B e f o r e :
THE HONOURABLE MR JUSTICE BRYAN
|| THE REPUBLIC OF ANGOLA
(ACTING BY AND THROUGH THE MINISTRY OF FINANCE OF ANGOLA)
(2) BANCO NACIONAL DE ANGOLA
- and –
||(1) PERFECTBIT LIMITED
(2) MAIS FINANCIAL SERVICES SA
(3) MFS & RESOURCE PROJECT PARTNERSHIP LIMITED
(4) RESOURCE CONVERSION PLC
(5) SAMUEL BARBOSA DE CUNHA
(6) HUGO ANTHONIE FOLKE GODFRIED REINIER ONDERWATER
(7) JORGE GAUDENS PONTES SEBASTIAO
(8) KERFALA SOUMAH
Paul McGrath QC and Stephen Robins (instructed by Norton Rose Fulbright LLP) for the Claimants
Mark Anderson QC and Steven Reid (instructed by Joseph Sutton Solicitors) for the Second and Seventh Defendants
Duncan Macpherson and Simon Jones (instructed by Zaiwalla & Co) for the Sixth Defendant
Hearing dates: 12, 13 and 14 March 2018
HTML VERSION OF JUDGMENT APPROVED
Crown Copyright ©
Mr Justice Bryan:
- The Claimants, the Republic of Angola ("Angola") and Banco Nacional de Angola (the "BNA"), allege that they are the victims of a very substantial fraud - having been induced to pay over US$500 million and €24.85 million belonging to Angola, to certain of the Defendants. The First to Eighth Defendants (collectively "the Defendants") are said to be some of the parties who were involved in a conspiracy to defraud the Claimants.
- The Claimants' case is that the Defendants made a series of representations to the effect that they were setting up an investment fund for the benefit of Angola in conjunction with a syndicate of reputable international banks. The Claimants say that there was no such syndicate; that the Defendants made false representations and tendered non-genuine documents to the Claimants to induce payments to the First and Second Defendants.
- In November 2017, the Claimants applied for proprietary injunctions, worldwide freezing orders and disclosure orders against the First to Seventh Defendants (the Eighth Defendant having been joined subsequently to the action). On 17 November 2017, Popplewell J made an order in the form sought by the Claimants ("the Order").
- The Claimants have since brought personal and proprietary claims against the Defendants seeking: (i) damages for deceit and/or conspiracy; (ii) restitution consequent upon rescission, failure of consideration or mistake; and (iii) declarations that the Defendants hold the sums of US$500 million and €24.85 million and/or the traceable proceeds on trust for the Claimants together with such orders as may be necessary to compel the Defendants to repay the same to the Claimants.
- The return date hearing in respect of the Order took place before me over 3 days from 12 to 14 March 2018. At that hearing:
(1) the Second and Seventh Defendants challenged the jurisdiction of this Court to grant relief against them;
(2) the Second and Seventh Defendants applied to set aside the worldwide freezing order and proprietary injunctions alleging that the Claimants breached their duties of full and frank disclosure on the without notice application and/or that there was (and is) no real risk of dissipation of assets by them;
(3) The Sixth Defendant applied to set aside or vary the Freezing Order for breach by the Claimants of their duties to make full and frank disclosure of material facts and/or defences;
(4) The Sixth Defendant also sought a stay on case management grounds if the Second and Seventh Defendants' jurisdictional challenge succeeded and/or if the Third Defendant's application for stay under the Arbitration Act 1996 was adjourned (the Third Defendant was not able to pursue any application for a stay at the return date hearing);
(5) The Claimants applied for the continuation of the Order or the granting of a further injunction containing similar relief.
B. The Parties and Significant Persons
B1. The Claimants and Associated Individuals
- Angola acts in this litigation through the Ministry of Finance of Angola (the "Ministry"). The Ministry is an auxiliary office of the President of Angola and is headed by Mr Augusto Archer de Sousa Mangueira, the Minister of Finance of Angola. Mr Mangueira made an affidavit in support of the Claimants' applications before Popplewell J.
- From 21 September 1979 until 26 September 2017, the office of President of Angola was held by President José Eduardo dos Santos. President dos Santos was, and remains, president of the Movimento Popular de Libertação de Angola (the "MPLA"). His son, Mr José Filomeno dos Santos, was the chair of the Angolan Sovereign Wealth Fund, having been appointed to this position by President dos Santos on 21 June 2013.
- President dos Santos was succeeded by President Joao Lourenço, who was elected on 23 August 2017 following President dos Santos' decision to step down as President. President Lourenço assumed office on 26 September 2017. He is also a member of the MPLA. As part of the transition, there have been a number of changes within the Angolan government. For example, on 10 January 2018, Mr José Filomeno dos Santos was dismissed from his position as chair of the Angolan Sovereign Wealth Fund by President Lourenço. Some of the Defendants have submitted that there is a significant political angle to the claim which it is said was not properly disclosed before Popplewell J. I will address this submission in due course.
- The BNA is Angola's central bank and sole banker. It is responsible for the issuing of the Angolan currency (the Kwanza), supervising the stability of the Angolan financial system, and managing Angola's foreign currency reserves. It has its own legal personality as a matter of Angolan law. The BNA is headed by a Governor. Dr Valter Filipe Duarte da Silva held this position from 5 March 2016 until his resignation on 27 October 2017.
B.2 The Defendants
- The First Defendant, Perfectbit Limited ("Perfectbit"), is a limited company incorporated in England in August 2010. Prior to August 2017, it was a dormant company with net assets of £560 and a sole director. In August 2017, the Fifth Defendant ("Dr Barbosa"), and the Eighth Defendant ("Mr Soumah") were appointed directors of Perfectbit. Shortly thereafter, on 18 August 2017, a payment of US$500 million was made to Perfectbit's bank account with the Bromley branch of HSBC Bank plc ("HSBC") in England.
- Dr Barbosa is a Brazilian national resident in Japan. He is a director of Bar Trading Japan Company Limited, a Hong Kong company, and holds forty-five percent of the shares in that company. Bar Trading Japan Company Limited is part of the Bar Trading Group. As matters stand, the Bar Trading companies are not party to the action.
- Mr Soumah is resident in England. As previously stated, he was joined to the action, as the Eighth Defendant, after the first application before Popplewell J.
- The Second Defendant, Mais Financial Services SA ("Mais") is a company incorporated in Angola on 2 December 2015. It is a holding company for Banco Pungo Andongo and Mais Seguros:
(1) Banco Pungo Andongo is an Angolan Bank incorporated in 2013. It started trading in 2014. Dr Pontes says that this company will soon be renamed Banco Mais.
(2) Mais Seguros has approval to carry out business as an insurance company. The evidence is that the requisite approval was granted by Mr Mangueira in May 2017. Mais Seguros is not yet trading.
- The Seventh Defendant (Dr Pontes) chairs Mais' board of directors. Through his share ownership, Dr Pontes controls Mais. He is resident in Angola and is an Angolan national. His evidence is that he has a number of business interests. These include:
(1) He is the former CEO and current President of Banco Pungo Andongo.
(2) Through Mais he owns Mais Seguros.
(3) In 2006, Dr Pontes founded Investmeimentos e Participaçoes Lda ("Inpal") with Mr Filomeno dos Santos. Dr Pontes now holds 97% of the shares in Inpal, with Inpal itself having a 49% stake in Standard Bank Angola.
(4) Inpal is the parent company of Bromangol SA ("Bromangol"). In 2012, Bromangol was awarded an exclusive concession contract by the Angolan Fiscal Authority to check and certify all imported and exported food, beverages, cosmetics and pharmaceutical products. This concession was terminated by President Lourenço on 9 November 2017.
- Dr Pontes is associated with Mr Filomeno dos Santos. He states that, although he has endeavoured to keep their relationship private, the two have been friends from childhood and have been involved in commercial projects together (for example, Inpal). Dr Pontes believes that these facts are well known within business and political circles in Angola.
- Dr Pontes also has some political experience. He was previously appointed by President dos Santos to the Commission on the Structuring and Management of the Capital Markets Commission. More recently, in July 2017 he was appointed by President dos Santos to the position of Executive Secretary of the Goods Control and Quality System National Council of Angola. This is an unsalaried position equivalent to a Secretary of State in this country. It carries with it responsibility for the regulation and control of food, beverages, cosmetics and pharmaceutical products in Angola. Dr Pontes has given evidence that President dos Santos requested Mr Mangueira vest Dr Pontes in office but Mr Mangueira declined to do so. Dr Pontes was relieved of his position as Executive Secretary by President Lourenço on or about 9 November 2017.
- The Third Defendant is MFS & Resource Project Partnership Limited ("Project SPV"). Project SPV is a limited company incorporated in England on 14 July 2017. Its directors are the Sixth Defendant ("Mr Onderwater") and Dr Pontes. Project SPV is owned by the Fourth Defendant, Resource Conversion Plc ("Resource Conversion"), and Mais.
- Resource Conversion is a company incorporated in England, whose sole director and ultimate beneficial owner is Mr Onderwater. This company was dormant until 2016. Mr Onderwater says that he previously operated his business through holding companies but was required in 2016 to use a simplified structure. Mr Onderwater says that Resource Conversion has a number of existing and new projects with a value of hundreds of millions of Euros.
- Mr Onderwater is a Dutch national who works in the agriculture and construction sectors. His evidence is that he has sometimes worked as a consultant to sovereign states, giving advice principally on construction, engineering and agricultural projects. Mr Onderwater recounts that he has worked a number of times with financial consultants and that his interest was always in the technical side of the projects (as opposed to the financial aspect).
C. The Order of Popplewell J
- On 17 November 2017, the Claimants applied ex parte without notice for a proprietary injunction in respect of the sums of US$500 million and €24.85 million and a worldwide freezing order in the sum of US$540 million against the First to Seventh Defendants, along with a Norwich Pharmacal order and a gagging order against HSBC.
- The applications for the proprietary injunction and freezing order were supported by an affidavit from Mr Mangueira. This was signed but not sworn. Mr Godden, a solicitor at Norton Rose Fulbright LLP ("Norton Rose") swore an affidavit supporting the Claimants' applications for service out, service by alternative means and permission to delay service.
- As foreshadowed above, Popplewell J made the order sought by the Claimants. The Order was continued, following without notice hearings before Popplewell J on 24 November 2017 and 1 December 2017, and following a hearing on 15 December 2017 (which the Defendants' legal representatives attended and at which a timetable was agreed for the filing and hearing of any applications to discharge the orders).
D. Procedural Matters
- On 6 February 2018, the Claimants applied for unless orders against Resource Conversion and Dr Barbosa requiring those parties to make good deficiencies in their asset disclosure in short order. This matter came before Popplewell J on 2 and 5 March 2018, with both Resource Conversion and Dr Barbosa being represented by counsel.
- Popplewell J held that there was "no doubt that both Resource Conversion and Dr Barbosa were and are in breach of their disclosure obligations." The judgment records that:
(1) "[t]here has been a continuing and deliberate failure … which I regard as both serious and significant."
(2) "Angola has established a good, arguable case – indeed, on the evidence which I have seen so far, a strong prima facie case, that it has a proprietary claim to trace and recover the proceedings of those three payments [the €24.85 million]."
(3) ".. there is force in the claimant's argument that Mr Onderwater is not a man whose word is to be trusted in the absence of corroborative documentary material. There is, as I have said on the material I have presently seen, a strong prima facie case of his involvement in fraud and his involvement in forwarding forged documents. He has been deliberately evasive in response to asset disclosure and has committed knowing breaches of the order and has delayed in providing information. He continues to refuse to provide information which is required, and that continuing failure supports the allegation that his word is not to be trusted."
- Popplewell J made unless orders against both Resource Conversion and Dr Barbosa ("the Unless Orders"). These provided:
(1) unless Resource Conversion provided specified information by 4pm on 9 March 2018 it would be debarred from seeking a case management stay or applying to set aside (or otherwise challenging the continuation of) the Freezing Order (Resource Conversion having previously issued an application notice to make such a challenge).
(2) unless Dr Barbosa provided specified information by 4pm on 13 March 2018, he was debarred from defending the Claimants' claims, and the Claimants would be at liberty to enter judgment against Dr Barbosa.
- Resource Conversion failed to provide the necessary information, as did Dr Barbosa. Consequently, Resource Conversion was not able to pursue its application for a case management stay, and to set aside the freezing order, that it intended to make.
E. The Applications
- The Applications made at the hearing before me were as follows:
(1) An application by Mais and Mr Pontes challenging the jurisdiction of the English court (the "Mais/Pontes Jurisdiction Challenge");
(2) An application by Mais and Mr Pontes to discharge the proprietary injunction and freezing order for alleged breaches by the Claimants of their duty of full and frank disclosure (the "Mais/Pontes Discharge Application");
(3) An application by Mais and Mr Pontes to discharge the proprietary injunction and freezing order on the basis that there was, and is, no risk of dissipation.
(4) An application by Mr Onderwater to discharge the proprietary injunction and freezing order on the basis of alleged breaches by the Claimants of their duty of full and frank disclosure (the "Onderwater Discharge Application").
(5) An application by Mr Onderwater for a stay of the Claimants' claims against him on case management grounds if the Mais/Pontes Jurisdiction Challenge succeeded and/or if Project SPV's application for stay under the Arbitration Act 1996 was adjourned (the Third Defendant not making that application at the return date hearing) (the "Case Management Stay Applications").
(6) An application by the Claimants for the continuation, or re-grant, of the relief ordered by Popplewell J.
- As will become apparent in the course of this judgment, there was a considerable overlap between the Mais/Pontes Discharge Application and the Onderwater Discharge Application.
- In the course of the hearing, the parties agreed to a consent order by which the sum of US$500 million was to be returned to the Claimants upon the fulfilment of specified conditions.
F. The Facts
- In order to address the submissions made by the parties, particularly in the context of non-disclosure, it is necessary to set out the facts as they stand in some detail. The detailed factual matters and the merits of the claims are, of course, generally a matter for trial. I simply record here what is required to address the applications made to the court on the return date.
F.1 Initial Contact
- The Angolan economy is heavily dependent upon the production of crude oil. Given fluctuations in the price of crude oil, the Angolan state faces numerous financial challenges. These include rising public debt and a reduction in its net international reserves. In recent years, Angola has sought to diversify its economy.
- In 2017, Mais and Resource Conversion came into contact with the BNA. It appears that Dr Pontes spoke with Mr Filomeno dos Santos, then President of the Sovereign Wealth Fund of Angola, about an economic investment plan. Dr Pontes' evidence is that Mr Filomeno dos Santos indicated that the Sovereign Wealth Fund did not encompass this type of investment but that Mr Filomeno dos Santos then spoke to his father, the President, who gave his approval. Mais and Resource Conversion proposed to the BNA that they would:
(1) provide a study to the BNA on the implementation of measures to develop the Anolan economy;
(2) create an investment fund with proceeds to be invested in a number of projects with the aim of diversifying the Angolan economy;
(3) provide foreign currency services; and
(4) assist in the management and reduction of Angola's national debt.
F.2 The "BNP Paribas Letter"
- In or around June 2017, a copy of a letter addressed to President dos Santos was received by the Ministry of Finance purporting to be from BNP Paribas ("the Letter"). The Letter itself is undated and is written in Portuguese. Although the Letter was discussed by Mr Mangueira in his first affidavit, he was unable to locate it at that point in time. It has subsequently been found and I have been provided with a certified translation.
- The Letter makes reference to BNP Paribas, with a logo in the top right hand corner. In the top left hand corner it states "The bank for a changing world". The body of the letter provides:
"BNP Paribas is a leading European financial banking institution that creates, implements and manages a variety of investment strategies, with a presence in various financial sectors at a global level and with liquid resources of over 345 billion EUR at its disposal, in accordance with our latest financial reports.
Through this letter, we have the honour of welcoming the Republic of Angola to our platform of investments, and inform you of the approval of the structure of the Special Purpose Vehicle (SPV) submitted by our partners Resource Conversion/Mais Financial Services to BNP Paribas Investment Partners, a financial institution responsible for the asset management of a portfolio comprising more than 500 (five hundred) billion assets in total, across the globe. Therefore, through the medium of an Investment Fund supported by us and the banks Bankinter, Deutche Bank, Société Générale, amongst others, we are prepared to:
1. Make available foreign currency, EUR/GBP/YEN, immediately and in an unlimited nature, to the Banco Nacional de Angola, through the international banks of WEU/UAE mentioned above.
