Credit Suisse seeks to strike out Mozambique ‘tuna bonds’ case

The $2 billion loan arranged by Credit Suisse was supposed to build Mozambique's fishing industry. Keystone / Hotli Simanjuntak

Credit Suisse has asked London’s High Court to strike out a lawsuit brought by Mozambique over the bank’s role in the $2 billion “tuna bonds” scandal, claiming failures to disclose government documents mean there cannot be a fair trial.

The Swiss bank and other parties are defending a lawsuit brought by the Republic of Mozambique, one of the world’s poorest countries, over their role in arranging $2 billion of loans and bond issues for the country in 2013, ostensibly to fund projects including a state tuna fishery.

The loans were partly concealed from the IMF and other donors, who cut support to the country after they were discovered. 

A civil trial is due to start in the High Court in September.

It comes at a time when UBS, which completed its rescue of Credit Suisse this week, begins to wrestle with legacy issues at its former rival, including a number of existing lawsuits.

Mozambique protests

In its application to the High Court, Credit Suisse claimed Mozambique’s failure to disclose documents from the office of its president as well as from the country’s state intelligence and security service meant that a fair trial would not be possible.

Andrew Scott KC, barrister for Credit Suisse, told the court that the “breaches are serious” and were the result of “choices made by the Republic on what disclosure it will provide.”

In written arguments, Credit Suisse claimed that Mozambique “remains in breach of its disclosure duties” and that the breaches were “wilful”. “Their effect is to preclude any possibility of a fair trial in the proceedings that the Republic chose to commence here,” the bank claimed.

Mozambique told the hearing that it was “not accurate or fair to characterise the Republic as a recalcitrant litigant which has set its face against giving proper disclosure”.

In its written arguments Mozambique said there had been “strenuous efforts” to obtain documents and the bank’s application “gives no weight to the substantial efforts made by the Republic to meet and overcome the momentous challenges in giving disclosure which it has had to face”.

It also said that “the assertion that there is a substantial body of relevant documents likely to be missing” from disclosure “is overblown and wrong”.

“Vast scale” corruption

“It would be wrong, at this stage, to assume that there is a substantial body of material missing as the applicants contend and thus that a fair trial is not possible.” Mozambique’s legal team said.

Jonathan Adkin KC, barrister for the Republic of Mozambique, added in written submissions that a trial should go ahead because the case involves “an international fraud and official corruption on a vast scale” and the court can determine at trial “whether there is ‘missing’ material as alleged”.

In 2021, Credit Suisse agreed to pay $475 million in fines and forgive $200mn of debt owed by Mozambique in a series of co-ordinated settlements with regulators in the US, UK and Switzerland over its role in the scandal.

The three-day High Court hearing continues with a ruling from the judge expected at a later date.

Copyright The Financial Times Limited 2023