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Cite as: [2000] EWHC 201 (Comm)

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IN THE HIGH COURT OF JUSTICE 1999 FOLIO No.610

QUEEN’S BENCH DIVISION

COMMERCIAL COURT

THE HONOURABLE MR. JUSTICE MOORE-BICK

BETWEEN

(1) GULF AZOV SHIPPING COMPANY LIMITED

(2) THE UNITED KINGDOM MUTUAL STEAMSHIP ASSURANCE ASSOCIATION (BERMUDA) LTD Claimants

and

(1) CHIEF HUMPHREY IRIKEFE IDISI

(2) LONESTAR DRILLING NIGERIA LIMITED

(3) LONESTAR OVERSEAS LIMITED Defendants

JUDGMENT

_________________________________

Mr. Graham Dunning and Mr. Ricky Diwan instructed by Stephenson Harwood appeared for the claimants.

Mr. Bitu Bhalla, Mr. John Benedict and Mr. James Bowling instructed by Speechly Bircham appeared for the first defendant.

Pursuant to the Practice Statement issued by the Master of the Rolls on 9th July 1990 I hereby certify that the attached text records my judgment in this matter and direct that no further record or transcript of the same need be made.

The Hon. Mr. Justice Moore-Bick

This matter comes before me by way of an application on the part of the claimants to commit the first defendant, Chief Humphrey Idisi, to prison for contempt of court. It arises out of an action begun in April 1999 in which the claimants sought to recover from the defendants a sum of US$3 million which they alleged had been extorted from them by the wrongful detention for almost two years at Sapele, Nigeria of the vessel Dubai Valour and damages in the further sum of approximately US$9 million in respect of losses incurred as a result of the detention of the vessel. In order to understand the issues which arise on this application it is necessary to describe briefly the circumstances which gave rise to the proceedings and their subsequent history.

The first defendant, Chief Idisi, is a Nigerian businessman whose activities include providing services to companies engaged in oil exploration and production in Nigeria. The second defendant is a company incorporated in Nigeria through which Chief Idisi conducts that business. The third defendant is a company incorporated in England which was used for collecting payments in London due to the first and second defendants. Chief Idisi is the chairman and major shareholder of the second defendant, Lonestar Drilling Nigeria Ltd, and it was not seriously disputed before me that in practical terms he controls the activities of both companies. In any event, that is a matter which in my view is clearly borne out by the evidence. It is unnecessary, therefore, for most purposes to distinguish between the Chief and Lonestar, although it is right to bear in mind that this application is made against the Chief alone.

In 1997 two drilling rigs belonging to Lonestar were carried on board the first claimants’ vessel Dubai Valour from India to Sapele, Nigeria under a bill of lading which contained a London arbitration clause. On arrival part of the cargo which had been loaded on deck was missing. The shipowners said that it had been lost overboard during a storm, but that explanation did not satisfy Lonestar which commenced proceedings in Nigeria claiming damages in the sum of US$17 million. The second claimant, the vessel’s P&I Club, was willing to provide a letter of guarantee in what it considered to be a reasonable amount in order to secure the claim, but was not willing to secure the full amount of the claim which it considered to be massively inflated. In the view of the Club the missing equipment could not be valued at more than US$1 million. As a result, in order to obtain security in the full amount of their claim the defendants ensured that the vessel was prevented from leaving Sapele indefinitely. Eventually, after various attempts to remove her had been thwarted and when her crew had reached the limits of their endurance, the claimants agreed to pay a sum of US$3 million into an escrow account in London for the benefit of Lonestar in return for its agreement to release the vessel. Shortly after the money had been deposited the vessel was allowed to leave Nigeria, having been detained for a total period of nearly 21 months.

Having obtained the release of the vessel her owners and the Club took immediate steps to prevent the money standing in the escrow account from being released to the defendants. On 23^rd April 1999 Timothy Walker J. made a worldwide freezing order against the defendants in the sum of US$12.3 million in which the sum standing in the escrow account and other sums standing to the credit of the defendants’ bank accounts in London were specifically identified. As is usual the order also required the defendants to give full disclosure of their assets in support of the injunction. The judge also made an order restraining the defendants from continuing or procuring the continuation of the proceedings which they had begun in Nigeria and from commencing or prosecuting any other legal proceedings in respect of their claim except in arbitration or by way of counterclaim in the present action.

The claimants began the present proceedings to recover damages for duress and for the wrongful detention of the vessel. The defendants were served with the proceedings in Nigeria, but failed to serve a defence within the time allowed and accordingly the claimants entered judgment in default on their claim to recover the US$3 million paid into the escrow account. The matter came back before Timothy Walker J. on 14^th July 1999 as a result of complaints by the claimants that the defendants had failed to make full disclosure of their assets. On that occasion the judge ordered Chief Idisi and Lonestar’s finance manager, Mr. Franklin Ahonkhai, to attend for cross-examination and to bring with them for that purpose a number of documents identified in the schedules to his order. This is an aspect of the matter to which I shall have to return. The cross-examination of both the Chief and Mr. Ahonkhai was later adjourned on terms that copies of those documents be provided to the claimants in the meantime.

The matter next came before the court in August 1999 after the claimants discovered that the defendants had disposed of a sum of US$350,000 in breach of the terms of the freezing order by transferring the bulk of it out of the jurisdiction and paying the balance to a firm of lawyers acting for them in this country. On the application of the claimants the matter came before David Steel J. who gave them permission to issue writs of sequestration in respect of the defendants’ property in this country. At the same time the judge ordered the defendants to return the sum of US$350,000 to the jurisdiction. Eventually the defendants did return the money in circumstances to which I shall refer in a moment, but not before the claimants had obtained permission to execute the writs of sequestration.

One of the assets owned by Chief Idisi took the form of fees due under a contract described as a “Services Procurement Agreement” under which he undertook in the capacity of “facilitator” to procure the provision by Ecodrill Nigeria Ltd, a company of which he is on his own admission chairman and alter ego, of personnel and administrative services to a company called Expro Gulf Ltd. Under that agreement the Chief was entitled to be paid a commission of 5% of net foreign currency received by Expro Gulf. Prior to the imposition of the freezing order commission had been remitted to an account with the National Westminster Bank in London. On 2^nd November 1999 the freezing order was varied by Cresswell J. to restrain the defendants from giving directions to Expro Gulf Ltd to pay sums due under that agreement to any account other than that with the National Westminster Bank.

On 26th November 1999 the matter came back before the court on the hearing of both the defendants’ application to set aside the default judgment and the owners’ application for summary judgment on their claim for damages for the detention of the vessel. On that occasion Langley J. dismissed the application to set aside the default judgment and gave judgment for the owners for damages to be assessed. He ordered the defendants to make an interim payment of US$2 million on account of damages. Orders for costs were also made against the defendants. The sequestrators appointed pursuant to the order made by David Steel J. had by then seized assets of the defendants to the value of US$783,644.07 and this sum was ordered to be paid to the claimants in part satisfaction of the order for an interim payment.

The claimants contend that Chief Idisi, both in his personal capacity and as the person who controls Lonestar, has acted in contempt of court by failing to comply with, or in some cases acting in flagrant breach of, the court’s orders and by failing to take all reasonable steps to ensure that Lonestar complied with such orders. They say that he was and remains in contempt of court by acting or failing to act in the following ways:

(a) by procuring or permitting the disposal of the sum of US$350,000;

(b) by giving instructions to Expro Gulf Ltd to remit sums owing to him under the Services Procurement Agreement to an account in Nigeria rather than to the account in London;

(d) by failing to make full disclosure of the defendants’ assets and by failing to provide copies of the documents which the defendants were ordered to disclose;

(e) by repeatedly failing to attend for cross-examination;

(f) by failing to submit to a medical examination ordered after he failed to attend for cross-examination on medical grounds;

(g) by failing to pay various amounts which he and the other defendants were ordered to pay to the claimants by way of costs and damages.

It will be necessary to consider each of these allegations in turn, but before doing so it is convenient to summarise the principles of law which apply to an application of this kind.

It is important to bear in mind, as Mr. Bhalla rightly emphasised, that proceedings for contempt of court are criminal or quasi-criminal in nature and that in an appropriate case they may result in a sentence of imprisonment. Indeed, by this application the owners are seeking an order that Chief Idisi be committed to Pentonville prison. Accordingly, it was common ground that the standard of proof is that which applies in criminal proceedings and therefore the applicant, on whom the burden of proof lies, must make the court sure of the facts which are alleged to constitute the contempt. This much was common ground, but the principle goes further than that. When the court is concerned with the circumstances in which a contempt has been committed and thus with the gravity of the defendant’s conduct, it must be satisfied to the point of being sure of any matters which it would regard as adverse to the defendant or which would tend to lead it to view his action in a more serious light and so affect its view of the appropriate penalty: see Z Bank v D1 [1994] 1 Lloyd’s Rep. 656, 667.

However, the primary dispute between the parties in relation to the law concerned the state of mind sufficient to justify a finding of contempt. Mr. Dunning submitted that in order to establish a contempt it is sufficient for the applicant to show that the defendant has committed an intentional act which is in fact contrary to the terms of the court’s order and that he does not have to establish that the defendant acted deliberately in breach of the order in the sense of knowing that he was doing an act which the court had ordered him not to do. Mr. Bhalla, on the other hand submitted that the applicant must show not only that the defendant acted in breach of the order but that when he did so he was aware of the fact.

In Heatons Transport (St. Helen’s) Ltd v Transport & General Workers Union [1973] A.C. 15 the National Industrial Relations Court had granted an injunction restraining the TGWU from “blacking” the applicant’s vehicles. Shop stewards did continue to black the applicant’s vehicles and the central question which fell for decision was whether their action was “wilful” so as to constitute a contempt of court. Lord Wilberforce, delivering the joint opinion of their Lordships, approved the statement of principle set out by Warrington J. in Stancombe v Trowbridge Urban District Council [1910] 2 Ch 190 that a person is liable to process for contempt if he in fact does an act prohibited by the order of the court and that it is no answer to say that the act was not contumacious in the sense that in doing it he did not intend to disobey the order.

