London’s High Court has ruled in favor of the Kazakh mining group Eurasian Natural Resources Corporation (ENRC), declaring that the UK’s Serious Fraud Office (SFO) is liable for damages over a decade-long corruption investigation that was eventually abandoned.
ENRC, consistently denying any wrongdoing, argued that the SFO initiated the investigation after inducing the company’s former lawyer to act against its interests.
The mining group sought around ÂŁ21 million ($26.6 million) for what it termed as “unnecessary” work caused by the SFO’s actions and its former legal representatives, Dechert. The latter’s ex-co-head of white-collar crime, Neil Gerrard, conducted an internal investigation for ENRC.
In a significant setback for the SFO, the High Court ruled in favor of ENRC, asserting that the investigation wouldn’t have commenced “but for the SFO’s wrongdoing.”
The court previously highlighted Gerrard’s unauthorized engagement with senior SFO officials, terming it a “reckless breach of duty” and alleging that the SFO induced him to do so.
While the specific damages relating to unnecessary work are yet to be determined, they pale in comparison to ENRC’s claim of nearly $1 billion for losses resulting from the SFO probe, which will be addressed in a separate trial.
ENRC was investigated from 2013 regarding alleged bribery for securing mining contracts in the Democratic Republic of Congo between 2009 and 2012. However, the SFO closed the investigation in August without filing any charges.
Michael Roberts, ENRC’s lawyer at Hogan Lovells, highlighted that the judgment “sends a clear message” against law enforcement’s use of defense lawyers as covert informants.
In response, an SFO spokesperson expressed disappointment, citing the ruling’s relation to past staff conduct and assuring careful consideration of the judgment’s implications. A Dechert representative emphasized efforts to resolve the resulting damages issues swiftly.