incorporation of the company, and we can see that

21 Brunei Investment wishes to join the company as a new

22 partner by purchasing shares in the company. Current

23 shareholders have agreed to that and they wish to amend

24 the value per share in the company's capital. The

25 shareholders also wish to increase the company's

Page 46

1 capital, and then, over the page, we can see what the

2 company's capital is about to become. We can see that

3 Kingdom Holding Company is 4 million shares,

4 a 400-million-share value in Riyals and

5 Brunei Investment Agency, 663,000 shares, and the share

6 value in Riyals is 66 million, which corresponds

7 roughly, at 27 cents to the Riyal, to about $17 million,

8 correct?

9 MR JUSTICE PETER SMITH: 70 or 17?

10 MR FREEDMAN: 17 million, at 27 cents to the Riyal. That is

11 right, isn't it?

12 A. I can't get, that. Can you explain what you mean?

13 MR FREEDMAN: The Riyal would correspond, at that time, to

14 about 27 cents to the dollar?15 A. The ratio of 3.75, yes.

16 Q. So if we divide 66 million by 3.75, we get to about

17 17 million; is that right?

18 A. More or less, I can't compare with you on this. Around

19 that.

20 Q. I want some assistance from you as to why that is not of

21 assistance in relation to valuing what their

22 shareholding was worth.

23 A. It is very easy. This is the paid-up capital. It is

24 like, you know, you have a company that may go for

25 example $1 at the IPO, but then six months or one year

Page 47

1 later could be worth $5, $6, $7, $8, $10. So this is

2 paid-up capital.

3 Q. I understand that, but at that point the paid-up capital

4 was increasing, wasn't it?

5 A. Yes, increasing, but still it is paid-up capital, the

6 initial one.

7 Q. What documents would we have to look at -- because this

8 is the only document that we have been provided with.

9 What is the real document that is going to show what,

10 in March 2000, that shareholding was worth?

11 A. I think it would be very prudent to approach BIA,

12 Brunei Investment Authority, and tell them what

13 documents you have there, and you paid $95 million based

14 on what? They need to be asked, not me.

15 Q. There is no need for us to do that, because we are

16 approaching the other party, the party that would have

17 provided the information. I'm asking you that question:

18 what document would show it was worth $80 million?19 A. They came -- Brunei Authority, they have, actually, you

20 know, UK-based people who really do their homework, so

21 they came, I think, to us in Saudi Arabia and they have

22 done their homework and they accept -- actually, they

23 gave the offer of $95 million. It is not that we told

24 them it is 95, but then, when they gave us 95, we

25 negotiated with them with the $15 million payment in

Page 48

1 cash and $80 million in kind in the centre, and by the

2 way, when they exited, they made a lot of money, they

3 are happy.

4 Q. It is right, isn't it, that this is all part and parcel

5 of broader business being done between Brunei and

6 Saudi Arabia?

7 A. You know, at that time, Sultan of Brunei wanted to have

8 an investment in Saudi Arabia, and he had some

9 investments in Mecca, our holy place, and he wanted to

10 really -- I used to, he used to invite me annually to go

11 to Brunei for a national day and he asked me "What can

12 I do with you to invest in Saudi Arabia?". So

13 I proposed to him certain projects -- that was not the

14 only project I proposed to him. I proposed to him15 several things, but he chose that.

16 Q. I want to get back to valuations about the aircraft, one

17 of the types of documents that you have been ordered to

18 produce is any valuations of the aircraft that you may

19 have.

20 The answer that has been given in this regard can be

21 seen in bundle F2 at page 548.

22 MR JUSTICE PETER SMITH: Put H1 away now?

23 A. Excuse me, would you --

24 MR FREEDMAN: Yes, H can go, and if you can go to F2,

25 please.


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13 (Pages 49 to 52)

Page 49

1 A. Which page?

2 Q. Would you go to page 548, please? This is just

3 completing about the shares, not about the aircraft. My

4 introduction was wrong. I'm talking about the valuation

5 of the shares. This is a letter from or an email from

6 Mr Meakin of TLT to your solicitors?

7 A. Who is TLT?

8 Q. They are the solicitors for Mrs Sharab. At page 548 at

9 point numbered 5 towards the bottom of the page

10 a question is asked of:

11 "Can we have any documents dealing with the

12 valuation of the shares transferred and any

13 correspondence with the seller in this respect? If it

14 is your client's case that no valuation was ever

15 requested or provided for the shares that were

16 transferred, whether by Arthur Andersen or another

17 external buyer, please confirm this in writing."

