England and Wales High Court (Commercial Court) Decisions

Case No: 2000 Folio 1104

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 11^th October 2001

B e f o r e : THE HONOURABLE MR JUSTICE MOORE-BICK - - - - - - - - - - - - - - - - - - - - -

	INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT	Claimant
	- and -
	AHMAD JAZAYERI	Defendant

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr. Murray Rosen Q.C. and Mr. Nick Parfitt (instructed by Herbert Smith) for the claimant Mr. Clive Freedman Q.C. (instructed by Philippsohn Crawfords Berwald) for the defendant - - - - - - - - - - - - - - - - - - - - -
JUDGMENT

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

Mr Justice Moore-Bick:

1. This matter comes before the court by way of an application by the claimant for summary judgment under CPR Part 24. The claimant, the International Fund for Agricultural Development (“the Fund”), is a specialised agency of the United Nations established by international agreement. Its purpose is to promote the economic advance of the rural poor in developing countries by identifying, funding and overseeing projects to improve agricultural productivity. An official of the Fund now known as a Country Portfolio Manager, previously a Project Controller, has primary responsibility for managing projects in each country. His responsibilities include identifying suitable projects, making proposals for their financing, and overseeing their implementation.
2. Between about 1991 and the end of 1997 the defendant, Mr. Jazayeri, was the project controller responsible for a group of West and Central African countries which included Guinea, Gabon and Congo. He was responsible to one of the Fund’s directors, Mr. Yahya Bouarfa, to whom he would submit proposals relating to the projects under his supervision. In order to evaluate and develop many of the projects under consideration it was necessary for the Fund to enlist the support of expert consultants in a variety of different fields. It was one of the project controller’s tasks to identify and recommend the appointment of suitable experts. The Fund says that Mr. Jazayeri took advantage of his position as a project controller to extort money from consultants by threatening to cut them out of any further work for the Fund in the countries for which he was responsible. It has brought this action to recover the sums which it says he received in this way as bribes or secret profits.
3. The claimants base their case on what they say are four specific instances in which Mr. Jazayeri received improper payments from consultants appointed to work for the Fund in accordance with his recommendation. The consultants are La Maison Guide, Groupe-Amta-Sud, (known as the Mikayoulou consultancy after its manager, Mr. Daniel Mikayoulou), Mr. Aimé Mianzenza and Agral Consultants International. Mr. Jazayeri has admitted that he received various payments from La Maison Guide, the Mikayoulou consultancy and Mr. Mianzenza, but in each case he has denied the Fund’s allegations of bribery and coercion and has offered his own explanation. He has admitted receiving one payment from Agral, for which he has again offered an explanation, but he has denied that the rest of the payments which the Fund says he received from Agral in fact came from that source.
4. In many ways this is not a typical application for summary judgment. The Fund’s case against Mr. Jazayeri is that he obtained payments from all four consultants dishonestly and in fraud of his employer. He has denied that allegation and many of the facts are hotly disputed. In most cases that would be enough to preclude a successful application for summary judgment, but Mr. Rosen Q.C. on behalf of the Fund submitted that in this case the explanations put forward by Mr. Jazayeri are so incredible that the court should not require the case to go to trial but should give judgment in favour of his client straight away.
5. The principles which govern an application of this kind were not seriously in dispute. Rule 24.2 provides that the court may give summary judgment against a defendant if it considers that he has no real prospect of successfully defending the claim and there is no other compelling reason why the case should be disposed of at a trial. By attesting to the truth of the facts on which his claim is based and deposing to his belief that the defendant has no real prospect of successfully defending the claim the claimant puts the onus on the defendant to bring forward evidence in response in support of his defence. However, it has been said many times that summary judgment is appropriate only in clear cases and that the court should not be drawn into conducting a mini-trial on the basis of conflicting witness statements. Recent statements of principle are to be found in Three Rivers District Council v Bank of England [2000] 2 WLR 15 and Swain v Hillman [2001] 1 All ER 91. It is particularly important to bear these principles in mind when allegations of dishonesty lie at the root of the claim. However, the mere fact that the defendant has put forward evidence which tends to contradict the claimant’s case does not invariably lead to the conclusion that the case should be allowed to proceed to trial. As Lord Hope recognised in the Three Rivers case, it is sometimes apparent from independent evidence that the defendant’s account is plainly without substance and has no prospect of being accepted by the court at trial and in such a case the court will exercise its power to give summary judgment. However, in a case where the defendant’s account appears far-fetched but is not contradicted by independent evidence, the court should in my view normally hesitate long before rejecting it as incredible at a preliminary stage. The evaluation of witnesses is essentially a matter for a judge at trial who has the benefit of seeing them give evidence. Moreover, where contradictory accounts are given in the witness statements, any attempt to evaluate the competing accounts inevitably involves an exercise in the nature of a trial. Having said that, however, I reject Mr. Freedman Q.C.’s suggestion that the court should take account of the possibility that additional evidence favourable to the defendant might come to light at trial. While recognising that a fuller picture may emerge at that stage, the court can only determine an application for summary judgment on the material before it. The defendant cannot ask the court to allow the matter to go to trial simply on the grounds that something unexpected might turn up to assist him.
