Cayman’s Grand Court has given the Kuwait Ports Authority permission to pass on to its home government confidential documents it obtained during an alleged fraud trial against the Cayman-based Port Fund.
The state of Kuwait plans to use the confidential material in arbitration proceedings brought against it by Marsha Lazareva, the former director of the private equity fund’s general partner Port Link.
Lazareva, a former managing director of Kuwait-based KGL Investment (KGLI), was arrested in November 2017 after being accused of embezzling funds in relation to advisory work conducted for the Kuwait Ports Authority (KPA).
She was initially sentenced to 10 years of hard labour.
Lazareva appealed her conviction, which was vacated in May 2019, with the Kuwait Court finding that the rights of the defendant had not been respected. The prosecution’s sole witness was found to have forged key evidence against Lazareva and her co-defendant Saeed Dashti. After a Kuwait civil court reviewed the evidence, it ruled in favour of KGLI and ordered a retrial but also set a bail of US$60 million.
Following petitions by Lazareva’s legal team to the UN Working Group on Arbitrary Detention, the amount was lowered and Lazareva was released on $3.3 million bail in June 2019.
In a second case, Lazareva was charged with embezzlement of funds from the Port Fund.
She had managed the creation of the KGLI-sponsored fund, whose investors included the Kuwait Ports Authority, other Kuwaiti state entities and investors from the Gulf region.
KPA is suing Port Link in the Cayman Islands alleging fraud and misconduct involving the fund. In these proceedings, the Ports Authority obtained confidential documents from the fund following a disclosure order.
Arbitration launched in 2018
Lazareva launched an arbitration in July 2018, alleging that her treatment by Kuwaiti authorities was in violation of the Kuwait-Russia bilateral investment treaty.
The case is being heard by a United Nations Commission on International Trade Law tribunal and the International Centre for Settlement of Investment Disputes in Paris is administering the proceeding.
In the arbitration, Lazareva’s lawyers claimed she is the victim of wider commercial and political disputes involving Saeed Dashti, her business partner and chairman of logistics company Kuwait & Gulf Link Transportation Company (KGL).
“Ms. Lazareva is the subject and victim of a politically-motivated vendetta initiated by powerful persons and entities, as well as competitors and rivals in Kuwait, against (KGL Investment), (Kuwait & Gulf Link Transportation Company), and [the Port Fund],” the lawyers said in a notice of arbitration.
According to Middle Eastern media citing Kuwait government sources, Lazareva is seeking $126.9 million in compensation.
In a January 2020 retrial, a Kuwait Court sentenced Lazareva to seven years of hard labour based on charges that her company, KGLI, had billed the Kuwait Ports Authority for work never performed. This verdict came shortly after Lazareva was sentenced to 15 years’ hard labor in a separate case involving the Port Fund and what her defence lawyers called “other false charges”.
Grand Court uses discretion
KPA asked the Grand Court to be released from its confidentiality obligations so that it could hand some of the documents it obtained during the Cayman litigation to its home government for use in the arbitration.
In his decision, Justice Raj Parker said the court used its discretion to weigh up competing interests. He found that the request falls under the Confidential Information Disclosure Act’s intention “to offer a gateway for the release of confidential information in recognition of the public interest in the due administration of justice”.
He rejected the argument that Lazareva’s case would be further disrupted, delayed or treated unfairly, if the application was granted.
If Lazareva’s evidence in the arbitration has been accurate, the 158 documents will bear that out or at the very least be neutral, Parker said.
There would also be no disruption, if the state of Kuwait decides, having reviewed the documents, that they are not relevant or do not undermine her account.
If, however, the documents are used in the arbitration proceedings and are admitted by the tribunal as relevant then it will further the administration of justice, Parker wrote in his decision.
Lazareva’s case has garnered worldwide attention, not least as a result of prominent advocates like human rights attorney Cherie Blair, wife of former UK Prime Minister Tony Blair; former FBI director Louis Freeh; and Neil Bush, son of former US President George H. W. Bush, who have all been lobbying on her behalf.
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