By Estelle Shirbon
LONDON (Reuters) - A billionaire Saudi prince fighting a lawsuit connected to the sale of a private jet to Libya's Muammar Gaddafi was branded "capricious" and "a debt-dodger" in a London court on Tuesday.
Prince Alwaleed bin Talal, a nephew of Saudi Arabia's King Abdullah, was in the second day of a cross-examination that is likely to be one of the most hostile public grillings inflicted on a senior Saudi royal.
At number 26 on the Forbes World ranking of billionaires, Prince Alwaleed owns large stakes in Citigroup, News Corp and Apple Inc, among other companies, through his Kingdom Holding Company.
The prince is being sued by Daad Sharab, a Jordanian businesswoman who says she was not paid a promised $10 million commission for brokering the sale of the jet to Gaddafi, which was completed in 2006 for $120 million after years of delays.
Prince Alwaleed says he never agreed the figure of $10 million and in the end decided to pay Sharab nothing because she had switched her allegiance to the Libyans during the long and tortuous sale process.
"In the Arab world stabbing in the back is very important and rules out any agreement," the prince told the High Court.
He repeated time and again that the agreement all along had been that Sharab would receive an amount that would be decided "at my discretion", and she overstepped the mark by asking for $10 million.
"She did not respect the fact that it was my discretion ... Discretion means I have all the right to do whatever I want," he said. "When she came with 10 (million dollars) I went to zero."
These comments prompted Sharab's lawyer, Clive Freedman, to ask the prince whether his discretion was supposed to be exercised reasonably, or "like the discretion of an absolute ruler who follows his every whim".
Freedman accused the prince of making up his evidence as he went along and of being a "debt-dodger" who had refused to pay Sharab for years of work on his behalf, giving no reason until forced to by litigation.
The prince said he did not lie, adding that Sharab had understood all along that she would be paid at his discretion and no one had forced her to work for him on those terms.
But Judge Peter Smith expressed surprised at the prince's defense. "Nobody is going to do business with you if it relies on your discretion and your discretion becomes capricious," the judge told the prince.
"Your case then is that your discretion entitles you to not pay her anything? I thought you were an honorable man and you wouldn't take advantage of people in this way," he said.
The judge said that it would be better for the parties to settle the case out of court, warning that one or both parties were at risk of being branded liars in his judgment. "I cannot believe that's in the interest of either of you," he said.
"I despair, frankly, that two people who were obviously friends and business acquaintances are driven to a situation where for six days (in court) each one has called the other a liar."
The bruising hearing will have given the prince a flavor of the British legal system ahead of a separate defamation case he has brought in London against the U.S. magazine Forbes.
The prince has fallen out with the magazine, which values his fortune at $20 billion. He says it is closer to $30 billion and the magazine uses valuation methods that are unfair to Middle Eastern investors.
(Editing by Mark Heinrich)