Mulugeta Guadie Mengiste and Another v Endowment Fund for the Rehabilitation of Tigray and Others
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Peter Smith,Peter Smith J |
| Judgment Date | 11 December 2014 |
| Neutral Citation | [2014] EWHC 4196 (Ch) |
| Date | 11 December 2014 |
| Court | Chancery Division |
| Docket Number | Case No: HC10C01299 |
[2014] EWHC 4196 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Peter Smith
Case No: HC10C01299
Mr McLoughlin for the Claimants
Mr Assersohn (instructed by MS Legal) for the Defendants
Hearing dates: 28th – 31st July 2014
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
This judgment arises out of a hearing I heard between 28th and 31st July 2014. The hearing itself arises out of a judgment I delivered on 22nd March 2013 [2013] EWHC 599 (Ch). Reference should be made to that judgment for the detailed background of the issues.
In summary the Claimants seek damages (for) it is alleged the wrongful obtaining of their share in businesses in Ethiopia. The Claimants had had extensive litigation in Ethiopia as set out in that judgment. In it they were successful as to part of their claims but unsuccessful as to others. In reality the Claimants' case before me was that the judgments in Ethiopia were obtained by perjury and fraudulent means in particular by the deliberate withholding of material evidence. They also claimed that the Ethiopian Courts were biased against them.
The issues are summarised in paragraphs 109–133 of the judgment in the other hearing. The issue was over the delivery of machinery by the Claimants to the Second Defendant. The Second Defendant alleged that no machinery had been delivered and sought return of the purchase price which had been paid. The judgment of the Ethiopian Courts (after litigation which lasted some 7 years) was essentially in favour of the Second Defendant which obtained a judgment in their favour requiring the Claimants to pay $1,550,000. Appeals against that judgment were unsuccessful and the Second Defendant on 14th April 2003 requested execution of the judgment. That was effected by a sale of the Claimants' shareholding in the Second Defendant which were sold for $54 per share on 30th April 2004. The Claimants allege it to be a sham auction.
As I have said there was extensive litigation in Ethiopia.
The Claimants contend however as I have said that the process was not fair. First the evidence of the Defendants' was perjured and fraudulent. Second the Ethiopian Courts did not give them justice.
In my judgment I rejected their allegations about the unfairness of the Ethiopian Courts.
As regards the injustice two key matters survived the hearings. First there was the Inventory. This was an inventory of machinery at the Defendants' premises. The Defendants in the Ethiopian proceedings successfully established that the machinery the Second Defendants paid for was never delivered which meant that there were payments for a failure of consideration. The Inventory was signed by a Mr Admassu on behalf of the Claimants (he did not give evidence) and by a Mr Teferie on behalf of the Defendants. He did provide evidence by a witness statement and gave evidence by video link from Ethiopia.
The Claimants' case was that the whole of the proceedings as I said were obtained by perjury and the Inventory was according to the Claimants' Expert a binding and conclusive statement as to the existence of the machinery at the factory and constituted admission that the machinery found at the factory was the machinery delivered by the Claimants in accordance with their contractual obligations. According to the Claimants' Expert that the Defendants had committed serious acts of perjury and that in his view the judgments were null and void.
This fell apart because when Mr Mengiste gave evidence whilst explicitly not accepting that the Inventory was not conclusive. This (see paragraphs 53–59 of my earlier judgment) meant the entirety of the Claimants' case as pleaded and led in opening and supported by expert evidence collapsed.
The Claimants' counsel Mr Robin Hollington QC sought an adjournment to try and resurrect the case. This I granted on terms but this led to a complete somersault in the sense that the Claimants' Expert had to rewrite his report on the basis that the Inventory was not conclusive and fraudulent and obtained as a result of perjured evidence as he said. I will not set out in this judgment the long and lengthy process of the earlier proceedings caused entirely by the need of the Claimants to reconstruct their case in the light of its destruction at an earlier stage in the proceedings.
