SFO settles Tchenguiz battle for £4.5m

The Serious Fraud Office (SFO) has agreed a £1.5m out of court settlement with Robert Tchenguiz, bringing a final close to its £300m battle with the two brothers.

The SFO has now agreed to pay out £4.5m in total to Robert and Vincent Tchenguiz to settle their £300m damages claims following their arrest and detention in 2011 after a botched SFO investigation.

The SFO has apologised to both brothers, who launched claims at the agency for trespass, wrongful arrest and misfeasance in a public office in 2012. The agency settled Vincent Tchenguiz’ £200m damages claim for £3m last week (28 July 2014).

Today Robert Tchenguiz said: “The most important thing to me is that the SFO has now apologised to me for all the wrongs suffered and has, finally, cleared my name.”

He added: “I am satisfied that the taxpayer should not bear the full financial pain of the SFO, and its former director’s misguided actions.”

The case was the biggest-ever damages claim hurled at the SFO and the two-year battle has already cost an eye-watering sum for the agency. In January 2013 it called for an additional £19m of funding from the Treasury in January, partly to cope with the case (26 March).

In April the SFO revealed it had spent £8.13m in total defending the claims up to February 2014 and had spent £3.79m in costs defending the claims brought by Robert Tchenguiz and his investment vehicle R20. A detailed witness statement submitted to the court by the SFO put future costs at between £500,000 and £1m (23 April 2014).

Today SFO director David Green QC said: “I am pleased that we have been able to resolve this final outstanding matter, without the need for a costly trial.

“As I said when Mr Vincent Tchenguiz accepted our offer last week, the SFO deeply regrets the errors for which we were criticised by the High Court in July 2012. On behalf of the SFO, I also apologise to Robert Tchenguiz for what happened to him. I reiterate that the SFO has changed a great deal since March 2011, and I am determined that the mistakes made over three years ago will not be repeated.”

The battle has drawn in a weighty roster of silks including Essex Court’s Joe Smouha QC, Matrix Chambers’ Alex Bailin QC and Maitland Chambers’ Catherine Newman QC for Robert Tchenguiz. Fountain Court Chambers’ Brian Doctor QC and Debevoise & Plimpton’s Peter Goldsmith QC were instructed for Vincent Tchenguiz and his investment vehicles.

All were instructed by Stephenson Harwood partner Sean Jeffrey, who took up the case after Robert Tchenguiz switched counsel from Shearman & Sterling partner Josanne Rickard (10 July 2014).

Blackstone Chambers’ Pushpinder Saini QC was also instructed by the SFO earlier this month in place of Serle Court’s Dominic Dowley QC to lead its case. Slaughter and May partner Jonathan Cotton instructed Saini.

However the battle is not over for good. Robert Tchenguiz will now continue his war against the third parties involved in the original investigation which could include liquidator Grant Thornton. The company was acting as liquidator for the Tchenguiz’ holding company Oscatello – one of Kaupthing’s largest debtors – at the time it handed documents to the SFO.

Robert Tchenguiz said today: “I do not believe that, without external influences, the SFO would ever had had any possible cause to arrest me for suspected wrongdoing. It is now quite evident that third parties played a major part in this hugely damaging farce.

“Having resolved my issues with the SFO, I now intend to join my brother in pursuing those who I believe to be both responsible and liable for the devastation that has been caused.”

In February two Grant Thornton employees brought an unsuccessful appeal over the disclosure of sensitive documents central to the case. The employees turned to Chadbourne & Parke partner John Verrill, who instructed South Square’s William Trower QC and David Allison (25 February 2014).