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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Serious Fraud Office v Saleh [2018] EWHC B8 (QB) (22 March 2018) URL: http://www.bailii.org/ew/cases/EWHC/QB/2018/B8.html Cite as: [2018] EWHC B8 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		[2018] EWHC 1012 (QB) Royal Courts of Justice
		22 March 2018

MR JUSTICE KERR:

Introduction

1. The claimant ("the SFO") applies in this case for an order vesting in its nominated trustee the ownership of a cash deposit of £4.4 million at the Royal Bank of Scotland ("RBS") in London held in an account for the benefit of the defendant, Mrs Saleh. The claim is made under provisions in the Proceeds of Crime Act 2002 ("the Act") which, in the broadest terms, permits recovery of money or other property representing the proceeds of criminal conduct.
2. Mrs Saleh is a citizen of Chad and Canada, of Sudanese origin, and wife of the former deputy Chadian ambassador to the USA, Mr Youssef Takane, a Chadian citizen. The SFO alleges that Mrs Saleh and other individuals linked to the government of Chad benefitted from corrupt financial inducements provided in 2009 and 2011, in return for the award of a contract to exploit certain oil reserves in Chad.
3. The alleged beneficiaries of the corrupt arrangements were Mr Takane; his wife Mrs Saleh; Mr Mohamoud Bechir, the former Chadian ambassador to the USA and other countries; his wife, Mrs Nouracham Niam; and a Mr Adoum Hassan, a teacher and associate of Mr Bechir and his family. The SFO's case is that the inducements were made available by a Canadian company, Griffiths Energy International Inc., to which I shall refer to as "GEI" though it subsequently changed its name to Caracal Energy Inc.
4. In January 2011, GEI, through a subsidiary, entered into a contract with the Republic of Chad for the sharing of oil production at certain locations in that country. The £4.4 million which the SFO seeks to recover, represents the proceeds of sale by Mrs Saleh of certain shares in GEI. It happened that the proceeds of sale were deposited with RBS in London, together with other monies from linked transactions with which I am not concerned. There, they were frozen by an order made by Mostyn J in these proceedings on 29 July 2014.
5. An application to discharge his freezing order failed before Andrews J on 21 July 2015 and on appeal from her decision on 28 July 2017. This is the trial of the Part 8 claim brought by the SFO in January 2015 to recover the £4.4 million under provisions in the Act. There was an application for summary judgment but it has not been pursued. I had written evidence from both parties and heard oral evidence from Mrs Saleh given by her in Sudanese Arabic through interpreters. I am grateful to counsel on both sides for their succinct and cogent submissions.
6. In order to determine the claim, I have to decide, first, whether the £4.4 million is "recoverable property" under the Act and, if so, whether Mrs Saleh can make good a defence against the claim under section 266 of the Act by showing, among other things, that she obtained her shares in GEI in good faith and that it would not be just and equitable to deprive her of the proceeds of their sale.

The Law

7. Part 5 of the Act contains provisions for the recovery of the proceeds of certain unlawful conduct. Section 243(1) enables such proceedings to be brought in the High Court in England and Wales by the "enforcement authority". Here, the SFO is the enforcement authority. The provisions enable it to recover in civil proceedings "property which is, or represents, property obtained through unlawful conduct" (section 240(1)(a)).
8. A claim for a civil recovery order under the Act is a civil claim that is sui generis. It is not necessary that the defendant must have taken part in any criminal enterprise, nor is it necessary that the person whose criminal conduct is the foundation of the claim should have been convicted of any criminal offence, either in any part of the United Kingdom or outside it. It is well recognised that the purpose of the legislation is to prevent enjoyment of the fruits of crime.
9. Unlawful conduct occurring outside the United Kingdom must be unlawful both under the criminal law of the country where it occurred and in a part of the United Kingdom if it had occurred in that part of the UK (see section 241(2)). This has become known as the "dual criminality" requirement. The SFO must prove, on the balance of probabilities, that the conduct on which it relies occurred (section 241(3)).
10. Section 242(1) of the Act provides:

"A person obtains property through unlawful conduct (whether his own conduct or another's) if he obtains property by or in return for the conduct."

11. By section 304(1) "[p]roperty obtained through unlawful conduct is recoverable property." If it has then been disposed of, it is still recoverable property if it is held by a person into whose hands it may be followed (section 304(2)). It cannot be followed into the hands of a person who obtains it in good faith for value and without notice that it was recoverable property (section 308(1)(b)). Recoverable property obtained through unlawful conduct remains recoverable if it is replaced on a disposal by other property which "represents" the original recoverable property (section 305(1) and (2)).
12. By section 266(1), in material part, omitting certain references to the law of the European Convention on Human Rights, which are no longer material:

"(1) If in proceedings under this Chapter the court is satisfied that any property is recoverable, the court must make a recovery order.

