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MAKING A MOCKERY OF PROCEDURES OF THE JUDICIAL SYSTEM AND THE LAW

Judicial history was made last week in the Supreme Court of Seychelles. In a ruling which shocked the whole legal fraternity, Supreme Court Judge Karunakaran ordered that the Democrat Party leader, Paul Chow, pay up over SR 500,000 or go to prison for 6 months for the debt of a company of which he was once one of the directors. It was not coincidental that the unprecedented ruling comes just as Chow has acquired a high profile in the politics of Seychelles as the new leader of the Democratic Party.

But the ruling has greater implications for the Seychelles which the judge probably does not realise. For the consequence of his decision has put the whole offshore industry in jeopardy. It in effect means that from now on a judge in Seychelles can make any director of a Seychelles IBC that he so chooses, responsible to pay the debts of the company, whether that director is in office or not, without specific legal proceedings brought against him, nor affording him the right to a fair hearing and trial

Of more immediate significance for everyone in Seychelles is the fact that all the protections afforded to directors of companies under the Seychelles Companies Act 1972 against the debts of the company created in the course of normal business, are no longer valid after this ruling. Case law that has been established over centuries in British and Commonwealth legal history, as well as the provisions of the Companies Act 1972, was set aside in favour of new precedent.

The case was made all the more complicated in that Mr Chow was not accused by anyone least of all the State Assurance Corporation of Seychelles (SACOS) the judgment creditor in the case - of doing anything wrong in any court of law either in Seychelles or anywhere in the world nor was there any claim made against him in any court. More intriguingly, Mr Chow's name never appeared on the cause list published by the registrar of the Supreme Court at all material times, either as a defendant or as a respondent. Yet the judge, out of the blue one sunny day decided to issue a warrant of arrest against Mr Chow so that he would be held in police custody and produced in front of him two days later, a decision unprecedented in the annals of legal history.

When this did not work at one session of the court presided over by the judge as result of prompt action by counsel of the judgment debtor company, the judge decided to try again later. This time he adjourned all his other cases that had been listed to be heard by him, dismissed counsel’s protest, retired to his chamber and had his stenographer type an arrest warrant which was hastily sent to the police. Once again, there was no case against Mr Chow filed by anyone either in the Supreme Court or any court in Seychelles or anywhere in the world, whether of a criminal or of a civil nature and neither was there a petition in front of any court naming him personally as a respondent.

Informed by counsel for the judgment debtor company of the judge’s action, however, Chow went to the Supreme Court in person even while the order for his arrest was being typed and processed - for it takes less than five minutes walking briskly to reach the Supreme Court from Premier Building where Chow’s office is located. Chow and the company’s counsel sought an audience with the judge in chambers which he granted. But the judge refused to recall the warrant. Instead he insisted that counsel file a motion and affidavit to recall the warrant of arrest, thus creating new precedent in legal proceedings.

When counsel protested that this flew in the face of established court procedures, and that even those accused in a criminal proceeding had been given more understanding, Judge Karunakaran remained adamant that he would not cancel his order to have Chow arrested, detained in a police cell to be brought in front of his court two days later. Counsel even made representation to the Chief Justice in chambers, but to no avail. Even after the motion was filed and the judge was sitting in session in another case the same afternoon, he refused to adjourn the case he was hearing to hear the motion. Instead he waited until after all hearings for the day had ended to inform counsel of the company that he would only hear the motion to cancel his order of arrest the next morning at 9 am. Meanwhile, the warrant of arrest would remain in force as ordered.

That evening Chow attended a function held at the residence of British High Commissioner Ms Diane Skingle in honour of members of the British Orchestra that was performing at the Plantation Club Hotel that week and returned home without a visit by the police. The next morning while Judge Karunakaran had no case to hear and his court was empty and Chow and the company’s counsel was present at the requested time of 9 am, the judge did not appear until 10.30 am to hear the motion. After recalling the arrest warrant, judge Karunakaran made an instructive remark in open court which threw the whole proceedings into its proper perspective. He warned that no one is above the law, “especially someone who professes to be standing for democracy”.

But unknown to Chow and the counsel for the company, another judicial order of arrest came into existence for Chow to be arrested. According to Paul Chow, this time the order was signed by the Chief Justice. It said that Chow should be arrested and brought before the “court on 31st May”. That order was dated 29th May too. But Chow was to find out about this other order only after the police appeared at his home at 7 am on 31st May and shown him the warrant. The police officers told him that they had instructions to take him to the Central Police Station in Victoria at all costs. But Chow was not held in police jail when he reached the police station. Instead he was released at 8 am to make his own way to the court, in spite of the warrant of arrest.

