Lies, damned lies and fakery

9 March 2024 by Rosalind English

Contax Partners inc BVI v Kuwait Finance House and others  [2024] EWHC 436 (Comm)

Legal news abounds these days with stories of fabricated decisions and authorities generated by ChatGPT and similar AI mechanisms. But there’s nothing like a bit of old-fashioned human plagiarism to tickle the palates, and the full force of a judge’s fury was unleashed on such an attempt recently in the High Court.

The facts appeared to be dry. The Claimant (an oil and gas company) commenced an arbitration claim against the Defendants, three companies in a banking group. It sought to enforce, under s. 66 of the 1996 Arbitration Act, what was said to be a Kuwaiti arbitration award dated 28 November 2022. This, in turn, was said to have been rendered in pursuance of an arbitration agreement between the claimants, Contax BVI, and the Defendants.

The Court was told that for a number of years Contax BVI had been attempting to liquidate an investment account held by the defendant banking company – to the tune of some €53 million. The Claimants then stated that this had been the subject of an arbitration under the auspices of the Kuwait Chamber of Commerce and Industry Commercial Arbitration Centre which had resulted in an award in its favour.

A number of documents were exhibited to the claimant’s witness statement, including the arbitration award, a decision by the Kuwaiti Commercial Court of Appeal and a document, said to be a statement by one of the claimant’s legal advisors, saying that attempts to enforce the award and Court of Appeal ruling in Kuwait had been unsuccessful. As Butcher J describes it,

“This application was put before me, in the ordinary way, on a without notice basis, for consideration on the papers, in early August 2023. Judges of this court have to consider very many paper applications of this type and others. I recall considering this one with some care, in that I did not find it all very easy to understand. I gave, I would say in retrospect, undue allowance for difficulties apparently arising from documents being prepared by people who were not native English speakers and/or whose grasp of English procedure was not perfect. It did not, however, occur to me that any of the documents might be fabrications. I was not on the lookout for fraud, and did not suspect it.”

Unsuspecting as he was, the judge made the order and gave the claimants leave to enforce it. But the defendants came back with a statement that there had never been any arbitration at all. As they put it in their skeleton argument supporting their application to have the order set aside:

“that the award is an out-and-out fabrication might seem at first blush unlikely – but substantial parts of it have been taken from Picken J’s judgment in Manoukian v Société Générale de Banque au Liban SAL [2022] EWHC 669 (QB)”

Butcher J described this case as “unique” in his experience, and “of the utmost seriousness”, and held that “there was no arbitration agreement or arbitration, and that the award and the Kuwaiti judgment are fabrications. I do not consider that there is a triable issue in relation to this.”

Documents before the Court

AI is definitely better at the business of fakery; due to the “black box” nature of its processing, it is almost impossible to identify the sources of its data. For a human processor it is much more difficult to conceal the true author of the material he or she has copied. So it was that the judge was able to establish the “arbitration award” , supposedly translated from Arabic, had substantial passages which are taken, with some modifications, from the judgment of Picken J in Manoukian, concerning completely different parties. It is best to see [40]-[44] of Butcher J’s judgment to get the full flavour of the claimant’s efforts to mislead the court but here is an example:

Extract from so-called Arbitration Award

” [5] … As a result, his position is (or was heading into the trial) precarious: any delay in the resolution of the present proceedings could potentially deny Contax Partners Inc BVI an effective remedy. It was for this reason, indeed, that the trial which took place before me was expedited: Contax Partners Inc BVI issued the proceedings on 1 December 2021; pleadings closed on 4 April 2022, and expedition was ordered at a hearing which took place on 21 June 2022.
[6] In further consequence of the need for expedition, I indicated at a hearing which took place on 7th December 2021 that Contax Partners Inc BVI claim was successful, specifically his primary case that the Banks are contractually obliged to effect the transfers to where he wish. I made an order, indeed, to that effect. In the circumstances, this judgment does not deal with other aspects at all or, at least, in any particular detail.”

Extract from Picken J’s decision in Manoukian:

” [3] … As a result, his position is (or was heading into the trial) precarious: any delay in the resolution of the present proceedings could potentially deny Mr Manoukian an effective remedy. It was for this reason, indeed, that the trial which took place before me was expedited: Mr Manoukian issued the proceedings on 19 December 2020; pleadings were closed on 6 April 2021, and expedition was ordered at a CMC which took place on 8 June 2021.
[4] In further consequence of the need for expedition, I indicated at a short hearing which took place on 25 February 2022 that Mr Manoukian’s claim was successful, specifically his primary case that the Banks are contractually obliged to effect the transfers. I made an order, indeed, to that effect. In the circumstances, this judgment does not deal with other aspects either at all or, at least, in any particular detail.”

As Butcher J points out, these examples, which could be multiplied, largely speak for themselves. He considered the following features to be important:

“(1) The text of the Award, in significant measure, derives from the text of Picken J’s judgment. This is obvious inter alia from: (i) the use of exactly the same, far from standard, defined terms (eg ‘General Transfer Right Issue’); (ii) the use of English legal terms (eg ‘claim in debt’, ‘exclusion clause’, ‘specific performance’); (iii) exactly the same phraseology being used, including the argot of English judgments (‘be that as it may’, ‘the submission is not entirely without merit’, ‘that said’, ‘fall to be considered’); (iv) the use of the same punctuation, even when it was not obvious, and arguably incorrect (eg in paragraph 129 of Picken J’s judgment, ‘…in debt, in the event, that the Court…’, both commas also appearing in the Award).”

Given his conclusion that both the award and the Kuwaiti judgment were fabrications, Butcher J set aside the order entering judgment against the Defendants in the terms of the purported “award”. He concluded (at para 52) that

“The result of this decision is that there are a considerable number of unanswered, but serious, questions, and in particular as to who was responsible for the fabrications which I have found to have been made, and whether there is culpability (and if any whose) as to the way in which the application for permission to enforce the purported Award was presented to the court. Those are matters which are likely to require investigation hereafter.”