Court Cuts Vulture Funds Claim: Zambias Debt Repayment Reduced
A “vulture” (gribbe) fund seeking more than 55 million US dollar from Zambia had its wings clipped in the high court Tuesday by the judge who limited its claim to 15,5 million dollar and cut its award of costs because of its “dishonesty” (uærlige optræden).
Justice Andrew Smith ruled in February that the 2003 agreement was legal but that the ratcheting up (drive i vejret) of the amount payable in the case of default was penal and struck it out.
He confirmed that the award would total 15,5 million dollar, the original amount outstanding plus 2 million dollar of interest (rente). He repeatedly criticized Donegal owner Michael Sheehan, and other witnesses Philip O’Rourke and Fisho Mwale, a former Mayor of Lusaka, for dishonesty.
As a result, he cut the award of costs to Donegal by a third, especially as Zambia had suffered extra costs of having to bring people from Zambia to rebut (modsige) the Donegal witnesses dishonest statements.
The judge did grant Donegal a 28-day freezing order on assets held by a Zambian company, Mofed Ltd, in Britain, worth about 10 million dollar, but refused to extend the order to Mofed assets held worldwide.
Donegal had also sought to lay claim on assets that Zambia may win in a separate trial in London against former president Frederick Chiluba and others for corruption. Judgment is due on May 4 so Justice Smith deferred his decision.
Donegal hopes that if Zambia wins that case and gets more than 5 million dollar, it can claim the difference between the $10 million of frozen Mofed assets and what it is owed (skyldes).
Meanwhile, Britain called Tuesday for action from the World Bank to prevent vulture funds from preying on some of the worlds poorest countries, which are struggling to provide basic healthcare and education.
Debt relief advocacy group Jubilee USA said further Tuesday it was “outraged” by the ruling. The group will try to stop Donegal from collecting the money from the ruling, and will also ask US President George W. Bush to raise the issue at the Group of Eight summit in Germany this June.
Kilde: www.worldbank.org
