West Africa: A complex multi-jurisdictional dispute
Quist were instructed to assist in an exceptionally complex multi-jurisdictional dispute involving numerous parties.
Initial proceedings concerned a $164 million import finance facility granted by a West African bank to finance the importation of petroleum products into a West African state under a joint venture agreement entered into by our clients. Following the initial success of the business, a dispute arose between the parties in respect of the alleged failure by our client to deliver petroleum products. Proceedings were issued by the bank in the English jurisdiction.
During the course of the proceedings, the bank made a number of successful interim applications, which resulted in it obtaining a worldwide freezing injunction against our clients in November 2012.
Our clients commenced proceedings against the bank in a West African jurisdiction. The main thrust of these proceedings was to establish that the proper jurisdiction for the resolution of the English proceedings was the West African state where various other disputes (between the parties) were being investigated and litigated.
These proceedings were ultimately settled in 2013.
There however followed a series of 6 new sets of proceedings in the West African state.
The Asset Management Corporation, concerned with, amongst other things, financial irregularities in the relevant West African country became involved in the cases. Its primary concern was to give effect to a statutory intervention in the Bank. In doing so and for improper reasons, it used its position to impose a scheme to restructure our clients’ business and loans (while taking control of its assets and operations). This in turn adversely affected their cash flow and resulted in a suit being precipitated by a world famous oil trading company against our client for unpaid debts.
It was alleged by our clients that the oil trading company and the Corporation were acting together improperly.
It is also noteworthy that the managing director of the Corporation was subsequently dismissed on the grounds of criminal conduct and for failing to run the Corporation’s activities transparently. Instead the institution had become politicised.
The oil company and our clients had been engaged in a series of intense negotiations, which resulted in a settlement. Our clients claimed that the oil company had obtained leverage during negotiations by, amongst other things, the Corporation’s involvement and behind the scenes strong-arm tactics. The oil company’s practices – the method of supplying oil products – were also questionable.
The oil company’s claim was more than $100 million. It sought to pursue the claim in the English jurisdiction.
Quist’s role in the English litigation (challenging jurisdiction) was a key factor helping our clients to build momentum in the various on-going proceedings in the African state. Quist worked closely alongside our local legal counterpart. Sound knowledge of the dynamics of the West African state’s legal system, the on-going proceedings and the political backdrop was central to an understanding of the commercial issues – irrespective of where they were being litigated.
Both Quist and the local legal team had to marshal evidence of impropriety some of which was admissible and some of which remained relevant but was inadmissible.
Parties against our clients had abused their powers, political connections and the banking and oil regulatory frameworks.
The complex multi jurisdictional and multi faceted litigation induced the parties to reach a final settlement of all of their respective claims.