French court dismisses corruption challenge in Cameroon food venture dispute
A French court has rejected a Cameroonian businessman’s attempt to set aside an ICC award in favour of a Spanish food group based on allegations it terminated their partnership to benefit from corrupt links with Nigerian officials.
In a decision on 4 June, the Paris Court of Appeal upheld a 2022 award in favour of the Barcelona-based GB Foods group, which is ultimately owned by Catalonia’s Carulla family.
The award was rendered by a Paris-seated ICC tribunal chaired by White & Case partner Charles Nairac, sitting with France’s Thomas Clay and Canada’s Paul Gélinas.
The court rejected the challenge brought by Gabonese holding company Tagidor Premium Investments International and its director along with two related companies. The director’s name is redacted in the judgment but he is identifiable from public records as Cameroonian businessman Francis Nana Djomou.
GB Foods was represented before the court by CMS while the Tagidor parties used Oplus. Counsel in the arbitration has not been disclosed.
The dispute concerns a failed partnership to produce and distribute food products including stock cubes under the “Jumbo” brand in Cameroon.
A first partnership was formed in 2013 but fell apart because of various problems. The parties enter a new set of agreements in 2016 to resolve their disputes, with Tagidor agreeing to pay around €700,000. But GB Foods terminated the new partnership in 2017, complaining of missed debt settlement deadlines. The Tagidor parties initiated arbitration two years later.
In an award in 2022, the tribunal awarded GB Foods around €900,000 plus interest for outstanding debts and invoices and €341,000 in costs. In turn, the Tagidor parties were awarded €430,000 plus interest.
Before the Paris court, the Tagidor parties alleged that the award was contrary to public policy as GB Foods had actually terminated their partnership to shift its operations to Nigeria and benefit from corruption and money laundering in that country.
They said they only learned after the arbitration that GB Foods had established a competing Nigerian joint venture with UK investment fund Helios in 2017.
The Tagidor parties claimed that GB Foods had formed the new partnership to exploit Helios’ alleged close access to the Nigerian government. It pointed to a media report alleging that one of the fund’s co-founders had illegally financed the campaign of Nigeria’s former vice-president Yemi Osinbajo.
They also suggested there were links between GB Foods and the former governor of Nigeria’s Kebbi state, Abubakar Atiku Bagudu, who was accused of corruption after the Pandora Papers leak in 2021 but has denied wrongdoing.
GB Foods said the allegations raised by the Tagidor parties were false and unrelated to the dispute before the tribunal. It said allegations based on unverified press reports were not enough to suggest corruption.
The Spanish group also pointed out that the tribunal was satisfied it had terminated its partnership with Tagidor because of serious contractual breaches. Tagidor maintained the award did not give effect to any agreement arising from alleged corruption.
The Court of Appeal said it could set aside the award if there were “serious, precise and consistent indications” that it would give effect to a contract obtained through corruption or allow a party to benefit from the proceeds of corrupt activities. It was not enough merely to invoke a corrupt context or presumptions of corruption without demonstrating a link to the facts of the case.
The court said the Tagidor parties’ allegation that GB Foods had exited their partnership to benefit from alleged corruption in Nigeria was “in no way supported by the facts.” They had not linked GB Foods’ Nigerian venture to any illegality and their claims were “purely hypothetical”.
Media reports relating to supposed criminal prosecutions were “either imprecise” or had no “temporal link” to the dispute. The court also considered the alleged corruption on the part of Helios, which did not appear in the proceedings, to be unproved.
It further rejected arguments that equality of arms had been infringed by the tribunal’s refusal to order GB Foods to produce documents relating to its project in Nigeria. The court said the tribunal’s decision to reject this broad document production request was well reasoned.
Tagidor Premium Investments International et al v GB Foods
In the Paris Court of Appeal
Read more similar news:
Comments:
comments powered by Disqus
