Jamai v Otkkritie International Investment Management

LADY JUSTICE GLOSTER: I am not going to give permission to appeal. This is a renewed oral application for permission to appeal following a refusal on the papers by Briggs LJ.

The judge found after a 46 day trial which took place between June and November 2013, the judgment being given on 10 February 2014, that the applicant, Mr Jemai, had been a dishonest participant (albeit not the ringleader or the senior fraudster) in a massive securities fraud involving Argentinian warrants. That judgment extends to 559 paragraphs, including various diagrams annexed to the end of the judgment.

Briggs LJ set out in extensive detail the reasons why he refused permission to appeal. The case concerned a very large fraud of a number of employees and others at a Russian bank called Otkkritie Investment Management Limited, which took place in early March 2011; and which followed on from a practice of the fraud known as the "sucker trade".

In all some $150 million approximately was stolen from the bank. The three principal players, of whom Mr Jemai was not one, received just over $36 billion each from the fraud.

The judge concluded that Mr Jemai was involved in the second Argentine warrants fraud for which he was rewarded with the sum of $400,000, (I interpose to say not the $15 million which the claimants alleged he was intended to receive, or had received).

Secondly, the judge found that he had dishonestly assisted Mr Kondratyuk, one of the principle fraudsters, to launder $35.4 million of Mr Kondratyuk's share of the fraud proceedings by introducing Mr Kondratyuk to Mr Jemai's mother, Mrs Jemai, for that purpose, and that she subsequently laundered the monies through her companies.

It is very difficult, as Mr Smith realistically accepted, and as Mr Pillow for the respondent submitted, for an applicant seeking permission to appeal to establish that he should be entitled to challenge the findings of the trial judge.

It is well established in the authorities that an appellate court will not interfere with a trial judge's conclusion on primary facts unless satisfied that he or she was wrong. In particular, appellate courts are extremely reluctant to interfere where the judge's findings of primary facts are based upon a detailed assessment of the credibility of the witnesses.

There are a number of cases with which this court is familiar which support these and similar principles. I refer merely to Henderson v Foxworth Investments Limited [2014] 1 WLR 2600 at paragraph 62 and 67, and Biogen Inc v Medeva PLC 1997 RPC 1, at page 445; where Lord Hoffmann, in a very well known passage, emphasises the need for appellate caution in reversing the judge's evaluation and the reasons for that.

I, of course, accept that those principles govern my approach in deciding whether there should be permission to appeal and whether this proposed appeal has a real prospect of success.

However, I emphasise that despite those principles, this court on this type of application for permission to appeal does indeed look at the judgment very closely indeed, particularly in a case such as this which has gone on so long and where there are many defendants; and, in particular, where one party has limited funds with which to represent himself.

Of course, the court is guided by those principles, but nonetheless in an appropriate case it will grant permission to appeal against a judge's findings of primary fact at first instance in circumstances where there are reasonable grounds to believe that the judge has got it plainly wrong.

It was for that reason that this application for permission to appeal has been given far more time by the courts than usually is afforded to this type of application, despite the fact that it was clear from the detailed reasons that Briggs LJ gave that he had fully reviewed the judgment, the grounds of appeal, and the skeleton argument.

When this matter first came before me on 16 June 2015, I heard from Mr Smith, who appeared for Mr Jemai at trial, for about an hour and a half, and because of my concern to be fully informed about the arguments that were being presented by Mr Jemai, I adjourned his renewed application for permission to appeal to an inter partes hearing to come on today.

I have heard further from Mr Smith and his very helpful submissions this morning. Having started at 9.30, I have also heard from Mr Pillow and his junior at the invitation of the court. I have read the judgment in full. I have read the skeleton argument and the grounds of appeal put in by Mr Jemai, I believe personally, but maybe also with the assistance of Mr Smith. That extends to 43 pages and addresses in extensive detail the issues in relation to which Mr Jemai basis his arguments that the judge reached inappropriate and wrong conclusions in relation to Mr Jamai's participation in the fraud and in the subsequent money laundering.

Time does not permit me to address all of the 31 grounds of appeal, but I can assure Mr Jemai that I have carefully considered every point that is made in what has been an anxious consideration as to whether permission to appeal should be granted.

I deal with just one or two of the grounds of appeal in order to explain the principal heads of attack mounted by Mr Smith on behalf of Mr Jemai. I emphasise, again, that I have taken into account the arguments in relation to all grounds of appeal.

