Blog Business Crime & Financial Services 22nd Feb 2023


Angus Bunyan, who acted for Nigeria in its application for compensation from Glencore, reviews the judgment.

As readers will doubtless be aware, last November the UK subsidiary of the international mining and commodities giant Glencore was in the headlines for all the wrong reasons. Having pleaded guilty to seven counts of bribery under sections 1 and 7 of the Bribery Act 2010, the company was sentenced to a £183m fine for what Fraser J described as endemic and sophisticated corruption amongst traders on the firm’s London-based West Africa oil desk which resulted in bribes worth tens of millions of dollars being paid to secure preferential treatment in the allocation of oil contracts in five African states. Along with the largest UK confiscation order of £93.5m and costs of £4.6m, it’s easy to see why the case generated a high level of media interest and legal commentary.

But a week before that sentence was passed, there was a related hearing in the case which has understandably received less attention but which is worthy of mention: The Federal Republic of Nigeria v Serious Fraud Office, Glencore Energy UK Ltd [2022] EWCR 2. Two of the counts to which Glencore had pleaded guilty concerned bribery of officials of the Nigerian National Petroleum Company, an entity wholly owned by the Federal Republic of Nigeria (‘FRN’). The FRN considered itself to be a victim of Glencore’s offending because, in summary, Glencore had effectively tried to control the Nigerian oil market through its bribes, skewing the market and creating a less competitive environment which in turn led to reduced prices and economic and reputational damage to a developing economy. It followed that the FRN’s position was that it ought to be a candidate for a compensation order under the provisions of the Sentencing Act 2020 (‘the Act’).

Having learnt that the Serious Fraud Office (‘SFO’) had determined not to ask for any compensation orders at all in the case, the FRN applied directly to the court in advance of the sentencing hearing for a compensation order in its favour. The first hurdle for the FRN, and one realistically conceded as troublesome, was whether, as a potential victim but non-party, it even had standing to make such an application. The FRN submitted, (i) that the wording of the Act was somewhat ambiguous-whilst section 135 (2) made it clear that only the offender and prosecution could make representations as to quantum, nothing in the section expressly excluded an application from a party other than the prosecutor and, after all, the court might make an order of its own motion in appropriate cases, (ii) that this potential distinction had not been argued in the leading appellate authority (R v Berwick [2007] EWCA Crim 3297) and, (iii) that (contrary to the submissions of the appellant in Berwick, which were adopted in the judgment), courts routinely make determinations concerning the rights of non-parties when making compensation orders to victims of crime. Fraser J rejected this argument, holding that Berwick was indeed authority for denying third parties standing to apply for compensation under the Act and that to construe the statute in the way contended for by the FRN could, ‘lead to compensation orders becoming the main fare of the Crown Court.’

The second hurdle for the FRN (assuming standing could have been established) was how to properly assess quantum for the purpose of any order. At the hearing, the SFO accepted that the FRN was an ‘indirect victim’ of Glencore’s activities, but maintained that the difficulties in assessing loss meant that a compensation order would not be appropriate (relying on the established line of authority to the effect that compensation in the Crown Court ought to be reserved for clear-cut or straightforward cases). The SFO’s case was that Glencore had obtained preferential access to oil, increased cargoes, valuable grades of oil and preferred dates of delivery via its corrupt conduct. Given this, the FRN’s submission to the court was that such difficulty as there was in calculating quantum could be overcome (albeit on a necessarily ‘broad brush’ basis) by looking either at the profit made by Glencore on the indicted contracts (because the FRN lost the ability to sell to the market at market rates as a result of Glencore obtaining licences and very large amounts of oil by bribery) or at least at the value of the bribes paid by Glencore to corrupt officials. Again, the court rejected these submissions, noting the difficulties in identifying which entities had suffered any quantifiable loss, issues of causation and the potential need for contested evidence.

So, the FRN’s bold attempt to go directly to the court in circumstances where it felt its interests were not being adequately represented by the prosecutor failed to trigger a compensation order in its favour. The Court did observe that civil redress was available and that the issues were probably not intractable in that jurisdiction and the FRN did at least have the opportunity to make oral submissions in open court (Fraser J listing the application because the FRN is a sovereign nation and because of the legal issues involved). But (whether or not the outcome of this application was correct in law), the inescapable fact is that at this point Glenore’s very significant financial penalties will provide a much-needed boost to the UK Consolidated Fund, but will do nothing to compensate Nigeria and its citizens for yet another egregious example of corruption visited upon them.


Angus Bunyan

Angus acted for the Federal Republic of Nigeria, led by Lord Garnier KC of 4, Pump Court and instructed by Sam Tate of RPC LLP.


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