For Lovells, the adviser to the liquidator Deloitte & Touche, it was the beginning of a process that would mean 10 years of pushing legal boundaries. Indeed, it was only last month that the firm successfully won the chance to put the Bank of England in the witness box for the first time in its 300-year history.

Lovells had to get involved with 64 countries and somehow thrash out agreements between hundreds of creditors and dozens of branches to try to get to the bottom of what was going on. For the first time it used a pooling agreement, which formed a consensus between all of the principal BCCI companies that all their assets would be pooled and that creditors to each liquidation would all receive the same rate of dividend out of the pool. Without such an agreement, the intermingling of the affairs of BCCI SA and BCCI Overseas was such that it could have taken years to determine which company was entitled to which assets.

So although the liquidation has called upon a cast of thousands, and City lawyers have had a field day racking up fees and unravelling the mess which was left behind, when you think BCCI, you think Lovells.

And while finding a top London law firm that is not involved in the BCCI debacle in some shape or form is far harder to find than a firm that is, Lovells is the only one that has been in the thick of it from the start.

The partners have earned themselves more than £85m in fees from the client, and have survived some economic downturns on the back of it.

Lovells senior partner Andrew Walker is pretty chuffed with the whole thing. He says: “It's obviously been an enormous job and a very long-lasting one. Really, it's much more than one job as well, because you've got all the litigation that goes with it. When it came to us as a job, it was in the early days of the recession in the early to mid-1990s, and in that sense I think one of the things it did was to shield us from the effects of the recession.”

But although Lovells might have done very nicely thank you very much, there are others still smarting. Lovells was not, after all, the law firm of choice – if truth be told, it was lucky to get the work in the first place.

Step back 11 years to the summer of 1990 in the sun-soaked United Arab Emirates. Auditor Price Waterhouse discovered enormous fraud within BCCI, and the Abu Dhabi government stepped in to take control of the bank and begin an investigation.

A law firm was needed to finalise the package of financial measures by which the Abu Dhabi government would support the BCCI group. So Price Waterhouse suggested three City law firms, which were summarily approached and then invited to beauty parade for the work. They were Simmons & Simmons, Allen & Overy (A&O) and Lovells.

A&O, with a team led by banking and litigation partner Nick Segal, scooped the work. Segal embarked on nearly a year's work advising the Abu Dhabi government, and through it BCCI, on the restructuring and the attempted rescue of the bank. At least 60 of the firm's lawyers were involved. But although Segal won that work, it all turned out to be a waste of time as the bank was unceremoniously shut down a year later. A&O was conflicted out of the subsequent liquidation, and the two firms which lost the beauty parade picked up the bulk of the work. Simmons was instructed by the majority shareholders, while Lovells got to act for the liquidator.

Segal sounds almost bitter. “It was very ironic,” he says, “but we had had an amazing 12 months on one of the most amazing projects I've ever done in terms of its scope and its challenges. There's a bit of irony in that having won a beauty parade, we didn't end up doing it for ever more – it's an assignment every firm would have loved to have had.” As his involvement meant he was flying over Iraq as the deadline passed that signalled the start of the Gulf War, his family may well have been relieved to have seen the back of that particular job.

But even once BCCI went into provisional liquidation and Touche Ross (now Deloitte & Touche following a merger with Deloitte Haskins & Sells) was appointed as provisional liquidator, Lovells did not get the call-up. Still it was not at the top of the list – that was Freshfields (now Freshfields Bruckhaus Deringer).

“Our initial lawyers for a matter of weeks were Freshfields,” says liquidator John Richards at Deloitte & Touche. “They'd been advising the Bank of England in its role as supervisor and regulator, and they were instrumental, so they advised us. Then it emerged that there might well be an action by the estate against the Bank of England, so they had to stand down. There was a fundamental problem in terms of their relationship with the Bank of England – you could totally foresee that there would be a future difficulty.”

And so Lovells finally got its break. Peter Horrocks, who took over as lead partner of Lovells from Jo Rickard of Freshfields, says: “Jo Rickard was there from the liquidation on 5 July right through until mid-August, and then I effectively took over her role. The Abu Dhabi government just said no – no, we're not having the Bank of England's lawyers in our jurisdiction, they've got to leave. Freshfields' lawyers were asked if they'd leave the country, and so we then had to coordinate a handover. Freshfields took the decision that they couldn't handle the job without having people in the jurisdiction.”