2. To create a strategic fund for investment in Angola with an estimated financial capacity of Thirty billion Euros, through Asset Management and Project Finance.
3. To negotiate the purchase of the Angolan external debt with different countries.
This financial structure is coordinated by Hugo Onderwater, through the aforementioned European financial institutions and, in Angola, by Dr. Jorge Pontes. These entities, together with BNP Paribas, are available for a meeting, strictly at the highest level, subject to Your Excellency's availability and consideration of Your Excellency.
- There were two annexes to this letter: first, what purported to be BNP Paribas' Financial Report (headed in the same manner as the letter itself) and second a "Summary of Activity – Hugo Onderwater".
- Before Popplewell J, the Claimants stated that they suspected that the Letter was not genuine. By an email on 21 February 2018, Norton Rose sought confirmation from BNP Paribas as to whether the letter was genuine. In the course of the hearing, BNP Paribas confirmed that they believed that this letter is counterfeit. The relevant email provided:
"We note the English translation refers to Resource Conversion Plc and Mais Financial Services S.A. as being "partners" of BNP Paribas Investment Partners.
We confirm that BNP Paribas London Branch has checked its systems and found no record of any relationship between any BNP Paribas entity and Resource Conversion Plc and Mais Financial Services S.A.
Further, on 1 June 2017 BNP Paribas Investment Partners rebranded to be called BNP Paribas Asset Management. This was announced on 25 May 2017 … . A genuine letter sent by the Chairman of BNP Paribas SA in mid-June 2017 would have very likely referred to BNP Paribas Asset Management rather than BNP Paribas Investment Partners.
Accordingly, to the best of our information and belief, we believe the letter attached to your email to be a counterfeit."
- Neither Mais, Dr Pontes nor Mr Onderwater have suggested that the Letter is authentic. None of them have taken responsibility for that letter and the provenance of the Letter will no doubt be addressed at trial. Mr Onderwater has given evidence in his latest witness statement that the Letter originated from Dr Pontes but has not expressly blamed Dr Pontes for producing the Letter. Dr Pontes has not commented on the Letter itself but has given evidence that he understood from Mr Onderwater that BNP Paribas was leading the syndicate. What is clear is that none of the Defendants have accepted responsibility for the production of the Letter.
F.3 The Presentations
- In June 2017, Mais and Resource Conversion made two presentations to BNA and the Ministry of Finance. This followed from the approach made by Mais and Resource Conversion to President dos Santos. The Defendants' evidence is that the meeting at which the presentations were made was arranged on relatively short notice. Mr Mangueira, Mr da Silva and Mr Filomeno dos Santos attended this meeting on behalf of the Claimants. Mr Onderwater represented Resource Conversion and Dr Pontes represented Mais. Mr Filomeno dos Santos and Dr Pontes travelled together to this meeting by a chartered plane.
- It appears that at least some of those present at the meeting expected BNP Paribas to also be in attendance. As explored below, the record of the meetings put into evidence by the Claimants suggests that they expected BNP Paribas to be present. Dr Pontes' evidence is that he too expected representation of BNP Paribas but that Mr Onderwater informed him just before the meetings that BNP Paribas would not be attending the meeting on short notice. Mr Onderwater denies mentioning BNP Paribas attending the meeting – stating that he had (and has) no relationship with BNP Paribas.
- I do not say anymore on this matter as this issue is one to be explored at trial. Likewise, the respective roles of Dr Pontes and Mr Onderwater in producing the slides and making the presentations is a matter for trial. I simply record that the nature of this meeting and the respective roles of Dr Pontes and Mr Onderwater, on behalf of Mais and Resource Conversion, appear to be in dispute.
- The meeting at which the presentations were made was held in Cascais, near Lisbon. In his first affidavit, Mr Manguira mistakenly stated the meeting was in London. This error has since been acknowledged.
F.3.1. The First Presentation
- The first presentation, entitled "Monetary Capacity Expansion Programme", stated on the first slide that it was prepared by Resource Conversion Plc & Mais Financial Services, S.A. That slide, and all other slides, bore the logos of both Resource Conversion and Mais. It is dated June 2017.
- The fourth slide records the measures proposed being the creation of a reserve fund via Asset Management for the BNA and the support of "monetary expansion operations" in US dollar, Euros, GBP and Japanese Yen. Slide 5 went on to state, under the title "BNA Request" and subtitle "Principles of market acceptance" that:
"Establish and set up SPV. SPV = RC-MFS Financial Engineering Ltd, with its head office at 6, Honduras Street, London, United Kingdom."
- Below this, reference was made to an implementation period of thirty days, a deadline of 15 July 2017 and "EU/UK compliance completed". It also contained references to an account being set up with Sumitomo Bank to hold a US$300 million deposit from the BNA.
- The presentation set out fourteen phases of the Monetary Capacity Expansion Programme. The detail of this programme is for exploration at trial. However, at phase 4, it was stated that a SPV would be set up with various bank accounts. The Claimants suggest that the US$1.5 billion was to be paid into a bank account held by the SPV. What the position was is a matter for trial, albeit it is not clear on the documents. Phase 7 also made mention of the "Establishment of a $300 million deposit for the purposes of asset management in an SPV bank account with Sumitomo."
F.3.2. The Second Presentation
- The second presentation, "International Strategic Fund for the Economic Diversification of Angola", also states on the first slide that it was prepared by Resource Conversion Plc and Mais Financial Services, S.A. As with the previous presentation, the Resource Conversion and Mais logos appear on every slide. Under the heading "Basic elements and principles of Fund management", it referred to the intended measures:
"- Create a strategic investment fund to accelerate diversification of the Angolan economy
- Create a fund with the capacity to act as a reserve fund for the Angolan State via "Asset Management"
- The slides proposed the creation of a strategic investment fund with the aim of raising US$30 billion to be invested in national portfolios and projects. Reference was made to Sumitomo Bank as being a part of the banking structure and to the involvement of a list of banks, namely "BCE, DB; RBS; Bankinter, BPN-Paribas; Santander; Standard Bank", who supported the initiative.
- The presentation also set out a "Fund implementation and operating structure" consisting of ten phases. Phases 1 and 2 were recorded as being complete, with phases 3 and 4 in the process of implementation. Phase 5 was set out under two headings:
Set up SPV: RC-MFS Financial Engineering Ltd: as qualified SPV "Qualified Trust Company"
Establish banking structure (Sumitomo) Transfer of assets: a) EUR 1020m (EUR 1.02 billion) Yearly profitability of 15%
Phase 5 (Model)
Use the AAA model *) between the receiving entity and the donor.
Assets placed under the system of management with two signatures from the RC and MFS for a period of 13 to 25 months.
*) AAA means the temporary transfer of assets without change of ownership taking place"
- Under phase 10, Implementation, it stated:
"Main operation in system of subcontracting with WEU banks/institutes in one or more of the following formats
b) Primary Market
Banks: BCE, DB; RBS; Bankinter; BPN-Paribas; Santander; Standard Bank*"
- A draft document entitled "Technical and Financial Consulting-Agreement" was also provided. It is unnecessary to address this document in detail, given such a consultancy agreement was later entered into, and is discussed below.
- Dr Pontes has produced in evidence what is described as a note of the meeting, prepared by Dr Pontes and Mr Filomeno dos Santos. Mr Onderwater has indicated that he does not accept this note as being an accurate record of the meeting. This is a matter for trial.
F.4 The Preliminary Analysis
- The Claimants have produced in evidence a document purporting to be a "Preliminary Analysis" of the proposals made in the presentations ("the Preliminary Analysis"). This is undated and does not state its origin. Mr Mangueira's evidence is that it was produced by the Ministry of Finance after the presentations.
- The Preliminary Analysis makes reference to a letter received by the TPE (that being a reference to the Angolan executive) from BNP Paribas. It recorded that there had been a meeting in the United Kingdom between an Angolan delegation – consisting of the Minister of Finance, the Governor of the BNA and the President of the Sovereign Wealth Fund – and Mais and Resource Conversion. The absence of BNP Paribas, as principal signatory of the letter, was specifically remarked upon. It went on to record that Mais and Resource Conversion had themselves noted the absence of BNP Paribas.
- The body of the analysis is not supportive of the Project. It states that "both the format of the documents (presentations) and the manner in which they are presented, hamper clarification and therefore hinder interpretation and analysis." A series of specific questions were then raised including questions as to who Resource Conversion and Mais are, their experience (as there is no information available online), the identity of the "true developers" and the supporting banks and the legal safeguards to protect Angola.
- Under the heading "Recommendations", the analysis concluded:
"23. Taking into account the mechanisms' potential merits, we are recommending that the developers submit a more detailed technical proposal for the financing transactions. This will enable a better understanding of the costs, risks and benefits of the funding structure.
24. The technical teams from the Ministry of Finance and the BNA, supported by a team of lawyers, should start negotiations with developers (including BNP Paribas – the principal signatory) as soon as possible."
- Mr Mangueira stated in his first affidavit, having addressed the Preliminary Analysis, that:
"At this stage, based on our analysis and the questions raised by NRF, the Ministry of Finance decided that it did not wish to proceed with the transaction. However, I now understand that the BNA continued with the transaction (i.e. without the Ministry of Finance)."
- Mr Onderwater has relied upon a press report by Maka Angola, dated 31 January 2018. This states that Mr Mangueira asked Dr Filipe to support his rejection of the Project but Dr Filipe refused and, with Mr Filomeno dos Santos, produced a favourable technical opinion and forwarded it to President dos Santos. Mr Onderwater states that, according to Dr Pontes, President dos Santos had that technical opinion, along with the Preliminary Analysis, when he decided that the BNA should proceed with the transaction. Mr Mangueira has not given evidence to the contrary. I address the potential significance of this below.
F.5 The BankInter Statement
- I have been shown a translation of a letter of 19 June 2017 from Mais, signed by Dr Pontes, to Dr da Silva. This makes reference to the meeting of the 14 June, and purports to list the drafts of the documents that would serve as the basis of the contractual relations between the BNA and its counterparties. Item 8 on this list was as follows:
"Management contract of instructions between the MFE and the syndicate of banks involved in the operation. This document has yet to be made available, because the account of the JV is pending in all the banks involved, as per points 3 and 5 respectively of the aforementioned timetable."
- This letter then stated:
"In respect of the documents which have yet to be finalised, this is due to the principle of "Non Solicitation", a basic rule of compliance for the mechanism installed. Even though, even without some of the essential steps of the process having been completed, Resource Conversion and Mais Financial Services have commenced process within the banking structure, as demonstrated by the bank statement attached. DOCUMENT ANNEX VI."
- Annex VI purported to be a bank statement from Bankinter, showing securities to the value of €9.7 billion in the name of Resource Conversion. It is now accepted that this document is false. The true value, as explained by Mr Onderwater, is that the correct nominal value of a shareholding was €9.7 million. I note Mr Onderwater's evidence is that he had not previously seen this statement (or the letter). This is another matter for trial.
F.6 The Contracts
- Following the Presentations, the BNA entered into two contracts in July and August 2017 (the Consultancy Agreement and the Asset Management Agreement (as each is defined below)). It was pursuant to these contracts that the sums of €24.85 million and the US$500 million were paid out by the BNA.
F.6.1 The Consultancy Agreement
- On 3 July 2017, in Luanda, Dr da Silva (then the Governor of the BNA) signed a "Technical and Financial Consulting Agreement" (the "Consultancy Agreement") with Mais. Dr Pontes signed on behalf of Mais. This followed a series of meetings and correspondence between Dr Pontes, on behalf of Mais, and the BNA.
- The recitals to the Consultancy Agreement record, amongst other matters, that:
"K) In today's global economy and financial crisis is urgent to adopt an appropriate macroeconomic strategy and define and implement monetary measures to ensure the adequate development of the Angolan economy in order to overcome or at least decrease the effects of the financial crisis.
L) Such strategy and measures should be preceded by elaborating a comprehensive study of the country's economic and financial reality (hereinafter referred to as the "Study"), which provides for proposals for the adoption and contracting of adequate and effective financial instruments in the international financial markets, enabling the BNA to perform its legal duties to the best of its ability, including preserving the value of the domestic currency.
M) BSFS is a corporation dedicated, among other activities, to management, financial and technical advisory, having technical conditions to support the BNA in preparing and developing this study and in implementing the measure referred to in the previous Recital.
N) The BNA intends to enter into a Technical-Financial Consulting Agreement with MFS for preparing a study on the implementation of monetary measures to be adopted by the BNA and the Angolan government for the development of the Angolan economy, namely with respect to the assumptions and procedures for the constitution of a strategic reserve fund by means of the asset management of foreign currency for the BNA and a private equity fund in accordance with the outcome of the abovementioned study.
O) Subsequently, the BNA shall enter into a further asset management agreement with Mais Financial Engineering Ltd (hereinafter referred to, as abbreviated, "MFE"), a joint venture between MFS and Resource Convention Plc, ("RCP", which shall take the form of a "special purpose vehicle" ("SPV"), with a view to increasing BNA's foreign currency capacity by means of the opening of clearing accounts for the latter in Kwanzas, in banks that are members of the European banking syndicate and vice versa."
- Dr Pontes takes issue with the translation of Recital N (and Clause 8.3, 9 and 15.2.b.). He says that the Portuguese original also refers to "public-private investment projects selected by the Angolan state", alongside the references to a private equity fund chosen by the Angolan government.
- The Object of the Agreement was set out in Clause 8:
2. The precise object of the Services is:
a) The preparation of a comprehensive Study on the economic and financial reality of the Country;
b) The Proposal for the adoption and contracting, in the international financial market, of the existing financial instruments available in the international financial market, that allow the BNA to duly fulfil its legal responsibilities for the preservation of the value of the national currency and participation in the definition of monetary, financial and foreign exchange policies;
c) Definition of the appropriate assumptions and procedures for the constitution of the funds referred to in paragraph 3 of this clause.
The Study referred to in paragraph 2 of this clause shall address the implementation of monetary measures to be adopted by the BNA for the development of the Angolan economy, in particular with a view to promoting the constitution of a strategic reserve fund by means of the asset management of foreign currency for the BNA and a private equity fund chosen by the Angolan government, in accordance with the requirements and parameters previously defined by MFS, in accordance with the outcome of the aforementioned study."
- Clause 19 set out Mais' obligations:
"Clause Nineteen (SCOPE AND PRINCIPLES")
1. By this Contract, the MFS assumes as obligation to:
a) Provide technical assistance to the BNA in the origination of the following fund; (i) a strategic reserve fund (hereinafter referred to as "Reserve Fund") via "asset management" of the foreign currencies for the BNA and (ii) a private investment fund for management of a "private equity fund";
b) Establish the Reserve Fund;
c) Establish the Asset Management Fund;
d) Support the BNA in the fulfilment of monetary expansion operations, particularly with the objective of increasing the net foreign exchange reserves in the Country and protecting the value of the national currency, in line with what is stipulated in No of article 3 of law No 16/10, of 15 July;
e) Operate the asset portfolio to be managed, as well as the investments and operations in the financial market;
f) Support the BNA in setting up the protocols between this central bank and the WEU/UAE banks for operations in Kwanzas.
1. In the provision of the Services, the MFS must fulfil the following principles of proper management of the Reserve Fund and the Asset Management Fund, as applicable:
a) fulfilment of medium/long-term investments in the mixed portfolio regime;
b) fulfilment of international debt investment of the Sonangol and Angolan State;
c) participation in "buy-back" programmes of existing international debt and strategic assets."
- Clause 15 set out the price of the services:
"Clause 15 (Price of Services)
1. The price of the Services covers fees and expenses.
2. The BNA undertakes to pay MFS for the net amount of taxes and contributions of:
a) EUR 16,200,000.00 (sixteen million and two hundred thousand euros), as consideration for the rendering of Services for the preparation of the comprehensive study of the economic and financial reality of the Country and the drafting of a proposal for the adoption and contracting of financial instruments in the international financial market existing and available on the international financial market, in order to allow the BNA to duly perform its legal duties in order ti preserve the value of the national currency and to participate in the definition of monetary, financial and exchange policies;
b) EUR 33,500,000.00 (thirty-three million and five hundred thousand euros), for the provision of technical support services, the creation of a strategic reserve fund by means of the asset management of foreign currency to the BNA and a private equity fund chosen by the Angolan government, in accordance with requirements and parameters previously defined by MFS, in accordance with the outcome of the study referred to in item a).
