A Dubai court has dismissed a Kuwaiti sheikh’s $21.4 million claim against UBS in which he alleged the Swiss bank failed to pay him for helping it become lead arranger on a $9 billion asset sale by Kuwaiti telecom operator Zain.
The case highlighted the complexity of doing business in the Gulf, where personal connections to high-ranking officials or executives are often valued in deal making.
But in a damning written verdict, Justice Sir David Steel described Sheikh Meshal – a member of Kuwait’s ruling family – as a witness in whose evidence it was “difficult to have confidence … his evidence in some respects did not just appear evasive but was demonstrably unreliable”.
Sheikh Meshal had claimed UBS recruited him with a verbal contract in July 2009 to help scupper French media conglomerate Vivendi’s (VIV.PA) bid to acquire Zain’s operations in about 15 African countries. UBS denied the allegation.
Vivendi called off the talks later that month. India’s Bharti Airtel subsequently bought Zain’s African assets for $9 billion in 2010. UBS advised Zain on the deal.
A written mandate from February 2010 detailing UBS’s role – included in the Dubai court’s judgment – showed the bank would be paid $22.5 million in fees should a deal be concluded.
Justice Steel said he accepted the evidence of former Zain chief executive Saad al-Barrak that Zain had a long-standing relationship with UBS and had sought its advice from the outset.
“There was no motive for the bank to seek help in its engagement as financial advisor to Zain let alone at substantial financial cost,” Justice Steel wrote.
“The claimant has fallen well short of establishing that any oral agreement was entered into … let alone on the terms alleged. Accordingly the claim must fail.”
A Zain spokesman said the company “was in no position to comment on court cases involving third parties”.
UBS declined to comment, while Sheikh Meshal’s lawyers Lutfi & Co were not immediately available for comment.-Reuters
