Zambia v Meer Care & Desai (A Firm)and Others
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE PETER SMITH |
| Judgment Date | 07 October 2005 |
| Neutral Citation | [2005] EWHC 2102 (Ch) |
| Court | Chancery Division |
| Date | 07 October 2005 |
| Docket Number | Case No: HC04C03129 |
[2005] EWHC 2102 (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: HC04C03129
William Blair QC and Michael Sullivan (instructed by DLA Piper) for the Claimants
Chima Umezuruike and Razak Atunwa (instructed by Bensons) for the 3 rd, 6 th, 7 th, 9 th, and 11 th Defendants
David Head (instructed by Reynolds Porter Chamberlain) for the 1 st Defendant
Hearing dates: 15 th August 2005
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.
Peter Smith J:
INTRODUCTION
On 15 th August 2005 I heard an application on the part of the Third, Sixth, Seventh, Ninth and Eleventh Defendants issued on 6 th April 2005 for a stay of the present proceedings brought against them by the Attorney General of Zambia.
I indicated that I would dismiss the application and give reasons for the dismissal.
In this judgment I set out the reasons for the dismissal of the application on the part of the above named Defendants.
At the same time I directed that a CMC should take place with a view to setting a timetable for the hearing of this action and (if necessary) part of the action in Zambia as appears in this judgment. That hearing is scheduled to take place (with other Defendants who did not appear on this application) on 10 th October 2005.
Initially the application was to set aside service and challenge the jurisdiction of the court but they were abandoned at the hearing before me. By the time of the hearing the application was made on the basis of 3 grounds as set out in the skeleton argument of Mr Umezuruike who with Mr Atunwa appeared for the Defendant Applicants. Those grounds are :—
a) The proceedings in the present form are in breach of Article 6 of ECHR
b) Forum non conveniens
c) Prejudice to the Applicant Defendants ability to defend criminal proceedings in Zambia
BACKGROUND
By these proceedings the Claimants seeks to recover substantial sums of Zambian Government money which were allegedly fraudulently misappropriated between 1996 and 2002 during the presidency of the Third Defendant Dr Frederick Jacob Titus Chiluba.
It is alleged by the Attorney General for Zambia ("the AG") that the misappropriation of the monies and the laundering of the same was undertaken pursuant to 3 conspiracies between various Defendants (identified in the comprehensive proceeding Particulars of Claim as the Zantrop Conspiracy, the Mofed Conspiracy and the BK Facility Conspiracy).
The modus operandi of each of the conspiracies was alleged to be the same namely the use of false contracts or contractual provisions as a façade to create an impression of legitimacy for payments made using misappropriated government monies. The monies it is alleged were then laundered (in the whole or in part) through bank accounts in London operated by the First and Second Defendants who are firms of solicitors in London.
On 24 th November 2004 I granted the Claimant a worldwide freezing order in the amount of £13,500,000 together with consequential directions against the Third to Sixth, Ninth, Tenth and Thirteenth Defendants. Service of that order was effected on the Defendants between 27 th November and 15 th December 2004.
By an order dated 12 th January 2005 the Freezing order was extended until trial or order and on 24 th February 2005 I made a further Freezing order against the Sixteenth to Eighteenth Defendants in the sum of $25,000,000 and in the sum of $30,000,000 against the Seventeenth Defendant. These Defendants took part in a separate trial involving them alone after the hearing of the present application before me. That trial continued for 7 days when the action was settled on agreed terms.
More detail of the substantive conspiracies are to be found in the first witness statement of Janet Legrand on behalf of the Claimant dated 26 th July 2005 (paragraph 13–66).
The Third, Sixth, Ninth and Tenth Defendants purportedly complied with the terms of the Freezing order (i.e. statement of affidavits of means) on 31 st May 2005. The affidavits served were unsworn but jurats were provided on 6 th June 2005. The Claimant does not accept those affidavits are truthful but for the purposes of the present application (in the absence of any other evidence to contradict them) I assume that the assets identified are the only present assets available for the Defendants in this action.
Grounds (a) and (b) substantially overlap. The essential argument on the part of the Defendants is that the proceedings should be stayed as against them and fresh proceedings commenced in Zambia because that would be fairer for them in the conduct of their defence. During the course of his submissions I raised with Mr Umezuruike how that would impact on the proceedings against the English Defendants. This would be unsatisfactory as I pointed out. The allegations are that the Zambian Defendants were the main creators of the conspiracies and the English solicitors were the facilitators of that conspiracy. If the proceedings as against the Zambian Defendants were to be stayed it is difficult to see how that could be fair to the English Defendants or the Claimant. It would be impossible so far as I can see for the action in England to fairly proceed absent the evidence of those vital players.
Conversely if the Claimant was required to commence proceedings in Zambia (self evidently absent the English Defendants) he would not obtain a judgment if successful that bound the English Defendants. Nor would he be precluded from re litigating the matters in England as against them even though he had lost against the primary conspirators in Zambia.
Faced with this Mr Umezuruike submitted this was the creation of the Claimant. When I sought clarification of this he said it was based on the fact that the Claimants instituted the present action within this jurisdiction but kept a set of Defendants unable to be present in England to give instructions to their lawyers or to be present in England to give oral evidence or to be present in England when other witnesses gave evidence to give effective instructions as to how they were to be cross examined. This he submitted arose out of the criminal proceedings and the fact that the Defendants were bailed in Zambia upon terms that their passports should be surrendered. Mr Umezuruike also raised the concern that the Claimants might use the present proceedings in this jurisdiction in effect as a stalking horse to extract out of the Defendants defences which they might not have to reveal at an early stage in the criminal proceedings or even force them to give evidence in these proceedings which they could then use in the subsequent criminal proceedings.
There is a short way to deal with this as I indicated in argument. It is to ring fence the English proceedings. Thus the proceedings take place in private, an order is made that none of the evidence adduced by the Defendants can be used against them in criminal proceedings nor any of the documents disclosed by them in these proceedings be used in the criminal proceedings unless they agree or the court otherwise orders. The result would be therefore that there could be no possible abuse of the criminal proceedings and the Defendants rights to silence and the way in which they conducted their criminal defences. Faced with that Mr Umezuruike relied on the second basis namely that the English proceedings did not give the Defendants a fair trial. This was based on a number of factors. First and foremost was the fact that the bail conditions prevented the Applicant Defendants from taking part effectively in the English proceedings. Mr Umezuruike said that the Claimants had four options. The first was to run parallel civil proceedings in England and Zambia. I do not see that is a sensible option. The second option that was said to be available was to discontinue the civil claim here as against the Applicant Defendants and proceed against the other English Defendants. That too does not seem sensible to me for the reasons I have already given. The third option would be to drop the English proceedings and proceed against the main protagonists by bringing proceedings in Zambia and discontinuing the proceedings against all other parties. That too seems to me to be unrealistic. Further there would be a significantly large cost consequence. The fourth possibility was to stay the proceedings against the...
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