Kotova v Director of Public Prosecutions (First Defendant) Commissioner of Police the City of London (Second Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Coulson,Lord Justice Lloyd Jones |
| Judgment Date | 08 December 2015 |
| Neutral Citation | [2015] EWHC 4111 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/2874/2015 |
| Date | 08 December 2015 |
[2015] EWHC 4111 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Lord Justice Lloyd Jones
Mr Justice Coulson
CO/2874/2015
Mr Timothy Owen QC and Mr Aaron Watkins (instructed by Byrne & Partners) appeared on behalf of the Claimant
Mr Timothy Cray (instructed by Crown Prosecution Service) appeared on behalf of the First Defendant and Second Defendant
The claimant is a Russian woman who, in June 2014, was convicted in Russia of one charge of attempted bribery. She was sentenced to five years' imprisonment that was suspended and in September 2014, about three months later, she was released from that suspended sentence pursuant to a general amnesty. The claimant is also the subject of a criminal investigation in the United Kingdom, again in respect of an allegation of bribery. The precise stage reached in the UK investigation was the subject of a dispute with which I deal in section 3 of this judgment.
It is the claimant's case that the maintenance of the UK investigation against her is oppressive and irrational. There are two strands to that argument. The first and the primary ground put forward by the claimant is that, because the circumstances surrounding the bribe which forms the centrepiece of the UK investigation were considered by the Russian court, there is a clear risk of double jeopardy. The second argument which is apparent from the papers (although it was not addressed orally) is that the UK investigation is stagnant and inactive and therefore should not be maintained.
For those two reasons the claimant seeks: (a) a mandatory order requiring the defendants to review any provisional charging decision and/or to discontinue the investigation; (b) a declaration that the defendants' current position is as a result of the defendants' maintenance of an irrational stance; and (c) costs.
Permission to bring these proceedings was granted by Mrs Justice Nicola Davies on 20 August 2014. The defendants failed to serve their evidence in accordance with her timetable. The eventual evidence was served on 17 November. That went not to the double jeopardy point but to the status of the process in the investigation in the UK. The claimant does not object to the admission of that evidence, and this court admitted it earlier today. Similarly, the claimant yesterday made an application to rely on a further witness statement that did go to the double jeopardy point. The defendants did not object to that evidence. Therefore, this court also permitted the claimant to rely on that late witness statement save where it might be said to trespass into areas of expert evidence relating to Russian law which is plainly inadmissible.
I propose to structure this judgment as follows. Section 2 will deal with the Russian proceedings; section 3 will deal with the UK investigation; section 4 will deal with the relevant principles concerned with challenges to prosecutorial decisions; section 5 will consider the double jeopardy point; and section 6 will consider briefly the delay submission. There is a summary of my conclusions in section 7.
The Russian Proceedings
Between July 2005 and January 2011 the claimant was a director of the European Bank for Reconstruction and Development ("the Bank"). The Bank has its main office at 1 Exchange Square, London EC2. As the director of the Russian Federation, Belarus and Tajikistan Office at the Bank the claimant had the power either to veto any project in those countries altogether or to delay financing by expressing reservations which then had to be considered by the Bank's board.
In February 2009 a company called Canbaikal Resources made an application to the Bank for a loan of $95 million to finance the development of the Untygeisky and Kulunsky oil fields and the construction of a pipeline. The principal director of Canbaikal Resources was Sergei Chernikov. The application was time-sensitive. For the project to be viable, the money had to be in place by the winter of 2010.
