Text of arms dealer’s meeting withheld

An arms dealers’s application for release of the full text of a ‘threatening’ meeting between him and a gulf state suing him for US dollars 2.6m (£2m) has been rejected by the High Court.

US-Iranian aviation executive Farhad Azima, 78, helped train pilots for the airline of Ras-al-Khaimah [RAK], part of the United Arab Emirates.

The emirate state’s investment body, RAKIA, has accused him of fraud and claims he colluded with the disgraced former head of the agency Dr Khater Massaad.

Dr Massaad was convicted of global embezzlement and mismanagement of US Dollars 1.5 billion during his tenure as boss and jailed for 15 years in his absence in 2015.

He had left RAK in 2012 and was arrested in Saudi Arabia in 2016 on an Interpol Red Notice.

Lawyers acting on behalf of RAKIA will tell the High Court, Azima misrepresented how much money he put into the aviation venture when it was closed in 2011 and should give the funds back.

But Azima says he should not have to repay anything, because he accurately stated how much value he put into the joint venture and information implicating him in the alleged dishonesty was illegally obtained by hacking his emails and texts.

Tim Lord QC, for Azima, asked the court for a the full text of a meeting note between RAKIA and his client in July 2016 to be provided.

In the meeting US lawyer Neil Gerrard for RAKIA told Azima that unless Dr Massaad agreed to a settlement in his dispute for the company, Azima would become ‘collateral damage’.

‘Our position is, quite simply, that that there is relevant impropriety on the part of Mr Gerrard making what we say was a threat,’ said Mr Lord.

He argued that impropriety meant that the threat meant that RAKIA lost its right to ‘without prejudice privilege’ of that meeting.

The court heard that the company, contesting the claim that the collateral damage quote was a threat, had provided the paragraph containing that particular exchange to Azira’s legal team.

But his barrister argued that given that this a section was already in the public domain, revealed by Azira during legal proceedings in the US, the whole document should no longer be privileged.

But Hugh Tomlinson QC, representing RAKIA, argued that the only section of that meeting his clients were obliged to disclose was the particular section referring to the perceived threat.

‘This is a public domain allegation to which we obviously have to respond,’ he said.

‘The suggestion that we are cherry-picking the document is wholly unsustainable.’

Mr Tomlinson argued that Mr Gerrard’s comment to Azima, which he accepts was spoken, did not constitute a reason to wave the privilege of the meeting.

‘That may not have been a pleasant thing to say.

‘It may have been a threatening thing to say but it doesn’t fall into the category of unambiguous impropriety,’ said Mr Tomlinson.

‘It is the kind of rude threat made in the course of negotiations emotions run high.’

Judge Patrick McCahill, QC, rejecting Azima’s application, said: ‘The first question that I have to ask myself is was this meeting, which purported to be a without privilege meeting, was this an occasion in which the claimant acted in a way which amounted to the loss of without prejudice privilege.

‘It seems to me that [the passage] unredacted in the disclosure material doesn’t amount to the sort of behaviour which is referred to as unambiguous impropriety.’

The judge described the exchange between Gerrard and Azima as being in the context of ‘hard fought commercial litigation’.

He added he could not unredact the full text of the meeting without the consent of all involved, including RAKIA.

Earlier judge McCahill had rejected an application by Mr Lord for redactions to two further documents to be removed.

He also ordered Azima to pay £58,000 in costs, bringing the total he has spent in costs so far to £180,000.

Azima, an Iranian American businessman, was introduced to RAK in the mid-2000s and asked to set up a business to trained pilots for their airlines.

He is a multi millionaire based in Kansas City but has luxury properties around the world and runs a complex web of aviation services companies.

Over the years Azima has secured legitimate US military contracts to supply bases in Afghanistan.

Azima and Massaad were also involved in the sale of a RAKIA-owned Sheraton hotel in Tblisi, Georgia to three Iranian businessmen – Houshang Hosseinpour, Pourya Nayebi, and Houshang Farsoudeh – who were key to the Iranian Revolutionary Guard’s efforts to evade US sanctions.

In 2013, the three Iranians were the subjects of a Wall Street Journal story outlining how Iran was using Georgia to evade sanctions.

The reporter, Jay Solomon reported Azima was a key source – but he was fired from the paper over his relationship with him, which involved a potential business deal involving the surveillance of Iran using Azima’s planes based in the UAE.