[Printable RTF version]
||Neutral Citation Number:  EWHC 599 (Ch)
||Case No: HC10C01299
IN THE HIGH COURT OF JUSTICE
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
THE HONOURABLE MR JUSTICE PETER SMITH
|| Mulugeta Guadie Mengiste
ADDIS Trading Share Company
||- and -
||Endowment Fund For The Rehabilitation of Tigray
ADDIS Pharmaceutical Factory Plc
Mesfin Industrial Engineering Plc
Mr Ashworth QC (instructed by Rylatt Chubb) for the Claimants
Mr Spink QC and Mr Assersohn (instructed by MS Legal) for the Defendants
Hearing dates: 8, 10 February, 30 April 8, 9, 10 May, 13 & 14, 22 August, 30, 31 October and 6 November 2012
HTML VERSION OF JUDGMENT
Crown Copyright ©
Peter Smith J:
- This judgment arises out of hearings before me to determine initially 3 substantive applications:-
1 The Defendants' application dated 12th October 2010 challenging the continuation of these proceedings within this jurisdiction on the ground that England is not a forum conveniens.
2 The Claimants' application for permission to serve the Second and Third Defendants out of the jurisdiction dated 14th February 2011.
3 The Defendants' application dated 18th January 2012 for an order requiring the Claimants to disclose details as to the identity of the Claimants' expert (called throughout the proceedings by the name of Mr Jones ("Mr Jones").
- The third application was determined by my ruling that Mr Jones' identity should remain anonymous save to Counsel for the Defendants. This posed significant difficulties I expect on the Defendants in the preparation of their case but Mr Spink QC who with Mr Assersohn appears for the Defendants accepted (unwillingly) that that was the only fair way for the Claimants to produce an expert. Basically Mr Jones was concerned that if his identity became known his life would be at risk. He was not willing to give evidence unless matters were put in place so as to preserve his anonymity. That was done by him giving evidence live with (in respect f the later evidence) a live transcription link. The former of those hearings took place at premises not within the precincts of the Court and Mr Jones felt sufficiently reassured to attend those premises. Only Mr Spink QC and Mr Assersohn attended for the Defendants. The subsequent hearings took place at the same premises on one day and within the Court on the following day with the live transcription link to the Defendants but Mr Jones' identity was preserved. By adopting that procedure it does not follow that I accepted that Mr Jones' fears were justified. In fact I do not accept them now having heard the evidence.
- This case is a familiar type of skirmish case that occurs when actions are brought in England and Wales which have no apparent connection with that jurisdiction. The present dispute involves parties who are all Ethiopian and is in respect of property and assets which were based in Ethiopia. Their relationship is governed by Ethiopian law and the wrongful actions complained about all took place in Ethiopia. At first sight the basis for the case being suitable to be determined in this jurisdiction appears to be slight.
- Cases like this, as I have said regularly come before the Courts. They are supposed to be dealt with quite robustly. In Spiliada Maritime Corporation v Cansulex Ltd  AC 460 at 465 F Lord Templeman gave guidance as to how these applications were to be dealt with:-
"In the result, it seems to me that the solution of disputes about the relative merits of trial in England and trial abroad is pre eminently a matter for the trial Judge. Commercial Court Judges are very experienced in these matters. In nearly every case evidence is on affidavit by witnesses of acknowledged probity. I hope that in future the Judge will be allowed to study the evidence and refresh his memory of the speech of my noble and learned friend Lord Goff of Cheveley in this case in the quiet of his room without expense to parties; and that submissions will be measured in hours and not days. An appeal should be rare and the Appellate Court should be slow to interfere. I agree with my noble and learned friend Lord Goff of Cheveley that there were no grounds for interference in the present case and that the appeal should be allowed."
- The Claimants in their closings used this observation of Lord Templeman to criticise the way in which the proceedings took place before me. It is dangerous to place too much reliance on that observation of Lord Templeman. For example in the case of AK Investments CGC (Appellant) v KYRGYZ Mobil Tel Ltd & Ors (Respondents)  UKPC Lord Collins said this (paragraph 7):-
"Experience has shown that Lord Templeman was being over optimistic when he said, in Spiliada (at 465), that in disputes about the appropriate forum the Court would not be referred to other decisions on other facts and that submissions would be measured in hours not days. But this case has been excessively complicated by any standards. The hearings before the Deemster and the Staff of Government Division each lasted for 4 days or more. The hearing before the Board lasted 4 days. The written cases of the parties exceeded 200 pages and more than 30 volumes of documents were placed before the Board containing almost 14,000 pages, as well as 170 authorities in 12 volumes. The core bundle alone consists of 6 volumes. The list of "essential" pre reading for the Board listed documents totalling some 700 pages. All of this was wholly disproportionate to the issues of law and facts raised by the parties".
- The Court of Appeal in the decision of Pacific International Sports Club Ltd v Igor Surkis  EWCA Civ 753 also referred to the Spiliada case paragraph 23 (see below) but nevertheless acknowledged that there was no criticism in effect of Blackburne J's decision to hear that case over 6 days because it was "peculiarly fact sensitive" and needed a full investigation to ensure a fair and full decision could be made.
- Cases of this nature have recently attracted the attention of the Supreme Court.
- VTB Capital plc (Appellant) v. Nutritek International Corp. and ors (Respondents)  UKSC 5 reinforced the proposition that consideration of cases like this was almost inevitably within the discretion of the judge at first instance and that the exercise of his discretion will be very rarely interfered with.
- It also commented on the length of cases. Lord Neuberger for example said this:-
"81 When a court is called upon to decide whether an action should proceed in this, as opposed to another, jurisdiction, it is being asked to decide a procedural issue at a very early stage. Where, as is now the position in this case, it is common ground that the parties would have a fair trial in the competing jurisdiction, the exercise will normally involve the court weighing up a number of different factors, and deciding where the balance lies. Whilst the same considerations will not always apply to applications for permission to serve out and applications for stays of proceedings, the argument on this appeal has highlighted three general points in relation to each type of exercise.
82. The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time-consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights.
83. Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds each, and to spend many days in court, on such a hearing. The essentially relevant factors should, in the main at any rate, be capable of being identified relatively simply and, in many respects, uncontroversially. There is little point in going into much detail: when determining such applications, the court can only form preliminary views on most of the relevant legal issues and cannot be anything like certain about which issues and what evidence will eventuate if the matter proceeds to trial.
84. This concern is not new. In Cherney v Deripaska  EWCA Civ 849, paras 6 and 7, Waller LJ said that whilst he "appreciate[d] that litigants do often feel strongly about the place where cases should be tried … disputes as to forum should not become state trials". He also lamented the "mountain of material" the Court faced in that case, and suggested that it "would have been better for both parties and better use of court time if they had expended their money and their energy on fighting the merits of the claim."
85. In Friis v Colburn  EWHC 903 (Ch), paras 3 and 5, having set aside an order for service out of the jurisdiction, Peter Smith J referred to the fact that the claimants' costs schedule was £215,280.50, following a hearing which, he said, had been "strung out by unrealistic stances and unnecessarily prolonged and complicated submissions which seem[ed] to achieve nothing other than create fogs of irrelevancy".
86. In that connection, the present case is striking, as Arnold J explained in para 3 of his judgment. The hearing before him lasted six days, after two days' pre-reading. He was faced with more than 27 bundles of documents, written evidence, and exhibits, and 14 bundles of authorities. One of the witnesses had made twelve witness statements, and further materials were added on a daily basis. (The hearing was not limited to the application to set aside permission to serve out: it included an application to amend, and applications to continue and to discharge a freezing order; however, no more than half the material and time can have been devoted to those aspects.)
87. Since the hearing of this appeal, the Court of Appeal has given judgment in Alliance Bank JSC v Aquanta Corporation  EWCA Civ 1588, a case involving similar issues to those in this appeal. At para 4 of Tomlinson LJ's judgment in that case, he referred to the fact that the first instance hearing of the application to set aside permission to serve out, on the grounds that England was an inappropriate forum (as well as raising some other points), lasted eleven days, and the hearing in the Court of Appeal appears to have lasted four days.
88. In Spiliada  AC 460, 465, Lord Templeman expressed the hope that in a dispute over jurisdiction, "the judge will be allowed to study the evidence and refresh his memory of [the principles] in the quiet of his room without expense to the parties; that he will not be referred to other decisions on other facts; and that submissions will be measured in hours and not days." That was a rather optimistic aspiration, not least when one bears in mind the understandable desire of lawyers to do, and to be seen by their clients to be doing, everything they can to advance their clients' case, especially where the dispute over jurisdiction may well be determinative of the outcome.
89. However, particularly with the benefit of procedural reforms, which have been introduced, or are in the process of being introduced, following reports from Lord Woolf and Lord Justice Jackson, the judiciary is now encouraged to exercise far greater case management powers than 25 years ago. Accordingly, judges should invoke those powers to ensure that the evidence and argument on service out and stay applications are kept within proportionate bounds and do not get out of hand. The second point is, in a sense, a sub-set of the first point, and concerns the extent to which a defendant who is challenging the jurisdiction of the English court should identify the nature of his case. In my view, the position is reasonably clear. As a matter of principle, a defendant is entitled to keep his powder dry: he can simply put the claimant to proof of its case. In general at least, that is true at any point of the proceedings. The mere fact that the defendant is challenging jurisdiction does not somehow impose a duty on him to specify his case. The onus is on the claimant to satisfy the court that there is a serious issue to be tried on the merits of the claim, and not on the defendant to satisfy the court that he has a real prospect of successfully defending it.
90. However, if the defendant chooses to say nothing, then it would be quite appropriate for the court to proceed on the basis that there is no more (and no less) to the proceedings than will be involved in the claimant making, or trying to make, out its case. Of course, in many instances, the defendant will be able to say that, although he has not submitted a draft statement of case, or produced a witness statement, setting out the details of his case, its nature is clear from correspondence, common sense, or even submissions. Consistent with my observations on the first point, I would not want to encourage a defendant to go into great detail as to his case in a long document with many exhibits, but if he is wholly reticent about his case, he can have no complaint if the court does not take into account what points he may make, or evidence he may call, at any trial. I agree with Lord Clarke that a defendant could exhibit draft points of defence, but in many cases, it may be disproportionate to expect him to incur the costs of doing so before it has been decided whether the claim is to proceed at all.
91. The third point was expressed by Lord Bingham in Lubbe v Cape plc  1 WLR 1545, 1556. He said, in the context of an application for a stay of proceedings on grounds of forum non conveniens, that
"[t]his is a field in which differing conclusions can be reached by different tribunals without either being susceptible to legal challenge. The jurisdiction to stay is liable to be perverted if parties litigate the issue at different levels of the judicial hierarchy in the hope of persuading a higher court to strike a different balance in the factors pointing for and against a foreign forum."
Precisely the same applies in many cases involving permission to serve out.
92. As Mr Mark Hapgood QC, who appeared for Mr Malofeev, said, appellate courts should be vigilant in discouraging appellants from arguing the merits of an evaluative interlocutory decision reached by a judge, who had to balance the various factors relevant to the appropriate forum, when the complaint is, in reality, that the balance should have been struck differently.
93. Lord Templeman in Spiliada, at 465 said that the determination of the appropriate forum is "pre-eminently a matter for the trial judge", because "Commercial Court judges are very experienced in these matters", and "[a]n appeal should be rare and the appellate court should be slow to interfere". This case was in the Chancery Division, whose judges entertain such issues less commonly than their Commercial Court colleagues, but their experience and expertise are such that the same conclusion applies. As Tomlinson LJ said at para 117 of his judgment in Alliance Bank, an appellate court "should hesitate long before interfering with the judge's assessment" on such an issue."
- Although the hearing took 12 days it would be wrong to conclude that I heard the case on the merits. The vast bulk of the evidence that I heard related to the hearing of the Expert evidence. The only factual issue that really arose was over the Inventory. As set out below that was the jewel in the claimants' crown in their opening but fell apart during the hearing. That led the claimants to attempt to revive their case after that collapse and present a completely new case based on fresh expert evidence. They also belatedly sought to have one of the Defendant's witnesses called for cross examination; they having initially decided that they did not wish to challenge his evidence (see below).
- This demonstrates that there is no possibility of assuming that every case on this jurisdiction would be dealt with as optimistically forecast by Lord Templeman. Although the Claimants in their closing criticised me for creating the situation that is actually wrong and not justified (see below).
- This case took 12 days spread over a period from February 2012 to December 2012. It has attracted 4 bundles of authorities and closing submissions of close on 400 pages.
- I do not criticise that. The difficulty in the case is that everything was in dispute. A major area of dispute centred over Ethiopian law and what happened in Ethiopia. This required considerable investigation because it was the lynchpin of the issue before me. The Claimants acknowledged that unless they established there was a real risk that justice would not be obtained in Ethiopia they could not maintain the action in this present jurisdiction.
HOW DID THIS HAPPEN
- The important point to note is the limited nature of Lord Templeman's observations. Spiliada was a commercial dispute concerning shipping. I can well understand in that type of case Lord Templeman making the observation that he did. The Claimants in paragraph 4 of their closing submissions omit the sentence before that part of Lord Templeman's judgment. He said this:-
"Commercial Court Judges are very experienced in these matters. In nearly (emphasis added) every case evidence on affidavit by witnesses of acknowledged probity"
- This case could not be further from that cosy scenario. Nothing has been agreed in this case between the parties virtually and everything has been fought.
- The Claimants' case is based entirely on a root and branch attack on the Ethiopian judicial system and the hearings that took place. The major plank for this argument was the evidential status of the Inventory referred to in this case. As set out in the Claimants' opening and as set out in the expert evidence of Mr Jones (to which I shall refer in the confidential part of the judgment in more detail) its case was that the Claimants could have no fair trial, the trial procedures in the numerous hearings justify that and there is a real threat of harm to Mr Mengiste and indeed to Mr Jones if their identity is known.
- Despite the seriousness of that allegation the Claimants wished it to be proven primarily on the evidence of Mr Jones without his identity being known and without even his CV being disclosed. The basis for this was that if either of those matters became public Mr Jones was fearful for his life. Mr Jones' stance was that unless I agreed to these terms he would not give evidence. This is hardly the type of case that in my view was envisaged by Lord Templeman.
- The Claimants in their closing (paragraph 7) submit that I decided that I wished there to be oral evidence and made an order to that effect. They then complain that there was 9 days of oral evidence on what they submit ought to have been a paper application and submit that I erroneously treated it as if it was a trial. Thus it is submitted the whole process is flawed.
- Nothing could be further from the truth. The applications came before me first on 9th February 2012. That hearing was listed as a result of an order made by Deputy Master Mark on 24th May 2011.
- Neither party appealed that order. It is instructive to remind the parties what that order said.
- First in paragraphs (1) – (8) the learned Deputy Master provided an order which attempted to provide a solution to the fundamental problem of Mr Jones' evidence. He relieved the Claimants of any obligation to reveal the identity of Mr Jones or any facts which would place his identity at risk of disclosure. He permitted redaction of the report by redacting the expert's name, his address, and those parts of the report concerning his qualifications, expertise and experience. He relied upon an affidavit of Ms Rylatt of Rylatt Chubb to verify the qualifications of the Claimants' expert which the Claimant was willing to reveal. He gave the Defendants permission to serve their own expert evidence by 29th September 2011 (paragraph (6)).