ISSUES OUTSTANDING
There were two significant issues. First whilst the Inventory was not conclusive evidence it was arguably evidence which showed that there was the possibility that machinery had actually been delivered. This was not addressed at any of the hearings in Ethiopia because the Inventory point arose after most of those proceedings were concluded. It was therefore fresh evidence. It was never put in by the Claimants in any of the hearings in Ethiopia because by then they said they had no confidence in obtaining a fair hearing before the Ethiopian Courts.
The second point of concern was the status of one of the Judges in Ethiopia of Judge Mehertab. She was a judge in the Tigray Supreme Court and by the time the case came before me she was President of that Court. Unfortunately she was also the wife of Mr Gebrue who was the Chief Executive Officer and a board member of EFFORT (i.e. the First Defendant). She had a role in the proceedings (see paragraphs 200 and following of the earlier judgment). She was in the very first hearing when the file was opened on 26th September 1998 and then sat on 20 separate occasions in the following 2 years and 3 months and reappeared for some of the hearings in the review process in 2004.
It is accepted by the Claimants that she was not one of 3 Judges who gave judgment in the case in the Tigray Supreme Court but she was one of the 3 who heard the evidence. I accepted the Claimants' submissions that it was impossible to know what her input into the judgments were.
The detailed involvement of Judge Mehretab was not set out in detail in the Particulars of Claim; receiving 1 reference only (paragraph 104) nevertheless in keeping with the Claimants' ability to produce a rolling and improved case the hearing went on (because of their ability to obtain adjournments and put off the decision) and this evidence could not be ignored.
REVIEW DISCRETION
I accepted the evidence of the Claimants' Expert that there was a possibility that the Claimants could obtain a review of the decisions that were made in the previous court despite there being a 30 day time limit in the procedural rules. This is based on a decision called Fissehaye. The Defendants' Expert had missed the case.
REVIEW IN ETHIOPIA
Neither of these points namely the Inventory and the presence of Judge Mehretab were ever raised in the Ethiopian proceedings.
I therefore concluded that both of these matters on the basis of the Claimants' Expert could still be raised in Ethiopia. I rejected the Claimants' evidence that there was general bias against them as set out in their case. I therefore stayed the Claimants' action but concluded that there might be issues over the Inventory and Judge Mehretab which the Claimants could take to the Ethiopian Courts. Also on the basis of their expert evidence it might be possible for them to obtain a retrial (paragraph 209 of my judgment). I also concluded the Claimants have an arguable case but there is no cogent evidence that they cannot present the arguable case in the Ethiopian Courts. The Defendants accepted the Claimants had an arguable case subject to some legal submissions that never arose for consideration.
Accordingly my conclusion is summarised in paragraphs 262 and 263 of my judgment as follows:-
"If the Claimants are successful then they will have their fair trial in Ethiopia based on the new material and if accepted a panel of Judges which does not involve Judge Mehretab and an independent judiciary.
On the other hand if that application fails depending on the reasons for its failure that may provide more compelling evidence that the Claimants will not obtain a fair hearing in Ethiopia. I must stress that I am not saying that a failure to obtain relief necessarily leads to the conclusion that the hearings were unfair. It depends entirely on how the hearings were disposed of."
Accordingly I stayed the Claimants' action but nevertheless indicated the stay could be lifted in the light of changed circumstances. I considered that the Claimants could go back to Ethiopia and if their expert was right they could seek to persuade the Ethiopian Courts to reopen the issues based on the two issues (and those two only) namely the Inventory and the role and status of Judge Mehretab. On the other hand I accepted that if they were unsuccessful that lack of success might lead to a possibility of the Claimants being able to say that they were unable to obtain justice in respect of these matters. However as I have set out above in an extract of paragraph 263 of my judgment merely because they fail to obtain relief does not mean that they have suffered an injustice. It is necessary to examine how they failed to obtain relief to see whether that is a justification for lifting the stay.
ISSUES
The Claimants went back to Ethiopia and were unsuccessful. They say this was because of unfair hearings in Ethiopia.
Arising out of the judgment in the earlier part of the proceedings are...
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