Horrocks had been on the ground in Abu Dhabi from the early days after the collapse anyway, advising Touche Ross on the Bingham Report, which looked closely at the role of the Bank of England.

Horrocks had commercial fraud and insolvency partner Jeremy Cole with him. “I first got involved when Peter Horrocks called and said can you come out to Abu Dhabi with me,” says Cole. “He said Brian Smouha [lead liquidator at Deloittes] would be with us on the plane. He told me to just pack a couple of shirts, as that's all I'd need, and that we'd just be going for a couple of days. While we were out there, a decision was made to switch from Freshfields to Lovells, so I was out there for four months.”

Richards says that Lovells replaced Freshfields because it was available and Smouha knew them. “At that stage it was a matter of looking at a firm with the capability but without the conflicts,” he admits. “A&O had acted for Abu Dhabi prior to closure, and Wilde Sapte had acted for the bank in the past. A lot of firms were conflicted, and Lovells didn't have any unmanageable conflicts and clearly had the experience and skills and the track record to support it.”

And so they began work trying to sort out the collapse, battling with the intermingling of the affairs of various BCCI businesses worldwide which had led one judge to describe the task of unravelling it all as “gargantuan”.

Since Lovells nabbed the work, the insolvency department has been bogged down with it. At the height of the liquidation, the start of 1992, more than 100 Lovells fee-earners were involved, 37 of whom were partners.

Worldwide legal fees for the liquidation have been a massive $260m (£180m), and a year ago Lovells had racked up nearly half of that, having charged more than £85m for its services.

Simmons also played a massive part in the process for the first five years, when it was representing the majority shareholders of BCCI, the rulers of Abu Dhabi. Simmons is understood, too, to have billed around £40m.

But not all of it was easy riding for Simmons either, although its was not a story of conflicts. Just like Lovells, it sent out an enormous team to Abu Dhabi in the first few months after the collapse and the two firms worked together to thrash out some of the agreements that would shape the liquidation (see key agreements box).

“We got a call on the day after the closure, the Saturday, and by the Monday we had two partners in Abu Dhabi and we had a presence until May 1995,” says Simmons litigation partner Gavin Bacon. “For the first six months we worked out of a squash court, until we found a permanent office.”

Recalls Cole: “To get to Simmons in the squash court you had to walk across a compound where they were drying dates. When you got to the door you had to stop and pick the squashed dates off your shoes.”

The two Simmons partners who were first on the scene were Jerry Walter, now head of corporate, and James Roome, now at Bingham Dana's London office. In the first year of the job Walter won the dubious honour of racking up more British Airways Air Miles than had ever been done before. He even featured in the airline's in-flight magazine.

But things were not to continue so nicely. Cole remembers that at one stage all the Lovells lawyers were arrested by the Abu Dhabi authorities. “On one occasion Peter [Horrocks] and I were out at a meeting; we came back and found the whole building under armed guard. They wouldn't tell us what was going on so we went back to the hotel and called the authorities,” he says. “They were arresting a number of the top-ranking employees, and in order to do so they put the whole building under arrest. It was pretty frightening.”

Simmons' involvement ultimately ended spectacularly when one of its partners, David Sandy, was indicted by US authorities in 1995 and accused of concealing the business diary of the bank's chief executive. Simmons resigned from the case and Macfarlanes, led by partner Paul Phippen, took over where Simmons left off. Sandy went through two mistrials before agreeing on a settlement last year, when he promised to refrain from practising law and receiving money from a law firm for 18 months, which ends in September.

Simmons senior partner Bill Knight says: “On the David Sandy issue, we've never commented and we don't intend to do so now. The charges against David were dismissed last year. We felt it would be right to resign from the case, and Macfarlanes took over. We spent two months on the handover, and it was extremely amicable and professional.”

But while the two main players may have had their share of traumas along the way, they are both viewed as having done a great job by their contemporaries.

One head of insolvency at a City firm says: “It's a double-edged thing when you get a case like that because you do get people taken out. The fees were very substantial at a time when M&A and corporate activity were pretty slow, and I think that given the chance, no one would say that they're not going to do it because it will take too many people out of the market.”

Between them, Simmons and Lovells shaped a liquidation and set the stage for things to come. With a recession around the corner, who knows when the next great international liquidation will appear, but never again will a law firm have to start from scratch – there will always be the BCCI experience to look back on.

