Super Max Offshore Holdings v Rakesh Malhotra
| Jurisdiction | England & Wales |
| Judge | Sir Michael Burton GBE |
| Judgment Date | 06 May 2020 |
| Neutral Citation | [2020] EWHC 1023 (Comm) |
| Date | 06 May 2020 |
| Docket Number | Case No: CL-2016-000797, CL-2016-000798 & CL-2018-000312 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 1023 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building,
Fetter Lane
London, EC4A 1NL
Sir Michael Burton GBE SITTING AS A JUDGE OF THE HIGH COURT
Case No: CL-2016-000797, CL-2016-000798 & CL-2018-000312
Ms Bingham QC & Ms Rogers (instructed by Clifford Chance) for the Claimants
Mr Marshall QC & Mr McCourt Fritz (instructed by Fladgate LLP) for the Defendant
Hearing dates: 10 – 12, 17 – 18, 26, 30 March
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This has been the hearing (including on the 18 March what I believe was then the first virtual Commercial Court hearing with (the expert) witnesses) of an application for the committal of Mr Rakesh Malhotra (the Defendant) for contempt, in fact based upon four consolidated applications alleging breach of several orders by Judges of the Commercial Court, and other alleged contempts, between 20th December 2016 and 24 March 2018.
It arises out of a hard fought dispute with the Defendant in relation to the management and ownership of the largest company manufacturing and marketing razorblades in India, by the First Claimant, Super-Max Offshore Holdings (SMOH), represented latterly by its Group Chief Executive Officer (CEO) Mr Anindo Mukherji (AM) and the Second Claimant, Actis Consumer Grooming Products Ltd (Actis), which had bought into SMOH, previously owned by the Defendant, and his family. The Defendant remained as Executive Chairman after the takeover, but with his powers very closely defined and restricted by an Authority Matrix, with which he was bound to comply by clauses 2.3 (ii) and 5 of his Employment Contract dated 1 April 2011, and which vested powers in an Advisory Board and most managerial powers in AM as the Group CEO.
The battle still continues in India and elsewhere, but so far as the litigation in England and Wales is concerned it was resolved after an eight day hearing in October 2017, by a judgment by Popplewell J on 13 December 2017, by which he concluded that the Defendant was in breach of his service contract, validly terminated on 10th February 2017, and made permanent injunctive orders in favour of the Claimants, to which I shall refer below.
The first contempt application (Application 1), consisting of 11 paragraphs (a) to (k) (plus one which I struck out in October 2019), relates to alleged breaches by the Defendant of the interlocutory order of Picken J of 20th December 2016 made ex parte, but in the presence of the Defendant's Counsel and Solicitors, though without instructions (the Picken Order). On 6 January 2017 the Picken Order was continued until judgment or further order by consent, by an Order by Andrew Baker J (Baker 1) and a further order was then made (Baker 2) over until a return date on 27 January 2017. The latter Order was continued on 27 January by Males J (the Males Order) over until 17 February 2017, when it was continued by consent by Teare J until 3 March 2017. The second contempt application (Application 2) relates to allegedly knowing false statements made by the Defendant in two paragraphs of a witness statement served on 20 January 2017 for the purpose of the 27 January hearing.
The Males Order was continued in substantially the same terms by Andrew Baker J until judgment or further order on 3 March 2017 (Baker 3). The third contempt application (Application 3) consists of 22 paragraphs. The first five relate to alleged breaches of the Males Order and paragraphs (6) to (9) inclusive to alleged breaches of Baker 3.
Popplewell J made a further interlocutory order until judgment or further order on 8 August 2017 (Popplewell 1) and he then heard the speedy trial between 9 and 19 October 2017, giving judgment, as I have said, on 13 December 2017, when he continued the interlocutory orders over until the resolution of final relief (Popplewell 2), which took place on 27 March 2018. Paragraphs (10) and (13)–(14) of Application 3 relate to alleged breaches of Popplewell 1; paragraphs (11) to (12) relate to further alleged breaches of Baker 1, and by paragraphs 1 to 7 and (in part) 9 of Application 4 the same matters are alleged to have constituted interference with justice by deterring or obstructing AM and the group CF0 Mr Desai from attending to give evidence before Popplewell J. Paragraphs (15) to (22) of Application 3 and paragraphs 8 and 9 of Application 4 relate to alleged breaches of Popplewell 2 and to interference with justice by punishing or victimising those, including AD and Mr Desai, who had given evidence before Popplewell J.
