ACACIA MINING – BISMARK HOTEL: DID ADV. KAREL DAELE ACT UNETHICALLY?

DID ADV. KAREL DAELE ACT UNETHICALLY BY ACCEPTING BARRICK-ACACIA REQUEST TO BE ADJUDICATOR ?
Thursday, June 02, 2016

In today’s newspaper, RAIA TANZANIA, on page 4, it was reported that Adv. Karel Daele must remove himself as Adjudicator in the matter between Bismark Hotels and Acacia Mining because of his conflict of interest. Our group decided to research and report on this to our readers.  See below for the newspaper article.

Adv. Karel Daele moved to live in Tanzania in 2006. He joined the law company, Mkono & Co., as a partner.
In 2012, Adv. Daele left Mkono & Co and Tanzania, and he moved to London where he joined the law firm, Mishcon de Reya.

In the approx. six years that Adv. Daele worked at Mkono & Co., he also wrote a number of publications – all available to read on the internet.
Some of these publications, he wrote together with Adv. Nimrod Mkono, the Managing Partner at Mkono & Co.

Clearly, Adv. Daele was one of the top and well-known partners at Mkono & Co. Any Google search will not dispute that Mkono & Co. have represented Barrick Gold and their various off-shoot companies, for many, many years, in different legal matters.
During Adv. Daele’s tenure as a partner at Mkono for some six years, Barrick Gold was very much a client of Mkono & Co.

However one looks at the situation, one way or another, there would have been partner discussions about different legal matters relating to Barrick Gold’s business. Let’s not forget we are talking about the biggest gold mining company in the world and certainly a very powerful client in Tanzania and also had to have been a very serious source of money for Mkono & Co.’s bank account!

  • How is it possible that Adv. Daele would accept the request to be adjudicator for Barrick – Acacia Mining?
  • How is it ethical that he accept the request to be adjudicator when he was a partner in a law firm that has represented Barrick legally for years and years?
  • Was it unethical that Adv. Daele did NOT disclose to Bismark that he worked in Mkono & Co. for some 6 years and that Mkono & Co. were legal council in Tanzania to the Barrick group?
  • Is Adv. Daele’s position as Adjudicator a clear CONFLICT OF INTEREST?

Let us turn to the specialists and professionals to understand what does it mean to have a conflict of interest?

First, we visit the website of the “Society of Ontario Adjudicators and Regulators” (since Barrick in Canada own about 69% of Acacia Mining):
They give a clear definition of “Conflict of Interest”:

A conflict of interest is any interest, relationship, association or activity that is incompatible with the adjudicator’s obligations to the tribunal. A ‘conflict of interest’ is defined for the purpose of this Code to include both pecuniary and non-pecuniary conflicts.

A non-pecuniary conflict of interest will arise where an adjudicator has an association, relationship or non-financial interest or activity that is incompatible with his/her responsibilities as an impartial decision-maker and as a member of the tribunal. The relationships, interests or activities of a close family member or close associate may raise a potential conflict for an adjudicator if they will be affected beneficially or detrimentally by the determinations of the tribunal.

There we have it very clearly… the words “relationship and association” certainly cover what amounts to around six years working in Mkono & Co., who represented Barrick.
Perhaps Adv. Daele would say that he did not actually represent Barrick directly in any legal matters and that other partners did the legal work. Nevertheless, it cannot be disputed that as a partner in Mkono, Adv. Daelle would have been privy to information, might have been consulted in his office by his Mkono colleagues on different matters… the possibilities are endless… and of course, the issue of the Barrick fees paid to Mkono and Adv. Daele was a partner in the office…. should we go on?
These and more issues all make up the picture of an “association” that Adv. Daele had directly or indirectly with Barrick.

In addition, let us not overlook Adv. Daele’s ongoing friendship with his ex-partner and co-publisher, Adv. Nimrod Mkono which certainly also constitutes a “relationship and association” with Acacia – albeit via Acacia’s lawyers.

Second, we select the website of “Adjudicate Today” for a second opinion on this matter. They explain very clearly as follows (we extracted the most relevant requirements to keep this as short as possible):  “WHAT IS REQUIRED OF ADJUDICATORS“.

