Mozambique: Hidden debts can be annulled – lawyers

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Mozambique: Hidden debts can be annulled – lawyers

3:17 CAT | 17 Mar 2021

in file CoM

Mozambican lawyers believe that the state’s claim to have the hidden debts annulled is still “feasible and valid” even after the British courts referred the case to arbitration.

“The interests of the Mozambican state are still worthy of protection. They are valid, despite the dispute having been referred to arbitration,” Elísio de Sousa, a lawyer, told Lusa on Wednesday.

Elísio de Sousa noted that arbitration would apply the same legislation as the court. The Mozambican Attorney General’s Office submitted the case about the hidden debts, which transferred the case to arbitration.

“The difference is that the court is a body whose competence is imposed by law, while arbitration is a jurisdictional solution previously agreed by the parties when they anticipate a dispute,” he emphasised.

Arbitration, he continued, will attend to the request and the Mozambican state’s cause, as would a common court.

“The parties can choose arbitration, but they do not choose the legislation and the principles of law, so all the disputed issues are taken into consideration,” Elísio de Sousa stressed.

Also read: British court upholds Privinvest appeal in case over $2 bln Mozambique debt scandal

Baltazar Fael, a legal expert from the Centre for Public Integrity (CIP), a Mozambican civil society organisation, said that an arbitration decision could be more technically refined than a deliberation by a common court.

“The arbitrators are specialised experts in the matters submitted for their consideration, so the decisions [‘awards’] tend to be technically better [than those of a court of law],” Fael stressed.

Fael said he expected the Mozambican state to present more convincing technical arguments because recourse to arbitration resulted from a free choice under the contract.

“If the Mozambican government and the respondent chose arbitration, then the British justice system was very right to refer the case to arbitration because that option resulted from an agreement between the parties,” he said.

He added that the recourse to arbitration did not change the expectations of the Mozambican state concerning the decision, namely, the claim for annulment of debts and compensation for any damages.

Last week, the Court of Appeal of England and Wales granted the Privinvest group’s request, concluding that the lawsuit filed by Mozambique in the English courts should be dealt with by arbitration.

“The claims of the Republic [of Mozambique] against the Privinvest companies fall within the scope of the arbitration agreements,” provided for in the supply contracts signed between Mozambican public companies and the shipping group, reads the ruling consulted by Lusa.

Also read: Mozambique: British courts “wash their hands” of the hidden debts’ case – Thomashausen

The US$2.2 billion (1.8 million euros) hidden debts of the Mozambican state were contracted in 2013 and 2014 without the consent of parliament or other entities, during the presidency of Armando Guebuza, from Credit Suisse and Russian bank VTB.

The loans were justified with maritime projects of the public companies Ematum, ProIndicus and MAM, provided by the Privinvest group, but never materialised.

After three former Credit Suisse bankers pleaded guilty to conspiring to launder money (in another trial linked to the case in 2019 in the US), the Mozambican Attorney General’s Office (PGR) filed the lawsuit in London against 12 defendants, including the bank and companies in the Privinvest group.

The PGR wants to write off ProIndicus’ $622 million (552.6 million euros) debt to Credit Suisse (incurred through the British subsidiary) and obtain compensation to cover all losses from the scandal.

Source: Lusa