- In paragraph (9) he gave the Claimants permission to serve further witness evidence as to fact.
- Finally in paragraph (11) he ordered "that all witness evidence who have given written evidence in these proceedings shall attend for cross examination at the said hearing if notice in writing shall have been given of the party's desire to cross examine them at least 28 days prior to the date fixed for the said hearing to commence, provided that the Judge shall decide whether and if so on what terms such cross examination shall take place". Paragraph 12 provided for there to be a trial of the issues with a 2-3 day estimate.
- Neither party appealed that order. However it is quite clear from the directions that the parties acknowledged not only that this was not a "normal" application in these procedures but there would be a trial of it with an estimate of 2-3 days. In my view that was the correct decision but it was not my decision; it was the decision of the Deputy Master in the light of submissions made by both parties. I find paragraph 7 of the Claimants' closing somewhat surprising. I am not aware of any objection or complaint made about the procedure until that closing was received.
- Further the procedure was under challenge. The Defendants issued an application on 19th January 2012. In that application the Defendants sought to revisit the Deputy Master's order in relation to the identity of Mr Jones.
- That was vigorously opposed by the Claimants.
- Further the factual evidence was significantly challenged. I refer by way of example to two points made in the Defendants' skeleton argument for the hearing of 8th February 2012. First in paragraph 70 they submitted that Mr Mengiste's evidence was entirely unreliable and referred to findings in the Ethiopian Courts that he acted in bad faith and had deliberately sought to damage the Defendants.
- Second in paragraph 71 they challenged the worth of Mr Jones' evidence because of the matters that were excluded from his report.
- In paragraph 72 they went on to set out significant challenges to his report. These were not merely expert nature challenges. In paragraph 72 they said "further [Mr Jones'] reports are riddled with inaccuracies, omissions, mis- characterisation, exaggerations, and inappropriate assertions of fact….. which both indicate his/her inherent unreliability and are also inconsistent with the proper expression of an independent expert's opinion." They then gave 5 examples.
- Faced with that namely a wholesale challenge to factual evidence and a wholesale challenge to the expert evidence it is difficult to see how I as the Judge appointed to hear the trial of this issue could realistically do it simply by looking at the affidavits and resolving the inconsistencies. I accept that is usually done in cases in relation to jurisdiction. However the very nature of the disputes made that impossible. I do not know for example how I can possibly decide whether or not Mr Mengiste's evidence is to be relied upon because of determinations in the Ethiopian Courts of bad faith. Equally I could not have known whether any reliance whatsoever could be placed on Mr Jones' evidence when it was proposed by the Claimants that I would not see the matters which were being withheld from the Defendants. It was therefore essential that the Claimants had a fair opportunity to present their evidence on this trial to see whether they were justified in maintaining this action within this jurisdiction. It is not a trial of the action as the Claimants in their closing mis-characterise it; it is a trial of that point. I accept and have always accepted that the Claimants only have to show arguments supported by cogent evidence that have a real prospect of success that there is a real risk that they will not obtain a fair trial in Ethiopia. However (like for example summary judgment applications) that does not mean that the Court accepts evidence merely because it is in a witness statement.
- Equally I was unwilling to accept Mr Jones' evidence in the format presented to me on 9th February 2012. For all I might know he could have no credible qualifications to give expert evidence in this case.
- That fear (which echoes the Defendants' fear) has proven remarkably prophetic. As I will set out in the confidential judgment where I will review the expert evidence Mr Jones' evidence showed the following:-
1 He had very little appropriate qualification to give expert evidence on these matters.
2 He did not understand his duties as an expert to the Court.
3 These duties and his potential exposure if his evidence was given recklessly or negligently was not explained to him by the Claimants' lawyers when he signed his experts report (contrary to the Expert Witness Protocol). This latter point I found particularly concerning. In effect Mr Jones was thrown to the wolves without any proper protection or advice as to the nature of his role and his duties and his potential liabilities.
- In the light of these difficulties I did revisit the order of Deputy Master Mark. On 9th February 2012 I made an order for the further consideration of the trial of these applications. The estimate with the agreement of Counsel (naturally) was extended to 5 days. That was on the basis that all parties accepted that the issue could only be resolved on the basis of live evidence and cross examination.
- I created a regime whereby Mr Jones gave evidence anonymously. However to protect him his identity was only revealed to the Defendants' Counsel, his examination and cross examination took place in camera and only Counsel and myself took part. His examination was split into two parts first as to his relevant expertise which took place in camera and second as to the substance of his report after the Defendants and their legal experts were given transcripts to enable matters to be put to the witness.
- With those protections Mr Jones gave evidence. Without these changes I would not have allowed Mr Jones' evidence to be received. Thus the procedure enabled the Claimants to present their case. They only complain about it after the event.
- I made no order beyond Deputy Master Mark's order as regards the lay evidence. However the parties clearly understood that lay evidence would have to be called if not agreed.
- Therefore the unusual course the trial of these issues took was entirely in accordance with the way in which the parties thought it would have to be dealt with when they applied before Deputy Master Mark for directions and was inevitable given the root and branch challenge to Mr Jones and the serious issues as to the lay people's evidence.
- This was well demonstrated by the Inventory issue. The Inventory was relied upon heavily both by Mr Jones and the Claimants. Their case was that the Inventory represented an agreed document as to what items of machinery the Defendants had received from the Claimants under the contracts. That being the case the Claimants and Mr Jones analysed the Inventory and came to the conclusion that it matched the entirety of the machinery which the Claimants contended alleged to have been provided under their contracts. The significance of this of course is the fact that the Defendants in the Ethiopian proceedings successfully established that the machinery the Second Defendant hd paid for was never delivered which meant that the payments that had been made were repayable as there had been a failure of consideration.
- This led the Claimants to submit that this fresh material evidence showed that the original trial was null and void because it had been obtained by fraud, forgery and perjury.
- The First Claimant (called Mr Mengiste) gave evidence on 8th May 2012 (pages 55 and following). He was not the person who had signed the Inventory on behalf of the Claimants that was Mr Mulatu Admassu. It was not proposed for Mr Admassu to give evidence by the Claimants. No explanation was given for his non attendance as a witness or even his non provision of a witness statement. Given that, of course the absence of an explanation as to the above weakens the Claimants if they challenge the Defendants' witness as to the signing of the Inventory. It is well established if a crucial witness does not give evidence without explanation the Court is entitled to infer that he has not been called because he would not support the case. However that became somewhat academic in this case.
- The Defendants' signatory to the Inventory was a Mr Teferie. He did provide a witness statement. However he was having trouble obtaining a visa to come and give evidence. There were also difficulties in him being permitted to give evidence to this Court via a video link in Ethiopia. There were difficulties about him giving evidence by video link in a different country. What is a matter of great regret in this aspect is on investigations with the UK Border Agency ("UKBA") it turns out that Mr Teferie had his application approved on 10th May 2012. However for some reason that was not passed on to the British High Commission in Nairobi. This was only revealed in a witness statement provided on behalf of the UKBA by Karen Evans a senior executive officer on 25th January 2013 pursuant to my investigation. That could have caused great problems for the trial.
- On 10th May 2012 it did not appear to be a problem.
- This was despite the fact that Mr Mengiste's evidence took a surprising turn. On 9th May 2012 I asked him the following question:-
"Mr Teferie, if he gets his visa, he is going to come and give evidence before me to the effect that the Inventory report was not conclusive. Do you accept that?
A: was not conclusive meaning
Q: meaning that you should not take at face value what was said in it necessarily?
A: The Inventory report in and of itself but without the context does not give much information.
Q: Absolutely. That is what he is going to say. I do not know whether you accept that or not? If you accept it fine. If you do not accept it, your witness is not going to be here to contradict what he says, is he?
A: It is the first inspection report……
Q: You know I am not asking you about that. I am asking you about the phrase "the Inventory report was not conclusive."
A: Was not conclusive.
Q: That is what he was saying
A: Further inspections are necessary. That much I accepted. I was never asked to confirm that the First and Second Defendants purchased and delivered items. What we asked of them was not to verify who paid for it. What we asked of them was to the existence of the machines.
Q: So there is going to be no challenge to what he says he knows is there? Because if there is, I will not have your witness giving evidence to contradict him, will I?
A: As long as it is limited to the existence of the machinery, the existence of the goods for me the interpretation, for me I will have no problem."
- At the conclusion of those questions I asked if anybody wanted to ask any questions. Neither party did.
- After that exchange Mr Hollington for the Claimants said this to me:-
"My Lord, before I call Mr Kantu, could I just mention in relation to Mr Teferie we have indicated that, obviously on the basis that we have not put in evidence to directly contradict the most important part of his evidence, but whilst we do not admit it, we do not see the point in coming all the way to England just to be asked a few questions about what his role was and what he was told by Mr Rashid and what Mr Rashid's role was in it"
- I replied:-
"if you accept his evidence, fine. If you do not accept his evidence and there is a conflict between what you understand to be the position then your witness ought to be here. If there is no reason why he is not here, absent any other explanation for his absence I will conclude as I have decided a whole string of cases starting with Lennox Lewis v Eliades that he will not come because he will not support your case……I do not know the extent to which you are going to challenge Mr Teferie at the moment but there are some obvious things, which I took to Mr Mulu on a brief excursion of it. But if you are going to put things that he is wrong and that other things are put if you have not got a witness then you will have to explain it to me what weight I give to your challenges in the light I have referred you to".
- Mr Hollington replied:-
"My Lord there is no point getting into a debate now. I merely mention it in case it was thought we had required Mr Teferie to come all this way without any intention to cross examine at length. We do not".
- Later I made observations about the Inventory (page 76):-
"I think Mr Mulu described the Inventory as "the most important document." I am not sure it is quite as important as you would hope, but when there is going to be issue over how this Inventory ended up in the form it did I have got to decide what the Inventory was for, and what it achieved, and what the parties believed it was achieving…….I might only have to decide at this stage there is cogent evidence that this Inventory shows the Defendants might have perjured themselves. I think that is the threshold. You do not get anywhere, in my book, if you do not produce your witness to deal with conflicts over the Inventory without cause."
- After further exchange Mr Hollington asked to reconsider his position on the 10th.
- On the next day Mr Hollington made an application for an adjournment. His basis for that is what he said:-
"Mr Hollington: This application [is] in order to enable us to put in further evidence. My Lord, it arises out of the questions that my client gave late yesterday afternoon in response to questions from My Lord when he essentially confirmed much of what he stated in paragraph 21 of Mr Teferie's witness statement. Our recollection is that he said the Inventory was not conclusive – which is what Mr Teferie said.
Mr Justice Peter Smith: I do not recall him saying that. But if he said it, he said it, you put it to him and I thought he accepted it. But one might have to look at the transcript. That was certainly my impression.
Mr Hollington: That is our impression of the answer he gave. My Lord, I could put him into the witness box in order to reconsider the matter, but that does not it seems to me, to get over the problem that arises out of that answer because we have communicated that evidence to Mr Jones, and I am instructed that his expert reports should be read on the basis that he was assuming that the [Inventory] was a binding agreement between the parties so if that is not the case, then the conclusion he draws out on that basis are not valid…...
My Lord what we need to do is get Mr Jones to produce a report not based on what the Inventory alone, on its face, proves but on the material that underlies it. He has, in his reports, proceeded on the basis that on its face that is a binding agreement which the parties cannot get out of under Ethiopian law. That proves, in his opinion that the judgment in Ethiopia was obtained by fraud. If it transpired that contrary to his understanding, the Inventory itself does not amount to a binding agreement between the parties, then he has to abandon his reliance on what the Inventory on its face says and go to the underlying documents".
- It is impossible to overstate the damage this part of the case has done to the Claimants. As I have said Mr Jones relied heavily on the Inventory as did the Claimants in their opening as showing that the Inventory was binding and conclusive and therefore constitutes an admission that the machinery found at the factory at the time of the inspection was the machinery delivered by the Claimants in accordance with their contractual obligations. If that is correct it appears that the entirety of the Defendants' claim in Ethiopia would appear to be undermined.
- Further on the basis of Mr Jones' report it would mean that the Defendants have committed serious acts of perjury and in his view of Ethiopian law the judgments were null and void.
- Mr Mengiste in his exchange before me whilst not explicitly accepting that the Inventory was not conclusive (as I said to Mr Hollington on 9th May 2012) nevertheless gave evidence in answer to those questions which could only lead to the conclusion that he accepted that the Inventory was not conclusive.
- That means Mr Jones' evidence simply falls away because it is based on a false premise. In reality if the matter had stayed there that would have been the end of the Claimants' case.
- Mr Hollington necessarily made the application in the hope that Mr Jones would come out with a fresh report which would enable the Claimants' case to survive. That application was strongly opposed by the Defendants. Mr Hollington initially asked for an adjournment for 6 weeks. The first difficulty about any further adjournment was my availability. I was listed to hear in early May a serious application in the case of the Royal Bank of Scotland v Hicks and Gillett (on appeal)  EWCA Civ 1743. Next I was the Judge deputed to hear the Farepak case which was scheduled to last for the remainder of the term. However that collapsed towards the end of the term (but that was obviously not known to me in May). The pressures of the Division however required me to hear another case which took up the rest of the term. In October after the first day on 1st October I was programmed to sit in the Court of Appeal for 3 weeks and shortly thereafter I was programmed as the assigned Judge to hear an extensive fraud case which I did hear and which lasted the rest of the term.
- It followed that any adjournment if acceded to unless special arrangements were made in the vacation would have meant the case would have gone off until 2013. This merely reflects how busy the Chancery Division is. It meant however that in my sitting pattern from early April 2012 to December 2012 I continuously sat with very little time in between.
- Naturally the Defendants opposed the application. However I delivered a judgment where I reluctantly acceded to the Claimants' Application and I directed that the case be heard in the long vacation on 13 and 14 August 2012 (part of my vacation Judge sitting). This seriously impacted on Mr Spink QC's personal circumstances. I will not set them out in this judgment; they are set out in the ruling I made on 10th May 2012.
- I therefore threw the Claimants a life belt to put in supplemental evidence by Mr Jones in effect rewriting his expert report. As set out in the commentary on the expert report he went far beyond that and produced fresh material which was not strictly in accordance with the order I made on 10th May 2012.
- In addition I made an order that the Claimants pay the Defendants' costs wasted by this exercise. I assessed those on the basis of brief fees that would have to be repaid to Counsel for the Defendants to re-familiarise themselves with the case 3 months later and other Defendants' costs. I ordered the Claimants as a condition precedent to pursuing the action further to pay £100,000 on account. This they did.
- Like the other orders I made in February the Claimants did not challenge this order nor seek to appeal it. It was for their benefit entirely.
- But for this successful application for an adjournment the evidence would have been concluded in May and the Claimants would have lost the jewel in the crown of their case.
- It follows therefore that despite the Claimants' complaints in their closing about the way the case has spun out over a year everything from May 2012 has been as a result of their actions.
- The first was this adjournment to obtain a fresh start with Mr Jones.
- The second arose in August in relation to Mr Teferie.
- As I have said in May Mr Hollington who then appeared for the Claimants indicated that he did not require Mr Teferie to give live evidence. This coupled with the failure of the Claimants to call their witness meant that their evidence on the Inventory was fatally flawed.
