Credit Suisse on Tuesday withdrew from the trial taking place in the London High Court on the case of Mozambique's "hidden debts'.

The case relates to loans of over two billion US dollars made in 2013 and 2014 to three fraudulent Mozambican security-linked companies (Proindicus, Ematum, and MAM) by the banks Credit Suisse and VTB of Russia.

These three brand new companies entered into "supply contracts' with the shipbuilding group Privinvest under which the entire loans were paid up front to Privinvest based on the flimsiest of business plans.

In theory, the loans were for a tuna fishing fleet, shipyards, and maritime security. But none of these ventures ever took off and soon became bankrupt. However, the banks were not particularly bothered because the loans were backed by state guarantees signed by the then Finance Minister Manuel Chang, meaning that the government became responsible for paying off these debts.

Mozambique's lawyers have stressed the fact that guaranteeing these loans was clearly illegal, smashing through the ceiling on guarantees fixed by the 2013 and 2014 budget laws. Following his signing of the state guarantees, Chang received millions of dollars from Privinvest and Mozambique argues that it doesn't matter if these payments are called "investments' or corrupt bribes as in either case they were illegal inducements for Chang to act against the best interests of the country.

Mozambique is seeking 3.1 billion US dollars from Privinvest and its owner Iskandar Safa for the "horrendous damage' caused to the country's economy. In addition, Mozambique is seeking to cancel debts held by the Russian-linked banks VTB Capital and VTB Bank (Europe), and the Portuguese bank BCP.

The trial at the Commercial Court in London had been delayed at the beginning of October after Mozambique reached an agreement with the main lender, Credit Suisse. According to Mozambique's lawyer, Joe Smouha, Credit Suisse waived an outstanding debt of around 450 million dollars. This deal also involved an agreement with eight banks that had participated in the Proindicus syndicated loan.

The trial is officially known as "The Republic of Mozambique (acting through its Attorney General) vs. Credit Suisse International and others'. However, upon reaching an agreement with Credit Suisse, Mozambique turned its focus on the two main remaining parties, Privinvest and VTB. Its lawyers studiously dropped any claim of wrongdoing by Credit Suisse.

But Credit Suisse was still part of the trial as Privinvest argued that, although it was entirely innocent and had never bribed anyone, if it was found liable then Credit Suisse should also be forced to cough up some of the compensation.

However, on Friday in a special Court sitting, Credit Suisse put forward the argument that the case against it by Privinvest should be struck out because, as Mozambique was no longer putting forward any evidence that Credit Suisse had done anything wrong, then there would be nothing on which Privinvest could base its claim that the bank should contribute to any damages. Credit Suisse's lawyer, Laurence Rabinowitz, stated that all calls from Privinvest and Safa should be dropped based on the claim having no prospect of success.

On Monday, Credit Suisse reached an agreement with Privinvest under which, according to a joint statement, the two sides have "reached a global settlement of all present and future disputes between them concerning disputed state-guaranteed financing transactions in Mozambique'. Thus, as there are no claims against the bank, Credit Suisse is no longer a litigant.

Judge Robin Knowles had been expected to rule on the strike out argument on Wednesday but the agreement between Credit Suisse and Privinvest makes this a moot point.

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