3. For the provision of foreign exchange and asset management support services by MFS, the BNA undertakes to pay MFS or the entity subcontracted thereby, or a joint venture or any other form of association for the provision of such services, a percentage of the FOREX fee charged by WEU banks and an asset management fee, the amount of which shall be agreed upon by the Parties.
4. If any of the services included in this Agreement are not deinfitively provided (definitive non-compliance), MFS shall refund to the BNA the proportionate share of the price stipulated in this clause for the provision of services that have not been provided."
- Clause 17 provided that the price was to be paid in Euros by bank transfer to an account opened for Mais at Millennium BCP ("BCP") in Portugal "or by another bank account opened in an international banking institution on behalf of [Mais] or an entity designated by this latter in writing."
- Clause 29 set out the procedure for the resolution of differences. Clause 29.5.(a) provided that, if the dispute was of a technical nature, then it was to be submitted to arbitration. The remainder of Clause 29.5. provided:
"b) If the dispute relates to strictly legal questions, or if the provision of the legal matters shall have implications in all the other matters in dispute, the dispute must be submitted to the Angolan Courts as soon as possible, the parties agreeing, immediately, to cooperate in the swift fostering of the legal procedure; and
c) in any other case, the dispute shall be decided by the Angolan Courts, the parties being subject, for this purpose, to the exclusive jurisdiction of these former."
- The applicable law, pursuant to Clause 31.2, was Angolan law: "The interpretation, insertion, fulfilment and breach of the Contract is governed by the legal framework in force in the Republic of Angola."
F.6.2 Invoicing and payments made under the Consultancy Agreement
- Mais invoiced the BNA for the sum of €5,025,000.00 on 3 July 2017 as a down payment supposedly stipulated in Clause 16(2)(a) above. That same day Mais also produced an invoice for a further €2,430,000. These were followed on 27 July 2017, by further invoices. The BNA made payments totalling €24,850,000 from BNA's Euro account at Commerzbank, Germany, to the account in the name of Mais at BCP Portugal.
F.6.3 The Letter from Sumitomo Bank
- By letter dated 13 July 2017, the BNA requested Sumitomo Bank to open an account in the name of MFS & RESOURCE Project Partnership Ltd. By letter dated 25 July 2017, Sumitomo Bank declined to open such an account. The letter states:
"I am writing in reference to the letter dated the 13th July 2017 which is addressed to MFS & RESOURCE Project Partnership Ltd (u.c.) with CC to Sumitomo Bank, Att; Mrs Nisrin Hala which was received by us from BNA on the 18th July 2017. We have carefully review the letter, taken note of the contents and after due consideration, we are writing to inform you that, unfortunately, Sumitomo Mitsui Banking Corporation Europe Limited (SMBCE – SMBCGB2L) is not in a position to accept a request to open an account in the name of MFS & RESOURCE Project Partnership Ltd as referred to in the letter. The proposed request of opening such an account sits outside of our appetite at SMBCE and therefore we would be unable to proceed.
We take this opportunity to note that BNA's account (account number: 304786) referenced in the letter is established solely for the purposes of deposit placements by BNA with SMBCE; noting that any deposits necessitate both incoming and outgoing payments to be made in accordance with BNA's standard settlement instructions for that account."
F.6.4. The Meetings at the Landmark Hotel, London
- In late July and early August 2017, BNA representatives were present in London and met with various entities to discuss investment funds at the Landmark Hotel. Dr Pontes' evidence is that these meetings were held in London following Mr Onderwater's request as the banks with whom he was working were in London. Again this is a matter for trial.
- There are two communications from Mr da Silva, then Governor of the BNA, to President dos Santos from this period. On the 3 August 2017, Mr da Silva reported:
"In response to the authorisation to travel to London, United Kingdom, from 31st of July to 04th August 2004, for a business mission to get contacts and meetings with the banking union's international banks in order to create the investment funds, we inform that the tasks foreseen into the timetable for actions, duly agreed with the consulting entity, Mais Financial Services, SA, are carried out adequately.
So, after having prepared satisfactorily all the conditions and carrying out all the preparatory meetings, we were informed today that the meeting with Consórcio. Resource Conversation/Mais Financial Services and the main international banks were scheduled for the 07th and 08th August in order to have a final discussion about the documents, which will lead to our stay in London for another 5 (five) days, therefore, we request, Your Excellency, the appropriate authorisation."
DAY-04/08/2017 1. Meetings with Consórcio Resource Conversation/Mais Financial Services;
DAY-07/08/2017 1. Meeting with Sumitomo Bank;
DAY-08/08/2017 1. Meeting with the banking union; Sumitomo Bank, HSBC, BNP Paribas, Bankiter, ICBC – Standard Bank, Royal Bank Scotland and Deutsch Bank.
2. Meeting with Norton Rose Fulbright Law Firm, London;
We are aware of your thoughtful consideration.
We are hoping that this current issue deserves, His Excellency, your special attention, we reaffirm our best regards."
- This was followed by a second letter on the 7 August 2017. This made reference to the letter of the 3 August 2017 before stating:
"Therefore, the following actions were carried out during the week:
HSBC's positioning in the trade union's leadership, which is replacing Sumitomo, in order to expedite the course of the fundraising process;
Creation of conditions for restoring the banking relations such as the case of HSBC;
Money transfer to Standard Chartered Bank, the bank operator mentioned by Consórcio Resource Conversation, which is replacing Sumitomo;
Analysis and negotiation of draft Agreement of the Asset Allocation & Management Agreement, which will serve as a basis for managing the accounts that will raise the funds;
Preparation and availability of the information requested by Consórcio Resource Conversation/Mais Financial Services to complete the compliance process with the bank operator;
The screening meetings with Consórcio Resource Conversation/Mais Financial Services.
Therefore, on 06 August, the transfer of USD1.5 trillion request for the Standard Chartered bank, since the type of bank account opened at Sumitomo does not work out with this banking operation.
During, this week, between the 8th and 11th of August, the Protocol/Trust Agreement will be submitted by the international banks' trade union and be signed the Asset Allocation & Management Agreement in London.
Moreover, the travelling to Angola of the representatives of the trade union of international banks and Consórcio Resource Conversation/Mais Financial Services are scheduled between the 14th to 21st August in order to carry out the courtesy meeting with His Excellency and sign the Protocol/Trust Agreement with BNA to boost the funds in Luanda.
In view of the foregoing, we request, His Excellency, your authorisation to sign the Asset Allocation & Management Agreement, whose contents are attached to this information. We also ask for the authorisation of our stay in London, as meeting and subsequent events require us to stay in London until the weekend."
- There is also an attendance note of a meeting at the Landmark Hotel on 4 August 2017 between the BNA (represented by Dr da Silva, Mr Anonio Bule and Mr Joao Ebo) and Norton Rose (Mr Peter Young and Ms Madhavi Gosavi attending). The note records:
"Given the economic state of Angola after the oil price drop, the BNA wanted to make the most of the assets they were holding, such as the country reserves and the "other assets". They wanted to use these assets to create liquidity and value in the Angolan economy.
Their trip to London was to review the London market and meet key players in the market.
The other aspect they were looking for is investments in Angola. They wanted to use funds under BNA's management to create value in the economy. They were looking for ideas to support this principle. I asked them if they were involving the Ministry of Finance. They clarified that they were doing this exercise independent of the MOF and said that I was not to disclose our discussions to the MOF.
Angola needed to focus on a diversified economy. The BNA wanted to raise funds for the following sectors: agriculture, mining and financial sectors. They want assistance as to how the BNA can help in the diversification and asset management. Basically, how can they use their reserves and assets to fund investments in Angola and generate value. I said that I had seen some documents on asset management and the BNA with Mais Financial and I asked them if they had seen Mais Financial during this trip. We did not get a concrete answer."
- I note here that Mr Onderwater has placed considerable reliance upon these meetings for the purposes of his discharge application; on the basis that these meetings were held to address the replacement of Sumitomo in the proposed structure and it was only at this point that Dr Barbosa and Perfectbit enter into the picture.
F.6.5 The Asset Management Agreement
- On 10 August 2018, the Governor of the BNA signed the Asset Management Agreement. It was expressed to be "concluded and executed in London" on that day.
- The recitals to the Asset Management Agreement stated, amongst other matters, that:
"4. The MANAGER has business relationships with major international banks, investment houses, brokerages, lawyers and auditors in terms of which the MANGER is able to organize the receipt/transfer of Cash Funds, Bank Instruments and Bonds, and obtain cash liquidity against such the assets. Further, the MANAGER is able to arrange for the Project Finance and Funding Capacity through the creation of International Investment Funds based on the assets and project guarantees as own capital to finance the aforementioned projects.
5. The OWNER would like to avail itself of the contacts and experience of the MANAGER and make available its asset/s in order to accomplish the aforementioned to their mutual benefit.
6. The MANAGER is willing to make the necessary arrangements for the implementation of the above by acting as the Qualified Trust Company, for the purpose of accomplishing the above.
- The terms of the Asset Management Agreement provided (amongst other matters):
"(1) The MANAGER has business relationships with major international banks, investment houses, brokerages, lawyers and auditors in terms of which the MANAGER is able to organize the receipt/transfer of Cash Funds, Bank Instruments and Bonds, and obtain cash liquidity against the Assets. Further, the MANAGER is able to arrange for the Project Finance and Funding Capacity through the creation of International Investment Funds based on the Assets and project guarantees as own capital to finance the aforementioned projects." (Clause 2.2.1)"
- Clause 8 provides for the resolution of disputes by arbitration, pursuant to the Rules of the International Chamber of Commerce, seated in London. That clause expressly provided that it did not "preclude any Party from obtaining interim relief on an urgent basis from a court of competent jurisdiction pending the decision of the arbitrator or enforcing any award made by the arbitrator."
- Clause 9 provides that the Asset Management Agreement is governed by and shall be construed in accordance with the laws of England and Wales.
F.7 The Transfer to Perfectbit
- By a letter dated 16 August 2017, Project SPV requested the transfer of US$500 million. This letter was signed by Dr Pontes and Mr Onderwater, as directors of Project SPV, in London. It provided:
According to the AA-agreement dd. signed 10th August 2017 between Banco Nacional de Angola and MFS & Resource Project Partnership Ltd, we kindly request you to transfer the first tranche of USD 500.000.000,00 (five hundred million United State Dollars) to the bank account of the Trustee with the following co-ordinates:
Account name: PERFECTBIT LIMITED
Address: 179 TORRIDON ROAD, LONDON SE6 1RG, UK
Bank Name: HSBC Bank UK
Bank address 8 Canada Square London E14 5HQ
Concept: Trust Agreement Dr S. Barbosa"
- The transfer was to be originated from an identified account in London in BNA's name.
- On 18 August 2017, BNA transferred US$500 million to Perfectbit's account with the Bromley Branch of HSBC from the requested account. That same day Perfectbit filed "filleted accounts" signed by its then (sole) director, Mr Dindyal, listing its assets as of 17 August 2017 as £560.
- On 21 August 2017, Dr Barbosa and Mr Soumah were appointed as directors of Perfectbit and were listed as persons with significant control of Perfectbit (with Mr Dindyal ceasing to be such a person). On 23 August 2017, Perfectbit filed a Notice of Change of its accounting reference period, the end of the period being moved from 31 August 2017 to the 17 August 2017.
F.8 The Letter to President dos Santos on 18 August 2017
- Mais and Resource Conversion sent a letter dated 18 August 2017 to President dos Santos. This letter stated:
"The MFS & Resource Project Partnership Ltd. Consortium, established between MAIS Financial Services S.A. and Resource Conversion Plc, are, by way of this letter, hereby confirming that, further to the signing, on 10th August 2017, of the Asset Allocation Agreement contract with the National Bank of Angola (BNA), the preparatory stage of the establishment of the Investment Fund for the purpose of supporting the diversification of the Angolan economy has now been completed. The main objectives of the fund are:
a) To invest a minimum of thirty-five thousand million Euros in structural projects within Angola under the heading of Project Finance.
b) To make immediately available to the BNA foreign currency, Euro/Pound Sterling/Japanese Yen, to the value of up to 300 million Euros a week, by way of the banking syndicate which supports the operation.
c) To negotiate the purchase of Angola's external debt with different countries.
Following the signing of this contract, the Consortium and the banking syndicate which supports the structure detailed above, will start the operation which culminated, on 17 August this year, in the placement of the first financial instruments related to the fund which totalled 2,500,000,0000.00 (two thousand, five hundred million USD) of which 500,000,000.00 USD (five hundred million USD – Annex A) serve as a guarantee against the amount which has been deposited in the meantime by BNA in order to start the funding process.
BNA executed the instructions of the Consortium with the transfer of the first 500,00,000.00 USD (five hundred million USD), for the Trustee structure established by the banking syndicate, which confirmed, at the end of 18 August 2017, receipt of the aforementioned amounts within the operations account of the banking syndicate headed up by HSBC UK (annex B).
The capacity of the initial 2,500,000,000.00 (two thousand, five hundred million USD) having already been received into the financial market, we are awaiting authorisation by the Angolan government for the legal establishment of the Investment Fund in Angola.
This step will make possible the establishment of a Trust in London and Jersey by the Consortium (in the week commencing Monday, 21st August), which, in turn will make up the Fund, ensuring that when financial operations are executed in the European Union or Angola they will enjoy a different level of taxation.
Both the Trust and the Investment Fund must shortly authorise the opening of correlated bank accounts with BNA and with commercial banks which will operate in Angola, such as with HSPC, JP Morgan, Barclays and RBS-Royal Bank of Scotland.
In the context of the official launch of the fund in question, and of a meeting of parties strictly at highest level, subject to Your Excellency's availability and consideration, the Consortium believes that the necessary prerequisites have been met for an official visit by the dignitaries of some of the international banking institutes mentioned above to Luanda, during Angola's post-election period; from 4th September 2017 onwards."
- This was signed by Mr Onderwater. Appended to this letter were (purported) Euroclear documents.
F.9 The "Flag Emails"
- On 20 August 2017, Mr Onderwater sent Dr Pontes an email expressing concerns about "flags" being created in the Euroclear system through BNA's attempts to check the guarantee on the Euroclear system. The email stated:
"Dear Dr Jorge,
The following has just been advised:
Since the guarantee was established, the Euroclear system has already been consulted 4 times to verify the guarantee, but without using the correct codes. every time this happens, it leaves a "flag" in the system. this is because on the part of the BNA they are probably trying to see, but they do not have the subscription of Euroclear or not with the level of subscription sufficiently high. the market operator is upset because this phase of the process is supposed to be CONFIDENTIAL. therefore, PLEASE ask those at the BNA to CALM DOWN, and not screw things up now. no more checks please. Its' all OK"
- This was followed by an email on the 21 August 2017:
"Dear Dr Jorge,
Today begins the financial part of the operation.
The market operator and Dr S.B. will advise BNA to maintain absolute 'radio silence.'
The most sensitive point for the banks is to check for a breaking of banking secrecy."
- On 28 August 2017, Dr Pontes emailed Mr Onderwater. This email set out a list of issues for discussion between the two. The first item concerned the alerts in the system.
"1. You spoke to me about the possibility of someone giving BNA written directions of how they could follow the protocols of the guarantee. I only received an email from you saying BNA was leaving alerts in the system, since the instrument was not sufficiently verified. Their attempt to seek verification is legitimate and the negative results that arise from this are our fault, for no having facilitated this verification."
- On 29 August 2017, Mr Onderwater replied:
"Point 1: After lots of effort on my part, they told me this morning that the trading desk of HSBC or Credit Suisse will contact Dr Bule by email.
However, someone has already verified the guarantee 5 (five) times. This could only be someone who had access to the 14-page document.
- The previous day, Mr Onderwater had forwarded an email from Dr Barbosa:
"I will help BNA with the outline step-by-step how to verify the screen.
However, simple verification can be done on the ISIN number on the euroclear site. On the screen a message will pop-up requesting password access which the BNA banker must have. After the screen will open an they can see the 14 pages.
As will if they are on they own euroclear account screen, they only need to input the ISIN Number and all information will appear.
Let me know if they need extra help."
- The explanation proffered by Mr Onderwater as to these emails is that there was a concern that, because individuals had attempted to access restricted information without the necessary codes, flags were being generated which could put the transaction at risk. The veracity of this explanation is ultimately a matter for trial.
