The Republic of Angola & Anor v Perfectbit Ltd & Ors, Court of Appeal - Commercial Court, April 26, 2018, [2018] EWHC 965 (Comm)

Resolution Date:April 26, 2018
Issuing Organization:Commercial Court
Actores:The Republic of Angola & Anor v Perfectbit Ltd & Ors
 
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Neutral Citation Number: [2018] EWHC 965 (Comm)

Case No: CL-2017-000702

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

COMMERCIAL COURT (QBD)

Royal Courts of Justice

Rolls Building, Fetter Lane

London, EC4A 1NL

Date: 26th April 2018

Before:

THE HONOURABLE MR JUSTICE BRYAN

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BETWEEN:

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Paul McGrath QC and Stephen Robins (instructed by Norton Rose Fulbright LLP) for the Claimants

Mark Anderson QC and Steven Reid (instructed by Joseph Sutton Solicitors) for the Second and Seventh Defendants

Duncan Macpherson and Simon Jones (instructed by Zaiwalla & Co) for the Sixth Defendant

Hearing dates: 12, 13 and 14 March 2018

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Judgment Approved

Mr Justice Bryan:

  1. Introduction

    1. The Claimants, the Republic of Angola (``Angola'') and Banco Nacional de Angola (the ``BNA''), allege that they are the victims of a very substantial fraud - having been induced to pay over US$500 million and €24.85 million belonging to Angola, to certain of the Defendants. The First to Eighth Defendants (collectively ``the Defendants'') are said to be some of the parties who were involved in a conspiracy to defraud the Claimants.

    2. The Claimants' case is that the Defendants made a series of representations to the effect that they were setting up an investment fund for the benefit of Angola in conjunction with a syndicate of reputable international banks. The Claimants say that there was no such syndicate; that the Defendants made false representations and tendered non-genuine documents to the Claimants to induce payments to the First and Second Defendants.

    3. In November 2017, the Claimants applied for proprietary injunctions, worldwide freezing orders and disclosure orders against the First to Seventh Defendants (the Eighth Defendant having been joined subsequently to the action). On 17 November 2017, Popplewell J made an order in the form sought by the Claimants (``the Order'').

    4. The Claimants have since brought personal and proprietary claims against the Defendants seeking: (i) damages for deceit and/or conspiracy; (ii) restitution consequent upon rescission, failure of consideration or mistake; and (iii) declarations that the Defendants hold the sums of US$500 million and €24.85 million and/or the traceable proceeds on trust for the Claimants together with such orders as may be necessary to compel the Defendants to repay the same to the Claimants.

    5. The return date hearing in respect of the Order took place before me over 3 days from 12 to 14 March 2018. At that hearing:

    (1) the Second and Seventh Defendants challenged the jurisdiction of this Court to grant relief against them;

    (2) the Second and Seventh Defendants applied to set aside the worldwide freezing order and proprietary injunctions alleging that the Claimants breached their duties of full and frank disclosure on the without notice application and/or that there was (and is) no real risk of dissipation of assets by them;

    (3) The Sixth Defendant applied to set aside or vary the Freezing Order for breach by the Claimants of their duties to make full and frank disclosure of material facts and/or defences;

    (4) The Sixth Defendant also sought a stay on case management grounds if the Second and Seventh Defendants' jurisdictional challenge succeeded and/or if the Third Defendant's application for stay under the Arbitration Act 1996 was adjourned (the Third Defendant was not able to pursue any application for a stay at the return date hearing);

    (5) The Claimants applied for the continuation of the Order or the granting of a further injunction containing similar relief.

  2. The Parties and Significant Persons

    B1. The Claimants and Associated Individuals

    1. Angola acts in this litigation through the Ministry of Finance of Angola (the ``Ministry''). The Ministry is an auxiliary office of the President of Angola and is headed by Mr Augusto Archer de Sousa Mangueira, the Minister of Finance of Angola. Mr Mangueira made an affidavit in support of the Claimants' applications before Popplewell J.

    2. From 21 September 1979 until 26 September 2017, the office of President of Angola was held by President José Eduardo dos Santos. President dos Santos was, and remains, president of the Movimento Popular de Libertação de Angola (the ``MPLA''). His son, Mr José Filomeno dos Santos, was the chair of the Angolan Sovereign Wealth Fund, having been appointed to this position by President dos Santos on 21 June 2013.

    3. President dos Santos was succeeded by President Joao Lourenço, who was elected on 23 August 2017 following President dos Santos' decision to step down as President. President Lourenço assumed office on 26 September 2017. He is also a member of the MPLA. As part of the transition, there have been a number of changes within the Angolan government. For example, on 10 January 2018, Mr José Filomeno dos Santos was dismissed from his position as chair of the Angolan Sovereign Wealth Fund by President Lourenço. Some of the Defendants have submitted that there is a significant political angle to the claim which it is said was not properly disclosed before Popplewell J. I will address this submission in due course.

