UK court orders $28.7m payment to Broadsheet

Amount to be debited from HC account in London as NAB fails to clear liabilities to lobbyist firm


Hasnaat Malik December 31, 2020

ISLAMABAD:

A high court in the UK has ordered debiting Rs4.5 billion from the accounts of the Pakistan High Commission in London over non-payment of a penalty by the National Accountability Bureau (NAB) to the foreign asset recovery firm Broadsheet LLC.

Foreign Office sources told The Express Tribune that the high court in London had ordered debiting millions of dollars from the accounts of the Pakistan High Commission in the UK by December 30.

In view of the court order, the United Bank Limited UK wrote a letter to the Pakistan High Commission on December 29, requesting it to provide written payment instructions with debit account details to facilitate the payment of $28,706,533.35 in line with the Final Third Party Order issued by the high court.

The bank also told the high commission that in case of non-receipt of the written payment instructions by December 30, the bank would have no choice but to proceed with unilaterally debiting the high commission’s accounts to meet the payment amount stipulated in the court order.

The sources said that around Rs4.5 billion ($26,153,783.34) NAB amount was lying in the UBL, London account, which is operated in the name of Pakistan High Commission in the UK.

The high commission has sent a communication to UBL Chief Executive Officer Brain Firth, conveying that any attempt by the bank to proceed with unilaterally debiting their accounts to make the payment would be a violation of the international law and a breach of trust that would impact the future relationship with the UBL.

As per the court order, the payment deadline expired on Thursday (December 31). However, Foreign Office officials claimed that the account had not been deducted. The sources said due to NAB’s slackness, Pakistan faced additional loss of millions of dollars.

In November 2018, the London Court of International Arbitration (LCIA) awarded penalty of $17 million to the anti-corruption watchdog. Later, $3 million case cost was added to the award. In March 2019, the LCIA awarded $20 million final award.

However, NAB did not pay that amount. And due to interest rate, the award amount reached $28.7 million by December, 2020. Earlier, the NAB officials had wrongly paid $5 million in the past. Now the country suffered around $14 million additional loss due to NAB’s negligence.

Senior lawyers have already demanded stern action against the NAB officials responsible for this loss. Until now, more than Rs2 billion had been spent on the litigation.

Case history

Based in the Isle of Man, the Broadsheet LLC was hired by NAB during Musharraf’s regime to trace hidden assets of 200 Pakistanis, including former prime minister Nawaz Sharif and former president Asif Zardari in foreign countries. NAB terminated its agreement with Broadsheet in 2003. The firm’s claim against Pakistan was worth at least $600 million.

Broadsheet’s dispute with NAB has a convoluted history. The company was established by Colorado businessman Jerry James. It entered into liquidation proceedings in the Isle of Man in 2005, before being dissolved but revived again.

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 the graft buster’s officials paid.

James died in 2011, reportedly after jumping off the fifth-floor balcony of a Paris hotel. However, NAB did not conduct an inquiry into the “fake deal”, wherein $5 million of public money was apparently embezzled in 2008.

Legal experts believed that due to alleged fake settlements, the LCIA awarded penalty of millions of dollars to Pakistan. In August 2016, the International Tribunal Judge Sir Anthony Evans upheld 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 that time.

The same international tribunal held that Pakistan was liable to pay damages as NAB had 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 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 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 made public, while Pakistan had submitted a counter-report prepared by FTI Consulting. Former NAB chairman Lt Gen (retd) Amjad Hussain had also recorded his statement before the tribunal.


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