Deutsche Bank AG v Sebastian Holdings, Inc.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 01 September 2023 |
| Neutral Citation | [2023] EWHC 2234 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2009-000709 |
and
[2023] EWHC 2234 (Comm)
The Hon. Mr Justice Bryan
Case No: CL-2009-000709
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
James MacDonald KC and Andrew McLeod, (instructed by Freshfields Bruckhaus Deringer LLP) for the Claimant
Duncan Matthews KC and Mr Tom Morris (instructed by Brecher LLP) for the Second Defendant
Hearing date: 1 September 2023
APPROVED JUDGMENT
The parties appear before me this afternoon to seek my case management directions as to whether Mr Alexander Vik (“Mr Vik”), who is a convicted contemnor subject to a custodial sentence passed by Moulder J, which she suspended on terms which include the provision of extensive documents and that “Mr Vik attends Court to be examined by DBAG” (the “Further Examination”) which is to take place on 19 and 20 September 2023 should, on that Further Examination, attend the Court in person (as the Claimant Deutsche Bank AG (“DBAG”) submits he should, both on the terms of the Committal Order of Moulder J and in all the circumstances), or whether I should exercise my discretion to allow him to attend remotely by video link from Connecticut, USA (as Mr Vik submits I should).
This involves a consideration and application, of the applicable principles in the context of the terms of the Committal Order and the two applications respectively brought by DBAG and Mr Vik and associated supporting evidence, namely:-
(1) DBAG's application dated 19 May 2023, that pursuant to the Court's general case management powers under CPR 3.1(2)(c) Mr Vik be required to attend in person at the Further Examination listed pursuant to paragraph 1 of Schedule B of the Committal Order of Moulder J (the “DBAG Application”). The DBAG Application is supported by the 5th statement of Christopher Robinson, dated 19 May 2023 (“Robinson 5”) and the first and second witness statements of Emma Jane Probyn, dated 21 July 2023 and 29 August 2023 (respectively “Probyn 1” and “Probyn 2”).
(2) Mr Vik's application dated 23 June 2023, that pursuant to CPR 32.3, Mr Vik have permission to give evidence by video link from Connecticut USA on the Further Examination (“the Vik Application”). The Vik Application is supported by the 11th and 12th witness statements of Patrick James Clarke dated 23 June 2023, and 16 August 2023, (“Clarke 11” and “Clarke 12”).
As will appear in due course below, the application on the operative path is the Vik Application, for unless I accede to that application for Mr Vik to give evidence by videolink, attendance is in person.
I confirm that I have read and considered, and had careful regard to, the content of each of the witness statements and exhibits thereto (which run to three lever arch files). I have also had the benefit of detailed skeleton arguments on behalf of each of DBAG and Mr Vik, and I have heard oral submissions from Mr James Macdonald KC on behalf of DBAG and Mr Duncan Matthews KC on behalf of Mr Vik, all of which I have borne well in mind. I also have the benefit of a Prior Judgments Bundle containing some 11 prior judgments in this case and running to some 755 pages, and 2 Authorities Bundles in relation to the authorities relied upon by the parties in the context of the matters before me today.
The immediate backdrop to the matters before me is the Order of Committal made by Moulder J on 15 July 2022 (“the Committal Order”). The Committal Order recorded that it was made:
“Upon the Court being satisfied so as to be sure that Mr Vik has been guilty of contempt of Court in failing to comply with paragraphs 1 and 2 of the order of Teare J, dated 20 July 2015, (‘Teare J order’) which required Mr Vik to produce certain documents and to attend Court to provide information as to the means of the first defendant, Sebastian Holdings Inc, (‘SHI’) of paying the judgment debt owed to DBAG (‘the Judgment Debt’) pursuant to the order of Cook J dated 8 November 2021.”
The specific acts of contempt in respect of which Mr Vik had been found guilty were set out in Schedule A to the Order. The Committal Order at paragraph 1 committed Mr Vik to Her Majesty's Prison Pentonville for a period of 20 months and ordered that a Warrant of Committal be issued to that effect. Paragraph 2 provided that the Committal be suspended and that:
“The warrant of committal remain in the Court Office at the Royal Courts of Justice, on condition that Mr Vik complies with the terms set out in Schedule B to this order.” (emphasis added)
Schedule B is titled “Terms of Suspension”. It is then provided as follows:
“The terms on which the committal in paragraph 1 of this order and execution of the warrant of committal are to be suspended pursuant to paragraph 2 of this order are as set out below.”
