JSC VTB Bank v Skurikhin

Deliberate non-compliance with disclosure obligations in a freezing order is a serious civil contempt which will ordinarily justify imprisonment. A substantial fine may be sufficient where the contempt has been purged and the assets recovered. Where non-disclosure continues, a lengthy sentence may be appropriate to encourage cooperation. Failure to attend an examination of a judgment debtor may also justify immediate imprisonment, but under CPR 71.8(4) the sentence may be suspended to permit the contempt to be purged.

JSC VTB Bank sought the committal of Mr Pavel Skurikhin for contempt of court. The alleged contempts were his deliberate failure to attend an oral examination ordered under CPR 71 and his deliberate failure to comply with disclosure obligations in a worldwide freezing order. The orders had been served by authorised alternative methods, including email, and contained penal notices.

The defendant did not attend or appear. The central issues were whether the breaches were proved to the criminal standard, whether the procedural requirements for committal had been met, and what sentences were appropriate.

1. The court found to the criminal standard that the defendant knew of both orders and had deliberately failed to comply with them. The Bank had complied with the procedural requirements for committal. The defendant was therefore in contempt in both respects.

2. Non-compliance with the disclosure provisions of a freezing order is particularly serious because the order is intended to prevent dissipation of assets and assist enforcement of an existing judgment. Applying the principles in JSC BTA Bank v Solodchenko and others (No 2), a substantial breach normally merits imprisonment. A fine may suffice where the contempt has been purged and the assets recovered, while continuing non-disclosure may justify a long sentence to encourage cooperation.

3. The court considered the guidance applied in JSC BTA Bank v Ablyazov (No 8), but treated that case as exceptionally egregious and therefore as limited guidance on sentence in the present case. The principles had also been confirmed and applied in Templeton Insurance Ltd v Thomas.

4. For the deliberate failure to disclose assets, the appropriate sentence was twelve months’ immediate imprisonment, concurrent in respect of the two disclosure contempts.

5. Failure to attend the judgment-debtor examination was also serious. Under CPR 71.8(4), the four-month sentence for that contempt was suspended to enable the defendant to purge it by attending a subsequent hearing. It was consecutive to the twelve-month sentence, producing an overall sentence of sixteen months’ imprisonment, with the four-month term suspended.