Dr Richard Barry Smith v Xavier Huertas (as Administrateur Judiciaire Et Commissaire A L'execution Du Plan Mandataire Ad Hoc A La Procédure De Redressement Judiciaire of Valorum Sa)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cooke |
| Judgment Date | 21 December 2015 |
| Neutral Citation | [2015] EWHC 3745 (Comm) |
| Docket Number | Case No: CL-2014-000114 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 21 December 2015 |
[2015] EWHC 3745 (Comm)
Mr Justice Cooke
Case No: CL-2014-000114
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr C. Samek QC and Mr J. Mehrzad (instructed by Magrath LLP) for the Claimant
Mr H. Mercer QC (instructed by Boodle Hatfield LLP) for the Defendant
Hearing dates: 15th and 21st December 2015
Introduction
The claimant (Dr Smith) seeks a declaration in this action that the defendant (Mr Huertas) is not entitled to have the judgment of the Cour d'Appel d'Aix-en-Provence of 26th March 2013 (the APCA Judgment) recognised or enforced pursuant to the provisions of the Judgments Regulation on the grounds referred to in Article 34.1, namely that such recognition and/or enforcement would be manifestly contrary to public policy. In the same action Mr Huertas applies for summary judgment, seeking a declaration to the contrary effect on the basis that Dr Smith's claim has no realistic prospect of success.
Dr Smith recognises in his skeleton that under Article 36 of the Judgments Regulation:
"Under no circumstances may a foreign judgment be reviewed as to its substance."
It is accepted that the only basis for challenge to the APCA Judgment of 26th March 2013 is provided by Article 34(1) of the Judgments Regulation:
"A judgment shall not be recognised … if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought."
Large elements of Dr Smith's witness statements and the expert evidence from French lawyers that he adduced were however directed to a particular finding in the APCA Judgment which corresponded with an earlier decision of that Court on 26th October 2006 (which was cited) that the date of insolvency or Cessation de Paiements (CDP), was 12th May 2008. The APCA Judgment contained additional reasoning of its own in this respect and went on to state in terms that the CDP date was not critical to the findings made against Dr Smith in relation to the criminal offence of which he was convicted and which gave rise to the compensatory award which is the subject of disputed recognition and enforcement here. It seemed to me at the outset on reading the skeletons, pleadings and evidence, that absent a challenge to the impartiality of the APCA, the ACPA Judgment was likely to be unchallengeable because of the terms of Article 36. Alleged failures in the fairness of the process could impact on this but might well be insufficient to justify a refusal to recognise the Judgment unless so gross as to be offensive to public policy.
The relevant part of the APCA judgment reads as follows:
" THE CHARGE
SMITH, Richard Barry is accused:
of having in VALBONNE, PARIS, from 01/04/1998 to 21/12/1998, in any event on national territory and for a time not covered by the statute of limitations, being de facto or de jure director of a private corporate entity subject to court-yordered liquidation receivership committed the offence of fraudulent bankruptcy or misappropriating or concealing all or some of the assets, in this instance by diverting funds owing to SA VALORUM to the benefit of PHARMAKOPIUS INTERNATIONAL, and by transferring without any consideration to VALORUM LTD (PHARMAKOPIUS EUROPE LTD) furniture belonging to SA VALORUM, …
With regard to the involvement of Richard SMITH:
1. with regard to the transfers of funds from the parent company to two subsidiaries of the former PHARMAKOPIUS international group
Through ruling of 26 October 2006 the Court of Appeal of Aix-en-Provence fixed at 12 May 998 the date on which FDMPHARMA was found in a situation of insolvency under the terms of the following reasoning: …
In fact the objective signs of the insolvency of the company appeared in the weeks following the capital increase: …
Thus, from the end of the first half of 1998, in spite of fund raising of 140,000,000 francs carried out three months earlier, the situation of the company, which no longer had the necessary funds to finance a restructuring that was now imperative, was irremediably compromised.
