JSC BTA Bank v Mukhtar Ablyazov (Recusal)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix,Lord Justice Toulson,Lord Justice Maurice Kay |
| Judgment Date | 28 November 2012 |
| Neutral Citation | [2012] EWCA Civ 1551 |
| Docket Number | Case No: A3/2012/2845 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 November 2012 |
[2012] EWCA Civ 1551
Lord Justice Maurice Kay
Vice President of the Court of Appeal Civil Division
Lord Justice Rix
and
Lord Justice Toulson
Case No: A3/2012/2845
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION COMMERCIAL COURT
MR JUSTICE TEARE
2009 FOLIO 1099
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Charles Béar QC and Mr James Sheehan (instructed by Addleshaw Goddard LLP) for the Appellant
Mr Stephen Smith QC, Mr Tim AkkouhandMiss Emily Gillett (instructed by Hogan Lovells International LLP) for the Respondent
Hearing dates : Tuesday 6 th November 2012 and
Monday 12 th November 2012
This appeal 1 is about the refusal of a judge to recuse himself as the nominated judge of trial in circumstances where he has had to hear, prior to trial, an application to commit one of the parties for contempt of court, and has found a number of contempts proven, leading to a sentence of 22 months' imprisonment. The question raised is whether in doing so the judge put himself out of the running, so to speak, as the judge of trial on the basis that, by reason of what is called pre-judgment, there would appear to the fair-minded and informed observer a real possibility of bias. This is the doctrine of apparent bias: see Porter v. Magill [2002] 2 AC 357. No one is suggesting that the judge is actually biased.
The litigant and appellant is Mr Mukhtar Ablyazov who until early in 2009 had been the chairman of the respondent bank, JSC BTA Bank (the "bank"), a major bank in Kazakhstan but now supported by its creditors. The bank has alleged that Mr Ablyazov has defrauded the bank of almost US$5 billion, and that he has done so by entering into specious but fraudulent transactions, such as loan transactions, with companies in which it is said that he was ultimately interested. Mr Ablyazov for his part asserts that the claims are an unjustified attempt by the President of Kazakhstan to destroy him as a political opponent and as a leading figure in Kazakhstan's democratic opposition.
The bank commenced its litigation by obtaining a worldwide freezing order against Mr Ablyazov and others. Since then the judge of the commercial court who has had the predominant role in the conduct of this litigation has been Mr Justice Teare. The judge has had unrivalled experience of this litigation and has been called upon to produce many judgments in it (Mr Ablyazov's solicitor has counted 26 such judgments). Pursuant to the original freezing order Mr Ablyazov has been required to make disclosure of all his assets and to refrain from dealing with them. Mr Ablyazov has made partial disclosure of assets, but the value of that disclosure is not very great in comparison with the value of the allegedly purloined billions. To assist in the uncovering of Mr Ablyazov's assets the judge has appointed receivers on the basis that Mr Ablyazov could not be trusted to comply with the court's orders: [2010] EWHC 1779 (Comm), [2010] EWCA Civ 1141.
In March 2011 the judge dealt with a lengthy case management conference. As a result three of the eight cases proceeding in the commercial court were selected for trial and shortly thereafter a date for trial before the judge was fixed to commence in November 2012. It is the practice in complex cases in the commercial court for there to be continuity of a designated judge for both interlocutory matters and final trial: see para D4 ("Designated judge") of the
Admiralty and Commercial Courts Guide at page 319 of volume 2 of Civil Procedure 2012.
The contempt proceedings
On 16 May 2011 the bank applied to commit Mr Ablyazov for contempt of court. A series of 35 contempts were alleged but as a matter of case management the judge limited the application to three allegations, one each under the separate headings of (a) non-disclosure of assets, (b) lying during cross-examination, and (c) dealing with assets: see [2011] EWHC 1522 (Comm), [2011] EWCA Civ 1386. The non-disclosure allegation concerned Bubris Investments Limited ("Bubris", a BVI company); the lying allegation concerned companies which owned a number of English properties, and also the so-called "Schedule C" companies, viz FM Company Limited (a Marshall Islands company) and Bergtrans Contracts Corp and Carsonway Limited (both BVI companies); the dealing allegation concerned assets held by Stantis Limited (a Cypriot company) which were assigned to Nitnelav Holdings Limited. The judge found these allegations proven, on the criminal standard of proof, so that he was sure of them. In effect he found that all these companies were owned by Mr Ablyazov. He found, however, that one of the English properties concerned, 79 Elizabeth Court, and the company which owned its shares, were not proven to be Mr Ablyazov's.
