Rakia-Amended-Particulars-Of-Claim
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IN THE HIGH COURT OF JUSTICE ru ~ ~T~~nv nTvrcrnrr BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES BUSINESS LIST(ChD) Claim No: HC-2016-002798 Amended Particulars of Claim under CPR rule 17.1(2)(a) Re-Amended Particulars of Claim by Order of His Honour Judge Kramer dated 18 July 2018 ~i'/_~I ~I~A RAS AL KHAIMAH INVESTMENT AUTHORITY Claimant and - FARIIAD AZIMA Defendant RE-AMENDED PARTICULARS OF CLAIM THE PARTIES 1. The Claimant (`RAKIA') is the investment authority of the Emirate of Ras Al Khaimah, and has its office address at Ras Al Khaimah, United Arab Emirates, P.O. Box 31291. 2. The Defendant (`Mr Azima') is an individual resident in the United States of America, whose current or last known address is 5921 Ward Parkway, Kansas City, Missouri 64113. THE SETTLEMENT AGREEMENT 3. Mr Azima is the 100% shareholder in HeavyLift International Airlines (`HeavyLift'), a company incorporated in the United Arab Emirates with its office address at Sharjah, United Arab Emirates, PO Box 9061. HeavyLift was purportedly struck off the register of Sharjah free zone of companies around Apri12013. 4. On 2 March 2016, RAKIA entered into a written settlement agreement with Mr Azima and purportedly HeavyLift (the `Settlement Agreement'). A true copy of the Settlement Agreement is appended to these Particulars of Claim at appendix 1. 4A. The recitals to the Settlement Agreement referred to the joint venture agreement entered between HeavyLift and the former national airline of Ras Al Khaimah, RAK Airways PJSC ("RAK Airways") on 12 April 2007 concerning the establishment of an aircraft simulator and training facility at Ras Al Khaimah International Airport (the "Training 1 14593993-3 Academy Joint Venture"). The recitals recorded that, "HeavyLift, acting through Mr Azima, has asserted that RAK Airways owes HeavyLiftfor investments HeavyLift made in the joint venture pursuant to the Joint Venture AgreemenP' and that the parties to the Settlement Agreement "wishe[dJ to resolve all outstanding issues Yelating to the Joint Venture Agreement". The Settlement Agreement then set out the terms on which the parties had agreed to settle any claims that Mr Azima or HeavyLift may have against RAKIA or any other RAK entity. FRAUDULENT MISREPRESENTATION CONCERNING THE AMOUNTS INVESTED BY HEAVYLIFT IN THE TRAINING ACADEMY JOINT VENTURE 4B. The parties' respective obligations in respect of the Training Academy Joint Venture were recorded in a joint venture agreement dated 12 April 2007 (the "Training Academy JVA"). The Training Academy JVA was signed by Mr Azima, on behalf of HeavyLift, and by Dr Massaad on behalf of both RAK Airways (as a party) and RAKIA (as guarantor of RAK Airways' performance under the Training Academy JVA). Under the terms of the Training Academy JVA, the parties agreed that HeavyLift would, among other things, provide and maintain a working DC-8 flight simulator, while RAK Airways would construct an appropriate facility to house the simulator. A RAK Free Zone company, RAK-HeavyLift Training Academy FZ-LLC, was incorporated on 11 April 2017 for the purpose of implementing and running the Training Academy Joint Venture. 4C. Pursuant to the Training Academy JVA, RAK Airways constructed a building to house the Training Academy at Ras Al Khaimah International Airport. HeavyLift subsequently installed asecond-hand DC-8 aircraft simulator, which it had previously acquired from MK Airways Limited for a total cost of US$167,500, in that building. 4D. The Training Academy opened for business in late 2007. It operated for several years until RAK Airways and HeavyLift jointly decided to close the Training Academy and to terminate the Training Academy Joint Venture. 4E. On 2 September 2013, Ray Adams (acting on behalf of Mr Azima) sent a letter to the then Chief Executive Officer of RAKIA, Jim Stewart, concerning "unresolved" matters regarding the Training Academy Joint Venture. The letter alleged that RAK Airways had failed to fulfil its obligations in respect of the Training Academy Joint Venture and alleged that RAKIA was therefore obligated to reimburse the substantial expenses that HeavyLift had incurred in performing its obligations in relation to the joint venture. The letter stated: "A substantial investment was undertaken by HeavyLift on behalf of the joint venture. That investment includes, among other things: 2 14593993-3 1. Cash, training materials, and equipment of approximately $2,260,000 USD. 2. Staff and management time and related costs contributed by our US company. [...] [D]ue to the failure of RAK Airways to provide its share of the joint venture investment, the amount HeavyLift has already disbursed needs to be repaid." 