2018 WikiLeaks release of Secret Document of International Chamber and Commerce (ICC) International Court of Arbitration

Leaked Documents

WikiLeaks publishes secret document from the International Chamber of Commerce (ICC) International Court of Arbitration, pertaining to a dispute over commission payment in relation to a $3.6 billion arms deal between French state-owned company GIAT Industries SA (now Nexter Systems) and the United Arab Emirates (UAE). The agreement was for the sale of 388 Leclerc combat tanks, 46 armoured vehicles, 2 training tanks, spare parts and ammunition. It was signed in 1993 and scheduled to be completed in 2008.

The case brought before the ICC arbitration tribunal was a claim from Abbas Ibrahim Yousef Al Yousef, a UAE businessman, that GIAT had not honoured a contract to pay him a 6,5% commission on the deal or almost $235 million total. GIAT stopped paying after sending Al Yousef over $195 million through his company Kenoza Consulting & Management Inc., which was registered in the British Virgin Islands. Al Yousef demanded the nearly $40 million that remained outstanding.

GIAT’s lawyers maintained that they had to stop payments as they became illegal when the OECD Anti-Corruption Convention was transposed into French law in the year 2000. They claimed “Kenoza intended to commit and indeed committed corruption acts”. Al Yousef firmly denied that any part of the commission had been used to bribe UAE officials or used in any corrupt acts. As GIAT did not produce any evidence for the claim, the ICC Tribunal did not rule on the issue but noted that “…if the excessive nature of the compensation for the Claimants service must be taken as evidence of a corrupt purpose of the Agency Agreement, this purpose must have been known and intended by both Parties to the agreement”.

The Tribunal did investigate what services Al Yousef provided to justify the excessive commission. Despite claims to the contrary, the Tribunal found that Al Yousef did not play an important role in the development of the Leclerc tank. The tanks were fitted with German engines, which created an obstacle as this would violate laws forbidding German arms sales to the Middle East. Al Yousef claimed he had successfully lobbied German authorities to obtain a waiver from these laws in “…a process which involved decision makers at the highest levels, both in France and Germany”. During a witness statement, Al Yousef could not remember the names of any German officials and told the Tribunal he had used lobbyists instead of meeting with German authorities directly.

Surprisingly, Al Yousef told the Tribunal that had he been on a retainer, he would have asked GIAT to pay him a million dollars a month as a consultant. That would have brought him $51 million to $60 million rather than nearly $235 million. As a result, the Tribunal concluded that “…the contractual commission rates is far above anything that could be justified (…). The remuneration is excessive by the standard which Mr Al Yousef himself set and by any standard which was raised in the arbitration”. His claims were dismissed and Al Yousef was ordered to pay the entire cost of arbitration by the Tribunal ($550 000) plus a portion of GIAT’s legal costs (€115 000).

Leaked Documents