F.10 The Meeting on 20 October 2017
- On 20 October 2017, Mr Mangueira, with others from the Ministry and from the BNA, attended a meeting in London with representatives of Mais, Project SPV, Resource Conversion, Perfectbit and Bar Trading Group. A note of that meeting has been put in evidence. I do not need to address the detail of that note and what was said (or not said) in the course of the meeting as that is a matter for trial.
F.11 The Letter to President Lourenço of 20 October 2017
- Mais and Resource Conversion sent a letter dated 20 October 2017 to President Lourenço. There appear to be two versions of this document. The version actually sent to President Lourenço was exhibited to the first affidavit of Mr Mangueia. This letter set out the objectives Mais, Resource and the BNA were endeavouring to fulfil. It then stated:
"The MFSRPP has signed an "Asset Allocation & Management Agreement" (AAMA) with BNA worth a total amount of USD$1,500m as part of which a transaction of temporary first allocation of funds worth USD $500m has been performed by MFSRPP via the appropriate financial banking institution.
The transfer of funds took place via the signing of a "Trust Agreement" with PERFECTBIT LTD – HSBC London, who is holding the untouched funds in its capacity as Trustee, as per the supporting documentation enclosed here in Annex 1.
The BNA assumes no risk as part of this transaction since, Credit Suisse, at the request of PERFECTBIT LTD – HSBC London, issued BNA with an irrevocable, unconditional and transferable bank guarantee for the same amount of transferred funds (USD $500M), guaranteeing its validity for a period of 1 (one) year, as per the supporting documentation enclosed here in Annex 2.
The operative instrument of this guarantee was put forward as per BNA's instruction. The initial funds transferred by BNA will be fully reimbursed during the week ending 10th November 2017, provided that BNA issues the "letter of confirmation" requested by HSBC, as per the supporting documentation enclosed here in Annex 3.
This initial, temporary transfer of funds permitted financial market transactions as per the supporting documentation enclosed here in Annex 4 and which, until the initial allocation of funds is reimbursed to BNA, will generate profits from developed financial instruments on the international financial markets by PERFECTBIT LTD – HSBC London, estimated to be worth up to USD $3 billion ("leverage") and which will then be used to establish an investment fund owed by the Angolan State."
- The letter went on to set out how the funds generated would be used and the steps the Angolan government needed to take. The signatures of Dr Pontes and Mr Onderwater footed the letter, with each page being headed by the Mais and Resource Conversion logos.
- Appended to this letter were a series of documents purporting to be from various financial institutions:
(1) The first set of documents purported to be from the Credit Suisse Group and consist of a "Bank Guarantee", a "Letter of Guarantee" and a "Bank Confirmation Letter". These were supposed signed and stamped by the Chairman of the Board of director and the Chief Financial Office of the Credit Suisse Group.
(2) The second set of documents purported to be a series of Euroclear documents, issued by Credit Suisse AG with a total issued amount of 2,500,000,000, a fixed interest rate of 6.5%. BNA was expressed to be the beneficiary.
(3) The final set of documents consisted of a "Bank Confirmation Letter" and a "Ready Willing and Able Letter" dated 10 April 2017 purportedly from HSBC, London. The receiver identified in the Bank Confirmation Letter was Bar Trading Japan Co Ltd, the representative identified being Dr Barbosa. This supposedly confirmed that HSBC had the sum of €500 million which was "freely transferable, legally earner, good, clean, cleared funds of non-criminal origin" with HSBC being "ready, willing and able to provide it to [Bar Trading Japan Co Ltd] as an administrative-hold blocked funds via SWIFT MT 799/760 confirmation." This document was purportedly signed by HSBC's Chief Operating Officer and its Group Financial Director. The Ready Willing and Able Letter states that HSBC was ready, willing and able to provide an administrative-hold blocked funds with a blocked sum of €500 million. Again, this document was purportedly signed by HSBC's Chief Operating Officer and its Group Financial Director.
- It is clear that none of the documents appended to the letter were genuine. On 2 November 2017, Credit Suisse's Fraud Department confirmed that the documents were to be regarded as counterfeit as the documents did not contain "the standard features expected within correspondence from Credit Suisse". Moreover, Credit Suisse indicated that the purported Euroclear documents "contain numerous grammatical errors which would not be expected and are believed to be counterfeit." The HSBC document has also been found to be non-genuine.
- Mr Onderwater's evidence is that he signed a different version of the letter that did not annex the Credit Suisse Bank Guarantee, Letter of Guarantee and the Bank Confirmation Letter. In support of this Mr Onderwater has produced a copy of a letter dated 20 October 2017. This refers to two annexes, not three. Each page of this document has been initialled by both Mr Onderwater and Dr Pontes (unlike the other version of this letter).
- I note, however, that Mr Onderwater's version still referred to the (non-genuine) Credit Suisse Bank Guarantee. His translation of his letter provides:
"BNA did not undertake any risk in this operation, since Credit Suisse, at the request of PERFECTBIT LTD – HSBC LONDON, provided an irrevocable, autonomous and transferable bank guarantee in favour of BNA in the same amount as the allocated funds (USD$ 500 million), a guarantee that is valid for the period of 1 (one) year."
- It also appended the (non-genuine) documents purporting to be from HSBC and Euroclear.
- I note also that some time later, on 13 November 2017, further false documents were sent to the Ministry – namely a false guarantee purporting to be from Credit Suisse to Standard Chartered Bank for US$500 million, a fax transmission report for that purported guarantee and a purported SWIFT message from Credit Suisse to Standard Chartered Bank. Credit Suisse's fraud department has confirmed that these are likely to be counterfeit and Standard Chartered have confirmed that they did not receive any such SWIFT message.
F.12 Investigation into the Contracts
- Mr Mangueira stated in his first affidavit that in mid-September 2017, the Ministry discovered that the BNA had proceeded with the transactions with Mais and Project SPV and was instructed to investigate the transactions (though he does not identify how this was discovered or who gave him the instruction).
- On 14 September 2017, Mr Mangueira attended a meeting with President-Elect Lourenço during which Mr Mangueira expressed some concerns about the transactions.
- On 17 or 18 September 2017, Mr Mangueira attended a meeting with President dos Santos, Dr da Silva, Mr Onderwater, Dr Pontes and Dr Barbosa. President-Elect Lourenço was not in attendance. Mr Onderwater has given evidence that Mr Mangueira did not say anything negative about the project to President dos Santos at this meeting. Dr Pontes says that approval was given, but that it was considered to be more politically apposite to leave the formality of signing the relevant orders and decrees to President-Elect Lourenço. This meeting was not mentioned in Mr Mangueira's first affidavit.
- On around 10 October 2017, Norton Rose were asked to advise in relation to the arrangements. Dr Pontes was removed from office by President Lourenço on 9 November 2017.
- On 17 October 2017, Dr Barbosa sent an email to Dr Pontes and Mr Onderwater attaching a purported bank guarantee from Credit Suisse.
- On 20 October 2017, a further meeting was held in London (previously referred to in paragraph 95 above). Representatives of Mais, Project SPV, Resource Conversion, Perfectbit and Bar Trading Group and their legal advisors attended. An attendance note produced by Norton Rose has been put into evidence detailing this meeting. That note records the attendance (amongst others) of Mr Mangueria, Mr Bule of the BNA, Mr da Silva, Mr Filomeno dos Santos, Mr Onderwater, Dr Pontes, Dr Barbosa and Mr Soumah. I note that Mr Filomeno dos Santos was representing "MFS Resource Consortium" and was "identified by MFS as attending in his capacity as an economist with an interest in helping the Angolan economy." What was said at that meeting is a matter for trial and will, no doubt, be explored in great detail.
G. The Mais/Pontes Jurisdictional Challenge
- The Claimants obtained permission from Popplewell J for service out of the jurisdiction upon Mais and Dr Pontes as necessary or proper parties to litigation within the jurisdiction pursuant to para 3.1(3) of Practice Direction 6B. Mais and Dr Pontes have challenged whether permission ought to have been granted.
- The relevant principles governing service out of the jurisdiction upon a foreign defendant pursuant to para 3.1(3) of Practice Direction 6B are well established. The principles were summarised by the Privy Council in Altimo Holdings & Investment Ltd v Kyrgyz Mobil Tel Ltd  1 WLR 1804 at :
"71 On an application for permission to serve a foreign defendant (including an additional defendant to counterclaim) out of the jurisdiction, the claimant (or counterclaimant) has to satisfy three requirements: Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran  1 AC 438, 453–457. First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, ie a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: eg Carvill America Inc v Camperdown UK Ltd  2 Lloyd's Rep 457, para 24. Second, the claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context "good arguable case" connotes that one side has a much better argument than the other: see Canada Trust Co v Stolzenberg (No 2)  1 WLR 547, 555–557, per Waller LJ affirmed  1 AC 1; Bols Distilleries BV v Superior Yacht Services (trading as Bols Royal Distilleries)  1 WLR 12, paras 26–28. Third, the claimant must satisfy the court that in all the circumstances [England and Wales] is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction."
- Mais and Dr Pontes accepted for present purposes that the first two requirements are fulfilled. It was accepted by Mr Anderson on their behalf that there is a good arguable case against both Mais and Dr Pontes. Mr Anderson also accepted that the gateway set out in paragraph 3.1(3) of Practice Direction 6B is open. He indicated that, but for Owusu, he would have argued that it would not have been reasonable for this Court to try the claims against any of the defendants within this jurisdiction. Mr Anderson reserved his position in relation to Owusu.
- The question, therefore, is whether or not England and Wales is clearly or distinctly the appropriate forum for the trial of the disputes between the Claimants, Mais and Dr Pontes and whether in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction. The applicable principles are well-established and derive from the well-known case of Spiliada Maritime Corporation v Cansulex  AC 460, which I have borne well in mind. In the context of service out of the jurisdiction (as opposed to where there is service as of right) the burden rests on the claimant to persuade the court that England is clearly and distinctly the appropriate forum for the trial of the action. The fundamental principle (as it was described by Lord Diplock at page 482) is where the case may be tried, "suitably for the interests of all the parties and for the ends of justice".
- A distinction is to be made, however, in the context of jurisdiction being sought where there has been a breach of an exclusive jurisdiction clause (in seeking to bring proceedings in England and Wales), where there is a single defendant, and in cases where there are multiple defendants being sued in England and Wales (often as of right, as in the present case).
- As to the former, the applicable principle is well-established, and was set out by the House of Lords in Donohue v Armco Inc  UKHL 64,  1 Lloyd's Rep 119. As recognised in that case by Lord Bingham at paragraph :
"… the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it. Whether a party can show strong reasons, sufficient to displace the other party's prima facie entitlement to enforce the contractual bargain, will depend on all the facts and circumstances of the particular case."
- In the context of a single defendant case and where there is another available forum (such as Angola) there is no risk of parallel proceedings and inconsistent judgments. However this has the potential to be a very real factor where there are multiple defendants including defendants sued as of right in England, and in relation to which the claimant is entitled to proceed to trial. The risk of parallel proceedings and inconsistent judgments is a factor to be considered in weighing up whether or not the Court ought to conclude that this jurisdiction is an appropriate forum: Donoghue v Armco at paragraph .
- In this respect, I have been referred to a number of decisions addressing the significance of the risk of parallel proceedings and inconsistent judgments in the context of multi-partite litigation. I address these below. I bear in mind that each case depends on its own particular facts. As was recognised by the Court of Appeal in Jong v HSBC Private Bank (Monaco) SA.  EWCA Civ 1057 at paragraphs  and , the reported decisions of first instance judges in deciding whether or not to permit a foreign defendant to be served outside of the jurisdiction are illustrations of circumstances in which a discretion has been exercised, and are not binding authority on how that discretion is to be exercised (citing what Millett LJ said in a different context in Jaggard v Sawyer  1 WLR 269 at 288). Nevertheless, the reasoning in such cases is equally applicable in the present case.
- In OJSC VTB Bank v Parline Ltd  EWHC 3538, a Russian bank brought proceedings within this jurisdiction against three defendants. The claim advanced by the claimant bank was that the defendants had unlawfully rendered a Russian company unable to pay its debts to the claimant. The first defendant was an English company. The third defendant was a Russian national domiciled in England. The second defendant was a Russian national domiciled in Russia.
- The first and third defendants were therefore served as of right in England. Leave had been given to serve the second defendant outside of the jurisdiction. The second defendant then sought to set aside that leave, on the basis that England was not clearly the appropriate forum.
- It was argued that the claimant's motive in suing the first and third defendants was to enable it to bring the second defendant into proceedings in England, that all parties could have been sued in Russia thereby avoiding any duplication of proceedings and the risk of inconsistent judgments, and that it was not in the interests of justice for the English court to take jurisdiction over the second defendant (as the protagonist) on the basis of its jurisdiction over the minor players.
- Leggatt J held that it was clearly more appropriate that the claim against the second defendant be tried in England. In reaching this conclusion, Leggatt J stated (at paragraph ):
"I accept that if the claim against the second defendant were a freestanding claim, all those factors would point overwhelmingly to Russia being the appropriate forum for the claim. However, the context is that the claim against the second defendant is not a freestanding claim, and it has to be considered in circumstances where the claimant has chosen to bring, and is entitled to bring, claims against the first and third defendants in England, which it says it anyway wishes to pursue, regardless of whether the second defendant is brought into these proceedings or not. What therefore has to be considered, as [counsel for] the claimant submits, is not whether England or Russia is the more suitable forum for the claim against the second defendant, other things being equal, but whether it is appropriate to have proceedings against the second defendant in Russia in circumstances where proceedings involving identical or virtually identical facts, all the same transactions, witnesses and documents, will anyway be taking place in England. The real question, in other words, is whether the factors which connect the claim against the second defendant with Russia carry weight in circumstances where to require the claim to be pursued in Russia would result in duplication of cost and the risk of inconsistent judgments – the same factors which make the second defendant a necessary or proper party".
- To similar effect are the earlier observations of Cooke J in Credit Agricole Indosuez v Unicof Ltd  1 Lloyd's Rep 196. There proceedings were initially brought against eight defendants. The first defendant was an English company, owned by the fifth to seventh defendants, with these defendants having been served within the jurisdiction. The second, third and eighth defendants were foreign companies – being in Kenya, Tanzania and Dubai respectively. The claimant then applied to join another entity, SDV, to the proceedings, and also sought permission to serve the (re-amended) claim form on the second to ninth defendants. Permission was given by Langley J to serve out upon SDV, with SDV then applying to set aside that permission. Cooke J dismissed that challenge, stating at paragraph :
"Although the burden is on a claimant to show, when seeking leave to serve out of the jurisdiction, that England is the appropriate forum where the case can most suitably be tried for the interests of all the parties and the ends of justice, the fact of continuing proceedings in England against other defendants on the same or closely allied issues virtually concludes the question, since all courts recognise the undesirability of duplication of proceedings and the lis alibi pendens cases make this clear. Although there are connecting factors with Kenya to which I refer later in this judgment, if proceedings are going on in this jurisdiction on the self-same or linked issues, this is clearly the most appropriate forum for those common or connected issues to be tried between all relevant parties".
- The connecting factors identified by Cooke J were the Kenyan domicile of three of the defendants, the location of the witnesses (including one who was compellable in Kenya with there being no reason to suppose he would be willing to give evidence in England), the factual connections with Kenya and the need for expert evidence from Kenyan coffee growers.
- The passages I have quoted were quoted by the Court of Appeal in Lungowe v Vedanta Resources plc  EWCA Civ 1528;  BCC 787 at paragraphs  and  with approval. Simon LJ (with whom Jackson and Asplin LJJ agreed) at paragraph  also referred to the following observations made by the editors of Dicey and Morris:
"113. At paragraph 12-033, the editors of Dicey note the classic exposition of Lord Goff's forum non conveniens test in the Spiliada case, but add: Lord Goff could not have foreseen, however, the subsequent distortion which would be brought about by the decision of the European Court in Owusu v Jackson. The direct effect of that case is that where proceedings in a civil or commercial matter are brought against a defendant who is domiciled in the United Kingdom, the court has no power to stay those proceedings on the ground of forum non conveniens. Its indirect effect is felt in a case in which there are multiple defendants, some of whom are not domiciled in a Member State and to whom the plea of forum non conveniens remains open: it is inevitable that the ability of those co-defendants to obtain a stay (or to resist service out of the jurisdiction) by pointing to the courts of a non-Member State which would otherwise represent the forum conveniens, will be reduced, for to grant jurisdictional relief to some but not to others will fragment what ought to be conducted as a single trial … There is no doubt, however, that the Owusu factor will have made things worse for a defendant who wishes to rely on the principle of forum non conveniens when a co-defendant cannot."
