English Grant Of Representation Required For Standing In Administration Claims

The claimant, The Ali Abdullah Alesayi Will Establishment (“the Establishment”), commenced proceedings against the defendant, Hashim Ali Alesayi, for claims related to the administration of the estate of the late Ali Abdullah Ali Alesayi.

Relevant background

• Ali Abdullah Ali Alesayi (“Mr Ali”) died in September 2016. He was the founder of the Alesayi Trading Corporation.
• In 2011, Mr Ali settled a Proof of Will before the Jeddah General Court which provided that one third of his estate assets were to be set aside for investment for needy relatives, the poor and charity (“the Will’s Assets”).
• The claimant Establishment is a legal entity registered in Saudi Arabia which was incorporated on 26 August 2019. It claims to be the “parent holding entity” for the Will’s Assets.
• In April 2021, an order was made in Saudi Arabia granting powers to Mohammed Ali Alesayi (“Mr Mohammed”), one of Mr Ali’s sons, in respect of Mr Ali’s estate (“the Probate Order”). The Probate Order gave Mr Mohammed power to commence legal proceedings on behalf of the Establishment.
• The defendant is another of Mr Ali’s sons. He resides in England and was served in the jurisdiction.

Chronology

• 5 September 2011 – Mr Ali settles Proof of Will
• September 2016 – Mr Ali dies
• 2 March 2017 – Luxembourg company Nebulae Sarl incorporated
• 11 August 2016 – Luxembourg company Bennington Sarl incorporated
• 2 October 2017 – Cayman Islands company Topaz Hub Holding Company incorporated
• 26 August 2019 – Claimant Establishment incorporated in Saudi Arabia
• 22 April 2021 – Saudi court makes Probate Order granting powers to Mr Mohammed
• 2022 – Establishment commences proceedings against defendant for:

1. 1. Breach of an alleged oral agreement concerning how the Will’s Assets would be held and transferred (the “Holding and Transfer Agreement”). The Establishment argued the defendant was obliged to transfer assets in his possession that were Will’s Assets to the Establishment.
   2. Breaches by the defendant of his alleged “Assistant Guardianship Duties” arising under the terms of the Proof of Will. This includes failures to transfer shares and convert shares to allow the Establishment to properly manage the Will’s Assets.
   3. Unjust enrichment of the defendant at the expense of the Establishment due to the breaches in (2).
   4. Declarations that the assets of three companies – Topaz, Nebulae and Bennington – are assets of the Establishment and due to the Establishment. The Establishment claimed these companies and assets are entirely funded by the Will’s Assets.

In bringing these claims, the Establishment was essentially seeking assets and declarations to allow it to administer the one-third share of Mr Ali’s estate that was designated in his will as the Will’s Assets for distribution to needy relatives, the poor and charities.

At the date of the hearing, neither the claimant nor Mr Mohammed nor any other person had any grant of representation in relation to the English estate of Mr Ali. When the claim came on for a costs case management conference on 9 May 2023, I raised with the parties the question whether the claim was properly constituted and whether the claimant had standing to pursue the claim. As they were not prepared to address the court about that question on that occasion, I adjourned the hearing with directions for the service of sequential written submissions. [11]

The Defendant’s Contention

The defendant argued that as the claimant had not obtained Grant of Representation the claims were a nullity.

Originally, in his written submissions, the defendant’ Counsel argued that only the second and third claims (for breach of duties and unjust enrichment) were a nullity for lack of a grant of representation. He accepted the Establishment had standing for the first and fourth claims (under the alleged agreement and seeking declarations). However, he separately applied to have those claims struck out or reverse summary judgment granted for other reasons.

His position shifted at the hearing itself. There, he contended all four claims were a nullity due to the lack of a grant of representation. He no longer pressed his strike out application in relation to the first and fourth claims.

Therefore, by the time of the hearing, the defendant’ position was that all claims were nullities due to lack of standing as there was no grant obtained to administer Mr Ali’s estate in England.

The oral submissions focused almost exclusively on this issue of standing.

The Claimant’s Position

For the Claimant it was argued that:

1. The first and fourth causes of action were personal claims not concerning administration of the estate, so the Establishment had standing to pursue them without a grant of representation.
2. Mr Mohammed could be substituted or added as a claimant under the rules to cure any defect in standing for the other causes of action.

Decision

On the issue of whether the claims were a nullity due to lack of standing to pursue administration claims without a grant of representation, the court found:

“The entirety of the claim is brought by the claimant on behalf of the estate of the late Mr Ali. Each cause of action seeks a remedy not for the benefit of the claimant personally but for the benefit of those entitled to the estate. The claim is therefore brought in a representative capacity and thus as part of its administration, and English law applies to the question whether the claimant has standing. As the claimant is not named as executor by the tenor of the Proof of Will, it could be entitled only to a grant of letters of administration. As no such grant has been obtained, the proceedings are a nullity.” [35]

On the argument that Mr Mohammed could be substituted to cure defective standing, the court held that, as the proceedings were a complete nullity, there could be no substitution:

“As I explain … I do not consider that the claimant has standing to pursue any of the present claim, and that it is all concerned with the administration of the estate of Mr Ali. Ms Drake accepted that, in such circumstances, there is no jurisdiction to add or substitute another person as claimant. As this claim is accordingly a nullity, there can be no question of Mr Mohammed being substituted as claimant either now or once he has obtained a grant of probate.” [24]

Therefore the court rejected both arguments by the Establishment for having standing.

Conclusion

“The entirety of the claim is brought by the claimant on behalf of the estate of the late Mr Ali. Each cause of action seeks a remedy not for the benefit of the claimant personally but for the benefit of those entitled to the estate. The claim is therefore brought in a representative capacity and thus as part of its administration, and English law applies to the question whether the claimant has standing. As the claimant is not named as executor by the tenor of the Proof of Will, it could be entitled only to a grant of letters of administration. As no such grant has been obtained, the proceedings are a nullity.”