Compagnie Noga D'Importation et D'exportation SA v Australian and New Zealand Banking Group and Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CHRISTOPHER CLARKE,MR JUSTICE DAVID STEEL,Mr Justice David Steel |
| Judgment Date | 21 February 2007 |
| Neutral Citation | [2007] EWHC 293 (Comm),[2006] EWHC 602 (Comm) |
| Docket Number | Case No: 1999 FOLIO 404,Case No: 2007 Folio No. 87 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 21 February 2007 |
[2006] EWHC 602 (Comm)
Mr Justice Christopher Clarke
Case No: 1999 FOLIO 404
IN THE HIGH COURT OF JUSTICE
COMMERCIAL COURT
QUEEN'S BENCH DIVISION
Miss Vasanti Selvaratnam QC (instructed by Mr Herzog) for the Claimants
Mr Paul Stanley (instructed by Byrne & Partners) for the Defendants
Hearing date: 17 th March 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
In this case the first claimant –Compagnie Noga D'Importation et D'Exportation S.A. ("Noga") —claims to have been defrauded of large sums of money in relation to certain Bills of Exchange ("the Ajaokuta bills"). The claim has been assigned by Noga to the second claimant Mr Nessim Gaon ("Mr Gaon"), whose family founded Noga. The Ajaokuta bills were provided in connection with the construction of a steel plant in Nigeria, and were drawn on the owners of the plant by a Russian entity, called TPE, for payment to the order of a Russian bank. Noga claims to have contracted to purchase the bills in 1992 and to have acquired a beneficial interest therein. In 1996 nine of the bills are said to have been sold by TPE to a company called Parnar Shipping Corporation for 19.06% of their face value; on sold by Parmar to a company called Mecosta Securities Inc ("Mecosta") for 26.25% of face value ; and then sold back by Mecosta to the Nigerian Government at 53%. Mecosta is beneficially owned by Abubakar Atiku Bagudu ("Mr Bagudu"), the ninth defendant, and Mohammed Sani Abacha ("Mohammed"), the tenth defendant. Noga and Mr Gaon assert a proprietary claim to the proceeds of the 1996 sale which are said to include certain Nigerian Par bonds held by some of the defendants. They also advance personal claims against some of the defendants for the value of trust property. The amount of the personal claim has up to now been quantified at US $ 700,000,000.
In 1999 a worldwide freezing injunction was granted by Timothy Walker, J against, amongst others, Mr Bagudu and Mohammed. Mr Bagudu now seeks to vary that freezing injunction so as to enable him to put up a bail bond (in the sum of CHF 5 million, circa US $ 3.8 million) for Abba Abacha ("Abba") who is Mohammed's brother. Abba has been charged with money laundering in Switzerland. According to his lawyer – Maitre Bertossa – this is not related to the Ajaokuta transaction. Mohammed and Abba Abacha are the two remaining sons of the late General Sani Abacha, the Head of State of Nigeria from November 1993 until his death on 8 th June 1998. Mr Bagudu is both a business associate of Mohammed and a friend of the Abacha family.
Abba was arrested in 2004 in Germany when trying to access bank accounts containing about $ 350,000 and extradited to Switzerland, where he is currently imprisoned. It is in order to free him from jail there that Mr Bagudu seeks a variation of the freezing order of Walker J. Since Mr Bagudu is no longer subject to a criminal investigation in Switzerland and since he intends to raise the money for the bail (which has to be provided in cash) from accounts of his at the Union Bancaire Privée in London, in respect of which no proprietary claim is made, provision of the bail monies by him is likely to be acceptable to the Swiss authorities.
