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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> The Serious Fraud Office v Saleh  EWHC 2119 (QB) (21 July 2015)
Cite as:  EWHC 2119 (QB),  WLR(D) 368,  Lloyd's Rep FC 62
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THE SERIOUS FRAUD OFFICE
|- and -
|IKRAM MAHAMET SALEH
Helen Malcolm QC and Nicholas Yeo (instructed by Stephenson Harwood) for the Defendant
Hearing dates: 8 and 9 July 2015
Crown Copyright ©
Mrs Justice Andrews:
i) The Claimant ("the SFO") cannot establish that the shares (and thus the money representing them) are "property obtained through unlawful conduct", and therefore recoverable property under ss.304 and 305 of POCA, because there has been a binding determination in Canadian forfeiture proceedings (consequential on Canadian criminal proceedings against GEI) that the GEI shares were neither crime related proceeds nor offence related property but were at all times from the date on which they were issued to Mrs Saleh her property lawfully acquired by her. The relevant Order of the Canadian court, made on 16 April 2014, ("the Order") is expressed to operate as a judgment in rem.
ii) The SFO is unable to satisfy the "dual criminality" requirements of s.241 of POCA by establishing that the behaviour complained of is not only an offence under the law of the foreign jurisdiction concerned (Canada and/or the USA) but would have been an offence under the laws of a part of the UK if it had occurred there;
iii) The PFO was obtained by material non-disclosure.
THE CANADIAN CRIMINAL PROCEEDINGS
"It may well be, I don't know, that some of these people have a different view of the facts than you folks have agreed to. So there has to be an effective means of providing notice to them before the Court grants a relief against them."
THE CANADIAN FORFEITURE PROCEEDINGS
"Okay. The only thing I was questioning was the I suppose I can get around it, in the sense that whereas no evidence has been presented by the Queen upon which I could find in favour of the the 490 has been satisfied; therefore, appearing that Saleh is innocent of any complicity.
All right, that's just a recital, in any event."
"AND WHEREAS no evidence has been presented by the Applicant, Her Majesty the Queen, in the Right of Canada, upon which this Honourable Court could conclude in favour of the Applicant that section 490.5(4) has been satisfied and it therefore appearing that Ikram Mahamet Saleh is innocent of any complicity in any indictable offence that resulted in the RCMP seizure of her shares in [GEI] or that the said Saleh shares in [GEI] were likely to have been used in connection with the commission of an unlawful act by either Ikram Mahamet Saleh or by [GEI]" [emphasis added].
"IT IS FURTHER ORDERED AND ADJUDGED THAT
This Order/Judgment of this Court is to be construed as a judgment in rem, in that the 800,000 common shares issued by [GEI] (now Caracal Energy Inc) to the Respondent, Ikram Mahamet Saleh, are neither crime related proceeds nor offence related property but were, at all times from the date those shares were issued to her, continuously to and beyond the date of this Order/Judgment, her property lawfully acquired by her."
HOW THE SFO BECAME INVOLVED
THE MERITS OF THE CLAIM FOR A PFO
i) GEI initially sought to provide a corrupt incentive to Mr Bechir by offering to pay a $2 million "consultancy fee" to his own company if they closed the deal;
ii) When it was advised that this would be unlawful, GEI decided to provide the same corrupt incentive by an indirect route. The $2 million "consultancy fee" was now promised to Chad Oil, swiftly incorporated for that purpose as a vehicle for Mrs Niam.
iii) As an additional incentive to her husband, Mrs Niam was allowed to acquire founder shares in GEI at a nominal price. Those shares stood to be worth a huge amount of money if GEI got the deal that it wanted in respect of the oil blocks. Commercially, therefore, their acquisition was an even greater incentive than the "consultancy fee" would have been.
iv) The three offers by Mrs Saleh, Mrs Niam and Mr Hassan to subscribe for a total of 10% of the founder shares in GEI all happened on the same day as the first consultancy agreement with Chad Oil was made, 15 September 2009. This was no coincidence.
v) They were the only three "outsiders" who subscribed for founder shares; moreover, none of them had the level of income ostensibly required of an investor in GEI ($200,000) that they stated they had in the offer to subscribe;
vi) Mr Hassan and Mrs Saleh were nominated by Mrs Niam to receive some of the founder shares. It does not necessarily follow from this that they were "nominees" in the sense of holding the shares on her behalf or on behalf of Mr Bechir. However, one legitimate inference that could be drawn from this nomination is that the incentive offered to Mr Bechir came in the form of the opportunity for Mrs Niam to acquire a total of 10% of the shares in GEI not only for herself, but for anyone else that she might wish to benefit and nominate as the recipient;
vii) There are strong indicia that Mr Hassan was a nominee in every sense, not least the fact that Mr Bechir was instrumental in making the application in his name, and that Mrs Niam took so much trouble to get hold of his shares and eventually did so before the sale to Glencore.
viii) Mrs Saleh had no apparent reason to be interested in investing in GEI;
ix) Mr Takane, her husband, was plainly involved to some extent in furthering GEI's interests. He was instrumental in directing payment of the "consultancy fee" to Chad Oil, and in the creation and execution of the second Chad Oil Consultancy Agreement in January 2011, although that company was ostensibly a vehicle for Mrs Niam used as the route for paying the "consultancy fee" originally offered to her husband Mr Bechir.
x) Thus it could also be inferred that the acquisition of the shares by Mrs Saleh was an incentive to Mr Takane.
"If any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward for doing or forbearing to do any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business he shall be guilty of a misdemeanour".
"[it] is a decision which establishes certain facts as proved or not in dispute; states what are the relevant principles of law applicable to such facts; and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned."
In the same case at 494A-C Lord Diplock, who agreed with Lord Brandon's conclusions and reasons, added that the moral overtones which the expression "on the merits" tends to conjure up may make it misleading. What it means in the context of judgments delivered by courts of justice is that the court has held that it has jurisdiction to adjudicate upon an issue raised in the cause of action to which the particular set of facts give rise, and that its judgment on that cause of action is one that cannot be varied, re-opened or set aside by the court that delivered it or any other court of co-ordinate jurisdiction.
ALLEGED MATERIAL NON-DISCLOSURE