(2) The recovery order must vest the recoverable property in the trustee for civil recovery.

(3) But the court may not make in a recovery order—

(a) any provision in respect of any recoverable property if each of the conditions in subsection (4) ... is met and it would not be just and equitable to do so...

...

(4) In relation to a court in England and Wales or Northern Ireland, the conditions referred to in subsection (3)(a) are that—

(a) the respondent obtained the recoverable property in good faith,

(b) he took steps after obtaining the property which he would not have taken if he had not obtained it or he took steps before obtaining the property which he would not have taken if he had not believed he was going to obtain it,

(c) when he took the steps, he had no notice that the property was recoverable,

(d) if a recovery order were made in respect of the property, it would, by reason of the steps, be detrimental to him.

...

(6) In deciding whether it would be just and equitable to make the provision in the recovery order where the conditions in subsection (4) ... are met, the court must have regard to—

(a) the degree of detriment that would be suffered by the respondent if the provision were made,

(b) the enforcement authority's interest in receiving the realised proceeds of the recoverable property.

(7) A recovery order may sever any property... ."

13. Section 266(4) has been described by Mrs Justice Andrews in National Crime Agency v Azam (No. 2) [2014] EWHC 3573 (QB) (not appealed on this point) in the course of her helpful analysis of the section 266 defence, at [76] as:

"...aimed at a proprietary estoppel type of situation in which an individual has been promised an interest in identified or identifiable property, and in reliance on that promise acts to his or her detriment, for example by renovating it at his own expense, or working on the land for no reward, in the legitimate expectation of receiving it, then actually receives the property from the transferor (e.g. as a testamentary gift) only to find that it has been purchased with the proceeds of crime."

The Facts

14. In 2008, two founders of GEI, Mr Bradley Griffiths and Mr Nyeem Tyab, were interested in establishing a company in Canada to exploit oil reserves in Chad. They contacted the Chadian embassy in Washington DC. In August 2009, they established GEI. They developed their contact with the ambassador, Mr Bechir.
15. On 30 August 2009, GEI entered into a consultancy agreement ("the first consultancy agreement") with a Maryland company owned and controlled by Mr Bechir called "Ambassade du Tchad LLC". The recitals recorded the interest of GEI in securing development and exploration rights in respect of oil blocks in Chad.
16. By clause 2 of the first consultancy agreement, the services to be performed by the "consultant", Mr Bechir's company, were broadly set out. They were to provide assistance to GEI with respect to due diligence matters, to assist by supporting GEI's project to explore and develop oil operations in Chad, and generally to provide support, advice, and assistance for that purpose (I paraphrase the provisions of clause 2).
17. By clause 3, the agreement would remain effective until 31 December 2009 or, if earlier, the date of any concession agreement for the purpose of exploiting oil reserves in Chad. By clause 4, the sum of US$2 million was payable as "consulting fees" provided that such an agreement was entered into before the "target date", i.e. the end date of 31 December 2009.
18. GEI then received legal advice in early September 2009 that it would not be appropriate to deal with a company controlled directly by Mr Bechir since he was a government official. The first consultancy agreement was therefore terminated without any payments being made.
19. On 10 September 2009, a new company was incorporated in Nevada called Chad Oil Consulting LLC ("Chad Oil"). The sole director and shareholder was Mrs Niam, the wife of the ambassador Mr Bechir. On 15 September 2009, Chad Oil and GEI entered into a fresh consultancy agreement ("the second consultancy agreement") which was almost the same as the first and clearly modelled on it. It provided, again, for the payment of US$2 million, this time to Chad Oil. The target date remained the same, 31 December 2009.
20. On the same day, 15 September 2009, 4 million shares in GEI were issued by it. That occurred pursuant to separate subscription agreements entered into by Mrs Saleh, Mrs Niam, and Mr Hassan. That was ostensibly part of a private placement of 40 million shares at a nominal price of 1 Canadian cent each so that the 4 million shares subscribed for by those three amounted to a 10 percent of the shares on offer. Mrs Saleh, Mrs Niam, and Mr Hassan were the only three subscribers for shares who were external to the interests of GEI. The other investors were involved with the business of GEI. Signed subscription agreements provided for payment for the shares at 1 Canadian Cent each. Mrs Saleh acquired 800,000 shares for the sum of Can$800, or approximately £454. Mrs Niam acquired 3.2 million shares.
21. I was shown the subscription agreement entered into by Mrs Saleh. Her name was typed at the end of it just beneath her signature which she inserted by hand in Arabic script. The date was 15 September 2009. Attached to Schedule A to the subscription agreement was a "certificate" apparently required under the regulatory regime applicable in the USA. It provided:

"The purchaser represents, warrants and covenants and certifies ... to the Corporation [GEI] ... that … in purchasing the Shares it satisfies one or more of the categories of 'accredited investor' indicated below (the Purchaser must initial the appropriate line(s)):

…

XXX Category 14.

