ARINSA News

Lebanese shipping group Privinvest on Wednesday asked to be allowed to appeal against the decision of the London Commercial Court that obliges the shipping group to pay around US$2 billion (€1.8 billion) in compensation to the Mozambican state.

At a hearing being held in the Commercial Division of the High Court in London, Privinvest’s lawyer, Duncan Matthews, asked for the execution of the payment to be suspended so that an appeal could be heard.

The lawyer invoked, among other reasons, Mozambique’s failure to disclose important official documents, so that “a fair trial was not possible”.

Privinvest also said that it does not have enough funds to pay the stipulated amount and warned that if this suspension is not accepted, it will have to go into insolvency.

In the judgement of 29 July, which culminated a four-year trial in British justice, Judge Robin Knowles ruled that Mozambique was entitled to payment of US$825 million (€741 million at the current exchange rate) and compensation to cover the US$1.5 billion (€1.35 billion) that it is responsible for paying to banks and bondholders.

To this amount must be added around US$421 million (€378 million) in cash and assets recovered in the meantime by the Mozambican authorities, he added.

Also under discussion in court today were the amount of accrued interest demanded by Mozambique, calculated at US$40 million (€36 million), and the payment of legal costs.

The legal team representing Mozambique’s attorney general’s office (PGR) estimated the costs incurred by the PGR in this case at around £49 million (€58 million).

The lawyer representing Mozambique, Joe Smouha, argued against Privinvest’s request for an appeal and a stay of execution.

“Fraud has consequences, and today there is a question of Privinvest suffering those consequences,” he said.

A decision on these matters should be made by the end of the day. Even if the request for an appeal is rejected, Privinvest can still appeal to the Court of Appeal.

In the judgement of 29 July, Judge Robin Knowles ruled that Privinvest paid bribes to former Mozambican minister of finance Manuel Chang, paid by the shipping group based in Lebanon and the United Arab Emirates.

It was Chang who signed state guarantees on bank loans taken out by public companies Proinducus, Ematum and MAM in 2013 and 2014 to buy ships and maritime surveillance equipment in 2013.

Discovered in 2016, the debts were estimated at around US$2.7 billion (around €2.49 billion), according to figures presented by the Mozambican public prosecutor’s office.

The case that became known as “hidden debts” plunged Mozambique into a financial crisis, after two decades during which the country was one of the ten fastest growing economies in the world, according to the World Bank.

In August, a federal jury in the United States found Manuel Chang guilty of accepting bribes and of conspiracy to embezzle public funds, which the former minister has indicated he intends to appeal.

On the sidelines of the proceedings in London, Mozambique has concluded out-of-court agreements with other creditors, namely Credit Suisse, Russian bank VTB and other financial institutions such as Portugal’s BCP bank to cancel or reduce amounts owed.