On March 29, two senior UK judges dismissed an attempt by Unaoil to challenge an SFO investigation into allegations that the company paid bribes around the world. It is the latest in a fast-growing list of failed judicial reviews against the SFO brought on shaky legal grounds.
In this post and the next ones, I'll look at the Unoil challenge and others. And I'll explore reasons why the companies may have brought questionable judicial reviews against the SFO.
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Unaoil hit the front pages of newspapers around the world last year after the Huffington Post and Fairfax Media accused the Monaco-based oil consultancy of paying millions of dollars in bribes on behalf of major companies, including Rolls-Royce, Halliburton, and Samsung.
Authorities in the United States, Australia and the UK are investigating allegations that the company used the bribes to secure its multinational clients contracts from governments across the world.
The Serious Fraud Office (SFO) has accused the company of conducting no “lawful business." Unaoil denies all the allegations against it.
So far, the company and its directors have brought multiple judicial review applications challenging the lawfulness of the SFO’s corruption investigation. Judicial reviews are a type of legal proceeding brought by an individual or company challenging a government body on the grounds that it has acted outside the scope of the law.
When such challenges are brought against government investigators, they have an extremely slim chance of succeeding. However, in recent years there has been a spate of judicial reviews against SFO investigations, all of which have failed.
There are concerns that these costly and time-consuming challenges are being used by well-resourced companies to affect the course of SFO inquiries, despite their small chance of success.
A fishing expedition? The Unaoil judicial review rejected on March 29 was filed in response to raids on the company’s offices and the homes of its chairman, Ata Ahsani, and its chief operating officer, Saman Ahsani.
Following a letter of request from the SFO, police in Monaco carried out the raids in March 2016, seizing the company’s primary server as well as phones, laptops and diaries.
Unaoil sought to challenge the letter of request in the UK High Court, claiming that the SFO had failed to disclose important information and had misled Monaco police into carrying out a wide-ranging raid that amounted to a fishing expedition.
The judicial review claim asked for all the documents and devices seized to be returned and for any copies to be destroyed.
The legal grounds for Unaoil’s challenge were set out during a hearing on December 1. At the hearing, Unaoil’s barrister Hugo Keith QC argued that the SFO, when asking for an overseas raid, is bound by a duty of candor to disclose relevant information in its letter of request that is favorable to the subject of the searches. The SFO failed to fulfill this duty, Keith said.
Keith complained that the SFO failed to mention that a transaction, which was characterized as corrupt in the letter of request, had been examined in an earlier High Court litigation without any finding of foul play. In the letter, the SFO accuses Unaoil of entering into sham contracts with a subsidiary of construction company Leighton Holdings.
The SFO told Monaco police that the contracts were a front to cover up the truth: Leighton was giving Unaoil funds to bribe Iraqi officials.
However, Justice Eder, who oversaw a High Court breach of contract dispute between Unaoil and Leighton, said in a 2014 judgment that evidence of corruption was at best “tenuous.”
Keith also said the SFO had omitted key information about two checks worth close to £2 million ($2.5 million), which were discovered in March 2016 when a businessman working for Unaoil was arrested at a UK airport. In the letter of request, the SFO cited the checks, which were made out to a suspect company, as grounds to believe that Unaoil may be committing offences “up to the present day.”
Keith said the checks were actually a few years old, dated 2013 and 2014, and the SFO’s failure to include this information in the letter of request to Monaco created a false sense of urgency.
Lord Justice Gross and Mr. Justice Nicol, the two judges overseeing the judicial review, dismissed this argument, saying while the checks may have been a few years old when seized, they were still valid.
“The carrying of checks in those amounts, made out to a suspect company, supported, and fairly supported, the suspicions expressed by the SFO in the LOR [letter of request],” Lord Justice Gross wrote in the decision.
The judge also wrote that Justice Eder’s earlier conclusion that evidence of corrupt payments was tenuous was based on “seriously incomplete” documentation and information. Justice Eder himself remarked in his judgment that “certain aspects of the story are, to say the least, somewhat obscure.”
Lord Justice Gross added that arguments over whether the SFO should have included more information about the checks or the Leighton-Unaoil litigation are actually besides the point, as the prosecutor is not bound by a duty of candor to disclose favorable information in letters of request.
The judge said a disclosure obligation of this kind would be “peculiarly inappropriate” for letters of request to foreign authorities. If the letter contained information that pointed towards the innocence of the suspect, Monaco police would probably have told the SFO to resolve its doubts before requesting a raid, the judge said.
“A LOR couched in such terms would be likely to cause real confusion to the requested state,” the judge said. “[It] would introduce unwarranted complexity...”
The judge also dismissed Unaoil’s claim that the SFO’s letter of request encouraged Monaco police to carry out a fishing expedition. The crux of Unaoil’s fishing-expedition claim was that the LOR focused on suspicions of misconduct in Iraq, but called for Monaco police to seize a much wider range of material, including documents related to other jurisdictions.
However, Lord Justice Gross swiftly dismissed Unaoil’s complaint in his decision, pointing out that the letter of request explicitly stated that the investigation spanned “several jurisdictions”. The judge also said there was no reason to doubt comments by SFO case controller Tom Martin in September 2016 attesting to the fact that the Unaoil investigation is focused on multiple jurisdictions.
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In the next post, I'll look at other juridical reviews brought by members of the Ahsani family, which runs Unaoil, and by other targets of SFO investigations. And I'll explore reasons why is the SFO is facing so many reviews.
Rahul Rose is a senior researcher for Corruption Watch, a London-based NGO that undertakes cross-border investigations into grand corruption and pushes for effective enforcement of UK anti-corruption legislation. He can be contacted here.