The first point which Mr Smith places great reliance on is that although he, Mr Smith, as counsel, appeared as counsel for Mr Jemai at trial, this was on a shoe-string basis and as a result of Direct Access.

Mr Jemai was a young man from Switzerland. This was his first job. Mr Smith was appointed just before the trial. English is Mr Jemai's third language and he was only able to obtain limited funds to pay for trial representation.

Mr Smith contrasts that with the extensive representation on the part of the claimants by a team comprising a QC and two juniors and a number of solicitors from Hogan Lovells, and a US lawyer as well. It is clear that the claimant's representation (in terms of expenditure and extent of the team) was far greater than that of Mr Smith acting on behalf of Mr Jemai.

Mr Jemai also points to the fact that until his trial representation by Mr Smith, and in the days leading up to trial, Mr Jemai had had no representation by solicitors; and he also at the same time had to deal with ongoing Swiss criminal proceedings (which had been instigated by the Swiss Public Prosecutor by the claimants), and that (because of his language difficulties) Mr Jemai would have found preparing his defence witness statements and giving evidence in English extremely difficult.

Mr Smith submits that it is not surprising that Mr Jemai was overwhelmed by the extraordinary lengthy and difficult case and the time pressures which he was under in order to submit documents. He also points to the problems that no doubt Mr Jemai had in dealing with trial bundles and disclosure.

He points, in addition, to the fact that at the start of trial Mr Smith submitted a 4 page opening skeleton argument ranged against a 193 page opening skeleton argument. Mr Jemai was also ill and suffering under the strain of the proceedings. He was, for example, ill at the hospital with a kidney problem arriving late at court on the first day of his counsel's closing oral submissions.

Of course, one has considerable sympathy with a litigant who faces these type of proceedings with limited funds but whilst that is so, it does not appear to me that one can regard Mr Jemai in any way as having had an unfair trial.

It is clear from the judge's judgment that the judge went in meticulous detail into the evidence relating to Mr Jemai's participation in the fraud, his knowledge, and his role in the subsequent money laundering activities. What was critical to the judge's finding was Mr Jemai's knowledge and his honesty.

Whilst it is correct that Mr Jemai did not have the extensive representation which the claimants had, there is nothing that I have seen, or which Mr Smith can point to, or nothing which is referred to in the grounds and the skeleton, persuades me that Mr Jemai has any real prospect of persuading this court that his trial was not compliant with his human rights to a fair trial, or that the judge failed in any material respect to make due allowance for the difficulties with which Mr Jemai had in coping with the trial.

Mr Jemai, as I have already said, was represented by Mr Smith throughout, and on the seventh day of the trial formally withdrew a suggestion he had made to Eder J that Mr Jemai was not receiving a fair trial. No similar suggestion was subsequently made on behalf of Mr Jemai during the trial.

Given those circumstances, I do not consider that there is any prospect of Mr Jemai establishing on a full appeal to this court that either he should have a new trial, or the judgment against him should be dismissed on the basis that he did not receive a fair trial.

Another point made by Mr Smith which he claims is critical is that the judge made mistakes on various factual issues which infected the rest of the judge's conclusions about the alleged fraudulent knowledge of Mr Jemai of the actual fraud itself, and his knowledge in relation to the provenance of the £400,000/£490,000 which he received (admittedly from the proceeds of the fraud).

Mr Jemai's case at trial was that he thought, and genuinely thought, that the £490,000, which he admits he received from the relevant bank account were repayment of a loan which he and his sister had made previously in 2007, or 2008, to his mother from his own funds.

Mr Smith submitted - and I thought initially with considerable force - that the judge, contrary to the evidence, concluded that there had been no such loan, Mr Smith submitted that that finding, which he claimed was clearly contrary to the evidence, infected the judge's conclusion that Mr Jemai was involved in the money laundering and knew about the problems of the £400,000/490,000 which he received.

I do not accept that Mr Jemai has any prospect of success of establishing this ground of appeal at trial. I have carefully considered the relevant paragraphs of the judgment, because on the first hearing I could see the force in what Mr Smith was saying.

However, it is not clear to me that the judge did indeed conclude that there had been no loan made originally by Miss Jemai and Mr Jemai to their mother. What the judge said is to be found at paragraphs 511 and 550 of the judgment in particular. Of course, there are other paragraphs which deal with it. What the judge was rejecting was the totality of the evidence given by Mr Jemai as to the reason which they put forward for the payment of $400,000 by Vantax to Fanteks and to Mr Jemai.