- In Jong, Ms Jong brought proceedings in this jurisdiction against HSBC Private Bank (Monaco) S.A. and two companies within the HSBC group domiciled in England and Wales. Her claim against HSBC Monaco was that it had carried out unauthorised trading and had also failed to place trades in accordance with instructions. The contract between Ms Jong and HSBC Bank (Monaco) provided for the application of Monégasque law. Almost all of the trades were effected in Monaco and governed by that law. Her claim against the English companies was that they failed to adequately consider her complaints made to HSBC Monaco so she continued trading for longer than she would otherwise have done.
- Ms Jong initially obtained permission to serve out of the jurisdiction upon HSBC Monaco. This was subsequently set aside by HHJ Purle QC, with great weight having been attached to HSBC Monaco's right to only be sued in Monaco. Ms Jong appealed unsuccessfully. Lewison LJ addressed a number of decisions touching upon the relevance of the relative importance of defendants to the question of whether permission to serve out of the jurisdiction should be granted. Reference was made to the judgment of Christopher Clarke J in JSC BTA Bank v Granton Trade Ltd  EWHC 2577 (Comm) and to Parline. In JSC BTA Bank, at paragraph , Christopher Clarke J expressed the view that "a decision as to the appropriate forum must necessarily take account of the relative importance within a case of different defendants and particularly those against whom proceedings in England are practically bound to continue." Having then considered Parline, Lewison LJ concluded that HHJ Purle QC was correct in seeing the claim against HSBC Monaco as being the most important, observing that it was difficult to see what practical advantage Ms Jong would gain by suing the English defendants alongside HSBC Monaco.
H.1 The Parties' Submissions
- Mr Anderson submitted that England and Wales is not clearly or distinctly the more appropriate place for the claims against Mais and Dr Pontes:
(1) BNA's claim against Mais is in breach of the exclusive jurisdiction provision within the Consultancy Agreement.
(2) The same jurisdiction agreement also binds Angola, even though Angola is not itself party to the Consultancy Agreement, as Angola gave authority to the BNA by entrusting its foreign currency reserves and/or by reason of President dos Santos' (informal) approval of the Project. An analogy was drawn with bailment.
(3) The claims against Mais and Dr Pontes ought to be litigated in Angola given the nature of the claim (being "Angolan to its core"), the identities of the various parties, practical considerations as to documentary evidence and the giving of witness evidence, the applicable law and supposedly sensitive issues of Angolan politics.
(4) The Defendants should not be treated as being of equal importance – for example Perfectbit is of more limited significance given it now has no assets and SPV likewise has no assets. It was said that the "real defendants" are Mais and Dr Pontes in Angola (who, it is said, have resources sufficient to meet any eventual judgment) and Resource Conversion and Mr Onderwater (who appear to have limited assets).
(5) The Claimants are able to manage the risk of parallel proceedings and inconsistent judgments – there being no impediment to the Claimants suing the Defendants in Angola and the Claimants may prefer to sue in one jurisdiction and then go to the other afterwards if necessary.
(6) The Claimants agreed to two closely related contracts containing two different jurisdiction clauses. The risk of multiple sets of proceedings and conflicting decisions always existed.
- Mr McGrath took the opposite position, submitting:
(1) There will be continuing proceedings in England against four of the Defendants as it is not possible for the Court to stay the claims against Perfectbit, Resource Conversion, Project SPV and Mr Soumah in light of Owusu.
(2) The jurisdiction provision in the Consultancy Agreement does not bind Angola so there are claims against Mais outside the scope of that agreement.
(3) Given there will be proceedings in England, England is the proper place for the determination of all the claims. The contrary conclusion involves the duplication of costs and a risk of inconsistent judgments. In circumstances where a defendant is a necessary or proper party to a claim which will be taking place and is taking place in this jurisdiction it will normally follow that England is the appropriate forum, irrespective of whether or not there is a jurisdiction clause in favour of a foreign court.
(4) It is not open to Mais and Mr Pontes to suggest how the Claimants could possibly seek to manage these risks given it would be a problem created by their application.
(5) Nor is it open to Mais and Mr Pontes to say that the defendants domiciled within this jurisdiction (now) lack assets such that litigation within England may not go ahead if the proceedings against Mais and Mr Pontes were moved to Angola. It is not for the Defendants to engage in this exercise, but if it is to be done, matters are to be judged as of the date when the applications were made; at that point in time Perfectbit held the U$500 million in its account (where that money still remained at the date of the hearing before me albeit that a consent order was agreed by the parties during the course of the hearing that was intended to facilitate its return in due course).
(6) Various factors were also identified linking this claim with England. Dr Pontes and Mr Onderwater chose to use Project SPV and Perfectbit, companies incorporated in England. Dr Pontes is a director of Project SPV, and Mais is one of the shareholders.
H.2 Application of the Legal Principles
- In the present case Mais prays in aid that BNA is in breach of the exclusive jurisdiction clause in commencing proceedings in England and Wales against Mais. Mr Anderson submitted Angola was also bound by the exclusive jurisdiction clause. However, on the face of the Consultancy Agreement, and as a matter of contract, the parties to the Consultancy Agreement, and the separate arbitration agreement within that contract, are those identified as being party to it, namely BNA and Mais. Those are the contracting parties that have agreed to its terms and identified themselves as the contracting parties. Mais has not demonstrated that Angola was a party to the Consultancy Agreement either by BNA contracting on behalf of Angola or on the basis that President dos Santos' authorisation had the effect, in some way, of binding Angola itself to the terms of the Consultancy Agreement. In any event even had Angola been a party to the Consultancy Agreement this would not have led me to reach a different conclusion in relation to forum in the circumstances identified below.
- As addressed above, the fact that the proceedings are brought in breach of an exclusive jurisdiction clause is likely to be determinative in a single defendant (and single claimant) case. However that is not this case. BNA (together with Angola) is bringing claims against other defendants that it can, and is, pursuing in England, and Mais is also defending claims brought by Angola.
- Whilst there are a number of matters that link claims against Mais and Dr Pontes with Angola (as identified by Mr Anderson including the identities of the various parties, practical considerations as to documentary evidence and the giving of witness evidence, the applicable law and any relevance of Angolan politics), the key factor in the present case is the fact that there are continuing claims in England - the claims in England against Perfectbit, Project SPV, Resource Conversion and Mr Soumah are going ahead regardless of whether the claims against Mais (and Dr Pontes) were to proceed in this jurisdiction or in Angola. Perfectbit, Project SPV, Resource Conversion and Mr Soumah were, and remain, real defendants who were not sued for the purpose of any jurisdictional advantage and, in contrast with the position in Jong, the claims against the various defendants are very much interlinked with common issues in relation to the various defendants.
- In this regard I am not in a position to go behind Mr McGrath's confirmation that the Claimants will continue to pursue the other defendants in this jurisdiction, and in any event I consider it practically inevitable that the proceedings will continue in this jurisdiction, and there are legitimate reasons for parties in the position of the Claimants to do so, not only in proceeding to any judgments to which they may be entitled but also in order to obtain legitimate advantages inherent in such proceedings (including disclosure and any witness evidence that may be secured), as well as the benefit of any judgments and the enforcement thereof here, and elsewhere.
- Nor am I of the view that the risk of inconsistent judgments is minimal or otherwise tolerable. Mais and Dr Pontes appear to contend (in effect) that they are victims of a fraud perpetrated by Mr Onderwater. Mr Onderwater appears to contend (in effect) that he is a victim of the fraud of Dr Barbosa and Dr Pontes. It is all too clear that there is a risk of inconsistent judgments in circumstances where defendants to an alleged conspiracy run what appear to be cut-throat defences. I am also mindful of the fact that the circumstances in which Dr Barbosa became involved is disputed by Mais and Dr Pontes, on the one hand, and Mr Onderwater on the other.
- I consider that there would be a very real risk of inconsistent judgments if proceedings were to take place in both England and Angola. This would be a "potential disaster from a legal point of view" as Brandon LJ put it in Aratra Potato Co Ltd v Egyptian Navigation Co  2 Lloyd's Rep. 119 at 128. See also the similar sentiments expressed by other judges of this Court which I consider to be equally apt on the facts of the present case:
1) "the Court would inevitably have regard to the fact that the … claims against Ltd and SA respectively were inextricably interlinked and that … in the interests of justice they would be heard together, so as to save costs and avoid inconsistent results": Aiglon Ltd v Gau Shan Co Ltd  2 Lloyd's Rep 164 per Hirst J at 172
2) "there is a risk, if actions in respect of the same loss must be brought in different jurisdictions, that there will be inconsistent decisions on the facts": Citi-March Ltd v Neptune Orient Lines Ltd  1 WLR 1367 per Colman J at 1375F-G
3) "If the proceedings ... against the applicants are heard in Kazakhstan … there is an obvious risk of inconsistent judgments and of waste and duplication of costs. That is a powerful factor in favour of having the applicants as parties to this litigation": JSC BTA Bank v Granton Trade Ltd  2 All ER (Comm) 542 per Christopher Clarke J at paragraph .
- I also consider that Mais and Dr Pontes downplay the very real connecting factors to England in the present case, and the desirability of all claims being resolved in the same forum. In this regard Dr Pontes and Mr Onderwater chose to use Project SPV (the Third Defendant), a company incorporated in England, as the vehicle through which (the Claimants say) some US$500 million was extracted from Angola. Mr Pontes is a director of Project SPV and Mais is one of the shareholders in Project SPV. As for the transfer of the US$500 million itself, this was to an English bank account, at the Bromley Branch of HSBC in England, of a company incorporated in England (Perfectbit, the First Defendant).
- I have kept well in mind the practical issues referred to by Mr Anderson as to the location of witnesses, translation and the like. However this court has considerable experience of dealing with such challenges, particularly in the context of high value disputes including through the use of technology (including live video-links, simultaneous interpretation and the like). The extent to which the proceedings against Mais and Dr Pontes will generate costs is limited by reason of the fact that translation of documents and the like will be required in the proceedings in this jurisdiction against those Defendants domiciled in England and Wales in any event. Moreover, there seems to be likely cost efficiency in having all the claims determined in England and Wales as opposed to having some of the claims determined here and others in Angola.
- In the above circumstances I am in no doubt whatsoever, and find, that England is clearly and distinctly the appropriate forum where the case can most suitably be tried for the interests of all the parties and the ends of justice, in particular in the context of the fact of continuing proceedings in England against other defendants on the same or closely allied issues, and in circumstances where the duplication of proceedings would also give rise to very real risks of inconsistent findings and increased costs. Accordingly the jurisdictional challenge of Mais and Dr Pontes fails, and I dismiss the same.
- I would add that when considering the question of whether England is the appropriate forum for the trial of the dispute there was an issue between the Claimants and Mais and Dr Pontes as to whether the matter is to be determined based on circumstances as they stood at the time when the application for service out was made (as the Claimants submitted, and as Mr Anderson accepted, generally represented the position), or on the return date (as Mr Anderson submitted was the case where the issue is, or is akin to, forum non conveniens in reliance on observations in the decision of ISC Technologies Ltd v Guerin  2 Lloyd's Rep. 430). I do not need to express any view on that alleged distinction given that I am satisfied that, viewing matters at either time, England is clearly and distinctly the appropriate forum. However, had it mattered (on the facts of a different case) I do not consider that ISC Technologies is concerned with appropriate forum (as opposed to forum non conveniens) nor do I consider that the requirements for permission to serve out of the jurisdiction (including as to appropriate forum) should be considered as at the return date rather than as at the date permission was sought. However, as I have identified, the point would make no difference in the present case. In the present case the action continued against multiple defendants in England as at the return date and is likely to continue to do so to trial. On either the application date or the return date England is the appropriate forum.
I. The Discharge Applications
I. 1 Introduction
- Both Mr Anderson, on behalf of Mais and Dr Pontes, and Mr Macpherson, on behalf of Mr Onderwater, have made separate applications for the discharge/variation of the Freezing Order for alleged breaches by the Claimants of their duties of full and frank disclosure.
I.2 Relevant Principles
- The relevant principles are well-established. The duty of full and frank disclosure on an ex parte application is fundamental and of great importance. What the duty entails was set out by Ralph Gibson LJ in Brink's Mat Ltd v Elcombe  1 W.L.R. 1350 at 1356:
"In considering whether there has been relevant non-disclosure and what consequence the court should attach to any failure to comply with the duty to make full and frank disclosure, the principles relevant to the issues in these appeals appear to me to include the following.
(1) The duty of the applicant is to make "a full and fair disclosure of all the material facts:" see Rex v. Kensington Income Tax Commissioners, Ex parte Princess Edmond de Polignac  1 K.B. 486, 514, per Scrutton L.J.
(2) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers: see Rex v. Kensington Income Tax Commissioners, per Lord Cozens-Hardy M.R., at p. 504, citing Dalglish v. Jarvie (1850) 2 Mac. & G. 231, 238, and Browne-Wilkinson J. in Thermax Ltd. v. Schott Industrial Glass Ltd.  F.S.R. 289 , 295.
(3) The applicant must make proper inquiries before making the application: see Bank Mellat v. Nikpour  F.S.R. 87. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries.
(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant: see, for example, the examination by Scott J. of the possible effect of an Anton Piller order in Columbia Picture Industries Inc. v. Robinson  Ch 38; and (c) the degree of legitimate urgency and the time available for the making of inquiries: see per Slade L.J. in Bank Mellat v. Nikpour  F.S.R. 87, 92–93.
- Balcombe LJ remarked in Brink's Mat at 1358B-C:
"On any ex parte application, the fact that the court is asked to grant relief without the person against whom the relief is sought having the opportunity to be heard makes it imperative that the applicant should make full and frank disclosure of all facts known to him or which should have been known to him had he made all such inquiries as were reasonable and proper in the circumstances."
- In Alliance Bank JSC v Zhunus  EWHC 714 (Comm) at paragraph , Cooke J expressed the test of materiality in the following terms:
"The test of materiality of a matter not disclosed is whether it would be relevant to the exercise of the court's discretion. A fact is material if it would have influenced the judge when deciding whether to make the order or deciding upon the terms upon which it should be made. The question of materiality is a matter for the court and not the subjective judgment of the applicant or his lawyers."
- More recently, Males J explained that a fact is material "if it is one which the judge would need (or wish) to take into account when deciding whether to make the freezing order": National Bank Trust v Yurov  EWHC 1913 at paragraph . This formulation was accepted to be the applicable test by counsel for Mais and Dr Pontes, Mr Onderwater and the Claimants.
- It is to be stressed, however, that an applicant is only required to disclose facts known to the applicant and those he would have known had proper inquiries been made. An applicant is not expected to flush out every single conceivable point. In JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev  EWHC 4336 (Ch), Mann J made the following observations in the context of the obligation to anticipate defences as part of the duty to make full and frank disclosure:
"171 The obligation to anticipate defences in pursuit of the obligation to make full and frank disclosure is very important. Mr Smith submitted that his clients were not to know that these points were to be taken by Mr Pugachev because he had not then (and has not even now) put in a Defence in the supported Russian proceedings. However, the fact that they have not been articulated in the supported Russian proceedings is not the point. An applicant for without notice relief has actively to consider what points of defence might be taken by the defendant and put them before the court. That is a fundamental requirement, and safeguard.
172 In making an assessment as to whether a point of defence is sufficiently obvious, one must guard against assuming that any point that has occurred to the defence lawyers ought to have occurred to the claimants' lawyers. The obligation to disclose does not require that every potential point be flushed out. Nevertheless there is an obligation to look at things from a defendant's point of view and anticipate defences which are obvious and those which require some thought but are nonetheless plain enough (as arguable defences) when thought about. Each case will depend on its own facts, and it is impossible to define a neatly applicable test which is capable of answering the point in every case. It is going to be easier to see what ought to have been disclosed in the light of the alleged non-disclosure, but that is no excuse for not giving the matter enough thought beforehand."
- Where there is a breach of the duty of full and frank disclosure, the court has a discretion as to the consequences of such. In Brink's Mat, supra, Ralph Gibson LJ stated at 1356:
"(5) If material non-disclosure is established the court will be "astute to ensure that a plaintiff who obtains [an ex parte injunction] without full disclosure … is deprived of any advantage he may have derived by that breach of duty:" see per Donaldson L.J. in Bank Mellat v. Nikpour, at p. 91, citing Warrington L.J. in the Kensington Income Tax Commissioners'; case  1 K.B. 486, 509.
