Federal Republic of Nigeria v Santolina Investment Corporation & Ors

A second application for summary judgment may be made where there has been a material change of circumstances since the first application. Guilty pleas entered by companies in related criminal proceedings may remove an otherwise arguable defence where they directly address the source and character of the assets claimed. The court must still assess the evidence on the summary judgment standard, but a trial is unnecessary where the defendants have no real prospect of defending the claim and no other compelling reason for trial remains.

The Federal Republic of Nigeria sought summary judgment against two companies controlled by a former Nigerian state governor. It claimed beneficial ownership of three London properties and bank balances, alleging that they represented bribes and secret commissions obtained through the governor’s public office.

A previous summary judgment application had been refused by Lewison J because allegations of corruption remained disputed and parts of the case required a trial. The present application relied principally on the companies’ subsequent guilty pleas and convictions for Nigerian money-laundering offences. The central issues were whether the second application was permissible and whether the new evidence established that the assets were recoverable without a trial.

1. Second application. The court could entertain a second application for summary judgment. Under the principles stated in Lloyds Investment Limited v Christen Ager Hanssen [2003] EWHC 1740 (Ch), approved in Collier v Williams [2006] 1 WLR 1945, a repeat application requires a material change of circumstances or material earlier error or non-disclosure, rather than a mere reargument.
2. Effect of the guilty pleas. The companies had pleaded guilty in Nigeria to charges alleging that money used for the relevant properties and accounts represented the proceeds of crime. The pleas were entered by their controller. The Nigerian court convicted the companies after considering the charges and proof of evidence.
3. Assets. The evidence established that the Santolina bank balances and the money used to acquire the three London properties were bribes obtained from state contractors. The explanations advanced as campaign funds, loans or trusts were inconsistent with the guilty pleas or implausible.
4. Disposition. Applying the Nigerian legal principles identified in the earlier judgment, the court held that the fruits of the bribes could be claimed by Nigeria. Summary judgment was granted. The earlier freezing injunction remained in force. Costs of the present and earlier summary judgment applications were awarded on the indemnity basis and assessed at £15,000; wider-action costs were left untreated.

This was a first-instance application. The judgment records an earlier refusal of summary judgment by Lewison J on 7 March 2007, but gives no citation for that decision. The present court reconsidered the matter because circumstances had materially changed.