Hearing commence on reference relating to UBS loan

The hearing into the Supreme Court reference relating to the K3 billion UBS loan that was obtained by the Government in 2013 has taken place and a decision will be given by the court at a later date.

This reference arises from an originating summons what was filed in 2014 and was referred to the high court by the late Justice Catherine Davani on Jan 28, 2015.

The reference has a total of 11 constitutional questions surrounding the alleged improper borrowing of K3 billion from the Union Bank of Switzerland AG by the Government. It was heard by a five-man Supreme Court bench on Friday.

Counsels representing the Ombudsman Commission, Former Chief Ombudsman Rigo Lua and former Acting Chief Ombudsman Phoebe Sangetari, Prime Minister Peter O'Neill, and the Attorney General all made submissions today.

Counsel to the Ombudsman commission Dr Vergil Narokobi opened the submissions with six questions to assist the court determine the 11 constitutional questions.

Dr Narokobi said the Ombudsmen Commission’s subject of interest in the investigation was the provision involved in securing the UBS loan and the engaging agents and governmental bodies, and not the Prime Minister.

He said since the Prime Minister was not the subject of interest, he was not the responsible person of purpose for the Ombudsman Commission to serve the “notice of intension to investigate” to.

It is a requirement for the OC to serve the section 17(1) notice of the Organic Law on the Ombudsman Commission which deals with the Proceedings of the commission on the subject of OC investigation.

“Section 17(1) Before investigating any matter within its jurisdiction, the Commission shall inform the responsible person of its intention to make the investigation”.

Dr Narokobi said that the Prime Minister is an employee of a governmental body of the National Parliament and his office is not independent or separate which makes him subject to the Ombudsmen Commission’s jurisdiction.

Prime Minister’s lawyer Mal Varitimos said otherwise. He said the Prime Minister should have been given notice that he was being investigated by the OC.

Varitimos also submitted that the PM should have been investigated under the Leadership Code and not the Organic Law on the Ombudsman Commission but Dr Narokobi said the OC used both jurisdictions to investigate the manner which the loan was obtained.

Under the Leadership Code as well as the Organic Law on the Ombudsman Commission.

On Jan 28,2015 National Court allowed Prime Minister O’Neill to obtain a reference under section 18(2) of the Constitution for interpretation at the Supreme Court, while the National Court proceeding was stayed, pending the outcome of the Supreme Court reference.

The National Court also allowed Prime Minister O’Neill certain orders restraining the Ombudsman Commission from publishing a preliminary report of the alleged improper borrowing after the Prime Minister’s conduct became subject to the Ombudsman investigation.

This is all in relation to the alleged improper borrowing of K3 billion loan from the Union Bank of Switzerland AG by the government to purchase 149, 390, 244 shares in Oil Search Limited, and improper tender and procurement of consultants in relation to the borrowing.

In a 36-page ruling, the National Court issued an interim injunction on Jan 28,2015 restraining the Ombudsman Commission, Chief Ombudsman Rigo Lua and Ombudsman Phoebe Sangetari, from:

  • Investigating any conduct on the part of the Prime Minister under section 219(1)(a) of the constitution and section 13 of the Organic Law on the Ombudsman Commission;
  • Publishing in any form the result of any investigation carried out by the Ombudsman Commission, whether by forwarding a copy of its conclusion, recommendation and suggestions to the person holding the position described in section 23 (1) of the Organic Law on the Ombudsman Commission;
  • Publishing any form the Provisional Report of December 2014 signed by Chief Ombudsman Rigo Lua and Ombudsman Phoebe Sangetari; and
  • Publishing in any form any amended Provisional report or final report.



Sally Pokiton