Haddad v Rostamani - Appeal of Bankruptcy Order

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  Haddad   v Rostamani & Ors [2026] EWHC 734 (Ch) (25 March 2026)

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[2026] EWHC 734 (Ch) | | |
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| | | Neutral Citation Number: [2026] EWHC 734 (Ch) |
| | | Case No: CH-2025-000351 |
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD)
IN THE MATTER OF MOHAMED HASSAN EL HADDAD
AND IN THE MATTER OF THE INSOLVENCY ACT 1986

| | | The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL |
| | | 25th March 2026 |
B e f o r e :

MRS. JUSTICE JOANNA SMITH DBE

Between:
| | MOHAMED HASSAN EL HADDAD | Applicant |
| | - and - | |
| | (1) KHULOOD ABDULLA HASSAN AL ROSTAMANI
(2) HASSAN ABDULLA HASSAN AL ROSTAMANI
(3) MARWAN ABDULLA HASSAN AL ROSTAMANI
(4) WAFA ABDULLA HASSAN AL ROSTAMANI
(5) BADREYA ABDULLA HASSAN AL ROSTAMANI
(6) HASNA ABDULLA HASSAN AL ROSTAMANI
(7) NAJLA ABDULLA HASSAN AL ROSTAMANI | Respondents |

Transcript of the Stenograph Notes of Marten Walsh Cherer Ltd.,
2nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.
Telephone No: 020 7067 2900. DX 410 LDE
Email: info@martenwalshcherer.com
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____________________ THE APPLICANT appeared In Person
MR. RYAN PERKINS (instructed by Allen Overy Shearman Sterling LLP) for the Respondents