There has been considerable delay in resolving these contempt applications, although the Claimants have listed them for hearing on at least two previous occasions:
i) Applications 1 and 2 were issued on 28 February 2017, and permission was given for the latter by Andrew Baker J on 24 March 2017. They were originally to be heard at the same time as the speedy trial, but, at the instance of the Defendant, at the pre-trial review before Picken J on 15 September 2017 they were adjourned until after that trial. Applications 3 and 4 were issued on 14 May 2018 and permission was given for the latter by David Foxton QC on 27 July 2018.
ii) There were orders made in October 2018 and July 2019 by Cockerill J and Knowles J, and the matter came before me for a four day hearing of the contempt applications on 7 October 2019. By that time the Defendant, now represented by Mr Philip Marshall QC and Mr McCourt Fritz, after several changes of Counsel and Solicitors, had issued an application to strike out a number of the grounds of application, and I dealt with that application, and with an application for a stay then raised for the first time by the Defendant by reference to two cases in Dubai, which meant that the full hearing time intended for the contempt application was in the event taken up with my dealing with those various applications by the Defendant. I struck out one of the subparagraphs of Application 1, as I have mentioned above, and granted a short stay. Permission to appeal my judgment was sought by the Defendant from the Court of Appeal and refused by Leggatt LJ in robust terms.
After a number of further orders by the Court, and the bringing of another strike-out application by the Defendant, which has not in the event been pursued, the matter has come on before me. The Defendant has not attended, and so has not given evidence, as he did not attend at the October 2019 hearing. He has been represented again by Mr Marshall and Mr McCourt Fritz, now instructed by Fladgate, and the Claimants, as they have been throughout, by Ms Bingham QC and Ms Rogers, instructed by Clifford Chance.
This is a contempt application, and the Defendant is entitled to elect, as he has done, not to give evidence and hence not to be cross-examined, and the Claimants must prove their case beyond reasonable doubt, and if an innocent explanation remains a reasonable possibility, the Defendant is entitled to the benefit of the doubt (see Daltel v Makki [2005] EWHC 749 (Ch) at [30] and JSC BTA Bank v Ablyazov [2012] EWHC 237 (Comm) at [8–9]). However, the Claimants are entitled to rely on the absence of explanation by the Defendant when explanation is required (and especially when notice has been given by the Claimants of an intent to do so, as it was here). I have drawn guidance from Arlidge, Eady & Smith on Contempt (5th Ed) at 15–55A and from Averill v U.K. [2001] 31 EHRR 36 at [43] and from the words of Popplewell J in Therium (UK) Holdings Ltd v Brooke [2016] EWHC 2421 (Comm) at [29], referring to Inplayer Ltd v Thorogood [2014] EWCA Civ 1511 at [40], and the inference that may be drawn by the Court that “ a deliberate decision not to give evidence by a person charged with contempt in relation to matters within his own knowledge has been made because he does not believe that his case will withstand scrutiny when tested by cross-examination, provided the case against him is such that it calls for an answer”, and of Whipple J in VIS Trading Co Ltd v Nazarov [2015] EWHC (QB) 3327 to similar effect.
As it happens, the Defendant did put in evidence at the time of the interlocutory applications now in issue before me, and he gave oral evidence at the hearing before Popplewell J, but he has not given any evidence before me, and I shall be left to draw my conclusions without the benefit of any explanation from him in response to the substantial quantity of correspondence before me, to much of which he was party, the evidence of the Claimants' witnesses, whom I have heard cross-examined by Mr Marshall and, in respect only of Applications 3 and 4 (by virtue of the Order of Cockerill J of 18 October 2018), in the light of the 13 December 2017 Judgment of Popplewell J. Silence cannot be a basis for finding a case of contempt of court proved, but if there is otherwise a case to answer I am entitled to draw an adverse inference from the absence of evidence from a witness such as the Defendant who could have given relevant evidence in explanation or answer. This applies also to the absence of evidence from other witnesses who could have produced some explanation in rebuttal of the Claimants' case ( Imam-Sadeque v Bluebay Asset Management (Services) Ltd [2012] EWHC 3511 (QB) at [9] per Popplewell J). That was a civil case, but, subject to caution, I apply...
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