Lawyer to "vigorously defend" Abraaj founder against Air Arabia lawsuit
Dubai - Air Arabia announced last week that it had filed a misdemeanour case against Mr Naqvi.
By Waheed Abbas
Published: Sun 20 Jan 2019, 5:21 PM
Abraaj Holdings' lawyer will "vigorously" defend its founder, Arif Naqvi against the case filed by Sharjah-based carrier Air Arabia against the private equity firm and its founder.
Air Arabia announced last week that it had filed a misdemeanour case against Mr Naqvi. In July 2018, Air Arabia announced a $336 million (Dh1.23 billion) exposure to Abraaj and funds managed by the company.
However, it stressed that this issue "has no significant impact on the carrier's business or on its operations."
Dr. Habib Al Mulla, Executive chairman and managing partner, Baker McKenzie Habib Al Mulla, who is representing the group and its founder said the lawsuit by Air Arabia was surprising as negotiations were underway between the two parties for an amicable settlement. He also stated that Air Arabia's move "is an abuse of legal system and shows bad faith on part of Air Arabia."
"We are surprised by the timing of this action given that negotiations between the parties have been regularly taking place in order to reach an amicable settlement. Furthermore, the liability in question is Abraaj's and not Mr. Naqvi's. Mr. Naqvi was merely a guarantor. His actions in this matter were for the benefit of Abraaj," Dr. Al Mulla said in a statement to Khaleej Times.
He said the claim in question is part of the provisional liquidation proceedings that is taking place in the Cayman Islands. The claim is also governed by an international arbitration clause and Air Arabia has already filed a request.
Arif Naqvi, who is living outside the UAE since the crisis began at Abraaj, is the largest shareholder of Abraaj Group. Abraaj Group is currently undergoing a court-supervised restructuring after it was accused of fund mismanagement amounting to $1 billion. In 2018, Naqvi has faced criminal cases from Hamid Jafar, founder of Crescent Group, for bounced cheques which were resolved in an out-of-course settlement. In addition, Abraaj is also facing a regulatory probe in Dubai.
"Therefore, we are surprised by Air Arabia's action to revert to criminal proceedings. This is obviously an attempt to exercise pressure in order to achieve gains that it is not entitled to under the provisional liquidation proceedings or the international arbitration," Dr. Al Mulla said.
"This is an abuse of the legal system and shows bad faith on part of Air Arabia. We will vigorously defend Mr. Naqvi and plan to submit a full defense to the prosecution to prove that this criminal complaint has no substance whatsoever," he added.