Kinder’s casebook: How the Tchenguiz brothers faced down the UK fraud office over a botched probe

The Lawyer’s litigation reporter looks at the ongoing saga of the Tchenguiz litigation

The ongoing Tchenguiz litigation, one of the UK’s most high profile on-going disputes, reached its latest stage last week.

Property entrepreneur Robert Tchenguiz lost his most recent application for the disclosure of confidential documents to the Guernsey Courts last week (11 February 2015), where he is battling to protect his assets from liquidators Grant Thornton.

Robert Tchenguiz and his brother Vincent faced down a failed criminal investigation by the UK’s Serious Fraud Office (SFO) that began back in 2012, but he was last week refused to use the documents disclosed during that case in his ongoing attempt to stop the seizure of one of his investment vehicles.

His lawyers, Stephenson Harwood led by litigation partner Sean Jeffrey, has instructed Lord Pannick QC on behalf of his client to take the matter before the European Court of Human Rights on the ground that their client’s right to a fair trial has been denied by the decision.

The Tchenguiz case is a long and complex one, made all the more demanding by the myriad offshoot disputes and the fact it is being taken through the courts in multiple jurisdictions by the two brothers and their various businesses and trusts.

Tabby Kinder

Case history

The brothers’ legal battle with the SFO began in 2011 when the fraud office conducted dawn raids on the brothers’ businesses before dropping its investigation in 2012.

Last year, the brothers won settlements of £1.5m (Robert) and £3m (Vincent) from the SFO after filing a £300m damages claim over the botched probe.

A judicial review led by then Queen’s Bench president Sir John Thomas of the SFO’s actions revealed it had made a series of errors and no charges were ever brought against the brothers.

The case is of monumental interest to the press and the legal world – in part because of the huge amounts of money involved, partly due to the brothers’ relative celebrity profiles, and also because of the detailed technical complexities involved in every court appearance.

Talking points

Some of the fees involved: In February 2014, a trio of barristers including a Brick Court silk and two from Fountain Court, instructed by Vincent Tchenguiz, charged a £126,650 brief fee for a six-hour disclosure appeal brought by two Grant Thornton employees over the disclose of sensitive documents central to the Tchenguiz’ £300m court battle against the SFO.

The SFO was forced to request an urgent cash injection from the government of £26.5m – 75 per cent above its core budget – in order to pursue its high-profile fraud investigations and pay out compensation to the Tchenguiz brothers.

Vincent Tchenguiz launched a £2.2bn lawsuit against Grant Thornton and Icelandic bank Kaupthing for their role in the probe in November.

The now defunct Icelandic bank Kaupthing’s involvement in the ongoing litigation throws a confusing spanner into the works. Vincent Tchenguiz launched a legal action against the bank following its collapse, claiming he was owned £1.6bn, and later claimed the bank provided misleading information to the fraud office to encourage an investigation that would have the billion-pound claim quashed.

Historic failings by the fraud office:In May 2012 secret negotiations were revealed that showed the SFO offered to drop their investigation into Vincent Tchenguiz in return for a £50m donation to charity.

Stephenson Harwood’s Sean Jeffrey was instructed by Vincent Tchenguiz from the start, but Robert Tchenguiz switched from Shearman & Sterling partner Josanne Rickard in favour of Jeffrey in 2014.

Blackstone Chambers’ Lord Pannick cuts an impressive figure in court. The House of Lords crossbencher has acted in a wide range of high-profile cases. Research his role in the Sunday Times Spycatcher case and his appearance for BBC director general Mark Thompson over a Jerry Springer blasphemy row.

Do say:

“The Tchenguiz series of ongoing litigations is an impressive example of private individuals using top litigators to hold government bodies to account, and the necessity of having a detailed technical knowledge of UK dispute procedures.”

Don’t say:

“Did you know that Robert Tchenguiz once dated Caprice and was apparently romantically linked to Princess Diana?”