Attorney General of Zambia v Meer Care & Desai
| Jurisdiction | England & Wales |
| Judge | Sir Anthony Clarke MR.,May,Jacob L JJ |
| Judgment Date | 07 March 2006 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 March 2006 |
[2006] EWCA Civ 390
Court of Appeal (Civil Division)
Sir Anthony Clarke MR. May and Jacob L JJ
Chima Umezuruike (instructed by Bensons) for the appellants.
William Blair QC, Michael Sullivan and Hannah Brown (instructed by DLA Piper Rudnick Gray Cary) for the respondent.
David Head (instructed by Reynolds Porter Chamberlain) for the first defendant.
The following cases were referred to in the judgment of Sir Anthony Clarke MR:
Aratra Potato Co Ltd v Egyptian Navigation Co (The El Amria) [1981] 2 Ll Rep
119.
Donohue v Armco Inc [2002] CLC 440.
Jefferson v BhetchaWLR [1979] 1 WLR 898.
Muyldermans v BelgiumHRC (1991) 15 EHRR 204.
Owusu v JacksonECAS (Case C-281/02) [2005] 1 CLC 246.
Panton v Financial Institutions Services LtdUNK [2003] UKPC 86.
Peer International Corp v Termidor Music Publishers Ltd [2005] EWHC 1048 (Ch).
Polanski v Conde Nast Publications LtdUNK [2003] EWCA Civ 1573.
R v Panel on Takeovers and Mergers, ex parte FayedUNK [1992] BCC 524.
Stay of proceedings — Forum non conveniens — Whether it would be appropriate to stay civil proceedings in England until criminal proceedings in Zambia had been determined — Whether English proceedings could be ring fenced — Whether sufficient safeguards against failure to comply with ring fencing order — Whether defendants who could not leave Zambia because of terms of bail could have fair trial.
This was an appeal against an order of Peter Smith J refusing an application on behalf of the appellants for a stay of the action against them.
The action was brought by the Attorney General of Zambia, on behalf of the Republic of Zambia, against 20 defendants. Zambia sought to recover government money said to have been misappropriated between 1996 and 2002 during the presidency of Dr Frederick Chiluba, who was the third defendant and one of the appellants. The defendants were said to have used false contracts to justify payments from Zambian government funds to London bank accounts. The moneys were then laundered, largely through London bank accounts operated by the first and second defendants, who were English solicitors' firms, and through a company called Access Financial Services Ltd (“Access”). The causes of action pleaded were conspiracy to injure and constructive trust based on knowing receipt and dishonest assistance. Permission to serve the appellants out of the jurisdiction was given under three heads of CPR 6.20: as necessary or proper parties to the claim made against other parties within the jurisdiction; the claims being in the tort of conspiracy to injure with the damage resulting from acts committed in England; and the claim being a claim against the defendants as constructive trustees by reason of knowing receipt or dishonest assistance with the receipt or assistance having taken place in England.
The first four appellants were the subject of criminal proceedings in Zambia. They were unable to leave Zambia, having surrendered their passports as a condition of their bail. The trials against them had begun but were not continuous under Zambian procedure. The charges against them covered the same ground as the civil proceedings.
The appellants applied for a stay on three grounds: they would not have a fair trial, contrary to article 6 of the European Convention on Human Rights, because they could not travel to England for the purposes of the English proceedings; England was not a convenient forum; and the English proceedings would prejudice the appellants' ability to defend the criminal proceedings in Zambia. The judge dismissed the application. Those defendants appealed, but accepted that the civil proceedings should take place in England rather than in Zambia.
Held, dismissing the appeal:
1. As the judge had held the way to prevent the English civil proceedings from prejudicing the Zambian criminal proceedings was to ring fence the English proceedings. To that end an order would be made to ensure that the trial would be in private and that no use would be made in the criminal proceedings of any pleading, document, witness statement or oral evidence filed, disclosed, served or given in the English proceedings. The order should include an undertaking to that effect by Zambia and an undertaking to be liable for contempt for any breach of the order. There was no significant risk to the appellants if the civil proceedings continued on that basis.
2. The appellants would receive a fair trial on the basis proposed in his judgment, namely evidence either being given in Zambia and transmitted to London by videolink or being given in Zambia before an examiner, preferably the trial judge, who could travel to Zambia for the purpose. The appellants would be in a less good position to give oral instructions to their solicitors and counsel from Zambia than if they were present in England, but they would nevertheless be able to present their case. It was not an absolute right of a defendant in a civil trial to attend the trial to give evidence and give instructions.
