Otkritie International Investment Management Ltd & Ors v Urumov

A trial judge’s adverse findings, even when strongly expressed, do not ordinarily prevent that judge from hearing later committal proceedings arising from the same litigation. Recusal is required only where the judge cannot act fairly or where a fair-minded and informed observer would see a real possibility of bias. Prior judicial findings made in the case are not extraneous prejudgment.

Unsupported allegations labelled actual bias do not alter that test. A judge should not recuse merely because a litigant criticises the judge or because another judge is available. Recusal may nevertheless be appropriate where the judge has already decided the very issues and evidence central to the committal application, but that was not this case.

Following a lengthy Commercial Court trial, Eder J found that Mr Urumov and others had defrauded the Otkritie companies through the Sign-On Fraud and the Argentinian Warrants Fraud. The companies then sought to pursue committal proceedings based on alleged breaches of a freezing order and allegedly false statements and disclosure documents.

Mr Urumov applied for Eder J to recuse himself. He relied on the judge’s adverse findings at trial, the strength of their expression, alleged uneven treatment of disclosure issues, the Dunant box, and an asserted deliberate error of law. Eder J rejected the individual allegations as groundless but recused himself because the allegation of actual bias was serious. The claimants appealed from the decision of the Commercial Court, [2014] EWHC 1323 (Comm). The central issue was whether the trial judge should be disqualified from determining the committal application.

Appeal allowed unanimously. The order that Eder J recuse himself was set aside and the committal application was restored to him.

1. The governing question was whether a fair-minded and informed observer would conclude that there was a real possibility of bias. A judge’s prior rulings and findings in the same litigation, reached after hearing the parties, do not ordinarily satisfy that test. There must be some substantial basis for thinking that the judge will decide by reference to extraneous matters, predilections or preferences, rather than the legal and factual merits.
2. The ordinary course is that the trial judge should deal with consequential applications, including permission to bring and the determination of committal proceedings. The judge is usually best placed to do so, and the course is economical and just. The fact that a committal allegation requires criminal proof reinforces that earlier civil findings do not themselves determine the later application.
3. Calling a complaint one of actual bias does not change the applicable principle. The complaints about disclosure, the Dunant box and the law of early termination were, in substance, complaints that the judge had decided factual or legal issues wrongly. They did not show actual or apparent bias. Nor did the availability of another Commercial Court judge justify recusal. Judges must not recuse too readily in long and complex litigation merely because a litigant criticises them.
4. Dar Al Arkan was distinguishable. There the judge had already decided issues likely to be crucial on the committal application upon essentially the same evidence. Eder J’s trial had concerned many wider issues; the committal application had a narrower focus and could produce a different result. Unlike the judge in Dar Al Arkan, Eder J expressed no personal discomfort about continuing and wished to do so. Re K was also distinguishable because Eder J had not indicated that he had prejudged guilt or sentence.
5. The judge was entitled to grant permission to appeal despite Mr Urumov’s absence. It was not an exceptional case in which permission already granted should be set aside.

• Court of Appeal (Civil Division) Allowed the claimants’ appeal and set aside Eder J’s recusal order: [2014] EWCA Civ 1315.
• High Court, Queen’s Bench Division, Commercial Court Eder J recused himself, with extreme reluctance, from hearing the proposed committal proceedings despite finding the individual allegations of bias groundless: [2014] EWHC 1323 (Comm).