Author: Syedur Rahman
18 March 2022
3 min read
Syed Rahman of Rahman Ravelli details a multinational arbitral award case and outlines the approach that needs to be taken in such situations.
A mining company has asked a New York federal court to compel Bank of America to produce financial information about another company, after gaining a UK court's permission to enforce an arbitral award.
The Congolese Katanga Contracting Services SAS has said - in a memo supporting its request that Bank of America NA conduct expedited discovery - that it seeks to enforce a valid judgment obtained in the United Kingdom over a series of contractual disputes against another Congo mining company, Tenke Fungurume Mining SA, which produces copper and cobalt.
Katanga said it has a number of contracts with Tenke, including contracts for the construction of storage facilities, and says that Tenke has a Bank of America account in New York. Katanga wants the bank to disclose Tenke's assets so that Katanga can freeze Tenke’s funds. Katanga is seeking to collect a $16.7 million arbitral award granted by an International Chamber of Commerce tribunal in London in August last year after arbitration proceedings.
In a statement, Katanga says it has a reasonable belief that Tenke is taking steps to dissipate its assets or make them unreachable. It believes that Tenke is doing this by transferring large sums of money that were outside of the Democratic Republic of Congo (DRC) into bank accounts within the country, where enforcement proceedings would be more difficult to conclude.
In its petition to Bank of America, Katanga says that Tenke is now in default of its obligation to pay what it owes. Katanga has said it filed a claim in the High Court of Justice, Business and Property Courts of England and Wales Commercial Court to seek disclosure of Tenke's worldwide assets. The application is set to be heard on March 25. Katanga has also said it has filed an application in the High Court for a worldwide freezing order.
Katanga is now seeking discovery from Bank of America in aid of the asset disclosure application and the freezing order application. It has said that it believes Tenke has transferred over $150 million from its Bank of America accounts to an account within the DRC, leaving just $1.6 million in its New York accounts. Katanga is now requesting authorisation to subpoena the bank for records showing when and where the funds previously held in those accounts were disbursed.
Enforcing arbitral awards globally requires careful consideration.
There are practical issues that claimants should consider when these types of issues arise. The most important ones are:
Once a claimant proceeds with enforcement, the next stage is to try and ascertain as much information as possible about the respondent’s assets in the jurisdictions where it is known to be active.
Using local counsel in these jurisdictions can be of huge value. The assets of a respondent can take many forms. They can be shares, bank balances, tangible assets such as property, aircraft, boats and other vehicles or intangible items of value such as intellectual property rights. Depending on the type of assets and the asset tracing techniques employed, public registers can be a useful source of information.
Once the assets are identified, the claimants will need to consider which jurisdiction they wish to pursue enforcement proceedings in.
This is an area where a tactical approach needs to be employed. The claimant will need to think about:
Any attempt to enforce an award in a number of jurisdictions requires a carefully-planned and coordinated approach.
There are inherent risks involved in bringing such action. But the chances of success will increase if you take the necessary steps beforehand to:
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.