6. Before I turn to consider the separate heads of claim covered by this application it is convenient to deal with one matter which has a bearing on three of them, namely, the prosecution of Mr. Jazayeri in the Superior Criminal Court of Rome in 1998 which eventually resulted in the imposition on him of a suspended sentence of 22 months imprisonment. In 1998 the Italian authorities began investigations into allegations that Mr. Jazayeri had coerced various consultants into making payments to him. In the course of their investigations the prosecuting authorities interviewed a number of witnesses including Mr. Mamadou Barry of La Maison Guide, Mr. Mikayoulou and Mr. Mianzenza. Following his extradition from the Netherlands Mr. Jazayeri was charged and examined by the investigating magistrate. He subsequently entered into a plea bargain with the prosecution as a result of which he received the sentence to which I have just referred. In support of its case the Fund relied both on statements made by witnesses to the prosecuting authorities in Rome and on statements made for the purposes of these proceedings. It also relied on answers given by Mr. Jazayeri to the investigating magistrate. It was not disputed that this material was all properly before the court.
7. What proved more controversial, however, was the significance, if any, to be attached to Mr. Jazayeri’s plea bargain. Evidence from Italian lawyers indicates that a disposal by way of plea bargain is not regarded in Italian law as equivalent to a conviction, although it may be relied on in civil proceedings as evidence of guilt. The precise consequences of entering into a plea bargain under Italian law are unclear, but Mr. Rosen for the Fund very properly accepted that for present purposes it is merely evidence, and nothing more than evidence, tending to show that Mr. Jazayeri committed the offences with which he was charged. How much weight should be attached to it is another matter. Mr. Jazayeri has explained what led him to enter into a plea bargain despite his innocence, the principal factor being the opportunity to regain his liberty after a prolonged period in custody and to do so without incurring a criminal record. This is something which the judge at trial, having no doubt heard Mr. Jazayeri give evidence, would be in the best position to evaluate. For the present, however, it is just one of a number of pieces of evidence which I have to consider.
8. The first limb of the claimant’s case concerns the consultancy known as La Maison Guide. It is common ground that in December 1994 La Maison Guide was appointed to act as consultant on a project in the Republic of Guinea on the recommendation of Mr. Jazayeri who was the project controller. The fee payable to La Maison Guide was US$250,000. It is also common ground that between February 1995 and September 1997 Mr. Jazayeri received into his private account with the Bank of Scotland in Jersey and another private bank account he maintained jointly with his wife with the Woolwich in Guernsey a total of eleven payments from La Maison Guide totalling US$162,000.
9. In June 1998 Mr. Barry, the manager of La Maison Guide, made a confidential report to the Fund. He said that in January 1995 Mr. Jazayeri had told him that the Fund needed to retain US$150,000 out of La Maison Guide’s fee in order to instruct additional consultants. When he asked for the contract to be amended to reflect the reduced fee La Maison Guide would receive Mr. Jazayeri threatened to remove the contract altogether and to cut him out of any further work for the Fund. He therefore felt obliged to comply with Mr. Jazayeri’s demands and so made the various payments in accordance with his instructions. He repeated his account when interviewed by the prosecutor in Rome. He also said on that occasion that he had received a small amount of assistance from only one external consultant whose fees and expenses were paid by La Maison Guide itself.
10. Mr. Jazayeri’s first opportunity to answer these allegations came when he was examined by the investigating magistrate in Rome. He denied that he had threatened Mr. Barry. He said that after the contract had been awarded to La Maison Guide he was approached by Mr. Barry who was unable to find suitable consultants to help him. He told the magistrate that he had personally instructed consultants, whose names he gave, who had written parts of the report which La Maison Guide eventually submitted to the Fund. He also said that he had purchased vehicles and office equipment for La Maison Guide. Since then he has stuck to his account in statements made for the purposes of these proceedings. He has also given a fuller account of the circumstances in which La Maison Guide came to be appointed as consultants in relation to this project and of how he disposed of the money which he received. This includes a description of the budgeting system operated by the Fund which Mr. Jazayeri says prompted him to adopt these measures with the general approval of Mr. Bouarfa. However, Mr. Jazayeri has produced no documents of any kind to support his assertion that he personally instructed consultants to assist with the project and only one document referring to some computer equipment (which does not mention La Maison Guide or Mr. Barry) to support his assertion that he purchased vehicles and office equipment for La Maison Guide. It is common ground that he has never suggested that he disclosed any of the details of these unusual arrangements to Mr. Bouarfa, or that he told him that he had received any payments into his personal bank accounts. Virtually every aspect of Mr. Jazayeri’s account is disputed by Mr. Barry and Mr. Bouarfa, each of whom has provided a statement commenting on his evidence.
