Daley v Bakiyev, Court of Appeal - Queen's Bench Division, July 29, 2016, [2016] EWHC 1972 (QB)

Resolution Date:July 29, 2016
Issuing Organization:Queen's Bench Division
Actores:Daley v Bakiyev
 
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Neutral Citation Number: [2016] EWHC 1972 (QB)

Case No: HQ14P04904

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 29 July 2016

Before :

THE HONOURABLE MR JUSTICE SUPPERSTONE

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Between :

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Joel Donovan QC and Nathan Roberts (instructed by Saunders Law) for the Claimant

Angus McCullough QC and Matthew Donmall

(instructed by Hickman & Rose, Solicitors) for the Defendant

Hearing dates: 22 June - 04 July 2016

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Table of contents

Mr Justice Supperstone :

Introduction

  1. In the early hours of the morning of 7 July 2006 Mr Sean Daley, the Claimant, was shot by an unidentified assailant outside his residence in Bishkek, the capital of the Kyrgyz Republic. Of four shots fired, three missed, but one struck him, damaging his internal organs. He was taken to hospital and received life-saving surgery. Some days later he was transferred back to the UK, via a hospital in Istanbul, where he received further treatment. Fortunately he appears to have made a good recovery from his injuries, but the medical evidence indicates that there are continuing psychiatric and physical effects from the attack.

  2. By his claim issued on 25 November 2014 the Claimant seeks damages in respect of the injuries he sustained in the attack. He alleges that the attempted murder was ``organised and arranged by the Defendant'' (Particulars of Claim, para 1).

  3. The Claimant is a British businessman who was representing the interests of a British mining company, Oxus Gold plc (formerly Oxus Resources Corporation) (``Oxus Gold''). Oxus Gold, through its local entity, was the former licensee of the Jerooy gold mine in the Talas region of the Kyrgyz Republic. It was the second largest confirmed gold deposit in the country. Mr Maksim Bakiyev, the Defendant, is the son of the then President of the Kyrgyz Republic.

  4. The Claimant's case is summarised at paras 4-6 of the Claimant's opening skeleton argument:

    ``4. [The Claimant] alleges that his shooting was an attempted murder arranged by [the Defendant] in order to prevent [the Claimant] from jeopardising a fraudulent scheme to obtain the Jerooy mining licence for a shell company, Global Gold Holding GmbH (`Global Gold'), at Oxus Gold's expense.

  5. [The Claimant's] case is that the ultimate beneficial owners of Global Gold were close associates of [Kurmanbek Bakiyev, the then President] and [the Defendant], the late Russian businessman Boris Berezovsky and Badri Patarkatsishvili; that the Jerooy licence was repayment for their assistance in raising [Kurmanbek Bakiyev] to power; and that [the Defendant] and his associates stood to (and did) reap massive financial rewards on re-sale of the licence. This gave [the Defendant] the motive for the attempted murder.

  6. As the President's son, [the Defendant] had the means to arrange the shooting: wealth, unparalleled influence, and the use of the State security apparatus. [The Claimant] also relies on evidence of [the Defendant's] propensity to use or threaten violence and extortion; on the close temporal connection between [the Claimant's] Oxus Gold activities and the shooting; and the perfunctory police investigation thereafter.''

  7. On 4 April 2014 the Defendant was convicted in absentia by the Pervomaisky District Court of Bishkek of organising the Claimant's attempted murder, along with his father, his brother, Marat, and Zhanysh, his uncle. That conviction is not admissible in these proceedings as truth of the facts and matters recited therein pursuant to the rule in Hollington v F. Hewthorn & Co. Ltd [1943] KB 587 (see Ruling of 29 June 2016 at Appendix hereto).

  8. The Defendant denies that he had any involvement in the shooting of the Claimant, whether by organising it, arranging it, or in any other way (Defence, para 3.2). Further, he denies that he had ``any financial interest or involvement in the Jerooy gold mine, whether through Global Gold or otherwise'' (First witness statement, para 32).

    The Factual Background Relating to the Jerooy Gold Mine

  9. The relevant facts relating to the grant of licences to develop the Jerooy mine are not materially in dispute.

  10. The Jerooy gold deposit was discovered in 1968. Initial steps were taken to exploit it, but these ceased in 1991 with the collapse of the Soviet Union. In 1993 Kyrgyzaltyn, the State-owned company which was responsible for the Kyrgyz gold-mining industry, entered into a joint venture with Morrison Knudsen Corporation, an American mining company, to develop the Jerooy mine. That joint venture broke down in late 1996. Kyrgyzaltyn agreed to make a deferred $2.5m termination payment to Morrison Knudsen.

