London High Court to hear Pakistan's plea

Firm was hired by NAB during the Musharraf regime to trace out hidden assets of Pakistanis in foreign countries


Hasnaat Malik June 27, 2019
Firm was hired by NAB during the Musharraf regime to trace out hidden assets of Pakistanis in foreign countries . PHOTO: EXPRESS/FILE

ISLAMABAD: London High Court will take up Pakistan's plea on June 28 against the London Court of International Arbitration (LCIA) decision under which the country was awarded a penalty of $21 million (Rs3.39 billion) in the infamous Broadsheet LLC case.

The National Accountability Bureau (NAB) had filed an appeal against LCIA in London High Court under section 68 of the UK Arbitration Act on the basis of two grounds.

Sources told The Express Tribune that NAB contended that the tribunal failed to conduct the proceedings in accordance with the procedures agreed by the parties and LCIA did not comply with the requirements of the award.

The NAB resolved that Broadsheet's contract was "fraudulent", however, on the advice of the legal team, it was decided that the "fraudulent" aspect would not be raised in the appeal as this ground was not brought up in the initial litigation.

Senior officials of Attorney General of Pakistan (AGP) office and NAB have left for the United Kingdom to attend the hearing, sources said.
NAB had filed an application under section 57 of the UK Arbitration Act 1996 about the removal of clerical mistakes in the award. The arbitrator partially accepted the plea but refused to make all the changes proposed by NAB, prompting the bureau to move its appeal.
Broadsheet LLC, based in the Isle of Man, was hired by the NAB during former president Pervez Musharraf's regime to trace out the hidden assets of Pakistanis in foreign countries. NAB terminated its agreement with Broadsheet in 2003.

According to the Global Arbitration Review (GAR), the firm's claim against Pakistan was worth at least $600 million. Former English Court of Appeal judge Sir Anthony Evans QC heard the case as sole arbitrator in a London-seated proceedings under the rules of the Chartered Institute of Arbitrators.

In July, the arbitration body heard for four days a claim by Broadsheet against Pakistan and its anti-corruption body – NAB – at the London office of Allen & Overy – the law firm representing NAB.
The bureau has again engaged the same legal firm to argue the appeal before London High Court.

Case history

Broadsheet's dispute with NAB has a convoluted and colourful history. The company was established by Colorado businessman Jerry James and entered liquidation proceedings in the Isle of Man in 2005, before being dissolved and then revived.

Meanwhile, James established a Colorado company with the same name and negotiated an agreement with NAB in 2008 that purported to settle the dispute for $5 million, which NAB officials paid. He died in 2011, reportedly after jumping off the fifth-floor balcony of a Paris hotel.

A senior law ministry official believes there is a need to conduct a thorough inquiry in Pakistan to identify the officials who had engaged Broadsheet on unfair terms in 2002. Likewise, an inquiry should be conducted into the "fake deal", wherein $5 million of public money was apparently embezzled in 2008, the official added.

It also remains to be confirmed whether the payment was approved during the tenure of Pakistan Peoples Party or by the Musharraf regime.

Another official claimed the payment of $5 million was given by the then-federal government and not by NAB. He also claimed that the names of a renowned Pakistani lawyer, as well as a retired SC judge, would also come up in the scam.

Legal experts believe that due to the alleged fake settlements, the LCIA awarded a penalty of $21 million to Pakistan on top of the millions of dollars the country had already spent on litigation.

In August 2016, the international tribunal judge Sir Anthony Evans upheld the Broadsheet's arguments that the 2008 settlement was not binding on it, as James had no authority to act on the company's behalf at the time.

The same international tribunal held that Pakistan is liable to pay damages as NAB wrongfully repudiated an asset recovery agreement with Broadsheet and committed a tort of civil conspiracy by entering into a sham settlement with a former Broadsheet executive.

The tribunal ruled that the Broadsheet was entitled to damages in an amount to be determined. Broadsheet was represented by Stuart Newberger of Crowell & Moring in Washington, DC.

Later, the quantum stage was started wherein Broadsheet relied on information gathered by a joint investigation team (JIT) established by the Supreme Court of Pakistan to examine evidence concerning the Sharif family's holdings.

Broadsheet submitted a forensic report from the security firm Stroz Friedberg, analysing the parts of the JIT report that were public, while Pakistan had submitted a counter-report prepared by FTI Consulting. Former NAB chairman Lieutenant-General (retd) Amjad Hussain had also recorded his statement before the tribunal.

It has been learnt that both Attorney General for Pakistan (AGP) Anwar Mansoor Khan and Law Minister Dr Farogh Naseem have written to Prime Minister Imran Khan asking for NAB to conduct an internal inquiry into the embezzlement of millions of dollars in the case.

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