Neutral Citation Number: [2007] EWHC 437 (Ch)
Case No: HC05 C03602
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IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
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Royal Courts of Justice
Strand, London, WC2A 2LL
7th March 2007
Before :THE HONOURABLE MR JUSTICE LEWISON
Between :
THE FEDERAL REPUPLIC OF NIGERIA Claimant
- and -
(1) SANTOLINA INVESTMENT CORPORATION (a company incorporated in the Seychelles)
(2) SOLOMON & PETERS LIMITED (a company incorporated in the British Virgin Islands)
(3) DIEPREYE SOLOMON PETER ALAMIEYESEIGHA
(4) MARGARET ALAMIEYESEIGHA
(5) FALCON FLIGHTS INCORPORATED (a company incorporated in the Bahamas)
(6) EBCO ASSOCIATES LIMITED
(7) FIDUCIARY INTERNATIONAL LIMITED (a company incorporated in the Seychelles)
(9) UBS AG (a company incorporated in Switzerland)
(10) HBOS plc
(11) ROYAL ALBATROSS PROPERTIES 67 (PTY) LIMITED (a company incorporated in South Africa)
Defendants
- - - - - - - - - - - - - - - - - - - - -
Mr. Rhodri Davies QC (instructed by Kendall Freeman) for the Claimant.
Mr Fenner Moeran (instructed by Devonshires) for the Third Defendant.
Hearing dates: 27th February 2007
- - - - - - - - - - - - - - - - - - - - -
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
…………………………….
THE HONOURABLE MR JUSTICE LEWISON
Mr Justice Lewison :
Introduction
1. The Federal Republic of Nigeria is a federation which consists of 36 states. It is governed by a written constitution. Each of the separate states is governed by an elected State Governor on whom the federal constitution places a number of duties. In May 1999 Mr Alamieyeseigha was elected as State Governor of the state of Bayelsa, which is one of the 36 states in the federation. His term of office was four years. He was reelected to the same office in May 2003 for a further four year term. However, in
September 2005 he was arrested in the UK on charges of money laundering. In
November 2005 impeachment proceedings were begun against him in Bayelsa state and on 9 December 2005 he was dismissed as State Governor. The Federal Republic allege that during his period in office Mr Alamieyeseigha accumulated assets as a result of the corrupt receipt of bribes and other payments in connection with the award of state government contracts. They say that the extent of those assets exceeds £10 million.
Some of the assets consist of immovable properties in London, title to which is vested in a company wholly owned by Mr Alamieyeseigha. Other assets are the balances held
in bank accounts in the name of Mr Alamieyeseigha, his wife and other corporate entities, some of which are wholly controlled by Mr Alamieyeseigha.
2. The Federal Republic have applied for summary judgment to recover those assets. The hearing of the application, which was skillfully and cogently presented by Mr Rhodri
Davies QC, occupied a single court day.
Summary judgement: the test
3. Part 24 of the CPR enables the court to give summary judgment against a defendant on the whole of a claim or on a particular issue if it considers that the defendant has no real prospect of successfully defending the claim or issue; and there is no other compelling reason why the claim or issue should not be disposed of at a trial.
4. The courts have now given guidance on the principles to be applied in deciding whether or not to give summary judgment. For present purposes I summarise the relevant ones as follows:
i) The court must consider whether the defendant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A “realistic” defence is one that carries some degree of conviction. This means a
defence that is more than merely arguable: ED & F Man Liquid Products v
Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v
Hillman
iv) This does not mean that the court must take at face value and without analysis everything that a defendant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man
Liquid Products v Patel at [10]
v) However, in reaching its conclusion the court must take into account not only
the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial:
Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ
550; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is
no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton
Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) Although there is no longer an absolute bar on obtaining summary judgment when fraud is alleged, the fact that a claim is based on fraud is a relevant factor.
The risk of a finding of dishonesty may itself provide a compelling reason for allowing a case to proceed to trial, even where the case looks strong on the papers: Wrexham Association Football Club Ltd v Crucialmove Ltd [2006] EWCA Civ 237 at [57].