- As regards the credit of and credibility of witnesses it is essential in my view that if a witness is to be challenged the points must be put fairly to him in cross examination. The reasons for this are obvious but sometimes need to be stated. First it gives the Judge a proper opportunity to assess the witness fairly in front of him and form his view as to his veracity. That is a vital tool for trials (whether of issues or otherwise) for a Judge in this jurisdiction. Second it gives the opportunity for the witness to present himself and confront the allegations that are made against him.
- It follows therefore that if a party does not put points to a witness it is completely inappropriate to allow them in the closing speech to criticise that witness' evidence when he has not been challenged in the witness box. I never allow it to be done. This was made clear to the Claimants in August. By that time Mr Hollington had dropped out of the case and the Claimants were there and thereafter represented by Mr Ashworth QC who has provided the Claimants' closing submissions. The entirety of the set aside days on 13th and 14th August were taken up by Mr Spink QC's cross examination of Mr Jones.
- The case therefore was required to be re-fixed for the cross examination of Dr Haile the Defendants' expert.
- Mr Ashworth took onboard my observations about the consequences of (1) not calling the Claimants' witness in respect of the Inventory and (2) not challenging Mr Teferie's evidence. He therefore on 22nd August 2012 applied for permission to have Mr Teferie called for cross examination. Despite the understandably strong opposition from the Defendants I took the view that justice again required the Claimants to be given a full opportunity to present their case and that Mr Hollington's decision was capable of being reviewed by Mr Ashworth QC and further that he could resile from that position. This was during the course of the trial of the issue and in my view justice required the Claimants to be given the fullest opportunity to present their case on the Inventory.
- I therefore granted the Claimants permission to cross examine Mr Teferie at the yet again adjourned hearing on 30th and 31st October and required them to pay the Defendants' costs of securing Mr Teferie's attendance. Provisions were made addressing what was to happen if they could not secure Mr Teferie's attendance either by witness attendance or video link.
- The UKBA once again unhelpfully refused Mr Teferie a visa (forgetting they had granted him one in May but not told anyone about it save the Kenyan High Commission). Mr Teferie gave evidence by video link. This evidence by the nature of video evidence was not entirely satisfactory. I will deal with that when I come to analyse the factual evidence.
- It follows therefore that the hearing was adjourned from May to August at the Claimants' request. The Claimants sought and obtained permission to recall Mr Teferie in October and the balance of the hearing in October was taken up with Mr Ashworth's cross examination of Dr Haile. In the event that overran so that Mr Ashworth's cross examination of Dr Haile continued on 6th November. The closing submissions were then relisted for 20th December but did not proceed because I did not have time to digest the lengthy closing submissions.
- Undaunted the Claimants produced yet more evidence for the adjourned hearing on 30th October 2012.
- This was a witness statement of Ms Rylatt the Claimants' solicitor. The evidence fell into 2 parts. That witness statement had been exchanged between the parties in August but was not provided to me until 30th October 2012. The first part is an update as to events in Ethiopia since May 2012. Obviously if the trial of the issues had finished in May that evidence would not have been required. No objection was taken to that evidence.
- The second part (paragraphs 6-9) was somewhat different. This was permission to rely on 2 potential witnesses by hearsay a Mr Cantu and a Mr Pedrini. In fact Mr Cantu gave evidence in May, Mr Hollington sought to supplement his evidence and I ruled against that. No challenge was made to that decision. This was in effect a re-run as to that. Mr Pedrini's evidence (and that of Mr Cantu) is to the effect that neither was willing to give evidence in Ethiopia because of the situation there. Mr Spink QC objected to this evidence because it was important, it was hearsay, it was late and he could not fairly present the case on behalf of the Defendants.
- Mr Ashworth QC reminded me that the case was to be a summary procedure to be dealt with robustly as to whether or not it was the forum conveniens. Second (as if I needed reminding of this) I was required to do justice between the parties.
- I ruled against him on this evidence (for the first time in regards the Claimants). The end of the road had in my view had come as regards further evidence. Mr Spink QC would not be able to challenge this material and there was absolutely no reason why this evidence could not have been produced many months or even years ago. No reason was produced for its late production; it was simply a party using delays to improve its case.
- I observed that the case had already reached close to breaking point about the acceptability of time the case had taken. I understand the Claimants in their closing to be elevating that observation to a criticism of me for the length of the trial of the issues has taken. It is in my view completely unjustified.
SUMMARY AS REGARDS NATURE OF HEARING
- I reject the Claimants' criticism. The procedure whilst unusual was already pre-set by all parties as a result of the order of Deputy Master Mark. The case was light years away from the type of case contemplated by Lord Templeman in Spiliada. The nature of the Claimants' case was such that for any decision to be made on whether or not the Claimants had a credible case which showed they were justified in their stance that there was a prospect that they would not have a fair trial in Ethiopia needed to be examined. That examination proved to be the correct course.
- The two lynch pins of the Claimants' case namely the evidence of Mr Jones and that of the Inventory collapsed spectacularly. The case thereafter was effectively a complete re-run based on Mr Jones' later expert reports.
- At no stage was any objection made to the procedure; by the time the case came in front of me in February 2012 the procedure was clearly mapped out. Virtually all of the evidence heard related to the expert evidence.
- Almost all of the time from May has been taken up by indulgences I gave to the Claimants. The purpose of this was to enable the Claimants to have the fullest opportunity to present their case.
- The criticism of my use of the word "trial" in the Claimants' closing is somewhat difficult. If it is to be inferred that I was trying the whole action I simply reject it. However I was trying the issues. I was directed to do that by the order of Deputy Master Mark at the instigation of the parties. I accept that that does not mean that I have to decide definitively whether or not the Claimants' justification is correct. I have to decide in effect whether they have a genuine case which has real prospects on the basis of cogent evidence. For the reasons that I will set out further in this judgment I reject almost the entirety of the Claimants' case save one which has troubled me and still troubles me.
EXPERT EVIDENCE:- A CRITIQUE
- I am criticised in the Claimants' closing for the way in which it is alleged I treated Mr Jones.
- The problem with Mr Jones was that he was an inexperienced expert witness. He had never given evidence before in any jurisdiction. That was known to the Claimants' lawyers. Despite that no attempts were made to assist him in the giving of evidence as an expert in that regard. It is plain that he did not understand his duties as an expert to the Court and as will be seen in my detailed analysis in the confidential judgment he repeatedly strayed into the argumentative. Further he made strongly worded criticisms which were simply not sustainable on the thought processes in his report and this was cruelly exposed by Mr Spink QC in his thorough and comprehensive destruction of him as an expert witness.
- It is plain from the exchange that took place before lunch on 14th August 2012 that Mr Jones simply did not understand his role as an expert witness. Further it was plain that he did not understand the consequences that might flow personally to him if he gave evidence which I found to be reckless or negligent. The reason for this was once again he had not properly been assisted by the Claimants' lawyers in respect of his evidence. It seemed to me that it was actually unfair to Mr Jones to be giving evidence being cross examined vigorously by Mr Spink QC. I reject that criticism set out in paragraph 84 above. It seemed to me clear that Mr Jones was blissfully unaware of the potential consequences. Mr Ashworth QC in his closing criticises me for that but Mr Jones was labouring under difficulties which were caused by his lack of understanding of his duties and the consequences of a finding that he broke his duties. The fault for this lies entirely with the Claimants' lawyers and examination of the transcript shows in my view that my concerns were legitimate and that I was right to raise them. It is not my fault that Mr Jones did not understand how he should give his evidence and the consequences if he failed to give his evidence in a proper way.
- I reject the submissions of the Claimants that this intervention affected Mr Jones' evidence as they submit. In fact my conclusion about Mr Jones is that he gave his evidence honestly but was of no help to me as an expert because of his lack of expertise and because of the weakness of his evidence. It was important for me to get across to Mr Jones that he was giving large parts of his evidence in an improper way. The purpose of that is to see what evidence was left after his pejorative observations were stripped out. The answer was nothing much of any credibility. I was not surprised his answers were "improved" after my warning. He thought more carefully about his answers because he understood his role for the first time.
- The difficulty was that Mr Jones clearly had something worth to say. He was honest in his evidence, but his answers were coloured by his clear desire to argue the case on behalf of the Claimants and his lack of training as an expert. The exercise of stripping away the irrelevancies in his reports to find something of worth was very time consuming. It is unfortunate (to put it mildly) as I have said, that he was permitted by the Claimants' solicitors to appear as a witness without any proper understanding of the nature of his role and his obligations. That considerably lengthened his evidence. The fault lies entirely with the Claimants' lawyers.
- I should say however that I do not believe he was negligent or reckless; it was simply that his evidence was not good enough.
- Significantly at the end of his evidence Mr Jones volunteered the following:-
"Whatever the result My Lord and I would like to express how grateful I am for the extent of the inconvenience you went through, in order to protect my identity. That is a genuine feeling that I would like to express My Lord. "
- Mr Jones is not an English lawyer. He is giving evidence as to Ethiopian law. He was (as the Claimants' lawyers well knew) an expert who had no expertise as regards giving expert evidence whether in this jurisdiction or elsewhere and this was his first outing as an expert witness. I expect he will remember the experience for some time and will probably have learnt a lot by it. However the fact that he was not aware of his duties and the consequence of the failure of his duties is entirely the fault of the Claimants' lawyers.
- Equally I reject the suggestion that I had made up my mind. I made it quite clear that I had not made my mind up and when I had considered Mr Jones' evidence in the round whilst I rejected it comprehensively I do not find that he gave evidence recklessly. He was not properly prepared for the role. He made concessions and took longer to answer simple questions because he finally realised what evidence he had to give.
- I accept that Dr Haile did not cover himself in glory either. He too was prepared to argue cases for the Defendants rather than be objective as an expert but that was far less than that of Mr Jones. In the event despite the lengthy evidence of both experts I have ultimately found myself as I set out in the judgment unable to derive any significant assistance from either of them on Ethiopian law and the procedures.
- Finally I cannot pass over another apparent criticism of me. In paragraph 34 of their closing the Claimants dealing with the evidence and the very important Fissehaye case which shows that the Cassation Bench of the Federal Supreme Court might dis-apply the 30 day time limit in Article 6. The Claimants assert "the Judge's criticism of Mr Jones in this regard is misplaced [TD4/38/6-15] as Mr Jones was drawing a distinction between the Tigray Supreme Court which would reject a review application out of hand and the Cassation Bench of the Federal Supreme Court which might well extend the 30 day time limit to stop an injustice being caused. The Judge's dislike (emphasis added) of what he perceived to be a new point which he believed contrary to the earlier evidence coloured his view as a witness throughout".
- I find that a quite extraordinary submission. First the idea that that exchange even if it is accurately recalled coloured my view of the entirety of Mr Jones' evidence is quite extraordinary. It is also incorrect. Second the transcript does simply does not bear this complaint out. The exchange arose in respect of the Fissehaye case and the fact that Mr Jones had as a result of the adjournment not merely delivered a report that addressed the consequences of the Inventory not being binding but produced further material elsewhere. Mr Spink took him to his original answers that he had given in May (TD4/34/1). On page 35 I raised the fact that Mr Jones' earlier evidence suggested an absolute 30 day limit on the Supreme Court and it would not entertain an application outside of that Mr Jones said "I accept that, yes." The following exchange then took place:-
"MR JUSTICE PETER SMITH: Your cross-examination, read on to page 57, I think. The theme coming through all that cross-examination, after Mr Hollington's intervention to
assist me, shows that you accepted that the 30-day limit
was an absolute one and that the Supreme Court would not
entertain an application made outside the 30 day period.
A. I accept that, yes.
MR JUSTICE PETER SMITH: Today, you are saying to Mr Spink, as a result of a different decision, that it is possible that the 30-day limit might not be applied absolutely. Now, that is what you are saying now.
A. I am saying now, yes.
MR JUSTICE PETER SMITH: Mr Spink has two points about that. The first one is that you said the opposite when you were examined before, which is correct. You have looked at the transcript.
A. I have.
MR JUSTICE PETER SMITH: The second is that you are saying this for the first time now. It wasn't in your fourth report. It wasn't in your corrections. The first time Mr Spink heard it was when you volunteered it during this series of questions. Now, that appears to be the position.
MR JUSTICE PETER SMITH: Now, as a result of that, I am not sure what you are telling me about the Supreme Court's ability to entertain a review outside the 30 day period.
MR ASHWORTH: My Lord, before the witness answers the question that your Lordship has posed; you referred to the Supreme Court and there are, of course, two Supreme Courts; he referred to the Tigray Supreme Court and the Federal Supreme Court.
MR JUSTICE PETER SMITH: Yes, quite right. The relevant Court to which the application for a review should be made.
A. You are right, my Lord. That will be the Tigray Supreme Court which was the first instance court in this case. And I stand by what I was saying earlier: that that Supreme Court will reject the application, saying the 30-day limit is absolute.
MR JUSTICE PETER SMITH: That is not what you have said earlier today.
A. No. You see, and then I said --
MR JUSTICE PETER SMITH: The other Supreme Court might --
MR SPINK: The Federal Supreme Court.
A. If they appeal from that, on the grounds of a procedural
MR JUSTICE PETER SMITH: Injustice, you said.
A. being allowed to keep injustice going, if that is proven of course, right, just like what happened in the other case. I am saying here there is a possibility, and I think this might. Federal Supreme Court – not even the Supreme Court. The Cassation bench which has the only power to make a new law, and I am here speculating to -- I am being very upfront here. There is that possibility on the basis of what they did in the Tirhas case, but --
MR JUSTICE PETER SMITH: You say you are being upfront but as I understand it, this is the first time you have expressed this opinion. You had an opportunity when you were examined earlier to say, if you go back to the transcript, pages 56 and 57, and you could have said then: but of course, that is the Tigray Supreme Court.
MR JUSTICE PETER SMITH: There is this decision in the Federal Supreme Court which admits of a discretion, possibly. If you had said that, Mr Spink might have taken you up on that and Mr Hollington might have said: there is more evidence. But you didn't. You said: no way would this application be entertained outside the month period.
A. I accept that, yes.
MR JUSTICE PETER SMITH: So this is a significant change then; isn't it?
A. I am sure they -- they went further into this, especially in reading the Cassation Court judgments. I am sure my judgment has evolved on this. But even now, I am not saying any concrete -- I am not saying in any way that the law is different. I was just talking about a possible change to the law itself, really. That is what I am saying. Otherwise the law, as it stands today, in the Cassation Court, is very careful in -- you know, going beyond what a clear statement of the law says. It is possible I might still be wrong.
MR JUSTICE PETER SMITH: You see, I did dangle this under your nose when -- if you look at page 56, you volunteered there, at line 24, that the court judicial process would be undermined if the strict rules were not followed. Do you see that?
MR JUSTICE PETER SMITH: Page 56, line 24.
A. Yes, that's what I said.
MR JUSTICE PETER SMITH: So your evidence there was that you could not imagine a judicial system allowing its processes to be undermined by allowing a review outside the one-month period. And I commented --
MR JUSTICE PETER SMITH: -- because it would undermine the process and I commented: not necessarily. The reason I said that, of course, is that in this country, time limits generally are not absolute.
A. I understand.
MR JUSTICE PETER SMITH: The law does have discretion. That would have been a time for you to say: ah, but there is this Cassation decision which might be a question of -- might bring into it a possibility of entertaining the application outside the limitation period.
