Louis Emovbira Williams v Central Bank of Nigeria
| Jurisdiction | England & Wales |
| Judge | Mr Justice Supperstone,Mr Justice Beatson |
| Judgment Date | 24 January 2012 |
| Neutral Citation | [2011] EWHC 876 (QB),[2012] EWHC 74 (QB) |
| Docket Number | Case No: HQ10X00931 |
| Court | Queen's Bench Division |
| Date | 24 January 2012 |
[2011] EWHC 876 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr Justice Supperstone
Case No: HQ10X00931
Jonathan Adkin (instructed by Sandra Williams) for the Claimant/Respondent
Edward Levey (instructed by Berwin Leighton Painter) for the Defendant/Applicant
Hearing dates: 25 and 28 March 2011
Introduction
The Central Bank of Nigeria, the Defendant, by notice dated 8 April 2010 challenges the jurisdiction of the English Court in these proceedings. By order dated 26 February 2010 Master Yoxall granted Dr Williams, the Claimant, permission to issue the Claim Form for service out of the jurisdiction and to serve the Claim Form and the Particulars of Claim on the Defendant in Nigeria. The Defendant seeks to have that Order set aside. Further the Claimant by notice dated 14 March 2011 applies for permission to amend the Claim Form and Particulars of Claim and, if and insofar as is necessary, for permission to serve the draft Amended Claim Form and draft Amended Particulars of claim out of the jurisdiction.
Background: The Claimant's Case
The Claimant is a Nigerian qualified barrister resident in England since 1979. He engaged in England in a number of commercial transactions relating to Nigeria. In or around April 1986 one of his clients, Pearl Konsults Ltd ("PKL"), was approached in England by a Mr Chukwu, a Nigerian, with a commercial proposition for the importation of foodstuffs to Nigeria. Mr Chukwu proposed to pay PKL 30 million Naira (the Nigerian currency) for the foodstuffs by means of certain banker's drafts to be encashed at a bank in Nigeria.
PKL approached the Claimant and informed him of the proposed transaction. PKL told the Claimant that it did not itself have sufficient funds or credit to enable it to participate in the transaction, but that if the Claimant was willing to guarantee a loan to PKL it would be able to participate in the transaction and would share the profits from the transaction with him. Following further discussions between the Claimant, PKL and Mr Chukwu it was agreed that:
i) PKL would borrow $6,520,190 from its bank, and the Claimant would provide PKL's bank with a guarantee that the loan would be repaid within 90 days;
ii) PKL would cause the $6,520,190 to be transferred to Mr Chukwu's solicitor in England, who would hold the funds pending the encashment of the Naira banker's drafts in Nigeria and release of the 30 million Naira for the use of PKL/the Claimant;
iii) Once the Naira banker's drafts had been cashed and the monies released to PKL/the Claimant in Nigeria, the funds held in England by Mr Chukwu's solicitor would be released to enable the foodstuffs to be purchased and shipped to Nigeria.
These arrangements were put into effect. PKL obtained the loan from its bank, which issued a banker's draft for $6,520,190 in favour of Mr Chukwu's solicitor in England, Mr Reuben Gale. Mr Gale undertook to hold those monies on terms that they would not be released until the 30 million Naira were available in Nigeria. The Claimant guaranteed the loan to PKL from its bank. The banker's drafts for 30 million Naira were encashed in Nigeria. However, the funds were immediately frozen. Notwithstanding this, Mr Gale paid some $6,020,190 of the monies held by him to an account in the name of the Defendant at Midland Bank in England. He retained the balance of $500,000 for himself. The Naira having been frozen, and the $6,020,190 having been paid away, PKL and the Claimant were unable to proceed with the transaction, PKL was unable to repay any of its loan, and the Claimant's guarantee was called upon in full.
The Claimant went to Nigeria in anticipation of the receipt of the Naira funds. Upon finding them frozen, the Claimant sought out Mr Chukwu. It subsequently transpired that Mr Chukwu was not a bona fide business man and the transaction he proposed was not a bona fide transaction. Mr Chukwu was operating on the instructions of elements within the Nigerian State Security Service ("SSS") with the purpose of relieving PKL and the Claimant of their monies. The Claimant alleges that he was the subject of an undercover "sting operation" carried out by the SSS with the participation and involvement of the Defendant. He was arrested by the SSS and charged with conspiracy to sell foreign currency without permission contrary to the Exchange Control and Anti-Sabotage Decree 1984. In February 1987 the Claimant was convicted by the Currency and Miscellaneous Offences Tribunal and sentenced to a ten year term of imprisonment, but he escaped and returned to England.