(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented.
(7) Finally, it "is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded:" per Lord Denning M.R. in Bank Mellat v. Nikpour  F.S.R. 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms."
"when the whole of the facts, including that of the original non-disclosure, are before [the court, it] may well grant … a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed:" per Glidewell L.J. in Lloyds Bowmaker Ltd. v. Britannia Arrow Holdings Plc., ante, pp. 1343H–1344A"
- In Arena Corporation Limited v Schroeder  EWHC 1089 (Comm) at paragraphs  and , Alan Boyle QC, sitting as a Deputy Judge of the High Court, commented that a failure to observe the duty of full and frank disclosure in a without notice application for a freezing order will generally lead to both the discharge of the original order and a refusal to renew the order until trial. At paragraph , he went on to summarise the relevant principles:
"(1) If the court finds that there have been breaches of the duty of full and fair disclosure on the ex parte application, the general rule is that it should discharge the order obtained in breach and refuse to renew the order until trial.
(2) Notwithstanding that general rule, the court has jurisdiction to continue or re-grant the order.
(3) That jurisdiction should be exercised sparingly, and should take account of the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.
(4) The court should assess the degree and extent of the culpability with regard to non-disclosure. It is relevant that the breach was innocent, but there is no general rule that an innocent breach will not attract the sanction of discharge of the order. Equally, there is no general rule that a deliberate breach will attract that sanction.
(5) The court should assess the importance and significance to the outcome of the application for an injunction of the matters which were not disclosed to the court. In making this assessment, the fact that the judge might have made the order anyway is of little if any importance.
(6) The court can weigh the merits of the plaintiff's claim, but should not conduct a simple balancing exercise in which the strength of the plaintiff's case is allowed to undermine the policy objective of the principle.
(7) The application of the principle should not be carried to extreme lengths or be allowed to become the instrument of injustice.
(8) The jurisdiction is penal in nature and the court should therefore have regard to the proportionality between the punishment and the offence.
(9) There are no hard and fast rules as to whether the discretion to continue or re-grant the order should be exercised, and the court should take into account all relevant circumstances."
- Males J expressed the relevant principles in National Bank Trust v Yurov, supra, in the following terms:
"18 Without attempting a comprehensive restatement which would serve no useful purpose, I consider that the following points are particularly relevant in the present case:
a. A fact is material if it is one which the judge would need (or wish) to take into account when deciding whether to make the freezing order.
b. Failure to disclose a material fact will sometimes require immediate discharge of the order. This is likely to be the court's starting point, at least when the failure is substantial or deliberate.
c. Nevertheless the court has a discretion to continue the injunction (or to impose a fresh injunction) despite a failure of disclosure; although it has been said that this discretion should be exercised sparingly, the overriding consideration will always be the interests of justice.
d. In considering where the interests of justice lie, it is necessary to take account of all the circumstances of the case including (without attempting an exhaustive list) (i) the importance of the fact not disclosed to the issues which the judge making the freezing order had to decide; (ii) the need to encourage proper compliance with the need for full and frank disclosure and to deter non-compliance; (iii) whether or to what extent the failure to disclose was culpable; and (iv) the injustice to a claimant which may occur if an order is discharged leaving a defendant free to dissipate assets, although a strong case on the merits will never be a good excuse for a failure to disclose material facts.
e. The interests of justice may sometimes require that a freezing order be continued, but that a failure of disclosure be marked in some other way, for example by a suitable order as to costs."
- In Kazakhstan Kagazy v Arip  EWCA Civ 381, Longmore LJ explained the need to maintain a due sense of proportion and to recognise the degrees of relevance within the broad scope of materiality. There Longmore LJ adopted the approach of Toulson J in Crown Resources AG v Vinogradsky (15 June 2001):
"36 As long ago as 1990 Sir Nicolas Browne-Wilkinson V-C asked this court for guidance about the right approach to be taken to the inevitably lengthy hearings which were then growing in relation to non-disclosure in respect of freezing and search and seizure orders, see Tate Access Floors Inc v Boswell  Ch 512, 533H–534D. I am not aware that this court has ever answered that cri de coeur and we did not receive any argument which would enable us to do so authoritatively in the present case. The judge adopted the approach of Toulson J (as he then was) in Crown Resources AG v Vinogradsky (15 June 2001) for cases of any magnitude and complexity and I am content to do the same:
'… issues of non-disclosure or abuse of process in relation to the operation of a freezing order ought to be capable of being dealt with quite concisely. Speaking in general terms, it is inappropriate to seek to set aside a freezing order for non- disclosure where proof of non-disclosure depends on proof of facts which are themselves in issue in the action, unless the facts are truly so plain that they can be readily and summarily established, otherwise the application to set aside the freezing order is liable to become a form of preliminary trial in which the judge is asked to make findings (albeit provisionally) on issues which should be more properly reserved for the trial itself (pages 4–5 of the transcript).
Secondly, where facts are material in the broad sense in which that expression is used, there are degrees of relevance and it is important to preserve a due sense of proportion. The overriding objectives apply here as in any matter in which the Court is required to exercise its discretion (page 6).
I would add that the more complex the case, the more fertile is the ground for raising arguments about non-disclosure and the more important it is, in my view, that the judge should not lose sight of the wood for the trees (page 7).
In applying the broad test of materiality, sensible limits have to be drawn. Otherwise there would be no limit to the points of prejudice which could be advanced under the guise of discretion (page 22).'"
J. The Mais/Pontes Discharge Application
- Mr Anderson submitted that there had been a number of breaches by the Claimants of their duty of full and frank disclosure by reason of their presentation of Dr Pontes (and President dos Santos' knowledge of Dr Pontes), the involvement of President dos Santos and supposed political aspects of the proceedings.
J.1 The Description of Dr Pontes
- In his first affidavit, Mr Mangueira introduced Dr Pontes in the following terms:
"The Seventh Respondent, Mr Pontes, is a Chairman and director of Mais and a director of Project SPV. Companies House records list his occupation as accountant, his nationality as Angolan and his country of residence as Angola."
- In the course of discussing the Consultancy Agreement, Mr Mangueira stated:
"There are a number of aspects of the Consultancy Agreement which I find concerning. In summary:
If the BNA was going to engage a third party to provide technical advice on macroeconomic matters and manage the State's assets, I would expect the provider to have appropriate expertise and experience of similar projects. As I explain in paragraph 76 below, while Mr Pontes is a well known businessman in Angola, I am not aware of a website for Mais or any online record of its prior experience or expertise (or indeed of Mr Pontes having such expertise). The absence of such matters casts considerable doubt, to the least, on the likelihood of Mais being experienced enough and able to provide the appropriate technical advice."
- In respect of Dr Pontes' assets, the following comments were made:
"Mais is incorporated in Angola, according to the Consultancy Agreement. Online and UK Land Registry searches have not identified any assets own by Mais. Mr Pontes, who appears to be the chairman of the board of directors, appears to have Angolan nationality and to be resident in Angola. On the basis of the available information it seems likely that any assets Mais or Mr Pontes have will be located in Angola.
Online searches have not identified any assets owned by Dr Barbosa, Mr Onderwater or Mr Pontes. To the extent they have assets, on the basis of the limited information available, it seems most likely they would be located in Japan, Portugal and Angola, where they are respectively resident.
I note that, given the urgency of the application and the importance of not alerting the Respondents in advance of the hearing, only very limited assets searches have been conducted and the Applicants have not engaged the services of an enquiry agent, who may ultimately be able to identify some additional assets."
- Mr Anderson has submitted that the affidavit gave a misleading impression of Dr Pontes as it presented Dr Pontes as an unknown, it being necessary to resort to internet searches and the like for information. What was not disclosed was that Mr Mangueira knew Dr Pontes as a man "of political substance with experience of government" trusted by President dos Santos who had operated in Angola in a regulated sector. Mr Anderson made the related submission that the fact that President dos Santos knew of Dr Pontes' lack of experience in investing sovereign funds should have been disclosed; the Claimants having relied upon his lack of experience as being an indication of fraud.
- Having considered Mr Mangueira's first affidavit, the Claimants' skeleton argument and the transcript of the hearing before Popplewell J, I consider that a fair presentation of Dr Pontes was made and that there was no material non-disclosure.
- The reference to internet searches on the Companies House website in the initial introduction of Dr Pontes is entirely explicable when reference had just been made to Project SPV, an English company of whom Dr Pontes is a director. The reference to apparent nationality is a minor matter and, on any view, could not in itself be material. The Claimants made the point that Dr Pontes does not have experience of investing sovereign funds. This fact is accepted by Dr Pontes. What has been submitted is that the Claimants were obliged to go further and set out the prior political experience of Dr Pontes and his operations in a regulated sector. I disagree. The fact that Dr Pontes had previously held political experience as a member of a Commission concerning Capital Markets and his position as Executive Secretary of the Goods Control and Quality System National Council of Angola are not material. Such experience does not qualify the fact that Dr Pontes has no experience of managing sovereign funds and does not place, and would not be considered to place, his lack of experience in that regard in a different light. Nor do his operations within a regulated sector. These are very different to the operation supposedly envisaged by the presentations and the contracts.
- It is also suggested that such matters are also relevant as they go to suggest that Dr Pontes is not the sort of man who would commit fraud. However, the evidence that was before Popplewell J and is before me, as identified above, includes contemporary documentation which was not genuine and suspicious transactions, that are directly linked to Mais and Dr Pontes (as well as Mr Onderwater). Their respective roles and involvement cannot be finally addressed prior to trial, but that material gives rise to a strong prima facie case of fraud involving Mais and Dr Pontes as well as Mr Onderwater. Set against the backdrop of the facts that were disclosed, I do not consider that any judge would have considered the matters complained about to be matters that would be relevant to the exercise of the court's discretion, or which a judge would wish to take into account when deciding whether to make the order sought. The fact that an injunction may, or would, have been granted given the evidence of fraud does not in itself make a fact immaterial, but the matters not disclosed were not material set against the backdrop of what was disclosed.
- Turning to the proposition that President dos Santos would have known of Dr Pontes' lack of experience, I do not consider that this needed to be disclosed. This does not bear on any positive defence to the matters alleged and in relation to which Mais and Dr Pontes were potentially implicated. If relevant at all, it would go to the inherent likelihood of fraud, but in the present case there was clear documentary evidence of there being fraud in which various defendants were potentially implicated. I do not consider that any judge would have regarded this fact, in the circumstances of the present case, as relevant to the exercise of the court's discretion, or which a judge would wish to take into account when deciding whether to make the order sought. More generally, the Claimants did note that the Defendants might argue that the Project was legitimate. The argument that President dos Santos approved this scheme with his eyes open to Dr Pontes' experience is merely a facet of this broader point explicitly raised by the Claimants.
J.2 The Roles of President dos Santos and Mr Filomeno dos Santos
- Mr Anderson submitted that the Claimants failed to disclose the role and the involvement of President dos Santos (in particular that Mr Mangueira attended a meeting with outgoing President dos Santos on 18 September and failed to voice his concerns as to the Project at that meeting) and the involvement of Mr Filomeno dos Santos.
- Mr Mangueria, in his first affidavit, noted that Mais had "first approached the then President of Angola who instructed them to speak with the Applicants". The letters from Dr da Silva to President dos Santos dated 3 and 7 August 2017 were set out in the affidavit, it being clear that authorisation from the President was necessary and had been sought. Mr Mangueira then detailed that the Asset Management Agreement had been entered into by the BNA.
- Moreover, under the heading "Other matters to be drawn to the Court's attention", Mr Mangueira stated:
"The Respondents may argue that the Consultancy Agreement and the Asset Management Agreement and the payments purportedly made pursuant to them were made at the request and/or with the knowledge, consent and/or involvement of officials in Angola. They may refer to the Presentations, which state "MinFin/BNA Request", and the letters from Dr da Silva on 3 and 7 August 2017 [to President Dos Santos] making reference to the proposed arrangements with Project SPV and requesting approval to sign the Asset Management Agreement. They may also refer to the SWIFT message from the BNA indicating that payment to Perfectbit was made under a Temporary Deed of Assignment, the BNA's initial failure to retract that SWIFT message when requested and the fact that Dr da Silva was dismissed on 27 October. I will leave legal submissions to our lawyers, but I do not see how such matters would be relevant if the Respondents obtained the Consultancy and Asset Management Agreements and payments of Angola's funds by deception."
(my bracketed inclusion and emphasis)
- It was therefore made clear by Mr Mangueira that the Project was first brought to President dos Santos and that Dr da Silva requested authorisation from President dos Santos to sign the Asset Management Agreement. What was submitted by Mr Anderson was that the involvement was not fully and properly disclosed – in particular it was not mentioned that:
(1) President dos Santos had approved the Project having considered two conflicting reports and opted for the course suggested by Dr da Silva and Mr Filomeno dos Santos, and
(2) Mr Mangueira had met President dos Santos on the 17 or 18 September 2018.
- It was submitted that the degree of support from President dos Santos was thereby misrepresented and that this was significant in three respects. First, Dr Pontes' lack of experience, relied upon as an indication of fraud, was known by the person who authorised the Project. Second, the impression given was that the Project was not being overseen by someone at the highest level. Third, it made it less likely that Dr Pontes would simply disappear with the money.
- I do not consider that what was said amounted to a material misrepresentation of the position or that what was not said amounted to a material failure to give full and frank disclosure. President dos Santos' involvement, approval and authorisation was made apparent to Popplewell J. It was clear that President dos Santos was involved from the outset and had a continuing part to play. Beyond this, I do not consider that it was necessary to disclose that President dos Santos had approved the Project having considered another report (which itself appears to have been based on material provided by the Defendants to the BNA) or that there was a meeting, during the transition of power in Angola, between Mr Mangueira and President dos Santos. These points do not suggest that Mais and Dr Pontes have any defence or answer to the claim itself. In this regard the material before Popplewell J included the deployment of documents that were not genuine, and in which Mais, Dr Pontes and Mr Onderwater were potentially implicated (albeit that the precise roles, knowledge and involvement of Mais, Dr Pontes and Mr Onderwater would be a matter for trial). It is also possible, indeed likely, that President dos Santos was himself taken in by the documentation that was presented to him.
- Once again I do not consider that a judge would have regarded the matters of which complaint is made, as relevant to the exercise of the court's discretion, or which a judge would have wished to take into account when deciding whether to make the order sought. However even if it were thought that more could have been said in relation to the involvement of President dos Santos I do not consider that the failure to do so amounted to non-disclosure of a material fact (nor would such matters be regarded as important or significant in terms of the outcome of the application for an injunction in the context of any discharge of the injunction or its continuance or re-grant).
- As for the involvement of Mr Filomeno dos Santos, it is true that Mr Mangueira made no mention of Mr Filomeno dos Santos. The potential relevance of Mr Filomeno dos Santos is said to be that due to the association with his father, his involvement indicates the approval and involvement of President dos Santos. However the involvement of the President was identified, as addressed above, and I do not consider the involvement of Mr Filomeno dos Santos added to that, or was material for disclosure.
- Finally, on this matter, it was submitted that there was a material misrepresentation as Mr Mangueira stated that Dr da Silva purportedly signed the contract (implying a lack of authority) when in fact he was authorised to do so by President dos Santos. I consider that Mais and Dr Pontes seek to make too much of this point – the President's involvement and the possibility that it might be argued that the transaction was legitimate, were disclosed, and I do not regard what was said as amounting to a material misrepresentation.
J.3 Alleged Political Motivation
- Mr Anderson submitted that there was a failure to disclose "at least a likelihood that this litigation is inspired not by a genuine belief that Dr Pontes deceived the President, but by a desire to … improve the political reputation of the new regime." In this regard, reference is made to the meeting on 18 September 2017, the timing of the instructions given to Norton Rose and the removal of Dr Pontes from office. I note that any improper motive on his part, or on the part of President Lourenço, was denied by Mr Mangueira.
- I do not consider that there was a non-disclosure of a material fact in this regard. It was quite clear that there was a political backdrop to this claim – the individuals identified are high-ranking officials in Angola, there was a recent change in regime and the Project itself involved vast sums of money. Any possible political motivation, however, was not material on the facts of the present case. There was clear documentary evidence of a fraud – namely false documents – against a backdrop of an incredibly large sum (US$500 million) being transferred to a small English company (Perfectbit), and that company's account with the Bromley Branch of HSBC (hardly an obvious choice of bank branch for the receipt of a sum of US$500 million).
