Kensington International Ltd v Republic of Congo
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE GROSS,The Hon Mr Justice Gross |
| Judgment Date | 13 July 2007 |
| Neutral Citation | [2007] EWHC 1632 (Comm) |
| Docket Number | Case No: 2002–1088; 1282; 1281; 1357 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 July 2007 |
[2007] EWHC 1632 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
COMMERCIAL COURT
The Hon Mr Justice Gross
Case No: 2002–1088; 1282; 1281; 1357
Jonathan Nash QC & Henry Knox (instructed by Dechert) for the Claimant
Jeffrey Gruder QC & Phillipa Hopkins (instructed by Ince & Co) for the Defendant
Hearing dates: 2.2.07; 23.2.07
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.
INTRODUCTION
The Claimant (“Kensington”) applies for orders requiring the four Third Parties (“VS”, “VB”, together “the companies”, “Mr. Chautard” and “Mr. Lambroza”) to provide information and disclose documents which, it alleges, will assist it in enforcing its judgments against the Defendant (“the Congo”). The Third Parties resist the application essentially on the sole ground that they wish to claim the privilege against self-incrimination.
Kensington is a judgment creditor of the Congo under four judgments of this Court. The amount presently outstanding is said to be some US$92 million. It is Kensington's case that although the Congo has the financial resources to pay its debts, it has sought to evade its obligations by complex, varied and dishonest schemes, all as now recorded in a number of decisions of this Court.
The Vitol Group (“Vitol” or “the Group”) is a major oil trading group, with, on the uncontradicted evidence before me, a close and long-established relationship with the Congo. VB and VS are, put colloquially, English companies; they are companies incorporated according to the law of England and Wales. They provide, respectively, broking (or trading) and financial, advisory, legal, claims and shipping services to the Group. It is admitted that, at some time (the period is not common ground), both VB and VS have been involved with Vitol's oil trading with the Congo.
Mr. Chautard is a French national. He is an employee of VB. On any view, he has been involved in Vitol's oil trading with the Congo. In a witness statement made on behalf of VB and VS in previous proceedings, he was described as “the representative of [VB] principally concerned with Congolese business”.
Mr. Lambroza is the Chief Financial Officer of the Group and an employee of VS. On any view, he too has been involved in Vitol's Congolese oil trading. On the material before me, he became a United Kingdom national on the 11 th October, 2004.
The information and documents sought by Kensington concern payments allegedly made by or on behalf of “Vitol Entities” (as defined in the draft order) to senior officials of the Congo or companies said to be controlled by them (“Vitol Payees” as defined in the draft order). As set out in Schedule A to the draft order, Kensington seeks the following:
“1. In relation to each payment made by any of the Vitol Entities to any of the Vitol Payees between 1 January 2002 and …January 2007:
(a) the date of payment
(b) the amount of payment and how it was calculated
(c) the identity and address of the payer
(d) the identity and address of the payee
(e) identity and address of any of the banks or other financial institutions involved in receiving the payment
(f) the consideration for which payment was made
2. In relation to each payment made by any of the Vitol Entities to any of the Vitol Payees between 1 January 2002 and …January 2007:
(a) any documents evidencing the making or receipt of the payment
(b) any documents containing or evidencing a request for or instruction to make the payment
(c)the contract(s) by which any of the Vitol Parties or any entity or person on whose behalf any of the Vitol Parties is acting or has acted agreed to make such payment
(d) any documents evidencing or containing the consideration for which the payment was made
(e) any documents evidencing how the amount of the payment was calculated”
In seeking such relief, Kensington invokes the well-established Norwich Pharmacal jurisdiction: see Norwich Pharmacal v Customs & Excise Commissioners [1974] AC 133 and s.37(1) of the Supreme Court Act 1981. But Kensington does not simply say that the Third Parties innocently facilitated or became mixed up in wrongdoing. The flavour of Kensington's case against the Third Parties may instead be seen from the 1 st Witness Statement of Mr. Schwarzkopf, made on its behalf on the 15 th January, 2007. Building on Kensington's discovery of substantial sums in Hong Kong bank accounts of various individuals said to be closely involved in the Congo's oil sales and the Congo's scandalous failure to honour the four judgments of this Court, Mr. Schwarzkopf said this:
“8. The information obtained by Kensington reveals that payments into the Hong Kong bank accounts were made by international oil traders who have long maintained a close and profitable relationship with Congo and officials of the Sassou-Nguesso regime, and who have long assisted Congo in its dishonest efforts to evade its creditors (including Kensington). These oil traders include the Vitol Group ('Vitol'), whose main operating companies include the London-based Vitol Services and Vitol Broking. The only credible explanation for these payments are that either they were made to assist Congo in hiding its assets or they were made as corrupt kickbacks to Congolese officials in return for valuable business.
