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LEGAL: SA Courts to Test Constitutionality of SA/USA Prosecution "Collusion"


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The High Court of South Africa is set to examine the constitutionality of a collaboration between SA and USA prosecutors in a case that has spanned more than a decade. This follows the lodging of a case by the head of a former SA fisheries giant, who says the ‘collusion’ – which saw the South African incarcerated in the US - was in contravention of a prior settlement agreement.

Arnold Bengis, whose company Hout Bay Fishing was destroyed in the wake of the double-barrelled prosecution, is suing the SA Government - including the Ministers of Justice and Agriculture, Forestry and Fisheries, and various officials – for damages of more than US$11 million.

He lodged papers in the Western Cape High Court on Monday, 10 February 2014, which seek, in addition to financial compensation, an order declaring that the respondents acted unlawfully, unconstitutionally and in bad faith in their dealings with the US government.

The current legal action flows from a series of criminal and civil proceedings against Hout Bay Fishing which began in 2001. The prosecution of Bengis and the company made global headlines at the time, as they entered a plea and sentence agreement with the SA Government.

In line with this agreement, Bengis paid substantial fines, and certain of the company’s assets were forfeited to the state. Following a letter from the National Director of Public Prosecutions, Bengis was led to believe that the agreement would bring finality to all criminal and related proceedings.

However, according to the founding affidavit lodged by Bengis this month, the Government disregarded the terms of the settlement agreement, and proceeded to actively assist and participate in an additional prosecution in the USA. He claims that this was done because SA authorities would be able to secure restitution in the USA which was far in excess of what they would be able to secure in a South African court.

Bengis further claims that he was misled into signing the plea agreement, which would subsequently serve as sufficient evidence to secure a US conviction and imprisonment.

In 2006, while incarcerated in the US, Bengis was approached by the SA Government and requested to give evidence against other fishing companies in SA in return for a significantly reduced restitution claim. Bengis claims that, after refusing to sign the agreement, authorities upped their efforts to secure exorbitant additional compensation via a restitution claim.

Authorities in the USA are now seeking payments of more than R260 million following a restitution order handed down in the USA in June 2013, while Bengis is seeking an order from the court to compensate him for the consequences resulting from their alleged unconstitutional handling of the matter.

In October 2013, Bengis and his co-applicants, launched a High Court application against various South African government departments and officials, following South Africa’s attempts to secure additional forfeiture from Bengis via the US courts. Bengis records that a final settlement was reached with the South African government relative to the amount of forfeiture to be paid in South Africa when Hout Bay Fishing pleaded guilty in 2001 in terms of a plea and sentence agreement, namely R40 Million. The said agreement was made an order of court.

However, South Africa completely disregarded the said agreement and has pursued further forfeiture against Bengis through the US courts. This, despite a damning order handed down by a US District Court Judge Lewis A Kaplan, against the SA authorities’ handling of the case.

Bengis is now asking the High Court in SA to declare the SA government’s actions as unlawful, and order that any funds received from the US by South Africa be returned to Bengis. The South African government is yet to file their answer to the application. Bengis is represented by Basilio R de Sousa and Advocate Gilbert Marcus SC.

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