QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE NICOL
| (1) The Queen on the application of Unaenergy Group Holding Pte Ltd
(2) Unaoil Monaco Sam
(3) Ata Ahsani
(4) Cyrus Ahsani and
(5) Saman Ahsani
|- and -
|The Director of the Serious Fraud Office
Jonathan Hall QC and Simon Pritchard (instructed by the Government Legal Department) for the Defendant/Respondent
Hearing dates: 01 December, 2016
Crown Copyright ©
Lord Justice Gross :
"…a designated prosecuting authority may itself request assistance under this section if –
(a) it appears to the authority that an offence has been committed or that there are reasonable grounds for suspecting that an offence has been committed, and
(b) the authority has instituted proceedings in respect of the offence in question or it is being investigated.
'Designated' means designated by ….[the 2004 Order]… "
The "assistance" that may be requested under s.7 is itself defined by s.7(2) as "…assistance in obtaining outside the United Kingdom any evidence specified in the request for use in the proceedings or investigation."
"…Unaoil specialises in integrating local capabilities with Western technology in niche areas of the oil industry, with the objective of making Unaoil the local partner of choice for larger international companies looking to execute projects in the areas in which Unaoil operates by way of a joint venture…"
i) The LOR was unlawful because it failed to disclose key information ("Ground 1");
ii) The LOR was unlawful because it was impermissibly wide (i.e., "a fishing expedition") and constituted an improper exercise of the statutory power under s.7, CICA ("Ground 2").
i) Was the SFO under a duty to the Claimants to comply with a "heightened procedural obligation" when issuing the LOR? ("Issue I: Duty")
ii) If any relevant duty was owed, was the LOR unlawful by reason of a breach or breaches of that duty? ("Issue II: Breach of Duty")
iii) Did the LOR constitute an unlawful fishing expedition? ("Issue III: Fishing Expedition")
iv) Depending on the outcome of Issues I – III, what order should the Court make? ("Issue IV: Disposal")
" Our investigation has recently commenced and we hope to charge one or more suspects in the coming months. Three of the main suspects are believed to reside and operate their business from Monaco. The SFO has intelligence to suggest that the main allegations will be published on an international news website on the 30th March 2016 and believe that this may prompt the destruction of the relevant evidence being requested….. "
" 2. The SFO is investigating wide-ranging allegations of bribery and corruption committed by senior executives of Unaoil Monaco SAM ('Unaoil')….
3. Material in the possession of the SFO (notably internal Unaoil emails and documentation) suggests that Ata, Cyrus and Asam Ahsani together with Peter Willimont and Basil Al Jarah paid bribes and/or conspired together to pay bribes to high-ranking Iraqi public officials on behalf of Unaoil clients."
" 9. The documents seen by the SFO to date strongly suggest that Leighton bribed Iraqi officials to obtain their contracts with SOC [i.e., the Iraqi state-owned oil producer]. It is that …[certain contracts]…were entered into to provide an apparent cover of legitimacy for payments from Leighton to Unaoil. These monies are thought to have provided Unaoil with its own share of the profits but also the funds to make corrupt payments to Iraqi officials.
10. These Iraqi officials and the middle man used to acquire influence were referred to by code names in email correspondence between the Ahsanis, Peter Willimont and their Iraqi partner, Basil Al Jahar, when discussing their business dealings…. "
A code was also said to have been used to disguise a particular payment. The SFO alleged that the use of codes evidenced the Claimants' knowledge that the payments were corrupt. The LOR recounted details going to allegations of Unaoil dealings with Iraqi officials, exercising influence with regard to the award of contracts to Leighton and likewise Rolls Royce.
" 23. ….On his person, Al Jarah was carrying two cheques from 'A. Ahsani'. Both were made payable to Armada Investments LLC (believed to be the company belonging to Al-Jibouri) [an alleged middle man and described, inter alia, as 'The Doctor' in the Code/s] in the sums of GBP £950,000 and GBP £925,000 respectively. The SFO therefore has a strong suspicion that the people named in this Letter of Request are continuing to commit further offences up to the present day."
