LONDON, Oct 19 (Reuters) – Mozambique’s $3.1 billion lawsuit against Emirati-Lebanese shipbuilder Privinvest is a politically motivated attack to deflect blame for the failure of economic projects, its lawyers said company against London’s High Court on Thursday.
Mozambique is suing Privinvest and its owner Iskandar Safa over the fallout from the decade-old ‘tuna bond’ scandal, which devastated the economy of one of the world’s poorest countries.
Mozambique alleges that Privinvest and Safa paid bribes on an “industrial scale” in relation to three projects in 2013 and 2014, including one to exploit tuna-rich coastal waters.
His lawyers said in court filings that Privinvest had chosen the assets and services to be provided for the three projects simply to justify the level of loans to be made, “not based on any real need for those services.”
But Privinvest and Safa, both of which deny any wrongdoing, claim Mozambique has wasted the economic potential of the projects and is now trying to avoid its financial obligations.
Duncan Matthews, who opened Privinvest and Safa’s case on Thursday, said: “The republic is presenting this case as the betrayal of the people of Mozambique – and they may be right. But it is not a betrayal by my clients.”
He said Mozambique has a “good plan to enable Mozambique to stand on its own two feet politically and economically”, but that the republic’s ministers have failed to make the projects work.
“Only when they felt it was in their own political and economic interests did they turn against the people who were trying to make the projects possible,” Matthews argued.
The process began in earnest this week after a delay caused by Mozambique’s 11th settlement with Credit Suisse’s new owner UBS (UBSG.S).
Mozambique has since switched its focus to Privinvest and, while dropping an $830 million claim for economic losses, is trying to recoup losses of $700 million and potential debts of $2.4 billion.
The case focuses on agreements that state-owned companies made with Privinvest for loans and bonds from banks, including Credit Suisse, backed by undisclosed state guarantees.
But hundreds of millions of dollars were lost and when the national debt came to light in 2016, donors such as the International Monetary Fund temporarily cut off aid, leading to a currency collapse, bankruptcies and financial turmoil.