The Claimant alleges that he was the victim of a fraudulent scheme. A Special Judicial Panel was subsequently set up by the Attorney General on the orders of the President of Nigeria to investigate the matter and it found that the Claimant was innocent of all charges. As a result the Claimant received a Presidential Pardon which was published in the official Gazette on 1 September 1993. Under the 1984 Decree no verdict or sentence is operative unless and until confirmed by the Head of State. By a letter dated 7 September 1993 the President informed the Claimant's legal counsel that the verdict, sentences and fines would not be confirmed and that "all the exercises relating to Dr William's case… are invalidated retrospectively with immediate effect". The letter continued:
"Your client is free to apply to the various government authorities to recover all his assets in the possession of the authorities and to have de-frozen his accounts held in his name or operated under his authority. In particular, … the Governor of the Central Bank has been directed to take necessary action to carry out the directives of the Commander-in-Chief."
By a Presidential Directive dated 14 September 1993, the President directed the Defendant to return the Claimant's monies to him. However this did not happen. (The Defendant does not admit the authenticity of the letter dated 7 September 1993 and the Presidential Directive dated 14 September 1993).
The Claimant alleges that in or around June 2009 he reached an agreement with the Defendant that his monies be returned to him, but that in breach of contract the monies have not yet been paid to him.
The Claimant's claims
Three sets of claims are put forward which have been referred to as (1) "the 1986 Trust"; (2) "the 1993 Trust"; and (3) "the 2009 Agreement".
The 1986 Trust claim arises, the Claimant says, from the Defendant's assistance in, and receipt of monies from, Mr Gale's fraudulent breach of trust. Mr Gale received and held the $6,520,190 on trust to use those monies only for the specified purposes identified by his undertaking. That was a trust of which PKL and the Claimant were beneficiaries (or, alternatively, as a result of his losses pursuant to the guarantee of PKL's loan, the Claimant is subrogated to PKL's rights as beneficiary of that trust). In paying those monies away when, as he knew, the 30 million Naira were not released and available to PKL and the Claimant, Mr Gale acted in breach of that trust. Further, in circumstances were Mr Gale was well aware that the entire transaction as represented to the Claimant was false, and that the true intention was to deprive PKL and the Claimant of monies, such breach of trust was fraudulent. The Defendant dishonestly assisted in this breach of trust by receiving $6,020,190 of the monies as part of the fraudulent scheme, and received these monies knowing they had been paid in breach of trust. The Claimant says that as a result of this the Defendant is liable to account to the Claimant as constructive trustee in respect of his losses arising from Mr Gale's breach of trust, by reason of its dishonest assistance in, and knowing receipt of the proceeds of, that breach of trust; and he is entitled to follow the monies paid by Mr Gale into the hands of the Defendant.
The 1993 Trust claim arises, the Claimant says, because the Defendant agreed to hold the monies at the direction of the President of Nigeria, and that pursuant to that direction the Defendant was constituted trustee of the monies for the Claimant. The Claimant says he has a proprietary claim to the monies held by his trustee, who is also liable to account for those monies and their profits.
The 2009 Agreement claim arises from the agreement that the Claimant says he made with the Defendant for the resolution of his claims and payment of $6,520,190 to him in around June 2009. He says this agreement has been breached and the monies not paid.
Service out of the jurisdiction: legal principles
In AK Investment CJSC v Kyrgyz Mobil Tel Ltd [2011] UKPC 7 at para 71 Lord Collins, delivering the advice of the Privy Council, summarised the requirements for service out of the jurisdiction:
"On an application for permission to serve a foreign defendant (including an additional defendant to counterclaim) out of the jurisdiction, the claimant (or counterclaimant) has to satisfy three requirements: Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438, 453–457. First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: e.g. Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645, [2005] 2 Lloyd's Rep 457, at [24]. Second, the claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in...
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