In Spectravest Inc v Aperknit Ltd [1988] F.S.R. 161 the defendants had produced garments using designs which were alleged to infringe the claimants’ copyright and on the claimants’ application for an interim injunction the court had accepted an undertaking from the defendants not to infringe the claimants’ copyright and to deliver up any offending articles in their possession. Subsequently the defendants produced garments with a similar design, having been advised by their patent agent that they would not thereby infringe the claimants’ copyright. In proceedings brought by the claimants the defendants submitted that they were not guilty of contempt because they had not intentionally broken their undertaking having acted on the advice of their patent agent. Millett J., applying Heatons’ case and the later case of Mileage Conference Group of the Tyre Manufacturers’ Conference Ltd’s Agreement [1966] 1 W.L.R. 1137, held that

“to establish a contempt of court it is sufficient to prove that the defendant’s conduct was intentional and that he knew of all the facts which made it a breach of the order. It is not necessary to prove that he appreciated that it did breach the order”.

This principle was applied in Director General of Fair Trading v Pioneer Concrete (U.K.) Ltd [1995] 1 A.C. 456 and by Jacob J. in the recent case of Adam Phones Ltd v Gideon Goldschmidt [2000] F.S.R. 163 after a thorough review of the authorities.

Despite the weight of these decisions Mr. Bhalla submitted that the defendant’s state of mind is an essential element of contempt and that the defendant in the present case could not be guilty of contempt unless it could be shown that he had intentionally, that is, consciously and deliberately, acted in breach of the court’s order. In support of that proposition he relied on certain passages from the judgments of the Court of Appeal in Irtelli v Squatriti [1993] Q.B. 83. That case concerned an injunction restraining the defendants from dealing with or disposing of certain property. The defendants subsequently executed a charge on the property in order to replace an earlier defective charge executed before the injunction had been granted. Given the existence of the earlier defective charge the defendants understood the new charge to be nothing more than a formality. On the application of the claimant the judge found the contempt established and committed the defendants to prison. On appeal Farquharson L.J. considered that the question for the court was whether the defendants had intended to act in contempt of the court’s authority. He was not satisfied that they had. Taylor L.J., agreeing, held that on the evidence then before the court (which included evidence not before the judge) the judge could not have been sure that the defendants had knowingly breached the court’s order and therefore could not have been sure that they were in contempt. Sir Donald Nicholls V.-C. also considered that a knowing breach of the order had not been established because it had not been proved that the defendants understood that the order prohibited them from executing any further charge of the kind in question.

I am not alone in finding this decision difficult to reconcile with the earlier authorities, none of which appears to have been cited to the court. (Indeed, the decision of the House of Lords in the Pioneer Concrete case came some time later.) In Adam Phones Ltd v Gideon Goldschmidt [2000] F.S.R. 163 Jacob J. was faced with precisely this problem. He would have preferred to apply a principle which required knowing disobedience to the court’s order, but felt constrained to apply the earlier line of authority which by the time of his decision had been reaffirmed in the Pioneer Concrete case. Similarly, Neuberger J. in Bird v Hadkinson (4^th March 1999, unreported) when faced with the same question felt bound to follow the line of authority reaffirmed in the Pioneer Concrete case. It is apparent from the judgments in Irtelli v Squatriti that the court was primarily concerned with the defendants’ application to introduce new evidence and relatively little attention appears to have been paid to the precise nature of mental element required for contempt of this kind. In common with Jacob J. and Neuberger J. I think that I am bound to follow the earlier line of authority. There is nothing in the judgments of the Court of Appeal in Irtelli v Squatriti to suggest that the court was intending to overturn an established line of authority, and indeed it was not necessary for it to do so. Once the court felt some doubt about whether the defendants had intentionally breached the order it was inevitable in the circumstances that the order committing them to prison would be set aside.

As a director of Lonestar Chief Idisi also had a responsibility for the actions of the company. In Attorney-General for Tuvalu v Philatelic Distribution Corporation Ltd [1990] 1 W.L.R. 926 the Court of Appeal held that where a company is ordered not to do certain acts and a director of that company is aware of the order he is under a duty to take reasonable steps to ensure that the order is obeyed, and if he wilfully fails to take those steps and the order is breached he can be punished for contempt. This principle was not challenged by Mr. Bhalla and is one which applies with equal force whether the order in question is couched in positive or negative terms.

I turn then to the individual allegations of contempt made by the claimants against the Chief.

1. Disposal of the sum of US$350,000.

On 23^rd April 1999 Timothy Walker J. ordered the defendants not to dispose of or deal with their assets within the jurisdiction up to a value of US$12.3 million. The order specifically applied to any money held in accounts at Bankers Trust Company in London. Some time after the order had been made a sum of US$350,000 was paid into an account at Bankers Trust Company in the name of Citizens Bank International for the benefit of the Chief or Lonestar. In June 1999, some time after the Chief had been notified of Timothy Walker J.’s order, three payments were made out of that account, one of US$162,358.79 in respect of salaries payable to expatriate workers in Nigeria, one of US$150,000 to Hansen & Co in Houston and one of £9,000 to a firm of lawyers, Grier Olubi, who had been acting for the defendants in this country. It was not disputed that these transfers were made on the instructions of the Chief or that between them they exhausted the whole of the sum of US$350,000 standing to the credit of the account at Bankers Trust Company.

Mr. Bhalla did not seek to justify the disposal of the US$350,000 in this way which he accepted constituted a contempt of court on the part both of the Chief and of Lonestar for which he tendered fulsome apologies on behalf of them both. He submitted, however, that the funds had been returned to the jurisdiction and that this particular contempt had been considered by Langley J. when the matter came before him in November last year. In these circumstances he submitted that it would not now be appropriate for me to impose any penalty in respect of it.

It is quite true that by the time Langley J. finally disposed of the matters before him last November the funds had been returned to this country, but the circumstances in which that came about are not without significance for this application. After the claimants discovered that the funds had been disposed of in breach of the injunction they made an application to the court for permission to issue writs of sequestration against the defendants’ assets. That application was granted by David Steel J. on 12^th August, but he directed that the writs should not be executed if the defendants returned the money to the jurisdiction by 8^th September, thereby giving them four weeks in which to purge their contempt before incurring any significant penalty. At the same hearing the judge directed that Chief Idisi and Lonestar’s finance manager, Mr. Franklin Ahonkhai, should attend for cross-examination during the week of 6^th September. In the event neither of them attended on the appointed day and no part of the sum of US$350,000 was returned to this country by 8^th September. The writs of sequestration were therefore executed and a sum of US$783,644.07 was seized.

Early in November the claimants applied for an order debarring the defendants from appearing or being heard on the application for summary judgment, or on their own application to set aside the default judgment, because of their contempt of court. The matter was listed before Langley J. on 8^th November together with the adjourned cross-examination of the defendant and Mr. Ahonkhai and the substantive applications. Shortly before that hearing the matter came before Cresswell J. on 3^rd November. He ordered the defendants to return the sum of US$350,000 to this country by 5^th November, but by the time the matter came on before Langley J. on 8^thNovember they had still not done so. In the course of the hearing Langley J. indicated that he was minded to debar the defendants from being heard on the substantive applications if they did not return the money in accordance with the order of Cresswell J. Only after that did they arrange for the funds to be returned to this country on 17^th November.

One can see from the history of this matter that although Mr. Bhalla was quite right in saying that the money had been returned by the time Langley J. gave judgment on 26^th November, it had been returned at the very last minute and only in response to a real risk that a failure to comply with the court’s order would result in the defendants’ being deprived altogether of the opportunity of presenting their case. Removing funds subject to a freezing order and failing to comply promptly with an order to return them to this country was clearly a serious contempt of court, but the fact that the money was eventually returned and that almost a year has now elapsed since that took place does, I think, provide some grounds for saying that it would be inappropriate at this stage to punish the defendants for it if it stood alone. However, I have no doubt that the removal of these funds was a deliberate and calculated act on the part of the Chief who was willing to flout the order of the court as long as he thought he could do so with impunity. It therefore remains an important part of the background against which the subsequent conduct of the defendants is to be judged.

2. Directions to Expro Gulf

During the summer of 1999 Expro Gulf had been paying sums due to the Chief by way of commission under the Services Procurement Agreement to a bank account at the National Westminster Bank in London. On 2^nd November Cresswell J. varied the freezing order made by Timothy Walker J. on 23^rd April by adding a paragraph restraining the Chief from giving instructions to Expro Gulf to pay the commission otherwise than to that account. On 26^th November 1999 Langley J. dismissed the defendants’ application to set aside the default judgment and gave summary judgment on the remainder of the claimants’ claim for damages to be assessed. At the same time he ordered the Chief to send a letter to Expro Gulf directing it to make all payments due under the Services Procurement Agreement to his account in London, thereby reinforcing the order of Cresswell J. The Chief did not despatch the letter within the time prescribed by the order, but it was eventually sent and as a result a sum of US$350,000 was paid into the Chief’s bank account in January 2000 which the claimants were able to seize by way of garnishee proceedings.

Payments of commission would have continued to flow into Chief Idisi’s bank account and so become available for seizure by the claimants had he not written to Expro Gulf on 8^th and 14^th February 2000 revoking his previous instructions and instructing it to make all further payments under the Services Procurement Agreement to a bank account in Nigeria in the name of Chief Gabriel Ofotokun. This was a clear breach of the orders of Cresswell J. and Langley J. and on the face of it a serious contempt of court.

The explanation put forward by Chief Idisi for what was on any view a deliberate breach of the court’s orders was that on 3^rd February 2000 an order had been made against him by the Nigerian High Court requiring him to ensure that all payments due to him from Expro Gulf were made to Chief Ofotokun’s account. This, if correct, would not prevent his being guilty of contempt, although it would certainly be a matter which the court would wish to take into account when assessing the culpability of his action. I have been provided with copies of various documents relating to the proceedings in Nigeria from which it is clear that an order was indeed made requiring Chief Idisi to ensure that certain monies were paid to Chief Ofotokun. Mr. Dunning submitted, however, that these proceedings were collusive and were commenced with the connivance of Chief Idisi in order to provide him with an excuse for redirecting the funds to Nigeria where they would be out of the claimants’ reach and available to satisfy his own business requirements.

