The Federal Republic of Nigeria v Doraville Properties Corporation and The United States of America

JurisdictionJersey
CourtRoyal Court
JudgeJ. A. Clyde-Smith,Clyde-Smith
Judgment Date23 January 2017
Neutral Citation[2017] JRC 19
Date23 January 2017

[2017] JRC 019

ROYAL COURT

(Samedi)

Before:

J. A. Clyde-Smith, Esq., Commissioner, sitting alone

Between
The Federal Republic of Nigeria
Plaintiff
and
Doraville Properties Corporation
Defendant

and

The United States of America
Proposed Intervener

Advocate J. M. Dann for the Plaintiff.

Advocate M. T. Jowitt for the Proposed Intervener.

Authorities

Doraville Properties Corp -v- AG [2016] JRC128.

Civil Asset Recovery (International Co-operation)(Jersey) Law 2007.

Royal Court Rules 2004, as amended.

USA v Abacha and others [2015] 1 WLR 1917.

SOCA v Perry (Numbers 1 and 2) [2013] 1 AC.

Judgments (Reciprocal Enforcement) (Jersey) Law 1960.

Mourant and Company (Trustees) Limited and Five Others v Broere [2003] JLR 509.

In re Esteem Settlement v [2000] JLR 165.

English Whitebook.

Gurtner v Circuit [1968] 1 QB 587.

Dollfus Mieg et Compagnie SA v Bank of England [1951] 1 Ch 33.

Allergen Inc v Sauflon Phamaceuticals Ltd [2001] All ER (D) 106.

Spencer, Bower and Handley, Res Judicata, 4th edition.

Brandon v Becher [1835] 6 ER 1517.

Girdlestone v The Brighton Aquarium Company [1874] Ex D 107.

Fraud — application to intervene by USA in the proceedings between the parties.

THE COMMISSIONER:
1

The United States of America (“USA”) applies to intervene in the proceedings brought by the Federal Republic of Nigeria (“Nigeria”) against Doraville Properties Corporation (“Doraville”).

2

The background is set out in detail in the Court's judgment of 22 nd July, 2016, Doraville Properties Corp -v- AG [2016] JRC 128, but by way of brief overview:–

  • (i) Doraville is alleged to be the recipient of funds stolen from Nigeria, and laundered through the USA, by General Sani Abacha, his family and associates during his military regime which came to an end on his death on 8 th June, 1998.

  • (ii) On 25 th February, 2014, and on the application of the Attorney General, the Court imposed a property restraint order over the recoverable property of General Abacha's son, Mohammed Sani Abacha, and specifically over the bank account of Doraville at Deutsche Bank International in Jersey, and this pursuant to Article 6(3) of the Civil Asset Recovery (International Co-operation)(Jersey) Law 2007 (“the 2007 Law”), the effect of which was to vest the funds within the bank account in the Viscount (Article 7(1) of the 2007 Law) who has taken possession of those funds.

  • (iii) On the 6 th August, 2014, and at the request of Nigeria, the USA obtained a default judgment in rem in the United States District Court for the District of Columbia against inter alia the bank account of Doraville.

  • (iv) The Attorney General has yet to apply to register the US default judgment in Jersey under Article 9 of the 2007 Law, but when and if he does so, it is the intention of Nigeria to oppose it.

  • (v) Doraville applied to discharge the property restraint order, which application was dismissed for the reasons set out in the Court's judgment of 22 nd July, 2016. That judgment is under appeal.

  • (vi) These proceedings were commenced by Nigeria by way of Order of Justice dated 11 th May, 2016, which recites that Mohammed Abacha and one of his father's associates, Abubakar Atiqu Bagudu, the beneficial owners of Doraville, entered into an agreement with Nigeria entitled the “Repatriation Agreement” dated 14 th July, 2014, by which it was agreed that the funds held in the bank account of Doraville (and other assets) would be transferred to Nigeria. In the Order of Justice, Nigeria seeks:–

    • (a) a declaration that the monies held in the bank account were held by Doraville as constructive trustee for Nigeria;

    • (b) an order that any monies in the bank account be transferred to Nigeria forthwith; and

    • (c) further or alternatively, an account as to which of the monies held by Doraville had been obtained from Nigeria unlawfully or otherwise in breach of trust, together with equitable compensation as to the sums so obtained.

  • (vii) Doraville gave notice that it did not intend to defend the proceedings brought by Nigeria, so that judgment would be obtained in default. The USA has applied to intervene to prevent such a judgment being obtained, as it is concerned that any such judgment would prejudice the ability of the Attorney General to register the USA default judgment on behalf of the USA under the 2007 Law.

