British court rejects immunity claim by two Saudi princes

LONDON Tue Mar 19, 2013 4:45pm GMT

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LONDON (Reuters) - A British court ruled on Tuesday that two Saudi princes involved in litigation in London over a business dispute did not have immunity from being sued, a new blow to the royal pair after they failed in an attempt to have the case heard in secret.

The elderly Prince Mishal bin Abdulaziz al Saud, one of King Abdullah's many brothers, and his son Prince Abdulaziz bin Mishal, had argued that they had immunity as members of the monarch's household.

But in a 45-page ruling that delved into Saudi royal genealogy, judge Geoffrey Vos said the two princes did not meet the requirements of Britain's State Immunity Act.

The princes plan to appeal against Vos's judgment.

The litigation, which has been going through British courts since December 2011, stems from sales in 2010 and 2011 of shares in Fi Call Ltd, a company jointly owned by Prince Abdulaziz and Jordanian businessman Faisal Almhairat. The pair have fallen out and accuse each other of serious wrongdoing.

Details of the allegations have so far remained secret because the prince and his father have argued that it would be damaging to Saudi Arabia's relations with Britain and the United States to air them in open court.

They have also asserted that Prince Abdulaziz would be "at risk of serious personal injury or death from reprisals" if details of one of the disputed transactions were made public.

These arguments were rejected on February 13 by Judge Paul Morgan, who said they came "nowhere near being clear and cogent evidence" to justify holding court hearings behind closed doors.

However, the details of the case remain secret pending an appeal by the princes against Morgan's ruling.

The secrecy and immunity arguments have been dealt with in two separate strands of hearings ahead of the main trial, which is scheduled for January 2014.

It is not the first time that the threat of damaging relations with Saudi Arabia has played a part in legal proceedings in Britain.

A corruption investigation into a huge arms deal between British defence contractor BAE Systems and the kingdom was dropped in 2006, officially because of concerns that it could harm Britain's security interests.

But there was widespread criticism at the time from anti-corruption groups and British media that the true motivation for shelving the case was to protect commercial interests.

(Reporting by Estelle Shirbon; Editing by Alison Williams)

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