UK Supreme Court allows Mozambique to sue Privinvest over “tuna bond” scandal.
Trial begins soon for missing funds from government-guaranteed loans.
Mozambique seeks to annul a loan guarantee and compensation.
The United Kingdom’s Supreme Court has ruled that Mozambique can proceed with its lawsuit against shipbuilder Privinvest in Britain concerning the $2 billion “tuna bond” scandal. This decision comes just weeks before a significant trial is set to begin in London.
Mozambique is suing Privinvest, its owner Iskandar Safa, Credit Suisse, and others in London’s High Court over government-guaranteed loans raised in 2013 and 2014, with hundreds of millions of dollars reportedly missing.
Privinvest had argued that any disputes between the parties should be resolved through arbitration as per their contracts. In 2021, the Court of Appeal ruled in favor of Privinvest, which was a setback for Mozambique’s efforts to recover the allegedly lost funds.
However, the Supreme Court has unanimously allowed Mozambique’s appeal against this ruling. As a result, Mozambique’s claims against Privinvest will now proceed to a lengthy trial scheduled to commence on October 3.
The “tuna bond” or “hidden debt” case has led to criminal investigations in both Mozambique and New York, along with several related lawsuits. The case revolves around agreements between Mozambican state-owned entities and Privinvest, partly financed by loans and bonds from Credit Suisse and purportedly backed by undisclosed Mozambican government guarantees, ostensibly for the development of the fishing industry and maritime security.
Mozambique, one of the world’s poorest nations, seeks to annul a sovereign guarantee on a loan it alleges was obtained through corruption and obtain compensation for other alleged wrongdoings.
However, the legal proceedings in London have faced challenges due to Mozambique’s repeated failure to disclose crucial documents, which posed a risk to the litigation. Privinvest and Safa had also attempted to involve Mozambican President Filipe Nyusi in the case but were unsuccessful, with the High Court ruling that he enjoys state immunity.