On 24th February 2016, Rishi Gulati, Australian Barrister and Academic Expert at Bretton Woods Law, gave a presentation at the Max Planck Institute for Public and International Law in Germany. The presentation concerned the latest developments on the law of the immunities of International Organisations focusing on access to justice. The presentation was very well received. Various matters were discussed in the presentation and the Q&A session, including the ongoing Haiti Litigation in US courts.
Following the successful appeals to the European Bank for Reconstruction and Development Administrative Tribunal (“EBRDAT”) in the cases of Kominek & Others v EBRD (see: EBRD 2013/AT/01 and EBRD 2013/AT/02), Neil Macaulay and Alex Haines of Bretton Woods Law (“BWL”) have secured another victory in the case of Grassi v EBRD (see: EBRD 2016/AT/01). On the 18th January 2016, the EBRDAT allowed Mr Grassi’s (“Appellant”) appeal against the 9th September 2015 decision by the EBRD President adopting the recommendation of the Bank’s Grievance Committee (“GC”). The GC, which sits as the body of first instance in the Bank’s internal justice system and below the EBRDAT, had recommended not to exercise its jurisdiction over all the elements contained in the Appellant’s ‘Request for an Administrative Review Decision’ (“RARD”) on the basis that it had been submitted outside the relevant procedural deadline, and was thus time-barred. The time limit for the submission of the Appellant’s RARD landed on a non-working day (i.e., Saturday) but was submitted the next working day (i.e., Monday). The EBRDAT found that, contrary to the GC’s recommendation and contrary to the Bank’s arguments, the Appellant’s RARD had, in fact, been timely submitted on the Monday, even if, strictly speaking, it came after the Saturday deadline. The EBRDAT had “no hesitation to ‘remedy’ the anomaly in the Grievance Procedures by way of a liberal interpretation” (see: paragraph 33 of the judgment).
The EBRDAT’s judgment adopted the arguments raised by the Appellant, and relied, inter alia, on best practices of other Multilateral Development Banks (“MDBs”) (e.g., the International Monetary Fund (“IMF”) and the African Development Bank (“AfDB”)). The rules of procedure at the Administrative Tribunals of a number of international organisations allow, as do many national systems, for the filing of a grievance on a ‘next working day’, thus preventing the unfair situation that had arisen in the Appellant’s case. The Bank had argued that the procedural rules should be interpreted strictly, despite the apparent prejudice in this case. The EBRDAT, however, relied on a judgment from the Administrative Tribunal of the International Labour Organisation (“ILOAT“) (see: Judgement No. 2882, at consideration 6) and further found that “the Bank’s interpretation is exceedingly pedantic and formalistic, and would unduly hinder the Staff Member from defending his right effectively” (see: EBRD 2016/AT/01, at paragraph 33).
In its judgement, the EBRDAT also took into account of the contra proferentem rule, natural justice, and fairness as a principle of international administrative law. Although the EBRDAT did not take the case of Kominek into account because its facts were different, that case also resulted in the EBRAT criticising the Bank for complicating matters unnecessarily: “Voluminous arguments and numerous documents have been submitted to the Judges, who have read them and concluded that this matter has been treated by the Bank as exceedingly complex when it is in effect quite simple. Indeed, it seems important that ordinary Staff Members perceive that the options for vindicating their rights are straightforward, lest they be intimidated by the ostensible prolixity (and attended costs) of the grievance system” (see: EBRD 2013/AT/01, at paragraph 21).
The latest EBRDAT decision is a victory for common sense: it remedies an exceedingly pedantic and formalistic approach depriving staff members from effectively defending their rights naturally, justly and fairly; it provides useful guidance for the GC on how to interpret the Bank’s internal laws; and it reaffirms the application of general principles of international administrative law to the internal law of the Bank with a view to filling its lacunas.