- If there is a sufficiently robust evidential basis upon which proceedings can properly be brought (as I am satisfied there was at the time of the application before Popplewell J, as indeed there remained at the time of the hearing before me), it would not matter if there was also a political angle or motive – the ingredients of the requisite causes of action were present, and the factors that justified an injunction were satisfied in the context of the facts surrounding the prima facie fraud – which spoke for themselves. Put another way, any alleged political motive, on the facts of this case, impacts neither on the merits of the respective causes of action, nor on the need for the injunction and relief sought.
- I have given careful consideration to all of the alleged breaches of the duty of full and frank disclosure advanced on behalf of Mais and Dr Pontes set against the backdrop of the evidence before Popplewell J, the Claimants' skeleton argument and the oral hearing before the judge, and I am satisfied that there was no material non-disclosure in the present case in relation to any of the matters alleged, and for the reasons addressed above.
- Like Longmore LJ and Toulson J before me in Kazakhstan Kagazy v Arip, supra and Crown Resources AG v Vinogradsky, supra, I would also reiterate that there is a need to maintain a due sense of proportion and in complex cases to recognise the degrees of relevance within the broad scope of materiality. In a complex case such as the present, not only is the ground for raising arguments about non-disclosure more fertile, but the more important it is that the judge should not lose sight of the wood for the trees. In the present case the wood is a prima facie fraud by which the Claimants were persuaded to part with some US$500 million and €24.85 million and pay large sums for alleged services of which (at least at this stage) there is precious little evidence.
- I would only add that to the extent that any of the matters relied upon ought to have been disclosed to the Court (contrary to the views I have expressed) I do not consider that any failure to mention such matters was substantial, nor do I consider that it was deliberate. In such circumstances, and whilst having full regard to the need to encourage proper compliance and to deter non-compliance, I consider that (applying the factors identified by Males J in National Bank Trust v Yurov, supra) on the facts of the present case as identified herein, the interest of justice would lie in the continuance of the freezing injunction.
- In the above circumstances the applications of Mais and Dr Pontes to set aside the worldwide freezing injunction and proprietary injunctions on the basis of an alleged failure by the Claimants to comply with their duty of full and frank disclosure are dismissed.
K. Risk of Dissipation
- Mais and Dr Pontes also seek the discharge of the freezing order (although not the proprietary injunction given the lack of relevance of risk of dissipation in that context), on the basis that the Claimants have failed to establish a risk of dissipation of assets as against Mais and Dr Pontes, based on "solid evidence" that there is a real risk, judged objectively, that a future judgment would not be met because of unjustifiable dissipation of assets by them (see Hollyoaks v Candy  3 WLR 1131).
In this regard it is well established that the claimant must adduce "solid evidence" to support an assertion that there is a real risk that a judgment will go unsatisfied. There are many factors that may go to discharge this evidential burden, and many of these are considered by Gee at paragraph 12-033 of Commercial Injunctions. Amongst those are:-
Good grounds for alleging that the defendant has been dishonest is relevant. Dishonesty is not essential to the exercise of the jurisdiction and there is no need to show an intention to dissipate assets. But if there is a good arguable case in support of an allegation that the defendant has acted fraudulently or dishonestly (eg being implicated in an ingenious scheme for the misappropriation of funds belonging to the claimant), or with an unacceptably low standard of commercial morality giving rise to a feeling of uneasiness about the defendant, then it is often unnecessary for there to be any further specific evidence on risk of dissipation for the court to be entitled to take the view that there is a sufficient risk to justify Mareva relief. For this the dishonesty must be relevant to risk of dissipation, and not every act of dishonesty is relevant to this. Once the risk of dissipation is shown, the limit of the Mareva relief will take into account claims for which the claimant has a good arguable case, including those which do not involve such an allegation."
- In the present case Mais and Dr Pontes have accepted that there is a serious issue to be tried – i.e. that the Claimants' allegations of fraudulent misrepresentation against them have a real prospect of success (albeit Mais and Dr Pontes deny any wrongdoing). It is entirely apt to characterise Mais and Dr Pontes as being "implicated in an ingenious scheme for the misappropriation of funds belonging to the claimant", in circumstances where there is a serious issue to be tried as to fraudulent misrepresentation (and so the honesty of those allegedly involved in relation thereto).
- In this regard there is evidence of the creation of false documents. There can be no honest explanation for the creation or deployment of such documents. Dr Pontes, as well as Mr Onderwater, are implicated in such documentation (albeit they each deny any such involvement), and it was pursuant to a letter signed by both Dr Pontes and Mr Onderwater (as directors of Project SPV) that Project SPV requested the transfer of US$500 million to Perfectbit, leading to the transfer of the US$500 million to the account at the HSBC Bromley branch in the name of Perfectbit.
- I reject the suggestion (advanced at paragraph 42 of the Skeleton Argument of Mais and Dr Pontes) that, "there is no compelling evidence that [Mais] or [Dr Pontes] were active participants in any fraud". It is recognised on their behalf that there is a serious issue to be tried, and I am satisfied on the evidence that I have identified in this judgment that there is a strong prima facie case of fraud against each of them that they will need to answer at trial. Involvement in the creation or use of false documents (if established at trial), as well as a willingness to make fraudulent misrepresentations, carries with it the very real risk that such individuals will unjustifiably dissipate their assets.
- In this regard it is also relevant to note that both Mais and Dr Pontes provided their asset disclosure late, and in the circumstances addressed in Mr Godden's sixth witness statement there is evidence in support of the Claimants' contention that there has been material dissipation of assets in breach of proprietary and freezing injunctions:
(1) At close of business on 5 December 2017, there was only €9,238,779.17 in the BCP Account (when Dr Pontes says he became aware of the Order).
(2) On 30 November 2017, Mais made a payment of €1 million to Concera SA (a company of which Dr Pontes is a director, direct shareholder of a 1% stake, and indirect shareholder of 97.5% of its shares). This was the date when Norton Rose emailed the Order to Dr Pontes. There were two subsequent payments of €100,000 and €350,000 on 4 December 2017. (I note that Mais made three earlier payments totalling €3 million from the BCP Account to Concera, and that Dr Pontes' evidence is that a substantial amount of this money has been paid out by Concera for the construction of a new laboratory for Bromangol).
(3) From 27 December 2017, Concera paid away around €400,000. Dr Pontes and Mais allowed this notwithstanding Dr Pontes' controlling interest in Concera and his (admitted) knowledge of the Order by this time.
(4) Dr Pontes has made a number of substantial payments from various bank accounts from December 2017 onwards, including but not limited to:
i. Numerous payments from an account held at Banco BIC including two substantial payments of 75 million Kwanzas (equivalent together to over £500,000) on 12 December 2017 and 12 January 2018;
ii. Payments exceeding 18.5 million Kwanzas (over £60,000) from an account with Banco Pungo Andongo since 26 December 2017;
iii. Payments out of accounts with Euro BIC and Novo Banco including numerous payments for luxury goods.
- By letter dated 13 February 2018, Norton Rose notified Dr Pontes of their knowledge of these matters. Notwithstanding this, Dr Pontes has not given any explanation for these payments (although he has addressed other aspects of the letter of the 13 February 2018 in his sixth witness statement). That is, prima facie, unjustified conduct which would go to impair the Claimants' ability to enforce any judgment, and which demanded explanation.
- I have taken into account the fact that Dr Pontes has interests in a substantial number of unlisted companies. I have been told by Mr Anderson that Dr Pontes has total assets of over US$300 million, mainly in Angola. However, I note much of Dr Pontes' wealth is bound up in unlisted companies and it is difficult to value the same. As Dr Pontes accepted in his evidence, the value of these shares is whatever someone would be willing to pay for them (and Dr Pontes raised doubts as to whether he could, in fact, find someone who would be willing to buy the shares in light of alleged reputational damage flowing from these proceedings).
- In the circumstances identified above, I am satisfied that there was at the time of the application, and remains, a real risk, judged objectively, that a future judgment would not be met because of unjustifiable dissipation of assets by Mais and Dr Pontes. Accordingly I am satisfied that the freezing injunction was properly granted in that regard, and ought to be maintained. The application of Mais and Dr Pontes in that context is accordingly dismissed.
L. The Onderwater Discharge Application
- Mr Macpherson, on behalf of Mr Onderwater, identified in an appendix to his skeleton argument no less than thirty-six alleged instances of material non-disclosure or partial disclosure. It is important that an applicant on a discharge application is realistic as to the points they take – the examination of such points is inevitably time-consuming – and what matters are matters which can be said to be material, not matters of lesser significance (even if established). I reiterate (as other judges have before me) that there is a need to maintain a due sense of proportion, and in complex cases to recognise the degrees of relevance within the broad scope of materiality.
- Wisely, in my view, Mr Macpherson's skeleton argument and oral submissions focused on certain main areas. First, an alleged failure to give fair presentation of certain facts supposedly indicating that the Defendants were unlikely to have conspired as alleged by the Claimants. Second, an alleged failure to identify the political actors, context and nature of this case. Third, a failure to set out the argument that Angolan law applies to the claims and to the interim remedies, and fourth it being said that Angolan law does not provide for proprietary claims over sums paid under the contracts and that there is a higher threshold test for relief in the nature of a freezing order. Reference was also made to miscellaneous failures to disclose – namely an alleged failure to disclose sufficient detail about the meetings at the Landmark Hotel in London in late July and early August. I have dealt with this, as Mr Macpherson did in oral submissions, under the second heading.
L.1 Alleged failure to draw attention to facts indicating that the defendants
were unlikely to conspire to steal the funds
- A number of submissions were made under this broad heading. The first was that the Claimants failed properly to present Dr Pontes to Popplewell J. Unlike Dr Pontes himself, Mr Onderwater expressly indicated that the Claimants ought to have indicated Dr Pontes' wealth.
- There is a very considerable degree of overlap between the submissions made on behalf of Mais and Dr Pontes, as addressed above, and those made by Mr Macpherson on behalf of Mr Onderwater in relation to Dr Pontes. As addressed above, I do not consider that the Claimants breached their duty of full and frank disclosure in relation to their presentation of Dr Pontes. The facts identified by Mr Onderwater, including as to Dr Pontes' wealth, when set against the backdrop of the false documentation that was generated, and the transfers that were made, do not amount to non-disclosure of material facts.
- Secondly, under this heading, it was submitted that the Claimants failed to draw attention to flaws in their case of an overarching conspiracy between the Defendants including Dr Barbosa, namely that:
(1) as originally conceived the payment of the US$500 million was to be made to BNA's own account with Sumitomo, this being a trust account from which the money would not leave; and
(2) Dr Barbosa and Perfectbit were only brought into the Project in late July or early August.
- It was submitted that the first fact also made it very unlikely that any conspiracy involved the theft of the US$500 million.
- I do not consider that there was any such flaw in the Claimants' case theory, or anything that ought to have been disclosed in that regard. In rebuttal of the suggestion that there was any significant shift in the fraud, reliance was placed by the Claimants upon a series of documents indicating quite clearly that the transfer of funds to a SPV was envisaged from the outset of the Project. The Claimants also place reliance upon the First Presentation. As addressed above, that presentation detailed phase 7 as being the "establishment of a $300 million deposit for the purposes of asset management in an SPV bank account with Sumitomo", yet the proposition that the money was never going to leave the BNA's control seems incorrect (or at the very least the position is unclear with a justifiable concern that the money was going to leave the BNA's control).
- There was a prima facie case of fraud established in the context of the use of documentation that was not genuine, and which led, amongst other matters, to the transfer of US$500 million to the account of a small English company, at the Bromley Branch of HSBC, in circumstances where by a letter dated 16 August 2017, signed by both Dr Pontes and Mr Onderwater as directors of Project SPV, Project SPV requested the transfer of US$500 million to that company, and on the very day that the transfer was made (18 August 2017), Perfectbit filed "filleted accounts" signed by its then (sole) director, Mr Dindyal, listing its assets as of 17 August 2017 as £560, and on 23 August 2017 Perfectbit filed a Notice of Change of its accounting reference period, the end of the period being moved from 31 August 2017 to the 17 August 2017. The effect of this was that it would be some time before the receipt of US$500 million would have to be revealed in any accounts. Set against such backdrop, I do not consider any change in modus operandi was a matter that was material or which ought to have been disclosed. The evidence before Popplewell J suggested (and continues to suggest) a prima facie case of fraud from the outset and at all times thereafter regardless of the precise modus operandi.
- Mr Macpherson submitted that more detail should have been provided as to the meetings in the Landmark Hotel. I do not consider this to be so. Those meetings were noted with the key documents from that period referred to and exhibited. Mr Mangueira did not attend those meetings and there is documentary evidence that the very existence of those meetings was being kept secret from the Ministry – namely the minutes of the meeting between the BNA and Norton Rose discussed above.
L. 2 The Potential Political Angle
- Mr Macpherson submitted that there were failings by the Claimants with the effect of masking a potential political motivation for bringing the claim. Again there is substantial overlap with Mr Anderson's submissions. In particular, Mr Macpherson submitted that there was a failure to refer to the active involvement and drive of President dos Santos in the Project, the meetings on the 14 and 18 September and the role of Mr Filomeno dos Santos. This was characterised as a failure to identify the political actors in the background to the claim and a further failure to identify the political events in the background to the claim.
- For the reasons set out above, I have concluded that the Claimants did not fail to disclose material matters in their presentation before Popplewell J in relation to such matters. In particular, the role of President dos Santos was made sufficiently clear and that of Mr Filomeno dos Santos did not call for discussion. Equally the meetings of the 14 and 18 September did not call for disclosure. I do not consider that it was necessary for Mr Mangueira to identify that he was instructed to investigate the transactions by President Lourenço – what matters is whether the relevant causes of action, and grounds for seeking an injunction are made out – not whether there was also a motive underlying (legitimate) actions in seeking to recover the monies, and prevent dissipation of assets. Nor do I consider Mr Mangueira's inaction in not raising (again) his concerns as to the Project to the outgoing President at the meeting on the 18 September is relevant. The fact that, at that meeting President dos Santos then indicated to Mr Mangueira that he would not retain his position as Minister of Finance was also not a matter calling for disclosure. Like the alleged political motivation, any personal motive on the part of Mr Mangueira does not touch upon whether or not there was a valid claim against the Defendants. In such circumstances I do not consider that the possibility that Mr Mangueira pursued the (legitimate) investigation of the transactions, as part of seeking to maintain his position in office, was a matter that ought to have been voiced to the court (even were that to be the case, which is not clear even now, on the material before me).
L.3 An alleged failure properly to address the possible application of Angolan law and associated consequences.
- Mr Macpherson submitted that the Claimants failed properly to address the potential application of Angolan law and the possible consequences of its application.
- As to the potential application of Angolan law, it was argued that the Claimants set out the application of the Rome II Regulation incorrectly in two respects:
(1) By relying first on Article 4 and only then on Article 12. Mr Macpherson submitted that it is arguable that Article 12 trumps Article 4 in this case and that ought to have been made clear to Popplewell J; and
(2) By failing to consider Article 15(d) of Rome II which provides that "the law applicable to non-contractual obligations under this Regulation shall govern in particular: … (d) within the limits of powers conferred on the court by its procedural law, the measure which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation."
- It was submitted on behalf of the Claimants that the first mischaracterised the analysis set out in their skeleton argument put before Popplewell J which set out the very argument relied upon Mr Onderwater, and that the second was not material and was inconsequential.
- In their skeleton argument, the Claimants addressed applicable law in the following manner. First, the Claimants noted that their principal personal claim against the Defendants is one of unlawful means conspiracy, with the unlawful means being the series of fraudulent misrepresentations made. The Claimants then summarised particular provisions of the Rome II Regulation:
"23.1 Article 4(1), which sets out the default rule that the law applicable to a tortious/delictual claim is the law of the country where the damage occurred "irrespective of the country in which the event giving rise to the damage occurred."
23.2 Article 4(2), which provides for the disapplication of the default rule where the claimant and the defendant are both habitually resident in the same country.
23.3 Art 4(3), which provides for the disapplication of articles 4(1) and/or (2) in circumstances where the tort/delict in question is "manifestly more closely connected" with a country other than that identified pursuant to those articles.
23.4 Article 12(1), which provides that, in relation to non-contractual claims arising out of pre-contractual dealings, the law applicable to the claim is that which applies to the contract in question (or which would have so applied, had the contract been concluded)."
