UK’s Supreme Court to decide whether £1.6bn Tuna Bonds case should be heard in London’s courts
Britain’s top court will this week hear a long-running dispute between Mozambique and a Lebanese shipmaker over whether a case relating to the ‘Tuna Bonds’ should be heard in London’s courts.
The UK’s Supreme Court will decide whether the dispute between shipping company Privinvest and the Republic of Mozambique over the $2bn (£1.6bn) scandal should be heard in Britain’s courts.
Privinvest is seeking to have the case heard in the International Court of Arbitration in Paris, while Mozambique is calling for the case to be heard in London’s more transparent High Court.
For Mozambique, having the case heard in Britain would offer it a better chance of exposing any wrongdoing to public scrutiny.
Mozambique has accused Privinvest of bribing officials to secure contracts from Mozambique’s government to supply ships, aircraft, and infrastructure for use in policing the East African country’s waters.
The African country had sought to use the ships and infrastructure to develop its coastline and marine resources, with a view to building a tuna fishing industry and exploiting its oil and gas resources.
The ‘Tuna Bonds’ scandal saw three Mozambican state-owned companies take on more than $2bn of government-backed debt to pay for the Privinvest supply contracts.
Mozambique’s former finance minister Manuel Change is accused by the country of illegally guaranteeing the sovereign-backed loans and keeping them secret from the country’s parliament, court documents show.
The $2bn worth of Mozambican government-backed loans and bonds were issued by Credit Suisse and Russian bank VTB.
An independent audit by Kroll later showed $500m worth of loans could not be accounted for and that Privinvest may have inflated its prices by more than $700m.
Mozambique claims the supply contracts and government-backed loans were all part of a “fraudulent scheme” to siphon money out of the African country in the form of bribes and kickbacks, court documents show.
In 2021, Credit Suisse agreed to pay $475m in fines and write a further $200m worth of Mozambique’s debts over its part in the Tuna Bonds scandal.
Privinvest is a Lebanon-headquartered shipbuilder founded by company chief executive Iskander Safa and his brother Akram Safa in 1990.
Mozambique is seeking to argue the sovereign guarantees are governed under English law, meaning the case should be heard in London.
Privinvest is instead arguing the supply contracts it entered are governed under Swiss law, and that the case should therefore be heard in the International Court of Arbitration.
Privinvest, which was approached by CityAM for comment, denies any wrongdoing.