11. A very similar picture emerges in relation to the Mikayoulou consultancy which was appointed in December 1994 to act as consultant in connection with a project in the Congo on the recommendation of Mr. Jazayeri. The fee was US$126,000. It is common ground that between March and December 1995 Mr. Jazayeri received into his private bank account in Jersey 3 payments from Mr. Mikayoulou totalling US$62,500.
12. In July 1998 Mr. Mikayoulou made a statement in which he said that he had originally offered to undertake the necessary work for a fee of US$100,000, but that Mr. Jazayeri had insisted that an international consultant be instructed as well. To cover the additional expense the fee was increased to US$126,000. Mr. Mikayoulou said that some time later Mr. Jazayeri had told him that half the fee, US$63,000, would have to be made available to cover the cost of the international consultant and that the money should be paid to his account as and when payments were received from the Fund. Mr. Mikayoulou said that he trusted Mr. Jazayeri and therefore did as he asked, but that he never saw the international consultant and carried out all the work required to complete the report himself. In due course Mr. Mikayoulou was interviewed by the prosecutor in connection with the proceedings in Rome. He gave much the same account, although he added that he had complied with Mr. Jazayeri’s demands because he felt that he might have been dropped from the project altogether if he had not done so. He said he regarded making these payments to Mr. Jazayeri as a necessary condition for getting the job.
13. The investigating magistrate asked Mr. Jazayeri about these allegations as well. He did not deny, and has never denied, that he received payments from Mr. Mikayoulou into his private bank account, but again he said that he had used them to instruct additional consultants and to purchase office equipment for Mr. Mikayoulou. He gave a similar account, though in greater detail, in the statements he subsequently made in connection with these proceedings, referring again to the Fund’s budgeting arrangements and identifying the consultants he says he engaged and the amounts he says he paid them. Once again, however, Mr. Jazayeri has failed to produce any documents to support his assertion that he personally instructed consultants to assist with the project, or any documents supporting his assertion that he purchased office equipment for Mr. Mikayoulou. Again, it is common ground that he did not disclose these unusual arrangements to Mr. Bouarfa or tell him that he had received any payments from Mr. Mikayoulou into his personal bank account.
14. The third head of claim concerns Mr. Mianzenza who regularly carried out work for the Fund on projects managed by Mr. Jazayeri. In August 1998 he too made a statement in which he said that in March or April 1994 he had been asked by Mr. Jazayeri to act as consultant in connection with a project in Gabon. A contract for the work was eventually signed in July 1994. Some time later Mr. Jazayeri had told him that the contract was originally to have been given to Agral and that it was necessary to pay him something to pass on to Agral by way of “commission”. Mr. Mianzenza said he agreed to do so because he had no reason to doubt what Mr. Jazayeri said and because he believed that if he did not comply with his demands he would have lost that job and not been used again. It is common ground that Mr. Mianzenza gave Mr. Jazayeri three open cheques, each one for FF49,746, approximately equivalent to US$10,000.
15. Mr. Mianzenza was not interviewed by the prosecutor in Rome, nor has he provided a statement in connection with these proceedings. However, Mr. Jazayeri was asked about these allegations by the investigating magistrate. After some initial hesitation he admitted that he had received cheques from Mr. Mianzenza, but denied that they had anything to do with the project in Gabon. In a statement made for the purposes of these proceedings Mr. Jazayeri said that Mr. Mianzenza had become a personal friend and that when he moved to Rome he had asked Mr. Jazayeri to lend him some money. The cheques, he said, were given to him by way of repayment of the loan. He gave a detailed account of the money he says he spent on behalf of Mr. Mianzenza and the purposes for which he lent him additional funds. Again, he is unable to provide any documentary support for his account, but in this case he is able to rely on a statement made by a Mr. Isaac Nakabale who says he was present when Mr. Mianzenza raised the question of a loan with Mr. Jazayeri.
16. Finally there are the payments which the Fund says Mr. Jazayeri received from Agral. Between July 1993 and September 1994 sixteen cheques were paid into Mr. Jazayeri’s personal account with the Bank of Scotland in Jersey. The Fund says that each of them was drawn by Agral on the same French bank, Banque Populaire, Industrielle et Commerciale de la Région Sud de Paris. It says that the receipt of a regular series of payments from a consultant for which no satisfactory explanation can be provided is only consistent with Mr. Jazayeri’s taking bribes or secret profits at its expense.
