UK Court Upholds Dismissal of $1.2 Billion Bankruptcy Petition Against Saudi Prince

Arabian Post Staff -Dubai

MTC sought to enforce an arbitration award from 2012, which granted them over £700 million against Prince Hussam. The debt, accruing interest and default commissions, had escalated to more than $1.2 billion. Central to the case was whether the English courts had jurisdiction to declare Prince Hussam bankrupt, specifically if he had a “place of residence” in England during the relevant period, as stipulated by Section 265 of the Insolvency Act 1986.

In January 2025, Chief Insolvency and Companies Court Judge Briggs ruled in favor of Prince Hussam, determining that MTC failed to provide sufficient evidence of the Prince’s residence in England during the specified period. The Court of Appeal has now affirmed this decision, effectively ending MTC’s bankruptcy claim.

The dispute originated from a 2010 loan agreement between MTC and Prince Hussam. Following a series of arbitration proceedings under the London Court of International Arbitration rules, MTC was awarded substantial sums in 2012 and subsequent years. Despite these awards, Prince Hussam contested their validity and did not comply with related court orders. In 2018, he was found in contempt of court and sentenced to 12 months’ imprisonment in absentia for failing to discontinue proceedings in Saudi Arabia, as mandated by an anti-suit injunction from the High Court.

MTC’s bankruptcy petition, presented in June 2022, hinged on establishing Prince Hussam’s residency in England to satisfy jurisdictional requirements. Evidence presented included his historical ties to a Kensington property, York House, where he resided between 1987 and 1990, and council tax registration at this address until December 2019. However, the court found that Prince Hussam’s primary residence and business activities were centered in Saudi Arabia, with only infrequent visits to the UK. Judge Briggs noted that the Prince’s last stay at York House was a brief four-day visit in March 2016, and he had no legal or beneficial interest in the property or any other in London.

The court also addressed the council tax registration, determining that it was arranged by an associate without Prince Hussam’s knowledge, and did not constitute evidence of residency. Judge Briggs concluded that MTC failed to prove the Prince had a place of residence in England during the relevant period, leading to the dismissal of the bankruptcy petition.

Representing Prince Hussam, Partner Amrit Johal of international law firm Spencer West described the ruling as a significant and hard-fought achievement. Johal emphasized the importance of jurisdictional clarity in international disputes, particularly those involving complex insolvency issues.

This case underscores the challenges of enforcing international arbitration awards, especially when jurisdictional questions arise. The Court of Appeal’s decision highlights the necessity for petitioners to establish clear jurisdictional grounds when seeking enforcement through bankruptcy proceedings in foreign courts.

Also published on Medium.

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