Mr Paul Stanley on his behalf submits that he should be allowed to do so. He relies on the many statements of principle to the effect that it is not the function of a Mareva to prevent a defendant carrying on business in the ordinary way or interfering with the defendant's ordinary way of life; not is it its function to place the claimant in a secured position: Derby & Co Ltd v Weldon (Nos 3 and 4) [1990] 1 Ch 65,76E; Gee, Commercial Injunctions (5 th ed 2004) paragraph 3.001; and paragraph 20.042 approved in Halifax plc v Chandler [2001] EWCA Civ 1750, paras 18–20. The fact that a defendant seeks to make payments in ordinary course which, if made, will diminish the assets available to satisfy any judgment is not per se a ground of objection. Indeed, the Court will permit the payment not only of sums which are legally due but also sums which a businessman would regard it as dishonourable not to pay: The "Angel Bell" [1980] QB 65. A defendant should, he submits, only be restrained from making a payment if the payment would constitute an artificial transaction carried out in response to the litigation whose effect may be to deprive the claimant of the fruits of any judgment. Here, as he submits, Mr Bagudu would, if he was free to do so, want to provide bail for Abba Abacha even though not legally obliged to do so. What Mr Bagudu says in his witness statement is this:
"9. The Abacha family have money which is frozen throughout Europe. It would obviously be preferable if the Abacha family were able to use its own money as a bail bond. There would therefore be no need for me to stand surety. However the Abacha family money is variously frozen not only by Noga but also by national authorities and the FGN. In addition I have been informed by Abba Abacha's Swiss Counsel that he does not believe that the Investigating Magistrate would accept this money as a bail bond and that he asked the Investigating Magistrate whether he would accept the Luxembourg funds as a source of the bail bond. I am informed that the Investigating Magistrate replied that such a transfer could be the source of the extra complications because the Luxembourg funds are alleged to be of criminal origin. I do not believe that Abba Abacha has any funds to meet the bail bond apart from the frozen family funds and the relatively small assets in Germany, which have been frozen and which he was arrested trying to access.
10. I am a business associate of Mohammed Abacha and was a business associate of his late brother Ibrahim. I have a continuing relationship with Mohammed not least because of this ongoing litigation. I believe it is in my own business interests to stand surety for Abba. Culturally within Nigeria my assisting the family in this regard will be seen as the proper thing to have done and I believe my actions will assist future independent business ventures.
18. I would have had no hesitation in standing surety for Abba Abacha in the normal course. Were it not for the Claimant's freeze it is something I would have done immediately. I am in a position to help the Abacha family. It would be expected culturally that I would offer that assistance, especially as it does not involve the loss of monies. Normally I would have no hesitation in doing this. Mr Gaon has done business in Nigeria for many years and he will be well aware of the social and cultural norms in Nigeria. As Mr Gaon will know if I am unable to provide this assistance then it would be regarded in Nigeria as my not meeting my cultural responsibilities for Abba's welfare and it will therefore cause me serious embarrassment and damage in Nigeria. I believe it is unfair that the Claimants should seek to use the freeze to stop me from doing something which I would have done in the normal course."
In his witness statement of 14 th March 2006 Mr Herzog, speaking with the agreement of Mr Gaon, responds:
"15. I do not accept Mr Bagudu's contention that he will be "damaged" either from a business or social or cultural point of view if the Court does not accede to his application to vary the injunction. Firstly, the Abacha family is associated in the minds of all right thinking Nigerian people with money laundering and corruption and despoliation of Nigeria and its people on an unimaginable scale. Secondly, the fact of making this application will absolve Mr Bagudu from any criticism. The fact that the court may not accede to his application will not be seen to be his fault. Thirdly, Mr Bagudu does not appear to be acting out of sense of duty to Abba Abacha but in order to advance his own business interests with an eye to future business opportunities for himself based on fostering "good relations" with the Abachas (see paragraph 10). This is not a good reason to vary the injunction. "
Mr Stanley submits that a claimant takes his defendant, as it were, as he finds him such that, if Mr Bagudu wishes, and would, but for the freezing order, have advanced the bail monies out of his own funds, thereby putting his own monies at risk, he should be allowed to do so. He also relies on a number of other factors as supporting the appropriateness of making the variation sought:
a. The sum involved in providing the bail monies is comparatively small: it amounts to about 0.5% of Noga's claim and to less than 0.3% of the total frozen funds. It has, however to be remembered that Noga are not the only claimants since the Federal Government of Nigeria ("Nigeria") itself has a huge claim against many defendants including Mohammed and Abba.
b. The sum is not paid away for good and will only be lost if Abba refuses to return to Switzerland. Mr Bagudu will undertake to return the bail monies to the bank accounts from which they are to come, once they are due back, and to inform the examining magistrate of this undertaking.
c. There are a number of factors likely to reduce the risk of Abba not answering his bail, in that:
(i) Abba's alleged offences are, in the view of Maitre Bertossa, unlikely to carry serious punishment having regard to the fact that five other defendants who in Maitre Bertossa's (not necessarily objective) view have a greater responsibility than that which is alleged against Abba, have been fined between CHF 25,000 and CHF 1,000,000;
(ii) Mr Bagudu...
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