The UK Serious Fraud Office (SFO) and Eurasian Natural Resources Corporation are giving themselves 24 hours to resolve a dispute about the conduct of the agency during an investigation into a Kazakh mining group. The civil trial ENRC was scheduled to begin on Monday has been delayed for one day, while settlement negotiations are taking place.
The lawsuit is part of an ongoing legal battle between ENRC and the SFO over the conduct of the agency during the 10 year investigation, which could cost the SFO millions of pounds.
The latest dispute is about whether SFO leaking information to media occurred during their investigation into an alleged corruption case at ENRC. This has been strongly denied by the agency. The trial involved two former SFO senior employees. On Monday, the SFO and ENRC confirmed that settlement talks were underway but declined to provide further comment.
If negotiations fail, the parties will inform the court Tuesday if an agreement has been made. The trial will resume as scheduled if the parties are unable to reach a deal.
The dispute is just one of many problems facing the agency. It has been struggling to gain a foothold in recent years, after the previous director Lisa Osofsky had several convictions quashed due to prosecutor failures, and shut down a number high-profile investigations.
Nick Ephgrave is a former policeman who was appointed director of the agency one year ago. He is trying to rebuild the agency using more investigative methods borrowed from the policing world and by filling the high number vacancies. The London High Court found that the SFO was liable in the ENRC case for a series of mistakes which led to unnecessarily high costs for the Kazakh Group.
In its latest set accounts, the agency had set aside £237.7mn for legal costs related to ENRC litigation. The mining company had sought up to $1bn for costs and revenue lost from the criminal investigation. However, in a December ruling by Mr Justice David Waksman, the damages were not “as high as ENRC had requested”.
The SFO began its investigation of ENRC in 2013, but ended it last year, citing “insufficient admissible proof to prosecute”.
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