It was then provided:
“ Attendance at Court for Further Examination as to SHI's means of paying the Judgment Debt.
1. Mr Vik is to attend Court to be examined by DBAG on the matters listed in paragraph 3 below (the Specified Matters) on a date or dates to be fixed to be no less than nine weeks from the date in paragraph 1.1 below.
1.1 that date is whichever is the later of:
(a) 14 November 2022; or.
(b) in the event that an appeal is filed the date on the final determination of any such appeal.
2. Upon attending Court on the dates referred to in paragraph 1 above Mr Vik is required to provide accurate answers to the best of his knowledge and belief to any questions as may be asked of him by DBAG or the Court in relation to the Specified Matters.”
(All emphasis added, save the underlining in the heading and “Specified Matters” which was in bold in the Committal Order)
It is clear, as is expressly set out in the sentencing judgment of Moulder J dated 15 July 2022 ( Deutsche Bank AG v Sebastian Holdings Inc and Alexander Vik [2022] EWHC 2057 (Comm)) that in sentencing Mr Vik to 20 months imprisonment (for what were multiple serious and deliberate breaches of a CPR Part 71 order committed to frustrate DBAG's efforts to enforce a circa USD 250 million Judgment Debt) Moulder J, “Hesitated long and hard as to whether or not to suspend this sentence.” She then continued at [80] of her judgment:
“On balance I have decided that I should give Mr Vik the opportunity to comply with the order in the sense that he should comply with the conditions which are imposed.” (emphasis added)
She concluded by stating (at [84]):
“I express no great confidence as to whether or not these conditions will lead to progress. I very much hope that it will and it seems to me that the authorities would urge me and encourage me to suspend the sentence and therefore that is what I order.”
DBAG's position is that the terms on which Mr Vik's committal was suspended (“Attend at Court”) require him to attend the Further Examination in person and he should not be permitted an exception to that requirement. It is submitted that it is clear that the express requirement that Mr Vik attend Court for the Further Examination was intended by Moulder J as a coercive element of the sanctions for his contempts. It was designed to increase the chances that Mr Vik would purge his contempts through the provision of truthful and accurate information in response to DBAG's and answers to the questions at the Further Examination. DBAG submits that Mr Vik's cross-application amounts to an attempt to water down this requirement and reduce the Court's ability to remain in control over his evidence through the use of coercive powers if necessary.
DBAG submits that remote attendance by Mr Vik is likely to be unsatisfactory, particularly where Mr Vik is a convicted contemnor with a long history of dishonesty and attempts to evade the Court's orders and refers to the facts on a previous occasion, when he was granted permission to give evidence remotely, there were technical difficulties. It is submitted that even if the measures now proposed are carried into effect, there would always remain some risk of technical difficulties and there is no good reason why DBAG, on that Further Examination, should be exposed to any risk at all in that regard.
DBAG submits that Mr Vik has identified no proper basis to justify, let alone require, his remote attendance at the Further Examination. The reasons that he has offered (through a witness statements made not by him but on instructions by one of his solicitors) are not good reasons (as is required on the authorities) but rather are vague, dubious, and wholly without merit. It is further submitted by DBAG that the Court cannot safely place any weight on these alleged justifications for permitting remote attendance at the Further Examination.
In contrast, on behalf of Mr Vik, it is submitted that, “The Committal Order does not require Mr Vik to attend the examination — it makes it a condition of the suspension of the sentence.” I have to say that I do not follow that submission or the distinction which is sought to be drawn. It is indeed a “condition of the suspension of the sentence” and as the Committal Order expressly states at [2], “The warrant of committal remains in the Court office … on the condition that Mr Vik complies with the terms set out in Schedule B.” Mr Vik is required to comply with the terms in Schedule B and one of those is, I am satisfied, that “Mr Vik is to attend Court”, language which is mandatory in nature.
At some point in Mr Mathews' oral submissions, it appeared to be suggested that compliance with the terms of the Committal Order and attendance at the Further Examination was optional on the part of Mr Vik. I consider that that is contrary to the express language of the Committal Order and also the meaning and spirit of that Order.
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