A. May I please clarify that, my Lord? Here, what I was talking about is, as you remember, in the -- in the report, I said: at that time, they had already given up hope in the independence of the -- in the fairness of the courts.
MR JUSTICE PETER SMITH: I see the point entirely Mr Jones. I can well understand the claim that the claimants have not embarked on the review because they had no confidence. If that is their correct view, it wouldn't have mattered whether they had to apply within 30 days 10 or ten years.
MR JUSTICE PETER SMITH: Whatever it was, whatever the time limits, they were not going to do it. That is a different point. That is a matter for evidence. That is a matter for me to hear why they did not make a new application.
A. I understand, yes.
MR JUSTICE PETER SMITH: Your report here is dealing with the law and the possibility of them applying outside the 30-day period. Do you understand?
A. I understand, yes.
MR JUSTICE PETER SMITH: This is the argument being run by you to explain in law, they could have made this application -- that is what you are telling me now – to the Cassation Court outside the one-month period
2 MR JUSTICE PETER SMITH: Is that what you are telling me now?
A. The -- the right that they have, if they discover new evidence, for example, now, either to go to the Tigray Supreme Court within 30 days; if it is after 30 days, they still have to go back to the first instance court, the Supreme Court here. But the likelihood, as I said, is the court is not going to accept that. So they might be able to go to the Federal Cassation Court, which could, if it follows the Tirhas line, could take a more liberal view on this.
MR JUSTICE PETER SMITH: Mr Spink, does your expert accept that or not?
MR SPINK: Well, he has never heard it before. It has never been said. I am going to cross-examine anyway on the merits for a couple of minutes, when your Lordship has finished on the: is it a new point or not, point.
MR JUSTICE PETER SMITH: It plainly is a new point.
MR SPINK: It is a new point.
MR ASHWORTH: My Lord, might I just note there, on page 57 and page 58, the point was made by Mr Hollington that -- we wandered from the past examination into the merits; and he said he was going to have to deal with it further in the legal examination; and in the re-examination. So it came at a slightly strange place.
MR JUSTICE PETER SMITH: But the debate I had flagged up didn't take place, I don't think, about this.
MR SPINK: No, your Lordship said -- I am sorry. If you read on, your Lordship said: well, he is not going to change his answer on this. You made it very clear that he would not be revisiting this point. In any event, if he wanted to revisit this point and change the evidence that he had given in his report and in the personal examination, the remedy would have been to serve some evidence, along with all that other evidence that was served on 31 May, raising this point. This is completely new.
MR ASHWORTH: My Lord, simply to flag up, this is a matter for submissions. I don't want to interrupt the cross-examination of the witness, but I was not there on the last occasion. I can only go to the transcript. It is clear at page 58, my Lord, line 7, Mr Hollington made some observations and he said at line 20:
"... in which case ... we may have to come back to ... re-examination ..."
Mr Spink said:
"Yes, I understand ..."
MR SPINK: But you haven't come back to it in examination.
MR JUSTICE PETER SMITH: This was the first hearing. The bits you just mentioned, I think, were at the second hearing when the adjournment application was made.
MR ASHWORTH: My Lord, that is on the transcript, the first hearing.
MR JUSTICE PETER SMITH: Where is it?
MR ASHWORTH: Page 58, my Lord.
MR JUSTICE PETER SMITH: I know that, but there was no coming back on the point that I said. Mr Hollington's re-examination did not extend to this, I don't think.
MR SPINK: No, it didn't.
MR JUSTICE PETER SMITH: I am not shutting anybody out, but Mr Spink is entitled to test this new opinion. It is plainly a new opinion.
MR ASHWORTH: My Lord, I don't for one moment say he is not, but I just want the witness to understand -- or it to be put fairly to the witness how things were left on that last occasion. Maybe I misunderstood, my Lord, but that is how --
MR JUSTICE PETER SMITH: I understand that. What should have happened is that if he was going to introduce a change to his answers, and it is a radical change, isn't it, really. Because he was quite firm. I think the most telling one is still that at page 56, I think. Page 56/24:
"I am answering here: no, it is not a ground in law because in my mind, I cannot imagine a law ... a legal system that would say if you lose confidence in a system, then the time limit will be extended or anything like that." So --
MR ASHWORTH: It is qualified, if you lose confidence in the legal system. That's -- my Lord, we will have to debate this later in submissions. I am sorry for interrupting.
MR JUSTICE PETER SMITH: Well, no, I think we do debate these things now because any questions that arise in the legal submissions which are not going to be until October, I don't want to have to meet an application by either party for Mr Jones to be recalled to clarify his evidence.
A. I am sorry, my Lord. But here really, what I was -- what I was talking about is: does the loss of confidence suffice under Ethiopian law, as grounds to extend the 30-day period? That is all I was talking about here.
MR SPINK: Yes. You said: no, it doesn't.
A. It doesn't. I understand --
MR SPINK: Unequivocally. And you gave a reason – excuse me -- on 56 why the courts would not allow that.
A. I agree with that, I said --
Q. Because it would undermine the system of justice?
A. It would.
Q. Now you are saying that if you took it to the Federal Supreme Court, the Federal Supreme Court would undermine the system by allowing an extension of time?
A. Not on -- not on grounds of loss of confidence. On --
Q. Well, on what grounds, then?
A. Whatever grounds they may have. I don't know --
Q. But there isn't a ground. The only ground you have put forward --
R JUSTICE PETER SMITH: Can you not talk over each other? It is difficult for the transcribers.
A. I am sorry.
MR JUSTICE PETER SMITH: It is both of you.
MR SPINK: The only ground you put forward on 110 is loss of confidence.
A. That's -- but I also said in that place that loss of confidence is not enough.
A. Under Ethiopian law.
Q. Well, there we are. There isn't any other ground to put forward?
A. And -- no, nor am I proposing anything new now. What I am saying is: that 30-day limit, seen independently of the issue of confidence, if they -- if the reason is lack of confidence, I can't see them going back to that court anyway. I am saying here: the 30-day limit, seen on its own, there are -- there might be room for it to be extended. That is all I am saying. I am not in any way suggesting that if the reason is the lack of confidence of the parties, that would apply. If they don't have the confidence, they won't go back to it anyway. That is how I put it.
Q. But you cannot suggest any other ground -- other than the one that you did put forward in 110, you cannot suggest any ground that is applicable to this case, that would cause the Supreme Court to change the law?
A. I don't have any other grounds, no.
Q. Right, okay.
A. Because this is -- that lack of confidence thing came from the clients -- the claimants themselves, and that is what I was talking about.
Q. I am going to finish on the merits of this point. You have, for the first time today, suggested that the decision in the Fissehaye case gives us a clue and might be a reason why the Supreme Court would extend the 30-day limit in this case. That is what you were saying just now. It is the Fissehaye case that you are relying on today as your hook, so to speak, as your indication that the Supreme Court.
A. I accept that.
Q. -- might -- yes?
Q. Fissehaye, you dealt with in your main report at paragraph 94 onwards, 94 to 96.
Q. So it was a case that you had already considered in your first report; yes?
Q. Fissehaye changed the law at the Supreme Court level. Previously it was thought that if you had already appealed a decision, even if you subsequently got new evidence that suggested the decision had been wrong, because you had already appealed, you couldn't go for a review on the basis of the new evidence. That was what was previously thought to be the law.
A. It was not just thought to be the law. The Cassation -- no, no, I am supporting what you are saying, Mr Spink.
MR JUSTICE PETER SMITH: If you are, it is easier if you say "I agree".
A. I agree.
MR SPINK: Fissehaye said: the procedural bar of having brought an appeal, the procedural bar, shouldn't stand in the way of having a look at that evidence and bringing -- enabling a review to be brought. That is what it said, didn't it?
A. I agree, I agree, I agree.
Q. This case -- Fissehaye said nothing about extending the time limit for the review.
A. I agree.
Q. Indeed, it must be the case that in Fissehaye, the review was sought within 30 days of the fresh evidence, which indicated there had been a fraud at the first trial, had been discovered?
A. It was a forgery case and you are right, I agree.
Q. Exactly. This case, there is no bar of the sort that was present in Fissehaye of an appeal having been made. In this case, we are simply talking about the fact that the claimants got their document, the inventory. They realised that it was a crucial piece of evidence and they didn't apply for a review within the 30 days.
A. I accept that.
Q. There's no procedural bar to the court doing justice in this case, as there was in Fissehaye, is there? There is no analogy, in other words, between this case and Fissehaye?
A. Except that in one case, there was the appeal. In this case, there is a time bar. That is the only -- if you call it analogy, that is the only relationship between them….. "
- I am completely at a loss to see how any part of that exchange shows that I was critical of Mr Jones, angry and that this has coloured my view of Mr Jones throughout the entirety of his evidence. In fact as this judgment will show further below I believe that his evidence of the Fissehaye case is important and shows that the Claimants do have a possibility of a review at the Cassation Court outside the time limits if they can adduce fresh evidence which is justifiable and which it is appropriate to adduce it. Dr Haile agrees with this and as his cross examination shows he frankly admitted that he had missed the Fissehaye case.
- Therefore quite contrary to the unjustified observations in closing the exchange elicited from Mr Jones a valuable piece of evidence which I accepted.
- It is clearly a fledgling development in the Appellate Court in Ethiopia. I set out below the exchange that took place further on in the cross examination of Mr Jones:-
" MR JUSTICE PETER SMITH: But the Fissehaye case, as I understand it, establishes that merely because you have appealed a decision does not disentitle you to having a review. We have a similar procedure in the Court of Appeal here. You can appeal a decision and if the Court of Appeal dismisses your appeal, you can nevertheless invite the Court of Appeal to review their decision; a separate independent right. So Fissehaye is simply saying: the procedural bar of an earlier appeal is not correct.
MR JUSTICE PETER SMITH: But as I understand it, it didn't say anything about extending the 30-day limitation period.
A. It did not.
MR JUSTICE PETER SMITH: So furthermore, the claimants in this case obtained their evidence, as I understand it, within the 30-day period; but for reasons that they no doubt will explain and for me to find, chose not to apply for a review.
A. That's correct.
MR JUSTICE PETER SMITH: So on that basis, what are we arguing about here? It is simply for the claimants to explain why they did not avail themselves of an opportunity to seek a review of the decision.
A. I accept that.
MR SPINK: The position is that on the current law in Ethiopia, certainly, the fact that they may have, in their own minds, had reason for not bringing the application within 30 days doesn't help them. That is an absolute time limit, the 30-day time limit.
A. As the law stands today.
Q. As the law stands.
A. I agree entirely.
Q. It would require a change in the law, at Federal Supreme Court level?
A. Cassation level, yes.
Q. I suggest to you that there is not any indication in Fissehaye that any such change in law would take place.
A. I think I will only be repeating myself, so if you --
Q. If you disagree with that. If you --
A. If you take it that way ...
Q. You think Fissehaye indicates that the court would change the law in relation to the time limit?
A. No, it doesn't. I am saying here: if you look at appeal as opposed to a general bar, and a time -- a time limitation period as opposed to a general bar, there is that level of similarity. Beyond that, there is not -- there is not".
- What the Fissehaye case showed was that the Cassation Court was prepared to allow an application for a review under Article 6 of the Ethiopian Code despite the fact that there had been an appeal. The reasoning behind this is that the Cassation Court believed:-
"As we have already seen, the controversial phrase of the provision is that shown under sub No. 1 that reads as "… before filing complaint against judgment or decision or order against which appeal can be filed…." If we take the phrase "before filing complaint and heard" and define it word by word, we may reach on conclusion as it says the request for judgment should e filed before the complaint filed appeal against he rendered decision. However, as the provision should be generally interpreted with the other phrases it contains and the conditions set under sub No1 A and B as well as verifying with the overall intention of the procedure code; it is thought that the conclusion we may reach on in such interpretation will be broader than that of the word by word interpretation of a single phrase.
The other point to be considered in interpreting the provision is the reason why it is specified to file request for judgment before filing appeal there is no benefit to make except wasting money, time and labour and complicating the case to file request for judgment to the court decided while the case is being under court process of appeal hearing, filing one case both to the lower and appeal hearing court thinking that the decision will be corrected (see again) by the appeal hearing court. It is also possible to consider that the appeal hearing court will make the appropriate correction examining it in respect of the C/P/C/No. 345 and 182.
On the other hand, though the court prefers to take the better and reasonable procedure in this level, it is not possible to say that the law doesn't consider that request may be arrive stating as the basic ground for the decision is any (or all) of the functions shown under 6/1/A/. As it is tried to state in detail above, the intention of the law is to reach on the truth. To reach on the truth, in terms of justice rendering, is the highest value able task. We understand from the general legal interpretation principle that it should be in the way it can make objective effect on the controversial issue, we have found it appropriate to have the belief that the provision of C/P/C/No.6 should be equally applicable whether appeal is heard or not as far as complaint is filed stating that the former decision is based on false evidence or crime related acts and the court finds it sufficient and convincing."
- This showed a greater willingness of the Cassation Court to review cases despite procedural defects if justice required it. There was no issue in the Cassation Court for the application being out of the 30 day limit. This shows to me that the Cassation Court is developing a more flexible approach. I believe that if the Claimants presented their case for an Article 6 review based on the Inventory and the role of Judge Mehretab (neither of which has been taken to a superior court) it has a prospect of persuading the Cassation Court to review what has gone on.
- Equally it has as I shall develop below a case which can be brought to seek to set aside the judgments on the basis that they were obtained by fraud or perjured evidence. The Claimants also assert they have arguments based on Ethiopian law to deal with limitation and res judicata issues.
- If this case remains within these courts in effect the court will try the case according to Ethiopian law. The parties have agreed that the forum conveniens for this dispute is plainly Ethiopia. The only obstacle to that is the Claimants' contention that they will not obtain a fair trial in Ethiopia. That fairness has not been tested as regards the Inventory and the position of Judge Mehretab. The reason given is that by that time Mr Mengiste had lost confidence in the Ethiopian Courts. As will appear below in this judgment I am not satisfied the Claimants have provided cogent evidence that there is a real risk that they will not obtain a fair trial in Ethiopia.
- It is essential to set out the transcript of this exchange in full for a number of reasons. First I cannot for the life of me see any expression of anger on my part. Second the point Mr Jones was making about the Fissehaye case for the first time in his evidence was that it was possible to use that decision as a possibility of invoking justice to circumvent the 30 day time limit in the Cassation Court for review. The one thing that was clear was that Mr Jones' evidence in that passage was completely unclear. It is a telling example of the difficulties of extracting any sense out of his report.
- I am not sure where this attack on the procedure achieves anything for the Claimants. It is unrealistic in my view to complain when a Judge has tried the issues that he should not have tried the issues and in effect there should be an appeal where no doubt the Claimants will seek an order that the judgment I give should be set aside and a fresh hearing take place in the limited way envisaged by Lord Templeman in Spiliada. It is difficult to see how that can be an appropriate approach. If their evidence on the testing of cross examination is destroyed what is the point of having another hearing for it to be determined that matters are arguable. There has been the argument on the evidence and the Claimants have comprehensively lost.