A natural person who had an individual income in excess of U.S.$200,000 in each of the two most recent years or joint income with that person's spouse in excess of U.S.$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; ... ."

The three Xs were marked against that statement.

22. Mrs Saleh gave evidence about the circumstances in which she acquired her shares. Her evidence was to the following effect. She said that she had prepared her two written witness statements for these proceedings with help from lawyers and had signed them both. Although they were in English, she could not read English well but had had the sense of what was in the statements conveyed to her. The second of her two statements included a paragraph (paragraph 8) which was translated to her and which in oral evidence she confirmed as true. It stated as follows:

"In or around September 2009, I was contacted by Mrs Niam, an old friend from Chad, with whom I have been acquainted for most of my life and who told me about an investment opportunity which she recommended that I should take. She told me that it was a speculative investment in a Canadian company which was seeking oil and gas drilling opportunities in Chad, which is my home country. At the time, I understood that Mrs Niam knew the people involved in the company which was called Griffiths [GEI]. I did not receive any more information than that but I was attracted to the investment because it was recommended to me and because it involved my home country. I purchased 800,000 shares which cost about $800. I did not discuss this with my husband. My purchase of the shareholding was not contingent on any event or the subject of any agreement. I paid for the shareholding out of my own money and I bought it in good faith."

23. In oral evidence she said that in September 2009 she was living in Washington DC with her husband, the deputy ambassador. She did not have a job. Mrs Niam was her friend and, as Mrs Saleh understood, was a sociology student at a university in Washington DC at the time.
24. Mrs Saleh's evidence was that Mrs Niam told her there was a company that was to invest in oil exploration in Chad and asked her if she wanted to invest in the business. Mrs Saleh had no knowledge of the oil and gas business. She did not know whether Mrs Niam had any knowledge of it. Mrs Saleh had never before or since made such an investment and did not understand that she was buying 2 per cent of the company. She said that Mrs Niam warned her that the value of the investment – Can$800 - might go down as well as up.
25. She did not agree that she had known that the company was trying to get drilling rights in respect of oil in Chad. She gave evidence that, at that time, she did not know that Mrs Niam's company was to receive US$2 million. Asked why she had not discussed the matter with her husband, she said that Mrs Niam had suggested that this should be something that they would do together "as women" and that Mrs Niam suggested they keep it between them in case the value of the investment should go down and they might get blamed by their husbands.
26. Mrs Saleh confirmed that Mrs Niam had brought the share subscription document to Mrs Saleh and that they would have gone through it together before Mrs Saleh signed it. Her husband might or might not have been in the house at the time. She did not discuss it with him. She agreed that she had been referred to the declaration of income by Mrs Niam and that she did not have and had not had income of more than US$200,000 in the previous two years; nor did the family have joint income of more than US$300,000.
27. She indicated that she understood that requirement to refer to ownership of property rather than income but did not suggest that either she herself or she and her husband together owned property worth those amounts. She said that she borrowed the money to pay for the shares from her brother who lives in Virginia.
28. She said there did come a time when she eventually told her husband, Mr Takane, that she had acquired the shares. She could not, she said, recall exactly when she had told him because it was a long time ago. He had expressed some surprise but was not unduly concerned about her buying the shares. She said that he never discusses his business activities with her. She knew that he was employed at the embassy but no more than that.
29. Such was her evidence on the circumstances in which she acquired her shares in GEI. Returning to the chronological narrative, on 26 October 2009, GEI entered into a memorandum of understanding with the Ministry of Petroleum and Energy of Chad signalling the start of negotiations for GEI to acquire exploration rights in respect of the relevant oil blocks.
30. On 31 December 2009, the second consultancy agreement expired without the envisaged payment of US$2 million having been made to Chad Oil. During 2010, negotiations took place towards the conclusion of a contract between GEI and the Republic of Chad for the exploitation of the relevant oil reserves. The memorandum of understanding was renewed and replaced in February 2010.
31. In March 2010, Mr Takane, Mrs Saleh's husband, emailed Mr Tyab of GEI saying that the conclusion of a production sharing agreement had been approved by the Ministry in Chad. On 10 March 2010, Mr Takane emailed Mr Griffiths, one of the founders of GEI, informing him of the appointment of a new oil minister, a Mr N'Gaoulam. That email contained the following:

"As you know, the date for the signature of the PSA [production sharing agreement] has already been scheduled for next week but it can be rescheduled at anytime of your convenience. What is essential now is first, to turn on the CA and, second to choose the appropriate date and move with your team to Ndjamena to finalize the deal. The sooner this work is over the better."