18 The answer that has been given is that that is19 beyond the scope of the order that the court has made,

20 but are there such documents?

21 A. Frankly speaking, I don't think there are any documents,

22 because the Libyans came -- the Brunei people came to

23 Saudi Arabia, they have looked at certain investments

24 that we have, and they chose to invest in the

25 Kingdom Centre, which was on the verge of opening, and

Page 50

1 then, after that, they have done their homework and they

2 have done their due diligence independently and they

3 gave a price, if I recall well. Once they gave me the

4 price, we negotiated with them, with the 15/80,

5 $15 million in cash and $80 million in shares.

6 Q. You have been asked to provide valuations of the

7 aircraft that you have had. What steps have you taken

8 to find out if there are valuations of the aircraft that

9 you have?

10 A. Do you mean the 340?

11 Q. Yes.

12 A. Oh, that was very simple, because the designer of the

13 340, one of his employees is called Brett Lindsay, that

14 guy worked on my other planes, my 767, I believe and he15 knew exactly, he was actually the designer on the 340

16 and he was the supervisor of the contract.

17 Q. You have produced no valuations, have you?

18 A. Of what?

19 Q. Of the Airbus. We have asked for valuations, and you

20 have produced no valuation that you have in relation to

21 the Airbus, correct?

22 A. Let me just -- what kind of valuation you want? You

23 mean when I bought it?

24 Q. We have asked whether you have any valuations from the

25 time that you bought it?

Page 51

1 A. There is no valuation.

2 Q. There are no valuations?

3 A. I don't recall there is any valuation at all, frankly

4 speaking.

5 Q. What steps have you taken to find out if there were

6 vallations?

7 A. I didn't need to. I have seen the plane and I know the

8 value of the plane, and I know how much the A340 costs

9 on the market. I know the furniture is of very high

10 calibre, and I know the designer who designed it and who

11 worked on it. So it is very easy for me to say from

12 $50 million to the price I bought it for is acceptable.

13 Q. You are not an expert in the price of aircraft, are you?

14 A. You don't have to be an expert, you can make your own

15 judgment on that, judgment call. I have to make my

16 judgment call.

17 Q. What communications have you had with brokers about

18 attempts to sell the aircraft?19 A. The 340 you mean?

20 Q. Yes.

21 A. You just mentioned that we did not really have any

22 brokers or any sale arrangements.

23 Q. Did you not try sell the aeroplane to somebody other

24 than Colonel Gaddafi?

25 A. Frankly, I don't recall, but really Gaddafi was the man

Page 52

1 that really we were focusing on.

2 Q. Is it really the case that you purchased the aircraft

3 believing that you could make a good turn on the sale of

4 that aircraft to Colonel Gaddafi?

5 A. No, no, when I bought it, I never knew that I'm going to

6 sell to it Gaddafi, I bought it because it was a good

7 deal. Actually, you know, I had my 767 -- if you follow

8 chronologically the order of the planes I have, I began

9 with a very small plane, eight passengers,

10 your Lordship, it was a very small Jetstar and, as

11 I expanded, I went up to 727 and then 767 and you know,

12 the Airbus, it came at a very bargain price for me, that

13 is why I bought it.

14 Q. What I suggest to you is that it really did come at15 a bargain price to you and that it really came at

16 a price of nearer $40 million to $50 million than

17 $95 million?

18 A. For sure this is an incorrect statement, because when

19 the Sultan of Brunei, the BIA, exited the centre right

20 now, they made way beyond the $95 million. So

21 unfortunately, this is a very incorrect statement, and

22 you can verify this with BIA.

23 Q. On any view, you made a profit at the time that you

24 sold. Even if you did pay $95 million, you made

25 a profit of more than 25 per cent, didn't you, when you


14/84



14 (Pages 53 to 56)

Page 53

1 sold to Colonel Gaddafi?

2 A. You mean from the --

3 Q. From 95 million to 120 million that is more than

4 a 25 per cent increase, isn't it?

5 A. That what is I do every day, make profits for my

6 shareholders in the company for Kingdom Holdings and

7 myself.

8 Q. So you did very well?

9 A. No, it was not very well. 20 per cent is a low return

10 for me.

11 Q. One of the reasons why you did very well is because,

12 normally, you would agree with me that an aeroplane like

13 that is a depreciating asset?

