Wednesday, Aug 28, 2013

DUBAI (Zawya Dow Jones)--A Dubai court has dismissed a claim by a Kuwaiti sheikh that he was owed $21.4 million for helping the Swiss bank UBS AG (UBS) get a lead advisory role on one of the Middle East's biggest-ever acquisition deals.

Sheikh Meshal Jarah Al Sabah, a member of Kuwait's royal family, alleged last year that he made an oral contract with UBS representatives in 2009 to scuttle the purchase of Kuwaiti telecom Zain's African assets by France's Vivendi. Sheikh Meshal was also to make UBS the lead investment banking advisor to Zain on the eventual sale of the assets to India's Bharti Airtel for $10.7 billion in 2010, he alleged, adding that he was to be paid 0.1% to 0.2% of the value of the deal.

But Sir David Steel, the judge in the Dubai International Financial Centre court case, said in a judgment handed down Tuesday that the sheikh was an unreliable witness, as was a former UBS employee who backed up his testimony. The sheikh's case was inconsistent and improbable, the judgment said.

Sheikh Meshal's case "derives no support from the contemporary documentation or the probabilities and is dependent on the oral evidence of two people of limited credibility," the judgment said, calling Sheikh Meshal "a man with a confused idea as to the basis of his claim."

UBS and lawyers for Sheikh Meshal declined to comment on the ruling.

The Swiss banking giant had argued that there was no oral agreement made at the 2009 meeting and that Sheikh Meshal was not entitled to any compensation. UBS already had a close relationship with Zain, the bank argued, and did not need help to secure a role in the transaction.

"The fact remains that there was no motive for the bank to seek help in its engagement as a financial adviser to Zain let alone at substantial cost," the judgment said.

UBS executives met with Sheikh Meshal and discussed employing him in the months after the Zain transaction, which the sheikh alleged was an effort to compensate him for his help on the deal. Those talks stopped in 2010, however. UBS claimed it was because Sheikh Meshal lacked the necessary experience, while Sheikh Meshal claimed he was not satisfied with a job as compensation for his help on the Zain deal.

Sheikh Meshal had argued he used his connections with prominent Zain shareholders to advance UBS's interests in the transaction, including by sidelining Vivendi and getting UBS its lead advisory role on the sale to Bharti.

Write to Asa Fitch at asa.fitch@wsj.com

Copyright (c) 2013 Dow Jones & Co.

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28-08-13 0751GMT