LONDON: The lawyer of Abraaj founder and well-known Pakistani emerging markets magnate, Arif Naqvi, has vowed to strongly defend him against Air Arabia's lawsuit against his client which has been issued while the settlement talks were underway between the two parties.
Habib Al Mulla, 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," Mr Al Mulla said. "Negotiations between the parties have been regularly taking place in order to reach an amicable settlement," Al Mulla said.
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."
Mr Naqvi's legal team does not have access to the complaint file and is therefore not aware of what charges are brought against Mr Naqvi but will try to obtain a copy, Mr Al Mulla said. Air Arabia filed a misdemeanor case against the Pakistani business mogul in relation to the collapse of the Dubai-based private equity firm. The Sharjah-based airline's legal action followed arbitration proceedings in July.
Abraaj Group, once the Middle East's biggest private equity firm, which managed about $14bn at its peak, collapsed last year after allegations of misuse of investors' funds but there is no personal allegation of ant wrongdoing against Arif Naqvi. Lawyers of Arif Naqvi have said that Abraaj is undergoing a court-supervised restructuring in the Cayman Islands and trying to sell off parts of the business to pay off more than $1bn in debt.
In a statement, Air Arabia said the court filing follows earlier arbitration proceedings that took place in July. “Air Arabia has investments outstanding with private equity firm Abraaj,” the statement said. In June, Air Arabia disclosed that it had an exposure of $336 million to Abraaj through fund portfolios and short-term loans.
