Judge refers lawyers to regulators in $11bn case

_{A judge about to open a can of Whoop Ass}

A judge has referred two lawyers to the Solicitors Regulation Authority and Bar Standards Board, in a judgment where Nigeria successfully challenged a $11 billion arbitration award made against the country.

This week, in the case of Federal Republic of Nigeria v Process & Industrial Development Ltd, the High Court granted an application to overturn the gigantic award, which had been given in 2017 to P&ID (an oil and gas company) over a collapsed gas deal, on the grounds that it was "obtained by fraud".

The judge, Mr Justice Knowles, found that P&ID had got the sum "only by practising the most severe abuses of the arbitral process".

Knowles slammed P&ID, and certain individuals connected with it, saying they had committed bribery throughout the arbitration, and had submitted and relied on knowingly false evidence. He said those individuals were "driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others."

The judge said that he would refer a copy of the judgment to the Solicitors Regulatory Authority and Bar Standards Board in relation to the conduct of two English lawyers for P&ID: Trevor Burke KC of Three Raymond Buildings, and Seamus Andrew, managing partner of Veltior.

Nigeria's lawyers had argued that certain internal legal documents provided to P&ID in the course of the arbitration were subject to legal privilege.

The judge said that "as legal professionals" Andrew and Burke appreciated that the internal documents "at least included documents that were privileged."

The judge lambasted the two lawyers, stating they "knew that P&ID and they were not entitled to see these documents," and their decision not to inform Nigeria or immediately return the documents "was indefensible".

The judge deemed that it was "untrue" when Andrew stated in oral evidence "that the documents were shared as part of settlement discussions".

"The reason Mr Andrew and Mr Burke KC behaved in this way was because of the money they hoped to make," he said. The judge stated that they, among others, "have very significant personal interests in this matter," contingent upon success for P&ID. "The figures are up to £850m in the case of Mr Burke KC and up to £3bn in the case of Mr Andrew," he said.

The judge added that he trusted the regulators would "consider the professional consequences of the conduct of Mr Burke KC and Mr Andrew in relation to Nigeria’s internal legal documents."

Seamus Andrew said in a statement that: "I do not accept the criticisms in the judgment concerning Nigeria’s internal legal documents. I believe that I acted in accordance with my professional duties, which included a strict duty of confidentiality to my client. I am confident that my conduct will in due course be vindicated by my regulator, with whom I shall be cooperating fully."

"I respectfully disagree with the trial judge’s finding that I gave two instances of untrue evidence. These findings are not supported by any analysis, and are contrary to the Judge’s clear finding that I did my best to answer the questions asked of me carefully and accurately. I appeared voluntarily as a witness to assist the court, providing substantial written evidence and three days of oral testimony, and I have cooperated fully throughout."

Andrew added: “I am considering my rights of appeal as a witness.”

Burke has also rejected the judge's findings against him, according to a report in the Law Gazette, stating: "I do not accept the criticism that have been made of me in relation to Nigeria’s internal legal documents. I gave my evidence in the English proceedings in good faith and to the best of my ability."

"I am confident that my conduct will be exonerated by my professional body with whom I shall cooperate fully," Burke added.

Mishcon de Reya, who acted for Nigeria said in a statement: "This is a hugely important decision for the people of Nigeria given the significant financial implications that the enforcement of a judgment this size would have had on the Nigerian economy."

Shaistah Akhtar, the Mishcon partner who led Nigeria's legal team, said: "We are pleased that the Judge recognised the severity of the fraud perpetrated against the people of Nigeria in his judgment, and trust that this landmark decision will deter other potential fraudsters and their backers from exploiting the legal system in the pursuit of monetary gain."

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Comments

The SRA will do nothing with this as Mr Andrew is not a junior paralegal who has made a minor mistake under poor supervision. If he were, the SRA would go at him with extreme prejudice.

£3bn!!!!

Even at current City rates that's at least a couple of months of hard billing.

Now that is a lot of money

"P&ID, and certain individuals connected with it, saying they had committed bribery throughout the arbitration, and had submitted and relied on knowingly false evidence. He said those individuals were "driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others."

And this has got something to do with Nigeria, you say?

According to Trevor's 3RB profile ".. His practice is wide-ranging and encompasses serious crime, fraud and professional discipline ...." Indeed.

Trevor's 3RB profile tells us "...His practice is wide-ranging and encompasses serious crime, fraud and professional discipline."

