Rubin Italia from B P Collins’ criminal team explores the background and players in the recent case of Eurasian Natural Resource Corporation (ENRC) v the Serious Fraud Office (SFO), which raised questions about the objectivity and independence of the SFO.
The SFO is tasked with investigating the most significant frauds. Over 10 years ago, it began an inquiry into Eurasian Natural Resource Corporation (ENRC). The investigation focused on allegations of bribery and fraud relating to ENRC’s acquisition of mining contracts in Africa.
ENRC issued a claim against the SFO and Neil Gerrard, the former head of white collar crime at Dechert LLP in 2021 (who has also worked for the ENRC) arguing that the SFO and Gerrard were guilty of misconduct. For example, it alleged that the SFO had destroyed documentation, including the wiping of the then head of the SFO, Lisa Osofsky’s, mobile phone.
Although the SFO was largely cleared in 2022, a significant aspect of its conduct, including leaking information to journalists, was criticised by the judge and faced further civil proceedings.
Evidence against Gerrard led to a damning ruling: “[He] had leaked confidential information to the press and the SFO to expand his investigation into bribery and corruption allegations because he was “obsessed with making money””. Additionally, the judge found that Gerrard lied in cross examination about leaking material to The Times. The judge also sent the judgment to the Solicitors Regulation Authority (SRA), for it to consider. The judge also found that Gerrard was an instigator and the SFO showed “bad faith opportunism”.
In December 2023 the High Court ruled on a number of issues of causation and loss – the judge ruled, in summary, that but for the SFO’s wrongdoing the decision would not have been made to investigate ENRC. The SFO’s wrongdoing was an effective cause of the losses claimed by ENRC.
The ruling also said the SFO would not have launched the probe in 2013 if the agency had not first induced Gerrard, ENRC’s former lawyer, to act against its interests, and the Court of Appeal refused permission to appeal.
The damages sought by ENRC for unnecessary work linked to the investigation amount to £21,000,000 which represents nearly a quarter of the allocated budget for the SFO in 2023/24.
As a post script to this set of circumstances the SFO has now closed the investigation against ENRC and has strenuously denied it had anything to do with the litigation commenced by ENRC.
The new head of the SFO, Nick Ephgrave, a former police officer, started his tenure in September last year. He gave his first public speech in March 2024 at the Royal United Services Institute. Whilst the speech contained a lot of positives about how the SFO was leading serious fraud on several pathways, there didn’t seem to be any recognition of any of the monumental errors of judgment before he took office.
The latest update from this long running dispute is that it has just been announced that both ENRC and the SFO have settled the matter, just before a seven-week trial was due to start over leaks made to the media by at least two SFO officers.
There is a still an upcoming trial between the SFO and ENRC to settle how much the SFO owes ENRC in unnecessary fees.
The SFO has always had significant reach in areas of bribery and corruption. It remains to be seen whether or not this case has clipped their wings.
If you wish to discuss a criminal matter with B P Collins’ criminal team, please email enquiries@bpcollins.co.uk or call 01753 889995.
