National Crime Agency v Abacha

Factual and Procedural Background

There are three applications before the court concerning a prohibition order originally made by Judge Foskett on 2 July 2014. This order froze assets valued at over £100 million, alleged by the United States of America to be proceeds of fraud linked to General Abacha and associates. Prior to this, a commercial freezing injunction over the same assets had been obtained by the United States from Judge Teare in February 2014 and continued by Judge Field in April 2014. The Blue Companies appealed the freezing injunction, and the Court of Appeal allowed the appeal, holding that an ordinary freezing injunction was inappropriate given the existence of a specific statutory scheme for such cases.

The prohibition order came into effect upon discharge of the freezing injunction in October 2014 and has since been varied by consent. It supports proceedings in the United States in rem against assets alleged to have been derived from unlawful conduct. A forfeiture judgment in the US District Court for approximately US$477 million has been obtained, with about US$23 million of those funds located in the United Kingdom. This judgment is currently subject to appeal, and further litigation concerning remaining assets is ongoing.

Legal Issues Presented

1. Whether the prohibition order should be continued given the statutory conditions under the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005/3184 are met.
2. Whether the Blue Companies are entitled to disclosure of the letters of request for mutual legal assistance sent by the United States to the United Kingdom, which triggered the prohibition order.
3. Whether the prohibition order should be varied to permit the Blue Companies' legal expenses to be paid from the frozen assets.

Arguments of the Parties

National Crime Agency's Arguments

• The statutory scheme does not require disclosure of the letters of request for mutual legal assistance to obtain or continue a prohibition order.
• The court must be satisfied that there has been a request by an overseas authority prohibiting dealing with relevant property identified in the request, which is met on the evidence.
• Mr Templeman's affidavit provides clear and unchallenged evidence that the statutory conditions are satisfied and that the prohibition order should continue.
• Disclosure of the letters is unnecessary for the fair disposal of the case and would breach established confidentiality principles protecting inter-State communications.
• The United States Department of Justice expressly does not consent to disclosure of the letters of request.

Blue Companies' Arguments

• The letters of request lie at the heart of the NCA's application and are critical to the case, thus must be disclosed to the Blue Companies.
• CPR Part 31.14(1)(b) grants a right to inspect documents referred to in witness statements, including the letters of request.
• The NCA's reliance on Mr Templeman's honesty is insufficient; disclosure is necessary as English civil litigation requires relevant documents to be disclosed.
• The Blue Companies cannot properly assess whether the property is "relevant property" without seeing the letters of request, especially given differences between US and UK money laundering laws.
• The NCA's general claim of confidentiality over mutual legal assistance requests is not a proper basis to refuse disclosure.
• The NCA cannot override disclosure obligations by policy documents or general assertions of confidentiality.
• Permission to appeal is sought on the disclosure issue due to its procedural importance and novelty, even though the Blue Companies do not challenge the variation refusal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Danisco A/S v Novozymes A/S (No. 2) [2012] FSR 22	The court's inherent jurisdiction to prevent inspection of documents if not necessary for the fair disposal of the action.	The court accepted the principle that entitlement to inspect documents referred to in witness statements is not unfettered and may be restricted to protect confidentiality and fairness.

Court's Reasoning and Analysis

The court first considered the disclosure application. It held that the statutory scheme under the 2005 Order does not require disclosure of the letters of request for mutual legal assistance. The court must be satisfied that the three statutory conditions are met: that the property is in England and Wales and reasonably believed to be needed to satisfy an external order; that no proceedings have been taken under Chapter 2 of Part 5 of the 2005 Order; and that no exceptions apply.

Regarding the identification of the property as "relevant property," the court found that the evidence in Mr Templeman's affidavit was sufficient to establish reasonable grounds to believe the property is relevant, even without seeing the letters of request themselves. The Blue Companies did not challenge Mr Templeman's credibility or the sufficiency of this evidence.

On the entitlement to disclosure, the court acknowledged the general rule under CPR Part 31.14(1)(b) allowing inspection of documents referred to in witness statements but emphasized that this right is not absolute. The court found that disclosure was not necessary for the fair disposal of the case, especially given the confidentiality attached to inter-State communications and the United States' explicit refusal to consent to disclosure.

Turning to the variation application, the court considered whether it was just to allow the Blue Companies to pay their legal costs from the frozen assets. The court inferred, based on limited material, that a third party closely connected to the Blue Companies had historically funded their litigation and was willing to continue doing so. It concluded that it would not be just to permit variation allowing payment from the frozen assets, given the availability of alternative funding.

Finally, the court ordered the continuation of the prohibition order, satisfied that the statutory conditions remained met. It declined to require the NCA to give an undertaking regarding service and made a costs order jointly and severally against certain respondents, which was not resisted.

The court refused permission to appeal the disclosure decision, finding that while the issue raised was arguable, it was essentially a factual question and did not raise a compelling point of principle warranting appeal.

Holding and Implications

The court's final decision was to CONTINUE THE PROHIBITION ORDER, refusing the application to vary the order to permit payment of legal costs from the frozen assets and dismissing the Blue Companies' application for disclosure of the letters of request.

The direct effect is that the prohibition order remains in force, maintaining the freeze on the specified assets. The Blue Companies are not permitted to inspect the letters of request, and their legal costs must be funded from sources other than the frozen assets. No new legal precedent was established; the decision primarily applies existing statutory interpretation and procedural principles to the facts before the court.