[Community-Discuss] Update on legal case

[Paul Hjul]

I am not sure I understand why the reaction being given by so many people
is to question or criticize the courts of Mauritius, I also wonder whether
they include the Judicial Committee of the Privy Council (JCPC) in this
questioning of capability. No doubt the fact that Mauritius can be painted
as an internationalist jurisdiction and that it remains a commonwealth
jurisdiction with appeals at the JCPC and I am surprised that nobody has
attacked Mauritius as a colonial and post-colonial project or some other
such epithet.

While I agree that generally we should wait to get more from the courts I
can't help but identify a worrying trend of groundwork being laid to rally
behind the court if it finds against Cloud Innovation and to launch a
specious attack on the court if it finds for Cloud Innovation. This is
quite deleterious. I am therefore going to reply to somebody whose good
faith I do not doubt and who I am generally in agreement with on the big
picture issues but who I fear is making adverse presumptions about the
mechanics of legal systems at play.



> The freezing of the bank accounts is most certainly a truly startling

> development and one that would most certainly NOT have happened in the

> United States, or, I expect, in most other civilized countries, at least

> not prior to a full trial on the merits and the actual conclusion of the

> over-arching legal case.



There is nothing uniquely peculiar about a court granting an attachment or
injunction against a litigants domestic bank accounts. Mareva injunctions (
http://templegroup.mu/mareva-injunction-and-solid-evidence-of-a-real-risk-of-dissipation-of-assets-sun-pat-g-k-f-ors-v-thomson-c-f-ors-2019-scj-5/
is a pretty nice write up from a non-Mauritius perspective) are certainly
not unique to Mauritius - hell the term is from an English case. And I've
managed to secure an interdict in South Africa on a bank account pending
determination of a main action and just in the nick of time - funds on
their way out the country, getting an interdict after hours on a Friday.
The main reason it happens is if a court is satisfied that the litigant
will dissipate their property or assets to frustrate the plaintiff by the
time trial occurs.

There are a couple of other reasons and a court granting an attachment or
freeze on bank accounts and it usually speaks volumes about the party whose
experiencing the attachment. Ships get attached all the time at the
commencement of an action ("arrested" the ship is arrested but for obvious
reasons not even the United States puts the physical ship in a county jail
after arresting it) and counterfeit (or allegedly counterfeit) and patent
infringing goods are possibly too easy to get an attachment on in many
jurisdictions - and IP lawyers can argue about this for weeks on end.
Ultimately I am not sure why you are presuming this is a "development"
related to Mauritius because it simply isn't. Unless you exclude the United
Kingdom, Switzerland, Canada, Australia, Germany, Netherlands and France
from your definition of "civilized countries" the assertion reeks of a
Yankee mischaracterization. There is a broad scope to debate whether
particular jurisdictions strike exactly the right balances and the like but
I am not aware of any litigant other than Afrinic finding Mauritius to be a
jurisdiction that they regret being subject to. Even if there is something
a person doesn't like about Mauritius law or legal system little has
changed since the decision to incorporate in that jurisdiction arises. I
can off hand think of plenty of other jurisdictions where I'd be concerned
about foreign firms being able to put me on a barrel through finding some
basis upon which draconian measures are practiced for some cause of action
or another.

