It is not often that the governments of six European countries and the
US hail a decision of the Chancery Division as “historic”. But such was the reaction to the judgment that Mr Justice Peter Smith handed down this May in Attorney General of Zambia v Meer Care & Desai.
The cause of the jubilation is not hard to fathom. The judge ruled that a number of defendants, including the former president of Zambia, Dr FTJ Chiluba, had conspired to misappropriate tens of millions of dollars from the Republic of Zambia. For Western governments, some of which reportedly bankrolled the proceedings, the decision was a welcome boost in the fight against political corruption in Africa.
The proceedings began in October 2004. The Attorney General of Zambia, acting on behalf of the Republic of Zambia, sued Dr Chiluba and 19 other defendants. Among their number were a former Zambian ambassador to the US, the former head of the Zambia Security Intelligence Service, ZSIS, and two small London-based law firms, one of which boasted Nelson Mandela as a client.
The Attorney General sought to recover monies transferred from the Zambian Ministry of Finance during Dr Chiluba’s presidency, ostensibly to pay debts owed by the Zambian Government. The Attorney General alleged that, pursuant to three fraudulent schemes, the bulk of the funds was diverted for the personal benefit of various of the defendants.
The most complex scheme, known throughout the proceedings as the ‘Zamtrop conspiracy’, centred on a bank account held at the London branch of Zambia National Commercial Bank. The account was run outside ordinary government control under the guise that it funded ZSIS operations. Accountants instructed by the Attorney General traced monies out of the account to numerous destinations with no conceivable connection to secret service activities. The beneficiaries included Legoland, Berketex Brides and a tailor’s shop in Geneva that supplied a monumental wardrobe of suits, shirts and shoes bearing Dr Chiluba’s initials.
The other principal scheme, known as the ‘BK conspiracy’, revolved around an arms contract between the Republic of Zambia and a Bulgarian company. Purportedly in order to finance its obligations under this contract, the Republic was prevailed upon to enter into a $100m (£49m) facility agreement with one of the defendants. The terms of the facility were unusual, to put it mildly. Despite being the borrower, the Republic was obliged to make a multimillion-dollar ‘down-payment’ to the lender. The Republic duly paid these monies, which promptly disappeared.
The trial of the action spanned four months. For three weeks, the court moved lock, stock and lever arch file to Lusaka so that the judge could hear evidence from witnesses based in Zambia. The judge agreed to this arrangement to accommodate four of the defendants, including Dr Chiluba, who were unable to travel to London; they were all charged with criminal offences in Zambia and had surrendered their passports to the Zambian authorities as a condition of bail. As it transpired, following an unsuccessful application to stay the action, these defendants ‘discontinued participation’ in the English proceedings long before the trial began.
The judge handed down his 220-page judgment on 4 May, 2007. He found that the Zambian defendants had conspired to misappropriate headline sums of $25m (£12m) under the Zamtrop conspiracy and a further $21m (£10m) under the BK conspiracy. Once realisations and interest were taken into account, the liability of these defendants topped $50m (£24m). The judge also held both firms of English solicitors liable for conspiracy and dishonest assistance.
The judgment criticised the defendants in language of uncommon stridency. Of Dr Chiluba, who bore the brunt of the censure, the judge declaimed that, “It is difficult to find an adjective that adequately describes the failure on the part of [Dr Chiluba]. He has defrauded the Republic… it is a shameful series of actions and he should be ashamed”.
Although the judgment contains a great deal of legal analysis, the significance of this case for English lawyers resides primarily in its confirmation that the English courts are ready and able to provide overseas governments with effective redress in sensitive political corruption cases. The Attorney General evidently decided to sue here, at least in part, because the English court has the power (which it invoked in this case) to grant worldwide freezing injunctions and because orders of the English court are readily enforceable elsewhere in Europe. Moreover, the judge went to great lengths — including decamping to Zambia — to ensure that the defendants were accorded a fair hearing. These factors may tempt other governments whose assets have been plundered to beat a path to the doors of the Royal Courts of Justice.
For Zambians this case has enormous legal and political significance. Barely a day passes without one of Zambia’s leading newspapers publishing an article that refers to it. Most Zambians, it seems, welcome the decision — particularly the lawyers. Charles Siamutwa, a partner of Corpus Legal Practitioners in Lusaka, says: “I have yet to come across a single lawyer who has made a negative comment about the judgment.”
A number of the defendants have sought permission to appeal from the Court of Appeal. In addition, the Zambian-based defendants, including Dr Chiluba, have applied to the Lusaka High Court to set aside registration of the judgment in Zambia. For all of the fanfare that greeted this judgment, the Attorney General’s legal battles are clearly far from over.
David Pope is a barrister and director of advocacy at Denton Wilde Sapte.