The evidence
5. The application is supported by a witness statement made by Mr Colin Joseph. It, with its accompanying exhibits, fills some seven lever arch files. Mr Joseph is a partner in the Federal Republic’s London solicitors. He has no personal knowledge of the events that give rise to the claim. Rather, his witness statement marshals the evidence derived from contemporaneous documents and from statements made by others. These statements include interviews given by Mr Alamieyeseigha and statements made by other people to the Nigerian Economic and Financial Crimes Commission (“EFCC”). It was not possible to read, let alone analyse, all these documents in the course of the hearing, or in the preparation time allotted. Somewhat remarkably, Mr Joseph says of the statements made by “witnesses” on whom the Federal Republic relies:
“I should make it clear that the [Federal Republic] does not necessarily accept the version(s) of events or explanation(s) of their conduct given by the individuals who have provided statements to the EFCC. In key aspects their evidence changes dramatically with time and in one striking case admissions have been made that previous evidence was false. In some instances the precise form of corruption may be unclear.”
6. This is not a promising start to a claim that there is nothing worthy of investigation at trial.
The main players
7. Santolina Investment Corporation (“Santolina”) is a company incorporated in the
Seychelles. It is wholly owned by Mr Alamieyeseigha. It is the account holder of a bank account in London with the Royal Bank of Scotland. There is a credit balance of £1.9 million. Although served with these proceedings, Santolina has not acknowledged service, has not served any evidence and was not represented at the hearing.
8. Solomon & Peters Ltd (“S & P”) is a company incorporated in the British Virgin Islands. It is wholly owned by Mr Alamieyeseigha, whose middle names are Solomon and Peter. It is the registered proprietor of four properties in London. On this application the Federal Republic claims that in the case of three of them the evidence is so strong that they are entitled to summary judgment. The three are:
i) Flat 202 Jubilee Heights NW2
ii) 14 Mapesbury Road NW2
iii) 68 & 70 Regents Park Road N3.
9. In relation to a fourth property, 247 The Water Gardens, the Federal Republic accepts that the case will have to go to trial.
10. Although served with these proceedings, S & P has not acknowledged service, has not served any evidence and was not represented at the hearing. Mr Alamieyeseigha claims no interest in 14 Mapesbury Road, but does claim an interest in the remaining two properties.
11. Mr Alamieyeseigha is the holder of a bank account in London with UBS. The credit balance on that account is US$535,000 or more. Mr Alamieyeseigha does not claim any beneficial interest in that account, which he says he holds for his wife and children. Mr
Alamieyeseigha has served evidence and was represented at the hearing by Mr Fenner
Moeran.
12. Mrs Alamieyeseigha is Mr Alamieyeseigha’s wife. Although served with these proceedings, she has not acknowledged service, has not served any evidence and was not represented at the hearing. She holds bank accounts with National Westminster Bank in London. They are largely inactive accounts, and their cumulative credit balances are of the order of £250,000.
13. Falcon Flights Incorporated (“Falcon”) is a company incorporated in the Bahamas. It is owned by a trust in relation to which Mr Alamieyeseigha was the settlor. He is not, however, a trustee. Although Falcon acknowledged service they did not contest the application. At the start of the hearing I made an order by consent which provided for the payment of the proceeds of a bank account held by Falcon into court (subject to a retention in respect of legal costs).
14. Although not defendants, there are a number of others who play a significant part in the story. The common ground about them is as follows:
i) Mr Soberekon is the moving spirit behind a company called Consort
Engineering which in 1999 was awarded a contract by Baylesa State Electricity Board for the repair and overhaul of two gas turbines and the supply of spare parts. Mr Alamieyeseigha says that Mr Soberekon is a long-standing friend of his; and I did not understand this to be disputed;
ii) Mr Aliyu is the moving spirit behind a company called A Group Property which was awarded a contract by Bayelsa State for the construction of the Governor’s and Deputy Governor’s lodge and associated perimeter fencing. He and Mr
Alamieyeseigha came to know each other in 2000;
iii) Mr Ayeni is a Nigerian lawyer and banker who acted for Mr Aliyu;
iv) Mr Uzamere is the moving spirit behind a number of companies. One of these is
Temat Associates. Although it is not entirely clear whether this company was awarded contracts by Bayelsa State, another of Mr Uzamere’s companies, Speed
Concepts Nigeria Ltd, was awarded a contract in 2001 for the design and construction of the Bayelsa State television studio and yet another of his companies, Amboy Nigeria Ltd, was awarded a contract for the construction of a government gate house in 2003.