The proceedings in question were commenced by Chief Gabriel Ofotokun and a company called Vik-Ereks Integrated Company Nigeria Ltd against Chief Idisi, Expro Nigeria Ltd (a company which apparently does not exist) and Ecodrill Nigeria Ltd. They were issued in the High Court at Isiokolo which, according to the evidence given by Mr. Gibbons on behalf of the applicants, is a small court centre approximately 1½ hours’ drive from Warri and Sapele, the main cities of the Delta State. Chief Idisi lives in Sapele and the plaintiffs are based in Warri and Sapele respectively, so it might be thought slightly surprising that the proceedings were started in Isiokolo. However, Chief Idisi’s lawyers have given an explanation for that, and in any event it does not, by itself, take the matter very far.

The claim in this action is for sums due under a contract made between Vik-Ereks, Chief Ofotokun and Chief Idisi under which Vik-Ereks agreed to supply drilling pipe to companies managed by Chief Idisi against payment by Chief Ofotokun who in turn was to recover the amount due from Chief Idisi over a period of time. The plaintiffs claimed a sum of N250 million from Chief Idisi for which they sought summary judgment. They also sought an order against the other defendants compelling them to pay any sums which might fall due from them to Chief Idisi into the bank account of Chief Ofotokun in Sapele. In effect, therefore, the plaintiffs were seeking a form of garnishee order in respect of debts owed by those defendants to the Chief. The court made an order in the terms sought by the plaintiffs, but that is hardly surprising in view of the fact that, according to the preamble to the order itself, Chief Idisi not only did not oppose their application but confirmed that he did not dispute either the claim itself or the relief sought. Chief Andi Osawota, who appeared for Chief Idisi on that application, has said by way of explanation in a witness statement made for the purposes of the present application that the Chief had no answer to the claim and could not stop the plaintiffs from obtaining an order tracing his assets in order to satisfy the judgment debt. However, he does not explain why he did not draw to the court’s attention on behalf of Chief Idisi the fact that the Chief was already subject to an order of this court requiring him to ensure that sums owed to him by Expro Gulf were paid to his account in London. It is also interesting to note that when the second and third defendants applied to have the order against them set aside Chief Idisi vigorously opposed their application. Chief Osawota says that it was necessary for him to do that because, having purported to accept service of the proceedings on their behalf, his credibility was in issue. I do not find that very persuasive, but in any event it does not explain why Chief Idisi also appears to have opposed their application for a stay of execution which was dismissed on 10^th October 2000.

There are undoubtedly some unusual aspects to these proceedings. The agreement between Chief Ofotokun, Vik-Ereks and Chief Idisi was produced for the first time only a few days before the present hearing, despite the fact that it ought to have been produced in response to Langley J.’s order of 17^th February 1999. It provides for payments to be made by Chief Idisi to Chief Ofotokun on a quarterly basis, but it does not specify the period over which payment for any particular consignment of goods is to be spread or for the payment of interest. Moreover, as Mr. Dunning pointed out, the purchase orders which have been produced as evidence of the underlying liability show signs of having been tampered with. In each case the date was originally the same as that which appears on the corresponding invoice, but has been overwritten so that it now antedates the invoice by several days. Mr. Dunning invited me to conclude from all this that both the agreement and the paperwork had been fabricated quite recently for the purposes of supporting the defendants’ case. I am not sure that the agreement itself is fabricated, but I have considerable reservations about the paperwork supporting the claim and therefore of the authenticity of the claim itself.

However, I am prepared to put these reservations on one side and assume that Chief Idisi did owe Chief Ofotokun a substantial amount of money under this agreement. Even so, I find it striking that Chief Ofotokun should have chosen that very moment to commence proceedings in respect of a debt which is said to have been outstanding for a considerable period of time. No evidence has been given about the commercial background to this action, nor has any correspondence been exhibited which would explain why proceedings came to be issued just at that time. It could have been mere coincidence, but that seems rather unlikely given the fact that Chief Idisi and Chief Ofotokun were long standing friends who had done business with each other for some time and that Chief Ofotokun was one of those who had helped Chief Idisi finance the present litigation. It is also striking that although Chief Idisi has substantial assets of various kinds in Nigeria, the only assets which the plaintiffs sought to bring within the ambit of the order were the payments due to Chief Idisi under the Services Procurement Agreement. Moreover, the enthusiasm with which the Chief not only submitted to judgment but acquiesced in the order requiring him to pay the money due to him under that agreement to Chief Ofotokun further supports the conclusion that it suited him very well for that order to be made against him. Had that not been the case, it is inconceivable in my view that he would not have resisted that part of the order which dealt with the commission payments or actively opposed the attempt of the second and third defendants to set aside the order against them.

Most of these points were raised in an affidavit sworn by Mr. Gibbons on behalf of the applicants at the beginning of September. The Chief has thus had plenty of time to deal with them, but he has signally failed to do so. He has merely stated that he was advised by his lawyers that he should comply with the order of the Nigerian court which, given that he is directly amenable to its jurisdiction, is understandable. However, he does not attempt to deal with the suggestion that the proceedings were instigated by him with a view to enabling him to have the benefit of the money due from Expro Gulf in Nigeria. Neither Chief Idisi, nor Chief Osawota gives any explanation for the apparent failure to inform the Nigerian court of the proceedings in London or of the court’s orders relating to the Expro Gulf payments. Chief Idisi made no application to this court for a variation of the order of Cresswell J. so as to allow him to direct Expro Gulf to make payments to Nigeria; he simply took the matter into his own hands and revoked the earlier instructions.

Viewing the evidence as a whole I am satisfied that Chief Idisi saw these proceedings as a way of providing him with an excuse for diverting the payments due from Expro Gulf out of the hands of the applicants to Nigeria where they could be used to meet his own business expenses. The nature and timing of the Nigerian proceedings as well as his response to them, especially when viewed against the background of his earlier removal of funds from London, are enough to satisfy me that he prompted Chief Ofotokun to set them in motion in order to enable him to take advantage of them. In effect, therefore, although once the order had been made by the Nigerian court Chief Idisi was bound by it, the conflict between that order and the order of this court was one of his own making and in those circumstances he must take responsibility for the revocation of his earlier instructions to Expro Gulf. The contempt which that undoubtedly involved can therefore properly be regarded as intentional and as such it is of a serious nature.

It is necessary in this context to mention another order of a similar kind which has been made against Chief Idisi, Lonestar, Deutag Nigeria Ltd, Expro Nigeria Ltd and Ecodrill Nigeria Ltd, this time by the High Court at Warri, in an action brought by Oceanic Bank International (Nigeria) Ltd.. This is an action begun early this year to recover N185 million alleged to be due under two short term loans made by the bank to Lonestar and guaranteed by the Chief. Again, the other defendants appear to have been joined simply in order to obtain an order against them directing payment of sums due from them to the Chief to an account in the name of the bank.

Since the Chief does not rely on this order as justifying his own or Lonestar’s failure to comply with the order of this court, it is unnecessary for me to consider it in quite the same detail. There is no evidence of the approach which the defendants took to that action, although I infer from the way in which Chief Osawota deals with it in his witness statement that the defendants did not contest either of these claims very strongly, if at all. They were made in respect of amounts outstanding under two agreements dated 23^rd and 25^th August 1999. The first of these was an agreement for a term loan of N85 million for a period of twelve months. The loan carried interest at 30% and was expressed to expire on 31^st July 2001. It was repayable in twelve equal monthly instalments. The agreement dated 25^th August was for the management of an issue of commercial paper by Lonestar to the face value of N100 million maturing on 13^th March 2001 and carrying a coupon of 30% per annum.

It seems obvious to me that the bank in this action has simply put forward a claim for the full amount of the principal sum under each agreement together with interest and charges, both unquantified. Given the terms of the two facilities, it is difficult to see how by February 2000 it could have had a good cause of action for the full amount due under each of them unless, perhaps, an event of default had occurred of a kind which rendered the sums immediately payable, yet none of those who have given evidence about the defendants’ relationship with the bank have ever hinted at that. It is also surprising that the whole of the principal should have remained outstanding under the first loan if, as the defendants say in another context, the bank was receiving payments from Lonestar’s customers by way of repayment of its liabilities. In my view this claim too bears all the hallmarks of collusion and as such it tends to reinforce the view which I take of the action brought by Chief Ofotokun.

3. The pursuit of proceedings in Nigeria

The contract of carriage under which the defendants sought to pursue their claims against the owners of the Dubai Valour contained a London arbitration clause. It was for this reason that Timothy Walker J. granted an injunction restraining Lonestar from continuing the proceedings against them in Nigeria. A few days after that order had been made Lonestar applied to the court in Nigeria to strike out its action, but for some reason the court made an order dismissing the action instead. The effect of such an order appears to be that Lonestar was thereafter precluded from bringing another claim based on the same cause of action. The order that was actually made may have resulted from an error on the part of the court, but even so, if the proceedings were not to be pursued in any event, it was not one of any great significance.

While their application to set aside the default judgment in this country and the claimant’s application for summary judgment were both still pending Lonestar expressed an intention to pursue its claim by counterclaim in the present action. Permission to pursue the claim in that way had been included in the original order of Timothy Walker J., and indeed the order made by Langley J. on 26^th November 1999 contemplated that it would do so. Lonestar’s attitude appears to have changed significantly, however, after Langley J. disposed of the applications before him. Not only did it not serve a counterclaim in the action, it served an amended defence in which it alleged that the claimants had repudiated the settlement agreement under which the Nigerian proceedings had been compromised and that Nigeria was the only suitable forum for the determination of its claim.

