Could it be that a key principle of contract law in the Republic of Cameroon is “agree now; pretend you meant something else later”? Of late, that seems to be the government’s view of its contractual obligations before the United Nations and U.S. federal courts – at least the U.S. Bankruptcy Court for the District of Oregon.
In or about 1984, Cameroon signed the “International Covenant on Civil and Political Rights”, pledging, among other things, that “any person whose rights or freedoms . . . are violated shall have an effective remedy”. Yet the government has so far denied one of its citizens the benefits of a remedy it extended to him in 2006 before the U.S. Bankruptcy Court sitting at Eugene, Oregon. The referenced gentleman is Yves Michel Fotso, a high-profile defendant in the criminal case of The People of Cameroon v. Marafa Hamidou Yaya, Yves Michel Fotso, et. al.
- Yves Michel Fotso and the BBJ-2 Affair
Mr. Fotso was Administrator Director General of CAMAIR, the now defunct national, Cameroonian airline company. In that capacity, Fotso was reportedly recruited to assist the Republic of Cameroon in purchasing a new presidential aircraft. Allegedly he was directed to contact GIA International, Ltd. (GIA) to determine if it could assemble funds to pay for the aircraft. GIA was then an American company based in Medford, Oregon. It has since been dissolved.
Sources indicate that in August 2001, GIA submitted a proposal to the Cameroonian government for financing a Boeing Business Jet 2 (BBJ-2) at a cost of $65 million dollars. Fotso arranged for CAMAIR to sign a contract with GIA for the purchase, supposedly as instructed by Cameroon officials. The final cost was to approach $72 million dollars: GIA would underwrite that amount which Cameroon would retire over a 10-year period, at which time title would revert from GIA to Cameroon. Reportedly all parties to this arrangement understood that CAMAIR was essentially a strawman allowing Cameroon to by-pass stringent restrictions on expenditure of public funds imposed by the IMF (International Monetary Fund) and World Bank.
According to various public records, GIA soon advised Cameroon officials that a BBJ-2 could be promptly obtained for $31 million dollars if the country paid a nonrefundable, $2 million dollar deposit within 72 hours of the proposal. Cameroon’s Minister of Economy and Finance reportedly instructed Fotso to transfer the $2 million from a CAMAIR account to a GIA, Bank of America account, before expiration of the 72 hour deadline. Within this time-frame, the Minister allegedly arranged for the “National Petroleum Company”, a state-controlled petroleum exporter, to reimburse CAMAIR and wire $29 million additional dollars to GIA’s Bank of America account.
After the infamous terrorist attacks in America of September 11, 2001, GIA was linked to Al Qaeda, apparently through misidentification; nonetheless prompting U.S. intelligence agencies to freeze GIA’s domestic bank accounts. With GIA blacklisted as a supposed financier of terrorist activities, the referenced BBJ-2 purchase was postponed, but seemed imminent, according to sources, by March of 2002. However, the transaction was again delayed and ultimately canceled.
- GIA Goes Bankrupt and Millions Allegedly Go Missing
It appears that by late 2002, GIA and CAMAIR were maneuvered out of the equation, leaving the government of Cameroon to negotiate directly with Boeing for its 767-200, a larger aircraft than the BBJ-2. Somehow GIA went bankrupt in 2004, purportedly owing Cameroon the $31 million dollars wired to the company in 2001. Working together, an American law firm and a Cameroonian government lawyer initiated litigation for Cameroon in the bankruptcy case, apparently to maximize the government’s recovery from GIA. Through these adversary proceedings, Cameroon asserts that both it and an “Indian Airlines” had claims against the GIA estate. Specifically, Cameroon sued David Wurst, the U.S. Bankruptcy Trustee assigned to GIA’s case, and Indian Airlines, alleging that GIA's estate included a C-130A aircraft "purchased by GIA using the funds from the ($31 mil)."
In any event, Cameroon by its American and Cameroonian lawyers as well as David Wurst and Indian Airlines reached a settlement as of September 20, 2006. The agreement addresses "any and all claims, demands, damages, costs, attorney fees, liabilities, claims for contribution, and claims for indemnity of every kind and nature, whether known or unknown including, but not limited to, any and all claims arising out of or in any way related to or which were raised or could have been raised in the adversary proceedings . . . and any and all claims of future losses or damages not known or anticipated, but which may later develop or be discovered." (emphasis added). Paragraph 13 of the settlement agreement provides that "(i)f any action or claim which is the subject of the releases is ever asserted in any manner against any person or entity released hereby, this Mutual Release shall constitute and may be asserted or pled by the person or entity so released, as a complete defense or bar of any such action or claim." (emphasis added).
As of the date of the final non-appealable order approving (the referenced) Settlement, the Trustee and Indian Airlines release the Republic of Cameroon, Cameroon Airlines and each of them, together with any of their members, managers, partners, agents, officers, directors, shareholders, agents, attorneys, employees, successors of the foregoing, affiliates and assigns from any and all claims, demands, damages, costs, attorney fees, liabilities, claims for contribution, and claims for indemnity of every kind and nature, whether known or unknown including, but not limited to, any and all claims arising out of or in any way related to or which were raised or could have raised in the adversary proceedings . . . and any and all claims of future losses or damages not known or anticipated, but which may later develop or be discovered.
- Is Yves Michel Fotso a Third Party Beneficiary?
Voila! Yves Michel Fotso is released from any and all civil and criminal charges premised on Cameroon’s payment of $31 million dollars to GIA . . . correct? Not according to the Republic of Cameroon, which is apparently poised to celebrate the anniversary of its settlement and related judgment before the Eugene, Oregon bankruptcy court, by convicting Fotso and others for embezzling the underlying funds. Perhaps the presiding judges and prosecutors do not realize that in America, “(t)he general rule on this subject is well-settled — that the law of the place where the contract is made . . . is to govern in expounding and enforcing the contract”.
Oregon is in the United States of America’s Ninth Federal Circuit which provides that “(t)he interpretation of a contract is a mixed question of law and fact”. Stressing its preference for “reasonable interpretations”, the Ninth Circuit holds that “(c)ontract terms are to be given their ordinary meaning, and when the terms of a contract are clear, the intent of the parties must be ascertained from the contract itself.” Again stressing reasonableness, the Ninth Circuit indicates that a party’s dispute of “. . . a contract’s meaning does not establish that the contract is ambiguous; it is only ambiguous if reasonable people could find its terms susceptible to more than one interpretation.”
It is difficult to imagine “reasonable people” concluding that Yves Michel Fotso is not among the “members, managers, partners, agents, officers, directors, shareholders, agents, attorneys, employees, successors of the foregoing, affiliates and assigns” of Cameroon Airlines, against which Cameroon waived “. . . any action or claim . . . in any manner” pursuant to the above referenced paragraph 13. Some pundits suggest the government never should have and, therefore, never intended for Fotso to benefit from that provision, especially with regard to criminal prosecution. But in America, analogous arrangements do not categorically offend public policy. One would think that Cameroon’s battery of government-paid lawyers would have clearly noted the country’s reservation of rights, if any, in negotiating an agreement to become the judgment of a U.S. federal court; an agreement not only implicating Cameroon’s public policies, but arguably impacting its obligations under international law.