Saturday, January 02, 2021

Broadsheet LLC seeks millions more from NAB after getting $28.7 million

As National Accountability Bureau (NAB) drags its feet, the amount owed to London firm keeps increasing due to statutory interest

  • Pakistani govt has paid $28.7 million to Broadsheet LLC
  • Another $3 million is still owed
  • As NAB drags its feet, the amount keeps increasing every day due to statutory interest

LONDON: Following a London High Court order, the Government of Pakistan paid $29 million to Broadsheet LLC but the litigation is far from over as the firm is now seeking millions more from the National Accountability Bureau.

An agent of the firm told that the bureau owes $3 million in legal costs. Confirming a payment worth $28,706,533.34 (28.7 million) by the Pakistani government to Broadsheet LLC liquidator's account as per the court ruling on account of $22 million judgment and $6 million initial legal costs, the agent said NAB still owes $3 million legal costs and it is costing the Pakistani government $150,000 per month at a statutory interest rate of $5000 per day.

"We have an enforcement cost order from the court. The $5000 per day interest is statutory, not punitive," he added. "NAB is dragging its feet to pay this amount and the interest amount is accumulating."

This means that the amount owed increases every day.

Kaveh Mousavi, a former Oxford University academic and ex-owner of the firm, remained unavailable for comment. But an agent from the firm's liquidation department said that both NAB and its legal team in London were responsible for the loss of millions of dollars to the national exchequer.

He said the anti-graft watchdog's counsel, Allen & Overy, did not respond to 18 letters sent by the firm in 14 months "until the point came where we had to threaten to go to the Solicitors Regulatory Authority".

"They were on the record and had an obligation to reply," he explained. 

Read more: Pakistan pays Rs4.59 bn to British firm for lost case

The agent claimed that Pakistan has incurred legal costs worth $20 million for its legal teams from 2015 - first Kendal Freeman, then a leading counsel from the Essex court, and third was Allen & Overy.

He said the government under former dictator Pervez Musharraf had approached Mousavi in 1999 and signed a deal. The agreement was abruptly canceled in 2003.

Mousavi met with General (retd) Hafeez in 2003 and resolved that the case over violation of the contract would be pursued if the matter is not settled, said the agent. "Mousavi did not want to bring a bad name to Pakistan but no one listened to him. The Broadsheet LLC went to court in 2003 and issued arbitration proceedings in 2009."

The former owner held two meetings in London with Advisor to PM Imran Khan on Accountability Shahzad Akbar last year and offered a settlement but the premier's aide "could not do anything".

Akbar remained unavailable for comment. But it may be noted here that Pakistan lost the case long before he came into the picture.

"Pakistan could have saved a lot of money by settling the case years ago but they were wrongly advised to fight, in the hopes that there would be no recoveries. Non-compliance over the payment would be noted at the international financial institutions," said the agent. "Pakistani people did not deserve this."

Read more: Pakistan readies to pay $27m to Broadsheet after London accounts frozen

A copy of the judgment, obtained by Geo News, showed that Pakistani government's accounts in London were frozen through an interim Order and the amount to Broadsheet LLC was also paid from frozen accounts.

In the London High Court's commercial division, District Judge Master Kay QC wrote the final judgment in the case filed by Broadsheet LLC with the Islamic Republic of Pakistan [on behalf of NAB] as defendant and United National Bank Limited as third party.

The judge finalised the June 23, 2020 interim third party order giving Pakistan until 4:30pm on December 23, 2020 to appeal. Pakistan, however, chose not to appeal. The court ordered that the claimant, Broadsheet LLC, should be paid $28.7 million no later than December 31, 2020.

“If the Defendant does appeal in accordance with paragraph 2 above, then the funds held by the Third Party subject to the Interim Order shall be paid into court, to be held pending determination of the appeal," read the verdict. 

Read more: Did Pakistan talk with Broadsheet to hire it again?

The Pakistani government attempted to claim sovereign immunity under the Vienna Convention but the court ruled that the account at the United Bank did not enjoy sovereign immunity as it has been used for commercial purposes.

The appeal period has now run out.

The anti-graft watchdog maintained that its current leadership has nothing to do with the original case as the major decision was made in 2016 - long before the current chairperson, Justice (retd) Javed Iqbal, took over.

A source at the Pakistan High Commission said the bureau would make decisions about money still owed to the London firm.