Lonestar’s concern over the nature of the order made in the Nigerian proceedings was first brought to the court’s attention in May 1999 when it sought to issue a notice of motion applying for the order to be amended under the slip rule. However, the court was unwilling to deal with the matter on this basis and Mr. Thompson Okpoko, one of the lawyers who acts for Lonestar in Nigeria, has explained that the court would not consider the application to correct the original order unless the case were first ordered to be relisted. The defendants also put before me a witness statement from Mr. Olisa Agbakoba who was acting for Lonestar at that time in which he confirms that and adopts what Mr. Okpoko has said on this point generally.

Applications were subsequently made to the court to have the case relisted, but whatever may have been Lonestar’s original intentions, it is clear that by the early months of this year they had gone beyond merely enabling the order to be corrected. The first thing that one notices is that after a flurry of correspondence with the court in June and July 1999 the application lay dormant for several months. Indeed, nothing was done to take the matter forward until 28^th January 2000 when Lonestar issued an ex parte notice of motion to have the previous order corrected and to have the action relisted in the general cause list. The reason why this application was made ex parte appears from the supporting affidavit of Miss Oluchi Ikemba which was described as an “Affidavit of Urgency”. In it she set out briefly the circumstances giving rise to the action and the settlement in April 1999 under which the claimant paid US$3 million into an escrow account. She then described how the defendant had surreptitiously filed an application in England which led to the freezing order and the eventual recovery of the US$3 million. Finally she stated that the owners were attempting to recover more money from Lonestar and that it was therefore in the interests of justice that the court should hear the motion to relist the action in order to prevent irreparable damage and injustice to Lonestar. Neither Mr. Agbakoba nor Mr. Okpoko has attempted to explain what lay behind that application, but on the face of it it was the first step towards bringing the matter back before the court to obtain some form of substantive relief.

It seems that a second notice of motion in similar form was issued shortly afterwards on 1^st February 2000 because the order made by the court when the matter did finally come before it on 28^th February refers to a notice of motion of that date, as does a later affidavit sworn by another one of the lawyers acting for Lonestar, Mr. Godwin Etim, to which I shall come in a moment. At all events, on that first occasion the court directed that the previous order should be amended and adjourned the application to relist the case to 3^rd April, apparently in order to give the owners an opportunity to file evidence. This order is of some significance for two reasons: first, it demonstrates that it was not necessary formally to relist the action as a prerequisite to correcting the previous order; secondly, it shows that the application to relist was more than a mere formality.

The owners did file evidence in the form of an affidavit sworn by Mr. Seun Peters in which he said that the files were closed in 1999 when the case was settled and that it would be in the interests of justice to refuse the application to relist the action. In response Lonestar filed the affidavit sworn by Mr. Godwin Etim to which I referred a moment ago. In it he said that by taking action in England to obtain a freezing order over the sum of US$3 million in the escrow account the defendants had rescinded the settlement agreement and that unless the action were relisted Lonestar would be without any remedy for the losses suffered by it for which the original suit was filed. He said that the owners and the Club had acted in bad faith and that the action should be relisted so that it could be decided on its merits and the rights of the parties determined once and for all.

The application to relist the action was granted on 3^rd April 2000; the order has been exhibited to Mr. Gibbons’ witness statement filed on behalf of the present applicants. Mr. Isah Kanoba, Lonestar’s legal adviser, has made an affirmation in the present proceedings in which he has said that the court fixed 3^rd July as the date on which it would deal with the question of relisting the action, but he is mistaken about that because the order of 3^rd April is quite explicit in stating that the action was to be relisted. At that point, therefore, it was open to the plaintiff to pursue it in the ordinary way.

Mr. Okpoko says in his affidavit that the application to relist the action was not made for the purposes of enabling Lonestar to proceed in due course to a hearing on the substantive issues, but was a step which had to be taken to enable it to obtain a variation of the original order. He says that Mr. Etim’s reference to the application being relisted so that it could be determined on its merits was merely a “statement of fact”, by which I understand him to mean that it was no more than a statement that the action would technically be capable of being prosecuted to judgment, even though, as indeed he asserts, Lonestar did not intend to pursue it any further. Mr. Agbakoba confirms that that was the case and Mr. Etim himself has provided a further affidavit in which he says that it was neither his instructions nor his intention to say that the proceedings would in fact be pursued to a conclusion. He says that the question of relisting only became an issue because the owners were contesting the matter and that it was necessary formally to depose to the fact that the action could be determined on the merits.

Despite what has been said by Mr. Etim, Mr. Okpoko and Mr. Agbakoba, I find it very difficult to accept that explanation because it flies in the face of all the evidence to which I have referred. Neither Mr. Okpoko nor Mr. Agbakoba suggests any reason why the owners should have been reluctant to agree to having the case relisted if all that lay behind the application was the obtaining of an order that it should be struck out. Nor does their account explain why Mr. Etim’s affidavit should have been cast in such forceful terms if that was really all that Lonestar was seeking to achieve. Most significantly, neither of them deals in any way with the background to the ex parte application or Miss Ikemba’s affidavit in support. All these documents point in the same direction. Moreover, this application was being pursued after the order correcting the original order had already been made. Neither Mr. Okpoko nor Mr. Agbakoba nor Mr. Etim says that an order to relist the action was necessary to validate in some way the previous order striking it out; nor was any subsequent order sought in those terms. It is clear that once the order for relisting had been made the action was restored to life, hence the later application for a stay made by Lonestar on 3^rd July 2000 which would otherwise not have been necessary or appropriate. Mr. Bhalla submitted that the purpose of relisting the action was partly to prevent the claim from becoming time-barred, but I find it impossible to accept that either. I think it is quite plain that, having failed in their attempt before Langley J. to stave off judgment against them in this country, the defendants decided to re-activate the proceedings in Nigeria with a view to obtaining a judgment in favour of Lonestar there. Armed with that they hoped to nullify the effect of the proceedings in this country. The conclusion that it was the intention of Chief Idisi and Lonestar to proceed with the action on the merits in Nigeria is further reinforced by a note and a letter which Chief Idisi wrote to Expro Gulf early in February and March 2000 respectively informing it that he had properly re-opened the action against the owners.

I am left in no doubt that the application to have Lonestar’s action relisted was a deliberate and calculated step to pursue the proceedings in Nigeria in breach of the order of this court. Mr. Bhalla submitted that Lonestar’s subsequent application in July of this year for a stay of the proceedings showed that the Chief did not wish to be in contempt of this court, but the fact remains that obtaining the order to relist the action was as significant a step in the prosecution of the proceedings as issuing and serving the writ or starting a fresh action. Despite what is said by Mr. Okpoko, Mr. Agbakoba and Mr. Etim, I am left in no doubt that the effect of relisting the action was to enable it to be pursued on the merits and that that was and remains the Chief’s intention. Having seen the way in which Chief Idisi has responded to the proceedings in this court in the past, I have no doubt that the application for a stay was issued simply in order to enable him to argue the very point which Mr. Bhalla now seeks to make on his behalf. In my view it was little more than a tactical move intended to enable him to put his case forward in the best possible light.

4. Failure to make full disclosure

As part of the worldwide freezing order which he made on 23^rd April 1999 Timothy Walker J. ordered the defendants to give the claimants details of all their assets both in this country and abroad. When the matter came back before him on 14^th July 1999 the judge concluded that the defendants had failed to comply with that part of his order and directed that Chief Idisi and Mr. Ahonkhai should attend for cross-examination. For that purpose the judge ordered the Chief and Mr. Ahonkhai to bring with them a number of documents identified in the schedules to the order, and on 12^th August David Steel J. ordered Chief Idisi and Mr. Ahonkhai to provide the claimants with copies of those documents by 31^st August 2000.

The claimants say that the defendants have failed to comply fully with any of the orders for disclosure or for the production of documents which have been made against them, but the matters on which they mainly relied in support of this application relate to the production of the documents identified in the schedules to the order of Timothy Walker J. to which I have referred. Chief Idisi for his part says that he and Lonestar have disclosed all the documents which they hold. For the purposes of the hearing the claimants produced a schedule setting out the principal respects in which they say the defendants have failed to comply with the court’s orders and this, with later modifications, provided the main focus for the argument before me. I propose, therefore, to concentrate on those matters.

(i) Statements relating to accounts held at Citizens Bank

The defendants were ordered to disclose statements relating to all bank accounts held by Chief Idisi and Lonestar Overseas at Citizens Bank. Statements have been disclosed for account No.0712873116 in the name of Chief Idisi, but the claimants say that one can infer from some of the entries in those statements that the defendants held other accounts at the bank for which no statements have been produced.

The basis for this allegation is the presence in the statements of credit entries denoting transfers with the suffix “CIB”. There is no evidence from the bank (or for that matter from Chief Idisi) to explain these entries or the significance of this notation. In particular, there is nothing to indicate from which accounts, if any, the transfers in question were made. In the absence of any other evidence I do not consider that these entries are sufficient to establish to the standard required on an application of this kind the existence of other accounts at the bank in the name of one or other of these defendants. The claimants are therefore unable to establish the basis for this part of their case.

(ii) Share certificates

The Chief was ordered to produce share certificates relating to his holdings in the following companies: Lonestar Drilling (Nigeria) Ltd, Lonestar Overseas Ltd, Ecodrill (Nigeria) Ltd, Fedison (Nigeria) Ltd, and Aweto Guest Quarters Hotel Ltd. No such certificates have been produced. Mr. Kanoba, to whose evidence I have already referred, also deals with this aspect of the case. He says that the companies in question are all private companies and that share certificates are not issued by private companies which rely simply on their internal records of share allotments. I have little doubt that the information which would have been obtained from the share certificates (if any had been issued) is to be found in the documents which Chief Idisi has disclosed. Although Mr. Dunning could point to discrepancies between the explanations which the Chief has given at different times for the absence of any share certificates, in the face of this evidence I am unable to find that there are share certificates in existence which he has wilfully failed to disclose and I am therefore not satisfied that the defendants have failed to comply with the court’s order in this respect.