14 A. Yes, but I have to say --

15 Q. Do you agree with that?

16 A. It depends. Which plane?

17 Q. The Airbus is a depreciating asset?

18 A. It is a depreciating asset, but the $95 million that19 I bought it for was very competitive, yes.

20 Q. So it would have depreciated in the period between March

21 of 2000 and the time of the sale, 3 and a bit years

22 later, in July 2003?

23 A. I don't look at it this way. I look at it from the

24 value of 250 going down, rather than from 95 going down.

25 So really, if you depreciate it from 250, at 120 it was

Page 54

1 still a bargain for Colonel Gaddafi.

2 Q. So if Brunei were so clever and so careful in relation

3 to their deal, why were they selling it to you at

4 a bargain price?

5 A. Good point. At that time -- I'm sure his Lordship

6 understands this very well because he had some dealings

7 with Prince Jefri. At that time, the Sultan of Brunei

8 confiscated and took all the possessions of Jefri and

9 actually Jefri had four planes, he had two 747s, the

10 Airbus 340 and another plane which I don't really

11 remember very well, and they just wanted to sell them

12 very fast, and with me they found a buyer who was

13 willing to do it very swiftly. He just wanted to dump

14 everything, the Sultan of Brunei, because there was15 a lot of pressure inside Brunei on the Sultan of Brunei

16 himself to dealing with any relationship with Jefri.

17 Q. So doing things very fast is inconsistent with very

18 detailed due diligence in relation to the acquisition of

19 shares in a company, isn't it?

20 A. I think this question has to be given to BIA not to me.

21 They were a willing signatory to the agreements.

22 MR FREEDMAN: I'm now going to turn to April 2003.

23 MR JUSTICE PETER SMITH: Shall we take a break then, until

24 11.30?

25 (11.23 am)

Page 55

1 (A short break)

2 (11.30 am)

3 MR FREEDMAN: In April 2003, you went to Libya with both

4 your Boeing 767 and your Airbus 340, didn't you?

5 A. Which date is that?

6 Q. April 2003?

7 A. Yes.

8 Q. You agree?

9 A. Yes, yes.

10 Q. You accept, don't you, that after you left the Airbus,

11 you had a discussion in your Boeing with Mrs Sharab?

12 A. And Fouad Alaeddin, yes.

13 Q. In your witness statement, if you just pick up your

14 witness statement, at bundle B1, at the end of page 46,

15 so tab 3, page 46, the third line of paragraph 24, you

16 say:

17 "I recall that while this was happening the claimant

18 and I were on board the Boeing and we discussed the sale19 of the Airbus and the sale price that I wished to

20 achieve. That discussion centred on the price that

21 I wanted for the Airbus and how it might be achieved."

22 Would you go from that to bundle A1, please,

23 bundle A?

24 A. A?

25 Q. Would you go in bundle A, please, to behind tab 4?

Page 56

1 Probably just to make it easier for you to follow, what

2 I'm going to do is I'm going ask you to go back in that

3 bundle to tab 3, and if you go to page 26 --

4 A. 26, yes.

5 Q. -- you are there saying at paragraph 17 that:

6 "Nothing was discussed between the defendant and the

7 claimant on this occasion that altered the basis upon

8 which the parties had agreed to proceed."

9 And the occasion that is being referred to is the

10 occasion when you were in Libya in April 2003?

11 A. Excuse me, which page, page 26?

12 Q. Page 26, paragraph 17.

13 A. All right. Yes, please?

14 Q. What is said there is in the second sentence:15 "Nothing discussed between the defendant and the

16 claimant on this occasion altered the basis upon which

17 the parties had agreed to proceed."

18 If you go back to tab 2, so we see what the occasion

19 is, at page 8, tab 2, page 8 in that bundle, go earlier

20 to tab 2, page 8, paragraph 18 --

21 A. Page 8?

22 Q. Page 8. Are you there?

23 A. Yes.

24 Q. Paragraph 18 is talking about what happened

25 in April 2003 and talking about the discussions in the


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15 (Pages 57 to 60)

Page 57

1 Boeing?

2 A. Yes, yes.

3 Q. What you are saying is nothing that was discussed there

4 altered the previous arrangements.

5 If you then go back to tab 4 of that bundle to

6 page 36, so go forward to behind tab 4. Are you behind

7 tab 4?

8 A. Yes.

9 Q. Page 36.

10 A. Okay, yes, I've got it.

11 Q. You were asked the question under paragraph 17 "Nothing

12 discussed ... [which] altered the basis from which the

13 parties had agreed to proceed":

14 "Please set out to the extent that the defendant is

15 able to recall the discussion he says he had with the

16 claimant on this occasion, stating, so far as he is

17 able, the precise words used, if in English or, if and

18 to the extent that the conversation was in another19 language, the English translation of these words.