In any event, the argument according to which the transfer of funds set out in the charge in reality took place prior to the state of insolvency is not relevant to the establishment of the offence of fraudulent bankruptcy insofar as, coming from a same intention and striving for the same aim, they had the effect of affecting the content of the available assets under conditions likely to make the company unable to address the current liabilities.
The existence of a causal link between the transfers of funds set out in the charge and the state of the insolvency of the company suffices to establish the offence of fraudulent bankruptcy.
Furthermore, and contrary to what he would have us believe, Richard SMITH was fully aware of the date of the three transfers of funds that FDMPHARMA was in a state of insolvency."
Counsel for Dr Smith recognised that he needed to show a breach of Dr Smith's Article 6 rights to a fair trial or such breach of natural justice that, as a matter of public policy, this Court ought not to enforce the judgment. He submitted that recognition and enforcement "would be at variance to an unacceptable degree with the legal order of the State in which enforcement is sought, inasmuch as it would infringe a fundamental principle — a manifest breach of a rule of law regarded as essential in the legal order of the State in which enforcement was sought or the right recognised as being fundamental with that order".
The grounds of challenge
Dr Smith contends that the judgment should not be recognised and that he is entitled to the relief he seeks because:
i) The criminal proceedings against him, including the partie civile element were contrary to Article 6.1 and/or 6.3 of the European Convention on Human Rights and/or a breach of natural justice under English law; and/or
ii) The criminal courts (i.e. the Tribunal Correctionnel de Grasse (TCG)) which was the first instance court and the APCA were guilty of actual or apparent bias against Dr Smith.
Article 6.1 of the ECHR provides that:
"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law."
Article 6.3 provides:
"Everyone charged with a criminal offence has the right[s]:
..
(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court."
It was submitted that the public policy ground may successfully be invoked even where there are on the face of it available remedies in the State of origin where, on the facts, the guarantees laid down in the legislation of the State of origin and in the ECHR itself have been insufficient to protect the party from a manifest breach of a relevant human right.
In summarising his position in his first witness statement, Dr Smith stated that it was only with an appreciation of the key background facts that the Court could see the inappropriateness of the allegations which Mr Huertas first contrived and then maintained against him, his irrational bias against himself and a co-defendant and the effect of his machinations in terms of depriving him and his French lawyers of information at key stages of the legal process and on one occasion actively misleading the French court. Only then could the injustice done to him be appreciated as a result of the procedural unfairness practised upon him in the courts in France. He maintained that it would not be fair to say that the background facts were irrelevant or seek to stigmatise or ignore them by characterising any consideration as an attempt to review factual findings of the French civil and criminal courts. He maintained that it was "the procedural unfairness I have been subjected to by French Authorities over the course of 16 years which has given rise to an exceptional matrix of facts which the Court must now recognise gave rise to a judgment in 2013 which is not only perverse, but, if enforced, would be manifestly contrary to public policy in the United Kingdom."
So it is that Dr Smith relies upon the findings against him by the French court to support his allegations of procedural unfairness and bias. This presents the obvious problem that he seeks the English court's review of the substance of the French court's judgments. In any event, as those judgments are reasoned, much more would be required to show bias, than simply the conclusions, unless those conclusions of fact and law were so obviously perverse as to constitute evidence of unfairness which they are not.
It is necessary to set out in extenso the terms of paragraphs 68 and 69 of the Particulars of Claim because they detail the complaints made by Dr Smith. Paragraph 68 is pleaded in support of the contention that the criminal proceedings as a whole, alternatively the appeal before the APCA, were unfair and contrary to Article 6(1) of the ECHR and/or in breach of natural justice, whilst paragraph 69 is pleaded in support of the allegation that the TCG and/or APCA were guilty of bias (actual or apparent) towards the claimant in the proceedings. Paragraphs 68 and 69 read as follows:
"68. The criminal (including partie civile) proceedings as a whole, alternatively the appeal before the APCA resulting in the Aix judgment were unfair...
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