For now, it just keeps rolling on. Deloittes will see the Bank of England in court next year, and Lovells will hope to break even more new ground. n


Luxembourg 1974

$1.5bn (£1bn)

Holding company


Grand Cayman 1975


$496.1m (£345m)


Branches in 28 countries totalling 63 offices

bahamas (1)

bangladesh (3)

barbados (1)

china (1)

france (3)

gabon (3)

grand cayman (1)

india (1)

ivory coast (2)

jamaica (1)

kenya (7)

korea (1)

liberia (1)

macau (1)

maldives (1)

monaco (3)

oman (12)

pakistan (3)

panama (2)

paraguay (1)

philippines (1)

senegal (1)

seychelles (1)

sierra leone (2)

sri lanka(2)

sudan (3)

togo (1)

turkey (3)


Luxembourg 1972


$403.6 (£280.7m)


Branches in 13 countries totalling 13 offices

bahrain (1)

cyprus (1)

germany (2)

italy (1)

japan (1)

jordan (3)

luxembourg (1)

mauritius (1)

netherlands (1)

uae (8)

uk/isle of man (24)

us (1)

yemen (2)


mb merchant banking

cb commercial banking

ib investment banking

fc finance company

ic investment company

l leasing

Other subsidiaries and affiliates

Unconsolidated (3)

BCCI Leasing (Malaysia) Sdn Bhd Malaysia 1982 $0.2m (£0.14m) 49%

Kuwait International Finance Company SAK Kuwait 1975 $15.5m (£10.78m) 49% FC IC

Banque de Commerce et de Placements SA Switzerland 1976 $26.2m (£18.2m) 15% CB

Other related entities

IZ Company for Exchange SAK Kuwait

Bank of the Third World BCC

Finance and Securities Ltd Thailand

BCCI Enterprises (Thailand) Ltd Thailand

BCCI Leasing Co Ltd Thailand

Comet (1985) Ltd Thailand

Constellation Ltd Thailand

BCCI Services (Private) Ltd UAE

Matopo Investments Ltd Hong Kong


1980 100%

$20m (£14m)








Consolidated (26)

Credit and finance Corp Ltd Cayman Islands 1977 $15m (£10.4m) 100% IB MB

BCCI Finance NV Netherlands Antilles 1983 $0.3m (£0.2m) 100% FC

BCCI (Lebanon) SAL Lebanon 1973 $0.3m (£0.2m) 100% CB

BCC (Zambia) Ltd Zambia 1980 $1.9m (£1.3m) 100% CB

BCC (Botswana) Ltd Botswana 1982 $1.6m (£1.1m) 100% CB

BCC Credit and Finance (Uruguay) SA Uruguay 1982 $1.9m (£1.3m) 100% CB

BCCI Finance (Kenya) Ltd Kenya 1980 $0.7m (£0.48m) 100% FC

BCC Niger Niger 1984 $1.2m (£0.8m) 100% CB

Italfinance Int SpA Italy 1981 $5.4m (£3.75m) 85% FC

BCCI (Nigeria) Ltd Nigeria 1979 $35.5m (£24.7m) 40% CB

BCCI (Swaziland) Ltd Swaziland 1978 $1.4m (£0.97m) 55% CB

BCC Zimbabwe Ltd Zimbabwe 1981 $4.7m (£3.27m) 53% CB

BCC Cameroon SA Cameroon 1980 $3.9m (£2.7m) 65% CB

BCC (Emirates) UAE 1982 $118m (£82m) 40% CB

BCC (MISR) SAE Egypt 1981 $32.5m (£22.6m) 49% CB

BCC Hong Kong Ltd Hong Kong 1979 $75m (£52m) 99% CB

BCCI Finance Int Ltd Hong Kong 1973 $4.7m (£3.2m) 99% FC

Banco de Credito y Comercio de Colombia Colombia 1983 $14.9m (10.4m) 100% CB

Banco de Credito e Comercio de Investmento SA Brazil 1986 $14.8m (£10.3m) 50% IB

BCC SAE Spain 1983 $33.4m (£23.2m) 99% CB

National bank of Oman Ltd (SAO) Oman 1973 $58.3m (£40.55m) 40% CB

BCC Ghana Ltd Ghana 1979 $0.4m (£0.27m) 55% CB

BCC Australia Ltd Australia 1986 $7.7m (£5.35m) 100% IB

BCCI (Trinidad & Tobago Merchant Bankers) Ltd Tobago (information unavailable) 100%

BCC SA Argentina (information unavailable) 99%

PT BCC Pratama Leasing Indonesia Indonesia 1983 $1.8m (£1.25m) 70% L

Conversions into sterling are at today's exchange rate