Lawyer to pay $225,000 costs in Kelleher-backed Liberian case

One of the lawyers acting on a long-running insurance case supported by Irish developer Garrett Kelleher has agreed to pay $225,000 in legal costs and stop acting for one of its plaintiffs.

The US district court in Philadelphia, Pennsylvania, heard that insurer Cigna Worldwide (CWW) is seeking $14 million in costs for contempt proceedings linked to a claim brought by Liberian business, Abi Jaoudi & Azar Trading (AJA), for damage suffered during the country's civil war in 1990.

Mr Kelleher loaned money to a firm that helped pay for AJA's lawsuit, which the company has been pursuing since 1991 through different jurisdictions in the US, Liberia and Cayman Islands.

Geneva-based US lawyer Sam Lohman this week agreed to pay $225,000 (215,000)towards CWW's costs for contempt proceedings that it took in an effort to stop AJA from pursuing the claim. Mr Lohman is to pay the money over 18 months and can no longer act for the Liberian plaintiff.

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Last week the court ordered him to hand over his passport and remain within its jurisdiction in Pennsylvania. Those restrictions are now lifted.

Arrest warrant

At a hearing in the Philadelphia court last week, Judge

Paul Diamond

indicated that he was considering asking the US attorney’s office to issue an arrest warrant for Mr Lohman, Mr Kelleher and Irish-Canadian lawyer

Martin Kenney

, who advised both AJA and Liberia’s insurance commissioner, for criminal contempt.

Neither Mr Kelleher nor Mr Kenney were in court last week, although their attorneys were present. Both men said afterwards that they would appeal and Mr Kenney added that he was confident that this would succeed.

Insurance giant Chubb, which inherited CWW's African liabilities following its merger with rival ACE this year, maintains the three men are in contempt by pursuing the action, because they are in breach of an injunction issued in 2001 barring anyone from attempting to enforce a Liberian court's $65 million judgment in favour of AJA.

AJA originally sued CWW in the US district court in Philadelphia in 1994, but lost when the judge, Thomas O’Neill, overruled a jury’s verdict in the Liberian company’s favour.

AJA then took a case in Liberia, where it won its $65 million judgment. CWW returned to court in 2001 and Judge O’Neill issued an order barring anyone from attempting to enforce the Liberian court’s ruling.

However, AJA and its supporters question whether the Pennsylvania court had the jurisdiction to make this ruling. They point out that, by 2001, no US interests were affected by the attempt to enforce the Liberian judgment, as CWW had sold its overseas property and casualty business, including any African liabilities, to ACE, which was then based in the Cayman Islands.

The Liberian government appointed its insurance commissioner Josie Senesei as receiver to CWW. He and his successor, Foday Sesay, took actions in the Cayman Islands on behalf of both AJA and a group of 22 other businesses which had won a judgment of $29 million against CWW in Liberia.

Mr Kelleher, Mr Kenney and Mr Lohman were found in civil contempt in July. Judge Diamond ordered them to appear at the hearing last week to adjudicate costs. However, Mr Kelleher and Mr Kenney, who is an Irish citizen, have challenged the court's jurisdiction over them.