"CA" is said by the SFO to refer to a consulting agreement although Mr Ashley-Norman QC, for Mrs Saleh, suggested that it might refer to a confidentiality agreement.

32. In June 2010, Mr Takane emailed Mr Tyab and Mr Griffiths outlining what he called:

"...obstacles witnessed ... during the last many negotiations conducted by your team with the Ministry."

The email went on to state that the ambassador, Mr Bechir:

"...will forward the letter to the President and will secure a direct meeting between you and the President in order to get your deal finalized."

33. There were further emails in late 2010 and early 2011 involving Mr Takane, Mr Bechir, Mr Griffiths, and Mr Tyab. Without going through them in detail, they recorded the stages in the progress towards the conclusion of a production sharing agreement of the type that had been envisaged in the first and second consultancy agreements.
34. On 13 January 2011, the Minister, Mr N'Gaoulam, executed a document conferring a licence on Mrs Niam in the name of the Ministry of Petroleum and Energy to seek investment opportunities for the exploitation of the relevant oil reserves in Chad. Shortly after that, the negotiations finally bore fruit and a production sharing contract, as it was called, was signed on 19 January 2011 in Chad by Mr Griffiths for GEI and by a Mr N'Gaoulam, the Minister, on behalf of the Republic of Chad.
35. At about the same time but backdated to 1 January 2011, a third and final consultancy agreement ("the third consultancy agreement") was signed by Mrs Niam on behalf of Chad Oil and by Mr Tyab on behalf of GEI. The terms were the same save that the target date was now 28 February 2011 and the US$2 million was to be paid into an escrow account by the end of January 2011. The "consultancy fee" was, as under the two previous agreements, payable if GEI succeeded in securing the development rights for the relevant oil fields in Chad.
36. The US$2 million was received by GEI's external counsel on or before 7 February 2011 and was paid over to Chad Oil on or about 10 February 2011. The relevant banking information and instructions were given by Mr Takane. There is no dispute that, as GEI admitted in later criminal proceedings in Alberta, Canada, GEI entered into the three consultancy agreements to provide a direct and indirect benefit to a foreign public official, Mr Bechir, to induce him to use his position to influence decisions of the Republic of Chad; and that this conduct is contrary to the criminal law of Canada.
37. After that, changes came to GEI in the summer of 2011. In July 2011, a new management team was put in place. At about the same time and a little later, new independent directors were appointed. The new managers and officers of GEI had not been involved in the corrupt transaction with Chad Oil or with the issue of shares in GEI to Mrs Niam, Mrs Saleh, and Mr Hassan. The same month, on 18 July 2011, Mr Griffiths died in a boating accident in Canada.
38. Plans were made for a flotation of GEI but in the course of due diligence for the purposes of the flotation, the first two consulting agreements were discovered by the new managers of GEI. The floatation then did not proceed. Lengthy and detailed investigations were then carried out by lawyers on behalf of GEI. These led GEI to report the matter to the Canadian authorities which resulted in criminal proceedings being brought against it.
39. As part of the investigations, Mrs Saleh was among those interviewed by GEI's lawyers. Her interview took place in Washington DC on 23 January 2012. It was conducted partly in English and partly in French, which she speaks and understands better than English. I do not have sufficient evidence to find that any part of it was conducted in her native Sudanese Arabic.
40. Her account in interview was summarised by a police officer, Mr Chad Babin, thus in later criminal proceedings:

"She indicated that she and Niam were long time friends. She received a late night call from Niam who indicated her dreams were coming true as someone in Chad had called her to assist a Canadian oil company in meeting the Minister of Petroleum in Chad. Niam ultimately told Saleh that she would be paid $2 million dollars and was going to get shares in the company. Saleh indicated she did not tell her husband, the Deputy Chief of Mission, about his conversation.

Saleh identified the subscription share agreement between her and GEI relating to the purchase of 800,000 shares of GEI. She signed the document not long after Niam's initial telephone call. When asked why she was getting shares, she explained that Niam told her she was her long time friend with similar marital problems so Niam was giving her something for the future. She stated that she and Niam went over the form, and she indicated she had greater than $200,000 income in each of the two years preceding the purchase because she understood this meant more than $200,000 in a bank account each year before the purchase.

Saleh indicated that she would tell Takane the company's project was doing fine when he asked, but Takane does not talk about his job with her and she did not know if Takane knew about Griffiths at this time.

Saleh stated she did not believe that Niam did any work for companies other than Griffiths other than some business with Niam's family trading business in New York City."

