FBME’s investigators: in contempt and under orders February 4, 2020
By: Dominic Carman, journalist, writer and legal commentator. www.dominiccarman.com

English judges are known for choosing their words very carefully:  In this context, the recent Commercial Court judgment of Mrs Justice Cockerill in the case of Saab v Dangate makes for particularly interesting reading. Although her language is not injudicious, she certainly does not mince her words.

In describing how two former Scotland Yard detectives, now private investigators, failed to follow a judgment which she had delivered last year, she identified ‘significant failures’, stating that they are in contempt of Court for failing to deliver up all confidential documents obtained by them during the course of their internal investigation at FBME Bank, and for failing to provide sufficiently detailed affidavits explaining the circumstances of the unlawful dissemination of confidential information by them to third parties.

The case was brought by brothers Ayoub-Farid Saab and Fadi Saab, the two shareholders of FBME Bank, against Dangate Consulting and the two former Metropolitan Police detectives who managed and operated it: Nigel Brown, who is Dangate’s majority shareholder, and Alec Leighton.

FBME Bank is a Tanzanian institution which was excluded from the US financial system in June 2014 by the US Financial Crimes Enforcement Network (FinCEN) over a range of money laundering allegations. The Saabs assert that Dangate and the investigators acted illegally and contrary to their interests after being retained to undertake a private investigation on behalf of the Bank.

Dangate Consulting’s website describes itself as ‘a specialist risk management and expert investigation company – providing bespoke and expert investigative, commercial risk analysis and litigation support services worldwide, with the uncompromising assurance of competency, compliance, governance and accountability.’

But following an earlier hearing on the merits of the claim last summer, Mrs Justice Cockerill’s judgment in favour of the Claimants called into question Dangate and the investigators’ uncompromising assurance of competence, compliance and accountability: ‘I conclude that the Defendants were in breach of their obligation of confidentiality’, she said. The judge also noted that Brown and Leighton’s actions were ‘such a broad disclosure of multiplicitous documents’, and that ‘it would be vanishingly rare for a situation to arise which justified such a very broad disclosure’.

These observations followed Brown and Leighton’s admission that they had undertaken widespread distribution of FBME’s confidential information, having divulged details to: the Central Bank of Cyprus (CBC), the Attorney General of Cyprus, the Cypriot Unit for Combating Money Laundering (MOKAS), FinCEN, the FBI, the Cypriot police, authorities in Tanzania and at least one journalist, among others.

Brown and Leighton’s plea that these abundant disclosures were made in the public interest was rejected by Mrs Justice Cockerill. The widespread leaking by the investigators therefore damaged FBME’s reputation without any legal basis for the disclosures.

But all this was only a prelude to Mrs Justice Cockerill’s latest judgment delivered in January 2020 concerning the enforcement of her earlier judgment and going much further. It followed an application made to the Court in November 2019 by the Claimants in relation to an Order of the Court made on 25 July 2019. This order had required the Defendants to comply by delivering all relevant documents in their possession, and providing specific information required in their affidavits. Mrs Justice Cockerill’s order therefore required the Defendants to provide copies of all communications evidencing each and every disclosure. The Claimants’ case was that the Defendants had ‘egregiously failed to comply’ with the July 2019 Order.

Mrs Justice Cockerill stated that she was producing the judgment because the Defendants assert that they have complied with their obligations. But her judgment states: ‘The basis for this assertion was (as was often the case with their defence at trial) broad and non-specific, failing to engage with the detail of the case against them. It is an assertion which is manifestly wrong and it is troubling that it should be made at all, still less advanced on their behalf by counsel.’ A stinging rebuke, both for Dangate and the company’s leading counsel, Steven Kay QC.

The judge continued by stating that ‘this matter could have been dealt with orally and in fairly short order at the hearing.’ The Defendants, she added, are ‘two individuals who are not in their first flush of youth’ and who have ‘the assistance of experienced criminal counsel in the form of Mr Kay QC’, but who nevertheless ‘appear (from the position adopted by them and advanced on their behalf at the hearing) not to have received clear advice to date about their position; and are likely to face as the result of any continuing non-compliance an application to commit them [to prison] for contempt.’

In response to submissions by David Allen QC, instructed by Quinn Emanuel Urquhart and Sullivan, on behalf of the Saab brothers, Mrs Justice Cockerill concluded: ‘I consider that the Defendants have plainly failed to provide the requisite level of detail in their affidavits.’ She added: ‘I consider that the Defendants have plainly either failed to understand or have comprehensively failed to comply with the disclosure requirement (in para 5) of the Order.’

Turning to the suggestions by Brown and Leighton that they had attempted to comply by providing adequate information, the judge concluded: ‘The impression given is that the Defendants have either not properly understood the 25 July Order, and have been labouring under the misapprehension that a broad summary is sufficient for compliance, or that they have made no real attempt to comply with the 25 July Order.’

The judge added: ‘I do accept the submission (by the Claimant) that it is unattractive for the Defendants, having consented to the 25 July Order in those terms, now to say that they cannot recall any details of the various disclosures they have made since 2015. It is also, in the context of the evidence given, not credible.’

Giving the Defendants a further 28 days to comply the judge made the following observation: ‘The next step if there is a failure of compliance will be an application in relation to contempt.’

So Messrs Brown and Leighton could face a prison term if they do not comply with the order of the court. The clock is therefore now ticking for Dangate, who have been found to have acted inappropriately in relation to FBME data.

In the meantime, the damage to FBME’s reputation has been done.  One wonders as to the wider picture, and the motives driving this unfortunate and bizarre episode.

By: Dominic Carman