HTML VERSION OF APPROVED JUDGMENT ____________________

Crown Copyright ©

1. MRS. JUSTICE JOANNA SMITH DBE:
3. This is the hearing of an oral renewal application by Dr.?Haddad for permission to appeal a Bankruptcy Order made by ICC Judge?Greenwood (" the Judge ") on 31st?July 2025. Permission to appeal was refused on the papers by Leech?J on 11th?March 2026.
5. Dr. Haddad's Grounds of Appeal initially numbered eight, and permission to appeal was refused on all of those grounds by Leech?J. Since then, however, Dr.?Haddad has reduced his Grounds of Appeal and refined them. He has abandoned Grounds 3-8, as he confirmed during the course of his oral submissions today, and the court is most grateful to him for having carried out that refinement. Dr.?Haddad continues to maintain his original Grounds 1 and 2, albeit that he sets these out in four newly-formulated Grounds identified in his skeleton argument for today's hearing. In doing so, he also addresses a point raised by Leech?J in paragraph 20 of his reasons for refusing permission to appeal.
7. Dr.?Haddad has represented himself at the hearing today with considerable courtesy and circumspection, given the limited time available. For that I am most grateful to him. The respondents, who have been ably represented today by Mr.?Perkins, take no point on the recasting of the Grounds of Appeal and have helpfully addressed them in the order in which they were addressed by Dr.?Haddad in his submissions. I shall do the same.
9. By way of preliminary observation, however, I should say that in advance of this hearing, I had read all of the documents that were identified in the reading list provided by the respondents. I have also read with considerable care the skeleton arguments served by the parties.
11. Given the time available for today's hearing, I asked Dr.?Haddad, during the course of his submissions, to focus only on the central points that he relied upon in support of his four Grounds of Appeal and he did that with great care. His skeleton argument is long and detailed and it is impossible for me to address every point raised in it in this judgment. However I have borne in mind all of the points he has made. For the purposes of my decision, I shall focus on the essential points canvassed by Dr Haddad at this hearing. In so doing (and where necessary) I shall adopt the defined terms and abbreviations used by the Judge in his judgment.
13. Ground 4
14. The essence of Ground?4 is set out in paragraph 221 of Dr. Haddad's skeleton argument. He contends that:
16. "... the Applicant has a real prospect of showing that the bankruptcy court below erred in treating the costs orders as uncontrovertible [sic] proof of debt without properly examining the fraud case that impeaches the issue-estoppel platform from which they arose. The fraud case is substantial, supported by new evidence obtained after the 2021 Judgment, and goes to the very foundation of the petition debt."
17. It is common ground that the Bankruptcy Court has jurisdiction to look behind a judgment debt if it has been obtained by fraud. But, to my mind, there is a significant difficulty with Dr. Haddad's submissions that the Judge should have taken this course. I do not consider there to be any real prospect of persuading the appeal court that the three Costs Orders which form the basis for the Bankruptcy Order were obtained by fraud or that the Judge?should have sought to look behind those orders.
19. The relevant Costs Orders made in the Partnership Proceedings are as follows:
21. a) first, an order to pay ?1,377,565 (on account of costs on the indemnity basis, the remainder to be assessed if not agreed), made by Zacaroli?J on 8th?November 2021, in the Partnership Proceedings;
22. b) second, an order to pay ?21,000 (on account of costs on the indemnity basis, the remainder to be assessed if not agreed) made by Zacaroli?J on 10th?November 2021, following an unsuccessful application by Dr Haddad for Zacaroli?J to recuse himself in the Partnership Proceedings; and
23. c) third, an order to pay ?80,000 (summarily assessed on the indemnity basis) made by Males?LJ?on 18th July 2022 when he dismissed applications for permission to appeal?against Zacaroli?J's orders.
24. In respect of the first Costs Order, which is by far and away the largest, I understand Dr.?Haddad to have accepted at the time that he had failed to give full and frank disclosure, which Zacaroli J held was a deliberate failure. It appears to me that it was inevitable in those circumstances that the costs order would be made and I cannot see how it could be said to have been procured by fraud. Dr.?Haddad has presented this court with no coherent case that it was procured by fraud. There is also no coherent case presented as to why the Second and Third Costs Orders were procured by fraud.
26. Accordingly, the Costs Orders were valid and I can see no prospect that they are susceptible to being set aside on grounds of fraud or otherwise. The Judge considered the allegation that the Costs Orders were procured by fraud and rejected it for reasons he sets out in his judgment.
28. None the less, Dr.?Haddad has asserted at this hearing that fresh evidence is now available which the court should take into account in considering this question. He identifies in particular an expert report from a UAE law expert, Dr.?Khrais.
30. However, as the respondents illustrated during the course of Mr.?Perkins's submissions, that report was considered by Fancourt?J in the Fraud Proceedings. Specifically Fancourt J refers in his judgment (striking out the Fraud Proceedings as against the Lawyer Defendants) that, following Zacaroli J's decision in the Partnership Proceedings, the Court of Appeal had dealt with an application to rely on new evidence, including the report of Dr Khrais. Fancourt J records in his judgment that the report was to the effect that previous expert evidence had deceived the court. At [145]-[146] he refers to the evidence in the new report in the context of an allegation made in the Partnership Proceedings and goes on to say that the allegation that it is intended to support "is hopeless and based on a misconception of the basis of the argument that was advanced on behalf of the First to Eighth Defendants" in the Partnership Proceedings.