The legal basis of the claim
15. The entitlement of the Federal Republic to recover the assets that it claims is a matter of the law of Nigeria. The Federal Republic relies on the report of Dr Ogowewo, a senior lecturer in law at King’s College London and a barrister and solicitor of the Supreme Court of Nigeria, which was served on the defendants in April 2006. At that time no permission had been given for the service of an expert’s report; but I gave permission at the hearing without objection from Mr Moeran. Dr Ogowewo says that a State Governor has two relationships: one with the Federal Republic and the other with the State of which he is a governor. Although he discusses the question whether, as a matter of Nigerian law, a principal has a proprietary claim to a bribe taken by one who stands in a fiduciary relationship to him, that question does not appear to be relevant. This is because Dr Ogowewo says that there does not appear to be a claim based on a fiduciary relationship between a State Governor and the Federal Republic. Rather, he says, the claim of the Federal Republic is a claim based on its constitutional duty to enforce the anti-corruption provisions of the Constitution. The way that he puts it is that:
“Nigerian courts will therefore not allow technical considerations of whether title to sue is vested in the Federal Government to defeat an action instituted by the Federal
Government to recover property that has been acquired corruptly flowing from a violation of a federal law which gives effect to a constitutional aspiration – the abolition of corrupt practices. The courts will derive a right of action with civil law consequences when interpreting the relevant federal law.”
16. Although Dr Ogowewo recognises that Bayelsa State would have its own cause of action based on breach by Mr Alamieyeseigha of his fiduciary duties to the State, he concludes that both the State and the Federal Republic are entitled to bring proceedings, relying on different grounds, and that only the rule against double recovery will prevent both actions from succeeding.
17. There was no expert evidence to challenge Dr Ogowewo’s report. Mr Moeran said that it was possible that Dr Ogowewo was wrong about the existence of a proprietary claim to assets representing a bribe. However, Mr Alamieyeseigha’s Nigerian lawyer, Mr
Oluyede, made two witness statements in December 2006 and February 2007 respectively. Although he might not have qualified as an independent expert himself, he
could at least have raised the question whether Dr Ogowewo was right, if there were a serious point to be made. He did not. Nor, as Mr Davies QC pointed out, did Mr Alamieyeseigha’s team ask any questions of Dr Ogowewo even though they had had his report for some nine months before the hearing. Moreover, it seems to me that the question is not a relevant one anyway. The Federal Government does not claim to be subrogated to whatever claim Bayelsa State may have. It claims to have its own independent cause of action arising out of its constitutional duty to stamp out corruption.
18. Mr Moeran also submitted that Dr Ogowewo’s statement was a very broad statement of principle unsupported by any direct authority on the particular question that he was considering. That kind of conclusion on Nigerian law would be best decided by the courts of Nigeria. This sounded as though Mr Moeran was sidling up to an application for a stay of these proceedings on the ground that there was a more convenient forum elsewhere. But he drew back. An English court deciding a question of foreign law decides a question of fact. It has no power to bind a foreign court developing its own jurisprudence. Whatever conclusion I come to is a conclusion not based on legal argument in the traditional sense, but on the opinion expressed by an expert witness.
My conclusion is no precedent; and will not preclude another court coming to a different conclusion on different evidence.
19. On this application, the only real question in my judgment is whether Mr
Alamieyeseigha should be given the opportunity to find an expert of his own, or whether I should proceed on the basis of Dr Ogowewo’s uncontradicted evidence.
20. I have come to the conclusion that I can proceed on the basis of Dr Ogowewo’s report because:
i) Mr Moeran was unable to identify any part of Dr Ogowewo’s report that would be challenged, although he did indicate one area in which it might be challenged;
ii) Mr Oluyede did not challenge any of Dr Ogowewo’s report in either of his two witness statements; nor did he indicate that any part of it might be challenged;
iii) Dr Ogowewo’s report has been available for many months, and despite difficulties in obtaining instructions, Mr Alamieyeseigha and his team have had ample opportunity to consider their position and, if need be, to ask for clarification of Dr Ogowewe’s report.
21. Accordingly, I approach the evidence on the basis that the Federal Republic has an independent cause of action to recover property acquired in breach of the anticorruption provisions of the Constitution. I emphasise that this is a finding of fact on the evidence before me.