" ….that they have been fully involved in the investigation of the allegations of bribery and corruption involving Unaoil in several jurisdictions and have detailed knowledge which will assist the Monaco's authorities execute this request. "
ISSUE I: DUTY
"…there is (or ought to be) correspondence between the standards of fairness which apply to a United Kingdom law enforcement agency when it invokes the assistance of foreign authorities, and those which apply when it seeks the same assistance from a domestic court."
Where the essence of what was sought internationally amounted to intrusive searches – no different from search warrants – a duty of candour rested or ought to rest on the applicant (here the SFO) under s.7(5), CICA, as under any ex parte application. It was to be remembered that the execution of a search warrant was a draconian state power. Mr Keith contended for a "heightened procedural obligation", closer to the well-recognised obligations applying to applications for domestic search warrants – though he accepted that the obligations were not identical, given that the context here was that of Mutual Legal Assistance ("MLA"). The obligation was more than the "amorphous, ill-defined obligation" of good faith between states but less than the full disclosure obligation, explained by Hughes LJ (as he then was) in In re Stanford International Bank Ltd  EWCA Civ 137;  Ch 33, at  (see further below). The matter could not be left to the scrutiny of the court of the requested state; in the MLA sphere, substantive scrutiny, or judicial oversight, was for the court of the requesting state. Nor was it right to rest content with such safeguards as were available at trial (if any trial took place); it was intrinsically unfair for the Claimants to have to wait until then. That a challenge at this stage might delay or disrupt a criminal investigation was neither here nor there; if the challenge was well-founded, so be it.
" …(1) the well-established principle that the courts will not entertain challenges to steps taken in criminal investigations save in exceptional circumstances, (2) the provisions and spirit of international conventions which apply to LORs, and (3) the longstanding reluctance of the courts to superimpose common law requirements upon the actions of UK authorities within the field occupied by CICA 2003, which is intended to be a comprehensive statutory scheme implementing the UK's international obligations in a field of high public interest and international comity. "
In making LORs, state parties were obliged to act in good faith and to proceed in accordance with the requirements of the applicable international conventions. The SFO had done so here; additional common law obligations should not be read in. Moreover, the individual enjoyed the judicial protections available in the requested state, a fortiori here, where Monaco was a party to the ECHR. Still further, the individual would be protected by the fair trial safeguards in the court of the requesting state, should a criminal prosecution ensue. Furthermore, in the course of oral argument, Mr Hall accepted that the making of a LOR was amenable to judicial review on the usual public law grounds, including irrationality; that too furnished a safeguard, "albeit with a light touch". At a later stage in the process, when the requested state was putting the LOR into action, a duty of candour would arise; according to Mr Hall, requested states commonly made inquiries of requesting states, at this (later) stage. If, still later, there was a challenge to execution of the search warrant (or local equivalent) that was a matter for the local law. That had no nexus with the LOR which operated "on the international plane". It was to be remembered that the warrant, not the LOR, authorised searches and seizures.
" 1 Requests for mutual assistance shall indicate as follows:
a the authority making the request,
b the object of and the reason for the request,
c where possible, the identity and the nationality of the person concerned, and
d where necessary, the name and address of the person to be served.
2 Letters rogatory referred to in Article 3, 4 and 5 shall, in addition, state the offence and contain a summary of the facts."
" 15. A request for mutual legal assistance shall contain:
(a) The identity of the authority making the request;
(b) The subject matter and nature of the investigation, prosecution or judicial proceeding to which the request relates and the name and functions of the authority conducting the investigation, prosecution or judicial proceeding;
(c) A summary of the relevant facts, except in relation to requests for the purpose of service of judicial documents;
(d) A description of the assistance sought and details of any particular procedure that the requesting State Party wishes to be followed;
(e) Where possible, the identity, location and nationality of any person concerned; and
(f) The purpose for which the evidence, information or action is sought.
16. The requested State Party may request additional information when it appears necessary for the execution of the request in accordance with its domestic law or when it can facilitate such execution.
17. A request shall be executed in accordance with the domestic law of the requested State Party and…. where possible, in accordance with the procedures specified in the request."
i) The SFO had reasonable grounds to suspect that the Claimants have committed offences involving complex and serious fraud.
ii) The pre-conditions for making the LOR had been met; there was no suggestion on the Claimants' part that the SFO had acted irrationally or ultra vires in doing so.
iii) The SFO had acted in good faith.