The judge gave three judgments in the committal application: one dealing with the alleged contempts of court, one dealing with sentence, and one dealing with the further consequences for the litigation as a whole, the so-called "unless" judgment. The contempt judgment was handed down on 16 February 2012 ( [2012] EWHC 237 (Comm)) and sentence was dealt with by a further extempore judgment given that same day. The unless judgment was given on 29 February 2012 ( [2012] EWHC 455 (Comm)).
In his contempt judgment the judge concluded that over the relatively narrow range of matters investigated, Mr Ablyazov had failed to disclose assets, had lied to the court, and had dealt with his assets in breach of the freezing order: and that in defending the committal application had relied on false witnesses and forged documents. The judge said (at para [80]):
"…notwithstanding the clarity and firmness with which Mr Ablyazov gave much, though not all, of his evidence I concluded that I could place little weight on his denials and could only accept what he said if it was supported by reliable contemporary evidence."
In his unless judgment the judge debarred Mr Ablyazov from defending the claims made against him in eight associated commercial court actions and struck out his defences in them unless within a stated period he both surrendered to custody and made proper disclosure of all his assets and dealings with them. The order that Mr Ablyazov surrender to custody had been made necessary by his failure to turn up for judgment on 16 February 2012 (although he had said through his counsel that he would). He became a fugitive and had disappeared. The stated period for surrender was until 9 March 2012, and for disclosure until 14 March 2012, save that the sanctions for non-compliance would not take effect until seven days after any dismissal of any appeal.
Mr Ablyazov did appeal, from all three judgments, and his appeal came before us in July 2012. On 25 July 2012 we informed the parties that the appeals had failed, for reasons to be reserved, save that it had not yet been decided whether the order for surrender to custody should also have been made the subject of an unless order. Our formal order was also reserved.
On 6 November 2012 our judgments were handed down, having been previously sent out in draft to the parties about a week earlier: [2012] EWCA Civ 1411. We dismissed all appeals (the appeal against the attachment of an "unless order" to the order that Mr Ablyazov surrender himself to custody was decided by a majority, otherwise we ruled unanimously). In dismissing the committal appeal, I had occasion to say this:
"[100] As this series of coincidences, misfortunes, errors, misunderstandings and inexplicable developments multiply, the court is entitled to stand back and ask whether there is in truth a defence or defences as alleged [to the committal allegations], even if no burden rests on Mr Ablyazov, and the burden remains on the bank, or whether there is at any rate the realistic possibility of such, or on the other hand whether the court is being deceived. The trial judge decided that it was being deceived by witnesses without credibility. It is not for this court to say that he was wrong without strong grounds for doing so, grounds which have simply not been formulated."
In dealing with the appeal against sentence, I went on to say:
"[106]…Moreover, Mr Ablyazov's contempts have been multiple, persistent and protracted, have embraced the offences of non-disclosure, lying in cross-examination, and dealing with assets, and have been supported by the suborning of false testimony and the forging of documents."
Finally, in dealing with the appeal against the judge's "unless" order, I said this:
"[189]…It cannot be just, fair, or proportionate, to permit a contemnor to avoid the consequences of his contempt by the expedient of disappearing from sight (but not from the ability to communicate with his lawyers). As the judge said, it is a matter of choice for Mr Ablyazov. He may have his trial on the merits, if he complies with the court's orders. The court has denied him nothing except his ability to ignore the court's orders indefinitely. On the contrary, the order was made in an attempt to persuade Mr Ablyazov to comply with the freezing order "and so ensure a fair trial in the full sense of that phrase" (at [76])."
It was an essential part of Mr Ablyazov's appeal to this court that, even if, contrary to his primary contention, any findings of contempt survived, nevertheless the unless orders should be abrogated so that he could be permitted to continue to defend the proceedings against him at trial, if necessary from the unknown location to which...
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