At present Apple is engaged in a little squabble where it has tried to tell
the English courts that they can't restrain imports into the country or set
license rates which Apple finds commercially unacceptable. Trust me if
Apple persists in playing chicken with the English (and Welsh) courts they
will find themselves on the back end of things, and Afrinic shouldn't be
perceived to be or actually be playing chicken with courts. My hunch is
that somebody representing Afrinic thought they could tell the Mauritius
courts what they could and couldn't do. If this hunch is correct it would
represent the sort of insufferable arrogance which could see the
organization destroyed. This would clearly not be in the interests of the
members nor of the region. Firms do this when they think they are
indispensable and legal representatives may push their luck if they think
that a court will be hesitant to act against their client. Ask Mr Zuma (who
is in prison right now) and his legal team about the assumption a party can
make that they can bolster against a court. Even if my hunch is wrong and
the reason the court has concluded that there is a risk of dissipation is
different or there is some special course of proceedings that can get a
Mauritius domiciled entity over a barrel the organization needs to address
the source of the risk of adverse legal proceedings.
It is therefore strongly a case that Afrinic needs to have the disputes
that are arising resolved expeditiously and so the organization needs to
commit to commercial resolution process such as arbitration rather than
pretending to be a government. The lack of a dispute resolution by
mediation and arbitration clause in the service agreement is an inexcusable
omission from Afrinic and it would certainly make things considerably
better if a justifiable process preceded the organization terminating the
agreement
While I am not certain as to whether this is how it will play out if
Afrinic purported to terminate the contract with Cloud Innovation on
spurious grounds and this termination is viewed as repudiation by Afrinic
it is quite easy that the damages are considerable, this would have been
avoided if the service agreement was differently designed. The attempt in
the service agreements to irrationally prejudice a member and favour the
organization cannot end well.

But lets hold to a United States standard (which you assert is a
jurisdiction where this would NOT happen). It most certainly is the case
that on a daily basis in the United States injunctions taking the form of
TROs (granted if there is irreparable harm threatened) and prejudgement
attachment writs (which IIRC is available when there is liquidated damages
arising from a grave breach of contract) are issued with the same effect
as preventing a party from undermining ongoing legal proceedings before the
conclusion happens. While SCOTUS has quite clearly differentiated US
jurisprudence from the UK injunction practice and I assume the French
saisie conservatoire practice, the 5 v 4 decision of SCOTUS is not without
criticism (
https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=4076&context=flr)
and as is always the case lawyers will find a way to promote their clients
interests. Thus between arrests, writs and TROs it is difficult argue a
substantive departure from the fact that a litigant with standing before a
court who would find themself with a brutum fulmen if the court does not
grant some relief in equity to restrain the defending party from
dissipating assets will readily find in any civilized jurisdiction a remedy
of some kind.
Countries which do not provide this ability for a litigant are frankly the
ones which are uncivilized - ubi ius ibi remedium  and all that.
I'd go so far as to say that bank accounts are definitely frozen daily in
every federal circuit and in many federal district courts (I am quite sure
both the Southern District of New York and the Northern District of
Illinois have standardized bank restraint prayer forms of practice that
both the feds and litigants faced with a recalcitrant and dissipating
defendant can and do use). In the US of course a plaintiff who has a lien,
such as the IRS, of course gets an attachment via the lien (rather than the
proven liability) and then you really are faced with a headache.

The fact that it is usually criminal enterprises who find their bank
accounts attached speaks to what a person has to satisfy a court of before
getting this relief. It is also why it is quite bizarre that the
organization is publicly boasting of the ability to circumvent the order.
If anything I think the general sense of foreign observers is that
government in the United States is too capable of obtaining restraint
relief and private actors not enough. If Afrinic was based in the United
States when your revelations about Ernest broke (or if it involved US
nationals committing the bribery) it would be the US asking to freeze bank
accounts - as they did with FIFA:
https://www.bbc.com/news/world-us-canada-35119240

The point is that whether an English-esque jurisdiction like Mauritius (the
jurisdiction not the language, appeals from the Mauritius Supreme Court
ultimately lies to the JCPC in London and this does actually occur - there
are at least two matters of the calendar at present) or a jurisdiction like
South Africa or the United States (common law jurisdictions which have
deviated from the English courts nomenclature practice or principles on
this issue) or a civil law jurisdiction you will find that courts can
restrain a malevolent (in the opinion of the court) counterparty when a
proper case to do so is made.