" ….it is essential that the duty of candour laid upon any applicant for an order without notice is fully understood and complied with. It is not limited to an obligation not to misrepresent. It consists in a duty to consider what any other interested person would, if present, wish to adduce by way of fact, or to say in answer to the application, and to place that material before the judge….. In effect a prosecutor seeking an ex parte order must put on his defence hat and ask himself what if he were representing the defendant or a third party with a relevant interest, he would be saying to the judge, and, having answered that question, that is what he must tell the judge….."
The likely colloquial response from the requested state would be an invitation to the UK judicial or designated prosecuting authority making the request to resolve its own doubts or difficulties and to re-issue the LOR if, or when, it had done so. At the very least, a LOR couched in such terms would be likely to cause real confusion to the requested state. In short, this duty only needs spelling out to demonstrate that it is wholly unsuitable for adoption in the context of making a LOR to a foreign authority.
i) The LOR was required to comply with the conditions for invoking CICA, s.7 (5), Art. 14 of the Strasbourg Convention and Art. 18(15) of the Palermo Convention. It did so comply; indeed (subject only to Issue III below), there was no argument before us that it did not. For present purposes, the SFO was thus obliged to, and did, set out, accurately, in the LOR, inter alia: that there were reasonable grounds for suspecting that offences had been committed; that those offences were being investigated; the object of and the reason for the LOR, together with a summary of the facts. The Claimants' case would require an additional domestic obligation to be read into this international scheme – moreover a proposed obligation afflicted by the difficulties already outlined. Though the context is somewhat far removed, the decision in R (Omar) v Foreign Secretary  EWCA Civ 118;  QB 112 serves as a reminder of the difficulty of introducing common law obligations or remedies into the international treaty regime sought to be implemented by CICA.
ii) The object of the international scheme is that as between friendly states with whom there are treaty obligations of mutual cooperation, requests for MLA will be acted upon – and as quickly as possible, at least unless there are compelling reasons for not doing so: R v Secretary of State for the Home Department, ex parte Abacha  EWHC (Admin) 787, at ; JP Morgan v SFO  EWHC 1674 (Admin), at  – . As Tuckey LJ observed in Abacha (loc cit), any requirements of procedural fairness "…must be fashioned with those considerations firmly in mind". As it seems to us, the introduction of the suggested "heightened procedural obligation" would introduce unwarranted complexity and would not assist in this regard; it would be much more likely to slow down the working of the international scheme rather than assist its expeditious operation. In particular, the statutory and treaty regime focuses on a statement of the facts and matters upon which the LOR is based, justifying its issue and calling for it to be acted upon. By contrast, the essence of the heightened procedural obligation goes to setting out the reasons casting doubt on the issue of the LOR and, hence, why it should not be acted upon.
iii) It is common ground or indisputable that the issuing of a LOR is a step in an investigation. Challenges by way of judicial review to investigators in the conduct of an investigation have and should have a "very high hurdle to overcome" and will be entertained only in exceptional circumstances: R (on the application of Soma Oil and Gas Ltd) v Director of the SFO  EWHC 2471, esp. at  and following. The Claimants' submission, if well-founded, would lead to increased scope for challenging the conduct by the SFO, acting in good faith, of an investigation into serious criminality. Such challenges to investigators should be very rare; we are not attracted to a development in the law which would encourage their increase.
i) In the requesting state, the SFO must comply with the CICA and treaty requirements. The SFO, moreover, must act in good faith, in accordance with this country's treaty obligations. As noted above, Mr Keith was somewhat dismissive, describing this obligation of good faith as "amorphous" and "ill defined". In the field of treaties, we respectfully disagree; the nature of the obligation is clear and well-established; questions of compliance or breach are necessarily context and fact specific. That breaches of the obligation of good faith may (hopefully) be exceedingly rare is nothing to the point. Further still, the making of a LOR, as Mr Hall in terms accepted, is amenable to challenge on public law grounds. Though such challenges are not at all to be encouraged (Soma Oil, supra), they would dovetail well with the statutory and treaty regime provided their focus was upon compliance with the CICA and treaty conditions for the making of a LOR. On this footing, they would not cut across the international scheme but would provide a means for testing whether the power to issue a LOR had been properly invoked where, in those rare cases, there were real grounds for believing that it had not.