(iii) Documents relating to Ecodrill (Nigeria) Ltd

Ecodrill is a Nigerian private company, 40% of the shares in which are owned by Chief Idisi. Mr Kanoba describes the Chief as its alter ego. Among the documents which the defendants were ordered to produce were bank statements and accounts for the company and a statement of amounts owed by the company to the Chief. None of these have been produced.

Mr. Kanoba says that Chief Idisi does not have the power to produce any of the missing documents, but I find that difficult to reconcile with his statement that the Chief is the company’s alter ego. Nonetheless, the fact remains that the Chief is not the majority shareholder (60% of the shares are held by a company in the Expro group). Other evidence suggests, however, that it is Chief Idisi rather than Expro who exercises real control over the company. He is its chairman and considered himself to have sufficient authority to accept service on its behalf of the proceedings brought by Chief Ofotokun. I have no doubt that he could produce these documents if he chose to do so and that in this respect he has failed to comply with the order.

(iv) Invoices rendered to Expro Gulf under the Services Procurement Agreement

The defendants were ordered to disclose and provide copies of invoices rendered to Expro Gulf in respect of payments due to Chief Idisi under the Services Procurement Agreement, but none have been disclosed. The explanation given by the Chief is that this is not the sort of contract under which invoices are rendered. However unsatisfactory that may be as a way of doing business, the nature of the contract is such that I am unable to reject such an explanation outright. I am not therefore prepared to find that the Chief has wilfully withheld production of this category of documents.

(v) Statements relating to other (unidentified) bank accounts held by Chief Idisi and Lonestar.

In addition to bank statements relating to accounts with certain named banks the defendants were ordered to disclose bank statements relating to any accounts which they hold or have held at any other banks. One way in which the claimants sought to show that the defendants have failed to comply with this part of the order is to identify two sources of income from whom no payments appear in any of the bank statements produced so far. It is convenient to consider this part of the claimants case by reference to these two sources, Mallard Bay Drilling (Nigeria) Ltd and Deutag (Nigeria) Ltd.

(a) Mallard Bay Drilling (Nigeria) Ltd

The defendants have disclosed a consultancy agreement between Mallard Bay Drilling (Nigeria) Ltd and Lonestar (Nigeria) Ltd under which Lonestar made the Chief’s services available to Mallard Bay. Under that agreement Lonestar was to be paid a monthly consultancy fee and a percentage of Mallard Bay’s operating revenue. However, none of the bank statements so far disclosed reflect the receipt of any payments under this contract.

I have little doubt that this agreement was entered into for the personal benefit of Chief Idisi, but whether it was or not, the defendants ought to have disclosed statements relating to any bank account, whether in his name or that of Lonestar, into which the fees and commission due under this contract were paid. The agreement between Mallard Bay and Lonestar appears to have come to an end in December 1996 when they executed a Release and Commitment Agreement under which Lonestar was to obtain title to a certain drilling rig. It was agreed, inter alia, that on receipt of the consideration neither party should have recourse against the other under the consultancy agreement, the terms of which were to be extinguished.

It was suggested on behalf of Chief Idisi that this agreement provided a complete answer to the claimants’ assertion that he or Lonestar continued to receive payments under the consultancy agreement, but I have to say that despite this document the evidence concerning the relationship between Chief Idisi and Mallard Bay remains most unsatisfactory. As Mr. Dunning pointed out, the Release and Commitment Agreement itself contemplated that Chief Idisi and Lonestar might provide further services to Mallard Bay in the future on terms to be agreed. More significantly, Chief Idisi dealt with this agreement himself in an affirmation he made in or about July 1999. On that occasion he said that Mallard Bay had lent him US$4 million in 1996 which he had used to buy the drilling rig in question, that loan being “in advance of future agency fees”. He said that at the time of making the affirmation US$1.9 million was still outstanding, thereby suggesting that commission in the sum of about US$2.1 million had since been earned. He also said that he received fees of US$10,000 a month from Mallard Bay. Anyone reading that affirmation would naturally understand that Chief Idisi had continued to provide services to Mallard Bay and was receiving payments from it on a regular basis. However, Mr. Kanoba in his affirmation says that the agreement with Mallard Bay came to an end in December 1996, that all outstanding sums were paid in kind by transfer of title in the drilling rig and that no further sums were paid to the Chief or Lonestar under the agreement. Mr. Kanoba made no mention of a loan nor of the continued receipt by the Chief of US$10,000 a month.

The difference between these two accounts is startling in itself, but the picture is rendered even more confused by the third affirmation of Chief Idisi made in October this year in which he says that Mr. Kanoba’s affirmation has been read to him and that he confirms the truth of its contents. He also says that he visited Mallard Bay in Louisiana in June 1999 at its invitation and expense to be present at the commissioning of a new rig. I find it difficult to believe that an invitation of that kind would have been made to someone who had had no business relationship with the company since December 1996 and it ties in with his earlier statement that he was still receiving regular payments from them in 1999. Regular payments of this kind would normally be made to a bank account nominated by the recipient and the Chief’s failure to disclose any bank statements showing the receipt of these sums points clearly to the conclusion that they have been paid into an account of which disclosure has not been given. I am satisfied, therefore, that there has been a deliberate failure to comply with the order in this respect.

(b) Deutag Nigeria Ltd

A similar consultancy agreement existed with a company called Deutag Nigeria Ltd. under which Chief Idisi or Lonestar received an agency fee of 3.5% and a monthly fee of US$8,000. In the affirmation which he made in July 1999 the Chief said that the agency fee was paid into his account with Oceanic Bank, the most recent payment having been made on 5^th July 1999. He also referred to the monthly payments in a way which suggested that he would be continuing to receive them for the foreseeable future. In his affirmation (which, of course, Chief Idisi has confirmed) Mr. Kanoba says that the sums due under the consultancy agreement were paid into an account at Deutsche Bank which is now defunct. He refers to statements exhibited by the defendants’ present solicitor, Mr. Rosshandler, relating to account No.693/0126953 for the period 1^st January 1996 to 30^th April 1999. However, it is now clear that Chief Idisi has another account with Deutsche Bank which remained active until it was made the subject of an attachment order. Moreover, Mr. Kanoba does not attempt to deal with the monthly payments which, in July 1999, the Chief had said he continued to receive.

As in the case of Mallard Bay, one would normally expect monthly payments by Deutag to have been made to a bank account nominated for that purpose. Since no payments from Deutag appear on any of the accounts which have been disclosed, one might well infer that the Chief has another account which has not been disclosed, and indeed it has now emerged that he has a second account with Deutsche Bank for which until very recently no statements had been provided.

In an affidavit sworn in October this year Mr. Rosshandler deals with the question of payments by Deutag to Chief Idisi. He says that two or three years ago the Chief bought a rig and other equipment from Deutag on terms that the price would be repaid by Deutag’s withholding sums falling due to the Chief under the terms of their consultancy agreement. The funds currently standing to the credit of account No. 693/5731567 with Deutsche Bank are said to have been paid by Deutag in error, it having apparently overlooked the fact that payments were not to be made to the Chief until the whole of the cost of the equipment had been recovered.

I find the suggestion that Chief Idisi has received no payments from Deutag for two or three years (apart from one which was made by mistake) impossible to accept. In the first place, in the affirmation which he made in July 1999 the Chief himself said that the agency fee due under the contract with Deutag was paid into his account with Oceanic Bank, not Deutsche Bank. Next, he made no mention of the purchase of a rig or other equipment from Deutag, nor of any arrangement under which payments due to him were to be set off against the price due in respect of it. This is all the more remarkable in view of the fact that in the immediately preceding paragraph he had described a rather similar kind of arrangement with Mallard Bay. Moreover, no documents evidencing a transaction of this kind have been put forward to support what Mr. Rosshandler says. I find it difficult to believe that any company which had entered into an agreement of that kind would have inadvertently remitted a sum of money to the Chief rather than setting off whatever was due against the amount outstanding. If the account given by Mr. Rosshandler is correct, Deutag must have established a method of accounting for payments which did not involve remitting any funds at all. No documents evidencing a contra-accounting arrangement of this kind have been disclosed, although one would normally expect them to have been generated in order to show what sums had been credited to Lonestar and the Chief. It may well be that Deutag has made a payment to the Chief which it is now seeking to recover, but I do not find the account of the relationship between Lonestar and Deutag given by Mr. Rosshandler at all convincing. It is inherent in what Mr. Rosshandler says that the Chief continues to act as consultant to Deutag and by his own account the Chief continues to receive payment, but no bank statements have been disclosed showing the receipt of the money and no satisfactory account has been given of how and where such payments are received. I am satisfied, therefore, that there has been a deliberate withholding of information in this respect.

(vi) Statements relating to accounts with Deutsche Bank

Mr. Dunning submitted that the claimants’ enquiries of Deutsche Bank had not only confirmed Chief Idisi’s failure to make full disclosure of his and Lonestar’s income from Deutag, but had also brought to light the fact that he had at least one other account with Deutsche Bank of which no disclosure had been given. This submission was based on the evidence of Mr. Kaiser of Stephenson Harwood who was told by the bank in May 1999 that there was a dollar account in the Chief’s name with a “five figure” balance. This could not, Mr. Dunning said, have been account No.693/0126953 which was said to have become defunct in June 1999 because there had been no transactions on it since November 1996. It must therefore be another account in respect of which no information had been provided.

In a further affidavit sworn right at the end of the proceedings Mr. Rosshandler confirms that the Chief did have two accounts with Deutsche Bank. The second, No.693/5731567, was opened at the suggestion of the bank in order to prevent fraudulent transactions on the original account, account No. 693/0126953, which thereafter became inactive. Apparently Mr. Kanoba, who said in his affirmation that all payments from Deutag had been paid into the first account, was unaware of the existence of the new account, although Chief Idisi, who confirmed that Mr. Kanoba’s affirmation was correct in all respects, certainly was not. Most of the statements for the second account have now been disclosed, although some are still missing. Those that have been produced show quite large movements on the account during the summer of 1999, so it is very possible that in May 1999 (for which the statements have not yet been produced) there was a “five figure” sum standing to the Chief’s credit. There was certainly a transfer of over US$30,000 in June 1999, probably before the bank received notice of any order freezing the funds.

