The African nation has been awarded over USD 2 billion by the UK High Court in the high-profile dispute involving corruption and bribery.
The Republic of Mozambique has proved triumphant in its ongoing ‘Tuna Bonds’ litigation case as the High Court of England and Wales today (29 July) ruled the nation had been “exploited by highly developed institutions and corporations that should know better”.
In his judgment Justice Robin Knowles awarded Mozambique just over USD 825 million in damages in its fight against major shipping company Privinvest and its late chairman Iskandar Safa, who died in January 2024. Mozambique was also awarded an indemnity of around USD 1.5 billion in respect of payments it is liable to pay to various parties, including banks and bondholders.
The dispute dates back to 2013 and centres on claims made by Mozambique that it was the victim of a conspiracy involving Abu Dhabi shipbuilder Privinvest and other defendants, who allegedly paid bribes to corrupt officials and employees of Credit Suisse (now part of UBS) to secure three supply contracts for maritime projects.
The supply contracts were executed by three special purpose vehicles (SPVs) owned by Mozambique and three Privinvest companies. The SPVs borrowed money from London-based banks, including Credit Suisse, to finance the purchase of goods and services under the supply contracts. The borrowing was secured by Manuel Chang – Mozambique’s former minister of finance who is facing bribery charges in the US over the saga – with the Republic claiming these guarantees were invalid and therefore not binding.
The case before the High Court took place between 2019 and 2021, with Credit Suisse and a number of other banks reaching a settlement with Mozambique on the eve of the trial, leaving the Court to focus on the remaining disputes between Mozambique, Privinvest and Safa, as well as several Mozambican officials.
Supporting Mozambique’s contention that corruption was at the heart of the three projects, Justice Knowles issued a strongly-worded judgment denouncing the defendants as “focusing on themselves rather [than] their responsibilities to others”.
The judge added that this self-interest “drove activity, including a focus on the money that was to be provided by lending rather than on what was to be supplied. No-one looked out for the interests of Mozambique and its people”.
Knowles rejected Privinvest’s evidence that it would not pay bribes, noting that Safa and his former company were “prepared to promise or pay whoever it took, and specifically Minister Chang, to procure the guarantees and guarantee confirmations and thus the projects. And that is what they did”.
In a further biting comment, Knowles stated Mozambique was “hustled” to purchase goods it could not utilise properly, while the chances of any sustainable choices being presented to the nation were “eroded at every turn”.
Speaking to CDR, Keith Oliver, partner and head of international at Peters & Peters, which represented Mozambique, says the judgment holds Privinvest and its late chairman responsible for corruption and bribery. “The judgment represents a major victory for a sovereign state before the commercial courts and vindicates the Republic of Mozambique’s decision to pursue justice in London for the Tuna Bonds scandal.”
In a statement, Privinvest said it has faced a “hopelessly broad range of unfounded allegations of widespread bribery and corruption for many years”.
Privinvest added it was deeply concerned about the judge’s finding in relation to Chang, pointing to Mozambique’s ‘hidden documents’ litigation strategy.
“This conclusion, which Privinvest intends to appeal, is based largely on inference and not supported by reliable analysis. This is a direct consequence of the [Mozambique president] Nyusi elite defying English Court orders and refusing to give evidence in support of their own country’s case or to hand over necessary documents.”
“As a result, Mozambique’s approach to this litigation risks having created a playbook for those wishing to bring cases to the London courts with no intention of playing by the English rules of fair play, that Privinvest expected to be enforced,” the company said.
Barristers Joe Smouha KC, Ciaran Keller and Akash Sonecha of Essex Court Chambers, Jonathan Adkin KC and Zahler Bryan of Serle Court, Richard Blakeley KC of Brick Court Chambers, Ryan Ferro and Sarah Parker of 3VB, and Edward Gilmore of Twenty Essex, instructed by Peters & Peters, acted for the Republic of Mozambique.
Privinvest and Safa were represented by barristers Duncan Matthews KC, Philip Riches KC and Matthew Chan of Twenty Essex, and Ben Woolgar and Frederick Wilmot-Smith of Brick Court Chambers, instructed by Signature Litigation.