NAB to pay Rs8.3 bn after losing case in UK

LONDON: The National Accountability Bureau (NAB) is set to foot the bill of more than $45 million (approx Rs6.238 billion) after losing a major case at the London Court of International Arbitration (LCIA) to the asset recovery firm Broadsheet LLC -- the firm hired by the NAB during Pervez Musharraf’s era to trace assets in UK and US of more than 200 Pakistanis (called ‘targets’ in the contract) including generals, politicians, businessmen with Benazir Bhutto, Asif Ali Zardari and Nawaz Sharif as the chief targets.

Although, Broadsheet failed to produce any evidence of any kind of wrongdoing by Nawaz Sharif’s son Hasan and Hussain Nawaz, but it is now set to make a new claim against the NAB for $25 million fine imposed on him by the accountability court in Al-Azizia reference verdict. The total cost to the NAB will be over US$60 million when all costs, damages and fines taken into consideration.

The News has seen papers, which show that the total amount payable by the NAB stands at around $60 million (approx. Rs8.317 billion) on various counts, and any attempt by the NAB to wriggle its way out could only increase fines, costs and interests.

It all started in 2000 -- a year after Pervez Musharraf took over in a military coup and established NAB to investigate corruption allegations against public officials including the Sharifs. Musharraf’s government entered into an agreement with the Isle of Man-registered Broadsheet LLC in early 2000 with the task to help track down assets of Nawaz Sharif and more than 200 other politicians, generals and officials at its own expense -- in return for 20 percent of any sums recovered from the designated targets.

The News has seen the papers which show that the NAB has been held responsible for contractual damages and breach of contract from the day it signed the contract to trace assets of ‘target’ Pakistanis.

The total award to Broadsheet against the NAB is $21,589,460 against the following targets: Schon Group: $48,760 interest from 1 Jan 2013; Lakhani: $25,000, 1 July 2005; Kasmi: $85,600, 1 July 2005; Lt Gen Zahid Ali Akbar: $381,600, 1 Jan 2016; Sherpao: $210,000, 1 Jan 2018; Ansari: $180,000 (1 Jan 2005), $158,500 (1 Feb 2007) and $1,089,460; Sharif Avenfield ($1,500,000) and Sharif (other assets) $19,000,000.

The arbitration order says that “the parties are requested to calculate the amount of interest from the above dates to the date of this award (17 December 2018) and although dates of all the ‘targets’ for interest rate application has been given but no dates have been given against the work carried out against sons of Nawaz Sharif. It’s understood that Broadsheet started work against Sharifs as the first targets immediately after signing the contract in 2003.

A source told this correspondent that separate to the above costs, Broadsheet would claim $10 million from the NAB in litigation and case costs after decision in its favour. In addition, Broadsheet will seek 7 percent interest rate and the total amount in interest rate will be around $6 million. The source told that Broadsheet will seek around $6 million further from the NAB after Nawaz Sharif’s conviction and fine imposition claiming that the assets recovery firm was the first to initiate work on his alleged assets and provided paperwork to the NAB.

The source revealed that the NAB’s defence law firm Allen & Overy LLP has been paid, so far, £11 million (approx. Rs1.92 billion) and £2.5 million (approx. Rs437 million). These costs could go up if the NAB continues to seek services of this firm or any other. Another hearing is set to take place in London after a month from now in which the schedule of payments will be decided.

Broadsheet LLC, based in the Isle of Man, was hired by the NAB during Musharraf’s regime to trace hidden assets of Pakistanis in foreign countries and a contract was signed for the jurisdictions of America and Britain. Broadsheet alleges that the NAB terminated it in 2003. It launched a claim of around $600 million against the NAB but the NAB said that it’s for $340 million.

Litigation against the NAB and Broadsheet LLC has been going on for many years but the last hearings of four days took place in the end of July this year where former English Court of Appeal judge Sir Anthony Evans QC heard the case as sole arbitrator in a London-seated proceeding under the rules of the Chartered Institute of Arbitrators.

Colorado businessman Jerry James formed Broadsheet LLC as an offshore company. He filed for liquidation proceedings in the Isle of Man in 2005, before being dissolved and then revived. He then established a Colorado company with the same name and negotiated an agreement with NAB in 2008 to settle the dispute for $2.25 million. The NAB made two payments after that: £2.25 million was paid to another law firm and £1.5 million was pad to Jerry James and in the later deal the then High Commissioner Abdul Basit was a witness. The NAB paid US$ 1.5 million to Jerry James despite the knowledge that Broadsheet had gone into liquidation and Jerry James did not represent the appointed liquidator.

Broadsheet argued that the NAB broke terms of the contract and entered into agreements with the ‘targets’ without notifying it and therefore depriving it of the share as agreed. In August 2016, the international tribunal judge Sir Anthony Evans upheld Broadsheet’s arguments that the 2008 settlement was not binding on it and it was established that James had no authority to act on the company’s behalf at the time. It was also ruled that Pakistan is liable to pay damages as NAB wrongfully repudiated an asset recovery agreement with the Broadsheet and breached contract. It said that the payment agreement between the NAB and Jerry James was a sham. It was declared that Broadsheet was entitled to damages but the full extent will be determined later.

The matter reached before the Supreme Court of Pakistan after Broadsheet LLC requested to the apex court for the release of a copy of Volume-X of the joint investigation team (JIT) report on the Panama Papers. Both Attorney General for Pakistan (AGP) Anwar Mansoor Khan and Prosecutor General NAB Asghar Haider opposed the contention of Broadsheet regarding obtaining Volume-X of the JIT report.

Latif Khosa, the counsel for Broadsheet LLC, argued if the Volume-X of the JIT report is not provided then it would have a negative impact on the arbitration pending before Sir Anthony Evans, sole Arbitrator of International Arbitration in the United Kingdom.

Justice Azmat Saeed said that a three-member bench on 10-07-2017 while hearing the PanamaLeaks case had passed the order that Volume-X of the JIT report would remain confidential.