Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Eurasian Natural Resources Corporation has settled a lawsuit against the UK Serious Fraud Office over alleged media leaks, without the agency paying any damages to the former FTSE 100 company, according to people with knowledge of the situation.
The deal marks a reprieve for the SFO in a years-long legal battle over its conduct in a criminal probe of the Kazakh mining group, which crashed out of the FTSE in 2013 amid allegations of corruption.
The case, which was due to go to trial this week, concerned whether the prosecutor leaked information to the media during a decade-long criminal investigation into ENRC, which the SFO had strongly denied.
ENRC will have to pay £500,000 to a SFO official as part of the settlement, according to a court document seen by the Financial Times.
The SFO and ENRC said in London’s High Court on Tuesday that the case had been settled for an undisclosed amount.
The SFO said on Tuesday: “Throughout this case we robustly defended the claims. A confidential settlement has now been agreed.”
ENRC, which is now part of the Luxembourg-headquartered Eurasian Resources Group, said it was “pleased” to report that a settlement had been reached.
Both parties declined to comment on the financial terms of the agreement.
John Gibson and Tony Puddick, a former and current SFO official respectively, were also named as defendants in ENRC’s lawsuit over the alleged briefings to journalists. ENRC must pay Puddick £500,000 as part of the settlement, according to the court order.
Despite the settlement in the media leaks case, the SFO could still have to pay millions of pounds in damages to ENRC in a separate case over its handling of the criminal probe.
The agency closed its investigation into ENRC last year citing “insufficient admissible evidence to prosecute”.
The lawsuit settled this week was one of a series filed by ENRC since 2017, which included allegations that its own lawyer colluded with the SFO to fuel the prosecutor’s investigation.
Neil Gerrard, a former London partner at the law firm Dechert, was retained by ENRC between 2010 and 2013 to investigate allegations of wrongdoing at the company in the Democratic Republic of Congo and in Kazakhstan.
A judge found that Gerrard had provided information to the SFO without ENRC’s agreement and against the company’s interests. The SFO opened a criminal investigation into ENRC in 2013.
A court ruled last year that the SFO was “in serious breach of its own duties” in the way it handled the case, which pitched the much-criticised UK government agency against ENRC, owned by wealthy oligarchs.
The separate trial to determine how much the SFO will have to pay ENRC over its conduct in the criminal investigation is pending.
The SFO has set aside £237.7mn to cover legal costs in relation to the ENRC litigation, two-and-a-half times its annual budget. ENRC is seeking about £250mn from the SFO and Dechert.
Mr Justice Waksman said “but for the SFO’s wrongdoing, it would not have commenced the CI [criminal investigation]”.
Puddick and Gibson did not immediately respond to requests seeking comment.
This article has been updated to clarify that the SFO has not paid damages to ENRC as part of this week’s settlement
