Judgment has been handed down by the Privy Council on 10 November 2014 in the long running Alhamrani v Alhamrani litigation. 

The proceedings related to a dispute between the children of the late Sheikh Ali Alhamrani. Walkers’ client, Sheikh Abdullah, commenced  proceedings in the British Virgin Islands (“BVI”) against his six brothers, (collectively the “Brothers”) represented by Harneys. The dispute centred  on the ownership of shares in a BVI registered company called Chemtrade Limited (“Chemtrade”), in which the Brothers held 75% of the shares,  Sheikh Abdullah held 12.5%, and their two sisters (the “Sisters”) together held the remaining 12.5%. 

Pursuant to a mediation process undertaken in April 2008 in Saudi Arabia, the Brothers made an offer to purchase the interests of Sheikh Abdullah  and the Sisters in jointly owned assets at a set price per share, or to sell their interests in the same assets at the same price per share (the “Offer  Letter”). Subsequently, the offer of sale was accepted by Sheikh Abdullah alone. 

In August and October 2008, in judgments known as “Judgment 1080” and “Judgment 1220”, the Saudi court known as the Board of Grievances  affirmed the existence of an agreement (“the Sale Agreement”) between the Brothers and Sheikh Abdullah. The Sale Agreement was governed by  the law of Saudi Arabia. The question in these proceedings is whether the Sale Agreement included the Brothers’ interests in Chemtrade, which  was not included in lists that were appended to the Offer Letter and set out in Judgment 1080. 

The action was tried by Mr Justice Bannister QC (the “Judge”) in 2012. After the longest trial in the BVI, which lasted 29 days, the Judge held in  December 2012 that the Brothers’ interests in Chemtrade were not included in the Offer Letter, and so were not included in the Sale Agreement.  Sheikh Abdullah appealed this decision to the Court of Appeal of the Eastern Caribbean Supreme Court (“ECCA”). On 18 September 2013 the  ECCA held that the Offer Letter and the Sale Agreement did include the Brothers’ interests in Chemtrade. Accordingly it allowed the appeal. 

The Brothers appealed to the Privy Council to reverse the decision of the ECCA and to restore the decision and order of the Judge. The Brothers’  case being, in essence, that the issues at trial were issues of fact upon which the Judge made clear findings and that the ECCA ought not to  have interfered with them. The Privy Council, in a judgment released on 10 November 2014, upheld the decision of the ECCA and dismissed the  Brothers’ appeal. 

The Privy Council considered the correct approach to contractual interpretation and adopted the statement in Dicey, Morris and Collins on  The Conflict of Laws, 15th ed, (2012) paras 9-019 and paras 32-143 to 145 cited with approval two English first instance decisions of Svenska  Petroleum Exploration AB v Government of the Republic of Lithuania (2005) and Toomey v Banco Vitalicio de Espana SA de Seguros y Reaseguros (2003). The decision also contains observations on the approach to expert evidence and the approach of an appellate court to findings of the trial  judge on the proper meaning of a contract governed by foreign law.