- The Claimants then set out their analysis of the legal position as follows:
"24. There are two distinct elements to the damage which the Claimants' have suffered as a result of the alleged wrongdoing; namely (a) the making of a payment of $500m to Perfectbit pursuant to the Asset Management Agreement; and (b) the making of payments totalling €24.85m to Mais pursuant to the Consultancy Agreement.
25. The Claimants submit that English law governs claims relating to the payment of $500m;
25.1 Applying article 4(1) of Rome II, English law would apply because the damage (which consisted of the making of a payment from one English bank account to another) clearly occurred in England.
25.2 It might be said that, under article 4(2), any claim against Mais in respect of this payment was governed by Angolan Law (because the Claimants and Mais could be said to be habitually resident in Angola). However, if it be right that all of the other claims in relation to this payment were governed by English law, with the result that Mais' liability arose entirely as a result of its participation in an English law conspiracy, then the Claimants would submit that Angolan law ought to be disapplied, in favour of English law, under article 4(3).
25.3 In any event, if the claim is properly to be analysed as one relating to the fraudulent inducement of contract, and therefore as being within article 12 of Rome II, English law would apply in any event. This is because the contract which was induced by the fraud, and pursuant to which the payment of $500m was made (namely the Asset Management Agreement) is expressly subject to English law.
26. If the claims in respect of the $500m are governed by English law (and the Claimants submit that they are for the reasons set out above) then it would follow that the question of whether Perfectbit holds that payment (or any of the traceable proceeds thereof) on constructive trust for the Claimants would also be governed by English law – see Dicey, Morris & Collins on the Conflict of Laws (15th Ed) at 29R-075. This conclusion would be supported by the general principle that claims to ownership of property or assets are governed by the lex situs of the relevant assets at the time of transfer. Given the transfer in England between two banks of the US$500m, it is clear that if the lex situs rule were applied, it would lead to English law applying as well.
27. It is the Claimants' case that the inducement of both the Consultancy Agreement and the Asset Management Agreement formed part of a single, continuous fraudulent conspiracy. In those circumstances, there is a strong argument that, under article 4(3) of Rome II, the claims in respect of the sum of €24.85m ought also to be treated as being governed by English law. However, in relation to the claim concerning this sum, there are arguments that some other law may apply:
27.1 The sum of €24.85 million was made pursuant to the Consultancy Agreement, which is subject to Angolan Law. Under article 12 of Rome II, non-contractual claims arising out of dealings prior to that contract would be governed by the same law.
27.2 The sum was paid from an account held by the BNA in Germany. Accordingly, under article 4(1) of Rome II, it might be said that German law applied. However, the Claimants submit that this possibility can be discounted in light of (a) the impact of article 12; and/or (b) the complete absence of any other connections between the Claimants' claims and Germany.
28. The Claimants maintain that the most appropriate law governing these claims is English law. To the extent necessary, the Claimants will submit that attempts to point to another law based on choice of law clauses in documents which appear to have provided non services, and were never intended to provide any substantive services or give rise to real obligations and were no more than mere vehicles for effecting the fraud should be discounted."
- It was therefore made clear that the Claimants were characterising their claims primarily as conspiracy claims, not as fraudulent misrepresentation claims, and that there is an argument for the application of Article 12 of Rome II, this pointing to the application of Angolan law. What Mr Onderwater has argued is that the presentation of applicable law was, nevertheless, deficient as the Claimants failed to identify that Article 4(3) is inapplicable if Article 12 applies, so paragraph 27 of the Claimants' skeleton argument was erroneous and offered "false comfort" to Popplewell J that he could apply English law to that part of the claim.
- I do not consider that the Claimants' presentation was deficient on this basis. The Claimants identified Article 4(3) as the basis of a "strong argument" for the application of English law. That said, Article 12(1) was identified as being applicable to non-contractual claims arising out of pre-contractual dealings, and in the context of the €24.85 million claim Article 12 was identified as being of potential application leading to the application of Angolan law. The Claimants then set out their submission that English law is the most appropriate law. It appears that there is an argument that Article 4(3) may apply, at least as regards Mr Onderwater (and Dr Pontes). In this regard:
(1) §35-093 of Dicey, Morris & Collins on the Conflict of Laws (15th ed) states:
"Scope of Article 12. According to Recital (30) to the Regulation culpa in contradendo is an autonomous concept and should not necessarily be interpreted within the meaning of national law. The Recital goes on to point out that it should include "the violation of the duty of disclosure and the break-down of contractual negotiations." But Art. 12 "covers only non-contractual obligations presenting a direct link with the dealings prior to the conclusion of a contract. The means that if, while a contract is being negotiated, a person suffers personal injury, Art.4 or other relevant provisions of this Regulation should apply". The terminology and these various observations suggest that Art.12 will apply to fault based claims, for example, to non-disclosure, fraudulent or negligent misrepresentations and duress which occur during the negotiation of a contract. Accordingly other types of claim, for example a claim for the value of services provided in anticipation of a contract, may fall outside Art.12, and within other provisions of the Regulation (notably, Art.10 dealing with unjust enrichment). Equally, however, these observations emphasise that the "culpa" in whatever form must occur in the context of negotiations with a view to concluding a contract. Thus Art.12 would not, it seems, apply in a case where (for example) a misrepresentation is made outside contractual negotiations or where a third party relies on a representation made in connection with a contract concluded between the representor and a different party. Such cases will fall, normally, within Art.4. Finally, as the principal connecting factor under Art.12 is the law applicable to a contract (or putative contract), its application may be restricted to claims between the parties (or prospective parties) to that contract, and not against any third party (e.g. an agent) involved in the pre-contractual dealings."
(2) To similar effect, Dickinson, The Rome II Regulation states:
"12.07 As the primary connecting factor within Art 12 is the law applicable to a contract, either concluded or contemplated, there is a strong argument for restricting its scope to claims between the (intended) parties to the contract so as to exclude (for example) a claim for damages by one of the parties against the issuer of securities that he has purchased on the market or the agent of another for misrepresentation or as a false procurator. There may, of course, be good reasons for concluding that claims against an agent, whether in contract or in tort/delict, should be governed under the Rome I Regime or Art 4 of the Rome II Regulation by the law of the contract (lex contractus), especially if he has taken an active part in negotiations conducted on the basis of drafts containing a choice of law provision. Art 12, however, would appear to contemplate an existing or contemplated contractual relationship between the parties to the non-contractual obligation. That view is consinstent, for example, with the approach taken under English law to liability for misrepresentation, providing a separate claim for damages as between the contracting parties only. …
12.08 The language of Recital (30) (12.03 above) reduces the significance of comparative analysis of this kind, which in any event is inconclusive. On balance, therefore, claims by or against the representatives of negotiating or contracting parties should be considered to fall outside Art 12, although the contract or supposed contract to which the agent's conduct relates should be considered as a circumstance to be taken into account in applying a flexible rule of displacement such as that in Art 4(3) of the Rome II Regulation or in identifying the law applicable under the Rome I Regime to any contract between agent and counterparty."
(3) The Supplement to that text provides at 12.20C:
"It is possible that a claim may relate to the defendant's conduct preceding the conclusion of two or more contracts, with different governing laws. In such a case, unless there is one contract to which the others are clearly subordinate (in which case it may be possible to apply the maxim accessorium sequitur principale to support the application of the law of the principle contract, the laws of each of the individual contracts should probably be applied on a 'distributive' basis, with the damage being apportioned between them. This process will be more straightforward if a contract has been concluded and performance has taken place, than if the negotiations have failed."
- In circumstances where both the leading texts indicate that a claim by a contracting party against a non-party for misrepresentation or the like can fall outside Article 12, I do not consider that the Claimants' reference to Article 4 of the Rome II Regulation was inappropriate. There is an argument for the application of English law along the lines indicated by the Claimants. It therefore cannot be said that the Claimants' submissions were untenable or misleading. The issue of the actual applicable law is ultimately a matter for trial. Popplewell J was made aware of the arguments as to the possible application of English law or Angolan law, and I do not consider there was any failure by the Claimants to comply with their duty of full and frank disclosure in that regard.
- I further note that Mr Macpherson submitted that the Claimants ought to have addressed the Consultancy Agreement and then the Asset Management Agreement on the assumption that matters of applicable law ought to be taken chronologically. I do not agree. I consider (as submitted by the Claimants) that the Asset Management Agreement is the focal point of the scheme and reflects the realities of the matter as it stood when it was before Popplewell J.
- Mr Macpherson has also submitted that the Claimants ought to have referred to Article 15 of Rome II. Article 15, so far as is relevant, provides "The law applicable to non-contractual obligations under this Regulation shall govern in particular … (c) the existence, the nature and the assessment of damage or the remedy claimed; (d) within the limits of powers conferred on the court by its procedural law, the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation".
- The Claimants did not address the position as regards the law governing interim orders. This seems to be on the basis that the applicable law governs such, as is the position under Rome II. What the Claimants did address is the law applicable to the question of whether Perfectbit holds the payment of $500 million on constructive trust (addressed above). In circumstances where the possible application of Angolan law pursuant to Article 12 was expressly identified and Angolan law then considered, I do not consider that the Claimants needed to draw attention to Article 15 itself. The submissions that were made by the Claimants were consistent with that provision.
- As to the issue of whether English law or Angolan law governed the question of whether there is a constructive trust over the €24.85 million this is a complex area of law that goes beyond the level of detail that I consider any party would be expected to address as part of a fair presentation to the Court. What was disclosed was the possibility of English law or Angolan law governing the question. Ultimately it is not necessary for me to determine this issue, although I consider it to be well arguable that Article 12 Rome II does not have the effect of applying Angolan law to that question. In any event even if (contrary to my view) this area should have been addressed I do not consider that any failure to do so amounted to a material breach, or one that would justify the discharge of the injunction or a refusal to re-grant the same.
- I turn now to the alleged failure properly to address the potential consequences of Angolan law applying to the claim for €24.85 million. Mr Macpherson submitted that the Claimants' analysis of Angolan law before Popplewell J was "cursory, inadequate and misleading". The Claimants' skeleton argument addressed Angolan law as follows:
"Despite that position, out of an abundance of caution, the Claimants consider it appropriate to address the question of how their claims against the Alleged Fraud Defendants would fall to be analysed under Angolan law:
29.1 In the limited time available, the Claimants have been able to obtain two letters from the legal office of the Ministry of Finance. These letters provide a brief summary of certain relevant principles of Angolan law.
29.2 Unsurprisingly, it appears that Angolan Law confers upon the victim of a fraud the right to claim damages against the fraudster.
29.3 In terms of interim remedies, Angolan law permits the seizure or freezing of assets "which have been improperly lost, and are in the possession of the defendant.
29.4 Where two or more persons conspire to commit unlawful acts, Angolan law renders them jointly and severally liable for the damages caused.
29.5 It therefore appears that, insofar as relevant to this application, Angolan law is sufficiently similar to English law that its applicability would not militate against the granting of the interim injunctions which the Claimants now seek."
- The Claimants exhibited two letters from the Ministry of Finance's Legal Department addressing issues of Angolan law. The first letter, dated the 15 November 2017, addressed issues of authority, liability for conspiracy and the arresto procedure (that being the interim seizure or freezing remedy under Angolan law). The second letter, dated the 16 November 2017, addressed the circumstances in which the victim of a fraud can bring a claim against the perpetrator under Angolan law and whether there are any prohibitions as to modes of service under Angolan law.
- Mr Macpherson has submitted that the Claimants' failed to make proper disclosure of Angolan law. In this regard, he relied upon a report from Mr Lunga, of Luis Martinho Lunga Advogados. This report stated that, under Angolan law, any claims made against the defendants would be in personam in delict or unjust enrichment (albeit it seems there is a right to follow funds "unless the said funds have been transmitted to the third party without compensation"). It further went on to state that the arresto procedure requires a claimant to establish "strong prospects of success of the claim" (as opposed to a good arguable case) and "the real risk of dissipation of the Defendant's assets and/or monies". Moreover, an arresto order "typically contains the precise identification of the assets that shall be seized by the Court", can be made over assets or parties outside of Angola and "the defendant does not have the obligation of disclosing his assets and bank accounts".
- In response, Mr McGrath relied upon a report from Lead Advogados. This indicated that the general rule is that a victim of fraud can only make in personam claims but that there are some exceptions. Of those exceptions, Article 289 of the Angolan Civil Code is said to be relevant, this establishing the effects of the nullity of legal transactions (namely reinstatement). Although this is not itself an in rem claim, it can have an effect on third parties (with the claim being made against the property). A third party has a defence if that party acted in good faith (this requiring the third party being ignorant of the nullity of the contract, with no obligation to know and that the third party believed that the contract would not cause damage to the Angolan State). As to the arresto procedure, Lead Advogados note that the claimant also has to prove that the freezing of the moneys/assets does not cause more damage than the benefits that are claimed. However, it is said that the risk of dissipation does not need to be shown against each one of the defendants and that the law requires the claimant to specify the specific assets to be seized if the claimant is in a position to do so. If the claimant is not in such a position, the court may notify any private or public entity to disclose information about such assets so they can be seized.
- I was also provided with a second report from Mr Lunga responding to the report of Lead Advogados. I have read and considered that report.
- I do not consider that the Claimants' presentation of Angolan law generally, or the arresto procedure was cursory, inadequate or misleading as alleged. Before Popplewell J the Claimants advanced the proposition that Angolan law was sufficiently similar to English law that it did not militate against the granting of freezing relief. Having considered the evidence on Angolan law from Mr Lunga and Lead Advogados, I am of the view (at least for present purposes) that this is so. There is a dispute as to the threshold for an arresto – whether it is necessary to establish a strong case on the merits or not. I do not consider that even if there is a higher threshold that this would militate against the granting of a freezing injunction – there would, in any event, be sufficient similarity. As to asset disclosure, I likewise do not consider any divergence (if divergence there be) to be such that it needed to be disclosed to Popplewell J.
- On a careful consideration of each of the points made on behalf of Mr Onderwater I do not consider that the Claimants breached their duty of full and frank disclosure in their presentation of the remedies available under Angolan law. Ultimately what the actual position is under Angolan law will be a matter for determination at trial.
- As with the allegations made on behalf of Mais and Dr Pontes I have given careful consideration to all of the alleged breaches of the duty of full and frank disclosure advanced on behalf of Mr Onderwater, set against the backdrop of the evidence before Popplewell J, the Claimants' skeleton argument and the oral hearing before the judge, and I am satisfied that there was no material non-disclosure in the present case in relation to any of the matters alleged, and for the reasons addressed above.
- Equally, as with the allegations made on behalf of Mais and Dr Pontes, even if any of the matters relied upon ought to have been disclosed to the Court (contrary to the views I have expressed) I do not consider that any failure to mention such matters was substantial, nor do I consider that it was deliberate. In such circumstances, and whilst having full regard to the need to encourage proper compliance and to deter non-compliance, I again consider that (applying the factors identified by Males J in National Bank Trust v Yurov, supra) on the facts of the present case as identified herein, the interest of justice would lie in the continuance of the freezing injunction
- In the above circumstances Mr Onderwater's application to set aside the worldwide freezing injunction and proprietary injunctions on the basis of an alleged failure by the Claimants to comply with their duty of full and frank disclosure is dismissed.
M. The Case Management Stay Application
- Given my conclusion on the Mais/Pontes jurisdictional challenge, Mr Onderwater's first basis for a case management stay falls away. As for the second, this was parasitic upon Project SPV's application for a stay of the BNA's claim pursuant to section 9 of the Arbitration Act 1996. That application was not pursued before me. I can see no reason why, in such circumstances, that application should be adjourned rather than dismissed (having been advanced but not pursued). I am satisfied that the right course is to dismiss Project SPV's application for a stay, and I do so. In such circumstances Mr Onderwater's second basis for a case management stay also falls away. Accordingly, Mr Onderwater's application for a case management stay also stands to be dismissed, and I so order. I would only add that in the context of the fact that proceedings would in any event have continued in England against a number of defendants, I do not consider that the present case would have been an appropriate case for a case management stay against Mr Onderwater.
N. Overall Conclusion
- In the above circumstances, the Order of Popplewell J continues to trial or further order. I trust the parties will be able to agree an Order recording the outcome of each application as identified herein, and as to costs (which prima facie should follow each event), but I will hear the parties in the event of any disagreement, or in relation to any consequential matters that cannot be agreed.