Public Joint Stock Company Vseukrainskyi Aktsionernyi Bank v Maksimov & Ors (Rev 1)

Contempt of court must be proved to the criminal standard. For a breach of a freezing order, the applicant must prove knowledge of the order, conduct amounting to breach, and knowledge of the facts making that conduct a breach. Knowledge that the conduct legally constitutes contempt is unnecessary.

Where contempt is established by circumstantial evidence, the court must assess the evidence cumulatively. The essential elements must be proved beyond reasonable doubt, but each individual evidential fact need not be so proved. If more than one reasonable inference remains, including one inconsistent with contempt, the application fails.

A director aware of an order against a company must take reasonable steps to secure compliance. Wilful failure to do so may itself constitute contempt.

The claimant bank applied to commit the first defendant for breaches of worldwide freezing orders made in support of an LCIA arbitration concerning an approximately US$200 million claim. The alleged breaches included failures to disclose assets, dealings with corporate assets, and failures by companies subject to a related Chabra order to provide disclosure.

A previous finding of contempt by consent covered the initial failure to disclose personal assets. The court had to determine whether further contempt was proved, whether the admitted contempt had continued, and the appropriate sanction and costs.

1. Disposition. The court rejected all alleged grounds except the admitted failure to provide personal asset disclosure and the allegation that Mr Maksimov knowingly permitted companies subject to the related order to fail to provide asset disclosure. The court would hear further submissions on sanction and costs.
2. Applicable principles. Non-compliance with an order carrying a penal notice may constitute civil contempt under CPR 81.4. The applicant had to prove beyond reasonable doubt that the respondent knew the order, breached it, and knew the facts constituting the breach. It was unnecessary to prove that he appreciated the legal character of the conduct as contempt. The court applied the principles stated in IPartner v Pancore and Masri v CCC.
3. Circumstantial evidence. The essential elements, rather than every evidential fact, had to be proved to the criminal standard. The evidence had to be assessed as a whole. If more than one reasonable inference remained and one was inconsistent with contempt, the application failed. The court applied the approach in JSC BTA Bank v Ablyazov, Daltel v Makki and JSC BTA Bank v Ablyazov (No 8).
4. Personal disclosure. Mr Maksimov understood that foreign self-incrimination concerns did not relieve him from the disclosure obligation unless the court ordered otherwise. He had good factual reasons for withholding disclosure, but no legal justification. His admitted contempt therefore lasted for nearly a year.
5. Corporate disclosure. A director aware of an order against a company must take reasonable steps to secure compliance. Mr Maksimov deliberately failed to do so. The same duty applied where he was director and 50 per cent shareholder of a parent company controlling the relevant subsidiary. His failure was wilful and constituted contempt, although technically the bank had obtained the companies’ asset information through his own disclosure.
6. The evidence did not establish beyond reasonable doubt that Mr Maksimov caused or knowingly assisted transfers of Bauman or KRP shares, or failed adequately to disclose the other assets relied upon.