A&O facing SRA probe over Dahdaleh bribery trial

Two Allen & Overy (A&O) partners are facing an SRA investigation over what their barrister called an “extraordinarily ill advised” meeting during a high-profile bribery trial against businessman Victor Dahdaleh.

Partners David Esseks and Peter Watson were representing Dahdaleh in his defence against the Serious Fraud Office (SFO), which alleged he funnelled billions of dollars in bribes to Aluminium Bahrain (Alba) to secure contracts.

In a dramatic turn of events, which temporarily derailed the trial, the lawyers attended a meeting with Dahdaleh, Akin Gump Hauer Strauss & Feld – Alba’s lawyers in the US –  and the lead prosecution witness but did not inform the SFO. The April meeting, just days before a court hearing, breached Dahdaleh’s bail conditions and put the lawyers at risk of being in contempt.

Following a hearing at Southwark Crown Court yesterday (26 March) both managed to avoid being sent before the Attorney General, Dominic Grieve QC for being in contempt, but could still face an SRA probe into whether they breached the code of conduct.

Judge Loraine-Smith, who oversaw the crown court hearing, said of the meeting yesterday: “I still do not understand how on earth this could happen”, and pledged to decide whether to refer it to the SRA by the end of the week.

A&O informed the regulator last May, when they were removed from the case and replaced with Norton Rose Fulbright partner Neil O’May. However the SRA has been waiting for the outcome of the trial to determine how to proceed.

In the adjourned hearing in November 2013 the court heard that the lawyers had allegedly put “substantial pressure” on Alba chairman Mahmood Al-Kooheji  days before the trial was due to take place  (7 November 2013). A&O denied the allegation.

Three Raymond Buildings’ Alexander Cameron QC, representing the partners, argued that they had thought that the Bahraini government wanted to seek a settlement and misunderstood the full details of the meeting.

Cameron said the lawyers thought “this was not a meeting that they should simply refuse to attend”.

The judge said: “Don’t get me wrong, this was a meeting between one of the main prosecution witnesses and the defendant, attended by one of the main prosecution witnesses and the defendant, attended by Akin Gump and A&O of which the SFO were completely unaware.”

Cameron responded with: “Had I been asked to advise, I would have advised that the Serious Fraud Office had to be informed.”

Cameron went as far as to say, “there is certainly a school of thought which says that, you know, in an ideal world, a client of A&O should be referred to firm X – I will not name any – who, as they probably would have done in the old days, are more experienced with the criminal courts in this country.”

The judge also called into question the actions of the former lead counsel for Dahdaleh, Matrix Chambers’ Clare Montgomery QC, who has been replaced by Cloth Fair Chambers’ Nicholas Purnell QC and Jonathan Bernard.

When told that all of Dahdaleh’s legal team was aware of the meeting Loraine-Smith said: “Are you telling me that Miss Montgomery knew that this meeting was going to take place?”

When told Montgomery was aware, he asked whether she had been aware that the criminal case would be discussed at the meeting, breaching contempt of court rules, and whether she knew Dahdaleh would be present, breaching his bail conditions.

Loraine-Smith said: “For the life of me, I cannot believe that, if she was told either of those matters, she would have said anything other than ‘this must not happen’.”

He added: “I cannot believe that a practising barrister in this country could say, “This meeting can go ahead, Mr Dahdaleh can be present, Mr Dahdaleh will not be in breach of that bail condition if he attends, it must not happen,” could say anything but that.”

Cameron could not give exact details of what the judge knew due to privilege issues and the fact the trial was ongoing but confessed: “Had I been asked to advise, I would have advised that the Serious Fraud Office had to be informed.”

The silk came in for criticism over the hastily-arranged hearing, which meant that none of the SFO’s counsel were able to make it. The judge said: “This hearing was arranged, frankly, for the convenience of Allen & Overy and Mr Cameron.”

Doughty Chambers’ Philippa Eastwood “stepped into the breach”, having been informed only the day before that the hearing would take place. She took the place of 7 Bedford Row’s Phillip Shears QC, who advised the SFO at the last case hearing on 21 March at Southwark Crown Court.

In a move which surprised the judge, Cameron urged him not to advise the SRA on its potential probe.

He said that the regulator was already looking into the firm and had the benefit of seeing privileged documents, even going on to argue that it would be better if Loraine-Smith did not speak to it about the case.

Loraine-Smith responded with: “Surely the first person they will want the views of will be the trial judge whose trial was derailed by this behaviour?”

But Cameron said: “Your Honour making a particular representation to the regulator in the absence of the full picture would be unfortunate.”

A&O said in a statement: “We welcome Judge Loraine-Smith’s decision not to refer the matter to the Attorney-General, following counsel’s representations in Southwark Crown Court yesterday. We are ready to co-operate with the SRA and believe there were good grounds to justify the action that was taken at the time.”