No Conflict of Interest:

A person cannot serve as an eligible adjudicator in any payment dispute where the person has any financial interest (except the adjudicator’s normal fees) or other interest in the outcome of the particular dispute.
The adjudicator should disclose as soon as possible any situation which may give rise to a conflict of interest.
In particular, an adjudicator who is a member or director of a company or industry association retained by any party to the dispute should not act as adjudicator without the fully informed consent of the parties.

Adv. Daele’s relationship with Acacia and indeed, Mkono & Co. can easily fit into the above mentioned “… or other interest in the outcome of the particular dispute.”

Impartiality:

Impartiality means freedom from favouritism or bias in word or action towards a disputant party.
Furthermore, an adjudicator is not to play an adversarial role and must maintain an even-handed approach towards all parties involved. An adjudicator should not become an adviser to any of the parties.

Neutrality:

If the adjudicator had at any time prior to the adjudication provided any services (eg. legal, consulting or commercial) or had any social or professional relationship with any of the parties, he/she cannot proceed with the adjudication. However, if after full disclosure, all parties to the adjudication agree, the adjudication may proceed.

Declaration by Adjudicator
They (the adjudicators) have not had any connection with either of the parties which is likely to give rise to a perception of conflict of interest eg. association, memberships, social or family relationship, employment, business, shareholdings;
How can Adv. Daele honestly and ethically make the above Declaration?

Third, we select the website of “The Canadian Law Society” for a third opinion on this matter. In their website, they include a document called : “ADJUDICATOR CODE OF CONDUCT” which explains very clearly all about this issue of Conflict of Interest.
(We extracted the most relevant points to keep this as short as possible):

Page 3:
PART 2   CONFLICT OF INTEREST AND REASONABLE APPREHENSION OF BIAS

IV. Definitions

6.    A conflict of interest is any interest, relationship, association or activity that is incompatible with an adjudicator’s obligations to the tribunal. Conflicts may be actual or perceived. In this Code, ‘conflict of interest’ includes both pecuniary and non-pecuniary conflicts.

8.    A non-pecuniary conflict of interest will arise where an adjudicator has a non-financial interest, relationship, or association ……….

10.   A significant professional relationship may include, for example, employee/employer, solicitor/client, partnership/association, or employee, associate or partner/law firm.

So we see that Adv. Daele’s six year period in Mkono & Co. as well as his “publishing partnership” with Adv. Nimrod Mkono certainly creates a conflict of interest here.

Finally, for the sake of the cynics who are reading this, please allow us to include what can only be considered as “the cherry on the top”….

We consulted with the website of “The Adjudication Society” in the UK – that is Adv. Daele’s playing field:

They have a Guidance document on their websites that states:

Page 5:
2.4     An adjudicator should ensure that he does not have a conflict of interest before he accepts an appointment. Failure to do so could result in the courts refusing to enforce a decision on the grounds there had been a breach of natural justice due to the bias of that adjudicator.
2.5.1   The fact that an adjudicator had, many years previously, been a colleague of one of the parties’ representatives in circumstances ……….
2.6      If an adjudicator is in doubt as to whether he has a conflict of interest he should as a matter of best practice disclose the potential conflict of interest to both parties before proceeding further.

We are not lawyers and this is not a court of law BUT one does not have to be an expert to spend some time using Google to understand what are the parameters to be an ETHICAL and HONEST Adjudicator. As The Adjudication Society in the UK writes in clause 2.6 their website : “…… as a matter of best practice……”

Clearly, from the above, Adv. Karel had NO right at all to accept the request from Acacia Mining to be their Adjudicator.
As regards Acacia Mining’s request in the first place?   Well, we already see all over the internet that Barrick Gold & Acacia Mining make up their own rules as they see fit, so let us not address this sad question.

In conclusion, we reach out to Adv. Karel Daele :
Sir, you did NOT act “…… as a matter of best practice……” and you really ought to show the world that you are a man of ethics and integrity… and you should remove yourself as Adjudicator – certainly for the sake of your own future.
The last thing you need is for this adjudication to follow you and haunt you all your years.. and for what ? Because Acacia Mining is waving their finger at you? Because they are waving money at you?
Don’t make a mistake!!   The pleasure of the money will be long gone after the bitter taste of scandal chases after you and remains with you!

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