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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> JSC BTA Bank v Solodchenko & Ors [2011] EWHC 1613 (Ch) (17 May 2011) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2011/B11.html Cite as: [2011] EWHC B11 (Ch), [2011] EWHC 1613 (Ch) |
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CHANCERY DIVISION
Strand, London WC2A 2LL |
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B e f o r e :
____________________
JSC BTA BANK | Claimant/Applicant | |
and | ||
(1) ROMAN VLADIMIROVICH SOLODCHENKO | ||
(2) PAUL KYTHREOTIS | ||
(3) JASON CHRISTIAN HERCULES | ||
(4) CELlNA HOLDING INVESTMENTS LIMITED | ||
(FORMERLY BUBRIS INVESTMENTS LIMITED) | ||
(5) SHORELINE INVESTMENT HOLDING LIMITED | ||
(FORMERLY GRANTA INVESTMENT HOLDINGS LIMITED) | ||
(6) NAFAZKO INVESTMENTS LIMITED | ||
(7) OLOFU INVESTMENTS LIMITED | ||
(8) MYMANA HOLDINGS INVESTMENTS LIMITED | ||
(FORMERLY KYMA INVESTMENT HOLDINGS LIMITED) | ||
(9) MABCO INC | ||
(10) CALERNEN FINANCE INC | ||
(11) ASTROGOLD CORP | ||
(12) GRUNDBERG INC | ||
(13) EASTBRIDGE CAPITAL LIMITED | Defendants | |
(14) SYRYM SHALABAYEV | Defendant/Respondent | |
(15) ALEXANDER UDOVENKO | ||
(16) PARK HILL CAPITAL LIMITED | ||
(17) ANATOLY ERESHCHENKO | ||
(18) MUKHTAR KABULOVICH ABLYAZOV | Defendants |
____________________
The Fourteenth Defendant/Respondent did not attend and was not represented.
____________________
Crown Copyright ©
MR JUSTICE BRIGGS:
(i) should the court proceed to hear the application in Mr Shalabayev's absence; and
(ii), if so, and if the contempt alleged is proved, should the court proceed immediately to sentence, again in his absence, or adjourn for a sufficient time before sentence to give him a final opportunity, either to purge his contempt or to raise any relevant matters in mitigation?
"9 . (1) Unless sub-paragraph (2) applies, each Respondent must within seven working days of service of this order and to the best of his/its ability after making all reasonable enquiries:
(a) inform the Applicant's solicitors in writing of all of his/its worldwide assets exceeding in value £10,000, whether in his/its own name or not and whether solely or jointly owned and whether the Respondent is interested in them legally or beneficially or otherwise, giving the value, location and details of all such assets;
(b) supply to the Applicant's solicitors copies of all documents in his/its control (which for these purposes shall mean documents which are or were in his/its physical possession and/or to which he/it has a right to possession and/or to which he/it has a right to inspect or take a copy) which evidence the matters set out in (a) above.
(2) If the provision of any of this information is likely to incriminate the Respondent, he/it may be entitled to refuse to provide it, but he/it is recommended to take legal advice before refusing to provide the information. Wrongful refusal to provide the information is contempt of court and may render the Respondent liable to be imprisoned, fined or have his/its assets seized.
10. (1) Unless sub-paragraph (2) applies, each Respondent must within seven working days of service of this order:
(a) to the best of his/its ability, and after making all reasonable enquiries, provide the answers in writing to the questions set out in Schedule D hereto; and
(b) supply to the Applicant's solicitors copies of all documents in his/its control (which for these purposes shall mean documents which are or were in his/its physical possession and/or to which he/it has a right to possession and/or to which he/it has a right to inspect or take a copy) which evidence the matters set out in (a) above.
(2) If the provision of any of this information is likely to incriminate the Respondent, he/it may be entitled to refuse to provide it, but he/it is recommended to take legal advice before refusing to provide the information. Wrongful refusal to provide the information is contempt of court and may render the Respondent liable to be imprisoned, fined or have his/its assets seized.
11. Within ten working days after being served with this order, the Respondents must swear and serve on the Applicant's solicitors an affidavit setting out the above information."
"It is important that you take legal advice in relation to the attached documents, ideally from an English-qualified solicitor, without delay. If you do not respond to the legal proceedings, judgment can be entered against you on the Bank's claims in your absence. If you do not respond to the committal proceedings (which are the subject matter of the 13 December 2010 Application Notice), you could be sentenced for the contempt of court alleged against you by the Bank, including to a custodial sentence. A hearing has been arranged for the committal application to take place at the High Court in London on 17 May 2011 at 10.30 am. We would strongly recommend that you participate in that process."
The letter concluded by providing contact details for Mr Hardman at Hogan Lovells, both by telephone and email.
