ICBC Standard Bank Plc & Ors v Erdenet Mining Corporation LLC (EMC)

A court may dispense with personal service of a committal or sequestration application where the respondent has, in substance, received the application and has a fair opportunity to respond. The court must nevertheless treat committal proceedings with particular care because of their quasi-criminal character. It may proceed in the respondent’s absence where service or effective notice, sufficient preparation time, waiver, lack of legitimate disadvantage, prejudice from delay and the overriding objective justify doing so. A procedural defect in a committal application may be waived where no injustice has resulted. A pending appeal or collateral challenge does not suspend the obligation to obey an order while it remains in force. A writ of sequestration may be authorised where the order was breached and assets may be, or may later be, within the jurisdiction.

The claimants obtained substantial awards in two LCIA arbitrations and orders requiring EMC to provide security and disclose assets. Knowles J ordered EMC to provide an affidavit identifying assets exceeding $500,000 by 22 August 2017. EMC did not comply. Its solicitors received the committal and sequestration application, but stated that they were not instructed in those proceedings and argued that personal service was required.

The claimants sought a declaration of contempt, permission to issue a writ of sequestration, dispensation with service, permission to proceed in EMC’s absence, waiver of the missing penal notice on the application notice, and indemnity costs. The central issues were whether effective service had occurred, whether the hearing could fairly proceed in EMC’s absence, whether the breach was contempt notwithstanding pending appellate challenges, and whether sequestration was appropriate.

1. Service. The regime governing committal and sequestration is a distinct and stringent procedural code. The earlier order permitting alternative service did not prospectively authorise alternative service of the committal application. Nevertheless, EMC’s solicitors had long acted for it, had engaged with the application, and EMC plainly knew what was occurring. Personal service of the application and, so far as necessary, the order was therefore dispensed with under CPR 81.10 and CPR 81.26.
2. Absence and procedural defect. Applying the checklist in Sanchez v Oboz and the caution in R v Hayward, the court was satisfied that EMC had sufficient notice, had no good reason for non-attendance, had waived its opportunity to appear, would gain nothing from an adjournment, and would suffer no legitimate disadvantage. The hearing could proceed in its absence. The missing notice required by the Practice Direction caused no injustice because EMC knew the order, the breach, the hearing and the possible consequences. The defect was waived.
3. Contempt. EMC had not provided the affidavit by the specified date or subsequently. Its pending challenges to the arbitration awards and the security order did not suspend the Knowles order. While that order remained in force, compliance was required. Contempt was established to the criminal standard.
4. Sequestration. The statutory and procedural prerequisites were met. A writ was appropriate despite uncertainty about present assets in the jurisdiction. Evidence that EMC exported copper and dealt with a buyer in Maidenhead showed that assets might be, or might later become, available within the jurisdiction. The disciplinary and enforcement purposes of sequestration also meant that the remedy was not futile merely because practical utility was uncertain.
5. Orders. The court declared EMC in contempt, permitted the claimants to issue a writ of sequestration against its real and personal property, ordered substituted service of the order, and awarded indemnity costs.

Not an appeal. The judgment records earlier arbitration proceedings, challenges to the awards, and orders made by Cooke J and Knowles J, but determines the present committal and sequestration application at first instance.