The BWL IAL team can be contacted at email@example.com
Returning foreign fighters from Syria have posed a legal challenge for domestic prosecuting authorities. BWL Academic Member and Australian Barrister, Rishi Gulati has undertaken work in the national security law area. In an interview with Radio National of the Australian Broadcasting Corporation on 17th November 2015, Rishi discusses a landmark case in Melbourne that is likely to set a legal precedent for returning foreign fighters.
On 27th November, Bretton Woods Law presented a seminar on international administrative law in Vienna. Hosted in conjunction with the British Embassy in Vienna and UK Trade and Investment (‘UKTI’) at the Residence of HE the British Ambassador, some 38 delegates from 25 different international organisations attended for a selection of lectures presented by members of BWL covering themes such as fundamental and essential rights, harassment, the big issues of IAL and litigating before administrative tribunals and legal insurance.
This event follows BWL’s participation in the Round Table at La Sapienza University in Rome on 6th November, which focused on the theme of ‘right of appeal in international administrative courts. The Round Table was organised by the Committee of Staff Representatives of the Co-ordinated Organisations (‘CRP’), the Association of Scholars of International and European Law, the University of Rome La Sapienza’s Department of Communication and Social Research, the Journal of the International Legal Cooperation, KorEuropa (On-line Journal of the European Documentation Centre of the Kore University of Enna), the International Law and European Union Law Series (Aracne Ed.). Jazz Omari delivered a presentation entitled ‘Should an appeal mechanism be introduced against rulings by the courts of International financial institutions?’ which compared the current structure of the internal justice systems at multilateral development banks and examined possible structural reforms devised by Lee Marler. The Round Table received a Medal of the Presidency of the Italian Republic and the presentations shall be published by Aracne Editions in the new year.
The African Development Bank with BWL Assistance Settles Sanction Case with Hitachi Ltd of Japan
The African Development Bank (“AfDB”) has today announced in Abidjan that it has entered into a Settlement Agreement with Hitachi Ltd of Japan, which brings to an end the three-year investigation undertaken by the AfDB’s Integrity and Anti-Corruption Department (“IACD”). IACD had alleged that two Hitachi companies – the German based Hitachi Power Europe GmbH (“HPE”) and its South African subsidiary Hitachi Power Africa (Pty) Ltd (“HPA”) – had engaged in sanctionable practices in order to be awarded in South Africa in 2007 the AfDB financed Medupi Power Station Boiler Works Contract.
BWL’s Lee Marler, Neil Macaulay and Alex Haines have represented IACD in this matter for the past two years and an international BWL team instructed by IACD (and comprised of Marler, Macaulay, Alan Sarhan and Ayman Daher (the latter two from BWL Canada)) will now proceed to assist Hitachi Ltd in fulfilling its settlement obligations to the AfDB.
The full text of today’s AfDB press release reads as follows:
“Abidjan, Côte d’lvoire Wednesday, 2nd December 2015 – The African Development Bank Group (“AfDB”) announces that on 2nd November 2015 it concluded a Settlement Agreement with Hitachi, Ltd. (“Hitachi”) of Tokyo, Japan.
The Settlement Agreement follows a three year investigation by the AfDB’s Integrity and Anti-Corruption Department (the “IACD”) into allegations of sanctionable practices by certain Hitachi subsidiaries on the AfDB financed Medupi Power Station Boiler Works Contract in the Republic of South Africa. The IACD alleged that at the material time Hitachi Power Europe GmbH (“HPE”) based in Germany and its South African subsidiary, Hitachi Power Africa (Pty) Ltd (“HPA”), engaged in sanctionable practices in order to be awarded the boiler works contract.
The AfDB acknowledges that Hitachi and its affiliates co-operated fully and openly with the IACD investigation, and that Hitachi was determined throughout to maintain its good relations with the AfDB and to protect the integrity of the Medupi project. Despite their differences, both parties shared a desire to resolve the current difficulties by way of settlement.
