Claimants request more time in Deloitte Middle East legal case

DIFC Courts must decide whether it can hear Nest Investment and others’ allegations against a ‘Big Four’ regional offshoot
Claimants request more time in Deloitte Middle East legal case
By Sarah Townsend
Thu 09 Feb 2017 05:21 PM

Dubai International Financial Centre (DIFC) Courts has granted a Dubai and Lebanon-based investment firm an extension to file evidence in a case against the regional offshoot of accountancy firm Deloitte.

According to a claim lodged in DIFC Courts in July, Nest Investment (Holding), along with others including Abu Nahl, the Jordanian Expatriates Investment Holding Company and Qatar’s Sheikh Nasser Bin Ali Bin Saud Al Thani, are suing Deloitte & Touche (Middle East) and its managing partner Joseph El Fadl for alleged deceit or negligence.

The latest ruling from DIFC Courts, on January 3, states that the claimants have until February 20 to file evidence in the case. The first hearing is to establish whether DIFC Courts is the correct jurisdiction in which to examine the case.

The claimants argue that DTME failed in an alleged duty as auditor since 1995 to Lebanese Canadian Bank (LCB) – a bank identified by the US government as a “financial institution of primary money laundering concern” following an investigation in 2011.

The claimants allege that DTME either deceitfully or negligently failed to highlight financial and anti-money laundering concerns regarding LCB’s accounts, and that this caused them as investors in LCB with a total 24 percent stake to suffer losses of $128 million, according to particulars of claim seen by Arabian Business after the case was filed last summer.

However, it is understood that the parties are disputing the question of where the case should be heard. The first hearing at DIFC Courts is intended to establish the most appropriate jurisdiction in which to air the proceedings; otherwise, the case will be dismissed.

The DIFC Courts ruling on January 3 said: “It is hereby ordered by consent that: 1) the deadline for the Claimants to file evidence in answer to the Second Defendant’s Application Notice CFI-027-2016/1 dated 12 December 2016 contesting the jurisdiction of the DIFC Courts be extended to 4pm on Monday 20 February 2016, and, 2) there be no order as to costs.

Under DIFC Courts regulations, DTME is not obliged to file a counter claim until the jurisdiction question is resolved.

A representative for the claimants declined to provide an official statement.

DTME also declined to comment on the specifics of the claim. It directed Arabian Business to a statement it had provided last year when this publication first reported on the case.

The statement from DTME said: “We are aware of a case filed by a group of claimants representing minority shareholders of the Lebanese Canadian Bank (the Bank) against Deloitte & Touche (M.E.).

“Deloitte & Touche (M.E.) hereby confirms that it has never entered into any contractual services relationship with this group of claimants, and that this claim against it is frivolous and baseless and if necessary we will take legal measures as may be appropriate.

“Deloitte & Touche (M.E.) is confident that its professional services to clients are of the highest standards of quality, integrity and professionalism, and are always in accordance with Deloitte’s professional standards as well as international standards and in line with the prevailing and relevant regulatory requirements.

“Confidentiality obligations towards the Bank and the relevant regulator prevent Deloitte & Touche (M.E.) from further comment on the matter.”

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