4F. On 6 July 2015, Afsaneh Azadeh (acting on behalf of Mr Azima) emailed a letter to Jamie Buchanan on behalf of RAKIA (copying Mr Azima) regarding the Training Academy Joint Venture. The letter stated amongst other things that prior to its termination "HeavyLift had already invested $2.5 million" to the Training Academy Joint Venture. The letter further stated that while hard copies of the Training Academy Joint Venture's audited accounts for 2007 and 2008 were not available, an extract from the "Director's Report and Balance Sheet Signature page" showed that as of 31 December 2008 the "Total Investment by HeavyLift" in the Training Academy Joint Venture was $2,582,881, which included a "Capital Contribution" of $1,000,000, "Share Capital" of $40,000 plus a further investment of $1,542,881 "Due to Related Parties ". 4G. In October 2015, Mr Buchanan engaged in email correspondence with Ms Azadeh (acting on behalf of Mr Azima) concerning a possible settlement of any potential claims that HeavyLift might have against RAKIA arising from the Training Academy Joint Venture. During that exchange of communications, Mr Buchanan explained that he required further information in respect of the losses that it was claimed HeavyLift had sustained as a result of RAK Airways' alleged breaches of the Training Academy JVA. In particular: 4G.1 On 21 October 2015, Mr Buchanan sent an email to Ms Azadeh stating that he was in the process of compiling "a list of questions" and that, "Subject to youY responses, we can then get to the heart ofwhat may be due to you." 4G.2 On 27 October 2015, Mr Buchanan sent a further email to Ms Azadeh in which he stated that: "I will hopefully get my questions to you by close of business Sunday 1 November. The answeYs will then enable me to assess the value ofamounts owing, ifany." 4H. On 29 October 2015, Mr Buchanan sent an email to Mr Azima concerning the Training Academy Joint Venture. The email contained a timeline of events concerning the Training Academy Joint Venture and referred to previous statements by Mr Azima that HeavyLift was entitled to approximately US$2.5 million in respect of the Training Academy Joint Venture. Mr Buchanan asked Mr Azima to clarify the amount that HeavyLift claimed to have lost as a result of the alleged breaches of the Training Academy JVA and to provide an explanation of the basis for those calculations: 3 14593993-3 "In order to clarify matters, I should be grateful if you would provide me with information on the following: Details please of the basis of the claims with reference to the JV: which particular provisions of the JV do you say have been breached? Where you say breaches have occurred can you please let me know what loss you say has been caused by those breaches. It would be helpful if you could provide evidence as to how you have calculated the loss." 4I. On 10 November 2015, Mr Azima forwarded an email to Mr Buchanan that contained several references to the amount HeavyLift had invested in the Training Academy Joint Venture. The email attached a number of documents and explained that: "I attach for your review the following: 1. Copy of Signed JV Agreement on the RAK-HeavyLift Training Academy signed by RAK Airways with performance guaranteed by RAKIA. 2. Copy of 2013.09.02 Letter to Jim Stewart(who at the time was running RAKIA)outlining our claim for loss. 3. Copy of 2015.05.31 Statement of Account outlining in detail our loss. 4. Copy of the 2008.1231 [sic] Management Accounts Balance Sheet on RAK-HeavyLift Training Academy which reflects the $2,260,000 investment of HeavyLift in the assets of the Academy. 5. Copy of the first 2 pages of the 2007 audit of RAK-HeavyLift Training Academy which supports the $2,260,000 investment shown in the Management Accounts. Unfortunately, the audit reports were in my office at the Academy and were destroyed after we were instructed to vacate and leave the building. We were also instructed to leave all records. We left all records in the care and custody of RAK Airways. Total Loss Per Statement of Account = $2,260,000 + $425,000 = $2,685,000." 4J. The attachments to the email referred to at paragraph 4I above included: 4J.1 A "Statement ofAccount" dated 31 May 2015, which stated amongst other things that (i) RAK-HeavyLift Training Academy FZ-LLC had received a fixed asset investment totaling US$2,260,000, which included expenditure of US$1,726,000 in respect of "Simulator (including installation &certification)" and (ii) there had been a further investment of US$425,000 in the company in the form of "Staff&Related Costsfrom US Company". 4J.2 A "Comparative Balance Sheet" which stated amongst other things that as at 31 December 2007 and 31 December 2008, RAK-HeavyLift Training Academy FZ- LLC owned a flight simulator worth US$1,725,959. 4K. On 14 November 2015, Mr Buchanan sent an email to Mr Azima stating that: "I have now reviewed Ray's email and have been authorised to verify the 4 14593993-3 various valuations referenced in his email.