Abraaj founder and well-known Pakistani emerging markets magnate Arif Naqvi has vowed to defend himself in Air Arabia lawsuit while the settlement talks were underway between the two parties.
Habib Al Mulla, Naqvi’s lawyer and executive chairman of Baker McKenzie Habib Al Mulla, said that it was surprising that Air Arabia issued the lawsuit while the talks were going forward amicably and there was no need for such an action against the London-based Naqvi.
Habib Al Mulla said Air Arabia’s complaint has no basis as it is subject to the ongoing provisional liquidation and arbitration process. He said that both parties have been in regular negotiations to find a way forward for an “amicable” settlement.
“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,” Al Mulla said.
“Negotiations between the parties have been regularly taking place in order to reach an amicable settlement.”
Legal action is also surprising because Air Arabia’s claim, which centers on the loan that it gave to Abraaj, is related to the company and not to its founder, the lawyer stressed in a statement.
“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,” Al Mulla said. “The claim in question is part of the provisional liquidation proceedings that is taking place in Cayman. The claim is also governed by an international arbitration clause and Air Arabia has already filed a request for arbitration.”
The lawyer said that Air Arabia’s move to file a lawsuit against his client indicates “bad faith” on the airline’s part.
“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,” he said. “This is an abuse of the legal system and shows bad faith on part of Air Arabia.”
Naqvi’s legal team does not have access to the complaint file and is therefore not aware of what charges are brought against him but will try to obtain a copy, Al Mulla said.
On Thursday, Air Arabia said it has begun legal proceedings against Abraaj founder Arif Naqvi in a court in Sharjah, the latest challenge for the founder of the collapsed private equity firm.
Air Arabia disclosed earlier this year it had an overall exposure of $336 million to Dubai-based Abraaj, which filed for provisional liquidation in the Cayman Islands earlier this year.
Air Arabia said in a stock exchange filing that it has filed a “misdemeanour” case against Naqvi in Sharjah, one of the seven emirates in the United Arab Emirates (UAE). The filing did not provide more details.
Naqvi, who is outside the UAE, was not immediately available to comment. His spokespeople did not immediately respond to inquiries.
Naqvi is the single biggest shareholder of Abraaj Holdings, which owned the firm’s investment management business now overseen by provisional liquidators.
Naqvi earlier this year had faced a criminal case from a local businessman against a bounced cheque, but the case was settled between the two parties. Abraaj is also facing a regulatory probe in Dubai.