41. Mrs Saleh was asked about that interview in her evidence before me. It was put to her that she had told the lawyers in the interview that Mrs Niam had told her that she, Mrs Niam, was receiving a $2 million fee for acting for the company. She said that Mrs Niam had told her she, Mrs Niam, would be getting something but had not given Mrs Saleh any details and that it had been a lawyer who had told her about the $2 million. She said that she did not know that Mrs Niam was to receive cash as well as her shares.
42. She said that there had been language difficulties during the interview which had been conducted in a mixture of English and French. She was shown the notes of the interview, not the summary from which I have just quoted. She explained that her French was better than her English but not fully fluent.
43. She denied having said that Mrs Niam was to receive "a lot of money". She said she had been told that the purpose of the meeting was "internal audit" and that there was no interpreter present. She denied having told the lawyers that Mrs Niam was to get $2 million. She said that there were numerous inaccuracies in the note of the interview. She said she was not aware of any reason why Mrs Niam should receive $2 million from this particular company.
44. She did not have any knowledge of Mrs Niam having any specialist industry knowledge about oil and gas. She reiterated that they planned to tell their husbands about the investment at a later stage if it turned out positive. She denied knowing that both her and Mrs Niam's husband had been involved in helping the company to do business in Chad. Such was her evidence in answer to questions about the interview in January 2012.
45. Returning to the narrative, GEI was then charged in Canada with the criminal offence of providing a corrupt inducement to a public official of a foreign state to induce him to use his position to influence acts or decisions of that state, contrary to section 3(1)(b) of the Corruption of Foreign Public Officials Act 1999. It was not part of the Crown's case that the inducement included the issue to Mrs Saleh of her 800,000 shares in GEI at a low price, nor the issue of shares to Mr Hassan, whose shares were subsequently bought by Mrs Niam. The inducements relied on by the Crown were: (1) payment of the US$2 million to Chad Oil; and (2) the issue of 1.6 million shares in GEI to Mrs Niam at a nominal price.
46. On 14 January 2013, Mr Sigurdson the prosecutor, Ms Robidoux QC, leading counsel for GEI, and the latter's President and CEO, by then Mr Gary Guidry, all signed an agreed statement of facts in Calgary, Alberta. GEI admitted the facts therein and the charge. The agreed amount of the fine was to be Can$9 million plus a 15 percent victim surcharge, making a total of Can$10.35 million. In mitigation, the Crown acknowledged that it was "not alleging, and GEI is not admitting, that any influence was actually realized."
47. On 22 January 2013 the judge, Brooker J, passed sentence in accordance with the facts in the agreed statement and his sentence was that agreed between GEI and the Crown. Then on 11 February 2013, the Public Prosecution Service of Canada ("PPSC") issued an application for forfeiture of the shares issued to Mrs Niam, Mr Hassan, and Mrs Saleh. It was supported by, among other things, a lengthy affidavit sworn on 21 March 2013 by Mr Chad Babin, a peace officer from the Royal Canadian Mounted Police based at the International Anti-Corruption Unit in Calgary. He swore that affidavit to obtain a search warrant in respect of certain premises in Vancouver, to enable him to take possession of the share certificate in respect of Mrs Saleh's 800,000 shares in GEI.
48. However, the Crown then, on 4 April 2014, gave notice to withdraw the applications for forfeiture against the three shareholders. The PPSC was unwilling to disclose to the SFO the reasons for the withdrawal without the SFO entering into a non-disclosure agreement which, properly and understandably, the SFO felt unable to do. The withdrawal was confirmed at a further hearing before Brooker J on 16 April 2014.
49. In June 2014, Mrs Niam sought to gain control of her 1.6 million shares and a further 1.6 million shares formerly owned by Mr Hassan, whom she had bought out, and to transfer them to a personal bank account in her name. However at that time, GEI was negotiating with a Swiss mining corporation, Glencore plc ("Glencore") for the acquisition by Glencore of the whole of GEI's issued share capital. Glencore acquired all the shares in GEI at £5.50 per share.
50. Under Canadian company law, the shares held by Mrs Niam and Mrs Saleh had to be sold to Glencore at that price. That sale then took place in July 2014. The proceeds were placed in an account at RBS in London in the name of the stock transfer agent, called Computershare Investor Services plc.
51. The US authorities then obtained an order permitting seizure of the proceeds of sale of Mrs Niam's 3.2 million shares. The remaining 800,000 shares, formerly held by Mrs Saleh, were now represented by the £4.4 million which is the subject of the present claim. That sum was the subject of the freezing order granted by Mostyn J in July 2014; the order that Andrews J in the Court of Appeal subsequently refused to discharge.

