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The DFSA succeeds in opposing Arif Naqvi’s Judicial Review Application in the DIFC Court

  • Legal Development 9 September 2021 9 September 2021
  • Middle East

  • Regulatory & Investigations

The DIFC Court’s decision arises from an application made by Arif Naqvi, the founder and former CEO of the Abraaj Group, to challenge the DFSA’s decision not to stay ongoing regulatory enforcement proceedings against Mr Naqvi, pending the outcome of ongoing criminal proceedings against him in the US. Mr Naqvi’s application to keep the DIFC Court’s decision on his judicial review private, was also rejected by the DIFC Court.

In June 2021, Mr Naqvi sought permission from the DIFC Court to commence judicial review proceedings against the DFSA. According to the DIFC Court’s judgment[1], the DFSA issued a Preliminary Notice against Mr Naqvi in which the DFSA alleged that Mr Naqvi played a central role in the events that led to the liquidation of Abraaj Investment Management Limited (AIML) and Abraaj Capital Limited (ACLD), and the resulting substantial losses suffered by investors.  The DFSA has previously sanctioned AIML and ACLD for serious breaches of DIFC legislation, including deceiving investors and the DFSA, and issued record breaking fines totalling USD 315 million against the two entities[2].

After receiving the DFSA’s Preliminary Notice, Mr Naqvi asked the DFSA to stay the DSFA regulatory enforcement proceedings against him until the ongoing criminal proceedings against him in the US had been concluded. It seems that Mr Naqvi sought to argue that if the DFSA’s regulatory enforcement proceedings were concluded before the US criminal proceedings, there was a risk that his right to a fair trial in the US would be prejudiced. The DFSA refused to stay the regulatory enforcement proceedings. Mr Naqvi therefore sought to challenge this decision by way of a judicial review in the DIFC Court.

In rejecting Mr Naqvi’s judicial review application, the DIFC Court found that “it cannot properly be said that there is a real risk of serious prejudice which might lead to injustice to him if the Regulatory Proceedings were not stayed.”[3]

Mr Naqvi subsequently made an application to the DIFC Court to keep his Judicial Review application private. Unsurprisingly, the DIFC Court rejected his privacy application too and found that the interests of justice do not require that the Court ought to decide Mr Naqvi’s judicial review application in private, or that the public should be denied access to the court record of the application[4].

As at the time of writing, a Decision Notice against Mr Naqvi has not been published on the DFSA’s website.

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