ii) So far as concerns the requested state, though disputed points of foreign law are intended to be rare – given the underlying expectation that requests for MLA will ordinarily be granted and acted upon speedily - it is to be remembered that MLA should "not be equated to a blank cheque": JP Morgan (supra), at . It is to be underlined that the issuing of the LOR – with which these proceedings are solely concerned – is but the first stage of the process. Additionally, in the present case, Monaco is a party to the ECHR, so that the conduct of the search and seizure (of which no complaint is made) is subject to the requirements of the ECHR.
iii) Finally, should the matter proceed to trial in the requesting state, there are the usual protections inherent in the trial process, safeguarding defendants and ensuring fairness.
ISSUE II: BREACH OF DUTY
i) Prior publication;
ii) Ongoing offences;
iii) Unaoil – Leighton litigation.
We take each in turn.
" In relation to the JICA MOU, there was a dispute between Unaoil and Leighton heard in the High Court of England and Wales for breach of contract. It is suspected that Unaoil made corrupt payments to the Iraqi officials prior to the JICA Contract being won by Leighton. The SFO believes, on the basis of documentation reviewed, that Leighton refused to honour the terms of the JICA MOU as it had made separate corrupt payments to others in respect of the same contract. Unaoil was awarded US$12,577,500 for unpaid debts and damages for loss of profits in the sum of US$5.8m by the High Court."
ISSUE III: FISHING EXPEDITION
" To confirm: the Director today opened an investigation into the activities of Unaoil, its officers, employees and agents for suspected offences of bribery, corruption and/or money laundering. He did so, pursuant to s. 1(3) of the CJA 1987, on the basis that there appeared to him reasonable grounds to suspect offences involving serious or complex fraud."
For his own part, Mr Martin, in his witness statement dated 30th September, 2016, was unequivocal:
" The investigation scope reflected the fact that the investigation team considered that there was evidence that Unaoil had paid bribes in a number of jurisdictions. It is important to emphasise that at no stage has the SFO's investigation been geographically limited and there has never been a decision by either the Director or me, as Case Controller, to investigate only issues relating to Iraq. I observe that in my experience, given the nature of the offences, and given the nature of Unaoil's business, it is unlikely that any offences committed by Unaoil would be confined to one particular jurisdiction. "
Accordingly, all the material sought (at pp. 10 and 11 of the LOR), if held at the specific addresses listed in the LOR, would be evidence in the investigation.
i) Although the LOR was principally focused on Iraq in terms of the specific allegations advanced, when read as a whole, it cannot be said to be confined to the Claimants' activities only in Iraq. Indeed, it is plain that the material sought was not limited to Iraq.
ii) The question accordingly is whether the investigation is geographically confined to Iraq. In this regard, we do not see any basis for going behind the Director's certification of the investigation – which is not limited to Iraq – and Mr Martin's very clear evidence, in terms, that it is not so limited. We are bound to say that we are fortified in this regard by the inherent likelihood that the activities of the Claimants forming the subject of the investigation are unlikely to be confined to a single jurisdiction.
iii) The remaining question is whether there were reasonable grounds for suspecting that offences had been committed in jurisdictions other than Iraq. Here too, we regard Mr Martin's evidence as telling decisively in favour of the SFO's case. Moreover, although the LOR does not elaborate on the grounds for suspicion, we do not think that there can be an obligation – at least under s.7 CICA – to set out what those grounds were. We add that we would be surprised if there was any such obligation, as the material forming the basis of suspicion may well be sensitive, at least at this early stage of the investigation. For completeness, the Claimants did not apply to amend the grounds for seeking judicial review to allege that the SFO did not, or could not lawfully, hold the view that there were reasonable grounds to suspect criminal offences beyond Iraq, and any such request at the hearing would have been far too late.
ISSUE IV: DISPOSAL