Mr. Dunning is, of course, quite right in saying that full disclosure should have been made in relation to both accounts at Deutsche Bank in response to the first order of Timothy Walker J. and that the relevant documents should have been produced in response to the judge’s order of 14^th July 1999. He pointed to the fact that the existence of account No.693/5731567 was only brought to the claimants’ attention by a side wind when a copy of the Chief’s letter of instruction to the bank was exhibited to Mr. Cohen’s second witness statement served in November 1999 and suggested that Chief Idisi was attempting to conceal the existence of the account for as long as possible. I am unable to accept that. It is quite true that in his original response to the order for disclosure the Chief simply referred in rather general terms to an account at Deutsche Bank containing about US$6,000 without giving any further details, but one can see from the way in which that affidavit as a whole is drafted that it deals with matters in very general terms. In that respect it is, of course, unsatisfactory, but the evidence now available suggests that there was at that stage only one active account, that is, account No.693/5731567, which did contain about US$6,000. It is now clear that Chief Idisi did instruct the bank to disclose information about account No.693/5731567 to his solicitors, but that there were errors on the part of both the bank and the solicitors which resulted in disclosure of information about the defunct account instead of the active one. It is no excuse for the Chief to say that the claimants have found out about the active account for themselves; nor is it an excuse for him to say that he left everything to his solicitors, since it is important for a person who is subject to an order of this kind to ensure that his solicitors have all the information which they need to enable him to respond to the court’s order and that any response which they make on his behalf is correct. However, carelessness is not the same as deliberate concealment.

(vii) Accounts with Oceanic Bank

The defendants derive their main source of income from drilling contracts with three companies, Shell Nigeria Exploration and Production Company Ltd (SNEPCO), Elf Petroleum (Nigeria) Ltd and Pan Ocean Oil Corporation (Nigeria) Ltd, under which they were receiving very substantial sums immediately prior to the freezing order. Before the claimants obtained that order those sums were being paid into an account with National Westminster Bank in London. Payments into that account ceased almost immediately after the order was made and during the initial stages of the hearing before Langley J. in November last year it was the defendants’ case that that was simply a matter of coincidence. However, they later changed their stance and put before the court evidence that following their failure to obtain a variation of the original order a new arrangement had been put in place under which the funds had been collected by Oceanic Bank in an account with one of its correspondents. As Langley J. observed, the effect of that arrangement was that the payments were not credited to any account in the defendants’ name. The defendants explained this arrangement by saying that the funds were used to run their business, but the statement of account produced in order to show how the funds were disposed of contains many unexplained transfers.

Because he was satisfied that they were still concealing their assets Langley J. ordered the defendants to give precise details of the accounts into which payments were being made under the drilling contracts. The defendants said in response that the sums in question were “domiciled” with Oceanic Bank, but did not provide details of the accounts in question or the arrangements under which they were established. The claimants made a request for further information about the foreign correspondent banks which were being used to handle or process payments of the funds said to have been domiciled with Oceanic Bank and in their reply to this request dated 19^th November 1999 the defendants said that they were “unaware of any relationship or identity of any correspondent bank of Oceanic or the account numbers of any such banks”. That may seem surprising in itself since the defendants presumably had to give instructions for the payment of money due to them from their customers, but in any event documents have since been disclosed which show that in July 1999 Chief Idisi signed a resolution of the board of Lonestar authorising instructions to be given to Pan Ocean to make payments to Oceanic’s correspondent for the credit of the domiciliary account. Also, at the beginning of October 1999, Chief Idisi signed a letter of instruction to Elf directing it to remit dollar payments to Bankers Trust Company for the account of Oceanic Bank domiciliary account for the benefit of Lonestar. No instructions to SNEPCO have been disclosed, although correspondence between the defendants and Oceanic Bank show that the bank was also receiving funds from SNEPCO and indeed SNEPCO has since confirmed that it received similar instructions in July 1999. It follows that at the time when the further information was given Chief Idisi did know the identity of at least one of Oceanic Bank’s correspondents and that the answer given must to his knowledge have been false. The defendants were thus deliberately withholding information in their possession relating to the collection and disposal of substantial amounts of money.

The explanation now put forward for the domiciliary account with Oceanic Bank is that it was one aspect of an arrangement under which Lonestar borrowed large sums of money from the bank in order to finance its business. A witness statement was produced from a banking expert, Mr. Abraham, in which he explains that a domiciliary account is used as a means of providing a lending bank with security. The customer who has borrowed money from the bank instructs his debtors to make all payments to the domiciliary account which is, in effect, an account in the name of and controlled by the bank itself. Such an account may be held with a foreign bank where the currency is foreign, as would be the case where remittances are made in US dollars for the benefit of a Nigerian bank. Sums received for the benefit of the customer are normally credited against his loan; any surplus is remitted in accordance with his directions. It follows from this, as indeed Mr. Abraham says, that funds which are paid into a domiciliary account will be dealt with in accordance with the arrangements between the bank and its customer.

Normally there would be no point in establishing a domiciliary account of this kind unless the bank required security, but I can see no reason in principle why such an account could not be established for other reasons. I say that because the precise nature of the relationship between Oceanic Bank and the defendants still remains unclear. The explanation originally given was simply that the account at Oceanic Bank was being used to operate the defendants’ business. Nothing was said about a loan or that it was an account maintained in order to provide the bank with security, and the manner in which instructions were given to Oceanic Bank for payments out of the account, some of which appear to have been for the benefit of Chief Idisi himself or his family, do not suggest that the bank was itself interested in the funds. In support of the suggestion that the defendants have a loan agreement with Oceanic Bank Mr. Rosshandler has exhibited a copy of an agreement dated 25^th August 1999 to which I have already referred under which the bank agreed to manage the issue by Lonestar of commercial paper to a face value of N100 million. However, the bank did not agree to underwrite the issue and did not require Lonestar to direct its commercial debts into a domiciliary account of the kind described by Mr. Abraham.

It appears, however, that this was not the only facility which Lonestar had with the bank. Mr. Bhalla drew my attention to Chief Idisi’s third witness statement made in November 1999 in which he described the relationship between Lonestar and Oceanic Bank and to which he exhibited the letter agreement dated 23^rd August 1999 (to which I have already referred in another context) by which the bank agreed to lend Lonestar N85 million for a period of 12 months. It does appear to have been a term of that loan that the proceeds of Lonestar’s contracts with SNEPCO and other companies should be domiciled with the bank, but the funds then due from SNEPCO alone are said to have exceeded US$500,000 and since the loan was repayable in monthly instalments one would have expected substantial sums to have remained available to Lonestar. The precise nature of the arrangement under which the domiciliary account was maintained is unclear. In his supplemental answers to the questions set out in Langley J.’s order which were served just before the hearing of this application Chief Idisi says that Lonestar was not itself entitled to the payments from SNEPCO, Elf and Pan Ocean and that “the monies so received by Oceanic were used to reduce the liability of Lonestar in its account with Oceanic”. Evidence has also been obtained from the managing director of the bank, Mrs. Ibru, to the effect that the funds in the domiciliary account all belonged to the bank so long as Lonestar continued to owe the bank money. She also said that Lonestar was in serious arrears in its account and that she was not happy with the extent of its indebtedness.

Despite this evidence, I am unable to accept the suggestion that Lonestar had no access to the funds paid into the domiciliary account. In the light of the directions which it gave for disbursements to be made from the account, it clearly did. Moreover, it is clear from other evidence that even before the loan agreements were made the proceeds of Lonestar’s contract with the oil companies had been domiciled with the bank. I have already described how the defendants’ account of the manner in which these payments were handled changed during the course of the hearing before Langley J. Having initially tried to persuade the judge that payments under these contracts had ceased just at the time the freezing order was made, they admitted that following their failure to obtain a variation of the order they had established this new arrangement with the bank. In the light of all the evidence I am satisfied that the Oceanic account was originally set up to mask the receipt by the defendants of payments under the contracts with the oil companies in order to enable them to continue to have the benefit of those payments as far as possible free of the effects of the freezing order. The existence of the domiciliary account may subsequently have provided some additional security to the bank when it came to grant the loan (although it took other forms of security, including mortgages on real property), but that did not prevent Lonestar from receiving the benefit of the payments into the account. I am satisfied, therefore, that this is another instance in which the defendants have failed to give full disclosure as was required of them. Instead it has been necessary to prise information about the operation of the Oceanic out of them over a period of months in the face of attempts to mislead the claimants and the court into believing that they no longer have any interest in or control over the proceeds of the contracts with SNEPCO, Elf and Pan Ocean.

(viii) Accounts with Afribank International Ltd and Afribank plc

Another bank at which the defendants held accounts was Afribank; statements have been disclosed relating to current account No.836036. Mr. Kanoba says that Afribank International Ltd is a subsidiary of Afribank plc and that the two companies jointly made a loan facility available to Lonestar in the sum of N300 million, with Afribank International Ltd acting as managers of the loan. He says that there are two accounts: a loan account in respect of the amount outstanding under the facility which has not yet fallen due for repayment and a current account in respect of amounts already due and owing. On 28^th June 1999 Afribank wrote to Chief Idisi in connection with the loan facility setting out the position on the accounts as at that date. This shows the existence of six accounts altogether: two “principal” accounts, one current account and three interest accounts, two relating to the principal accounts and one relating to the current account. Mr. Dunning submitted that no statements have been disclosed for one of the principal accounts. This appears to be correct, but that account appears to represent no more than the balance on the loan account not yet due for repayment. It does not appear to be an account into which funds were being paid for the benefit of the Chief or Lonestar. If there has been a breach of the order in relation to this account, therefore, I do not think it is of any great significance.

(ix) Other accounts with Oceanic Bank

The claimants say that the defendants have also failed to disclose documents relating to all their accounts with Oceanic Bank. In his affirmation Mr. Kanoba explains the position as follows. Lonestar had two accounts with Oceanic Bank, one at Warri and one at Port Harcourt, both of which had an overdraft facility. Apparently the bank had originally overlooked the fact that there were these two accounts, but when it became aware that it was exposed to a greater credit risk than it had intended it insisted that the two accounts be merged. That, it is said, occurred in July 1999 and the Warri account number was retained. After that only one statement of account was produced which related to the Warri account No.070017005284.

