JSC BTA Bank v Ablyazov

A court has a discretion to decline to hear a contemnor, but must decide how the interests of justice are best served in the individual case. Refusing a hearing is justified only by grave considerations of public policy, particularly where the contempt impedes justice.

An appeal against a committal order directly engages personal liberty. Although refusal to hear such an appeal is not invariably incompatible with European Convention on Human Rights article 6, it will be justified only very rarely and must be proportionate. The same caution applies to conditions whose breach would automatically dismiss the appeal. Contempt alone is insufficient.

The Bank alleged that its former chairman had misappropriated very large sums through offshore companies. It obtained a worldwide freezing order, asset-disclosure orders and other relief. Teare J later found the appellant guilty of several contempts, committed him to prison for 22 months and ordered an interim costs payment. That decision was reported as [2012] EWHC 237 (Comm).

The appellant appealed against the committal order but went into hiding. The Bank applied for an order dismissing the appeal unless he surrendered to custody, disclosed asset dealings by affidavit, paid £750,000 on account of costs and provided £200,000 security for the appeal costs. The central issue was whether dismissal for non-compliance with those conditions would be a proportionate exercise of the court’s power over a contemnor seeking to challenge an order affecting his liberty.

1. The Bank’s applications were dismissed. The governing question was whether, in the circumstances of the individual case, the interests of justice would be served better by hearing the contemnor or refusing to do so. Refusal is a strong measure, justified only by grave considerations of public policy. Particular care is required where the appeal challenges the findings constituting contempt or the resulting committal order.

2. The court retains a discretion to refuse to hear a contemnor who wilfully disobeys an order and makes clear that the defiance will continue if the order is affirmed. The discretion was not removed by article 6 of the European Convention on Human Rights. Nevertheless, the response must be proportionate. Contempt proceedings involving imprisonment are criminal in nature for article 6 purposes, and an appeal against committal is equivalent in principle and practice to an appeal against a conviction carrying imprisonment.

3. The importance of permitting a person to challenge an order affecting personal liberty was a powerful consideration. The Strasbourg authorities did not establish that refusal to hear a contemnor could never comply with article 6, but they confirmed that such refusal would be justified only very rarely. Mere contempt was insufficient.

4. The appellant’s persistent disobedience, dealings contrary to the freezing order, failure to assist receivers and apparent departure from the jurisdiction strongly favoured the Bank. Even so, requiring surrender to custody would be disproportionate because the appeal directly challenged the findings and orders leading to imprisonment. The Bank’s legitimate need for asset information did not make surrender an appropriate price for being heard.

5. The same reasoning governed the proposed conditions concerning the interim costs payment, security and disclosure. Although several factors identified in Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065 were present, non-compliance would dismiss the committal appeal without a hearing. That consequence was disproportionately severe. None of the requested conditions was imposed.

1. Court of Appeal (Civil Division): By [2012] EWCA Civ 639 , dismissed the Bank’s application to make continuation of the committal appeal conditional upon surrender, disclosure, payment on account of costs and security for costs.
2. High Court, Queen’s Bench Division (Commercial Court): By [2012] EWHC 237 (Comm) , Teare J found the appellant in contempt and ordered his committal for 22 months. He later ordered costs, an interim payment and compliance measures, while suspending the debarring sanction pending the committal appeal.