Many individuals and organization maintain banking facilities in Mauritius.
The question is what did Afrinic do to cause a Mauritian court to conclude
that they present a risk of defying the courts orders and ruling or
otherwise dissipating property or frustrating the rights of another
litigant.
Because neither party is giving us actual documentation from the courts we
have to assume that both parties are "in the wrong" and that the Mauritius
courts will give no party preferential treatment. For this reason if we
hear of a matter being struck from the roll or an order lapsing or the like
we have to assume that its a procedural issue and await the full
determination of the matter on the merits, similarly if we hear of ordinary
relief being granted by a court of a procedural nature its to keep the
status quo pending determination of merits. If we witness relief being
granted that requires the court to be satisfied that the party against whom
the relief is given has done something extraordinarily bad then we can
assume the later. If the parties give us the information candidly we can
get a better idea of what is for what but honestly the sooner the parties
get the disputes handled in commercial dispute resolution mechanisms the
better.

Disparaging the Mauritius courts is wholly out of place and
counter-productive - lets hope Afrinic doesn't take any further to doing so
as it will not end well. The country has a credible judiciary and regard
for the rule of law is on track relative to the continent (at present I
think Rwanda and Namibia are fairing better on some indices but longer term
trends mean unless Afrinic wants to relocate to Namibia - which has a
considerably less developed banking and related sectors and would mean
abandoning the Judicial Committee of the Privy Council. It might mean that
commercial lawyers in Hong Kong and Singapore are less in waters but to
what benefit for the system. Personally I quite like the fact that Afrinic
is in a jurisdiction which has not abandoned the Judicial Committee of the
Privy Council and certainly prefer it to a jurisdiction which has kept the
wigs and trappings while having a general erosion in other ways).

In so far as a section of the membership is pushing the organization to
adopt a xenophobic anti-rule of law based approach those members other
members must distance themselves from such sentiment - this likely includes
joining in on an action for the dissolution of the organization even if
such outcome is sub-optimal. The Mauritian courts have restrained Afrinic's
banking accounts this should be a "come to Jesus moment" for the
organization, sadly if the chatter on this mailing list is anything to go
by members are going to have to find themselves taking action or the Board
is going to have to come clean about this "assisted review" and what steps
it has taken or authorized to cause a court to restrain bank accounts. We
received communications pronouncing victory in litigation only for it to
turn out that less than a week later to be quite different. Since then
we've had additional board resignations and uninformative updates but no
commitment of the organization to defend itself while respecting and
complying with the courts.

All of this is regardless of the fundamental merits of whether the
considerable allocations made to certain members. Such determination of
merits should be done on a fact and law basis by an appropriate forum. The
Board and staff are clearly not such an appropriate forum.

Moreover


> I have previously mentioned other reasons that I and others might have

> for harboring displeasure with respect to the Mauritian legal system.

> There is no need for me to repeat those now, and in fact I have been

> cautioned against doing so again out of concern that either I or some

> AFRRINIC staff members might, as a result, be convicted of the heinous

> offense of "disrespecting the court" and that we might thus find ourselves

> dragged away in chains to what is no doubt some special Mauritian dark

> and dank dungeon specially reserved for offenders of such a unique caliber.


You mean like Steven Dozinger who a single US judge has caused to be
detained without trial for more than 2 years? Personal liberty is a much
greater infringement than bank accounts.
https://www.theguardian.com/us-news/2021/mar/28/chevron-lawyer-steven-donziger-ecuador-house-arrest
.

There is no reason to disrespect the courts, there is every reason question
the commitment of role players investigate and prosecute criminal actors.
One cannot but wonder whether the reason for honing in on a large resource
member is as a distraction - its a nice narrative, the organization is
"under threat" from "foreigners" and "capitalists" rather than has been
gutted by corruption. This narrative is bullshit, if there is misconduct on
the part of Cloud Innovation then there is plenty of room within the
Mauritian and Seychelles legal systems to hold them accountable. If there
is a genuine felt policy gap then there is a process to develop policies.

Although if you want to take a course of disrespecting courts in the hope
of ending up in a dank dungeon I am quite sure arrangements to use the
Tower as more than a tourist destination can be made - that will certainly
be darker and more dank as a dungeon than anything on a tropical island.



