Mozambique can sue Privinvest in London ‘tuna bond’ case, UK court rules

By Sam Tobin

LONDON (Reuters) -Mozambique can sue shipbuilder Privinvest in Britain for alleged bribery connected to the decade-old $2 billion “tuna bond” scandal, the UK Supreme Court ruled on Wednesday, weeks before a blockbuster trial begins at London’s High Court.

Mozambique is suing Privinvest, its owner Iskandar Safa, Credit Suisse and others over three loans raised in 2013 and 2014, ostensibly to develop its fishing industry. The African country alleges the deals were corrupt and have left it exposed to a potential liability of around $2 billion.

In the Supreme Court case, Privinvest argued the dispute must be heard in secret arbitration proceedings. But senior judges unanimously allowed the case to be heard in a lengthy public trial in the High Court, due to begin on Oct. 3.

The judgment validates Mozambique’s decision to bring proceedings in the High Court, said Mozambique’s London law firm Peters & Peters. “The republic looks forward to proving its case against Privinvest and Mr Safa in the trial …,” it added.

Privinvest, which has offices in Lebanon and Abu Dhabi, did not immediately respond to requests for comment.

The trial next month will hear Mozambique’s allegations that Privinvest and Safa paid more than $130 million in bribes to corrupt officials and Credit Suisse staff.

Privinvest denies wrongdoing, saying it made only legitimate payments, investments or political campaign contributions.

The African nation also alleges Credit Suisse, which was bought by peer UBS in June, ignored red flags that allowed its bankers to strike corrupt deals.

Credit Suisse, which is defending itself in the case, has said three former bankers, who have already pleaded guilty in the United States, hid their misconduct.

The bank agreed to pay about $475 million to British and U.S. authorities in 2021 to resolve bribery and fraud charges and has pledged to forgive $200 million of debt owed by Mozambique.

The tuna bond or “hidden debt” case dates back to three deals between state-owned Mozambican companies and Privinvest – funded in part by loans and bonds from Credit Suisse and backed by undisclosed Mozambican government guarantees.

Mozambique, one of the world’s poorest countries, wants to revoke a sovereign guarantee on a loan it alleges was corruptly procured and secure compensation for other alleged wrongdoing.

The London lawsuits have been mired in difficulty as Mozambique’s failure to disclose key documents has threatened to derail the litigation.

Privinvest and Safa have also unsuccessfully tried to draw Mozambican President Filipe Nyusi into the case. The High Court ruled this month that Nyusi has state immunity.

Helen Taylor, a legal researcher at pressure group Spotlight on Corruption, said the Supreme Court ruling represented a “major win” for Mozambique.

“Open justice is absolutely essential in this case given the overwhelming public interest in ensuring there is proper scrutiny of a corruption scandal that has left the Mozambican people on the hook for billions of dollars,” she said.

(Additional reporting by Kirstin Ridley in London and Manuel Mucari in Maputo; Editing by William James, Tomasz Janowski and Alexander Smith)