SFO wins Property Freezing Order appeal in Chad oil corruption case

23 Ionawr, 2017 | Eitemau newyddion

The Court of Appeal today ruled in favour of the SFO in an appeal by Ikram Mahamat Saleh against a property freezing order made in respect of £4.4m plus interest, the proceeds from the sale of 800,000 shares in a Canadian oil and gas company Caracal Energy Inc, formerly Griffiths Energy International Inc.

The SFO’s case was that Mrs Saleh’s acquisition of the shares was part of a series of corrupt transactions, which involved personnel and companies connected to the diplomatic staff at the Chadian Embassy in Washington DC in order to promote and secure its commercial interests in Chad. This resulted in a property freezing order made by Mr Justice Mostyn in the UK on July 2014.

Mrs Saleh first challenged the order in July 2015, and a judgment was handed down the same month by Mrs Justice Andrews DBE in favour of the SFO. Mrs Saleh appealed the issue of whether an order made in April 2014 by a court in Canada had the effect of precluding the SFO from contending that the money is recoverable property under the UK’s Proceeds of Crime Act (POCA).  Mrs Justice Andrews had held that the Canadian Order did not have this effect, a view with which the Court of Appeal agreed.

Counsel for Mrs Saleh argued that the Canadian court accepted Mrs Saleh to be innocent of complicity in any indictable offence, and on that basis the Canadian court concluded that the Saleh shares were neither crime related proceeds nor offence related property. As part of the order it was not open for the SFO in the UK, nor anyone else anywhere else to contend otherwise, he argued, and that this was conclusively dealt with in the Canadian proceedings.

The Court of Appeal judges (Lord Justice Simon, Rt Hon. Sir Martin Moore-Bick and Rt Hon. Sir Stephen Tomlinson) did not accept this argument. It was decided on the facts that the Order in Canada was not an Order in rem. They went onto say, ‘if the Canadian Order were to preclude the SFO from pursuing the proceedings in this jurisdiction, it would be inconsistent with the statutory regime established by POCA; and that, even where the requirements for the recognition and enforcement of in rem judgments are satisfied, the Court retains a residual discretion to depart from the ruling to avoid injustice.’

The Canadian company pleaded guilty in 2013 to corruption charges in Canada and was fined.  There are also ongoing proceedings in the US.

Following the appeal, the SFO will now continue its pursuit of a civil recovery order in this case.

The full judgment is available here. The SFO was represented in court by Andrew Mitchell QC and Fiona Jackson of 33 Chancery Lane and Henry Forbes Smith of One Essex Court.

Notes to editors:

1. Mrs Saleh is the wife of the former Deputy Chief of Mission for Chad in the USA.
2. The £4.4m was credited to an account at the Royal Bank of Scotland in the name of Computershare Investor Services Plc.
3. The High Court decision in 2015 from Mrs Justice Andrews relating to Saleh v Director of the SFO.