Court of Appeal
Published November 30, 2007
Kensington International Ltd v Republic of Congo and Others
Before Lord Justice May, Lord Justice Carnwath and Lord Justice Moore-Bick
Judgment November 7, 2007

The defence of self-incrimination was not available against an order requiring disclosure of documents concerning alleged payment of bribes.

The Court of Appeal so held dismissing appeals from various orders made in respect of proceedings brought by the claimant, Kensington International Ltd, against the defendant, the Republic of Congo.

On July 13, 2007, Mr Justice Gross held that the third parties, Vitol Services Ltd, Vitol Broking Ltd, Gilles Chautard and Shlomo (Sam) Lambroza, were not entitled to rely upon the privilege against self-incrimination in respect of information and documents concerning payments said to have been made made by or on behalf of their parent company, Vitol Group SA, to senior officials of the defendant by way of bribes.

Mr Jeffrey Gruder QC and Ms Philippa Hopkins for the third parties; Mr Jonathan Nash QC, Mr Peter Ratcliffe and M r Henry Knox for Kensington International.

LORD JUSTICE MOORE-BICK said that on balance the public interest required that persons in possession of property on behalf of others should be compelled to give information about their dealings with the property in order to protect the interests of those entitled to it, notwithstanding that that involved departing from the general rule that a witness need not incriminate himself.

The loss of privilege was largely, if not entirely, balanced by rendering information disclosed inadmissible in proceedings for an offence under the Fraud Act 2006 or a related offence.

An application for disclosure (see Norwich Pharmacal Co v Commissioners of Customs and Excise ([1974] AC 133)) could be regarded in some senses as independent of the substantive claim which it was designed to support, but it did not necessarily follow that the expression “proceedings relating to property” in section 13(1) of the 2006 Act was intended to refer only to the immediate proceedings between the applicant and the person from whom disclosure was sought.

In the present case, substantive proceedings had been brought to recover the amounts owed by the defendant and in those circumstances the expression “proceedings relating to property” extended to the proceedings viewed as a whole.

Since “property” in section 13(1) included money, the expression “any proceedings for the recovery of [money]“ must be understood as including proceedings to recover a debt by suing on the chose in action: see Bank of England v Riley ([1992] Ch 475).

The judge had found that the third parties were at risk of incriminating themselves of offences under other statutory provisions and at common law, but that the offences in question were all related offences that involved corruption in one form or another.

Mr Gruder submitted that they did not involve any form of fraudulent conduct or purpose because none of them required proof of dishonesty, which he said was an essential ingredient of fraud.

The essence of fraud was deception. Although it was difficult to see how fraud could be committed without dishonesty, dishonesty was not the critical distinguishing mark of fraud.

For an offence to involve some form of “fraudulent conduct or purpose” within section 13(4)(b) it had to involve an element of deception. Offering a bribe with the intention that it be accepted and acted upon involved a form of fraudulent conduct, or at any rate of fraudulent purpose.

Lord Justice May agreed and Lord Justice Carnwath delivered a concurring judgment.

Solicitors: Ince & Co; Dechert LLP.

Times Recommends

• The best legal yarns this Christmas
• Legal school 'earned £1m by exploiting bar course'
• Axe may fall on 5,000 more City lawyers