32. Dr.?Haddad makes an entirely legitimate point that the Fraud Proceedings were separate proceedings and did not involve the parties to the petition and the respondents accept that the observations made by Fancourt?J in his judgment were made in the context of a different claim. None the less, what is clear from those observations is that the report from Dr Khrais is not new evidence; Dr Haddad has previously attempted to introduce it into an appeal in the Partnership Proceedings and it was before Fancourt J in the Fraud Proceedings. I agree with the respondents that it is very difficult to see why the Bankruptcy Court, or indeed the appeal court, would come to a different view as to the relevance of this evidence.
34. As Mr.?Perkins points out, it is not in dispute that the Bankruptcy Court had the discretion to make the Bankruptcy Order. The question for the Judge was whether he should exercise his discretion to look behind the costs orders in the Partnership Proceedings.
36. In my judgment, no solid ground has been presented by Dr Haddad, whether in his oral submissions or in his skeleton argument, as to why the Judge should have exercised that discretion and, as I have said, no coherent case on fraud in relation to the Costs Orders has been advanced. In those circumstances, I consider that this ground of appeal has no real prospect of success.
38. Ground 1A
39. At its heart, Ground 1A asserts that an error was made by ICC Judge?Mullen in his refusal to set aside the statutory Demand dated 2 February 2023 claiming payment of the sums due under the Costs Orders. Specifically Dr Haddad contends that his consideration of the existence of cross-claims was flawed, essentially because he did not consider cross-claims which had been made in the KBD Proceedings, brought by Dr.?Haddad against the first respondent only. Dr Haddad says that the Judge's finding that he did not have a counterclaim which exceeded the Petition debt was therefore also wrong and that the Judge was wrong to apply the Turner principle.
41. However, as the respondents point out, Dr. Haddad's skeleton argument on Ground?1A does not appear to tell the full story. It suggests (wrongly) that the KBD Proceedings were "not active" at the time of the hearing before ICC Judge Mullen, that it was not yet properly constituted and that no active proceedings were before the court.
43. In fact, in evidence filed in support of his application to set aside the Statutory Demand, Dr Haddad expressly referred to the KBD Proceedings and set out an extract from his claim together with an accurate summary. He also exhibited the full Particulars of Claim. Thus ICC Judge?Mullen was well aware of the existence of those proceedings and he dealt with the claims they raised (which he rejected as giving rise to legitimate cross-claims) in his judgment. Permission to appeal that decision was refused by ICC?Judge?Mullen himself and, subsequently, by Rajah?J who refused permission under an ECRO to apply to the Court of Appeal. In those circumstances, it was not open to the Judge on the hearing of the Petition to revisit the matter. That would have been a contravention of the Turner principle. It would only have been possible to revisit the matter if a material change of circumstances could be identified. The existence of the claims in the KBD Proceedings did not amount to a material change of circumstances; the detail of those claims had been before ICC Judge Mullen and he had considered them.
45. In his skeleton argument and in oral submissions, Dr.?Haddad refers to what he calls the Profit Letter, which he says was "discovered in June 2023", by way of an example of a material change in circumstances. However, it is clear from his own heading in the skeleton that this was discovered in 2023 (the year before the hearing before ICC Judge Mullen) and it was in any event relied upon in the evidence before ICC Judge?Mullen. If Dr Haddad had wished to contend that it was not properly taken into account by ICC Judge Mullen at the time he could have sought to appeal on that basis. However, permission to appeal was refused and there is no scope now to rely upon the Profit Letter as a material change of circumstances.
47. In my judgment, there is no real prospect that Ground 1A could succeed before an appeal court.
49. Ground 2
50. This Ground is set out at paragraphs 165-166, in summary, of Dr Haddad's skeleton argument. In essence, the question raised is whether the Judge and (also) Leech?J erred in the approach they took to the position of the 2nd-7th respondents, who are not parties to the KBD Proceedings. Essentially they rejected reliance on the cross-claims in those proceedings as against the 2 nd -7 th respondents in circumstances where they were not parties to the KBD Proceedings and there was no adequate basis for the suggestion that there were claims against them.
52. It does not appear to be controversial that there is no mutuality of claims and that the cross-claims against the first respondent do not amount to a defence to the Petition brought by the 2nd-7th respondents.
54. However, Dr.?Haddad says that there is a claim he could make against the 2nd-7th respondents. However, as was pointed out by Mr.?Perkins, this is exactly the point he made before the Judge, who dismissed it. He dealt with it at paragraphs 31-32 of his judgment, where he found, amongst other things, that the way in which any such claim had been articulated was "wholly inadequate as a basis upon which to conclude that Dr.?Haddad had a claim against the other Petitioners". He said that:
56. "[w]hilst Dr.?Haddad outlined the possibility of the other Petitioners' indirect stake or involvement in KMP Saudi, he failed to explain the nature of his alleged cause of action against them, or to articulate its content and he failed completely to refer to any evidence of their actual participation in alleged wrongdoing - the allegations were no more than bare assertions; no draft particulars of claim were produced. Moreover, the KBD Proceedings began against Ms.?Khulood in July 2023; in the two years since then, Dr.?Haddad has not attempted to join the other Petitioners, despite having otherwise made a plethora of applications of one sort or another; his Notice of Opposition referred only to the claim pursued against Ms.?Khulood".
57. He went on to say that, in those circumstances, he was not persuaded that there was any basis for a claim against the 2nd-7th Petitioners