Due in part to the high level of assistance provided to the IACD by Hitachi, the AfDB has agreed to impose the sanction of debarment for twelve months with conditional release upon HPE and HPA, the two companies at the centre of the IACD investigation. Debarment will be terminated as soon as Hitachi enhances its integrity compliance programme to the standard set by the AfDB’s Integrity Compliance Guidelines. Moreover, Hitachi has voluntarily agreed (1) to make a substantial financial contribution to the AfDB, which will be used to fund worthy anti-corruption causes on the African continent; and (2) to co-operate with the IACD on a variety of matters, including enhancing where necessary its existing integrity compliance programme referenced above.
“The sanctions imposed under the settlement agreement reflect the level of cooperation provided by Hitachi, Ltd. in the investigation of the Medupi matter, for which the IACD is grateful”, said Anna Bossman, Director of the IACD. “Hitachi has shown by its actions that it is committed to doing business in an ethical manner and the IACD believes in giving credit for such dedication. As I have said before, the IACD is ever willing to resolve amicably allegations of sanctionable practices with companies that show a sincere commitment to integrity, who collaborate in the resolution of allegations and who elect to enhance their compliance polices and procedures.”
On 30th October 2007, Eskom awarded the AfDB financed Medupi Power Station Boiler Works Contract for the design, manufacture, supply, erection and commissioning of six coal fired steam generator units at its Medupi plant at Lephalale in the Limpopo Province of South Africa to the consortium of HPE and HPA. Mr Johann Benöhr led the IACD investigation with support from Ms Funmilayo Akinosi and Mr Simeon Obidairo. Lee Marler, Neil Macaulay and Alex Haines of Bretton Woods Law, London represented the IACD.”
Separately, Hitachi Ltd also settled on 28th September 2015 with the United States’ Securities and Exchange Commission (“SEC”) and its press release of the same day, in which it acknowledged the assistance provided by IACD and by implication BWL, reads as follows:
“Washington D.C., Sept. 28, 2015 — The Securities and Exchange Commission today charged Tokyo-based conglomerate Hitachi, Ltd. with violating the Foreign Corrupt Practices Act (FCPA) when it inaccurately recorded improper payments to South Africa’s ruling political party in connection with contracts to build two multi-billion dollar power plants.
Hitachi has agreed to pay $19 million to settle the SEC charges.
The SEC alleges that Hitachi sold a 25-percent stake in a South African subsidiary to a company serving as a front for the African National Congress (ANC). This arrangement gave the front company and the ANC the ability to share in the profits from any power station contracts that Hitachi secured. Hitachi was ultimately awarded two contracts to build power stations in South Africa and paid the ANC’s front company approximately $5 million in “dividends” based on profits derived from the contracts. Through a separate, undisclosed arrangement, Hitachi paid the front company an additional $1 million in “success fees” that were inaccurately booked as consulting fees without appropriate documentation.
“Hitachi’s lax internal control environment enabled its subsidiary to pay millions of dollars to a politically-connected front company for the ANC to win contracts with the South African government,” said Andrew J. Ceresney, Director of the SEC’s Enforcement Division. “Hitachi then unlawfully mischaracterized those payments in its books and records as consulting fees and other legitimate payments.”
According to the SEC’s complaint filed in U.S. District Court for the District of Columbia:
- Hitachi was aware that Chancellor House Holdings (Pty) Ltd. was a funding vehicle for the ANC during the bidding process.
- Hitachi nevertheless continued to partner with Chancellor and encourage the company to use its political influence to help obtain government contracts from Eskom Holdings SOC Ltd., a public utility owned and operated by the South African government.
- Hitachi paid “success fees” to Chancellor for its exertion of influence during the Eskom tender process pursuant to a separate, unsigned side-arrangement.
Hitachi’s misconduct violated the books and records and internal accounting controls provisions of the federal securities laws, specifically Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934.
Without admitting or denying the SEC’s allegations, Hitachi agreed to a settlement that would require the company to pay a $19 million penalty, and it would be permanently enjoined from future violations. The settlement is subject to court approval.