The Issues, Reasoning and Conclusions

52. It is convenient to address the issues in the order in which they are helpfully set out in a letter sent by the SFO to Mrs Saleh's solicitors in preparing for this hearing. The first issue is whether the issue of shares by GEI to Mrs Saleh amounted to unlawful conduct under the criminal law of Canada. As a starting point, it is common ground that the basis of GEI's plea of guilty to criminal charge against it in Canada did not include any admission that the issue of shares to Mrs Saleh by GEI was a criminal act under the law of Canada.
53. Mr David Quest QC for the SFO submitted as follows. He said the evidence is overwhelming that the issue of the shares to Mrs Saleh formed part and parcel of the corrupt arrangement to influence the ambassador - GEI had admitted as much in respect of the shares issued to Mrs Niam - and that the US$2 million payment was part of that corrupt arrangement.
54. He invited me to infer that the issue of shares to Mrs Saleh was part of the same overall arrangement. He pointed out that the first consultancy agreement had been made with the ambassador's own company and that it was only when lawyers pointed to the difficulty that created, that Mrs Niam's company, Chad Oil, had been incorporated in Nevada, opening the way for the second consultancy agreement.
55. According to Mrs Saleh, Mrs Niam was, at that time, a sociology student in Washington DC without any known expertise in the oil and gas industry and Mrs Saleh was unaware of any reason why Mrs Niam should receive such a large amount of cash. Mr Quest pointed to the emails in 2010 and 2011 showing that Mr Bechir, the ambassador, and his deputy Mr Takane, Mrs Saleh's husband, were closely involved in the negotiations culminating in the production sharing contract and, contemporaneously with it, the third consultancy agreement leading to the actual payment of US$2 million in February 2011, soon after the production sharing contract had been signed.
56. Mr Quest reminded me that the shares had been issued to all three shareholders on the same day, 15 September 2009, the very day the second consultancy agreement was entered into. The issue of the shares amounted to a 10 percent stake in GEI. There was no reason for the founders of GEI to offer such a large stake, or any stake, in GEI to complete outsiders at a nominal price unless GEI expected something in return. It was fanciful, he suggested, to suppose there was a genuine commercial reason for the transaction, other than an improper inducement. He reminded me, finally, that the above analysis which he commended to the court does not, in itself, require any guilty state of mind on the part of Mrs Saleh.
57. In answer to those submissions, Mr Ashley-Norman QC for Mrs Saleh made the following points. He submitted that the evidence deployed by the SFO in these proceedings was much narrower and less detailed in its compass than had been the investigations from 2011 to 2013 conducted by GEI's lawyers, and that even those far more extensive negotiations had ended with an outcome that remained neutral on the issue as to whether shares issued to Mrs Saleh were part and parcel of any corrupt enterprise.
58. He referred me to the transcript of the sentencing hearing in the criminal proceedings, in which GEI's leading counsel had carefully recorded the absence of any admission by it that Mrs Saleh's part in the matter and the issue of shares to her formed any part of what was described as the "unlawful compensation", that is to say the corrupt inducements.
59. He pointed out, furthermore, that the forfeiture proceedings in respect of her shares, though brought, had been withdrawn and that, in the light of that evidence emanating from Canada, this court should conclude that the SFO's proposition was not made out when it asserted that the shares issued to Mrs Saleh formed part and parcel of the corrupt inducements.
60. I come to my reasoning and conclusions on that issue. In my judgment, the overwhelming and overriding consideration is that GEI could have no possible reason for offering such a valuable stake in its business to Mrs Saleh for such a low price unless that had been done for an ulterior purpose. It cannot sensibly be suggested that it was done for any bona fide commercial reason nor that it was simply a gesture of gratuitous generosity to Mrs Saleh.
61. It must in my judgment, for the reasons advanced by Mr Quest and in the SFO's written case and evidence, have been done for the purpose of inducing a Chadian public official, either the deputy ambassador Mr Takane, or Mr Bechir the ambassador, or both, to influence decisions of the Republic of Chad.
62. Andrews J made similar observations under ten points at [60] of her judgment on the occasion when she refused to discharge the freezing order made by Mostyn J. They are to similar effect as Mr Quest's submissions to me in this trial of the Part 8 claim. She made those observations in support of her decision that there was then a "good arguable case" that the shares allotted to Mrs Saleh and Mr Hassan were part of the corrupt incentives provided by GEI.
63. I gratefully adopt them in support of my conclusion that they provide overwhelming and easily sufficient proof on the balance of probabilities that allocation of those shares to Mrs Saleh was part of the package of corrupt incentives offered by GEI. I therefore conclude that first issue in favour of the SFO.
64. The next live issue is whether the SFO can show that the conduct of GEI in issuing the 800,000 shares to Mrs Saleh, if committed in England, would be a criminal offence in England. If it would be, the "dual criminality" requirement is satisfied and the property is recoverable property. It is not disputed that the £4.4 million realised on the sale of Mrs Saleh's shares "represents" the shares themselves, applying the tracing provisions in section 305 of the Act.
65. Mr Ashley-Norman QC submitted that the SFO had not been able to prove that the dual criminality requirement was satisfied. He noted that in submissions to Andrews J in the discharge application in respect of the freezing order, leading counsel then appearing, Mr Mitchell QC, had submitted to her that the relevant English law offence was that of bribery at common law, an offence which is now disavowed by Mr Quest in his submissions to me.
66. Likewise, Mr Ashley-Norman reminded me Mr Quest and the SFO do not, for the purposes of this hearing, rely on any offence of money laundering under different provisions in the Act, which would require it to be established that Mrs Saleh had the necessary mens rea for any such offence. That left two statutes, one dating from 1889 and the other from 1906. Mr Ashley-Norman complained that the SFO had not been able to explain how GEI would be guilty of offences under those two statutes and thus must fail to establish the dual criminality requirement.
67. Mr Quest responded simply by pointing to the text and language in the two statutory provisions. Both were subsequently repealed when the Bribery Act 2010 entered into force, but that Act came too late for the present proceedings because it had not yet been enacted or entered into force at the relevant time in 2009 when the shares were issued to Mrs Saleh.
68. The relevant part of section 1 of the Prevention of Corruption Act 1906 provided at the relevant time as follows:

