NAB - Broadsheet saga: Pakistan pays Rs4.59 bn to British firm for lost case

• Broadsheet was hired by NAB to trace assets in the UK and USA of more than 200 Pakistanis
• The London High Court had issued on 17 December a Final Third Party Order for payment to the NAB’s former client by 30th of December
• NAB was found to have breached the terms of contract with the asset recovery firm

LONDON/ISLAMABAD: Pakistan made a payment of $28.706 million (Rs4.59 billion) to the British firm Broadsheet LLC after losing the long-running litigation at the London High Court.

The amount was transferred from the Pakistan High Commission (PHC) on behalf of the National Accountability Bureau (NAB) to the assets recovery firm — 21 years after it was hired to trace alleged foreign assets of dozens of Pakistanis which it failed to find any.

The London High Court’s Financial Division had issued on December 17 a Final Third Party Order for payment to NAB’s former client Broadsheet by December 30 — drawing curtains on a case that has cost Pakistani taxpayers billions of rupees.

Broadsheet was hired by NAB during Pervez Musharraf’s government in 1999 to trace assets in the UK and USA of more than 200 Pakistanis (called ‘targets’ in the contract) including generals, politicians, businessmen — Benazir Bhutto, Asif Ali Zardari and Nawaz Sharif as the chief targets.

Read more: Did Pakistan talk with Broadsheet to hire it again?

The firm didn’t recover a single asset of any target anywhere in the world but its litigation against NAB started over the broken contract when the anti-graft watchdog ended its contract in violation of the terms and conditions.

‘NAB breached contract’

A Pakistan High Commission source, on condition of anonymity, confirmed to Geo News that it had received the court order for the payment from the London High Court and had “no choice” but to comply with it. At the earlier hearings, the court held NAB responsible for contractual damages and breach of contract from the day it signed the contract to trace assets of Pakistanis.

On a hearing on December 17, the London High Court ordered that $28.7 million should be debited by 30th of December. After the order was made and its copies sent to the United Bank Limited’s branch near Oxford Street, Pakistan High Commission and NAB, the High Commission wrote a letter to the bank threatening that it will stop doing business with the bank if it made the payment to Broadsheet.

Read more: PCB issues clarification after Broadsheet threatens to seize Pak cricket assets

Geo News has seen correspondence sent from the High Commission London to the Pakistan government asking to “facilitate the payment of USD 28,706,533.34”.

“In case of non-receipt of written payment instructions by 30 December 2020, the bank will have no choice to proceed with unilateral debiting the accounts of Pakistan high commission to meet the payment amount as stipulated in the court order,” the UBL wrote to Pakistan High Commission after receiving the order, according to the note sent by the PHC to the Foreign Office in Islamabad.

The High Commission letter added: “In response, the Mission has sent a communication to the Chief Executive Officer UBL Brian Firth conveying that any attempt by the Bank to proceeds unilaterally debiting the account of Pakistan High Commission to meet the payment amount, without instructions, would be a violation of international law and a breach of trust and will have an impact on our future relationship with UBL.”

Geo News understands that Pakistan also sent a “Note Verbale” to the British government seeking diplomatic immunity and that the Foreign and Commonwealth Office (FCO) should “take up the matter with the relevant authorities” and that the accounts of Pakistan High Commission “cannot be debited/frozen under any circumstances” because these “enjoy diplomatic immunity under Vienna Convention.”

NAB advised against challenging court order

A source confirmed here that after receiving the London High Court order, Pakistan High Commission was requested to provide written payment instructions with debit account details to facilitate the payment of $28,706,533.35 in line with the Final Third Party Order issued by the court.

The government source said that NAB had sent £26 million into the High Commission account at the end of June 2020 into the UBL account near Oxford Circus but this was not the full amount that should have been deposited in the bank account of the PHC and there was a shortfall. Geo News has learnt that NAB didn’t appeal the 17 December order of London High Court’s Financial Division.

“The NAB had until 24 December to appeal the decision but NAB’s lawyers at Allen & Overy advised NAB that it has exhausted all legal options and any further litigation will increase costs on many folds including for Broadsheet, to the NAB lawyers, penalties and accruing interest,” said the source.

The Foreign Office officials in Pakistan have claimed that the High Commission account had not been deducted but the High Commission source in London said the payment to the Broadsheet is a legal matter and compliance is important or else face repercussions.

Allen & Overy was not available to comment on Thursday but previously a source at the PHC had said that Pakistan had made to the defence law firm payments of £11 million and £2 million for the previous work. It’s understood that the total final bill of the law firm could be as much as the payment made to Broadsheet. The source said that the law firm has not invoiced yet for the last three hearings.

In June 2020, NAB had sought Rs4.41 billion from the Finance Division to clear $27.277 million outstanding liabilities of M/s Broadsheet. This was after the Broadsheet LLC won a case of arbitration against the NAB in the Chartered Institute of Arbitration, London. The Arbitrator had issued part final award (quantum) for $21,589,460.00 along with interest.

It also issued part final award (costs) amounting to $5,637,130.50 against the Pakistani government through NAB. The total amount payable stood at $27,226,590.50.

‘No comment’

When contacted a NAB source said that he cannot comment as “the office is closed” when the call to comment was made and that “the official record related to the case is in office as the case is very old from 1999 and the decision of the case was announced in 2016 before the present management of NAB”.

“The official response will be given after obtaining relevant information during office hours in due course of time,” said the NAB spokesman.

In August 2020, the Broadsheet had secured a freezing order in London on $26 million in Pakistani state funds reserved in various UK commercial bank accounts.

Through a London based High Court of Justice, the company obtained a Third Party Debt Order which directed the United National Bank to freeze financial assets in its accounts that belong to the Pakistani state – effective until the final hearing which made the final order in favour of Broadsheet.