The defendants have disclosed statements for both these accounts, but there have also been disclosed statements in respect of another account, account No. 0701308403. These cover the period January to April or May 1999 (the last few documents are almost entirely illegible) but stop there. The existence of this account has not been acknowledged by any of those who have given evidence on behalf of the defendants and therefore there is nothing to explain how it was operated or why no statements have been disclosed for the period since May 1999. On the face of it, therefore, there has been a failure to comply fully with the order in respect of this account.

(x) Payments due from Fedison (Nigeria) Ltd

Fedison (Nigeria) Ltd is another private company. One third of the shares is owned by Chief Idisi; the balance is owned by his wife and daughter. The Chief was ordered to disclose any consultancy and joint venture contracts, accounts, bank statements and a statement of any sums owed to him by the company. Mr. Kanoba suggests that Fedison is a shell company which did not trade and therefore has never produced any accounts. The Chief himself in his affirmation in July 1999 said the company was “dormant”. However, a valuation report on the Chief’s property in Nigeria produced by the international surveyors and valuers Knight Frank indicates that Fedison owns two properties in Port Harcourt which, according to the Chief, command a combined rental income of almost US$40,000 a year. (I assume this is an annual rental, although the Chief’s evidence is not explicit.). During 1999 the company maintained an active current account with Oceanic Bank. This evidence is not consistent with the Chief’s assertion that the company is dormant, but it is not clear on the other hand that he has failed to disclose documents of the kind described in the order.

(xi) Payments due under contracts with Weatherford and Ikonobe Enterprise Ltd

On 17^th February 2000 Langley J. adjourned the Chief’s cross-examination yet again on condition that he answer on oath certain questions relating to his assets. These included questions relating to Lonestar’s current drilling contracts with Weatherford and Ikonobe Enterprise Ltd. He was ordered to give particulars of the income receivable under Lonestar’s contracts with those companies and the manner in which it was received and disposed of. Chief Idisi accepted that his first response to this order was unsatisfactory and accordingly he served supplemental answers very shortly before the present application came on for hearing. In those supplemental answers he said that there had been no contracts with Weatherford or Ikonobe since July 1998. However, documents already disclosed include an invoice in the sum of US$1,627.50 issued by Lonestar to Weatherford apparently for the use of two elevator bodies for the month of October 1999 and an invoice in the sum of N1,102,500 issued by Lonestar to Ikonobe for the hire of a houseboat for the month of November 1999.

Mr. Bhalla contended that as far as Ikonobe is concerned, the defendants have disclosed all invoices relating to the use of houseboats, whether under contractual arrangements on an ad hoc basis. That may be so, but the difficulty I have is that no one from the defendants has said anything about the circumstances in which this particular invoice came to be issued, so the position remains entirely unexplained. As to Weatherford, Mr. Bhalla submitted that the position was covered by the statement obtained from Mr. Wilson Nakpodia, a partner in the firm of Hassan, Nakpodia, Lonestar’s accountants. Mr. Nakpodia says, when dealing in general terms with Lonestar’s financial position, that its contract with Pan Ocean is the only contract the company has had between October 1999 and September this year. None of the witnesses has explained the arrangements under which Lonestar issued the invoice to Weatherford in November 1999, but I note that the invoice refers to the use of equipment during October 1999 and it is possible that Lonestar provided no further services to Weatherford after that. Although I have doubts about the matter, I am not able to be sure on the present evidence that there has been a failure to comply with the court’s orders in this particular respect.

(xii) Aweto Guest Quarters Hotels Ltd

Among the assets owned by Chief Idisi is a company called Aweto Guest Quarters Hotels Ltd. He was ordered to disclose the accounts of the company as well as bank statements and details of sums owing to him by the company. In his affirmation Mr. Kanoba refers to a valuation report prepared by Knight Frank which, he says, confirms that the company owns two properties, one of which is complete and the other incomplete. The one which is complete generates income which he understands to be shown in its bank statements. The other does not generate any income. Statements for the company’s account with Oceanic Bank covering the period from late March to 4^th November 1999 have been disclosed, but Mr. Kanoba says that as far as he is aware no accounts have ever been produced for the company.

The properties to which Mr. Kanoba refers appear to be those referred to in a letter dated 22^nd September from Knight Frank to the directors of Aweto Guest Quarters Hotels Ltd. This letter describes two freehold industrial complexes in Part Harcourt containing warehouse and office buildings, one of which incorporates five detached houses. The latter complex is still uncompleted. This report thus accords with what Mr. Kanoba says in his affirmation. However, the evidence relating to Aweto Guest Quarters Hotel remains far from satisfactory, not just because the bank accounts which have been disclosed for the company do not extend beyond early November 1999, but also because in the affirmation which he made in July 1999 Chief Idisi referred to a company by the name of Aweto Guest Quarters Nigeria Ltd which he described as a property holding company which did not trade and which had no assets other than those referred to in a valuation report which he exhibited to that affirmation. That report, which was prepared by a local surveyor, referred to a leasehold interest held by Aweto Guest House Hotels Ltd in a property at 8A & B Circular Road, Presidential Housing Estate, Port Harcourt which the Chief said generated a rental income of US$7,650 a month.

Mr. Dunning submitted that there is evidence here that Aweto Guest Quarters Hotel is obtaining income from this property which has not been disclosed and which does not appear to be finding its way into the Oceanic Bank account. In fact, however, I think that there has been a misunderstanding about this, although, because of the rather chaotic way in which disclosure has been handled, I think the Chief has only himself to blame for it. Nos 8A &B Circular Road were also valued by Knight Frank who in their letter of 22^nd September 1999 to Chief Idisi state that it is held on leasehold terms by the Chief himself to whom the lease was assigned. It is also fair to note that in his second affirmation the Chief did describe this as one of his properties. In the circumstances I am not satisfied that it is an additional property operated by Aweto Guest Quarters Hotel of which the Chief has failed to give disclosure.

5. Failure to attend for cross-examination

No less than four separate orders have been made for Chief Idisi to attend court for cross-examination and three dates have been fixed for him to attend. However, he has consistently failed to do so, in each case excusing his failure by reference to his state of health. The first date was 8^th September 1999, but shortly before he was due to attend the Chief sent a message to the effect that he was too ill to travel to London to submit himself to cross-examination. He provided in support a letter from a clinic in Lagos, First Consultants’ Medical Centre, signed by a Dr. Adadevoh. This said that the Chief suffered from high blood pressure, that he had collapsed in his office on 2^nd September and was rushed to hospital and that he had been advised to undergo a period of bed rest.

Mr. Dunning drew my attention to the fact that, although Dr. Adadevoh said that Chief Idisi was an old patient of his who had been suffering from high blood pressure for some time, it was apparent from his passport that the Chief had been well enough to make a large number of journeys to America and Europe during the previous few years. At the time of the first date set for his cross-examination the Chief was still in contempt of court in relation to the removal of the sum of US$350,000. Mr. Dunning drew my attention to a letter written on 9^th August 1999 by the solicitors then acting for him, D.J. Freeman, seeking the applicants’ confirmation that they would not seek to have the Chief committed if he did attend. In the light of that letter Mr. Dunning submitted that the real reason for his failure to attend was his concern about the risk of committal rather than any serious problem with his health. At all events, the Chief did not attend on 8^th September and the matter had to be adjourned. His cross-examination was later re-fixed for 8^th November.

When the matter was called on before Langley J. on 8^th November the Chief was again not present, although on this occasion Mr. Ahonkhai did attend. The Chief’s counsel, Mr. Bhalla, told the judge that the Chief had been admitted to hospital on the previous Friday (that is, 5^th November) after suffering a stroke. There was at that time no medical evidence supporting Mr. Bhalla’s instructions, but in a letter dated 8^th December 1999 Dr. Adadevoh stated that the Chief had “recently” suffered a severe attack of angina and had been admitted to hospital as an emergency. He is also said to have suffered a similar attack on 29^th November. The letter does not, however, make any mention of events which are said to have occurred on 5^th November.

The cross-examination of Chief Idisi was re-fixed for 16^th February 2000, but shortly before the hearing the claimants were told that the Chief would not be coming to London because his state of health again made that impossible. On this occasion those acting for him produced a letter from Dr. Nwobo of the Queen’s Clinic in Port Harcourt dated 10^th February 2000 in which the doctor describes the Chief as a known hypertensive and diabetic who had suffered heart failure leading to hospitalisation on a number of occasions in November 1999. Dr. Nwobo stated that in his opinion the Chief was not fit to travel and should avoid any stressful situations.

As further evidence of the Chief’s condition Mr. Rosshandler produced as part of exhibit “JRH 26” to his twelfth witness statement a letter dated 11^th February 2000 also written by Dr. Nwobo. The wording of that letter is identical to that of the letter dated 10^th February save for the addition of one complete paragraph in which Dr. Nwobo states that the Chief was admitted to hospital in Lagos on 2^nd September after collapsing in his office, that he had previously suffered a similar episode on 8^th June 1998 in Port Harcourt, that he was admitted for hypertensive heart failure on 10^th November 1998 and also on 22^nd December 1999.

Mr. Dunning invited me to take a sceptical view of the medical evidence in this case for a number of reasons. First, he pointed out that there is evidence in the documents that Chief Idisi had signed letters on behalf of Lonestar on 7^th, 9^th and 14^th September 1999 and was therefore presumably in his office attending to his business affairs on those days. He also pointed out that the Chief’s passport showed that he had been through passport control at Gatwick Airport on 11^th November 1998, the day after Dr. Nwobo had said in his letter of 11^th October that he had been admitted to hospital for heart failure. Finally he relied on the fact that the Chief had failed to submit to an independent medical examination pursuant to the order of this court.