Sir Anthony Clarke MR:
1. This is an appeal brought with the permission of Mummery LJ against an order of Peter Smith J made on 15 August 2005, refusing an application on behalf of the appellants for a stay of this action against them.
2. The action was brought by the respondent, the Attorney General of Zambia, against 20 defendants. The Attorney General expressly sues on behalf of the Republic of Zambia (“Zambia”). Zambia seeks to recover Government money said to have been misappropriated between 1996 and 2002 during the presidency of Dr Frederick Chiluba, who is the third defendant and one of the appellants. The defendants are said to have used false contracts to justify payments from Zambian Government funds to London bank accounts. The monies were then laundered, largely through London bank accounts operated by the first and second defendants, who are English solicitors' firms, and through a company called Access Financial Services Limited (“Access”). The three conspiracies alleged by Zambia can be shortly summarised in this way.
(1) The Zamtrop conspiracy, to which each appellant was a party.
An account was opened at the Zambian National Commercial Bank in London by the Zambian Security Intelligence Services. US$25 million was paid to this from the account of the Zambian Ministry of Finance at the Bank of Zambia, on the false premise that it was required to satisfy government liabilities under contracts with two United States companies. It was then disbursed to certain of the defendants.
(2) The Mofed conspiracy.
A £100,000 consultancy fee was paid by the Ministry of Finance to MISSL Associates Limited, the fourteenth defendant (“MISSL”). This was purportedly for services provided by MISSL under a management agreement in relation to a London property. The property was owned by Mofed Limited, an English company which was in turn owned by the Zambian Ministry of Finance. No consultancy services were provided. This claim concerns two of the appellants, the sixth and ninth defendants, Ms Chibanda and Mr Kabwe.
(3) The BK facility conspiracy.
This claim concerns approximately US$34 million paid by the Ministry of Finance under a purported arms contract between Zambia and Bulgaria. The money was paid to bank accounts in Belgium and Switzerland. At least part of this money was then remitted through client accounts of the London solicitors.
3. The causes of action pleaded are conspiracy to injure and constructive trust based on knowing receipt and dishonest assistance. Of the 20 defendants, five are appellants in this appeal. The appellants are these: (1) Dr Chiluba, the third defendant, President of Zambia between 1992 to 2002; (2) Ms Stella Chibanda, the sixth defendant, a senior official with the Zambian Ministry of Finance; (3) Mr Aaron Chungu, the seventh defendant, a director of Access; (4) Mr Faustin Kabwe, the ninth defendant, chief executive officer of Access; and (5) Mr Francis Kaunda, the eleventh defendant, also a director of Access.
4. All the appellants are Zambian nationals. They are domiciled in Zambia and are at present in Zambia. As I have indicated, the first and second defendants, Meer Care and Desai, and Cave Malik respectively, are English firms of solicitors resident and domiciled in England. The eighth defendant, Mr Bimal Thaker, is a partner in Cave Malik and also resident and domiciled, I think, in England. It is the claimants' case that pursuant to the Zamtrop conspiracy in particular, but also to the BK facility conspiracy, these defendants laundered a substantial amount of the misappropriated funds through Meer Care and Desai's and Cave Malik's client accounts held in London.
5. As to the third defendant, Dr Chiluba, it is said that he, his family and friends beneficially received substantial amounts of the misappropriated government monies. As to the fourth defendant, Mr Chungu, who was the Director General of the Office of the President at all material times during Dr Chiluba's presidency, from 8 December 1995 he was one of two authorised signatories and from 22 July 1999 he was the sole signatory to the Zamtrop account. He was arrested but has, it is said, fled from Zambia. He is thought to be in the Congo. He is not at present playing an active part in the action.
6. The fifth defendant, Mr Shansonga, was Zambian ambassador to the United States between 2000 and 2002. He is a Zambian national who has been permanently resident in England since 1995. He is said to have received substantial amounts of misappropriated monies and to have owned or controlled a number of companies including the thirteenth defendant, MISSL, which were, it is said, used to launder the misappropriated funds.
7. As to the sixth defendant, Ms Chibanda, it is said that it was upon her instructions that most of the payments were made by the Bank of Zambia to the Zamtrop...
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