- I remind myself that the key points which the Claimants placed heavy reliance upon namely Mr Jones and the Inventory were exposed by this exercise of being of no help or of any great significance. Without that exposure the Claimants would have taken this action to trial in this jurisdiction when in my view there is no basis for so doing save possibly in respect of two aspects. Even there I entertain great doubts as to whether there is any case made out by the Claimants on the material before me. I strongly suspect this stance is for the purposes of an appeal because the Claimants believe they are going to lose. This is not the first time that minatory attitude is being demonstrated in this case. I am not impressed with the implied threat nor deterred. For the reasons set out above I believe the Claimants' complaints are unjustified. I repeat no complaint was made about the setting of the procedures in February following Deputy Master Mark's order. It is difficult to see how an appeal involving unsaid criticisms and unsaid points will succeed see Allen v Bloomsbury Publishing Ltd  EWCA Civ 943 as referred to in Sir Martin Broughton v KOP Football (Cayman) Ltd & ors  EWCA Civ 1743 at paragraph 52. If there was to be a challenge to the undoubted exercise of my discretion as to how the issues raised in this action were to be resolved that challenge should have taken place in February when the timetable which the parties had had already set before Deputy Judge Mark's order was refined to deal with Mr Jones' evidence not in unheralded closings after 11 days of hearing.
- I refer to paragraph 4 and 9 – 16 of the Defendants' supplemental submissions dated 18th January 2013 in response to the Claimants' substantive closing submissions criticising the procedure. Those entirely accord with my view.
- Having addressed the procedural and other complaints raised by the Claimants which I reject I will now go on to deal with the other matters in this case.
OUTLINE OF CLAIMANTS' CASE
- The criticisms of the Claimants were 3 fold:-
1 A challenge to the fairness of the entirety of the judicial system in Ethiopia (they having already had proceedings in Ethiopia about these issues).
2 A challenge to what had been decided in Ethiopia (and as part of that challenge the Claimants sought to deal with the objection raised by the Defendants of res judicata).
3 An allegation that the political system in Ethiopia was such that there was a real prospect of the Claimants suffering harm if they submitted to the jurisdiction and brought these proceedings within the Ethiopian law courts.
NATURE OF CLAIM
- The Claimants' case is set out in their Particulars of Claim dated 11th August 2010. Their case is that the Defendants and in particular the First Defendant ("EFFORT") misappropriated the Claimants' 49% shareholding in a pharmaceutical manufacturing business venture in Adigrat in the capital Tigray regional state of Ethiopia. EFFORT was the 51% shareholder.
- The means by which it is asserted that the Defendants achieved this end was the procuring of a Judgment from the Ethiopian Court nominally in the name of the Second Defendant ADDIS Pharmaceutical Factory Plc ("APF"). It was the vehicle for the joint venture between the Claimants and EFFORT but in reality in favour of EFFORT it is contended. Such Judgments were obtained by perjury and other fraudulent means in particular by the deliberate withholding of material evidence.
- The Judgment against the Claimants was enforced by judicial sale of the Claimants 49% shareholding to EFFORT's wholly owned subsidiary the Third Defendant Mesfin Industrial Engineering Plc ("MESFIN") which was completed on 30th April 2004.
- In the Claimants' initial opening (paragraph 6 and following) it was alleged that the best evidence of the Defendants' fraud is what is referred to as the "new evidence" in the Claimants' expert reports namely a signed Inventory report dated 18th October 2005 (after the Ethiopian proceedings had been finally concluded). It was the Claimants' expert's opinion that the Inventory amounted to admission by the Defendants that the evidence which it put before the Ethiopian Courts was false and perjured. In other words whereas judgment was given against the Claimants that the goods and services had not been supplied as referred to in the litigation in Ethiopia the Inventory amounted to admission by the Defendants that they had been and that they were aware of it.
- The Claimants contended it was not necessary in this context as regards their case that the Ethiopian Courts were biased in favour of the Defendants; unbiased courts could equally have been deceived by the Defendants. However the Claimants do not suggest they should raise that issue before the Ethiopian Courts because of their complaints about the conduct of the Ethiopian Courts in the proceedings that had already taken place and generally as regards the prospects of obtaining a fair trial in Courts in Ethiopia. They have not brought their case on the Inventory before any Court in Ethiopia.
SUMMARY OF FACTS
- In early 1992 the First Claimant ("Mr Mengiste") established the Addis Pharmaceutical Formulation Unit ("APFU") in partnership with Mr Araya Workneh ("Mr Araya"). The partnership was later converted to a private limited company in the name of Addis Pharmaceutical Formulation Private Ltd Company ("APF") in March 1993. APF was incorporated under the laws of Ethiopia. At this stage Mr Mengiste enjoyed a 51% majority shareholding.
- Both APF and APFU were established for the production and retail distribution of pharmaceutical products for human, animal and plant diseases in Ethiopia. The factory to produce these products was built in the town of Adigrat in Tigray. It was completed and formally opened in February 1997.
- The Claimants contend that EFFORT wanted the business and expected its owners to hand it over to it.
- EFFORT is a charitable organisation the purpose of which is the promotion of the education, health, economic and social development of people of Tigray. Membership of it is open to all although it does include members who are affiliated to political parties according to Mr Gebrue the former Chief Executive Officer and former board member it includes many who are not.
- Nevertheless it is accepted that certain members of EFFORT and those involved at senior management level are members of the ruling party or hold posts in the government. The Defendants do not accept that that of itself establishes either that those individuals or the government would seek to influence the Ethiopian civil courts where those proceedings to be tried in Ethiopia or the civil courts would allow themselves to be influenced by any form of bias.
- The Second Defendant (APF) is a company registered under Ethiopian law which manufactures and distributes pharmaceutical products. EFFORT is a shareholder in that company. The Third Defendant (MESFIN) undertakes engineering business. EFFORT is also a shareholder in that company.
- The Claimants assert that EFFORT wanted the business. The first step was to persuade Mr Araya it is alleged to give his stake. The Claimants resisted EFFORT's pressure to transfer 2% of the shares to EFFORT it is said which EFFORT wanted so as to give it control. It is said in the face of an explicit threat to his business interests Mr Mengiste acceded to that demand but he asserts there is evidence to suggest the transfer was never effectively carried out.
- Mr Mengiste was the General Manager of APF until he was removed on 12th March 1998 and replaced by Dr Mamo Asgedom. The Claimants assert that it was not done correctly but rather through a letter dated 12th March 1998 from Mr Seye Abraha (being then the CEO of EFFORT) to a foreign business visitor.
- The Claimants allege that EFFORT through APF issued proceedings on 7th July 1998 against these Claimants. The Claims against Mr Mengiste arose out of his role as General Manager. It was alleged that he had entered into contracts for the supply of goods and services on behalf of APF at lower prices or in respect of goods which were not delivered and those paid to the Second Claimant. The Claim then was ETB 8,920,187.47 (said to be USD $1,200,000) plus interest.
- The Claim was amended and ultimately the number of Claims were increased to 9 dealing with further payments for goods and dealings with Serteci Engineering Contracting Company ("Serteci"). The total Claim now was ETB 25,000,000 (or just over $3,200,000).
THE ETHIOPIAN JUDGMENTS
- There has been extensive litigation in Ethiopia. In that litigation the Claimants substantially lost but they did not lose on every issue.
- The first proceedings referred to above led to 2 judgments dealing separately with different parts of APF's Claims issued by the Supreme Court of Tigray (the Regional Supreme Court) in January 2001 and January 2003. Mr Mengiste was found to have acted dishonestly and in bad faith and between them he and the Second Claimants were ordered to pay a total of ETB 13,422,933 ($1,550,000).
- APF appealed to the highest Court in Ethiopia the Federal Supreme Court of Ethiopia in relation to those parts of the first instance decisions which had been decided against it. Mr Mengiste cross appealed but not against all of the elements in the first instance decisions that went against him. In a judgment issued in March 2003 almost all of the decisions of the Regional Supreme Court were affirmed by the Federal Supreme Court although one decision in favour of APF was overturned.
- In 2004 the Claimants petitioned the original first instance Court the Regional Supreme Court to have that Court's judgment reviewed under Article 6 of the Ethiopian Civil Code ("the Civil Code") on the grounds that they had discovered new evidence entitling them to a review. That petition was rejected and judgment issued in June 2004.
- The Claimants then petitioned the Cassation division of the Federal Supreme Court for a hearing by Cassation in relation to the Regional Supreme Court's June 2004 refusal to undertake a review. That petition was rejected by the Federal Supreme Court in February 2005.
- The Ethiopian litigation lasted nearly 7 years from commencement of proceedings to dismissal of the Claimants' petition for Cassation.
- There was extensive and exhausting examination of all of these judgments and argument as to what they meant during the course of the hearings before me.
- It is very difficult to see on the extensive material produced before me (save potentially in one respect which I shall deal with below) anything which can lead me to conclude that the Claimants have even an arguable case (let alone cogent evidence) that the judiciary did not and will not give them a fair trial if they litigate the matters which they contend ought to be litigated despite the extensive proceedings which took place in Ethiopia.
- The single matter of concern appears to be the role of Judge Hiriyti Mehretab. She had 2 roles in the litigation (as I shall set out below) at interlocutory stages in the Regional Supreme Court. In addition she was one of the Judges in that Court which rejected the Claimants' Article 6 application for a review on 10th June 2004. At all material times she was the wife of Mr Gebrue. He was CEO of EFFORT from January 2009 until October 2011 and Board Member from 1995-2001 and 2008-October 2011. He was also Board Chairman of APF from 1997 (on its conversion to a Share Company until 2001). The Claimants allege that they were unaware of this.
- A petition dated 25th August 2004 was submitted to the Federal Supreme Court for a hearing by Cassation. It was allegedly rejected in a one line judgment.
ENFORCEMENT BY DEFENDANTS
- On 14th April 2003 EFFORT submitted a request to the Regional Supreme Court for execution of the judgment. The application succeeded and an auction took place on 25th February 2004 which was approved by that Court. The sale of the Claimants' shares in APF was completed on 30th April 2004 to the Third Defendant at a price of ETB470/$54 per share. This is alleged by the Claimants to be a sham auction.
THE PRESENT CLAIM
- The Claimants' summary is in paragraph 2 of the Particulars of Claim which is that the Defendants by means which under Ethiopian law would be regarded as wrongful appropriated for themselves for no or wholly inadequate consideration the Claimants' interest in the pharmaceutical manufacturing business. It is alleged that the liability is joint and several and they seek the return of the 49% investment in the venture together with interest and further or other loss and damages. The Claimants set out the proceedings as summarised above and allege (section 4 and following) that the Defendants admitted that they were not entitled to the judgments they received in the Ethiopian proceedings because of the fact that they signed the Inventory dated 18th October 2005 which the Claimants contend constitute admissions that the Defendants had actually received the goods which they alleged in the Ethiopian proceedings they had not received and in respect of which the Ethiopian Courts gave them substantial judgment on the basis they had not received them. The Claimants' stance was that the admission meant that it was also an admission of perjury.
- Section 5 of the Particulars of Claim sets out the legal consequences of that allegation (if established) in the Ethiopian Courts. If those contentions are correct it appears to me that the Claimants would obtain full relief in the Ethiopian Courts according to Ethiopian law. Now the effect of Ethiopian law was much disputed in front of me. It is impossible for me sitting in the Chancery Division to come to any conclusion definitively as regards Ethiopian law.
BASIS FOR ACTION
- One has to look at section 8 of the Particulars of Claim to see why despite the Claimants' setting out of a clear line of evidence which supports, they contend claims that they can bring against the Defendants arising out of their fraud and perjury and their detailed setting out of Ethiopian law which entitles to bring that claim why they do not litigate in the Ethiopian Courts. As I have said above the overwhelmingly natural forum conveniens for this litigation must be Ethiopia and that is accepted by all parties.
- In section 8 the Claimants contend the Ethiopian Courts have shown themselves to be unwilling or unable to administer justice fairly and impartially between the parties.
WHAT NEEDS TO BE ESTABLISHED
- Whilst this was a "trial" of the issues as directed with the agreement of the parties by the order of Deputy Master Mark it is not a trial which requires me to decide the case for the Claimants or the Defendants on the balance of probabilities. I accept the Claimants' submission that they do not have to prove on the balance of probability that there will be no fair trial. They have to show that there is a real risk on the basis of cogent evidence that they will not obtain a fair trial.
- Whilst it is the fervent hope as expressed by Lord Templeman in Spiliada above, that cases like this can be dealt privately in the quiet of a room by a Judge without expense to the parties that is regularly a forlorn hope. This case demonstrates that but it is no the first one. I was referred by the Claimants to the Court of Appeal decision in Pacific International Sport Club Ltd v Igor Surkis & Ors  EWCA Civ 753 at paragraph  where Mummery LJ said this:-
"the Spiliada sent out strongly worded signals (a) to the lower court that it is inappropriate in jurisdictional spats of this kind to have long drawn out hearings at first instance….. "
- I have already commented above about the misconceived submissions on how this action developed.
- It is instructive to take on board the actual decision in Pacific International. It was an appeal against a decision of Blackburne J in May 2009. The issue was the same as in the present case namely whether despite the appearance of the natural forum being the Ukraine whether the proceedings ought to take place in this jurisdiction despite the fact that all parties to the litigation and the asset being fought over were Ukrainian and none of them had any connection with this jurisdiction. The judgment of Blackburne J was described as an impressively meticulous judgment. There was no criticism of the exercise that he went on to deal with and no suggestion that he ought to have adopted a different procedure.
- As Blackburne J said in paragraph 41 of his judgment (quoted in paragraph 24):-
"…..the need to examine most clearly the matters relied upon as demonstrating that a fair trial in what is otherwise the appropriate forum for the resolution of the dispute will not be possible….. "
- The test and threshold is fully set out in paragraphs 31-35 of the judgment in Pacific International and I accept as I have said earlier in this judgment this is not a trial to be decided on the balance of probabilities. However it is a trial as to whether or not the Claimants can establish by cogent evidence that they might not obtain a fair trial in Ethiopia. The English Court approaches with considerable circumspection any contention that a potential Claimant cannot obtain justice or a fair hearing in a foreign Court and will require "positive and cogent evidence to persuade it to the contrary" see Abadin Daver  AC 398 at 411 and Cherney v Deripaska (No 2)  EWHC 1530 (Comm) at paragraph  as Clarke J observed these allegations are relatively easily made and are difficult to comprehensively refute. He was persuaded on the evidence before him that the risks inherent in a trial in Russia (assassination, arrest on trumped up charges and lack of a fair trial) were sufficient to make England the forum.
- The Court of Appeal reiterated this test in Yukos Capital Sarl v OJSC Rosnef Oil Company  EWCA Civ 865 at paragraphs 78-80. The Privy Council in the AK Investment case affirmed that the test required was for there to be cogent evidence that there was a risk that justice will not be done in a foreign jurisdiction and it was not necessary to establish on a balance of probabilities that the risk will eventuate. However that is dependant on the circumstances as a whole and the Claimant will need to show that there is a real risk that justice will not be obtained in the foreign Court (see paragraphs 93-96 per Lord Collins). However he also reiterated the need, because of the seriousness of the determination that justice would not be done in a foreign country by a foreign court, for cogent evidence.
- This is essentially a judgment call of the Judge at first instance based on the facts as found by him (see ibid paragraph 139).
- Finally in the context of these cases I refer to the decision of Mr Justice Andrew Smith in Ferrexpo AG v Gilson Investments Ltd  EWHC 721 Comm. In that case he was faced with a contention that there was a real risk that the Claimants would not have a fair trial in the Ukraine for reasons similar to the ones in the present case. On reviewing the evidence he concluded that the Claimants had failed to produce any cogent evidence of that. In so doing he analysed the expert evidence of both sides but without an oral hearing. This demonstrates that the Court can assess the evidence at this stage. It will be seen that the hearing took 4 days. This is another example which goes against the optimistic observations of Lord Templeman.