20 Insofar as the defendant cannot now recall the precise

21 words which were spoken, please set out to the best of

22 the defendant's recollection the gist of the same."

23 The answer that is given is:

24 "That is a request for evidence. The defendant's

25 case is clearly and sufficiently stated."

Page 58

1 Now, the only information that you have provided

2 about the conversation in the plane about what was

3 actually said, was in your witness statement that the

4 discussion centred on the price.

5 Why is it that your witness statement is so brief,

6 not saying what actually was the discussion that took

7 place?

8 A. Very clear, because at that time when Gaddafi chose the

9 Airbus, the main subject at that time was to see what is

10 the price, because if the price -- let's say, if he gave

11 me a ridiculous price, I would just withdraw the whole

12 thing.

13 Q. You have been asked to set out in the pleading what was

14 the nature of the discussion. You failed to do that.15 You then have a witness statement and it is your

16 opportunity to set out the full nature of the

17 discussion, and you just say there was a discussion

18 about the price. Why are you being so evasive?

19 A. I mean, at that time, when there is no deal yet, I mean

20 you have to have a price to see if there is a deal.

21 Once there is a deal, then you have to have a contract.

22 Q. Why are you hiding the conversation?

23 A. I'm not hiding. At that time we had one objective only,

24 we had two objectives when we go to Libya: which plane,

25 which was decided by Gaddafi; number 2, what is the

Page 59

1 price? Without the price, there is nothing else can be

2 discussed.

3 Q. But you had a discussion about the price. But you are

4 not willing to say in that witness statement what the

5 discussion was about the price. Why not?

6 A. The objective was to know what is the price that Gaddafi

7 was willing to pay.

8 Q. What did you say about the price?

9 A. We were trying to get the maximum amount that we can get

10 from him.

11 MR JUSTICE PETER SMITH: It would be a short conversation

12 then, wouldn't it?

13 A. Sorry?

14 MR JUSTICE PETER SMITH: It would be a very short

15 conversation, the conversation on that basis is "Get the

16 best price".

17 A. Obviously, your Lordship, we have to see -- we have to

18 discuss -- I mean, we just came back from Gaddafi, the19 meeting was positive, he decided he wanted to buy one of

20 the planes. The key question right now is the price,

21 the contract, the time of delivery. All these matters

22 were very crucial right now to decide on the next step.

23 MR JUSTICE PETER SMITH: What did you discuss about the

24 price then? You don't tell me that, do you? Did you

25 tell her to get 135, 120?

Page 60

1 A. I don't recall exactly.

2 MR JUSTICE PETER SMITH: 95?

3 A. No, no.

4 MR JUSTICE PETER SMITH: Did you think 95 was the bottom

5 figure that you might go to?

6 A. No, no, I think it was 120 or 135. I don't recall

7 exactly, but I think these two figures we brought up,

8 I think, 120 or 135. But I think the price was put

9 there.

10 MR JUSTICE PETER SMITH: There is a big difference between

11 120 and 135.

12 A. I think it was 120, I think.

13 MR FREEDMAN: She recalls that the discussion lasted about

14 an hour with you in the Boeing.

15 A. It is possible, because we were awaiting the transfer of

16 all the personal belongings from the Airbus to my plane

17 so it could have taken an hour, yes.

18 Q. She says that you told her the aircraft actually cost

19 you $90 million. You could have said that, couldn't

20 you?

21 A. I don't recall that, but it is possible. But I don't

22 recall that.

23 Q. She says that what you were looking for was to be able

24 to sell the aircraft between $100,000,000 and

25 $110,000,000?


16/84



16 (Pages 61 to 64)

Page 61

1 A. I don't think so, because if I was at 95, why would

2 I sell it at 110? I mean, I wanted to get the maximum

3 price. I think 120 was the price.

4 Q. It is a very good price to get between 100 million and

5 110 million, even if you have paid 90 million or

6 95 million. That is a very good price because it has

7 depreciated for three years.

8 A. It depends who is the seller. Not me.

9 Q. Do you remember, whether she said to you -- whether you

10 said to her that you wanted to get between $100 million

11 and $110 million?

12 A. No, I think 120, and she was happy with that, because,

13 I mean, her job is to go and to convince Gaddafi to buy

14 it at 120.

15 Q. What you said to her was that, if she got between know

16 $100 million and $110 million, you would pay to her the

17 previously agreed commission of $2 million.

