Abu Dhabi royals seek to strike blow to former estate manager’s defence

The Abu Dhabi royal family is applying to strike out a key strand of the defence of the former manager of its £5bn UK real estate empire, in a case in which it is seeking to recover “tens of millions of pounds” in damages. The claim has been brought by a number of companies which own a portfolio of central London properties – including the Berkeley Square estate – that are ultimately beneficially owned by Sheikh Khalifa bin Zayed bin Sultan Al Nahyan, emir of Abu Dhabi and president of the United Arab Emirates. They accuse Lancer Property Asset Management, which was fired as manager of the estate in 2017 after 16 years of service, of dishonesty and fraud, alleging that there was a “dishonest arrangement” between Lancer and engineer Dr Mubarak Saad Al Ahbabi, who was the chairman of Sheikh Khalifa’s private office, the Department of the President’s Affairs, and was, until 2015, the claimants’ representative in relation to the properties. It is said that the purpose of this arrangement was to “siphon off” £32m in payments to Al Ahbabi. Lancer and its directors vigorously deny the allegations and are defending the action. In addition, they are pursuing a counterclaim for payment of £12m they say is due for services rendered under their asset management agreement. Today, the claimants launched an application to strike out part of the Lancer defence, relating to material disclosed during an earlier mediation between the parties in 2012, which they say was shared “without prejudice” and as a result is privileged, meaning it cannot now be relied on. Outlining the dispute, David Quest QC told judge Mr Justice Roth: “The case is concerned with what we say was a dishonest arrangement by which Dr Al Ahbabi and Lancer and its directors agreed to inflate the fees payable under the asset management agreement for the improper purpose of funding payments that Lancer made back to Dr Al Ahbabi and, in particular, to his company, Becker.” He said the defendants’ “primary case” is that Sheikh Khalifa had himself approved the payments, and that his knowledge is to be attributed to the claimants because he was their sole owner and controller. But, in addition, the defendants allege that the claimants knew independently about the payments, and it is in this aspect of the case that the so-called “without prejudice” material is particularly significant. Quest told the judge that the central issue before him today is “whether these statements in the mediation papers are admissible”. He said that this is significant because the defendants argue that, if the material is allowed, it would show that the claimants’ case that they only learned of the payments in 2017 is “demonstrably false”, a major strand of the defence. Quest added: “It is said that the purpose of this application is to suppress the evidence so that we can run a deliberately false case. The point I wish to make is that we do not accept that premise. We do not accept that the without prejudice material would falsify the case or that we are trying to use the privilege in order to put forward a false case.” At a previous hearing earlier this month, David Wolfson QC, representing Lancer and its directors, said: “The claim is not only defended, but we say it is misconceived.” Lancer managing director John Kevill added: “The claims made against us are fundamentally misconceived. We regard them as malicious and vexatious and we are defending them vigorously.” The case will go to trial after 1 May 2021, with a length of 18 days. Today’s hearing continues. To send feedback, e-mail jess.harrold@egi.co.uk or tweet @estatesgazette Photo: Nicholas Bailey/Shutterstock