- Also in that case he considered the nature of evidence that is not direct testimony but such as reports and he said this in paragraph 44:-
"But this is no reason that allegations of the kind made by Ferrexpo need not be supported with evidence that enables the court to examine their basis, and which is sufficiently detailed and focused to justify them. In my judgment, some of Ferrexpo's evidence, including evidence upon which Professor Koziakov relied, is not of this quality. Some of it could properly be described as mere "press or political comment" unsubstantiated by independent evidence, such as Aikens J criticised in Dornoch Ltd and ors v Mauritius Union Assurance & anor,  EWHC 1887 (Comm)."
- I accept the Defendants' submission (paragraph 74 of their closing) that these decisions continue to show the threshold. It has been suggested that the 15th edition of Dicey referred to in paragraph 74 above suggests that nowadays the Court will not generally order a stay of the proceedings see paragraph 12-041 referred to in the Defendants' closing (ibid). I do not think (despite the undoubted authority of the authors) that the cases establish any such preference as regards stay or non stay. It is plain in my view that the cases require a decision on a fact basis on the evidence before it. The threshold is as I have set out above. How that evidence is evaluated for the purpose of deciding whether the threshold has been reached depends on the requirements of each case. Thus in the present case I do not see, given the procedural orders made before the case came before me and given the root and branch challenge to the Claimants' expert evidence, that it could be fair to either party to determine this case without having that evidence tested in the best way that is to say live evidence and cross examination. This is not "trying the case", it is simply determining whether or not the Claimants have reached the necessary threshold of providing cogent evidence of a likelihood of not obtaining justice in the foreign country. As I have said elsewhere (a point the Defendants obviously rely upon) had Mr Jones not been cross examined and had the evidence in relation to the Inventory not been tested the Claimants would have said with some force given those matters that it would be quite wrong to stay their proceedings and that the threshold is established. In fact that evidence when tested completely fell apart.
- I also accept that absent cogent evidence the Court's doubts about impartiality and honesty is not sufficient to prevent a stay being ordered see for example Pacific International paragraph 399.
- That is the conclusion I draw from the authorities. The parties in their closing submissions provided a detailed analysis of those cases but it is not necessary for me to review those because each case is fact sensitive.
- On the facts there is no doubt that the forum conveniens for this dispute is overwhelmingly Ethiopia. I adopt the summary of the Defendants in their closing (paragraph 110) although it should of course be noted that Mr Teferie's visa difficulties were not what the parties and myself thought they were at the hearings.
- I reject the Defendants' submission that the fact that an English judgment is not enforceable in Ethiopia is significant. The fact that the Judgment would be unenforceable appears to be agreed between the parties. However merely because the judgment is not enforceable in Ethiopia in my view is not relevant. If the Claimants obtain a judgment they will be able to enforce it throughout the whole world (subject to the relevant rules in any particular country). Precisely the same occurred in Attorney General of Zambia v Meer Care & Desai  EWHC 952 (Ch). In that case the Attorney General of Zambia brought proceedings against many Defendants including the former President of Zambia the late Dr Chiluba. The proceedings were brought within the UK jurisdiction so that any judgment which the Attorney General obtained would be an English judgment and it was felt that enforcement of that judgment worldwide would be easier than a judgment obtained in Zambia. I need not go into the details as to what happened. The Defendants challenged the jurisdiction for various reasons. All of those challenges were rejected and the case was heard and judgment delivered substantially against all the Defendants.
- The judgment has never been enforced in Zambia apparently because it turned out the law as regards enforcing judgments in Zambia as it operated before independence was repealed and not replaced by anything else. That did not render the judgment worthless as the Attorney General has recovered substantial assets in Belgium and in England and Wales. Equally in the present case the Claimants are not required to identify what assets they might execute against; it is sufficient in my view for them to seek to obtain a judgment which they will seek to enforce worldwide.
- Equally the costs order issue is irrelevant. If the Defendants believe they will have difficulty obtaining costs against the Claimants they can seek security in the usual way. I am not saying that it will necessarily be granted but it is a tool available to the Defendants who are sued by foreign and so called impecunious Claimants. Ironically of course there is no such reciprocal right for Claimants suing impecunious Defendants or Defendants against whom a costs order would be difficult to establish. The Defendants are in this position.
CONSIDERATION OF THE EVIDENCE
- I have considered the evidence provided by both parties both primary and secondary and I have considered the judgments in the Ethiopian Courts. I have considered the evidence of Mr Jones and Dr Haile as regards Ethiopian law. I will deal with this in the confidential judgment.
- The Claimants' evidence falls in to 3 parts. First there is the evidence of Mr Mengiste and the other non expert witnesses. Second there is the evidence of Mr Jones and third there is the evidence in respect of the literature provided by the Claimants which they contend shows a fair trial is not possible in Ethiopia.
- A large part of the time taken was an analysis of the proceedings in Ethiopia and Ethiopian law.
- Ultimately this in my view simply led to a huge distraction which contributed very little to either side's case. The longer this went on the more it seemed that I was being required to sit in an appellate capacity sitting on Ethiopian Judges deciding cases within their jurisdiction according to Ethiopian law. This was not only a fruitless exercise it was an impossible one. The battle lines between Mr Jones and Dr Haile were extraordinary. It is difficult to see anything of significance that they agreed in relation to the hearings and the law.
- It is not sufficient in my judgment to analyse the various judgments delivered over the years and to express a view that the judgments were wrongly decided of itself. It is necessary to show that the judgments are so skewed that the only conclusion that can be made is that the whole of the judiciary in reality will ensure that the Claimants will not obtain a fair trial. Cogent evidence of that is required and from the analysis of the judgments and the law there is in my view no such cogent evidence.
- I considered the various judgments and procedural steps taken in the Ethiopian litigation. It might be possible to show some areas of those decisions that had I been an Ethiopian Judge I might not have agreed with. That is not the point however. If that was the test there would be an awful lot of Judges in this country who would be alleged to be biased against Claimants.
- I found the judgments reasoned. Some were brief but that of itself is not a cause for criticism. As the Defendants pointed out in their closing it is not as if all the litigation was one way in favour of the Defendants. Indeed in monetary terms the Defendants lost about 35% in value of their claims as the pie chart in the Defendants closing submissions show. That is not of itself significant however. One lost case might create the pie chart but that does not mean there is no bias of itself. Equally I reject the dramatic description of the Courts treatment of the Claim 1 as being "Alice in Wonderland" (the words of the Claimants' then Counsel orally in opening this case).
- It is useful to deal with Claim 1 as it shows all the various arguments and counter arguments as well as showing how the Regional Supreme Courts decided the case and how it was dealt with on appeal and review. It was regarded as the Claimants' most significant case.
- As I have said above I am not trying these cases. On considering the Regional Supreme Court's decision I am not sitting on the appeal of it. Nor is it relevant that I might have come to a different conclusion. The essential requirement is that the way the Court treated this Claim is such that it provides cogent evidence that the Claimants are justified in their contention that they might well fail to obtain a fair hearing in Ethiopia.
- In fact the decisions in my view show nothing of the sort.
- The Defendants' case was that Mr Mengiste entered into a contract on behalf of the Second Defendant for the purchase of electrical equipment from the Second Claimant. He authorised payment of Birr 4,538,280 to the Second Claimant but it did not deliver the electrical equipment. Thus it is alleged the Claimants are jointly and severally liable for that figure plus interest.
- The Defence served by the Claimants was that the goods were plainly delivered as evidenced by the fact the factory could not operate without them and that the Second Defendant acknowledged existence of the equipment in a list of Inventory and Audit report. The Second Defendant's response was that it had had to import the electrical goods themselves (set out in the reply).
- The Regional Supreme Court rejected the Second Claimant's contentions that it delivered the goods. It was ordered to repay the money claimed plus interest. It rejected the Second Defendant's contention that Mr Mengiste was jointly and severally liable. It also rejected the claim that interest was payable from the date the money was taken as opposed to the date the notice was served seeking recovery. The Court finally held that Mr Mengiste was liable for failing in his responsibilities and was ordered to pay interest on the money that had been paid to the Second Claimant.
THE SECOND DEFENDANT'S APPEAL
- The first Claimant cross appealed against the decision.
- The Second Claimant did not appeal. That meant the judgment against it would stand unless in some way Mr Mengiste was able to obtain a decision in his favour on appeal which necessarily meant that the judgment against the Second Claimant could not stand.
- In the Federal Supreme Court the Second Defendant's appeal on interest was rejected and the appeal of the First Claimant was dismissed.
- In fact the true analysis is that the Court came to conclusion based on an imperfect production of evidence by both sides. Mr Mengiste did not give evidence which is surprising given the importance of the issues. The Claimants produced invoices but they did not prove delivery only a demand for money (see cross examination of Mr Mengiste (09/05/12/21/20-36)). The Claimants have never produced any evidence showing they had paid for the goods which they say were transferred on to the Second Defendant to justify the payments that the Second Claimant had received. By way of contrast the Second Defendant produced two invoices (08/96 and 14/96 and a packing list 11/15 25-38) which when compared with the Claimants packing list shows the goods identical. They also produced banking documents (11-3-18) showing payments in respect of the invoice 08/96.
- Faced with all that I can well understand why the Courts came to the conclusion they did.
- Mr Jones stated in his second report (paragraph 51) that the "court effectively shows that, regardless of the strength of their legal arguments and evidence, the present Claimants could never have won the case before it. That the Court did this with full knowledge of what it was doing."
- The Claimants' Counsel accepted that the Appeal Court was not biased in respect of the complaint (8/05/12 26/32/40) although he maintained the conclusion expressed by Mr Jones that on the review the decision should have been overturned and the cassation court should have allowed the appeal.
- Mr Mengiste accepted it in cross examination that the documents support the Regional Supreme Court's finding that the Second Defendant bought the electrical goods. Even in the proceedings before me the Claimants have not produced any documents showing they paid for these goods. Mr Mengiste gave an explanation for this in these courts for the first time (09.05/12 23/32-43) to disclose it would have shown that he was a party to a criminal scheme to avoid paying tax. That is hardly a credible explanation in my view. It is certainly no explanation for not producing them now.
- Mr Jones alleged that the court showed bias in relation to the review hearing of Claim 1. The Claimants sought to put in the document from Serteci dated 18th February 2004 (11/5/39). This document many years after the event is an ambiguous documents and of no use in my view. Further the basis for putting it in required the Claimants to argue that the document could not have been discovered earlier (which was not asserted). It was accepted that it could not have been found within the Second Defendant's premises. Given that, it was put to him that the review was doomed to failure and he answered "maybe so" (13.08.12/202/1).
- The next two pages of the transcript there show how Mr Jones was willing to attempt to argue the unsustainable and doggedly maintain his attempt to suggest that the courts were biased despite the overwhelmingly obvious position that the Appeal Court refused to allow the evidence in on well established principles.
- The Claimants make a further complaint (paragraph 7 and following of their analysis of the Scott Schedule) that the court allowed "this claim" that the Second Defendant had purchased the goods elsewhere to be put in via a reply rather than an Amended Defence. This is something that is not uncommon in these courts. It might be a procedural irregularity but it takes the matter no further. I cannot see that the Court's decision is wrong or even arguably wrong. It is certainly no cogent evidence at all of bias by the Courts.
IMPACT ON THE CLAIMANTS AND MR JONES CREDIBILITY
- In their closing the Defendants have robustly criticised Mr Mengiste's credibility in relation to this claim. They also vigorously criticise Mr Jones. That they submit leads to a conclusion that this evidence is strongly supportive of their contention that no reliance can be placed on either Mr Mengiste or Mr Jones. I refer to paragraphs 290 and following of their written closing. This is well demonstrated as regards Mr Mengiste by his sudden revelation of the tax fraud issue and equally by the fact that when pressed on cross examination in relation to the Second Defendant's packing list volunteered for the first time that it was a forgery. The allegation of forgery was a point not raised in the Regional Supreme Court, was not referred to in his witness statements, was nowhere referred to in Mr Jones' reports or in the Claimants' opening. This was despite the importance of Claim 1 as emphasised by then Counsel's graphic opening and the clear importance of the invoices and packing lists and the fact that Mr Mengiste himself had exhibited the documents without comment to his own witness statement.
- This is very damning indeed. It leads inexorably to the conclusion that the Claimants have no merit whatsoever on what was their major case. If anything is in the world of Alice it is their criticism of the Ethiopian Courts. It clearly does not provide cogent evidence that the Claimants will not obtain a fair trial in Ethiopia.
- There is nothing to be gained from a detailed analysis of the remainder of the claims and the parties' competing arguments. None of it in my view provides any cogent evidence that there is a prospect that the Ethiopian Courts are biased against the Claimants.
- As I have said I have read the judgments and I see nothing of significance to complain about to such an extent that it can provide cogent evidence of a potential bias against the Claimants. Claim 1 was in my view correctly decided on the evidence put before the Courts at that time.
- The Claimants' stance on all the other issues in the litigation as regards what the Courts decided in my view provide no cogent evidence that there is a risk that the Claimants will not obtain justice in Ethiopia.
- The same is true as regards the procedures in the Ethiopian Courts (save possibly in relation to freezing injunctions as to which I shall say something more below). The Courts have an extensive procedural code the contents of which are familiar to a Judge sitting in the Chancery Division even if expressed in different forms. There is nothing in those which merits any criticism whatsoever.
- I do not propose to go into the detailed submissions both sides made on the various claims that were adjudicated upon by the Ethiopian Courts and the subsequent appeals and applications for review. Those matters were the subject not only of detailed analysis but also the expert evidence. It is not appropriate in my view to come to a concluded decision on those. I have to be satisfied that there is cogent evidence which supports the Claimants' case for keeping this action within this jurisdiction. If this action is kept in the jurisdiction it might well be that the findings of the Ethiopian Courts will be examined.
- The reason for that is because as the Defendants accepted in paragraph 412 of their closing on 9th May 2012 (pages 83-84) Mr Spink accepted that the Claimants had an arguable case on the facts. The Defendants' case was that in Ethiopian law they had no case.
- The essence of that submission involves consideration of Articles 5 and 6 of the Civil Procedure Code of the Empire of Ethiopia 1965.
- Those provisions provide as follows:-
"Art. 5 Res judicata
(1) No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, and has been heard and finally decided.
(2) Any matter which might and ought to have been made a ground of defence or attack in the former suit shall be deemed to have been directly and substantially in issue in such suit.
(3) Any relief claimed in the former suit which has not been expressly granted by the decree passed in such suit shall, for the purpose of this Article, be deemed to have been refused.
(4) Where persons litigate in good faith in respect of public or private rights claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this Article, be deemed to claim under the persons so litigating."
"Art. 6 Review of judgments
(1) Notwithstanding the provisions of Art 5., any party considering himself aggrieved by a decree or order from which an appeal lies, but from which no appeal has been preferred, or by a decree or order form which no appeal lies, may, on payment of the prescribed court fee, apply for a review of judgment to the court which gave it where:
a. subsequently to the judgment, he discovers new and important matter, such as forgery, perjury or bribery, which after the exercise of due diligence, was not within his knowledge at the time of the giving of the judgment; and
b. had such matter been known at the time of the giving of the judgment, it would have materially affected the substance of the decree or order the review of which is sought.