  11. In around 1997 Oxus Gold went into Kyrgyzstan with the objective of mining the Jerooy gold deposit. On condition that a well-known mining company co-invested with Oxus Gold, Kyrgyzaltyn agreed to form a joint venture with Oxus Gold. Oxus Gold therefore formed a company called Norox Mining Company (``Norox'') with one of its shareholders, Normandy Mining, a substantial Australian mining concern. In September 1998 Norox and Kyrgyzaltyn entered into a joint venture agreement and formed Talas Gold Mining Company (``Talas Gold''). Ownership was shared between Norox (67%) and Kyrgyzaltyn (33%). In 1999 Normandy Mining withdrew from Norox and transferred its shares to Oxus Gold which then became 100% owner of Norox. On 6 March 2000 Talas Gold was issued with a licence for the right to use sub-surface mineral resources for the purpose of development of mineable reserves of Jerooy gold deposit (``the Jerooy licence'').

  12. On 16 March 2001 the licence was suspended by the State Geological Agency of the Kyrgyz Republic (``the SGA'') and on 8 May 2002 the SGA annulled the licence on the basis that Talas Gold was in default of their obligations.

  13. On 19 April 2003 the licence was reinstated. However the SGA claimed that Norox again failed to discharge its obligations to develop the Jerooy deposit and on 3 August 2004 it annulled the licence a second time.

  14. On 11 August 2004 the Government of the Kyrgyz Republic made Decree No. 597 confirming the decision by the SGA to annul the licence.

  15. Talas Gold requested reinstatement of the licence and on 15 November 2004 the Government of the Kyrgyz Republic (``the Government'') wrote to Talas Gold setting out conditions on which it would continue negotiations on the licence restitution. However negotiations did not proceed: Talas Gold claimed they agreed to the proposal; the Government claimed that the conditions specified in the letter were not fulfilled.

  16. On 27 January 2005 the Government by Decree No.46-p employed an international law firm Le Boeuf, Lamb, Greene & MacRae to consider the legality of its decision not to reinstate the licence. The law firm confirmed that the actions of the prime minister and the Government did not oblige them to do so.

  17. In March/April 2005 the ``Tulip Revolution'' led to the resignation of President Akayev and Kurmanbek Bakiyev became President (``the President'').

  18. On 8 August 2005 by Decree No.358-p the Government instructed a law firm Davenport Lyons to conduct a legal evaluation of the actions of the prime minister and the government in not reinstating the licence. They also confirmed the lawfulness of the actions of the prime minister and the government and that they were not obliged to reinstate the licence.

  19. By a letter dated 14 November 2005 Mr Kulov, the Prime Minster of the Kyrgyz Republic, confirmed the Government's decision not to restore the licence. In order to speed up the implementation of the Jerooy project, the Government issued Decree No.619 dated 28 December 2005 ``On accelerating the development of the Jerooy gold ore field'' in accordance with which a search for a potential investor was carried out.

  20. On 10 January 2006 Mr Blair, the British Prime Minister, wrote to the President expressing his hope that there would be restitution of the licence to Oxus Gold. The President replied on 1 February 2006 informing him that the licence would not be reinstated.

  21. On 10 March 2006 Mr Kulov wrote to the President (referring to a letter the Government had received dated 21 February 2006 from Clifford Chance on behalf of Oxus Gold giving notice of a claim arising from the termination of the licence) requesting the President

    ``to choose one of the two possible options of our further activities:

    (1) unconditional refusal from further co-operation with Oxus Gold Plc and employment of an international law firm in order to protect the interests of the Government of the Kyrgyz Republic in relation to the project, which will lead to inevitable international arbitration proceedings,

    or

    [(2) further negotiations with Oxus Gold].''

  22. On 16 March 2006 the President replied to Mr Kulov:

    ``I hereby approve the first option of our activities (unconditional refusal from co-operation with Oxus).''

  23. On 18 May 2006 the inter-district court of the city of Bishkek dismissed the claim by Talas against the annulment of the licence on 3 August 2004.

  24. On 23 May 2006 by Decree No.377, signed by Prime Minister Kulov, the Government decreed that approval be given to a draft Joint Activity Agreement between Kyrgyzaltyn and Global Gold to develop the Jerooy gold field.

  25. On 29 May 2006 the Kenesh (Parliament) of the Kyrgyz Republic by Decree No.1009-III noting that ``a tense situation has arisen currently at the Jerooy gold field, which is of importance for the future economy of the Kyrgyz Republic'', decreed that the Government should abolish Decree No.377 as it contravened the law of the Kyrgyz Republic; and further that the General Prosecutor's Office be instructed ``to carry out an investigation and to bring to justice those individuals who concluded general agreements to develop the Jerooy...

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