Working with a senior vice-president of the Bank, I A Lebedev, the claimant decided to solicit a bribe from Canbaikal in return for not exercising her power to veto or delay the project which, because of its time-sensitive nature, came to the same thing. The bribe requested by the claimant was in the sum of $1,425,000, with $150,000 being paid as an advance. The claimant solicited this bribe from Mr Chernikov at a meeting on 26 May 2010 at the Djhu-Djhu Restaurant on Smolensky Boulevard in Moscow. Lebedev was also present. Thereafter, as the subsequent judgment of the Russian court put it, the claimant "decided to put Chernikov in such a situation that he would be unable to refuse to make an unlawful payment in order to prevent negative consequences for legitimate interest of Canbaikal Resources". The claimant did this by providing untruthful and damaging information about Canbaikal's finances to the officials at the Bank who were scrutinising the Canbaikal offer. Levedev told Chernikov what the claimant had done. In this way the claimant hoped to make Chernikov — and thus the viability of the Canbaikal proposal — wholly dependent upon her support.
However Mr Chernikov promptly contacted the Bank's compliance office and told them what was going on. Thereafter, as the Russian court put it, he "expressed a false acceptance of her unlawful demands" in order to obtain proof of her illegal actions. Compliance officers were with him when he spoke to the claimant on the telephone and agreed to pay the money she asked for.
As a result of these events, the Russian court was anxious to stress that although the bribe had been solicited and payment had been accepted, no money had actually changed hands. They said, "Kotova and Levedev did not bring their criminal plan to completion due to circumstances outside their control as Chernikov decided not to give money to them but to write a complaint to the Bank which initiated an inquiry into Kotova".
The claimant and Levedev fought their trial between February and June 2014. Moscow District Court produced a lengthy judgment dated 16 June 2014, parts of which we have already referred to. It confirmed that it had been established that the claimant "committed preparation for commercial pay, ie deliberately created conditions for receiving improper financial funds by an official for her actions in the interests of the giver and in connection with her official duties, including pay-off/extortion, however failed to finish the contemplated crime due to circumstances outside of her control". At page 43 of the judgment, when dealing with sentencing, the court noted that the claimant had committed "an unfinished crime [so that] the ….. maximum sentencing cannot exceed 1/2 of the maximum most strict punishment" under the Russian Criminal Code. It was on that basis that the court arrived at the five-year term.
The UK Investigation
The UK investigation is also concerned with the claimant's improper performance of her role at the Bank. In 2009 Vostok Energy Ltd, a company incorporated in the UK and involved in the oil and gas industry, made an approach to the Bank for funding. In June 2009, finance of $100 million was provisionally approved, being an equity investment of $40 million and a loan of $60 million. At the time that this proposal was being finalised the claimant met the Chief Executive Officer of Vostok, Alexander Kapelson, for dinner. That took place on 15 July, five days after the Vostok project had passed the Bank's final review and two weeks before it was due to be presented to the Bank's board for final approval.
On 16 July the claimant called Alexander Kapelson. On 17 July there was a further call, and two other important things happened. First, the sum of $199,985 was received into the account of a company called Heyburn Investment Inc, a company which had been set up by the claimant some years earlier. The payment was made from the Monaco bank account to which Alexander Kapelson was a signatory and was in the name of a Russian associate of his. Secondly, the claimant sent a written document to the Minister of Economic Development at the Russian Federation announcing her intention to support the Vostok project. The Vostok project was then presented and approved by the Bank on the basis set out above.
Once the Russian investigation into the attempted Canbaikal bribe began, the Bank conducted an internal investigation into the claimant's activities. Documents were found which indicated the sum paid in respect of the Vostok project.
In December 2010 the second defendant in these proceedings formally began its investigation. The features of that investigation included: (a) on 18 January 2011 at a full board meeting of the Bank the Bank agreed to a waiver of the claimant's privileges and amenities and those of her staff; (b) on 24 January 2011 the second defendant executed a search warrant at the claimant's home address in W1 and seized documents in connection with both Vostok and Heyburn Investment, including a statement showing the credit for $195,985 in July 2009; (c) on 4 April 2011 Vostok's solicitors were informed by the City of London Police that they suspected that Alexander Kapelson had made a corrupt payment to the claimant.
A computer search of Vostok's database revealed a number of documents detailing the Monaco account from which the money was paid to Heyburn...
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