Super-Max Offshore Holdings v Rakesh Malhotra
| Jurisdiction | England & Wales |
| Judge | Sir Michael Burton |
| Judgment Date | 06 May 2020 |
| Neutral Citation | [2020] EWHC 1130 (Comm) |
| Date | 06 May 2020 |
| Docket Number | Claim No. CL-2006-000797/000798/00312 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 1130 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Sir Michael Burton GBE
Sitting as a High Court Judge
Claim No. CL-2006-000797/000798/00312
Ms Bingham QC and Ms Rogers (instructed by Clifford Chance) appeared on behalf of the Claimants.
Mr Marshall QC and Mr McCourt Fritz (instructed by Fladgate) appeared on behalf of the Defendant.
Wednesday, 6 May 2020
(12.15 pm)
JUDGMENT (as approved)
This has been the hearing of consequential matters, including the imposition of sentence arising out of my conclusions set out in my judgment supplied to the parties last week in draft and handed down today, dated 6 May, 2020, by which I found the Defendant in contempt in respect of 31 particularised grounds set out in four applications, as appears in paragraph 135 of my judgment and the reasons given in that judgment, to which I refer.
Mr Marshall QC has again appeared, together with Mr McCourt Fritz, and has made submissions on behalf of the Defendant and Ms Bingham QC and Ms Rogers have again appeared on behalf of the Claimants.
Mr Marshall QC has put forward two submissions in particular. First, that the contempts are now stale and second that the Claimants have not established any or any substantial prejudice. I shall deal with those two submissions first.
It is certainly right to say that the allegations in the four applications start in December 2016 and continue through to late March 2018. But the Defendant accepts that there can be no responsibility upon the Claimants for the fact that matters were not dealt with until after the judgment of Popplewell J, in December 2017, because that is what the Defendant himself sought. And no doubt in the light of the criticism of the Defendant by Leggatt LJ in the Court of Appeal, makes no criticism of the period since October 2019. The two periods upon which Mr Marshall QC concentrates in his submissions are between December 2017 and July 2018, and between July 2018 and October 2019. I am satisfied that for the reasons set out in Ms Bingham QC's skeleton at paragraph 22 (d) to (h) and more fully in her Reply Note for this hearing and accompanying detailed chronology, that there can be no criticism of the Claimants in respect of those periods either. In the authority referred to by Mr Marshall QC, Attorney-General's Reference (No 2 of 2001) [2004] AC 72, there is specific reference in the context of Article 6 of the ECHR to action or inaction by a public authority, not relevant here. But in any event I am satisfied that there is no breach of any Article 6 right of the Defendant by virtue of the fact that, after disposal of a considerable number of interlocutory applications by the Defendant, the four applications were only resolved by me in March of this year with judgment handed down today. Not only am I in the circumstances satisfied that no responsibility for delay can be laid at the door of the Claimants, but I conclude that the Defendant is unable to complain of the passage of time or its impact, if any. I am also not persuaded, as Mr Marshall QC suggested in his written submissions, that the relationship between the Claimants and the Defendant is in some way ancient history. Even if the litigation in England and Wales has, subject to any outstanding appeal, finally been resolved, it does appear clear that there are still live disputes in other jurisdictions, particularly in India. Indeed, that appeared not only in the evidence before me, and in Popplewell J's interim relief judgment of March 2018, but in Mr Marshall QC's own opening skeleton of October 2019, at paragraph 51, when he said:
“ The main committal applications are only one part of a larger picture of ongoing multi-jurisdictional litigation between the parties and associated persons including an LCIA arbitration and proceedings in India and Dubai.”
As for the question of prejudice, I do not accept Mr Marshall QC's argument that there has been no or no substantial prejudice to the Claimants, and the following seems to me to be clear.
(i) The Claimants had a considerable struggle to deal with the continuing breaches of 7 orders of the Court, which they were only able to surmount with difficulty. The picture is clear from my judgment and is manifest in the evidence.
(ii) The fact that the false statements were made in the interlocutory witness statements meant that they had to deal with the difficulty of establishing the falsity of those statements, and meeting evidence that was falsely put forward in order to support them. In any event, as appears from the decision of the Court of Appeal, Etherton MR presiding, in Liverpool Victoria Insurance v Khan [2019] 1 WLR 3833, at paragraph 60:
“ Because this form of contempt of court undermines the administration of justice, it is always serious, even if the falsity of the relevant statement is identified at an early stage and does not in the end affect the outcome of the litigation.”
(iii) The fact that the Claimants were in the event able to adduce the evidence of Mr Mukherji and Mr Desai before Popplewell J despite the best efforts of the Defendant and his agents does not mean that there was no prejudice to the Claimants, and in any event I take into account the very bad experience which both Mr Mukherji and Mr Desai had.
(iv) I do not accept that the appalling series of communications from the Defendant between January and March 2018 had no lasting effect on the recipients, and in any event it plainly caused prejudice and distress at the time.
I have been assisted by both Counsel in considering a number of authorities, from which I derive the following matters.
(i) I accept that when considering what sentence to impose in respect of contempt of court, a custodial sentence is a last resort.
(ii) I accept that the fact that there are 30 particularised findings of contempt does not of itself exponentially increase their gravity, but I need to look at the substance of them. I consider that they fall into 5 categories:
Category 1, the breach of orders by the court which were specifically intended to stop the coup by the Defendant in breach of his contractual obligations between December 2016 and January 2017.
Category 2, the false statements in the witness statement.
Category 3, the communications with Relevant Employees, in continuing breach of Court orders, between March and November 2017, intended to undermine and disrupt the Claimants' continuing management.
Category 4, the disgraceful WhatsApp and email communications between January and March 2018.
Category 5, the steps taken to prevent Mr Mukherji and Mr Desai from leaving Dubai so as to attend and give evidence at the Popplewell trial.
(iii) I consider that the intentional breach of 7 continuing court orders is serious, and defies the court's jurisdiction. It is plain that the breaches were premeditated, contrary to Mr Marshall QC's submission in paragraph 31 of his skeleton, and pursued in what I have described in my Judgment as a deliberate race against the clock to try to get in before the Court orders; and the communications with Relevant Employees continued even after a neutral form of communication to employees was specifically agreed by the Defendant and incorporated...
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