We often sit in on debates among legal teams over the merits of filing a criminal complaint to put pressure on counterparties, an essential strategy in complex disputes.
Such a tactic can carry risk for the claimant. However in some countries, particularly in the Middle East, a public prosecutor’s criminal file may be accessible to legal counsel in civil proceedings and an important source of evidence.
Critics of the criminal complaint tactic often raise two valid points:
First, you will have no control over a government authority’s investigation. You cannot turn it on or off or shape its direction. It will have no value as a point of leverage over your counterparty. In some jurisdictions – Switzerland is a good example – public prosecutors have a reputation for aggressively pursuing investigations in ways which may impede a claimant’s own affairs.
Second, a not guilty finding by a public authority will appear to exonerate the counterparty and can be used in commercial proceedings to undermine the claimant.
While these are appropriate concerns, we have seen occasions where savvy local counsel were able to obtain permission from a government authority to use that authority’s findings in civil proceedings. This can be a game changer in countries whose local courts do not recognise disclosure.
If you need to demonstrate transactional activity in a bank account, communications among individuals, or the shareholding structure of businesses incorporated in opaque offshore zones, under some circumstances local public prosecutors can be an ally in high-stakes disputes.
Prior to co-founding Raedas, Nicholas Bortman was based in the United Arab Emirates and carried out dispute related investigations across the Middle East, India and Africa for six years.