Today
WikiLeaks publishes a secret document from the International Chamber
of Commerce (ICC) International Court of Arbitration, pertaining to a
dispute over commission payment in relation to a $3,6 billion arms
deal between French state-owned company GIAT Industries SA (now
Nexter Systems) and the United Arab Emirates (UAE). The agreement was
for the sale of 388 Leclerc combat tanks, 46 armoured vehicles, 2
training tanks, spare parts and ammunition. It was signed in 1993 and
scheduled to be completed in 2008.
The case
brought before the ICC arbitration tribunal was a claim from Abbas
Ibrahim Yousef Al Yousef, a UAE businessman, that GIAT had not
honoured a contract to pay him a 6,5% commission on the deal or
almost $235 million total. GIAT stopped paying after sending Al
Yousef over $195 million through his company Kenoza Consulting &
Management Inc., which was registered in the British Virgin Islands.
Al Yousef demanded the nearly $40 million that remained outstanding.
GIAT's
lawyers maintained that they had to stop payments as they became
illegal when the OECD Anti-Corruption Convention was transposed into
French law in the year 2000. They claimed "Kenoza intended to
commit and indeed committed corruption acts". Al Yousef
firmly denied that any part of the commission had been used to bribe
UAE officials or used in any corrupt acts. As GIAT did not produce
any evidence for the claim, the ICC Tribunal did not rule on the
issue but noted that "...if the excessive nature of the
compensation for the Claimants service must be taken as evidence of a
corrupt purpose of the Agency Agreement, this purpose must have been
known and intended by both Parties to the agreement".
The
Tribunal did investigate what services Al Yousef provided to justify
the excessive commission. Despite claims to the contrary, the
Tribunal found that Al Yousef did not play an important role in the
development of the Leclerc tank. The tanks were fitted with German
engines, which created an obstacle as this would violate laws
forbidding German arms sales to the Middle East. Al Yousef claimed he
had successfully lobbied German authorities to obtain a waiver from
these laws in "...a process which involved decision makers at
the highest levels, both in France and Germany". During a
witness statement, Al Yousef could not remember the names of any
German officials and told the Tribunal he had used lobbyists instead
of meeting with German authorities directly.
Surprisingly,
Al Yousef told the Tribunal that had he been on a retainer, he would
have asked GIAT to pay him a million dollars a month as a consultant.
That would have brought him $51 million to $60 million rather than
nearly $235 million. As a result, the Tribunal concluded that "...the
contractual commission rates is far above anything that could be
justified (...). The remuneration is excessive by the standard which
Mr Al Yousef himself set and by any standard which was raised in the
arbitration". His claims were dismissed and Al Yousef was
ordered to pay the entire cost of arbitration by the Tribunal ($550
000) plus a portion of GIAT’s legal costs (€115 000).
Source,
docs:
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