In a hot and busy courtroom in London, the legal parties for the Vatican and a City financier set out their arguments as the two-week trial kicked off.
It’s a historic trial, as it’s expected to be the first time the Vatican has appeared in an English High Court.
The HQ of the Catholic Church fought hard not to have this case go to a court in England, as the claimant’s barrister, Fountain Court’s Charles Samek KC, told the court that the “Secretariat failed on jurisdiction and stayed on staying this case”.
The dispute stems from a corruption scandal from the fallout of the Vatican’s purchase of an expensive landmark property in Chelsea.
The Vatican bought a 45 per cent stake in the property in 2014 but ultimately became the indirect owner in 2018 of the landmark building, a former Harrods depositary, at 60 Sloane Avenue.
British-Italian City financier Raffaele Mincione and his Luxembourg firm Athena Capital Fund acted as investment manager for the Vatican Secretariat of State from 2014 to 2018.
The intention of the West London property was to convert it into 49 luxury apartments, but after problems arose with the project, the Vatican later sold the building at a loss of about £100m.
The Vatican alleged the Secretariat substantially overpaid for the property and its actions were linked to corruption and fraud.
Read more
Father, Son, and My Lord: Vatican faces English High Court over luxury Chelsea property fraud
Samek KC was early to clarify Mincione’s criminal conviction in the Vatican City.
He stated that Mincione was acquitted of all the offences charged in the Office of the Promoter of Justice (OPJ) indictment surrounding the transaction.
He noted there were supposed to be formal reasons, yet “we’re still waiting for findings six months on,” he told the judge.
Despite this, Mincione was convicted of the consequence of a $200.5m (£156m) investment into the Athena Fund between 2013-2014.
He noted that the “Secretariat must be held to its pleaded case and not those imported from the Vatican trial to this English court”.
The claimants, Mincione along with his fund, Athena Capital, launched these legal proceedings seeking declaratory relief as they argue that “they acted in good faith in and about the transaction and the negotiation and execution of the contractual document”.
While the defendant’s barrister Brick Court Chambers Charles Hollander KC’s written arguments stated that it was “far from being a ‘good faith’ deal, the transaction itself was the coup de grace.”
The Wednesday opening was focused on the claimant’s barrister, Samek KC, who outlined his arguments regarding the details of the transaction in question.
The barrister noted that the Vatican argued that his clients made a fraudulent representation that the property’s market value was £275m.
He stated that the claim of “misrepresentation regarding the property’s value, is unsupported and unsustainable”, adding that information regarding the property had been “consistent well before the hatching of the alleged conspiracy”.
“It doesn’t make sense,” the Silk barrister noted.
In a written statement, Hollander KC said that Mincione said that the higher valuation was made “fraudulently” and was based on “a series of hypothetical assumptions which could not logically have been relied upon”.
Samek KC went on to state that he has “never come across a fraud case before where you have a valuation prepared by a respected Strutt & Partners, gone through an audit by PwC and is in accordance with Luxembourg law.”
He highlighted that there was “no dodgy accounting outlet”, it was PwC, as he added that one finds it is usually different firms in different jurisdictions but in this case it was one account [PwC].
The case will run until 18 July, with an anticipated judgment expected to follow at a later date.
Commenting on the opening of the legal proceedings, Mincione said: “I am delighted that these proceedings in England are finally underway.”
“I look forward to these issues being examined by an independent and internationally-respected judicial system,” he added.