9. ….Vitol's operating companies, and/or their principal executives involved in dealings with Congo (Messrs Lambroza and Chautard), must therefore possess information and documents showing what other payments have been made, and to whom and in what jurisdictions those payments have been made…..Mr. Lambroza, Mr. Chautard and the companies Vitol Services and Vitol Broking have all become so mixed up in the wrongdoing by which Congo has dishonestly evaded its creditors and concealed its assets, that they should be required under Norwich Pharmacal principles to provide the information and documents requested by Kensington.
12. ……Congo has deliberately and dishonestly attempted to evade enforcement of the Judgments using a variety of devices with the knowing assistance of counterparties in oil trading and finance, including in particular the Vitol Group.
19. The Vitol Group has a substantial and long-established relationship with Congo. Kensington has determined that from 2002 until the present, Vitol purchased at least 65 cargoes of Congo's oil worth nearly US$3 billion. Messrs Lambroza and Chautard have both been central to Vitol's relationship with the Congo and the Sassou-Nguesso regime since its inception…
23. There is mounting evidence….of the Vitol Group's knowing collusion with Congo in seeking to evade enforcement of the Judgments.
74 ….there appear to be only two credible alternative explanations for the payments by Peakville and Vitol SA into the Long Beach account. Either these constitute monies paid to and held by Congo for its own convenience, to be hidden from creditors….; or, put candidly, they are corrupt kickbacks or rake-offs in return for the placing of valuable business with Vitol…..
81(c) Vitol Broking, Vitol Services, Gilles Chautard and Sam Lambroza are very likely indeed to have been involved in the scheme by which Peakville made the payments to Long Beach between June and October 2005 and in arrangements made for similar payments which must have been made to Congo or its officials at other times. I say this in view of the crucial role played by each of the respondents to this application in Vitol's purchases of Congo's oil, their central importance to Vitol's relationship with the Congo and the depth of their involvement in the Congo's dishonest judgment-proofing schemes as set out above.”
Faced with such accusations, an obvious response of a reputable trader might well involve an indignant root and branch factual refutation of the allegations in question, perhaps coupled with an expressed willingness to assist the judgment creditor so far as it was able to do so. That, however, is not the stance adopted by the Third Parties. To the contrary, while resolutely making no admissions to any of the allegations made by Mr. Schwarzkopf, the entire thrust of the Third Parties'case is that those allegations could, if proved, amount to criminal conduct under the laws of this country. They go on to assert the privilege against self-incrimination pursuant to s.14 of the Civil Evidence Act 1968, which provides as follows:
“(1) The right of a person in any legal proceedings other than criminal proceedings to refuse to answer any question or produce any document or thing if to do so would tend to expose that person to proceedings for an offence or for the recovery of a penalty –
(a) shall apply only as regards criminal offences under the law of any part of the United Kingdom and penalties provided for by such law;
and
(b) shall include a like right to refuse to answer any question or produce any document or thing if to do so would tend to expose the husband or wife of that person to proceedings for any such criminal offence or for the recovery of any such penalty.”
Accordingly, if well-founded, however unattractive the point may be, the Third Parties are entitled to maintain their claim to this privilege. Moreover, a claim for this privilege is not evidence and does not give rise to an inference, still less any admission, of guilt.
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