"...If any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business ... he shall be guilty of a misdemeanour..."

69. The 1889 Act is the Public Bodies Corrupt Practices Act 1889. Section 1(2) provides:

"Every person who shall by himself or by or in conjunction with any other person corruptly give, promise, or offer any gift, loan, fee, reward, or advantage whatsoever to any person, whether for the benefit of that person or of another person, as an inducement to or reward for or otherwise on account of any member, officer, or servant of any public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which, such public body as aforesaid is concerned, shall be guilty of a misdemeanour ... ."

70. It is then necessary to refer to section 7 of the same Act which (as amended in 2001) provided at the relevant time that the expression "public body":

"...means any council of a county or county of a city or town, any council of a municipal borough, also any board, commissioners, select vestry, or other body which has power to act under and for the purposes of any Act relating to local government, or the public health, or to poor law or otherwise to administer money raised by rates in pursuance of any public general Act, and includes any body which exists in a country or territory outside the United Kingdom and is equivalent to any body described above."

71. In my judgment, the conduct of GEI would plainly constitute an offence under the 1906 Act. In the part of section 1 which I have quoted, the "person" is GEI, the "agent" is Mr Takane and/or Mr Bechir, and the consideration for inducement or reward is for showing favour to GEI in its affairs or business. It is true that the consideration or gift was made to the wives and, in one case, a company owned by the wife of the agent, but I do not think that that matters. It remains a consideration given for the benefit of the husband (the public official) as well as the wife.
72. The 1889 Act is wider in the sense that it refers to an inducement to any "person" but it must be done on account of a member, officer or servant of any "public body", as defined, doing something favourable to the provider of the inducement. It seems to me likely, though I do not think I need to decide affirmatively, that the definition of a public body in section 7, including as it does a body outside the United Kingdom equivalent to one which administers "money raised by rates in pursuance of any public general act" is wide enough to include the Chadian Ministry of Petroleum and Energy.
73. Even if that is wrong, the conduct of GEI, in my judgment, would plainly, if committed in England, have amounted to an offence under section 1 of the 1906 Act. It follows that under section 266(1) of the 2002 Act, I must make a recovery order unless or to the extent that Mrs Saleh can make out a defence under that section. I turn then to consider whether she has such a defence under section 266(3)(a) and (4) of the Act.
74. It is common ground that all of the four conditions set out as (a) to (d) under section 4 must be met. Mr Quest submitted that, as to the requirement in (a), (receipt of the shares in good faith) her evidence to that effect, both oral and written, was most unsatisfactory. She had adopted language in her written statements which she did not understand. In her oral evidence, her evidence of knowledge about Mrs Niam's receipt of money from GEI was not credible and was contradicted by the record of the interview suggesting that she had known about the US$2 million at the time it was paid in February 2011.
75. Her oral evidence, suggested Mr Quest, about the circumstances in which she acquired her shares was implausible. It is clear from the emails that Mr Takane was involved in communications between GEI and officials in Chad, and with securing payment of the US$2 million. If Mrs Saleh's evidence were true, she and her husband would both have been involved in the matter but blind to each other's involvement, which was not plausible.
76. Mr Quest submitted that a person receiving the shares in good faith would have asked all sorts of questions about what they were for. He also pointed out that Mrs Saleh had lent her name to a declaration on the share subscription agreement (Schedule A) about her income, which was not true. It followed that she had not received the shares in good faith, Mr Quest submitted, and that therefore under section 266(4)(c), she was on notice that the property was recoverable.
77. As to the requirements at (b) and (d) - the taking of steps resulting in detriment to her should a recovery order be made - he relied upon the reasoning of Andrews J in Azam and submitted that the detriment is not the loss of the property in itself. It must refer to any expenditure or work done in reliance on receipt of the property, a factor absent here.
78. Mr Ashley-Norman submitted by way of riposte as follows. He accepted that the burden was on Mrs Saleh to make good the defence. He suggested that while her evidence had indeed been unsatisfactory in certain respects, the kernel of her case set out in paragraph 8 of her second witness statement, which I have already quoted, and which was translated to her, was unshaken and should be accepted.
79. He invited me to find that there was insufficient evidence to support any fair inference that she did not obtain the shares in good faith and that, as regards the requirement at section 266(4)(b), the taking of steps, she had indeed taken the step of paying Can$800 for the shares.