On 31st May, Chow appeared at the court of judge Karunakarun’s as ordered. But when the clerk announced the case, Mr Chow’s name was not called either as a defendant or a respondent. Yet, after dealing with proceedings before him, the judge wanted to know if Chow was in court. A motion filed by counsel for the judgment debtor company to inform the court that the company was in liquidation and was represented by a liquidator was ignored by the judge, even though the issue was crucial to the case under company law.

The next time the case was to be mentioned was Wednesday 7th June, at least this is what was on the cause list. After clearing the various criminal cases before him that day, Judge Karunakaran decided he would conduct a hearing of civil case number 409, between the State Assurance Corporation of Seychelles (SACOS) a defunct state owned company as judgment creditor versus First International Financial Company Ltd, another defunct entity in voluntary winding up ordered by another judge of the supreme court, as judgment debtor.

Civil case 409 started as a simple commercial debt claim made in 1998 by the State Assurance Corporation of Seychelles (SACOS) against the company, First International Financial Company Ltd of which Chow was one of its directors as well as the majority shareholder. On 23rd June 2004, the two companies entered into a judgment by consent whereby the defendant company agreed that it owed the plaintiff company R493,078.60 plus R16,726 of costs. The judgment by consent also stipulated “That neither party has any other claim against the other”.

In court documents dated 21st December 2005, SACOS the Judgment Creditor issued a “Summons after unsatisfied Judgement”, against First International Financial Company the Judgment Debtor. The summons threatened First International Financial Company Ltd the judgment debtor - that “if you do not appear in obedience to this summons, you may by order of this court be committed to the common gaol of Victoria”. The court document also said that the summons “be served on: First International Financial Company Ltd c/o Paul Chow, Premier Building, Victoria.”.

It is to be noted that Chow does not live at Premier Building, which is an office block where the company’s registered office was. It is the only court document where Chow’s name appears.

In January on the date the case was listed for mention, Chow, representing the judgment debtor company informed judge Karunakaran in chambers in the presence of a junior counsel acting for SACOS that his company had petitioned another court for voluntary winding up. The judge agreed to set another date for mention pending the decision of the other court. When that date came, however, because all the judges of the Supreme Court were attending a seminar, all the case listed for that day were rescheduled by the Registrar of the Supreme Court. Chow was informed by the Registrar that he would be informed by letter of the date the case would be listed for mention.

In the meantime, Paul Chow had assumed the leadership of the Democratic Party and had declared on television that he would lead his party in an electoral arrangement with the largest opposition party in the country the Seychelles National Party led by Reverend Wavel Ramklawan, for the presidential election contest. But a letter from the Supreme Court giving the date for mention never arrived at the company’s office even though the case had been listed for mention on the cause list posted at the Supreme Court. By the time counsel for the company arrived at the court, however, Judge Karunakaran had already issued the first of his warrant of arrest of the DP leader and the whole issue took a different perspective.

The same week, The People newspaper, organ of the Seychelles People’s Progressive Front (SPPF), the party nominating James Michel as their Presidential candidate in the forthcoming presidential election ran a front page story declaring Chow a crook, in what is considered unprecedented defamatory language in the annals of journalism. In at least three editions of the paper, the same defamatory language was used to character assassinate Chow. One issue even accused Chow of stage-managing the whole affair to win public sympathy and gain publicity.

In their last edition of the People about the case, however, the SPPF showed its very ugly hand in this whole affair. It claimed that Chow had spent a night in jail at Victoria police station. It appears from this article that the script for this whole affair could only have been written at Maison du Peuple, the headquarters of the SPPF. So confident of the leadership of the SPPF that the script would work as written that they forgot to check on the reality. Chow did not spend the night in jail as they alleged.

The whole affair not only showed the politicisation of the judiciary in stark reality. After virtually exhausting leading questions and accusations to Chow who the judge could not decide whether he was there as a witness or an accused - to try and establish the basis for his eventual ruling, judge Karunakaran asked counsel for the company if she had any question to ask Chow. When counsel responded that Mr Chow was not her client, the judge reacted:

The judge: “Why is he here then?”

Counsel: “I don’t know my lord. You issued the warrant for his arrest and to be brought before you.”

This saga, from the perspective of the SPPF has run its course. It remains to be seen what other tricks the discredited, dispirited and frustrated leaders of that party have up their sleeves or is this their last gasp?

In a free and open society which our Constitution guarantees and defends this saga would have been the public controversy of the century. The public, however, is being deprived of the fundamental right to know because SPPF under the leadership of Albert Rene continues to corrupt the society by controlling and manipulating all the institutions of the state for political ends.