Whether to proceed in Mr Shalabayev's absence
"12. Contempt proceedings are quasi-criminal proceedings, as Lord Justice Oliver there emphasises, and they are criminal proceedings for the purposes of Article 6 of the European Convention on Human Rights. I was therefore referred to consideration by the House of Lords as to when a criminal trial can take place in the absence of the defendant. This was in the case of R v Jones (Anthony) [2002] UKHL 5 [2003] I AC 1. There their Lordships approved, with one qualification, the guidance given in that case in the Court of Appeal in a judgment of the court delivered by Lord Justice Rose, R v Hayward [2001] QB 862. The Court of Appeal, after noting the general right of a defendant to be present at his trial and indeed to be legally represented, and the discretion of the trial judge to proceed without him, said this (at para.22):
'That discretion must be exercised with great care and it is only in rare and exceptional cases that it should be exercised in favour of a trial taking place or continuing, particularly if the defendant is unrepresented. In exercising that discretion fairness to the defence is of prime importance, but fairness to the prosecution must also be taken into account. The judge must have regard to all the circumstances of the case, including in particular ... '
The Court: of Appeal then set out various factors to be considered, which I read omitting the one that was disapproved by Lord Bingham on appeal in the House of Lords:
'(1) The nature and circumstances of the defendant's behaviour in absenting himself from the trial or disrupting it, as the case may be and, in particular, whether his behaviour was deliberate, voluntary and such as plainly waived his right to appear;
(2) Whether an adjournment might result in the defendant being caught or attending voluntarily and/or not disrupting the proceedings;
(3) The likely length of such an adjournment;
(4) Whether the defendant, though absent, is, or wishes to be, legally represented at the trial or has, by his conduct, waived his right to representation. '
(5) concerns an absent defendant's legal representations which does not here apply:
'(6) The extent of the disadvantage to the defendant in not being able to give his account of events, having regard to the nature of the evidence against him.'
(7) concerns the risk of the jury reaching an improper conclusion about the absence of the defendant and so obviously does not apply; and (8) refers to the seriousness of the offence:
'(9) The general public interest and the particular interest of victims and witnesses that a trial should take place within a reasonable time of the events to which it relates.'
The remainder are not relevant."
(a) The evidence clearly demonstrates personal service of the freezing order and the case for a finding of contempt is based, simply, on Mr Shalabayev's complete lack of response to date to the obligations imposed in relation to disclosure. It is, on the question of whether the contempt is proved, a straightforward case in which a fair and just outcome is wholly unlikely to be affected by Mr Shalabayev's presence or absence, with or without legal representation.
(b) The evidence about Mr Shalabayev's continuing active use of his email accounts and his use of proxy servers shows that this application and the evidence in support has come to Mr Shalabayev's attention and that he is deliberately declining to respond, both to the freezing order and to this application.
(c) The ordinary course of an adjournment, coupled with a bench warrant compelling a respondent's attendance, is unlikely to bring about Mr Shalabayev's attendance, since he is almost certainly out of the jurisdiction and, even if within the jurisdiction, his whereabouts are not known. Any adjournment until Mr Shalabayev's attendance can be ensured might well be indefinite and that would amount to a denial of justice to the Bank.
Whether the contempt is proved
Whether to proceed immediately to sentence
(a) In ordinary criminal proceedings, a decision to proceed to trial in the defendant's absence by no means leads automatically to sentencing in his absence, as well. Although I profess no expertise in criminal procedure, my understanding is that, in such circumstances, a criminal court will frequently afford a defendant an opportunity to attend to mitigate, all the more so where a custodial sentence is on the cards.
(b) The balance of factors which, as here, lead to a conclusion that an absent defendant will suffer no injustice if contempt is proved in his absence may well not lead to the same conclusion in relation to sentence. Liability may, as here, be straightforward, but the possibility of purging contempt or other mitigation may well mean that an immediate sentence could cause, or at least risk, injustice or unfairness.
(c) An adjournment during which the respondent is notified that a serious contempt has been proved and that there is a real likelihood of his being imprisoned may serve the beneficial purpose of bringing him to his senses and ensuring compliance. Alternatively, it may simply be fair to afford him that opportunity.
(a ) Mr Shalabayev is a foreign national who, although apparently a fluent English speaker, is unlikely to have obtained any qualified English legal advice about the risk of a sentence of imprisonment which he now faces.
(b) That risk, as I wish to make clear by this judgment, is a very serious one indeed. Without in any way prejudicing the matter, I can safely say that a sentence of imprisonment is a strong probability if Mr Shalabayev continues to be as unresponsive as he has been to date.
(c) It is inherent in the Bank's application that Mr Shalabayev be imprisoned, that there is perceived to be a real (i.e. more than fanciful) prospect that he will wish to re-enter the jurisdiction at some time in the future. Otherwise a sentence of imprisonment would be a pure case of the court acting in vain.
(d) If an adjournment is coupled with an immediate bench warrant requiring Mr Shalabayev to be brought to court for sentence, he will be as likely to be dealt with effectively, if he returns, as he would be if a sentence of imprisonment is passed now, giving him liberty to apply to purge once imprisoned.
(e) Importantly, that course will enable the court to be better equipped to decide on an appropriate sentence at that stage, taking into account anything that Mr Shalabayev might then wish to advance by way of purging or mitigation.