The judge referred to the original loan, which there is indeed some evidence was made, or at least that payments were made to support the existence of a loan as a supposed loan. But the judge was not, on a close reading of the relevant paragraph of the judgment rejecting the existence of the loan. What he is addressing, and properly addressing, is the story given by Mr Jemai and Miss Jemai as to why they claimed that they innocently thought that the £400,000/£490,000 which funded the repayment of the alleged loan was an innocent payment and not the proceeds of the fraud - and not the repayment of a loan.

As Mr Pillow points out, there is a substantial amount of evidence which clearly the judge was entitled to rely upon in coming to his conclusion that Mr Jemai did know that the money that was funding his £400,000/£490,000 payment was indeed the proceeds of the fraud.

It is not necessary for me to set out the detailed evidence as it is in my judgment clear that the judge was entitled to reach the conclusion which he did. Other errors likewise in relation to the £400,000, do not provide Mr Jemai with any reasonable prospect of success.

Time does not permit me to go through all the other grounds of appeal. Mr Smith placed great weight on the fact that the judge failed properly to assess the fact that Mr Jemai was a young man, who for the mere sum of £400,000, would be unlikely to risk his future career at the bank.

Mr Smith submits that the judge failed to take into account the fact that Mr Jemai would have been extremely unlikely to have risked a future career for such a small sum of money and failed to give proper consideration to this point.

Again, having read the judgment, it seems to me that the judge carefully addressed the relevant position of Mr Jemai and his position as regard the more senior fraudsters. He was entitled, in the light in particular of Mr Jemai's relationship with Mr Kondratyuk, to conclude that in all the circumstances and, despite his junior position, Mr Jemai would participate knowingly in this fraud and would assist Mr Kondratyuk in the subsequent money laundering of Mr Kondratyuk's funds.

Mr Smith also relies as a ground of proposed appeal on the fact that he asserts that the judge should have wholly disregarded the evidence of Mr Kondratyuk which implicated Mr Jemai. He points to the fact that it was highly unsatisfactory that Mr Kondratyuk gave evidence in Russian by means of a video link in France, which Mr Smith submitted gave rise to a double disadvantage.

Again, like Briggs LJ, I do not consider that on a proper and close analysis of the evidence there is anything in this point. The judge meticulously considered the evidence of Mr Kondratyuk and directed himself appropriately as to the extreme caution with which he, the judge, should approach such evidence. In particular, he rejected the evidence of Mr Kondratyuk that Mr Jemai was to receive $15 million, and in particular addressed the point that Mr Kondratyuk's evidence should not be believed in relation to this point.

He also specifically considered whether merely receiving £400,000 was sufficient to amount to supportive evidence of fraud. In paragraph 518, the judge concluded that although, compared to the amounts received by all the other fraudsters, the £400,000 was "a relatively small sum", nonetheless, on the evidence Mr Jemai regarded it as a handsome reward for the vital role that he had played in the fraud.

The judge also emphasised that he made it plain that his conclusion as to the amount of his share of the proceeds does not:

The judge was clearly well aware about that the fact that Mr Jemai only received a relatively small amount of proceeds that Mr Jemai received required the judge to carefully consider the evidence relating to Mr Jemai's honesty and knowledge.

It is clear in my judgment that an attempt to challenge the judge's evaluation of Mr Jemai's state of mind and credibility on appeal in this area would fail. All the matters referred to (that is to say the relatively small sum of £400,000, Mr Jemai's junior position, et cetera) were well known to and clearly then into account by the judge. Moreover, there was substantial additional evidence which in my mind supported the judge's conclusion as being a reasonable one on the evidence that Mr Jemai was, albeit at a junior level, a participant in the fraud.

For those reasons I am not prepared, as I said at the beginning of the judgment, to grant permission to appeal. No error of law is identified in the grounds of appeal and in my view it has no real prospect of success, nor is there any other compelling reason why the appeal should be heard.

I should say that, at the previous hearing of this matter I gave permission to Miss Jemai, Mr Jemai's sister, to appeal the judge's finding in relation to her. The evidence relating to her knowledge and participation is wholly different. A point also arises in her appeal in relation to quantum. Nothing said in my giving permission to Miss Jemai supports or relates to Mr Jemai's position or vice-versa. For those reasons, this application is dismissed.