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Court of Appeal overturns Unaoil bribery conviction

Insights / / London

On 10 December 2021, the Court of Appeal in R v Akle & Anor [2021] EWCA Crim 1879 concluded that the Serious Fraud Office’s (SFO) failure to disclose vital evidence had unfairly led to Ziad Akle (Akle) being convicted and jailed for bribery.

Background

In July 2016, the SFO opened an investigation into the activities of Unaoil in connection with the bribing of decision-makers in order to win crude oil export contracts in Iraq.

Ata Ahsani and his sons Cyrus and Saman Ahsani owned and controlled the Unaoil group of companies. They held the offices of Chairman, Chief Executive Officer and Chief Operating Officer respectively. Akle was alleged to have conspired with others to pay Oday Al Quoraishi, an agent of the South Oil Company, a total of $608,000 for his personal benefit, in order to influence the terms and allocation of contracts to the advantage of Unaoil and its clients.

In July 2020, following a trial at Southwark Crown Court, Akle was convicted of two counts of conspiracy to give corrupt payments and sentenced to five years’ imprisonment. The SFO had also secured convictions against three others, Basil Al Jarah, Stephen Whiteley and Paul Bond.

In October 2019, Saman and Cyrus Ahsani struck a plea deal with the US Department of Justice and a decision was taken by the SFO that in those circumstances, it was not in the interests of justice for them to be prosecuted in the UK. Their father and Unaoil founder, Ata Ahsani has not been prosecuted.

The Crown Court decision

In July 2020, Akle was found guilty of two counts of conspiracy to give corrupt payments and sentenced to five years’ imprisonment for paying bribes to secure a $55m contract to supply offshore mooring buoys.

During the trial, Akle’s lawyers made three applications to throw out the prosecution’s case:

1) Abuse of process

During pre-trial disclosure, the SFO provided Akle's lawyers with schedules summarising the nature and content of materials obtained during the SFO investigation but not used in the SFO's case against Akle. Some of the entries in the schedules referred to contact between the SFO and David Tinsley (Tinsley), a retired US Drug Enforcement Agent, acting on behalf of the Ahsanis.

Despite requests from Akle's lawyers, the SFO declined to provide copies of the documents summarised in the schedules.

Akle's lawyers argued that Tinsley, who had no official title or status, was a broker for the Ahsanis and had had contact with Lisa Osofsky, the Director of the SFO. Tinsley had also been in contact with Akle. Akle's lawyers alleged that the SFO's involvement with Tinsley showed the flouting of all legal and regulatory safeguards, amounting to an abuse of process.

2) Admissibility of Basil Al Jarah’s guilty plea

Basil Al Jarah (Al Jarah) (Unaoil’s Iraq territory partner), was a friend of the Ahsanis, based in Iraq. He entered into an agreement with the SFO and was sentenced to imprisonment of three years' six months (reduced from ten years because of his plea and co-operation). The SFO sought to adduce evidence of Al Jarah's convictions at the trial.

Akle's lawyers submitted that Al Jarah's plea, and the decision by the SFO not to pursue charges against the Ahsanis, appeared to have been improperly influenced and facilitated by Tinsley. Tinsley was "a fixer" seeking to negotiate between the Ahsanis, the US authorities and the UK authorities, and it was said that Al Jarah had entered his pleas as a result of being placed under improper pressure by Tinsley and was therefore inadmissable.

3) Evidence relating to Tinsley

Akle's lawyers sought the judge's permission, by cross-examination of the officer in charge of the case, to adduce evidence of the involvement of Tinsley with the Ahsanis, the SFO, Al Jarah and Akle.

The judge refused all three applications. The applications became the subject of the three grounds of appeal against Akle's conviction.

Court of Appeal decision

Before the hearing, the Court of Appeal directed the SFO to disclose the underlying materials listed in the pre-trial disclosure schedules. The materials showed that Lisa Osofsky and other senior SFO figures had multiple contacts with Tinsley. The Court remarked that the refusal to provide the materials "was a serious failure by the SFO…  neither the defence nor the judge had anything like the full picture".[1]

The Court heavily criticised the SFO's conduct. As suggested by Akle's lawyers, it appeared that Tinsley successfully used senior management at the SFO to facilitate his direct access to the SFO case team, who ultimately engaged with him about the prospect of Al Jarah and Akle pleading guilty.

Whilst the Court understood why Lisa Osofsky may have been willing to have an initial meeting with Tinsley to discuss the Ahsanis, when it became clear that Tinsley was also discussing Akle and Al Jarah, each of whom was legally represented; there was an apparent conflict between their respective interests and the interests of the Ahsanis. Tinsley was focused on pursuing a course of action in the best interests of the Ahsanis, including delivering a package of pleas from others that would encourage the SFO to abandon any prosecution against the Ahsanis.

The Court identified discrepancies between the underlying documents and the corresponding schedule entries, which would have strengthened Akle's case. The records evidenced the SFO's change in stance, from caution around Tinsley, to Tinsley actively trying to persuade Akle and Al Jarah to plead guilty and accept the advantage a guilty plea from Al Jarah would give the SFO's prosecution of Akle. 

The Court commented on several red flags, including the striking contrast between Lisa Osofsky's account of her contact with Tinsley and Tinsley's assertions to Akle about the extent and success of his dealings with her; as well as the text message exchanges between the SFO's chief investigator and Tinsley being lost.

The Court emphasised that "Tinsley was the last person whom the SFO should have allowed, or caused, to undertake the role of trying to persuade [Al Jarah] and Akle to plead guilty (and thereby to benefit the Ahsanis in their dealings with the SFO)”. 

The Court granted Akle's application for leave to appeal, quashing the convictions and declining to order a retrial. 

Comment

The Court of Appeal’s judgement highlights failings on the part of the SFO perhaps borne through the SFO’s difficult history in securing corporate or executive bribery convictions; or through their failure to understand what their disclosure obligation is. This judgment only serves to make future investigations, disclosure exercises and prosecutions harder for the SFO.

The judgement not only exposed the serious disclosure failures by the SFO but also the unorthodox practices conducted by the most senior management of SFO, in engaging with a “fixer”. Lawyers for Akle have said: This judgment sends a clear message – the SFO can no longer engage in backroom deals. There is no room in this jurisdiction for justice by fixer.”

Any corporates or executive under SFO, or other regulatory investigation should be willing to scrutinize the regulator’s practices, examine whether the rules of criminal procedure have been followed, and ensure that disclosure obligations and duties have been complied with. The same also applies in relation to on-going cases, where defence teams should be asking prosecutors to clarify or provide further descriptions of their unused material schedules, ensure that such material is served so that clients can have a fair trial.

Suella Braverman, the attorney-general, said she was “deeply concerned” by the judgment and would be “discussing the implications with the director of the Serious Fraud Office urgently”. An independent investigation into the SFO’s handling of the case has also been launched.

It will be interesting to see how, if any, complaints arise from Al Jarah’s legal team, as to his guilty plea, and what other findings in respect of the SFO’s practices the courts may find.

There is no doubt that the judgement is devastating for the SFO and calls in to question its credibility as a prosecuting authority dedicated to tackling complex fraud, bribery and corruption.
______________________________________________________________________

[1] https://www.bailii.org/ew/cases/EWCA/Crim/2021/1879.html

Colette Kelly

Colette Kelly Partner, Criminal and Regulatory Solicitor

Waled Salih

Waled Salih Associate

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