National Crime Agency v Abacha

A prohibition order under Part 4A of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 may be made or continued without disclosure of the underlying mutual legal assistance request. The court must be satisfied that the statutory conditions are met, but evidence from a properly informed witness may establish that property is identified in the request and is relevant property. Inspection of a referred document is not unfettered. Confidentiality attaching to inter-State communications may justify withholding it where inspection is unnecessary for the fair disposal of the application. A variation of a freezing or prohibition order to fund legal costs is discretionary and may be refused where a connected person is reasonably likely to provide the funds from another source.

The National Crime Agency applied to continue a prohibition order freezing assets alleged to represent proceeds of fraud. The Blue Companies applied for disclosure of the United States mutual legal assistance requests relied on in making the order and for variation of the order to permit payment of their legal costs from the frozen assets.

The prohibition order had followed earlier commercial freezing-injunction proceedings and was made under the statutory scheme governing external requests and orders. The central issues were whether disclosure of the requests was required or necessary for a fair disposal of the application, and whether it was just to permit payment of legal costs from the frozen property.

1. Continuation of prohibition order. The three statutory conditions under Part 4A of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 were satisfied. The order was therefore continued.
2. Disclosure. The legislative scheme contains no requirement that an external request be produced or disclosed. The court was entitled to rely on Mr Templeman’s evidence that the property was identified in the requests and was relevant property. The evidence established reasonable grounds to believe that the property was relevant property, a threshold lower than clear evidence.
3. Although CPR rule 31.14 appeared to confer a broad right to inspect documents referred to in a witness statement, that right was not unfettered. Under Danisco A/S v Novozymes A/S (No 2) [2012] FSR 22, the question was whether inspection was necessary for the fair disposal of the application.
4. Inspection was unnecessary. The respondents had sufficient material to challenge the order, had not in fact challenged the evidence on relevance, and the United States had confirmed that it did not consent to disclosure. The customary confidentiality of communications between foreign states, grounded in international comity, therefore prevailed. The disclosure application was dismissed.
5. Variation for legal costs. The court had power to vary the order, but the applicants had not shown that variation was just. The history of Mr Bagudu’s voluntary payment of litigation costs and his close connection with the Blue Companies gave reasonable grounds to conclude that funds were available from another source. The variation application was refused.
6. The inferences concerning Mr Bagudu’s connection with the trusts were drawn from limited material in an interlocutory application and were not intended to determine issues in other proceedings. Permission to appeal on the disclosure issue was refused.

First-instance decision. The judgment records earlier Commercial Court freezing-injunction proceedings and an appeal by the Blue Companies, but does not give the citation of that appellate decision.