17. There is no doubt that the first of these payments was made by Agral because the cheque by which it was paid has been produced. It is drawn on the Banque Populaire. The remaining payments were all broadly similar in amount to the first and the Fund has contended that that of itself tends to support the conclusion that they all came from the same source. That inference has, however, been substantially undermined by the Fund’s subsequent acknowledgment that three payments which it had originally included in the series in fact came from Mr. Mianzenza. The Fund’s case that the series of cheques all came from the same source now rests on evidence from an employee of the Bank of Scotland in Jersey, Miss Ingram, who was responsible for making arrangements for their collection. She says that to the best of her recollection all the other payments were made by cheques drawn on the same bank for the account of the same customer, Agral. Unfortunately, however, it has not been possible to make available any documents relating to these other cheques.
18. When he was first asked to comment on these payments Mr. Jazayeri denied having received any money from Agral, but when the first cheque was produced he was forced to accept that in that instance, at any rate, he had done so. He said that throughout the time of his employment by the Fund he had been in business with his father-in-law exporting carpets from Iran to Italy. This cheque represented the price of some carpets he had sold to Agral following a visit of one of its directors, Mr. Alouche, to his office in Rome in 1993. However, he denied that any of the other payments had come from Agral. He said that during 1993 and 1994 he had also been in business with a Mr. Fussi exporting paper from Italy to Tanzania. He was responsible for arranging for the purchase and shipment of the goods from Italy; Mr. Fussi was responsible for financing the venture and for selling the paper. He said that Mr. Fussi had sent him a series of post-dated cheques to reimburse him for payments made in connection with the business and he has produced a statement from Mr. Fussi supporting his account.
19. I am grateful to both counsel for taking me with great care through the evidence relating to each of these four limbs of the case. I have to remind myself, however, that it is not appropriate for the court to embark at this stage on any kind of trial. I accept that the account given by Mr. Jazayeri cannot be viewed in isolation and must be considered in the context of the other evidence before me and I also accept that I am entitled to take into account the fact that he has not produced in support of his account any documents of the kind which, if it is true, might be expected to be available. However, an application of this kind does not provide the proper occasion on which to assess the weight of competing evidence. Unless I am satisfied that there is no real prospect that the judge would accept Mr. Jazayeri’s account after hearing him give evidence, it would not be right to give judgment against him at this stage. Moreover, when considering that question I have to bear in mind that where allegations of dishonesty are made the court will normally require cogent evidence before being satisfied that they are made out.
20. In my view the strength of the Fund’s case on this application differs in relation to different heads of its claim. I am far from persuaded that Mr. Jazayeri has no real prospect of successfully defending the claim in relation to the payments from Mr. Mianzenza. Indeed, Mr. Rosen was inclined to acknowledge that if this were the only head of claim it would not be a case for summary judgment. Given the nature of the evidence currently put forward in support of the claim relating to Agral, I also think that it would be wrong to give judgment on that head of claim at this stage. I have greater doubts about Mr. Jazayeri’s prospects of successfully defending the claims relating to La Maison Guide and the Mikayoulou consultancy, but on balance I do not think it would be right to give judgment on these either at this stage. Mr. Jazayeri’s account of the manner in which he dealt with the payments he received from La Maison Guide and Mr. Mikayoulou is unusual, to say the least, and unsupported at present by any independent evidence, especially documents. However, there will have to be a trial in any event in relation to the other two limbs of the claim at which Mr. Jazayeri’s credibility will be of central importance and the Fund will inevitably wish to explore his relationship with Mr. Barry and Mr. Mikayoulou in that context. In addition, the court will also have to consider in that context what, if any, inferences should be drawn from his willingness to enter into a plea bargain in the criminal proceedings in Rome. In those circumstances it would be wrong in my view for the court to express any concluded opinion about Mr. Jazayeri’s evidence in relation to these two heads of the claim at this stage.
21. Having reached that conclusion I do not think it would be appropriate for me to say any more about the merits of the case. There is, however, one other matter which I wish to mention. Having regard to what I have said about the first two limbs of the Fund’s claim, I have, of course, considered whether I should exercise my power under paragraph 5 of the practice direction supplementing Part 24 to order that Mr. Jazayeri should pay into court the amounts claimed by the Fund in relation to La Maison Guide and the Mikayoulou consultancy, and to order in default of compliance that judgment should be entered for the Fund on those parts of its claim. However, there is evidence before me which makes it clear that Mr. Jazayeri would be quite unable to comply with an order of that kind and that to make such an order would effectively amount to giving judgment against him. It would not be right, therefore, to exercise those powers in this case. The application must therefore be dismissed.