A settlement being hammered out in a UK court between Ahmad Hamad Al Gosaibi and Brothers and five banks suing for US$250 million (Dh918.1m) over unpaid debts hit a snag yesterday over an "undertaking" demanded by the banks' lawyers.
The Al Gosaibi group, once one of Saudi Arabia's most powerful business empires, collapsed in 2009 leaving about $9 billion of debts.
It began the case at the High Court in London by arguing it was not liable to repay the money to the banks because it had been the victim of a fraud.
But in a dramatic turnaround on Wednesday, the group's lawyer, Ewan McQuater, admitted his client's liability to compensate the banks in respect of loan facilities he accepted were "contractually binding" on the Al Gosaibi group.
The case returned to London's High Court yesterday as lawyers debated precise terms, which must now be approved by the judge, Mr Justice Flaux.
Lawyers for HSBC said the "minute of order" should include a section making clear that the Al Gosaibi group would not dispute the issue of contractual liability in any foreign court.
The judge put this to Mr McQuater, who said he had yet to receive firm instructions on this issue from his clients.
Mr Justice Flaux said they were no doubt "still reeling" from the effects of Wednesday's development.
Mr McQuater said his clients had "admitted liability" and had agreed to pay the costs of the action. "We consent to judgment in these matters, but not in the form put to us today," he told the judge. There were, he said, still "issues" about asset disclosure and other related topics to be resolved.
The judge asked Mr McQuater if he could tell the court "on instructions" whether his clients intended to "honour the liability they have admitted and pay the debt".
Mr McQuater replied: "We admitted liability. They would like to pay, but it looks unlikely that they will be able to."