(2) An application for review shall contain the same particulars as a memorandum of appeal and shall be supported by an affidavit containing strict proof of the fulfilment of the conditions laid down in sub-art (1) (a). The application shall be filed within one month of the ground of application having been discovered by the applicant.
(3) On granting the application, after giving notice to the opposite party to enable him to appear and be heard in support of the decree or order the review of which is sought, the court shall make such order in regard tot eh re-hearing of the case as it thinks fit.
(4) No appeal shall lie from any decision of the court granting or rejecting an application for review."
- The Defendants in their detailed closing submit that all of the disputes between the relevant parties have already been adjudicated upon in Ethiopia and therefore Article 5 prohibits them from being re-litigated. This is the thrust of Dr Haile's evidence.
- Any other position in my view is untenable. The Pleadings one way or another seek to reverse the effect of the decision of the Court of Ethiopia. The Ethiopian Courts (and by definition the English Courts if they were trying this on Ethiopian law) would hold that the doctrine of res judicata prevented the fundamental point being litigated namely whether the goods in question had been supplied or not.
- The only way forward for the Claimants would be an application for a review under Article 6. The fundamental difficulty raised by the Defendants is the 30 day time limit.
- Whilst it is true that Mr Jones initially seemed to accept that Article 6 presented a fatal obstacle to the Claimants' proceeding in Ethiopia he revised that view when referring to the Fissehaye case identified above (see the Defendants' analysis in their closing paragraphs 462-466).
- The platform for an application for a review would be the Inventory. As a document which provides conclusive evidence of perjury as I have said that fundamental plank of the Claimants' case collapsed in May. Nevertheless the Inventory whilst not being conclusive is prima facie evidence which the Claimants could say supports their view that the Defendants had the machinery. I have observed that the Claimants have not produced evidence as to how they paid for the machinery. Equally the Defendants have not produced evidence beyond the packing list and some Banking Documents as set out in paragraph 172 above to show that the machinery sitting in the factory is identical machinery but was bought from elsewhere.
- The factual evidence on the Inventory as it developed did not in my view show cogent evidence to support the Claimants' case. I have referred to the evidence and recall of Mr Teferie. I formed the view that Mr Teferie's evidence survived the cross examination. The other party to the Inventory (on the Claimants' side) was not called by the Claimants. I have referred to Mr Mengiste's damaging concessions.
- Thus the evidence and the initial lofty claims of the Claimants collapse and without that lofty status it seems to me that no clear picture of the evidence of the Inventory is established to satisfy the requirement of cogent evidence. There is an arguable case but at the moment it is not cogent.
REVIEW IN ETHIOPIA
- The Inventory and the issues surrounding it have not been brought before the Ethiopian Court. Subject to the question of fairness on the basis of Mr Jones' final evidence on Article 6 it seems to me that it remains open to the Claimants on that basis to take this evidence of the Inventory to the Ethiopian Courts for the first time and to seek a review. In the process they must of course persuade the Cassation Court to extend the 30 day time limit. I do not know whether that would be successful. It should be born in mind that the Defendants accept the Claimants have an arguable case but seek to prevent that being brought on the grounds of res judicata and expired time under Articles 5 and 6. If the Ethiopian Court finds the Claimants' evidence on the Inventory compelling there must be at least a possibility that they will regard the justice of the case as being sufficient per Fissehaye to dispense with the Article 6 30 day limit and direct a re-trial.
- In my view that is one of the things that the Claimants must do.
- The Claimants accordingly must take the question of an application for review in respect of the Inventory back to the Ethiopian Courts. Subject to what I say about the general literature there is in my view no cogent evidence to show that there is a real risk that the Claimants will not obtain a fair hearing on such an application. It might be that if they make the applications for a review based on the Inventory and Judge Mehretab (see below) and are rebuffed in an unfair way that they then obtain further evidence to show that they will not obtain a fair trial in Ethiopia.
- Judge Mehretab is a Judge in the Tigray Supreme Court. I understand she is now the President of that Court. She is also the wife of Mr Gebrue who was the Chief Executive Officer and a board member of EFFORT.
- She had a significant role in the cases in Ethiopia. She was in the very first hearing and the file was opened on 26th September 1998 and then appeared on 20 separate occasions in the following 2 years and 3 months and reappeared for some of the hearings in the review process in 2004. The hearings are summarised in the Claimants' closing submissions (paragraph 104).
- It is accepted by the Claimants that she was not one of the 3 Judges who gave the judgment in the case in the Tigray Supreme Court but she was one of the 3 who heard the evidence. I accept the Claimants' submission that it is impossible to know what her input to the judgments were.
- This detailed involvement of Judge Mehretab was not of course set out in any detail in the Particulars of Claim. It receives one reference only (paragraph 104). Nevertheless in keeping with the Claimants' ability to produce a rolling and improved case as the hearing went on (because of their ability to obtain adjournment and put off the decision) this evidence cannot be ignored.
- I am well aware of the principles summarised in the case of AWG Group Ltd v Morrison  1WLR 1163 at paragraph ,  and  whether or not she was actually biased is not the test. The requirement of justice is that justice must be seen to be done. I do not see how Judge Mehretab could have sat in this case without her expressly revealing the relationship she had with Mr Gebrue to the Claimants and to give them an opportunity to say whether or not she should recuse herself. There were suggestions in the evidence that Mr Mengiste was aware of the connection but I was not convinced that was made out. In any event whether he was aware of the connection does not advance the Defendants' position. The duty of the Judge is clear; she must address the potential appearance of injustice that would ensue if she sat on the case. This she never did. I have no doubt that if this case was tried in England and the allegations were made in respect of an English Judge that Judge would be removed if he did not remove himself.
- However the Claimants have never taken this complaint to the Ethiopian Courts. This is the second matter which I believe they should take to the Ethiopian Courts under a review. It is only when the Ethiopian Courts consider a review based on that factor that the question of maintenance of these proceedings in this jurisdiction can be fully considered.
- There was evidence about the effect of freezing injunctions in Ethiopia which might have caused concern. The evidence of both experts ultimately was that freezing injunctions freeze all of the assets irrespective of the value of the assets as opposed to the value of the claim. The Claimants contended that the freezing injunction ruined their business despite the fact they had enough money to cover the value of the claims.
- That is a regime which would not apply in this jurisdiction with that potentially damaging effect. One must not forget however that the present situation on freezing injunctions has evolved over a period of 30 years of operating them. Numerous exceptions and clarifications have occurred. For example the original freezing orders did operate to freeze businesses (but not to the same level). Nevertheless the effect was regularly that businesses had to close down because they could not run the businesses. Exceptions were made (and still remain) for bona fide payments in the ordinary course of the business to be exempt from freezing injunctions. That of itself is not necessarily entirely effective. Banks are notoriously nervous about freezing injunctions and regularly (for example) review a client's financial position in the light of a freezing injunction and reserve the right to remove credit and overdraft facilities on account of a freezing injunction. Equally the less user friendly banking operations means that the policing of bank accounts by local bank managers has largely disappeared.
- This might have been a concern if injunctions of that nature were in prospect. However the damage has been done and either the Claimants' contentions as regards the Ethiopian result are correct or not. This therefore is a point which has no significance.
- My conclusions thus far are as follows:-
1 The Claimants have failed to persuade me that there is any cogent evidence which shows the procedures in the Ethiopian Courts were wrong in respect of matters that were put before those Courts.
2 There is nothing in the Ethiopian Judgments which show in my view any bias or any cogent evidence which shows that the Claimants will not obtain a fair hearing. I have already commented that the Judgments to my mind read well, the legal principles are uncontroversial and the codification rules provide a balanced and fair system.
3 There may be issues over the Inventory and Judge Mehretab but subject to what I say below the Claimants ought to take those issues to the Ethiopian Courts. It may be possible for them to obtain a re-trial. Alternatively if the Ethiopian Courts behave in an inappropriate manner that would in my view justify coming back to Court here and seeking to lift the stay which I propose to impose.
4 The Claimants have an arguable case but there is no cogent evidence that they cannot present the arguable case in the Ethiopian Courts.
COGENT EVIDENCE FOR POTENTIAL DENIAL OF JUSTICE
- The evidence of this falls into 3 sections. First there is the evidence of the Claimants (Mr Mengiste in effect). Second there is the expert evidence on both parties and third there is the gathered amount of public documents about Ethiopia.
- In that latter context I refer to the observations of Mr Justice Andrew Smith in the Ferrexpo AG case at paragraphs 42 – 44.
- Mr Mengiste believed there was no point in going back to Ethiopia. He fell out with the ruling elite and he says that it is not safe for him to travel to Ethiopia. He believes he may face jail or even worse as set out in paragraph 17 of his witness statement of 31st August 2011. He was not cross examined on that part of his witness statement.
- Merely because Mr Mengiste says he has fallen out with the regime and thus feels unable to return to Ethiopia does not mean that I necessarily accept that. That itself is not cogent evidence of a justified fear on his part which leads him to conclude it is not safe for him to go to Ethiopia. In this context I refer to the third witness statement of Mr Getachew dated 12th October 2010. He is the Defendants solicitor. In paragraph 16 he refers to enquiries he has made in the Immigration Department of Federal Democratic Republic of Ethiopia which suggests that Mr Mengiste has visited Ethiopia in recent years on several occasions most recently on 9th March 2010. That was only a month before the Claim Form was issued in this action. In any event it is not necessary in my view for Mr Mengiste to attend the applications that the Claimants will make in Ethiopia. Mr Mengiste did not give evidence in the original trial. In any event the applications that I contemplate the Claimants making are review applications. I do not see that Mr Mengiste has to go physically to Ethiopia for those applications to be made on his behalf.
- I reject the Claimants' assertion in paragraph 95 of their closing that merely because Mr Mengiste says it is so I necessarily have to accept that. I have to be satisfied that Mr Mengiste's evidence provides cogent evidence of his supposed fear. I do not accept his evidence because his evidence is unreliable generally and he does not provide any instances of why he personally should be in fear. Whilst it is true the Defendants did not cross examine him on that it is equally true that the Claimants did not cross examine Mr Getachew on the evidence he gave about later visits by Mr Mengiste.
- I do not reject Mr Mengiste's evidence entirely. For example I am prepared to accept that he did not know of the relationship between Mr Gebrue and Judge Mehretab. Certainly I do not accept that the Defendants have established any knowledge of a sufficient standard. In any event in that context of course even if he knew it does not deflect from the obligations of the learned Judge to consider her role and whether or not she could properly hear this case despite the lack of objection.
- I have already set out above the unusual chain of events which led to Mr Teferie giving evidence by video link. I have already commented about the difficulties evidence by video link presents. It was well shown here with the usual delay in answering questions and the necessity to repeat questions because the question does not appear clear over the video link.
- Mr Teferie in paragraph 16 of his witness statement states that the purpose of the meeting and the signing of the Inventory was not to ascertain who paid for and who delivered the items but merely to ascertain the existence of the items. Mr Admasu who attended that exercise on behalf of the Claimants has not given evidence. No explanation for his lack of attendance has been given. Absent an explanation I am entitled to and do conclude that he does not appear because he will not support the Claimants' case. Mr Mengiste gave evidence but the strength of his evidence was crushed as set out above.
- Whilst there was some unsatisfactory answers given by Mr Teferie in the context of the requirement of the Claimants to establish that there was cogent evidence which supports its contention that the Inventory was intended to be binding I find the evidence is not cogent at all.
- There may be some residual issue about the worth of the Inventory but to my mind that is something to put before the Ethiopian Courts; it has not been done so before for reasons which I find entirely unconvincing.
EXTRANEOUS EVIDENCE ABOUT SITUATION IN ETHIOPIA
- This evidence falls in to two categories. First there is the evidence of the experts and second there is the evidence of Articles and reports and the like.
- In respect of the latter I refer to the Ferrexpo AG decision referred to above where Mr Justice Andrew Smith said this (paragraphs 43 and 44):-
"43 I accept this last observation as far as it goes: the value of the opinion of an expert such as Professor Koziakov does not depend upon proof of "each individual piece of original information" and the court is concerned about whether his "conclusions about the whole picture are correct" (or here that there is a real risk that they are correct): see R v Ahmed,  EWCA Crim 184 para 62 per Hughes LJ. Moreover, even at common law the courts have always allowed expert witnesses to rely upon hearsay evidence in relation to their evidence of opinion (once the primary facts on which their opinion is based are proved by admissible evidence): R v Abadom, (1982) 60 CAR 48,52 per Kerr LJ, and English Exporters (London) Ltd v Eldonwall Ltd,  Ch 415,421E. There are obvious difficulties in presenting direct or primary evidence of matters such as concern Ferrexpo.
44 But this is no reason that allegations of the kind made by Ferrexpo need not be supported with evidence that enables the court to examine their basis, and which is sufficiently detailed and focused to justify them. In my judgment, some of Ferrexpo 's evidence, including evidence upon which Professor Koziakov relied, is not of this quality. Some of it could properly be described as mere "press or political comment" unsubstantiated by independent evidence, such as Aikens J criticised in Dornoch Ltd and ors v Mauritius Union Assurance & anor,  EWHC 1887 (Comm)"."
- I turn to consideration of the experts.
- I accept that the procedure adopted put the Defendants to a disadvantage. Although Mr Spink complains about this in closing the reality is that I did not perceive the Defendants having any difficulty in presenting their case. Not to allow Mr Jones' evidence at all would have been an injustice to the Claimants.
- The result of the exercise is that whatever Mr Spink thought about the procedure he successfully dismantled Mr Jones' credibility as a witness completely.
- Some examples are given in paragraph 147 of the Defendants' closing. Further examples are given in the confidential closing submissions. I set out some of them:-
"148 In relation to the status and significance of the Inventory Report (as well as on many other issues), Mr. Jones has made a series of sweeping, unbalanced, exaggerated and/or otherwise inappropriate statements incompatible with him being a reliable, objective and independent expert: see, for example:"
a. The inventory "leaves absolutely no doubt that the whole case was a fabrication" (our emphasis, ¶105 [13/1/34])
b. "What the Claimants have in their hands is a voluntary admission of guilt" (i.e. that the Defendants committed perjury and that this conduct was relied upon by the court in reaching its judgment) (our emphasis, ¶108 13/1/108])
c. The inventory is a "confession" (¶129 [13/1/44])
d. The inventory provides "conclusive evidence" that the claim had had no factual foundation (our emphasis, ¶129 [13/1/44]).
e. In addition, Mr. Jones seeks to bolster the above conclusions by making sweeping and one-sided factual assumptions about the way in which the inventory came into existence that are not supported by any evidence."
- I have highlighted these because they relate to the Inventory. It is difficult to overstate the extent to which Mr Jones was prepared to depart from his duties (unknown to him at the time) as an expert. The Claimants only salvaged this by attempting to in effect rewrite Mr Jones' report on the basis that the Inventory was not conclusive.
- The Claimants were given the opportunity for Mr Jones to address a supplement to his report arising out of the way Mr Mengiste's evidence had gone in relation to the Inventory. The Claimants abused that opportunity by seeking to raise other matters beyond that limited purpose for which the adjournment was granted.
