- The Washington Times - Thursday, May 18, 2006

BANDAR SERI BEGAWAN, Brunei — An eight-year legal tussle between the sultan of Brunei, one of the world’s richest men, and his playboy brother, one of the world’s most profligate princes, is reaching its climax in a long battle that has kept a string of British lawyers in lucrative employment.

Once their long workday is finished, the rival teams of British lawyers play golf, tennis and badminton in the palatial surroundings of their five-star hotel. After exercising, they can swim in one of the Empire Hotel and Country Club’s eight luxurious pools.

Each morning at about 8:15, the 10 barristers and solicitors, along with three appeals court judges, have been taken by a fleet of chauffeur-driven black BMWs and Mercedes from their hotel, nestled beside the South China Sea, to Brunei’s High Court of Justice 15 minutes away. It is there, sitting in private and with three uniformed guards at the door of the spacious courtroom, that Derek Cons, the president of the appeals court, brought down the curtain Saturday on the latest round of a bitter legal battle.

The hearing, which began in late April, was the result of a feud involving two royal brothers that has caused untold embarrassment to Brunei, a sultanate north of Borneo that is slightly smaller than the state of Delaware.

Since 1998, rival lawyers have represented the Brunei Investment Agency (BIA), the investment wing of the sultan’s autocratic government, and Prince Jefri, his younger brother, who has been accused of siphoning off the equivalent of $15 billion from the state that once provided him with a standard of living of which most people only dream.

The details that have emerged of profligacy and decadent lifestyles would make uncomfortable reading for the ruler of any country. For the royal family of staunchly Muslim Brunei, which once prided itself on its discretion, the events have proved cataclysmic. The legal dispute has uncovered the playboy antics of Jefri, 52, who is purported to have spent more than $2.8 billion on himself in his final 10 years as finance minister, before he was stripped of the job in 1997.

Toys and fast women

Much of the money purportedly was spent on a succession of “toys” — about 2,000 cars, including Ferraris, Rolls-Royces and Aston Martins; 17 aircraft, including a Comanche attack helicopter; and a 180-foot yacht that has two speedboats on board. The yacht had 24-carat gold-plated fittings and elevators between the decks. Other stories emerged of the prince’s fondness for women with lifestyles as fast as his cars.

Jefri had channeled much of Brunei’s oil and gas wealth into an investment company, Amedeo. His problems began when Amedeo, damaged by the economic crisis in Asia in 1997, collapsed, forcing the Brunei government to bail it out. As part of the prince’s out-of-court settlement in 2000 with BIA, he agreed to hand over more than $5.6 billion in assets, and 10,000 of his purchases — from 16,000 tons of Italian marble to Mercedes-Benz fire engines — were sold at auction in a “sale of the century.” At one point, the prince seemed likely to face contempt charges, but that idea has been dropped.

The lifestyle of the sultan, who was educated at Royal Military Academy Sandhurst and is a friend of the British royal family, is hardly frugal either.

He lives in a 1,788-room palace with corridors of gilt and marble. He loves polo and shares his brother’s fondness for top-of-the-line cars. Indeed, at one point in the 1990s, it was thought that the Brunei royal family accounted for half of the sales of Rolls-Royces worldwide.

The sultan, who, with an estimated fortune of $113 billion in 1990, was regarded as the world’s wealthiest person, does not hold back on gifts or parties. One of his daughters received an Airbus for her 18th birthday, and he hired pop singer Michael Jackson to perform at his own 50th birthday party 10 years ago.

For the past few weeks, other cases in the appellate court were cleared to allow the hearing to go ahead unhindered. Rumors abound that the sultan wanted the legal action out of the way before July 15, so that it would not tarnish his 60th birthday celebrations.

Sultanate dates to 1300s

Sultan Haji Hassanal Bolkiah is the 29th of his line, which dates back to the 14th century. He has ruled since 1967 and his current titles include prime minister, defense minister and finance minister. Yet few pretend that the sultan, who is married with four sons and six daughters, is anything other than an absolute ruler in a country with a population of 350,000.

For the past two weeks, neither the sultan nor his brother, who have not spoken in two years, were in court. The judges, normally based in Hong Kong, sat beneath a giant photograph of the sultan as they listened to evidence relating to Jefri’s appeal of two judgments by the chief justice of Brunei.

The first appeal was against a ruling last year that refused to allow Jefri to have his case heard in a foreign court. His attorneys, led by James Lewis, argued that the legal system in Brunei was not sufficiently independent of the sultan to allow the prince a fair hearing.

In a second appeal, the prince’s attorneys sought to overturn a ruling this year entitling BIA to issue orders against Jefri to enforce the terms of the settlement agreement he signed in May 2000, including the transfer of $5.6 billion of his assets to BIA.

By the time it is over, the legal battle promises to be one of the most costly ever. Aides to Jefri estimate that BIA’s legal fees, including those of Freshfields Bruckhaus Deringer, the sultan’s London solicitors, could reach $376 million, a figure said to be “ridiculously high” by an adviser to the royal family. However, the final cost of the eight-year dispute could end up at between $470 million and $941 million.

Each side sees the dispute differently. Jefri’s camp tries to portray the legal action as a vindictive act by the sultan against his younger brother. The prince’s attorneys argued earlier that the transfer of acquisitions from BIA was lawful and undertaken with the approval of the sultan.

Sultan ‘above the fray’

The sultan’s attorneys, however, say he is personally detached from the dispute and that the legal action was forced on BIA by Jefri’s refusal to honor the settlement made six years ago. “This is not simply a spat between warring brothers,” said an adviser to the royal family. “Prince Jefri has lost every substantive case and hearing since 1998, and his last hurrah is to say: ‘I can’t get a fair trial anyway.’ ”

The rulings from the appeals court are expected next month. Meanwhile, the royal family is fearful of the repercussions that the continued negative publicity surrounding the case will have on its allies in the West and its own people.

The U.S. State Department, in its review of Brunei published in March, noted “problems in the government’s human rights record, particularly in the area of civil liberties.” Its concerns centered on the lack of democracy, arbitrary detention, discrimination against women and foreign workers, and constraints on freedom of speech.

The sultan knows he must retain the support of his people. In 1962, a full-scale rebellion in Brunei was suppressed by British troops. The intervention, which led to a “state of emergency” that remains in effect, was before independence from Britain in 1984. If anything were to prompt a second revolt, the sultan’s position would be even more precarious.

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