SC to take up Broadsheet's petition seeking Volume-10 of JIT report next week

The Supreme Court has fixed for Tuesday (August 22) the Broadsheet LLC’s petition seeking the release of Volume-10 of the Joint Investigation Team (JIT) report on the Panama Papers leaks case.

A two-member bench of the top court headed by Chief Justice of Pakistan (CJP) Umar Ata Bandial will take up the plea on August 22. The apex court issued notices to the Attorney General for Pakistan (AGP) and the relevant parties in the case.

The National Accountability Bureau (NAB) struck a deal with the asset recovery firm during Pervez Musharraf’s government in 1999 to trace assets in the UK and the US of more than 200 Pakistanis (called ‘targets’ in the contract) including generals, politicians, businessmen — Benazir Bhutto, Asif Ali Zardari and Nawaz Sharif as the chief targets.

Conflict over payment emerged after NAB suddenly terminated its contract with Broadsheet in 2003. Broadsheet claimed that it helped NAB in tracing the Sharif family’s foreign assets but the anti-graft watchdog did not pay it for its services.

Later, Broadsheet moved a UK court against NAB over the payment issue.

The asset recovery firm wanted to present a copy of Volume-10 of the JIT report in the UK court as evidence.

Battle for Pakistan’s $31m to Broadsheet takes new turn

Last month, the Court of Appeal of the Isle of Man handed a crucial victory to Kaveh Moussavi’s Broadsheet company which was contracted by NAB in July 2000.

The legal battle at the Isle of Man centres around the $29 million that Pakistan paid to Broadsheet LLC after London High Court arbitration judge Anthony Evans, the former judge of the Court of Appeal of England and Wales, ruled against NAB and in favour of Broadsheet over breach of contract.

As soon as the payment was made by Richard Deitz’s multimillion-dollar hedge-fund VR Global Partners started a case against Broadsheet claiming $51 million out of the $31 million that Pakistan paid to Broadsheet LLC.

Judge Evans had found that Broadsheet was unlawfully sacked by the NAB in October 2003. Broadsheet launched a successful arbitration action against the NAB and the Pakistan government at the London Court of International Arbitration and was awarded damages of $22 million and costs and ancillaries amounting in total to $31 million by the judge.

The latest Isle of Man Court’s judgment is the second victory of Broadsheet LLC against VRGP Capital in this long-running saga. It was in October 2017, after Broadsheet had won the first round against NAB, that VRGP rushed in to invest $6,000,000 in Broadsheet’s efforts against Pakistan.

Once the payment was made by Pakistan, VRGP claimed that the entirety of the “proceeds of claim” belonged to it as the sums collected by Broadsheet belonged to it as it allegedly had a priority agreement with Broadsheet over sums seized due to the “escalator clause” that was in the agreement.

VRGP sued Broadsheet for the full amount but the Isle of Man High Court ruled against it. VRGP’s appeal to the Isle of Man Court of Appeal has also been thrown out was also thrown out last week. The court dismissed both heads of VRGP’s claim that the funds in possession of the liquidator were “proceeds of the claim” — they were “recovered funds subject to the Insolvency Act of the IoM and subject to the Statute’s liquidation process and its mandated waterfall” and dismissed the argument that a constructive trust had been created in favour of VRGP on account of its priority claim.

The court ruled that private contracts contrary to public policy are not enforceable. The matter now returns to the lower court for final determination of the claims of the parties regarding the shares of each. The lawyers acting in the initial arbitration, Crowell and Moring will receive their circa $11,000,000 as will the now-defunct hedge fund BlackRobe LLC, which initially extended funding to Moussavi to fund his war chest against the NAB. The remaining funds left in the liquidator's account circa $11,000,000 will now be the subject of a final legal tussle between the liquidator and VRGP.

In his judgment, Judge Evans ruled that Broadsheet had been a victim of a conspiracy to defraud by elements of NAB in collusion with corrupt middlemen; that it had carried out its contractual obligations to the full; that it had been frustrated in its work by the corrupt shenanigans of officials in collusion with freebooting businessmen; that it had been driven into bankruptcy as a result of these activities and was thus entitled to compensation.

Judge Evans had also added in his judgement that the NAB had not been forthcoming with the documentation necessary for the tribunal to have a complete picture of the extent of the damage that Broadsheet had suffered. For this reason, the record was kept open in the event that further evidence did emerge.

Pakistan did not comply with the order of the Tribunal and Broadsheet was forced to take enforcement action at the high court after its investigators located $31 million at the London branch of United Bank. The funds were seized on the order of the high court in Dec 2020 and transferred to the liquidator’s account.

Contacted for comment, Moussavi said he cannot comment on specifics of the case in view of the sub judice status of the matters.

“This case has now gone on for 23 years. It has a feel of Charles Dickens and Bleak House. We have had our share of incompetent lawyers, corrupt officials, rogue businessmen et al. We set out to find the stolen money. We found hundreds of millions but not from people we initially thought were the chief rogue players.

"But today, thanks in large measure to the efforts of conscientious Pakistani intelligence officers, whistle-blowers and parliamentarians we are at the point of cracking this puzzle wrapped in a conundrum rolled into the enigma of collusion by rogue businessmen and corrupt officials.

"Let me add that whatever we collect the Pakistani people are a stakeholder in the outcome and entitled to a share of recoveries. That after all was the point of our contract. The fact that corrupt officials breached that contract does not and should not mean that the people of Pakistan should suffer," he said.