3

The application by the USA to intervene in the proceedings brought by Nigeria first came before the Court on 30 th September, 2016. During that hearing, the following emerged;–

  • (i) The Order of Justice made no reference at all to the property restraint order obtained by the Attorney General under the 2007 Law and the fact that there were no monies now in the bank account of Doraville over which any judgment could be obtained.

  • (ii) Nigeria's intention was to obtain judgment over Doraville's reversionary or contingent interest in the funds now held by the Viscount should the application by the Attorney General to register the US default judgment fail and the funds be returned to Doraville.

4

The matter was adjourned to see whether parties could agree the basis upon which the Order of Justice might be amended and judgment granted in favour of Nigeria in a manner which did not prejudice the proceedings under the 2007 Law. I had indicated that I was minded, subject always to counsel's further input, to order Nigeria to amend its Order of Justice along the following lines:–

  • (i) To recite the proceedings under the 2007 Law, the property restraint order and the vesting of all of the monies in Doraville's bank account in the Viscount;

  • (ii) To seek a declaration over Doraville's reversionary interest in the monies held by the Viscount, however that should be best articulated; and

  • (iii) To limit any order sought to that reversionary interest.

5

Nigeria offered an undertaking not to enforce any judgment it obtained against Doraville until the proceedings under the 2007 Law had terminated, which I had indicated I would be minded to accept.

6

Nigeria has now proposed amendments to its Order of Justice (for which leave has not yet been granted) and in which it does now recite the proceedings under the 2007 Law and the vesting of the funds in the Viscount. It is proposed to amend the relief sought in this manner:–

“AND THE PLAINTIFF CLAIMS:

A declaration that any monies held in accounts at Deutsche Bank International Limited in Jersey in the name of Doraville interest retained by Doraville in the Doraville Property, whether reversionary or contingent or otherwise in nature is held upon constructive trust for Nigeria. are held by Doraville as Constructive trustee for Nigeria or alternatively that Nigeria is beneficially entitled to such monies;

An order that, in the event that the property Restraint Order is discharged, set aside or otherwise ceases to have effect any monies held in accounts at Deutsche Bank International limited in Jersey in the name of Doraville shall be transferred to Nigeria forthwith;

Further or alternatively, an account as to which of the monies held by Doraville have been obtained from Nigeria unlawfully or otherwise in breach of trust, together with equitable compensation as to the sums found to have been found to have been obtained unlawfully or in breach of trust, together with an equitable lien or charge over the Doraville Property as security for the same.”

7

It can be seen that the proposed amendment to prayer (3) goes beyond a simple declaration of a constructive trust over Doraville's reversionary or contingent interest in the funds held by the Viscount.

8

The parties were unable to reach agreement and the matter came back before me on 23 rd November, 2016. The USA's position was that I should stay these proceedings until the proceedings under the 2007 Law had terminated, but if not, the proposed amendments to the Order of Justice should be strictly limited to those which I had indicated. If any wider amendments were permitted, the USA would wish to persist with its application to be convened.

The application to intervene
9

By its summons, the USA seeks to be joined as a party to these proceedings and an order that “the proceedings be stayed sine die until further order of the Court, the proceedings be dismissed or that the proceedings be adjourned to an alternative date to be fixed”.

10

The application is brought under Rule 6/36 of the Royal Court Rules which is in the following terms:–

“6/36 Misjoinder and nonjoinder of parties

At any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application –

  • (a) …

  • (b) order any of the following persons to be added as a party, namely –

    • (i) any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, or

    • (ii) any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between that person and that party as well as between the parties to the cause or matter,

    But no person may be added as a plaintiff without that person's consent signified in writing or in such other manner as the Court may direct.”

11

Advocate Jowitt for the USA submitted that its application to be joined as a party came within both of the two bases set out in Rule 36, namely that the presence of the USA before the Court was necessary to ensure that all matters in dispute may be effectually and completely determined and adjudicated upon, or that it is a person between whom and any party to the proceedings there may exist a question or...

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2 cases
  • Robert Tantular v HM Attorney General
    • Jersey
    • Royal Court
    • 8 April 2020
    ...JLR 29. AG v Ljungman [2014] (2) JLR 1. United States v Abacha [2015] WLR 1917. Republic of Nigeria v Doraville Properties Corporation [2017] (1) JLR 46. Macmillan v Bishopsgate Investment Trust Plc (No 3) [1995] EWCA Civ 55 Saisies Judiciaires — are the Court's powers limited to property s......
  • Doraville Properties Corporation v HM Attorney General
    • Jersey
    • Court of Appeal
    • 22 February 2017
    ...Commissioner of the Australian Federal Police v Mulder [2013] NSWSC 993. Federal Republic of Nigeria -v- Doraville Properties Corporation [2017] JRC 019. Appeal against decision of the Royal Court 22 July 2016, dismissing the Appellant's application for a property restraint order to be disc......

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