Kensington International Ltd v Republic of Congo

The Court of Appeal dismissed three appeals by Vitol-related parties against orders made in the Commercial Court supporting Kensington's efforts to enforce English judgments against the Republic of Congo. The court held that (i) interim relief under section 25 of the Civil Jurisdiction and Judgments Act 1982 may be shaped to provide effective support for foreign substantive proceedings and therefore an order restraining payments more widely than payments of debts "due or accruing due" was warranted to secure the efficacy of an interim attachment made in Geneva; (ii) a further Norwich Pharmacal disclosure order relating to specific imminent cargoes was not an abuse of process and could be granted despite earlier disclosure undertakings, since the orders were different in nature and burden; and (iii) section 13 of the Fraud Act 2006 abrogates the privilege against self-incrimination in "proceedings relating to property" (as defined in s.13(3)) where the risk is of incrimination for the Fraud Act or a "related offence", and bribery offences fall within that definition. The court therefore upheld the injunction and the Norwich Pharmacal orders and rejected claims to privilege against self-incrimination in the circumstances of the case.

Kensington obtained four Commercial Court judgments against the Republic of Congo and sought to enforce them by attaching debts said to be owed to the Congo. The Congo traded oil through opaque structures and Kensington commenced proceedings in Geneva seeking interim attachment of sums said to be owed by Vitol S.A. to the Congo. Kensington applied in England for orders (i) restraining two UK Vitol companies from making payments to the Congo (under s.25 Civil Jurisdiction and Judgments Act 1982, in support of the Swiss proceedings), (ii) Norwich Pharmacal disclosure about two imminent cargoes ('Ti Topaz' and 'Oliva'), and (iii) Norwich Pharmacal disclosure about alleged bribery payments made in Hong Kong. The UK Vitol companies (and two employees) appealed against orders of Cresswell J (continuing an injunction restraining payments and requiring disclosure in relation to transactions between 1 January and 10 April 2006), Field J (Norwich Pharmacal disclosure relating to specific imminent cargoes), and Gross J (Norwich Pharmacal disclosure relating to alleged Hong Kong payments and the scope of privilege).

Nature of the applications: (i) interim injunction restraining payments and wide disclosure in aid of Geneva attachment proceedings; (ii) Norwich Pharmacal disclosure as to specific cargo transactions; (iii) Norwich Pharmacal disclosure into possible bribery payments and consequential property tracing.

Issues framed: whether the English court had power to grant the broader injunction (beyond payments of debts due or accruing due) in aid of foreign proceedings; whether an application for specific disclosure in July 2006 was an abuse of process after an earlier consent variation; and whether section 13 of the Fraud Act 2006 removes privilege against self-incrimination in these proceedings and whether bribery is a "related offence" within s.13(4).

Court’s reasoning: (i) in support of foreign substantive proceedings the court must consider the nature and possible remedies of those proceedings and grant interim relief effective to achieve their purpose; given the arguable scope of the Swiss interim attachment and the findings of earlier judges about concealment and collaboration, Cresswell J was entitled to the broader injunction to prevent circumvention; (ii) the Field J disclosure related to specific shipments and depended on distinct evidence and burden and therefore was not an abuse of process; (iii) section 13 does abrogate the privilege in proceedings relating to property (as defined) when the risk is of incrimination for the Fraud Act or a related offence; bribery involves corrupt conduct that necessarily has a fraudulent character for purpose of s.13(4)(b), and the provision applies to proceedings taking place after the Act came into force even where events pre-dated it. The appeals were dismissed.

Appeals dismissed. The Court of Appeal upheld the Commercial Court’s orders: (i) the injunction made in support of the Geneva attachment proceedings was within the court’s powers under s.25 Civil Jurisdiction and Judgments Act 1982 and was a proper exercise of discretion in the exceptional factual context; (ii) the Norwich Pharmacal order for disclosure of information about imminent cargoes was not an abuse of process; and (iii) section 13 of the Fraud Act 2006 removes the privilege against self-incrimination in proceedings relating to property as defined in s.13(3) where the risk is of incrimination for the Fraud Act or a related offence, and bribery constitutes a related offence, so the judge was right to reject claims of privilege in the circumstances.

Appeals from orders of the High Court of Justice, Queen's Bench Division (Commercial Court): order of Gloster J (10 April 2006) and subsequent continuation by Cresswell J (26 May 2006); Norwich Pharmacal order of Field J (26 July 2006); Norwich Pharmacal order of Gross J (13 July 2007). The appeals were heard in the Court of Appeal and judgment handed down on 7 November 2007 ([2007] EWCA Civ 1128).