A Last Minute Deal in the 'Tuna Bond' Case
This week the podcast returns after a brief hiatus with a timely case about bribery on a grand scale.
You can listen to the episode for more details but essentially the East African country of Mozambique took out significant loans to develop the country including a state tuna fishery, hence the name of the scandal.
The problem was that Mozambique has since accused the company involved (Privinvest) of paying more than $130 million in bribes to Mozambican officials and bankers at Credit Suisse.
While those corrupt bankers have since pleaded guilty in the U.S. and the banking firm has paid out nearly half a billion dollars to resolve bribery charges in the U.S. and the UK, the bank was still a defendant in the claim brought by Mozambique…until now.
With the trial set to begin tomorrow, Credit Suisse has announced an out-of-court settlement with Mozambique to get out of what will likely still be a lengthy legal battle with Privinvest.
Earlier this year Credit Suisse was on the verge of collapsing before it was taken over by UBS and the new owners will surely be glad to draw a line under the whole affair. As the company announced in a statement:
“The parties have mutually released each other from any liabilities and claims relating to the transactions [and] are pleased to have resolved this long-running dispute.”
The exact terms of the deal are private but according to Reuters, UBS will forgive part of a loan that is worth around $100 million.
Part of the incentive for UBS to strike a deal will have come from the Supreme Court decision that I cover on the podcast this week. In that case Privinvest argued that Mozambique was bound by arbitration agreements and so any dispute would have to be held behind closed doors. That was unanimously rejected by the Justices and so the case will be heard in open court.
UBS/Credit Suisse likely did not want their dirt laundry being aired in public hence the deal but the trial will proceed with Privinvest denying the allegations.
Whether it actually begins tomorrow or not is still up for debate. In another twist, the president of Mozambique, Filipe Nyusi, may still be liable. He had previously been found to have state immunity but Privinvest was granted permission to appeal that decision on Friday. It is now certainly possible that the trial judge will stay the main proceedings until the Nyusi case is resolved.
As the proceedings develop, the recent decision of the Supreme Court could be the end of the beginning rather than the beginning of the end.
Episode link: https://uklawweekly.com/2023-uksc-32/
Make a difference today,
Marcus