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Banker fails to set aside freezing order in Libyan bribery case

Out-Law News | 16 Oct 2018 | 11:43 am | 2 min. read

The High Court has dismissed an application to set aside a freezing order brought by a banker involved in an ongoing case brought by the firm which manages a Libyan sovereign wealth fund.

Peter MacDonald Eggers QC, sitting as a deputy judge of the High Court, found that "there was and remains a real risk that Mr Ohmura will dissipate his assets to avoid the enforcement or execution of the judgment against him". Ohmura had already been found guilty of dishonest conduct" along the same lines, and was "an experienced banker" who was "not only adept and skilled in the carrying out of financial transfers and transactions and the use of corporate structures to achieve such surreptitious ends, but was found by the court to have done so".

The judge's ruling was also interesting because he had declined to set aside the order despite FM Capital Partners Ltd (FMCP), the asset management firm for whose benefit the order was granted, not applying for the order until after it had obtained judgment against Mr Ohmura, according to civil fraud and asset recovery expert Jennifer Craven of Pinsent Masons, the law firm behind Out-Law.com.

"The judge affirmed previous law that demonstrates a delay is not a bar in and of itself to obtaining a worldwide freezing order (WFO)," she said. "If the court believes there is a 'real risk of dissipation' then the mere fact of a delay, although potentially affecting the court's discretion, will not prevent the grant or continuance of a WFO."

"The judgment details reasons as to why there remained a risk of dissipation. These centred around the defendant's skill set in dealing with international financial transactions; his use of sham companies; and the dishonesty demonstrated by the previous judgment against him," she said.

However, Craven noted that although the case "serves as a good example that a WFO may be granted if the application is delayed", parties should still seek a WFO as early as possible, with the benefit of legal advice.

"This will minimise potential dissipation and maximise the potential recovery of assets and the chances of an application being granted," she said.

In July, the High Court found against Ohmura and his associate, Frederic Marino, in respect of all claims brought against them by FMCP, which manages assets on behalf of the Libya Africa Investment Portfolio. FMCP had claimed that Marino, who is its co-founder and former chief executive, and Ohmura, had funnelled substantial amounts of money away from the business between 2009 and 2014 through illicit investments and secret commissions. Ohmura was found liable in dishonest assistance and bribery.

In September, FMCP obtained a without notice WFO against Ohmura, restraining him from removing or disposing of up to $11.25m worth of assets. Ohmura applied to have the WFO set aside on the grounds that there is no risk of dissipation of assets. He also argued that FMCP's delay in seeking the WFO was "fatal" to its application, as it should have done so as part of its original court action.

On the delay point, the judge said that he could not "discern any prejudice by Mr Ohmura by reason of such delay".

"The fact remains that a judgment has been obtained by [FMCP] against Mr Ohmura and there have been findings of dishonesty on the part of Mr Ohmura both in respect of the matters which are the basis of his liability to [FMCP] and his giving of evidence before the court," he said. "These are matters which may materially alter the assessment of the prospects of success of [FMCP's] application after the judgment."

"I do not see how, at least in most cases, if there has been delay on the part of the applicant in obtaining relief, that should affect the existence of the risk of dissipation of assets on the part of the respondent, no matter how the applicant assessed the risk. While I can see that delay might be relevant to the exercise of the court's discretion in granting or refusing a freezing order, I have difficulty in understanding its relevance to assessing the risk of dissipation in most cases," he said.