18 A. If this is the case, why didn't she put this in her19 three letters she sent to me? It is false.

20 Q. You also said to her that if she could persuade Libya to

21 invest the $20 million in Touscha, the commission would

22 remain $1 million?

23 A. Incorrect.

24 Q. All of that was by reference back to the conversation

25 that she had had with Mr Alaeddin?

Page 62

1 A. Your Lordship, at that time we had one objective only.

2 It was to finalise with the Libyans the signing of the

3 contract at $120 million.

4 Q. She wanted a written confirmation, but you insisted that

5 your word was enough?

6 A. She could have pulled out.

7 Q. You agreed with her that if she got more than

8 $110 million, she would be able to keep the excess for

9 herself?

10 A. Never, ever. That is not the way I conduct my business.

11 Q. The benefit to you was this: that as far as you were

12 concerned, she wasn't going to get more than

13 $110 million, so you could make that promise to her?

14 A. I was very consistent, your Lordship, from the15 beginning. Any payment has to be my discretion only and

16 based on the amount of work she does.

17 Q. We saw that you had no recollection about what happened

18 in August 2001 on the boat. Why do you have any more

19 recollection in relation to what happened in the Boeing

20 in April 2003?

21 A. I don't understand the question.

22 Q. Why do you have any more recollection about what

23 happened in the Boeing in April 2003 than you have about

24 what happened in the boat in August of 2001?

25 A. Because this was a landmark date when I went to meet

Page 63

1 Gaddafi and he chose one of the planes. Clearly we went

2 back to the plane and, at that time, you have to decide

3 on the price. But see, at no time I gave a number.

4 Daad did a good job, she did support and help. No one

5 is denying that, for sure, and my discretion -- it was

6 kept at my discretion. I would have given her something

7 for sure, but for sure no amount was discussed.

8 Q. If you have that recollection, I suggest to you that you

9 would have put it in your witness statement.

10 A. No amount was discussed with anyone on that.

11 Q. If you had that recollection, why didn't you put it in

12 your witness statement?

13 A. Put what?

14 Q. If you had the recollection of how much money was

15 discussed, why didn't it go into the witness statement?

16 A. I always wanted $120 million for this thing.

17 Q. Do you have a recollection of what was discussed?

18 A. At that time, sure. I mean, first of all, we were happy19 that Mr Gaddafi -- and happy that he accepted the

20 Airbus, and we were actually joking and smiling on how

21 he chose the Airbus because it is European-based and has

22 four engines.

23 Q. That wasn't my question.

24 A. No, but I'm answering you.

25 Q. It is not an answer. My question was: do you have

Page 64

1 a recollection of how much was discussed?

2 A. No, you asked me, do I have any recollection of what was

3 discussed?

4 Q. Do you have a recollection of how much the price that

5 was discussed?

6 A. I told you 120.

7 Q. If you have that recollection, then why didn't you put

8 it in your witness statement?

9 A. It is a given that it is $120 million.

10 Q. The reason why it is not your witness statement is

11 because you are making this up.

12 A. No way, because at that time when we went on the plane,

13 we had one objective only, to sell the plane and to get

14 a price. That is the only objective at the time,15 because, without a sale contract, without a contract

16 amount, everything else would just be a technicality and

17 not worthy of discussion.

18 Q. You said to her you would be happy with $110 million

19 which meant she could have anything above that?

20 A. It is a completely incorrect statement, because she did

21 send me three letters thereafter and she is saying

22 "I would like to get my commission", but not at one time

23 she mentioned $10 million.

24 Q. Let's look at the basis of your denials in your witness

25 statement. Can we look at your witness statement, at


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17 (Pages 65 to 68)

Page 65

1 page 47, so tab 3, page 47?

2 A. 47, yes yes.

3 Q. If we go to paragraph 29 you say there -- first of all,

4 let's go paragraph 28, you say:

5 "I don't specifically recall how I learnt that the

6 claimant and Mr Alaeddin had reached an agreement in

7 principle with Colonel Gaddafi for the sale of the

8 Airbus at a price of $120 million."

9 Now, doesn't that indicate that your recollection is

10 not much good if you cannot even remember when it was

11 that you heard about the agreement in principle?

12 A. No, but then you have to continue, it says:

13 "However, it is clear that there would have been

14 a telephone conversation with the claimant and

15 Fouad Alaeddin during which ... confirmed $120 million."

16 We have to continue.

17 Q. We know about things, about recollection of what would

18 have happened, what might have happen

Documents

Sharad v Alwaleed