The SEC’s investigation was conducted by Jon Jordan and Thierry Olivier Desmet of the FCPA Unit in Miami with assistance from Kathleen Strandell, David S. Johnson, and Matthew P. Cohen. The SEC appreciates the assistance of the Justice Department’s Fraud Section, the Federal Bureau of Investigation, the Integrity and Anti-Corruption Department of the African Development Bank, and the South African Financial Services Board.
“We particularly appreciate the assistance we received from the African Development Bank’s Integrity and Anti-Corruption Department and hope this is the first in a series of collaborations,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit.””
BWL barristers are renowned experts in the sanctions procedures operated by the world’s multilateral development banks (“MDB’s”), such as the African Development Bank (“AfDB”), the Asian Development Bank (“AsDB”), the Inter American Development Bank (“IADB”) and the World Bank Group.
Lee Marler, BWL’s co-head of Chambers, is quoted as saying that “we are very proud to be IACD’s standing counsel and we are delighted to have assisted the Department these past years in bringing the Medupi case to a successful conclusion, but we are equally proud to be able to represent our other clients before the anti-corruption units, sanctions boards and committees of the other MDBs. Our strength is our depth of knowledge and unparalleled experience, for at BWL we prosecute for the AfDB but defend everywhere else and it is this rich mix that serves to ensure that we give balanced and objective advice to all of our MDB clients”.
The BWL MDB team can be contacted at firstname.lastname@example.org
On 1st and 2nd October 2015, the third annual International Administrative Law (“IAL”) Centre of Excellence conference took place at King’s College, London, where delegates represented 26 international organisations, including the World Bank, the EU, UNIDO, EPO, WHO, WTO, EBRD, AsDB, IAEA, OECD and OECD.
The IAL Centre of Excellence annual conference brought together international civil servants, union representatives, independent lawyers and lawyers for human resources and management, academics, and others interested in IAL from around the world, with a view to shaping and improving this area of the law.
The conference topics included recent developments in IAL, the concept of fairness, whistleblower protection at the UN, updates on legal insurance and class actions, the EU courts and violation of Article 6 ECHR.
The conference culminated with the presentation of the second version (2015) of the IAL Centre of Excellence’s Internal Justice of International Organisation Legitimacy Index. The 2015 version of the Index comprises of 28 international organisations of different sizes and from different continents, and ranks the internal justice systems of international organisations against one another with reference to customary international human rights law and general principles of international law.
Earlier this year, Alex Haines from Bretton Woods law gave a presentation on the Appeals Systems of international organisations at the Council of Europe in Strasbourg for its Administrative Tribunal’s 50th anniversary: The International Colloquy of the Administrative Tribunal – Common focus and autonomy of international administrative tribunals.
All members of Bretton Woods Law, London (“BWL”) are delighted to announce that Bretton Woods Law Canada (“BWLC”) opened its doors to clients in Montreal’s fashionable and avant-garde ‘old quarter’ on Monday, 12th October 2015. Ayman Daher and Alan Sarhan are the two partners leading the efforts of this new and dynamic law firm, which has a specialisation within Canada and elsewhere on governance, compliance and business risk, as well as the traditional Public International Law practice areas normally associated with BWL.
Ayman and Alan, who are supported internationally by the team at BWL, are highly talented and accomplished lawyers at the Quebec bar, who have unparalleled experience within Canada in dealing with anti-corruption issues within large multinational North American companies, including defending companies accused by the Multilateral Development Banks (e.g., African Development Bank (“AfDB”), the Asian Development Bank (“AsDB”) and the World Bank Group) of having in engaged in sanctionable practices on MDB financed projects.
With comprehensive assistance provided as necessary from BWL barristers, BWLC will advise and help Canadian and other companies in all aspects of anti-corruption work, including the design and implementation of ‘gold standard’ integrity compliance programmes.
To learn more about BWLC and to view the profiles of Ayman and Alan, visit our sister website at www.brettonwoodslaw.ca
Posted by: Lee Marler and Neil Macaulay – BWL’s Co-Heads of Chambers