QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| Compagnie Noga D'Importation et D'exportation SA
Nessim D Gaon
|- and -
|Australian and New Zealand Banking Group and others
Mr Paul Stanley (instructed by Byrne & Partners) for the Defendants
Hearing date: 17th March 2006
Crown Copyright ©
MR JUSTICE CHRISTOPHER CLARKE:
"9. The Abacha family have money which is frozen throughout Europe. It would obviously be preferable if the Abacha family were able to use its own money as a bail bond. There would therefore be no need for me to stand surety. However the Abacha family money is variously frozen not only by Noga but also by national authorities and the FGN. In addition I have been informed by Abba Abacha's Swiss Counsel that he does not believe that the Investigating Magistrate would accept this money as a bail bond and that he asked the Investigating Magistrate whether he would accept the Luxembourg funds as a source of the bail bond. I am informed that the Investigating Magistrate replied that such a transfer could be the source of the extra complications because the Luxembourg funds are alleged to be of criminal origin. I do not believe that Abba Abacha has any funds to meet the bail bond apart from the frozen family funds and the relatively small assets in Germany, which have been frozen and which he was arrested trying to access.
10. I am a business associate of Mohammed Abacha and was a business associate of his late brother Ibrahim. I have a continuing relationship with Mohammed not least because of this ongoing litigation. I believe it is in my own business interests to stand surety for Abba. Culturally within Nigeria my assisting the family in this regard will be seen as the proper thing to have done and I believe my actions will assist future independent business ventures.
18. I would have had no hesitation in standing surety for Abba Abacha in the normal course. Were it not for the Claimant's freeze it is something I would have done immediately. I am in a position to help the Abacha family. It would be expected culturally that I would offer that assistance, especially as it does not involve the loss of monies. Normally I would have no hesitation in doing this. Mr Gaon has done business in Nigeria for many years and he will be well aware of the social and cultural norms in Nigeria. As Mr Gaon will know if I am unable to provide this assistance then it would be regarded in Nigeria as my not meeting my cultural responsibilities for Abba's welfare and it will therefore cause me serious embarrassment and damage in Nigeria. I believe it is unfair that the Claimants should seek to use the freeze to stop me from doing something which I would have done in the normal course."
"15. I do not accept Mr Bagudu's contention that he will be "damaged" either from a business or social or cultural point of view if the Court does not accede to his application to vary the injunction. Firstly, the Abacha family is associated in the minds of all right thinking Nigerian people with money laundering and corruption and despoliation of Nigeria and its people on an unimaginable scale. Secondly, the fact of making this application will absolve Mr Bagudu from any criticism. The fact that the court may not accede to his application will not be seen to be his fault. Thirdly, Mr Bagudu does not appear to be acting out of sense of duty to Abba Abacha but in order to advance his own business interests with an eye to future business opportunities for himself based on fostering "good relations" with the Abachas (see paragraph 10). This is not a good reason to vary the injunction. "
a. The sum involved in providing the bail monies is comparatively small: it amounts to about 0.5% of Noga's claim and to less than 0.3% of the total frozen funds. It has, however to be remembered that Noga are not the only claimants since the Federal Government of Nigeria ("Nigeria") itself has a huge claim against many defendants including Mohammed and Abba.
b. The sum is not paid away for good and will only be lost if Abba refuses to return to Switzerland. Mr Bagudu will undertake to return the bail monies to the bank accounts from which they are to come, once they are due back, and to inform the examining magistrate of this undertaking.
c. There are a number of factors likely to reduce the risk of Abba not answering his bail, in that:
(i) Abba's alleged offences are, in the view of Maitre Bertossa, unlikely to carry serious punishment having regard to the fact that five other defendants who in Maitre Bertossa's (not necessarily objective) view have a greater responsibility than that which is alleged against Abba, have been fined between CHF 25,000 and CHF 1,000,000;
(ii) Mr Bagudu in a position of influence over Abba both culturally and socially because he is an elder who, if the variation sought is allowed, will have assisted him; and
(iii) there is little point in his absconding because he could be extradited from Nigeria, which would be only too willing to do so because Switzerland has seized all the Abacha family money and given it to Nigeria.
(i) that it would be wholly inappropriate to vary the freezing order so as to allow Mr Bagudu to put up bail of CHF 5 million on behalf of his co-defendants' brother and thus run the very real risk of diminishing by that amount the sum for which the claimants may be able to enforce any judgment;
(ii) that such a payment would not be one within the scope of the ordinary Mareva proviso or one which, consistently with the policy underpinning the Mareva jurisdiction, it would be appropriate to allow; and
(iii) that a variation should certainly not be allowed:
(a) in the absence of full and accurate evidence from Abba, his wife, and Mohammed as to the extent of their assets, and
(b) until attempts by them to secure a variation of any orders that preclude the use of those assets to raise bail have failed.
She points out that the investigating magistrate in Switzerland has not indicated that he will not accept Abacha family money as bail money, only that that may involve complications. Further the effect of allowing a variation will be to reduce by a large sum the assets that are caught by the injunction, in circumstances where the sum paid may well be lost, if the bail is forfeited, and where the assets in reality caught by the Mareva are much less than the $ 700,000,000 claimed in the action. Further the undertaking offered is inadequate to protect the claimants against loss of the bail money if Abba does not answer to his bail.
i. The essential test is whether it is in the interests of justice to make the variation sought;
ii. Since the court has already determined that, in the absence of a freezing order, there is a real risk of dissipation sufficient to justify the making of an order it is for the applicant to satisfy the court that it is appropriate make the variation sought and to adduce any evidence that is necessary to persuade the court that that is so;
iii. In determining whether or not to allow the variation proposed the Court is concerned to examine whether to do so would be consistent with the policy that underpins the jurisdiction, namely that a defendant should be restrained from evading justice by disposing of assets otherwise than in the ordinary course of business with the result that any judgment goes unsatisfied; Gangway Ltd v Caledonian Park Investments (Jersey) Ltd  2 Lloyd's Rep 715; TTMI Ltd of England v ASM Shipping Ltd of India  EWHC 2666 (Comm).
iv. The correct test is "to consider objectively the overall justice of allowing the payment to be made including the likely consequence of permitting it on the prospects of a future judgment being left unsatisfied, and bearing in mind that the assets belong to the defendant and that the injunction is not intended to provide the claimant with security for his claim or to create an untouchable pot which will be available to satisfy an eventual judgement" : Gee, paragraph 20.054;
v. If the question is whether or not the Mareva should be varied so as to allow frozen monies to be used to fund a defence it may be necessary to show that there are no other funds or sources of payment which should as a matter of objective fairness be used for that purpose in preference to the frozen funds. The same principle must apply if what is sought is to fund the giving of a recognizance in favour of another.
vi. Because the court has already been satisfied of a risk of dissipation judges are entitled, on an application to vary, to have a healthy scepticism about assertions made by the applicant particularly where the applicant, or those to whom his evidence or contentions relate, have been less than frank in dealing with the court or the claimant.