The order for a medical examination came about in the following way. As a result of the Chief Idisi’s failure to attend for cross-examination on 16^th February Langley J. adjourned the hearing on terms that within 28 days of the service of the order he submit to a medical examination at St. Nicholas’ Hospital, Lagos by a doctor of the claimants’ choice, at their expense and at a time of their choosing. The order permitted him to attend and be examined in the company of his own doctor. The claimants instructed a doctor to carry out the examination and made an appointment for 6^th March 1999 which they duly notified to the Chief, but he failed to attend. Mr. Rosshandler exhibits to his twelfth witness statement a letter dated 3^rd March 1999 which the Chief says he sent to the claimants’ solicitors giving his reasons for not attending. The claimants say they did not receive this letter, but whether they did or not its terms are instructive when one comes to consider the Chief’s attitude to this examination. He said

“I regret I am unable to attend at St. Nicholas’ Hospital for the above exercise for the following reasons: -

1. My doctor is unable to attend the medical examination and I cannot on medical advice travel long distance without my doctor.

2. It would in my candid opinion be unguarded and a dangerous exposure to submit to medical examination by a doctor nominated by my adversaries in matters as contentious as this.

In the circumstances therefore I would suggest and do in fact demand that my medical re-examination be by an independent medical expert at a Government Hospital and in Port Harcourt. . . . . . . . .”

Further, in response to a subsequent letter from the claimants’ solicitors he wrote again on 27^th March repeating what he described as his “fundamental objection” to submitting himself to a medical examination by a doctor appointed by the claimants. This is all the more surprising given the fact that it was the Chief himself who had first made the suggestion that he should be examined by a doctor appointed by the claimants.

There is evidence, both in the form of an affirmation by Chief Idisi and in the form of a letter from the doctor himself, that Dr. Nwobo was unable to accompany the Chief to Lagos for an examination on 6^th March 1999. There is also evidence that Dr. Nwobo advised the Chief against making the journey without a medical escort who was familiar with his case. However, the Chief had his own doctor in Lagos, Dr. Adadevoh, and there is nothing to suggest that he was not available to attend the examination if he had been asked to do so. Nor is there any evidence that only Dr. Nwobo was capable of providing the necessary medical escort to cover the journey. Whatever may have been the true position as to that, however, the Chief’s attitude is made quite clear in his letters of 3^rd and 27^th March. As he himself says, he had a fundamental objection to submitting to a medical examination by a doctor appointed by the applicants and sought, in effect, to negotiate a different arrangement. He made no attempt to suggest an alternative date for examination in Lagos and in my view was plainly not willing to comply with the order of Langley J., whether or not a medical escort had been available for the journey.

In a witness statement made just before the hearing Chief Idisi explains why he had a fundamental objection to being examined by the claimants’ doctor in Lagos. He says that the doctor they had chosen was the one who had earlier treated various members of the vessel’s crew and was also the doctor to the Russian Embassy in Lagos. He also says that he discovered from documents which were made available at the hearing before Langley J. that the claimants had spent hundreds of thousands of dollars with a variety of lawyers and others “seemingly to acquire political and other influence”. This is the first time that any concrete grounds have been put forward for his fundamental objection to undergoing an examination by the applicants’ doctor, and I do not find them very persuasive. If Chief Idisi had concerns about the circumstances in which the medical examination was to take place, the right course was for him to bring them to the court’s attention and ask to have the order varied. He did not do so; instead he simply failed to comply with the order. His witness statement only serves to confirm that he did object to being examined by the claimants’ doctor and was unwilling to comply with the order.

What, then, is one to make of the medical evidence generally? The inconsistency between the dates given in Dr. Nwobo’s letter of 11^th February 2000 and the stamp in the Chief’s passport would have cast considerable doubt on the reliability of the whole of Dr. Nwobo’s evidence were it not for the fact that during the course of the hearing he provided an affidavit explaining that the references in his letter to June and November 1998 should have been to June and November 1997. In the light of that affidavit, to which he has exhibited his clinical notes, I feel bound to accept his explanation. There remains, however, the apparent inconsistency between the description of the Chief’s condition in September last year and the correspondence signed by him around that time, as well as the coincidence between the dates fixed for his cross-examination and the collapses which are said to have resulted in his admission to hospital. Moreover, his continued refusal to attend for examination by the claimants’ doctor tends to undermine my confidence in what Dr. Adadevoh and Dr. Nwobo say about him. On the other hand, I do not feel able to discount it completely, as Mr. Dunning suggested I should, given that it is supported by other evidence, in particular the witness statement of Margaret Egbe, a family friend. I think it may well be possible that stress caused by the imminent prospect of cross-examination (not to mention possible committal for contempt) may have exacerbated the Chief’s longstanding heart problems. Although the evidence is not the most compelling, I find myself unable to be sure that the Chief was fit enough to travel to London for cross-examination on the dates when he was ordered to attend. If his failure to comply with the order was wilful, therefore, it is not one which I think can properly be regarded as truly culpable.

6. Failure to submit to medical examination

I have already described the circumstances in which Chief Idisi came to be in breach of this order. I am quite satisfied that the real reason why he failed to comply with it was his fundamental objection to being examined by the claimants’ doctor. That, of course, provides no excuse for what was in my view a wilful breach of the order. His offer to submit to a medical examination by a doctor in Port Harcourt does not in my view go very far towards mitigating the seriousness of his contempt. There is evidence that any examination in Port Harcourt would be subject to a degree of “patient control”, but more importantly, I can see no reason to be confident that the Chief would in fact submit to such an examination.

7. Failure to pay costs and interim payment

On 26^th November 1999 Langley J. ordered the defendants to pay the claimants US$2 million by way of an interim payment on account of damages and £115,365 in respect of costs, in each case by 17^th December 1999. No payment of any kind has yet been made by the defendants themselves, although the claimants have recovered over US$1 million through the execution of writs of sequestration and garnishee orders. Nothing has yet been paid or recovered on account of costs. On 17^th February 2000 Langley J. ordered the defendants to pay a further sum of £15,000 in respect of costs forthwith. Again no payment has yet been made. Finally, on 12^th April 2000 pursuant to the order of Langley J. of 26^th November 1999 the defendants were served with certificates requiring them to pay costs in the sum of £195,905.29 to the claimants within 14 days. No part of that sum has been paid either. This last matter had not been made the subject of the claimants’ application, but in the absence of any objection from Mr. Bhalla I gave the claimants permission to amend their application notice in respect of it and dispensed with re-service.

It was common ground that the various amounts outstanding in respect of interest and costs have not been paid and also that no application has been made by the defendants for further time in which to pay them. On the face of it, therefore, there is a clear breach of the court’s orders. The only explanation offered by the defendants for this unhappy state of affairs is that they do not have the funds to discharge their obligations. It is difficult for me to assess the true extent of the defendants’ assets, partly because it is by no means clear that full disclosure has even now been made pursuant to the various orders made in this case. Certainly both Timothy Walker J. and Langley J. were not satisfied that the defendants had disclosed all their assets.

At the last minute evidence was filed in the form of an affirmation from Chief Idisi which deals in a rather broad way with the financial position of Lonestar. In it he says that as a result of the proceedings Lonestar has lost much of its business and has severe difficulties in making the payments ordered by the court, but he does not deal with his own assets in any detail other than to say that the fixed assets in Nigeria far exceed any claim which the claimants may have. These assets are said by the defendants themselves to be worth in excess of US$25 million, a figure which is supported by the valuation reports prepared by Knight Frank to which some reference has already been made.

I accept that property in the form of fixed assets is quite different from cash in the bank and is not immediately available to satisfy obligations of this kind. However, such property can be used as a means of raising the money required for that purpose. According to Chief Idisi, the claimants have started proceedings in Nigeria to execute on the defendants’ property and I am left in no doubt that the defendants have decided to force the claimants to obtain payment of the various amounts due to them under these orders by execution if they can. I am satisfied that in this respect as well the Chief is in deliberate contempt of court.

Summary

It follows that I am satisfied that there have been a number of serious breaches of the court’s orders. Insofar as Chief Idisi has failed to comply with orders directed to him personally; he is of course guilty of contempt, but I am also satisfied that by virtue of the position which he occupies in Lonestar he had the power to ensure that it complied with the orders directed to it. Accordingly, insofar as Lonestar has failed to comply with orders of the court that is because the Chief has failed to take all such reasonable steps as were open to him to ensure its compliance. In these circumstances he is also liable for the contempts committed by Lonestar.

Although Mr. Bhalla did address me briefly during the hearing on the consequences of any finding of contempt, I think it right to give him an opportunity to address me further on that question in the light of my findings before any order is made.

There is one final point I should like to make in relation to the way in which this application has been conducted. On 29^th March 2000 Langley J. gave directions for the service of evidence under which the claimants were required to serve any additional evidence by 14^th April and the defendants were to serve their evidence in response by 19^th May. The claimants complied with that order but the defendants failed to do so, partly, it is said, because between 17^th February and the end of March the Chief had no solicitors acting for him in this country. In the event the defendants served no evidence in relation to the application until 28^th September, two working days before it was due to be heard, when five lever arch files of material were sent to the claimants. Further evidence was served on 29^th September and yet further evidence has been served during the course of the hearing.

Wisely, no doubt, Mr. Dunning on behalf of the claimants did not object to the admission of this evidence, nor did he seek an adjournment to enable him to absorb it in the way he might have wished. Four days had been allowed for the hearing (which in the end proved insufficient) and it might have been very difficult to list the matter again for several weeks. However, the production of a large amount of evidence at such a late stage inevitably made it very difficult for both parties to present their arguments in an efficient and economical manner and that has in turn made the court’s task in dealing with what was already a complex application a great deal more difficult. I do not accept that difficulties over representation, which were in any case resolved during April at the latest, provide a sufficient explanation or excuse for dealing with the matter in this way. Parties and those advising them must understand that a failure of this kind to comply with the basic requirements of orderly litigation is one which is likely to result in sanctions of one kind or another, such as the refusal of permission to adduce evidence which is served late or special orders in relation to costs. I shall hear counsel on the form of order which I should make in this case.