80. As regards the requirement at (c), he submitted that Mrs Saleh would have to be on notice that the issue to her of the shares was in some way likely to be improper or "dodgy"; and he submitted that the SFO's reliance on emails sent much later was wholly insufficient to ground an interference that she had any such knowledge.
81. As regards the requirement of detriment in (d), Mr Ashley-Norman submitted that the detriment has to be regarded as the loss of the whole of the £4.4 million and not just the Can$800 paid for the shares, since it would be unreal to overlook and ignore the vast increase in their value between their acquisition and their sale.
82. He repeated his submissions that GEI had never admitted the exertion of actual influence over the Chadian government in order to gain the contract, that it was not clear there was corruption on the part of all the Chadians involved in the transactions, and that the involvement of lawyers at each stage was a contra-indicator of any indication of impropriety. On balance, he suggested that Mrs Saleh should be acquitted of any corruption which took her a long way to establishing the just and equitable defence under section 266.
83. Turning to my reasoning and conclusions on this issue, I have to say that I did find Mrs Saleh's evidence unsatisfactory. She had been prepared to sign documents written in a language she does not properly understand and can barely read. I am surprised that her second witness statement was supplied in English and not approved by her in Arabic and then translated. The passage in paragraph 8 of her second witness statement, heavily relied upon by her and said to be the kernel of her case, had to be translated to her. She was not able to read it.
84. The account she gave clearly had elements of truth in it. For example, she accepted signing the subscription agreement. She accepted that she was aware of the income declaration in it and she accepted that she did not have enough income to justify what she signed up to in that declaration. However, I do not accept that she was under the misapprehension that the shares that she received were a speculative investment recommended to her, without any knowledge on her part that she was getting them as part of an arrangement intended to benefit the company issuing the shares.
85. Nor can I accept, having listened to her evidence, that she did not share with her husband knowledge that she held those shares, that he was unaware she held them and that she only planned to inform him later if and when they should go up in value. Mr Takane, who did not give evidence, was actively involved in the arrangements from, at the latest, March 2010 when he was sending and receiving emails in the correspondence I have referred to, about the negotiations towards the conclusion of a production sharing agreement. In February 2010, it was he who gave banking directions for the payment of US$2 million. It is not plausible that he was ignorant of the share allocation to his wife, Mrs Saleh, in September 2009 or that if he knew about it, his wife did not know that he knew about it.
86. The idea that Mrs Saleh expected they might go down in value and that she did not know about the company's plan to drill for oil in Chad I do not find credible. I do not find her to be a naïve woman and I am satisfied from her written and oral evidence that she was aware of the true nature of the arrangements. I am therefore unable to find that she received the shares in good faith and that the requirements of section 266(4)(a) and (c) are met. That is, of course, sufficient to dispose of her defence.
87. If I had found in her favour that she had received the shares in good faith, I would have accepted that the requirement in (b) was met since she paid Can$800 in anticipation of receipt of the shares which, for what it would be worth, was "detrimental to her" within the wording of (d). However, applying similar reasoning to that of Andrews J in the Azam case, I would not have accepted that, undertaking the balancing exercise required by section 266(6) of the Act, the balance would have come down in her favour and led to the conclusion that it would not be just and equitable to include the proceeds of the shares within the recovery order.
88. I would add that in that connection, as I have said, there was some disagreement between the parties about whether the "detriment" referred to in section 266(a) is necessarily the same as that referred to in the phrase "detrimental to him" in section 266(4)(d).
89. Mr Quest submitted that the meaning must be the same in both cases such that the "detriment" in subsection (6) is limited in this case to the Can$800 paid by Mrs Saleh for the shares. Mr Ashley-Norman begged to differ. He pointed out that the vastly increased value of the shares at the time they were realised meant that the amount of the detriment had, for subsection (6) purposes, by then increased to 4.4 million.
90. I think it is best to express no view on that point since I did not hear detailed argument on it and it is not material to the result in this case. I will leave it to another judge for another day.
91. In conclusion, for the reasons given, I will make the order sought by the SFO whose claim succeeds.