EUPillar Ministry of Defence and Support of the Armed Forces for Iran v Faz Aviation Ltd (Formerly FN Aviation Ltd) and Al-Zayat [2007] EWHC 1042 (Comm)

Summary

The dispute was related to proposed purchase of an Aircraft A340 to be used by the Iranian Government. The aircraft was to be acquired by an intermediary, Faz, from HMSF – a contract was concluded between the parties for those purposes. Another contract was concluded between Faz and another intermediary, Safat, so that the latter could acquire the aircraft. Saffat paid $120 millions. No aircraft was delivered. The claim was brought by the Iranian government in fraud, conspiracy and dishonest assistance. The claimant also sought a world freezing order. The question was whether Faz was domiciled (i.e. having central administration/principal place of business) in England. The standard of proof was a “good arguable case”. It was held that the English court had no jurisdiction because the claimant failed to demonstrate that the defendant was domiciled in England. In this context, Mr Justice Langley stated: “52 Had the questions been whether there was a central administration or principal place of business of Faz in 2002–2004 and perhaps 2005, and, if so, where were they, I think MODSAF's case that there were, and that they were in England, would have required a fine balance to be made on the evidence, viewing as I do the evidence of Faz with some scepticism. There is very little evidence that Faz had any other business to administer than the aircraft transaction. 4 Stanhope Gate and Mr Davies were the day-to-day centre for that business. Mr Dunn's letters speak for themselves. On the other hand, in a real sense, the business was carried on and controlled by Mr Al-Zayat from wherever he was and that was largely in and from Cyprus, although he was also a frequent visitor to England. 53 But I am satisfied that MODSAF has failed to show a good arguable case that Faz had any real business either to administer or to operate after May 2005. Insofar as administration was required, by that time those who were at all active for Faz were substantially to be found in Cyprus: see [35]. Mr Wilken's connections with England were tenuous. I do not think there was “a principal place of business” anywhere else applying the words of Leggatt L.J. in the Rewia (cited above) which I have quoted in para.27. At all times, of course, Faz (and Mr Al-Zayat) could have been proceeded against in Cyprus. That is still the case.” [52-53]