59. There is nothing of any more substance presented to this court today. Dr.?Haddad has still not articulated any claims that he could make against the 2nd-7th respondents. Thus, although, as the respondents accept, the merits threshold is low, it has not been reached and there is no real prospect that the appeal court will take a different view.
61. Grounds?3 and 1B
62. I will take these Grounds together as they are concerned with the same issue.
64. In paragraph 155 and following of his skeleton argument, Dr.?Haddad deals with a point that was raised by Leech?J at paragraph 20 of his reasons for refusing permission to appeal. In that paragraph, he said this:
66. "I make it clear that it is not a matter for this Court to decide whether the Appellant should be entitled to defend those applications. It may be that the Appellant will be able to persuade the trustee to defend the applications or that he will be able to take an assignment of the claims in the KBD Proceedings before the final determination of the First Respondent's applications. But if the Appellant has been unable to persuade the trustee to defend the applications and there has been no determination of them on the merits, that is also something which the Court can consider on an oral renewal of the PTA Application".
67. Dr.?Haddad contends that the contingency referred to by Leech J has now arisen, and he points to a letter from the Trustee of 3rd?March 20206 and also to a letter from the Trustee of 12th?March 2026 to the court. He contends that the whole purpose of the Bankruptcy Order was to stifle the KBD Proceedings and he says this was not a legitimate purpose. This he says means that there is a real prospect of success on appeal, alternatively that it gives rise to a compelling reason for the appeal to be heard.
69. In the 26 March letter, the Trustee provides various information as to the current status of the administration of the bankruptcy estate.
71. In relation to the assets of the bankruptcy, the Trustee says that she is considering how to obtain the necessary advice in relation to the KBD Proceedings, for the purposes of considering the appropriate steps to take in relation to this asset, which may include adopting the proceedings, assigning the cause of action and/or disclaiming the cause of action, and that she is also investigating the potential for the sale or realisation of land in the Kingdom of Saudi Arabia. She refers to having proofs of debt. She goes on to deal with the impact of the stay on the administration and notes that whilst it is true that the bankruptcy estate is currently without funds, the Trustee has not yet exhausted efforts to obtain suitable funding. She finishes by saying that she does not intend to attend the hearing.
73. The problem with Dr Haddad's submissions on these Grounds is that the Judge made clear findings that the Petitioning creditors were not acting so as to stifle the claim and that the Bankruptcy estate has value. This is not a case where Dr Haddad is without assets or interests that could be realised. Furthermore, the Costs Orders forming the basis for the Bankruptcy Order have been owed for a considerable period of time. The Judge accepted evidence from the Petitioners that they wished to recover those costs. I accept the respondents' submissions that there is no real prospect of any challenge to the Judge's findings in this regard.
75. As the respondents point out, it is not uncommon to have a situation where a Judgment Debtor is indebted under a costs order, but seeks to litigate in separate proceedings.
77. The Judge addressed this potential in his judgment, at paragraphs 45-46, referring in particular to the authority of Shepherd v Legal Services Commission [2003] BPIR 140, a case which he said bore similarity to that presently before the court. I will not read out what he says at paragraphs 45-46, but it does seem to me, as the respondents contend, that what he says there has a significant bearing on the similar facts in this case.
79. The effect of the Bankruptcy Order is to remove assets from the bankrupt's control. That is, as the respondents' contend, a necessary and intended effect of the statutory scheme. It is for the Trustee to decide what action to take thereafter. Where this is an inherent feature of the statutory scheme I cannot see that it gives rise to any abuse. I also cannot see that it is a compelling reason to grant permission to appeal.
81. This is not a case, as Mr.?Perkins correctly pointed out, where there is, for example, a novel point of law which might be of public importance, which the Court of Appeal should deal with, or a case where there is an action that affects a large range of interests such that a compelling reason to grant permission to appeal can be made out.
83. I consider that, notwithstanding the observations of Leech J (and having given careful consideration to the points he has made) where there is no real prospect of success on Dr Haddad's grounds of appeal, the fact that the Trustee may now choose not to pursue the KBD Proceedings (or as Dr Haddad put it, may "let it burn") is not a matter which gives rise to a compelling reason for this matter to be heard on appeal.
85. Overall, therefore, and for all of those reasons, which I have dealt with in brief, I am going to refuse permission to appeal on each of the four Grounds.
87. Conclusion
88. It is clear from at least one of the judgments in the bundle, that it has been said before that Dr Haddad has refused to take?"No" for an answer. He has continued to take that approach and he has fought his case to this point (as he was entitled to do) but, in my judgment, it is not in the interests of justice, where he has no real prospect of success on his Grounds of Appeal, to permit this case to go any further.
90. (For continuation of proceedings: please see separate transcript)
91. In the circumstances of this case, where I have found the submissions of the respondent to be extremely helpful and where they have helped to focus in on the key issues arising in relation to each of the grounds of appeal and have enabled this matter to be dealt with swiftly and efficiently and, I should say, entirely fairly in my judgment, I consider that it is appropriate to make the order that the respondents invite me to make, namely that their costs should be paid as expenses in the Bankruptcy.
93. (For continuation of proceedings: please see separate transcript)
94. - - - - - - - - - - -

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