22. The relevant anti-corruption provisions of the Constitution can be summarised for present purposes as follows: i) A person elected as Governor must make a declaration of his assets and liabilities before a High Court judge. The declaration must be repeated on leaving office and on starting a new term;
ii) A public officer must not put himself in a position where his personal interests conflict with his duties and responsibilities;
iii)A Governor may not maintain or operate a bank account in any country outside
Nigeria;
iv) A public officer may not ask for or accept property or benefits of any kind for himself or any other person on account of anything done or omitted to be done by him in the discharge of his duties;
v) The receipt by a public officer of any gifts or benefits from commercial firms, business enterprises of persons which have contracts with the government are presumed to have contravened the preceding prohibition unless the contrary is proved;
vi) A public officer may accept personal gifts or benefits from relatives or personal friends to such extent and on such occasion as are recognised by custom;
vii) A Governor may not accept a loan except from the government or its agencies, a bank or other specified financial institutions;
viii) A Governor may not accept any benefit of any kind from any company, contractor, or businessman or the nominee or agent from such a person.
The position of the unrepresented defendants
23. Mr Davies QC submits that since the unrepresented defendants have not chosen to participate in these proceedings, I should ignore Mr Alamieyeseigha’s evidence to the extent that it purports to advance defences on their behalf. The unrepresented corporate defendants have their own independent boards of directors and it is for those directors to decide whether to contest the Federal Republic’s claims. Mrs Alamieyeseigha is an adult of full capacity; and again, it is for her to decide whether to contest the claim against her. Indeed it would have been possible for the Federal Republic to have applied for judgment in default of acknowledgment of service or default of defence; and in that event the court would give judgment for such relief as the Federal Republic was entitled to on its particulars of claim: CPR 12.11 (1). The Federal Republic should not be worse off against those defendants because it has chosen to apply for summary judgment under Part 24.
Overview
24. I begin by setting out some of the facts which I believe are either common ground or are incontrovertibly established by contemporaneous documents.
25. As I have said, Mr Alamieyeseigha was elected as State Governor of Bayelsa in May 1999. Under the constitution he was required to make a declaration of his assets. He disclosed assets of approximately £286,000 in value and income of £6,000.
26. In early September 1999 Mr Alamieyeseigha opened a US dollar account with UBS in London (No. 323940.01) with an initial deposit of $35,000.
27. In late 1999 S & P bought a lease of Flat 202 Jubilee Heights for £241,000. The funds for the purchase were provided by Mr Soberekon. S & P still holds legal title to that flat.
28. In April and May 2001 Mr Aliyu made two payments into Mr Alamieyeseigha’s UBS account of $1 million and $500,000 respectively. These funds were almost immediately used to buy bonds.
29. In July 2001 S & P acquired legal title to 14 Mapesbury Road. The purchase price was £1.4 million. The funds for the purchase were provided by Mr Aliyu.
30. In July 2002 S & P acquired the property at 68 and 70 Regents Park Road for £1.4 million. The purchase was in part funded by a mortgage of £693,500 from the
Lancashire Mortgage Corporation.
31. In April 2003, in anticipation of the coming to an end of his term of office Mr
Alamieyeseigha made a second declaration of assets. He was re-elected as Governor in May 2003; and made a third declaration of assets in December 2003. Neither of these declarations mentioned the bank account at UBS or the three London properties.
32. In September 2003 Mr Alamieyeseigha acquired Santolina. Santolina opened a number of bank accounts including one with the Royal Bank of Scotland. During 2004 a number of substantial deposits were made into this account. It opened a second account in August 2005. 33. I have already mentioned Mr Alamieyeseigha’s arrest and impeachment.
The individual assets
Flat 202 Jubilee Heights
34. Flat 202 Jubilee Heights is a two bedroomed flat. The acquisition of Flat 202 was handled by EBCO Associates Ltd. It was that company that received the payment of $409,761.24 (about £250,000) from Mr Soberekon. EBCO was run by Mr Otrofanowei, who also incorporated S & P on Mr Alamieyeseigha’s behalf. The payment was received on 30 September 1999, as is shown by a written advice from EBCO’s London bankers. S& P holds legal title.
