A courtroom showdown is looming in Britain between international banks and the al Gosaibi family of Saudi Arabia.
A case brought by six banking groups opens in London's high court today against Ahmad Hamad Al Gosaibi and Brothers, the family partnership that runs the conglomerate's trading empire in Saudi Arabia.
The banks are seeking the repayment of US$250 million (Dh918.2m) in loans and interest they claim is owed by Al Gosaibi since the company defaulted on liabilities in 2009.
The alleged liabilities are the tip of an iceberg of debt confronting Al Gosaibi. In total, the partnership owes about $9 billion to more than 100 Saudi and international banks.
The company argues it is not liable for the debts because they were the result of alleged fraud, theft and forgery by Maan al Sanea, the Kuwaiti-born entrepreneur who oversaw the family's financial services business until the default.
Mr al Sanea has consistently denied any wrongdoing, and is not a party to the London action.
The most significant claim is by HSBC, which is seeking repayment of $86m for its Asian and Middle East business units. Mr al Sanea was a 3 per cent shareholder in HSBC at the time of the default.
The Arab Banking Corporation, based in Bahrain, is claiming $74.7m in its own right and $30m via its Sharia-compliant business, ABC Islamic Bank.
British Arab Commercial Bank is asking for repayment of almost $19m, and a unit of the French banking giant Credit Agricole is seeking $5.8m.
The UK case is the first time in the two-year old dispute a judge will hear evidence and decide liability. Other actions brought in Europe, the US and the Cayman Islands have so far not produced conclusive rulings in the affair. The trial is scheduled to last seven weeks, and will hear evidence from members of the al Gosaibi family, as well as accounting, banking and handwriting experts.
Partners of Al Gosaibi are still banned from travelling by the Saudi authorities, but the London court is considering a plan to hear evidence via a video connection from Al Khobar in Saudi Arabia, the location of the family's home and business headquarters.
A committee appointed by King Abdullah recently decreed Al Gosaibi and Mr al Sanea should resolve their liabilities to Saudi banks as a matter of priority, but said nothing about international creditors.
None of the parties involved would comment ahead of the opening of the London proceedings.