> Whether that is the best way to run a national legal system or not is,

> I suppose, in the eye of the beholder. All I can say for sure is that at

> this moment I am really quite glad that I personally do not own any bank

> accounts in Mauritius.



Many multinationals who've got capabilities to perform a proper assessment
of risk are very happy to have bank accounts in Mauritius and I am quite
certain that a lot of the motivation for Afrinic being domiciled in
Mauritius was because several regional organizations didn't want the bank
accounts in South Africa. Undoubtedly if Afrinic was domiciled in Namibia
we'd be sitting with complaints about the Namibian legal system today. I
don't think you could end up in a dark and dank dungeon if for no other
reason than the country is mostly sand. If anything the main fear any US
citizen has is their bank accounts in foreign jurisdictions being frozen
because of a squeeze from the US on other jurisdictions. I doubt any
African dungeon can be worse than the PATH train service between New York
and New Jersey.



> In short, from where I am sitting, *everybody* is hiding something, and

> I don't believe that any of this information hiding is being done for my

> benefit -or- for the benefit of the AFRINIC community. The folks doing

> the hiding are looking after their own interests.



I don't think anybody with any understanding of these things doubts that
people are hiding information. Personally I'd love to know exactly how the
allocations were made and there is plenty of reason to suspect various
things. The question is which organization owes a duty to the community and
to its members? A commercial venture or a member based organization? The
main thing the community needs to know right now is whether the hostmaster
made the allocations of such large blocks in circumstances which Afrinic's
records reveal is extra-ordinary. Consider the situation where the staff of
Afrinic for corrupt purposes made such a large allocation to a firm where
they were engaged as paid consultants in the hope of using same as a front.
Or a situation in which an organization emphatically paid Afrinic a tidy
sum for such a large allocation. In either circumstance it is against the
members interests for the truth to be brushed aside and for the
organization to through membership termination being adversely impaired,
Afrinic has a corrupt interest in covering up and exactly what a person
believes is just will depend from person to person but be intimately linked
to the facts.

Its also worth pointing out that a party seeking ex parte relief has
responsibility to be highly candid with the court (to take the court into
its confidence as it were), on the 4th August the Mauritius courts could
express extreme opprobrium against Cloud Innovation if same neglected to
disclose material information - and their lawyers know this, so its fair to
assume that they have avoided this risk by being candid at least with the
court.

But here is the major point - either Cloud Innovation or whichever
predecessors they obtained transfer from - were legitimately allocated the
address space or there was something untoward and covered up for many years
by Afrinic. Asking them to provide the evidence to aide in destroying them
is so profoundly contrary to a functioning justice system that any
jurisdiction that doesn't want to be a banana republic will understand why
its the case. Apart from self-preservation or the like there may be other
reasons why they don't want to make certain disclosures - some of which may
relate to actors who are hostile to a free and open Internet and for whom
such information would be beneficial. Many concerns would evaporate if a
credible process with trustworthy actors were involved. But this entire
activity from Afrinic reeks of seeking to brush aside the hard questions
and hope that some boogey man threat of foreigners will cause a glossing
over.

I understand why the CEO might want to be cautious and not disclose as much
as he should. What needs to end and end soon is a culture within the
organization of believing it is too big to fail - because that attitude has
caused it to fail and the sooner it admits this failure the sooner it can
fix itself. This requires more than anything a decision from the Board,
sadly we've already seen good members of the board resign and when one
considers that a seat on the board was until recently held by the now
disgraced Vika Mpisane it is difficult not to conclude that absent
sufficient external pressure that actually has efficacy nothing is going to
change.

In a world were nobody can be trusted it is best that the law rather than
capricious men rule the roost. This is why as Andrew has already called for
and I have put forward in the members discussion a meeting to fill the
vacancy is needed, we should here more next week from the court but if
Afrinic fails to get the injunction on their account lifted then it truly
is time for the discussion to shift away from whether the Mauritius courts
should be restraining the bank accounts and towards how does Afrinic
resolve its dispute crisis.

Paul
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