10 years later, JERSEY to share Robert Tantular's £1.3 million of dirty money with Indonesia

INTRODUCTION

1. Tuesday, 6 June 2023, the Judicial Committee of the Privy Council (the 'Board'), the highest appeal court for Jersey, handed down its judgment in three appeals arising from the same dispute over the scope of two saisies judiciaires(freezing orders) granted by the Royal Court of Jersey.
2. The saisies judiciaireswere granted under the Proceeds of Crime (Jersey) Law 1999 ('POCL 1999') and the Proceeds of Crime (Enforcement of Confiscation and Instrumentalities Forfeiture Orders) (Jersey) Regulations 2008 (the ‘2008 Regulations') which modify the POCL 1999 provisions relevant to foreign confiscation and forfeiture orders (the 'Modified Law').
3. The legislation is central to Jersey's powers to tackle financial crime. HM Attorney General Mark Temple KC was successful in all three appeals. 
4. The Attorney General was acting in response to requests for assistance from the Republic of Indonesia. Other parties to the proceedings included Robert Tantular and his family members, the trustee of the assets and the Viscount of Jersey, who administered the assets subject to the saisies judiciaires.
   • Two of the appeals were brought by the Attorney General against judgments of the Jersey Court of Appeal.
   • The third appeal was brought by Robert Tantular and his family members against a judgment of the Jersey Court of Appeal. 
5. The Board consisted of Lord Sales, Lord Hamblen, Lord Leggatt, Lady Rose and Lord Stephens. The hearing took place in London on 8 and 9 February 2023. 

Facts 

1. The Board's combined judgment summarises the relevant facts and sets out the procedural history of the case back to 2013.
2. Mr Tantular had been the president and director of two companies that owned shares in an Indonesian Bank called PT Bank Century Tbk.
3. He was convicted of fraud and money laundering offences in Indonesia, which were upheld by the Indonesian Supreme Court, following the collapse of Bank Century.
4. In 2004 Mr Tantular had created the Jasmine trust by settling assets on its trustee in Jersey, the original trustee being ING Trust Company (Jersey) Ltd.
5. In 2005 a holding company of the trust had bought an apartment in Singapore for Singapore $7.1 million in which Mr Tantular's wife and children lived.
6. The apartment was mortgaged to Credit Suisse in the sum of about Singapore $4.4 million at the time that the first saisie judiciairewas applied for and granted by the Royal Court in 2013.
7. A second saisie judiciaire was granted by the Royal Court in 2014. 

The first appeal – jurisdiction 

1. The first appeal (brought by the Tantular beneficiaries of the trust) concerned whether POCL 1999 and the 2008 Regulations permit saisies judiciaires to be made in relation to property situated outside Jersey, at least where the persons who can exercise the rights of ownership or control of that property (in this case the Jersey based trustee) are subject to the jurisdiction of the Jersey courts.
2. The Tantular beneficiaries argued that because the trust property was situated in Singapore and was held through a BVI incorporated holding company the Jersey Court did not have jurisdiction under the Modified Law to order the saisies judiciairesover foreign situate assets.
3. However, the Board agreed with the judgment of the Court of Appeal (Lord Anderson of Ipswich, Sir Wyn Williams and Sir William Bailhache) on this point, and with the judgment of the Royal Court (Commissioner Clyde-Smith), at first instance. 
4. Significantly, the Board held that a wider interpretation of the legislation allowed Jersey to provide more effective co-operation and asset recovery, and that there are particular reasons why it is appropriate for Jersey to provide such assistance (paragraph 72).
5. The Board noted that Jersey has a very substantial trust industry and that the trust structure in this case (a discretionary Jersey law trust, with a BVI incorporated asset holding company holding underlying assets situated abroad) is a common form of Jersey based trust.
6. It agreed with the Court of Appeal that an interpretation of the legislation which allows the Court to make interim orders, such as the saisie judiciairesin this case, which ensured that the assets of a criminal or suspected criminal are retained in Jersey pending a resolution of the issues relating to confiscation will 'without doubt, provide significant assistance in helping to protect Jersey's reputation in financial matters' (paragraph 73). 

