On 4 May 2007, following a four-month trial held in two countries simultaneously, Mr Justice Peter Smith gave judgment in the High Court in London against the former president Dr Frederick Chiluba in the Republic of Zambia’s flagship anti-corruption case.
Chiluba and many of his co-defendants were found to have conspired during his presidency to defraud Zambia of millions of dollars in two massive conspiracies. Judgment against himwas subsequently quantified at more than $57m (£28.04m).
Eighty per cent of the people of Zambia live on less than $1 (49p) a day. By grotesque contrast, Chiluba was found to have spent more than $500,000 (£245,900) of stolen government money on clothes for himself. The UK’s minister for international development Hilary Benn described the judgment as “an historic victory for the people of Zambia”.
Why was the case brought in England?
The 20 defendants included the former head of the Zambian Secret Service and the country’s former ambassador to the US, as well as a number of other prominent Zambian officials and businessmen. There were, however, also defendants based in England, Belgium, Switzerland the US and the British Virgin Islands.
The defendants included two English law firms, Cave Malik & Co and Meer Care & Desai, which were both found to have participated in sub-conspiracies to misappropriate monies from the republic and to have dishonestly assisted the Zambian defendants by passing millions of dollars through their client accounts.
The case was brought in London because the stolen money passed through bank accounts in London before being disbursed. Further, England was the only jurisdiction in which claims against so many defendants in so many different jurisdictions could properly be determined.
The trial of the preliminary issue
The number of defendants was reduced to 17 following the trial of a preliminary issue against some of the Belgian defendants in August 2005. They had claimed to be bona fide purchasers for value of two aparthotels in Belgium, which had been bought with stolen government monies. Their defence collapsed during the trial, resulting in the handover of the properties and payment of substantial sums to the republic.
The challenge of multiple defendants
Dealing with so many defendants in a single case presented a particular logistical challenge. All those who defended did so robustly and there were many interlocutory hearings in quick succession. For example, the Zambian defendants’ first challenge to the English court’s jurisdiction took place the day before the trial of the preliminary issue began.
A further complicating factor was the fact that, at the same time, the republic’s English legal team was defending Zambia in substantial and complex proceedings brought against it in the Commercial Court by a vulture fund, Donegal International, which was seeking to recover $55.5m (£27.3m) in respect of distressed sovereign debt it had purchased for only $3.2m (£1.57m) six years earlier.
That case was heard throughout May 2006, with a further week’s hearing in December, in the middle of the trial of the anti-corruption proceedings. The republic’s penalty defences in that case were successful and the eventual judgment was for $40m (£19.68m) short of what had been claimed.
The right to a fair trial
Chiluba and four other Zambian-based defendants were the subject of criminal investigations and proceedings in Zambia, and had had to surrender their passports as part of their bail conditions. They challenged the English court’s jurisdiction over them and contended that a fair trial of the action could not take place in England without prejudicing the criminal proceedings in Zambia.
Their objections were surmounted by the innovative and practical case management solutions devised by Smith J, which were endorsed by the Court of Appeal. He made a number of orders designed to protect the Zambian defendants’ position, with the following effect:
•the material produced by the defendants in the civil proceedings was ring-fenced from use in the criminal proceedings or elsewhere without the court’s permission;
•all interlocutory hearings and the trial took place by videolink with Lusaka, so that the Zambian defendants could participate throughout;
•with the consent of the Zambian government, the trial judge sat in Zambia as a special examiner, so that he could hear the evidence of the Zambian defendants and their witnesses in person; and
•the trial and all interlocutory applications took place in private.
The judge also encouraged the Zambian attorney general to agree to lift a restriction notice that had been imposed on assets in Zambia pursuant to anti-corruption legislation to enable the Zambian defendants to realise funds to pay for legal representation.
The implementation of these arrangements was a considerable logistical challenge. A dedicated satellite link in Zambia and state-ofthe- art videoconferencing equipment in both Court 61 at the High Court and the Chikwa courtroom in Lusaka were procured and installed.
Their jurisdiction challenge having failed and the House of Lords having refused permission to appeal, the Zambian defendants announced that they were “discontinuing participation” in the proceedings.
The case nevertheless proceeded inaccordance with the orders that had been made. The defendants’ trial bundles – some 110 lever-arch files per set – were couriered to Zambia and hand delivered; additional shelving was installed in Court 61 to accommodate the active defendants (by the time of the of the trial there were six sets of legal teams in the London courtroom) and, at the end of November 2006, four sets of trial bundles, including the judge’s papers, were shipped out to Lusaka, where the courtroom was set up for three weeks of evidence by videolink.
Chiluba declined to attend the trial to give evidence, but the time in Lusaka was well spent. A number of the republic’s 47 witnesses of fact and its Zambian law expert gave evidence by videolink to the courtroom in London.
The case took less than two years to come to trial and the trial finished on time, four months later.
A supercase in size and complexity, with multiple defendants and unique logistical challenges, the result was achieved by a combination of teamwork, pro-activity and determinationon the side of the legal team and effective and creative case management by the court.
Smith J’s judgment, delivered some two months later, was extensive. It was published in full in the Zambian press, ensuring, as the judge had intended, that the Zambian people know the truth about how huge sums of money were stolen from the republic under a cloak of secrecy that was maintained by the climate of fear created by the Chiluba administration.
As Smith J observed: “At the end of the day, he was the president at the top of the control of government finances. He was uniquely positioned to prevent any corruption. Instead of preventing corruption he actively participated in it and ensured it happened… It’s a shameful series of actions and he should be ashamed.”
Janet Legrand is a partner at DLA Piper