35.In his statement under caution made to the EFCC on 27 September 2005 Mr Soberekon said that: “I’m not clear in my head having any financial deal with EBCO Associates Ltd UK until I confirm my records.” On the following day, in another statement made under caution to the EFCC he said:
“About the EBCO Associates fund transfer, to the best of my knowledge, I can recollect about £250,000 transfer to EBCO Associates Ltd but I do not have knowledge of where it went from there. The transfer was made from my account at NatWest Bank, London while I was in London. The governor of Bayelsa State asked me to pay this company for an undisclosed reason. The EBCO Associates account in London Trust Bank plc was given to me by [Mr Alamieyeseigha] and I made the transfer of £250,000 … on 30/9/99. This is from profit made from the gas turbine overhaul…. The funds transferred to EBCO on behalf of the governor was an appreciation of the contract awarded to my company by Bayelsa State Government.”
36. Mr Alamieyeseigha says that the flat was bought on his behalf by Mr Otrofanowei. He says that in order to pay for the flat he borrowed $409,751 from Mr Soberekon, who is a long-standing friend, and that he has since repaid the loan by installments. He says that since the payment by Mr Soberekon was made in September 1999, only four months after Mr Alamieyeseigha had been elected State Governor, it could not have been as a result of any contract that he had awarded to Mr Soberekon or his company. Mr Alamieyeseigha gave the same explanation to the EFCC. I have taken Mr
Alamieyeseigha to be making a claim to beneficial ownership of this flat. Mr
Alamieyeseigha’s claim that the money that came from Mr Soberekon was a loan that
has been repaid was not put to Mr Soberekon in the course of his interview by the EFCC. Nor has it been put to him since.
37. On the face of it there is an issue of fact. However, Mr Davies says that Mr
Alamieyeseigha’s account is “unsupported, implausible and incredible.” The two main points that he makes are:
i) There is no written evidence to corroborate Mr Alamieyeseigha’s bare assertion that the money was a loan that has since been repaid;
ii) In the sworn asset declaration that Mr Alamieyeseigha made on his election as
Governor, he declared assets of an equivalent value of £286,000, so that it would not have been possible for him to have repaid £250,000 to Mr Soberekon without a wholesale liquidation of his assets.
Mr Alamieyeseigha’s UBS account
38. As I have said, this account was opened in September 1999 with a deposit of $35,000. The latest valuation shows a balance as at December 2005 of $535,812. The bank statements for this account show a large number of payments into the account, some of which are substantial. Some are simply described as “Foreign Money Deposit”: others give the name of the originator. Mr Davies focused on two deposits in particular: $1 million paid in by Mr Aliyu on 25 April 2001 and $500,000 paid in by Mr Aliyu on 4
May 2001. A few days later these payments were used to buy bonds, which were added to Mr Alamieyeseigha’s portfolio. In January 2002 these bonds were transferred to the portfolio held by Falcon.
39. Mr Alamieyeseigha says that he did not regard this account as his account, as it was set up for the benefit of his wife and children. This is why it did not feature in his declarations of assets. He gave a similar explanation of the purpose of this account to the EFCC. He says that all the contributors to this account were his personal friends and associates; and that no money was transferred from Nigeria to this account. I take Mr Alamieyeseigha in his capacity as legal holder of the account to be advancing a defence that this account does not represent the fruits of corruption.
40. Mr Alamieyeseigha told the EFCC that he got to know Mr Aliyu in 2000 through a friend. This would have been after he had been elected as State Governor. He said that
Mr Aliyu has assisted him in his private capacity in the procurement, renovation and sale of properties. It is common ground that Mr Aliyu’s company was awarded a contract by Bayelsa State for the construction of the Governor’s and Deputy Governor’s lodge and associated perimeter fencing. Precisely when this contract was awarded is not clear. On the one hand Mr Aliyu says that it was not until 2002. On the other there are documents that suggest that additional payments amounting to the equivalent of £3 million were paid to Mr Aliyu’s company in August 2001 under a contract which had already been awarded. The Federal Republic relies on the documents in preference to the statement of Mr Aliyu, upon whom, in other respects, they rely. The contract itself is not in evidence.
41. Mr Aliyu was also interviewed by the EFCC. However, he was not asked about the particular payments into the UBS account. There are other named originators of payments. They do not appear to have been interviewed and there is no material which indicates the motives for their payments.
42. Mr Davies says that since Mr Alamieyeseigha has not explained the source of the funds passing into this account except in the very vaguest terms, and since the amount of the payments in far exceed Mr Alamieyeseigha’s declared assets, it can only be concluded that these are illegitimate funds and represent the fruits of corruption.
14 Mapesbury Road
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