I don’t know anything about this area of law. Perhaps, due to my ignorance, I’m surprised that such huge success fees are legal. Are they legal? Should they be legal? When so much money is involved, it becomes much harder for lawyers to carry out their professional duties ethically. I assume that this successful appeal for Nigeria, means that the lawyers concerned do not receive the success fee. Grateful for knowledgeable lawyers to educate me…

Now if you just pay me that release fee and give me your bank details, I can immediately transfer $3bn to your account.

3 billion? Is this the biggest fee any lawyer has ever received? Must be true for total lifetime income too, let alone on one instruction.

I bet he still pays his paralegals less than market rate…

Ian, I'm wondering if the success fees quoted were so large because it was originally an arbitration rather than court proceedings and so the safeguards and limitations are absent or different. Years since I did one, admittedly.

Perhaps the SRA can confiscate any fees earned from Mr Andrew pay that towards the Axiom Ince debacle.

...but also a bit surprised about the silk. He was the nephew of one of the true "baddies", and it does stink to high heaven. This was a commerical dispute - why go to a criminal silk?

If it’s too good to be true - it usually is ! Wonder if that Silk & Co paid up ‘transaction fee’ upfront so the £3bil could be BACS to over to them ?

Wonder what they were looking forward to spending the ‘windfall’ on !

a private planet ?🪐

I’ve had a read of the judgment which is available on the web at no cost.

Burke is a relative of one of the businessmen who was a prime mover in this gas deal. Perhaps this helps to explain his retention on this case.

From reading the judgment, the arbitration was compromised as P&ID deliberately concealed the fact that bribery played a substantial part in their winning the contract with the Nigerian Government. The tribunal also did not consider properly the merits of the P&ID claim that they did not build the plant for wet gas processing as they were obligated to do, because the Government of Nigeria did not build a pipeline and supply gas as they were obligated to do. The Government could just as easily argue the opposite case - why should they build a pipeline when P&ID had made no preparation, not even the land acquisition for the plant.

The Government failed to fight their case adequately at the arbitration for reasons more related to incompetence than bribery but bribery also played a role.

The Judge points out that the flow of internal legal privileged documents from the Nigerian Government to P&ID’s senior team - business and legal - could only have been because of continuing bribery during the arbitration. Documents provided to P&ID included highly sensitive privileged communications on Nigeria’s legal arguments in the case as well as on issues such as quantum of damages.

On this last point Burke and Andrew under their ethical duties as lawyers should have sent the documents back to the Nigerian Government unread and issued enquiries as to whom was sending these documents and taken steps to stop it. Indeed Burke questioned about this issue, claimed to have launched an investigation - but in fact the Judge found this not to be true. Similarly Andrew tried to claim the docs were shared deliberately as part of settlement discussions - untrue and obviously untrue.

Under English law it appears that lawyers can negotiate any success fee they wish as long as it is on a “no win, no fee” basis.

It will be interesting to see what happens with Burke and Andrew. It must have been obvious to them that they were receiving highly privileged legal documents from the other side as a result of bribery and corruption - yet did nothing to stop it, “red-flag” it, raise it as an issue. Absolutely shocking and perhaps clear evidence that success fees should be capped at a level which ensures that lawyers remember and honour their duties.

A final comment - how much does it take to bribe a key lawyer in the Nigerian Government? Sadly not very much. Her annual salary was in the order of USD5,000. Various payments were made for amounts which so far as I can see never exceeded more than USD10k. Perhaps in total - over many years - she received some USD50k.

The result was a long term contract with P&ID which was wholly in the favour of P&ID and which ultimately opened up the Nigerian Government to an arbitration award against them of USD6 billion plus interest! The arbitration while competent, professional and ethical failed to spot any of what was actually going on and it does make one wonder whether an arbitration is always the best way forward…

See below from Skeletor’s website (Andrew’s firm). Nice.

Our values.

INTELLIGENCE

The right balance of IQ and EQ is vital in our work. Brute strength is never enough. Understanding and humanity count for everything.

So acting in a single arbitration can propel you to billionaire status? I'm in the wrong area...

I'm assuming the Nigerian govt would simply refuse to pay such a huge award and they'd suffer zero consequences in doing so.

The success fees were likely to be large because it is arbitration against a state. They were presumably contingent upon recovery, and enforcing an arbitral award against the state is very difficult if not impossible. I assume the lawyers were paid very little, if anything at all, up front.

I don’t think that’s right What? It’s precisely because Nigeria was on the hook for such a large sum of money that she brought the action in the English courts to set aside the arbitration - the option of simply not paying it was never an actual option.

Nigeria is signed up to the ICSID convention. To not honour an arbitration award properly granted against the Nigerian Government would be illegal and would have consequences as foreign investors would require greater protection in a world where they could not rely on arbitration as a means of dispute resolution.