- Thus in Mr Jones' memo dated 10th August 2012 he said this:-
"In some areas I have used language that might suggest that I have gone beyond my role as an independent expert. This is totally inadvertent, which I regret and would like to correct. To that end, I have identified a number of paragraphs in my first 2 reports where this inadvertence has been reflection….and, in each case, I have suggested appropriate qualifications to those paragraphs."
- I reject Mr Jones' statement that the errors were inadvertent. Further the corrections were designed to improve his evidence after it had been completely destroyed in the confidential part of his evidence. It is unfortunate that Mr Jones (through his inexperience) was allowed to serve such a series of tendentious reports. Anyone reading the reports who is familiar with litigation within this jurisdiction would know that the tenor of the reports was inappropriate. He admitted in cross examination that he had gone beyond what he should have said as an expert (after only becoming aware of his duties in that regard in my view as a result of the cross examination in this issue). Not everything was the subject matter of his recanting. Thus in paragraph 105 of his report dated 9th August 2010 he said:-
"it appears the Defendants' agents gave false statements "knowingly", on "facts material to the issue to be decided by the tribunal" and calculated to influence the outcome of proceedings. But if any court is prepared to consider the evidence objectively and impartially, the Inventory report and the schedule leaves absolutely no doubt that the whole case was a fabrication."
- I cannot see any of that is proper comment by an expert who is called to establish whether or not the Claimants can obtain a fair trial within the Ethiopian Courts. Yet he failed to qualify that.
- I have already set out in the transcript above dealing with the Fissehaye case how Mr Jones changed his evidence in relation to the powers of the Court to review outside the 30 day limit.
- Another example is in paragraph 29 of his report where he said "[D1] was a political heavyweight that could do whatever it wishes and an ordinary businessman, in which the rule of law has failed the weaker party who was left with no option other than submission to the will of the powerful and the moral force pleading with them to do the right thing as there was no way of compelling them to act according to the law".
- During his personal examination he was asked by me if he thought the Court was going to be asked to determine whether EFFORT was a political heavyweight. He accepted that he was not competent to give evidence as an expert on that issue.
- Mr Jones does not better his position by withdrawing the untenable. He purported to withdraw that paragraph in the August hearing stating "the understanding I got from my previous cross examination was: this was a political statement to make and I shouldn't be doing it……" he then withdrew it. I accept the Defendants' submissions that it was a political statement and not based on any assessment of the merits of the case and that he was correct to withdraw it. Equally I accepted their submissions that he should never have made it in the first place.
- However during cross examination he said:-
"what are my views currently? Effort has abused its power in Ethiopia and that is what I tried to explain, on the basis of the case, why this might look like, the way I expressed it, as a political heavyweight" (T/13/08/12/66-67).
- That seemed to me at the time and still seems to me to be the case that Mr Jones has withdrawn the paragraph then seeks to reinstate it. It demonstrates a continuing inability on the part of Mr Jones properly to understand his role as an expert. He cannot restrain himself as he plainly sees the action in my view as a political case.
- Despite the plain inadmissibility of Mr Jones' evidence and his attempt to correct it by withdrawing it the Claimants still persist in asserting that EFFORT is a political heavyweight in their closing (paragraph 101).
- There is no credible testimony or other evidence to show there is cogent evidence to support this contention. Equally I reject the Claimants' contentions that the chance of success in making out this sort of allegation (i.e. fraudulent conspiracy) before the Court of Tigray is in reality non-existent. I reject that on the evidence and also on the basis that the litigation could be pursued in other areas as the Defendants say in their closing.
- All of this leads inexorably in my view to the conclusion that the Claimants have not shown any cogent evidence that they cannot bring their new material to the Courts in Ethiopia in order to obtain a fresh trial.
- I accept that criticisms can be made of Dr Haile's evidence. He was certainly willing to descend into the forum on several occasions. However they pale into insignificance when compared with the performance of Mr Jones. I set out (for ease of comparison) my analysis of Mr Jones' and Dr Haile's evidence in the confidential part of this judgment. However in so doing I accept that Dr Haile's evidence and my criticisms and analysis of it can be shown to all parties because that part of the evidence was given in open court.
OTHER EVIDENCE SHOWING UNFAIRNESS IN ETHIOPIA
- The Claimants rely upon a number of formal reports as well as some information taken from the internet. None of this evidence has been tested and faces the difficulties posed by Mr Justice Andrew Smith above.
- The Claimants have summarised them in paragraph 136 of their closing.
- Not to be outdone the Defendants rely on their own set of reports.
- I have read the reports relied upon by the Claimants. They show a country struggling to bring its institutions (including the judiciary) more in line with western orientated principles. This is inevitable given the history of the country following the overthrow of Emperor Haile Selasse by the military regime which was in force until 1992. However I do not see those reports as portraying a bleak picture. If one looks for example at the World Bank Assessment 2004 (bundle 4/5) that shows a line of promising developments with great difficulties. It is interesting to contrast that report with the Canadian International Development Agency of October 2008 that shows a substantial progress in the independence of the judiciary. That is reinforced by Dr Assefa Fiseha's Article for the Ethiopian Bar Review December 2009. The Defendants produced a letter from Dr Fiseha dated 10th August 2012. He updated his article. In that review letter he said:-
"Ethiopia's judicial system has suffered from lack of autonomy in the past but its position is now improving. Judicial reforms, has indicated in several reports and published document, is top priority of the Government and as a result there has been a significant improvement in terms of access to justice, case flow management, judicial autonomy and accountability as well as on the right to speedy trial particularly on civil and commercial matters.
By and large the judiciary operates autonomously but in some criminal cases there still remains a lot of work to be done. The role of the police and prosecution is still complicated and in lower courts problems related to non compliance of court orders is at times observed.
Particularly since the adoption of the July 2010 judicial administration council proclamation, the appointment of the independent judiciary has shown and improvement. Candidates are now (2011-2012) required to sit for a competitive exam before recruitment for judicial positions. Merit and ethical considerations are given more weight in the recruitment process."
- In some way that is highlighted by the Fissehaye case referred to in the judgment above.
- The Claimants comment on this letter was (paragraph 136):-
"Although it is acknowledged that those passages are to some extent moderated by the letter apparently from Dr Fiseha."
- The use of the word "apparently" is clearly designed to hint that the letter is a forgery. That issue was never raised in the hearing and it is seen obscurely alluded to in this closing. That is a small but significant example of several unacceptable statements in the Claimants' closing. If there was evidence to suggest the letter was a forgery that should have been raised. If there was no evidence and it is in my view completely unacceptable to hint that the letter is a forgery for the first time in the closing.
- As Dr Fiseha's letter acknowledges the bulk of his Ethiopian Bar Review was addressing Human Rights and criminal law aspects. There is nothing in his report in my view which particularly appertains to civil proceedings like the current proceedings under review.
- The same can be said about the US Department of State's report 11/3/2010 [3/6] it was concerned almost entirely with political interference in the criminal process and human rights abuses. In respect of civil litigation it observed (6/33):-
"The law provides for an independent judiciary. Although the civil courts operate with independence, the criminal courts remained weak, overburdened, and subject to political intervention and influence".
- It repeated that at page 9/33:-
"Civil courts, which provided judicial remedy for alleged wrongs, were generally viewed as independent and impartial. The law provides citizens the right to appeal human rights violations in civil courts; however no such cases were filed during the year".
- The EU final report on Ethiopia May 2010 [4/1] is entirely concerned with the electoral process. It touches on the judiciary (pages 25-26). The criticisms of the courts relate to political matters and there is no evidence in the report to suggest that civil cases are not the product of independent judicial decision making.
- The first report relied upon is the USAID Ethiopia Commercial Law and International Reform and Trade diagnostic [10/2]. Dr Haile refers to this. He is criticised in the Claimants' closing (paragraph 137(a)) as selectively quoting. It is true that he omitted the content of the paragraph at page 10/2/23 (page 66) of that report in the body of his report as the Claimants suggest. This was not put to him in cross examination however. Reading Dr Haile's report and his commentary on the report and reading the report myself I conclude there is no cogent evidence from that report which shows that the Claimants will not obtain a fair trial. To the contrary it shows once again a fledgling court system striving to improve its processes over the years. I am confident that the judiciary in Ethiopia in 2013 is somewhat different from the judiciary that appertained when the litigation first started in Ethiopia.
- The Defendants' other reports are subject to criticism but are supportive generally of my view of the way Ethiopian courts in commercial and civil matters are striding towards an independence and have achieved it.
- None of this evidence has of course been tested. This weakens its weight. This is more so the case when the Defendants have produced their own reports which contradict the conclusions the Claimants wish to draw from their version of the reports.
- Such generalised and untested material in my view needs to be treated with caution. It might be supportive of other evidence but there is nothing cogent in it nor any other cogent evidence that it can support.
- Whilst there might be areas of concern over the years in Ethiopia they are clearly being addressed and there is no cogent evidence from these reports to suggest these Claimants will not obtain a fair hearing in the Ethiopian Courts. It would be arrogant in the extreme in my view for this Court to pronounce adversely on the Ethiopian systems of justice on the basis of material before me.
THE WAY FORWARD
- The Claimants (paragraph 143(g)) suggest that the natural forum for all of this litigation "now that various substantial costs…….have been incurred and vast amounts of time has been spent on this application because of the procedure adopted the Court in England is very well placed to deal with the issues in this English action. The lawyers here are fully conversant with the facts and indeed more so than it would appear than the Ethiopian lawyers were in Tigray and Addis Abada ….." To adopt the phrase of then Counsel for the Claimants this is an approach "in the World of Alice in Wonderland". First the Claimants complain about the procedure (although as I have shown above it was their procedure and not one forced on them by me). Second they then seek to suggest that because of that procedure the action should remain within this jurisdiction (essentially I suspect before me because nobody else has the knowledge and experience supposedly of the Ethiopian case and the procedures). This demonstrates the fluidity with which the Claimants in their closing appear to be able to run with the hare and the hounds in their submissions. It is unreal. The suggestion that I have detailed knowledge of the background of the cases and the law is not maintainable. Whilst the law has been delved into and the decisions have been delved into it cannot be described as being anything other than the tip of the iceberg.
- It remains fundamentally the case that the natural forum for the dispute in this action, is the Courts in Ethiopia.
- I have come to the conclusion that the Claimants have provided no cogent evidence to suggest that the original procedures based on the evidence then before them operated in a way that was unfair to the Claimants. Equally the Claimants provided no cogent evidence either by reference to the evidence of Mr Mengiste and the other lay witnesses or by the evidence of Mr Jones or by the evidence so called of the reports that the Ethiopian Courts will not provide the Claimants with a fair hearing.
- Nevertheless there is a way to sever the Gordian knot. The key points which have concerned me are the Claimants' evidence in relation to the Inventory. I appreciate the Claimants' high hopes for this document were crushed in May but there are doubts about the Inventory which merit investigation in an Ethiopian Court in my view. Second there is the role of Judge Mehretab. Third there is the Defendants' acknowledgement that the Claimants have an arguable case.
- None of this has been taken to the Ethiopian Courts. Given Mr Jones' belief in the Fissehaye case it seems to me there is a clear case to take these matters to the Ethiopian Courts.
- If the Claimants are successful then they will have their fair trial in Ethiopia based on the new material and if accepted a panel of Judges which does not involve Judge Mehretab and an independent judiciary.
- On the other hand if that application fails depending on the reasons for its failure that may provide more compelling evidence that the Claimants will not obtain a fair hearing in Ethiopia. I must stress that I am not saying that a failure to obtain relief necessarily leads to the conclusion that the hearings were unfair. It depends entirely on how the hearings were disposed of.
- In the light of those findings I will accede to the Defendants' application for a stay. Nevertheless that stay (like any other stay) can be lifted in the light of changed circumstances. If the Claimants believe they have cogent evidence provided by the way in which their applications were treated in Ethiopia it is open to them to apply to lift the stay.
- I do not think the Claimants should have an unlimited time with which to make such an application. I will hear representations on that when I hand the judgment down.
PERMISSION TO SERVE OUT OF THE JURISDICTION
- There was not much time devoted to this second application. I refer to the brief reference paragraphs 144-146 of the Claimants' submissions. The Defendants are more comprehensive (paragraphs 405-475). The bulk of the Defendants' submissions are in effect a re-run of their argument in support of their application for a stay.
- The notes on the jurisdictional gateway set out in PD 6b paragraph 3.1 shows that they have to have a good arguable case that one of those gateways is made out. Further CPR 6.37 (3) states "the Court will not give permission unless satisfied that England & Wales is the proper place in which to bring the claim".
- The Defendants have accepted on the facts that the Claimants have an arguable case but suggest that in law some of the Claimants' claims are not sustainable. I have decided on the Defendants' stay application that there is no cogent evidence which supports the Claimants in their contention that they will not obtain a fair trial in Ethiopia.
- The evidence overwhelmingly leads to the conclusion that the natural forum (absent any suggestion of unfair trial) is Ethiopia. Both parties at various stages embraced that stance.
- The test required to satisfy CPR 6.37 is set out in CPR 6.36 and PD 6b – Service out of the jurisdiction and in particular paragraph 3.1. At the time of this judgment I do not accept the Claimants fall within any of the categories set out in paragraph 3.1.
- However if on their return to the Ethiopian Courts they are rebuffed and the manner in which they are rebuffed provides cogent evidence that that was as a result of unfair treatment of them in the Ethiopian Courts it seems to me that they ought to be in a position to lift the stay and in those circumstances they will have an arguable case that is reasonable for the Court to try this action in the way in which they say and with the parties which they assert ought to be joined. Their case would then fall within rule 3.1 (3) (a) (b).
- However in my view as a result of my judgment it is premature to accede to such an application. The reasons are twofold. First Ethiopia might provide the Claimants with a pleasant surprise in that their applications are acceded to and there is a fresh trial of the issues between the Claimants and the Defendants. The proceedings in this jurisdiction will have no purpose. Second if they are disappointed in the Ethiopian proceedings they will be able to renew their application to lift the stay and in that eventuality seek permission to serve out of the jurisdiction based on fresh evidence.
- I will therefore not make any decision on the application to serve out of the jurisdiction as it might never arise or if it does arise will be based on fresh evidence.
- In light of all of the above I grant the stay sought by the Defendants and decline to give the Claimants permission at this stage to serve out of the jurisdiction under CPR 6.36.
- I am disappointed in the tenor of large parts of the Claimants' closing. The reasons for my disappointment are set out above. I have tried extensively in this case to give both parties a reasonable opportunity to present their case. Given the position of Mr Jones that has always been a very difficult exercise. I had to balance Mr Jones' apparent fears and his refusal to give evidence unless his fears were accommodated against the consequent fettering of the Defendants' ability properly to deal with Mr Jones' evidence. As Lord Justice Lewison commented in a different decision (see KOP Football above) such decisions require coming to "the least worst solution where parties have diametrically opposed interests" (KOP paragraph 51). It is disappointing when the Court strains to accommodate both parties and create a scenario where they can put their cases when one of those parties (never having complained about the procedure at all and having largely benefited by it) after the event complains about it.
- I could not leave the criticisms unchallenged. That has unnecessarily in my view lengthened an already lengthy judgment. It is unprecedented in my experience for a Judge to be forced to defend in his judgment criticisms made in closing of actions taken entirely for the benefit of those complaining who voiced no concern let alone criticism of the procedures at the time.
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