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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Khrapunov v JSC BTA Bank [2018] EWCA Civ 819 (24 April 2018) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2018/819.html Cite as: [2018] EWCA Civ 819 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
THE HONOURABLE MR JUSTICE PHILLIPS
Strand, London, WC2A 2LL |
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B e f o r e :
and
LORD JUSTICE NEWEY
____________________
Ilyas Khrapunov |
Appellant |
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- and - |
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JSC BTA Bank |
Respondent |
____________________
Stephen Smith QC and Tim Akkouh (instructed by Hogan Lovells International LLP) for the Respondent
Hearing date: 27 March 2018
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Crown Copyright ©
Lord Justice Sales:
"5. The Cross-Examination Application be allowed and the [Bank] shall be at liberty to cross-examine [the appellant] in respect of his purported compliance with paragraphs 7 and 8 of the Freezing Order granted by Mr Justice Males on 17 July 2015.
6. [The appellant] do attend before a Judge of this Court to be cross-examined as aforesaid. The hearing is to be listed (with a time estimate of one day) for 26 May 2016, being the earliest available date convenient for leading counsel for [the Bank] and leading counsel for [the appellant]."
"7. [The appellant] has permission to apply to vary paragraph 6 above to provide that he attend for cross-examination by way of remote video-link instead."
"In my judgment there is no basis upon which it would be appropriate to grant an adjournment of today's hearing or vacate it. In my judgment, [the appellant] has failed to comply with [the 23 March order] and has done so without reasonable or indeed any justification."
Analysis (1): the appeal
Analysis (2): Should the order made by Phillips J below be discharged and the 23 March order varied pursuant to CPR Part 3.1(7) to provide for cross-examination in Switzerland?
i) To attend for the said cross-examination by video-link from Switzerland on such date or dates as may be agreed between the parties or fixed for such purpose;
ii) To co-operate in arranging for the said cross-examination to take place by video-link from Switzerland;
iii) To take the oath prior to the commencement of the said cross-examination;
iv) Not to refuse to answer any questions properly put to him in the said cross-examination by reason of any privileges which are or may be available to him under Swiss law or procedure;
v) Not to refuse to answer any questions properly put to him in the said cross-examination by reason of any duty on him arising under Swiss law;
vi) To answer every question properly put to him in the said cross-examination.
Mr Samek explained to us that the test for whether a question is properly put to the appellant for the purposes of these undertakings will be whether, upon objection being taken, the High Court judge observing the cross-examination by video-link rules that it is properly put.
"… AND UPON Hogan Lovells International LLP ("Hogan Lovells") undertaking to the Court (until further order of the Court) that (a) its partners and employees who receive information relating to the arrangements for the Second Defendant's cross-examination (including, in particular, the date(s) and time(s) of the said cross-examination) (the "Information"), shall keep the Information confidential (and shall, in particular, not disclose the same to the Claimant) and (b) the Information shall only be provided to partners and employees who are directly concerned with the case
AND UPON Stephen Smith QC and Tim Akkouh, counsel instructed by the Claimant in relation to this case ("Counsel"), undertaking to the Court (until further order of the Court) that they shall keep the Information confidential
Provided that (a) the said partners and employees of Hogan Lovells and Counsel shall be permitted to share the Information with one another and the Court and (b) Hogan Lovells shall be permitted to engage a stenographer for the said cross-examination"
The object of these undertakings would be to ensure that not even the Bank would know the date and time to be fixed for the cross-examination, so as to obviate any risk of the Bank tipping off the Ukrainian authorities in order to prompt them to make an extradition request if the appellant came to England.
Cross-examination in England: Risk of extradition proceedings in relation to Ukraine and detriment to the appellant
The Evidential Process in Switzerland
"In a civil or commercial matter, a person duly appointed as a commissioner for the purpose may, without compulsion, take evidence in the territory of a Contracting State in aid of proceedings commenced in the courts of another Contracting State if -
a) a competent authority designated by the State where the evidence is to be taken has given its permission either generally or in the particular case; and
b) he complies with the conditions which the competent authority has specified in the permission."
Switzerland has declared that evidence may be taken according to article 17 "subject to prior authorization by the Federal Justice and Police Department".
"a) he may take all kinds of evidence which are not incompatible with the law of the State where the evidence is taken or contrary to any permission granted pursuant to the above Articles, and shall have power within such limits to administer an oath or take an affirmation;
…
c) the request [to a person to appear or to give evidence] shall inform the person that he may be legally represented and, in any State that has not filed a declaration under Article 18, shall also inform him that he is not compelled to appear or to give evidence;
d) the evidence may be taken in the manner provided by the law applicable to the court in which the action is pending provided that such manner is not forbidden by the law of the State where the evidence is taken;
e) a person requested to give evidence may invoke the privileges and duties to refuse to give the evidence contained in Article 11."
"The summons must indicate the fact that the person concerned … is not obliged to appear or to participate in the evidence-taking. The person in question is therefore free not to cooperate at all or to interrupt the taking of evidence (Art. 21 let. c Hague Evidence Convention). The … commissioner may not take any coercive measures against the witness. Article 18 Hague Evidence Convention, however, provides that states may declare that foreign persons authorised to take evidence may apply to the competent authority to obtain the assistance required to carry out such acts by using coercive measures. Switzerland has made no declaration in relation to this subject, which makes it impossible to force the persons specified by the procedural steps to collaborate in terms of Chapter II of Hague Evidence Convention….
In contrast to the proceedings under Chapter I of the Hague Evidence Convention, the evidence is to be taken, as a rule, according to the procedures provided for by the law of the requesting court. However, if the specified procedures are against the law of the state of execution, they may not be used."
"If cross-examination is intended, there are two possible approaches. First, a sole commissioner can be appointed – for example, a neutral person – who will chair the taking of evidence and will see to it that the examination by the lawyers of the parties is conducted in accordance with Swiss law (no coercion, reminder of exemptions or any prohibition from giving evidence). In this case only one authorisation will be given. Second, it is also possible that each agent is appointed commissioner. In this case, authorisation will be granted to each person to conduct the examination."
"One can equally imagine recourse to video conference techniques in terms of Chapter II of the Hague Evidence Convention. Authorisation is in this case subject to the same conditions as in the 'traditional' cases of authorisation (see III.C.1.2, p. 28)."
The way forward
"The authorities demonstrate that it is vital for the court, in the interests of justice, to have effective powers and effective sanctions [sc. in relation to enforcement of a freezing order]. Without these, it would be possible for a defendant … to flout the orders of the court, which are the court's considered means by which to keep the scales of justice for the parties even. If once it became known that the court was unable or unwilling to maintain the effectiveness of its orders, then it would lose all control over litigation of this kind, with terrible consequences for the administration of justice. Those wrongly accused of fraud would be relieved of a certain amount of inconvenience, but fraudsters would rejoice and hitch a free ride to interminable litigation on the back of ill-gotten gains."
"…the claimant was entitled to bring proceedings in England to protect his civil rights notwithstanding that he was a fugitive from justice; that although there was a public interest in not assisting a fugitive from justice to escape his just desserts the claimant would in fact do so whether or not a video link order was made, and there was a strong public interest in allowing a claim properly brought in England to be properly and fairly litigated; that if the administration of justice was not brought into disrepute by the claimant bringing proceedings in England it would not be brought into disrepute by allowing him recourse to the procedural facility of video conference link; that, as a general rule, where proceedings were properly brought in England a claimant's unwillingness to come to England because he was a fugitive from justice was a valid, and could be a sufficient, reason for making a video link order; and that the judge's order should be restored."
Conclusion