A raid organised by British fraud investigators of allegedly corrupt oil industry middlemen in Monaco was a "speedy and aggressive" fishing expedition, a British court has been told.
But the investigators contend they had reasonable grounds to suspect wide-ranging corruption by Unaoil, insisting they were justified in requesting the raid.
Serious Fraud Office barrister Jonathan Hall QC said that on receiving material on a hard drive in mid-March they "quickly formed the view" that Unaoil was bribing public officials in relation to high-value oil and gas contracts in the Middle East, the former Soviet Union and western Africa.
The material included a chain of emails relating to negotiation of a deal involving Australian company Leighton Offshore, under which a middleman allegedly responsible for bribing Iraqi officials would be paid "many millions" if Leighton was awarded a contract in Iraq.
"It was apparent Unaoil was involved in quite extensive corrupt activity," Mr Hall said.
Unaoil, which was implicated in an international multimillion-dollar bribery scandal earlier this year by reports in Fairfax Media and the Huffington Post, went to the English High Court this week in a challenge to the resulting investigation by the SFO in the UK.
On March 29, just before Fairfax published the results of its own investigation, the SFO raided the offices of Unaoil and the homes of several Unaoil executives in Monaco.
The SFO was aware of the upcoming reports, and told Monaco officials it wanted the raids to take place before publication because they were concerned the suspects would destroy evidence.
Thousands of documents, phones, laptops and other material were removed from the Unaoil offices, warehouse and residences, packed into a truck and driven out of Monaco by the SFO, Unaoil's barrister Hugo Keith QC told the court on Thursday.
But the SFO arranged the raids, through Monaco's police, by making "distinct and serious misrepresentations" to the local officials, he said.
The SFO is still reviewing the material – including a computer server containing about 53 terabytes of data.
The SFO initially denied Unaoil access to any of the material, saying it would facilitate further criminal offences, Mr Keith said. The SFO took the position that Unaoil had no legitimate business activity at all.
"It is a regrettable fact that even today, now over six months later the vast majority of material has not been returned," he said. "The search had a devastating impact on the business, led to laying off employees and a collapse in turnover."
Mr Keith said the SFO, in its letter to Monaco requesting the raids, had misrepresented how far its investigation had progressed, or at least fallen short of a duty to be candid about the strength of its case against Unaoil.
"What was said on the face of the letter of request (to Monaco) was mistaken or misleading," he said.
The letter had referred only to allegations of bribery and corruption relating to Iraq, but the raid had netted documents covering a much wider brief.
The SFO "effectively gave the green light to the Monegasque authorities to take everything", he said. "There must be a limit (that) requires the relevant body to be satisfied there are reasonable grounds to suspect the commission of an offence – not 'these are thoroughly disreputable people, we'd like to see anything you've got relating to anywhere'."
The SFO said it had arrested Basil al-Jarah, Unaoil's Iraqi business partner, in possession of cheques drawn on the account of "A. Ahsani" and made out to Armada Investments for the amounts of £980,000 and £925,000.
Ata Ahsani is the chairman of the Unaoil Group.
The SFO told the court it had evidence of corrupt payments linking Mr Jarah with a middleman "apparently responsible for payment of bribes" dating to before 2011, and the discovery of the cheques led it to suspect the offences had continued up to the present day.
However Mr Keith said the relevance of the cheques had been exaggerated in order to give the SFO's request to Monaco a sense of urgency.
"What could be a better ruse for persuading a foreign receiving authority for acting speedily – and dare one say aggressively – than to say 'unless you get in there, there will be the destruction of evidence and the commission of further offences?" he said.
Mr Keith argued the possession of the cheques didn't necessarily mean they would be used for corrupt purposes.
However High Court judge Lord Justice Gross commented "it's a funny thing to be wandering about with".
Mr Hall, for the SFO, said the investigators' suspicions were not limited to Iraq, and they were seeking materials from the raid that went beyond Unaoil's dealings in Iraq "for good and obvious reasons".
Mr Keith said the SFO should not be allowed to keep the material it had obtained in the raid.
"If it was unlawfully obtained they should be deprived of the ability to use it," he told the court.
Lord Justice Gross and Mr Justice Nicol reserved their decision, which will be handed down in writing at an unspecified date.