    4. The BNA is Angola's central bank and sole banker. It is responsible for the issuing of the Angolan currency (the Kwanza), supervising the stability of the Angolan financial system, and managing Angola's foreign currency reserves. It has its own legal personality as a matter of Angolan law. The BNA is headed by a Governor. Dr Valter Filipe Duarte da Silva held this position from 5 March 2016 until his resignation on 27 October 2017.

      B.2 The Defendants

    5. The First Defendant, Perfectbit Limited (``Perfectbit''), is a limited company incorporated in England in August 2010. Prior to August 2017, it was a dormant company with net assets of £560 and a sole director. In August 2017, the Fifth Defendant (``Dr Barbosa''), and the Eighth Defendant (``Mr Soumah'') were appointed directors of Perfectbit. Shortly thereafter, on 18 August 2017, a payment of US$500 million was made to Perfectbit's bank account with the Bromley branch of HSBC Bank plc (``HSBC'') in England.

    6. Dr Barbosa is a Brazilian national resident in Japan. He is a director of Bar Trading Japan Company Limited, a Hong Kong company, and holds forty-five percent of the shares in that company. Bar Trading Japan Company Limited is part of the Bar Trading Group. As matters stand, the Bar Trading companies are not party to the action.

    7. Mr Soumah is resident in England. As previously stated, he was joined to the action, as the Eighth Defendant, after the first application before Popplewell J.

    8. The Second Defendant, Mais Financial Services SA (``Mais'') is a company incorporated in Angola on 2 December 2015. It is a holding company for Banco Pungo Andongo and Mais Seguros:

      (1) Banco Pungo Andongo is an Angolan Bank incorporated in 2013. It started trading in 2014. Dr Pontes says that this company will soon be renamed Banco Mais.

      (2) Mais Seguros has approval to carry out business as an insurance company. The evidence is that the requisite approval was granted by Mr Mangueira in May 2017. Mais Seguros is not yet trading.

    9. The Seventh Defendant (Dr Pontes) chairs Mais' board of directors. Through his share ownership, Dr Pontes controls Mais. He is resident in Angola and is an Angolan national. His evidence is that he has a number of business interests. These include:

      (1) He is the former CEO and current President of Banco Pungo Andongo.

      (2) Through Mais he owns Mais Seguros.

      (3) In 2006, Dr Pontes founded Investmeimentos e Participaçoes Lda (``Inpal'') with Mr Filomeno dos Santos. Dr Pontes now holds 97% of the shares in Inpal, with Inpal itself having a 49% stake in Standard Bank Angola.

      (4) Inpal is the parent company of Bromangol SA (``Bromangol''). In 2012, Bromangol was awarded an exclusive concession contract by the Angolan Fiscal Authority to check and certify all imported and exported food, beverages, cosmetics and pharmaceutical products. This concession was terminated by President Lourenço on 9 November 2017.

    10. Dr Pontes is associated with Mr Filomeno dos Santos. He states that, although he has endeavoured to keep their relationship private, the two have been friends from childhood and have been involved in commercial projects together (for example, Inpal). Dr Pontes believes that these facts are well known within business and political circles in Angola.

    11. Dr Pontes also has some political experience. He was previously appointed by President dos Santos to the Commission on the Structuring and Management of the Capital Markets Commission. More recently, in July 2017 he was appointed by President dos Santos to the position of Executive Secretary of the Goods Control and Quality System National Council of Angola. This is an unsalaried position equivalent to a Secretary of State in this country. It carries with it responsibility for the regulation and control of food, beverages, cosmetics and pharmaceutical products in Angola. Dr Pontes has given evidence that President dos Santos requested Mr Mangueira vest Dr Pontes in office but Mr Mangueira declined to do so. Dr Pontes was relieved of his position as Executive Secretary by President Lourenço on or about 9 November 2017.

    12. The Third Defendant is MFS & Resource Project Partnership Limited (``Project SPV''). Project SPV is a limited company incorporated in England on 14 July 2017. Its directors are the Sixth Defendant (``Mr Onderwater'') and Dr Pontes. Project SPV is owned by the Fourth Defendant, Resource Conversion Plc (``Resource Conversion''), and Mais.

    13. Resource Conversion is a company incorporated in England, whose sole director and ultimate beneficial owner is Mr Onderwater. This company was dormant until 2016. Mr Onderwater says that he previously operated his business...

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