The second appeal – assignment of the mortgage 

1. The second appeal (brought by the Attorney General) concerned whether the Court of Appeal was right to grant a declaration that Credit Suisse as the holder of the mortgage over the apartment in Singapore was entitled to assign its rights under that mortgage to a third party.
2. In 2018 Credit Suisse had been granted a variation to the saisies judiciaires to allow it to sell the apartment in Singapore.
3. However, members of Mr Tantular's family had subsequently applied for a declaration that the saisies judiciairesdid not prevent Credit Suisse from assigning its rights under the mortgage to a third party.
4. The family also proposed that the rights be assigned to an old family friend in Indonesia who would then pay off the debt to Credit Suisse and be more flexible about repayment of the loan, thereby allowing them to stay in the apartment.
5. The Royal Court at first instance (Commissioner Clyde-Smith and Jurats Ramsden and Pitman) had refused to grant the declaration, but following an appeal by the Tantulars, the Court of Appeal had granted the declaration sought. 
6. The Board disagreed with the decision of the Court of Appeal on the grounds that the proposed assignment to the old family friend could have aided or abetted a breach of the saisie judiciaireand would have permitted a transfer that interfered with the administration of justice.
7. It confirmed that the mortgage itself was not subject the saisies judiciaires which applied to the net equity in the property.
8. The Board gave guidance to banks in the position of Credit Suisse and found that in this case the differences between Credit Suisse, as a regulated global financial institution acting at arm's length to the Tantulars, and the old family friend who was an unregulated individual "could not be more clear cut'(paragraph 156). 

The third appeal – sovereign immunity 

1. The third appeal was also brought by the Attorney General, on the grounds that a costs order made by the Court of Appeal was contrary to the regime for providing effective mutual legal assistance to foreign states.
2. It concerned whether the state of Indonesia can be made liable for legal costs on the basis that it had submitted to the jurisdiction of the Royal Court, either by instituting the proceedings brought by the Attorney General, or by taking steps in those proceedings to support the making of the saisies judiciaires.
3. The Court of Appeal had ordered that the Indonesian Ministry of Justice should be made jointly and severally liable with the Attorney General to pay the costs of the application concerning the declaration in relation to the mortgage assignment.
4. This was on the basis that the commencement of the process of applying for the saisies judiciairesshould be characterised as institution of proceedings by the Indonesian Ministry of Justice, albeit with the assistance of the Attorney General.
5. The Court of Appeal had also relied on the conduct of an official from the Indonesian Ministry of Justice in relation to applying for the second saisie judiciairein 2014 as showing direct involvement in how the applications were progressed. 
6. The Board held that the Court of Appeal fell into error in making the costs order.
7. After reviewing the UN Convention against Transnational Organised Crime 2000 (the 'Palermo Convention') and relevant caselaw, it held that it is the Attorney General who brings the proceedings on his own behalf, albeit for the benefit of the foreign Government that makes the request.
8. The Republic of Indonesia was not a party to the proceedings.
9. The involvement of the official from the Indonesian Ministry of Justice did not show that the proceedings were instituted by Indonesia, and that nothing done by the official amounted to an intervention or step in the proceedings by Indonesia for the purposes of the State Immunity Act 1978, as extended to Jersey by the State Immunity (Jersey) Order 1985. 

Next steps 

1. The Board's judgment records (paragraphs 61 and 62) that the parties settled the proceedings by agreement after the hearing before the Board, but that the Attorney General had requested that the Board nevertheless proceed to give its judgment on the three appeals since they raised issues of wider public importance.
2. The settlement draws a line under the dispute and finally allows the Attorney General to proceed to negotiate an asset share agreement with Indonesia, which he has now commenced.
3. The net assets available are a sum of £1,325,000 which is ring-fenced in the Criminal Offences Confiscation Fund. 
4. The Attorney General Mark Temple KC commented: 
   • "The judgment of the Board of the Judicial Committee of the Privy Council is significant and helpful in clarifying important aspects of Jersey's financial crime legislation.
   • It provides confirmation at the highest appellate level concerning the Jersey Courts' jurisdiction to freeze and confiscate the proceeds of crime in an effective way where the Attorney General receives requests for assistance from foreign Governments.
   • Whilst the case has taken ten years to reach a conclusion, it shows the extent of the Law Officers' Department's commitment to defending Jersey's reputation for tackling international financial crime."

Source

• https://www.gov.je/News/2023/Pages/Jersey%E2%80%99sAttorneyGeneralWinsThreeAppealsInThePrivyCouncilInLandmarkFinancialCrimeCase.aspx

BACKGROUND

• Read more from 2020 - https://www.comsuregroup.com/news/jersey-concludes-saga-with-robert-tantular-and-his-criminal-property/

Other sources

• https://www.bailiwickexpress.com/jsy/news/landmark-privy-council-case/