The Cayman Islands Court of Appeal has dismissed an appeal brought by Saudi Arabia’s Algosaibi Group in the longest and most expensive trial in the country’s history.

Algosaibi Group has been embroiled in a long-running litigation against Cayman-based companies owned by businessman, Maan Al Sanea. The Ahmad Hamad Algosaibi and Brothers (AHAB) conglomerate had appealed a May 2018 decision by Chief Justice Anthony Smellie.

In his 1,348-page judgement, the chief justice had described the feud between the two Saudi Arabian business empires as “a cauldron of fraud”. The Court of Appeal in its ruling sided with the chief justice in his initial ruling.

Although AHAB with its appeal initially sought a complete reversal of the judgement’s findings, the Court of Appeal in its decision made clear that AHAB could have only achieved a retrial as the appeals court could not interfere with the chief justice’s findings of fact unless they were “plain wrong”.

The 276-page appeal judgement only differed from the original judgement in certain subsidiary legal aspects of the case and, as a result, ordered a retrial on the limited issue of whether any part of a single US$191-million transfer, which Al Sanea made shortly before the business collapsed, can be traced to one of his companies.

In its case AHAB alleged that Al Sanea, who had married into the Algosaibi family, had used his position as managing director of the Money Exchange, an unincorporated division of AHAB, to perpetrate a multi-billion-dollar fraud from within the group.

In the trial, it was undisputed that the Money Exchange had for decades understated AHAB’s borrowing and debt levels in financial statements handed to more than 100 financial institutions to fraudulently obtain bank loans under the guarantee of the family conglomerate. However, AHAB asserted the family company partners had not been aware of the fraud until the Money Exchange and other businesses operated by Al Sanea collapsed in 2009.

This in turn caused AHAB to default on US$9.2 billion dollars of debt, which it sought to recover from Al Sanea’s personal companies in the Cayman Islands. Chief Justice Smellie, however, in his judgement ruled that AHAB partners knew about the fraudulent borrowing at the Money Exchange, which had been institutionalised to defraud the lending banks in “an enormous, long-standing Ponzi scheme”.

Rather than being victims, the chief justice found that the Algosaibis were the “primary architects” of the fraud.

The appeal raised a total of 51 issues, which claimed, among others, core errors and substantive and procedural irregularities that meant AHAB had not received a fair trial. It also questioned whether the Algosaibis had known about and consented to the borrowings by Al Sanea or whether Al Sanea had misappropriated funds from the Money Exchange by forgery and manipulation or in breach of fiduciary duties.

The appellant suggested that the chief justice had copied and pasted large parts of the respondent’s closing written submissions in his judgement and disregarded almost all of AHAB’s final oral and written counter-submission without giving any adequate reason. However, the Court of Appeal found that, “The Chief Justice’s preference for the respondents’ case was not a matter of unfairness but of judgement, meticulously recorded.”

The court agreed with the chief justice’s conclusion that the AHAB partners had knowledge of the fraud on the banks and of Al Sanea’s borrowings. “Nor has the chief justice failed to appreciate that Al Sanea was himself dishonest, and in all probability the chief villain of the piece,” the Court of Appeal said in its 276-page judgement.