JSC BTA Bank v Ablyazov (Recusal)

A judge’s prior determination of contested issues, including findings of contempt and adverse credibility findings, does not by itself create apparent bias at a later civil trial. The court must ask whether the fair-minded and informed observer would see a real possibility that the judge could be influenced by considerations extraneous to the legal or factual merits.

The inquiry is fact-sensitive. Relevant circumstances include the scope of any overlap, the judicial character and language of the earlier findings, and the advantages of continuity in complex litigation. A fully informed party may waive an objection by continuing to participate without raising it when under a duty to speak. Such an election is ordinarily binding.

The claimant bank alleged that its former chairman had fraudulently misappropriated assets. Teare J was designated to manage the complex Commercial Court litigation and conduct the trial. Before trial, he found the defendant guilty of several contempts involving non-disclosure, false evidence and dealings in breach of a freezing order.

The defendant subsequently applied for Teare J to recuse himself, alleging apparent bias through pre-judgment. The judge refused the application because there was no real possibility of bias and because any right to object had been waived. The defendant appealed. The central issues were whether the earlier findings created an appearance of pre-judgment and whether continued participation without objection constituted an informed, voluntary and unequivocal waiver.

1. Appeal dismissed. The Court of Appeal unanimously held that the fair-minded and informed observer would not conclude that there was a real possibility of bias. The court independently reached that conclusion rather than merely reviewing the judge’s own assessment.

2. Apparent bias is a wholly fact-sensitive inquiry. Earlier findings against a party, including findings reached after hearing evidence and applying the criminal standard in contempt proceedings, do not of themselves require recusal. The critical question is whether the judge might be influenced for or against a party by considerations extraneous to the legal or factual merits.

3. The judge’s earlier conclusions formed part of his judicial assessment of the same litigation. They were expressed in moderate, judicial language and had survived appeal. Any replacement judge would be entitled to read and consider those judgments and would be bound by any resulting issue estoppels. The existing judge was therefore not materially disadvantaged by his direct familiarity with the evidence.

4. The overlap between the committal proceedings and the trial was limited. The judge had not determined the essential allegations that the defendant had fraudulently diverted the bank’s funds. Only two of the many companies whose ownership was relevant at trial had featured in the committal proceedings. The adverse credibility findings would occupy only a small place within the wider trial evidence.

5. The fair-minded and informed observer could take account of the justice and efficiency achieved by continuity of judicial management in complex civil litigation. Those considerations cannot cure an appearance of bias, because recusal is not discretionary. They nevertheless form part of the informed factual context. There had also been no allegation that the judge’s extensive prior management of the litigation was unfair.

6. The defendant had independently waived any right to object. Waiver requires a voluntary, informed and unequivocal election, but it may be tacit. The defendant knew the relevant facts and, having continuous expert legal representation, was properly inferred to know of the right to object. His continued participation, particularly at the pre-trial review, coupled with his duty under rules 1.1 and 1.3 of the Civil Procedure Rules 1998 to assist the court in furthering the overriding objective, made silence unequivocal.

7. The waiver operated as a binding election. Even assuming a residual power to assess its continuing effectiveness, there was no basis for permitting withdrawal where that would prejudice other litigants, waste court resources and facilitate a tactical attempt to derail the trial.

• Court of Appeal (Civil Division): The court granted permission to appeal after extensive argument but unanimously dismissed the appeal: [2012] EWCA Civ 1551.
• Commercial Court: Teare J refused to recuse himself. He held both that there was no real possibility of apparent bias and that the defendant had waived any right to object. No citation for that decision is stated.