Dar Al Arkan Real Estate Development Company & Anor v Al-Sayed Bader Hashim Al Refai & Ors

The judgment concerns the management of a committal application by Kroll Associates UK Limited alleging civil contempt by the claimants for breaching a preservation undertaking and a drives delivery order and for making dishonest explanations to the court. The judge concluded that, on balance, the committal application should be heard well before the substantive trial in order to vindicate the court's authority and preserve its ability to impose effective sanctions. The judge also concluded that he must recuse himself from hearing the committal application because his earlier December 2012 judgment contained detailed, adverse and specific findings about the claimants' credibility that could give rise to a real possibility of apparent bias. Finally, the judge declined to rule in advance on the admissibility or use of his earlier judgment in the committal hearing, leaving such matters to the judge who conducts the committal hearing.

This was a first instance case management judgment in which Kroll sought declarations of contempt, fines and imprisonment against the claimants for alleged breaches of a preservation undertaking and a drives delivery order made in June 2012, and for alleged dishonest evidence given on a previous interlocutory application. The court had previously heard a discharge application and delivered a December 2012 judgment finding breaches of the preservation undertaking and concluding that documents had been deleted by the claimants' managing director.

Nature of the application: Kroll sought (i) declarations of contempt for breach of an undertaking and of a delivery order and (ii) orders for fines and imprisonment (committal) against the claimants and Sheikh Abdullatif.

Issues for decision:

• When the committal application should be heard (before or after trial);
• Whether the judge should recuse himself from hearing the committal application because of his earlier findings in the December 2012 judgment; and
• Whether the December 2012 judgment should be ruled inadmissible or excluded in advance from use in the committal hearing.

Court's reasoning: The judge reviewed authorities concerning the court's case management discretion and the particular purposes of committal proceedings (punishment, deterrence and protection of process). He accepted that Kroll had cogent arguments for an early hearing: the allegations were serious, there was a public interest in upholding the court's authority, and earlier resolution gives the court greater leverage to impose effective sanctions (including financial orders, imprisonment or possibly striking out). The judge weighed those considerations against the claimants' arguments that overlapping issues with the substantive trial and the risk of satellite litigation justified postponement. Applying authorities including JSC BTA Bank v Ablyazov and JSB BTA Bank v Ereshchenko, he concluded that overlap alone does not require postponement and that here overlap, the likely availability of evidence and the cogency of Kroll's case supported an early hearing.

On recusal the judge applied the apparent-bias test and concluded that his December 2012 findings as to credibility and dishonesty were detailed and adverse and went to the heart of the matters likely to be determinative on the committal application. Having regard to the notional fair‑minded and informed observer, he concluded that there was a real possibility that he had pre-judged major issues and therefore recused himself from hearing the committal application.

On admissibility and use of the December 2012 judgment the judge declined to rule in advance. He considered such questions best left to the judge conducting the committal hearing because (i) deciding exclusion would generate granular disputes about what constitutes a "finding", (ii) the precise issues and uses of the earlier judgment were not yet clear and (iii) a judge cannot be expected to ignore material but such matters of admissibility are for the trial judge to determine.

Procedure and wider context: The court had ordered a split trial; the "iniquity issues" were listed to begin in March 2015 and the claimants were challenging the split-trial order in the Court of Appeal. The judge recognised the particular practical and international features of the dispute (claimants and key witness outside the jurisdiction) and addressed the practical enforceability of sanctions.

The judge directed that the committal application should be heard well before the substantive trial to uphold the court's authority and to preserve the ability to impose effective sanctions, but concluded that he must recuse himself from hearing that application because his earlier December 2012 judgment contained detailed adverse credibility findings that created a real possibility of apparent bias. He refused to determine in advance the admissibility or use of his earlier judgment and left those questions to the judge who will hear the committal application.

The judgment records earlier interlocutory steps: a discharge application decided in the December 2012 judgment ([2012] EWHC 3539 (Comm)), a separate judgment on the committal application dated 20 December 2013 ([2013] EWHC 4112 (Comm)) and a case management order of 22 November 2013 directing a split trial with the "iniquity issues" listed to begin in March 2015; the claimants were challenging the split-trial order in the Court of Appeal. The judge also noted that his decision on power to imprison was under appeal but proceeded on his earlier view.