Khrapunov v JSC BTA Bank

A court may refuse a late application to vary arrangements for cross-examination where the delay, without adequate explanation, frustrates an existing order. A later material change of circumstances can justify reconsideration under the Civil Procedure Rules 1998, but finality remains an important consideration.

Risk of arrest or extradition does not automatically entitle a person to give evidence by video link. The court must balance that risk against the detriment to the opposing party and the public interest in effective enforcement. Where examination abroad would lack effective compulsion and sanctions, the court may require attendance in England to preserve the efficacy of a freezing order.

The Bank had obtained a worldwide freezing order requiring the appellant to disclose his assets and assets administered for another defendant. Evidence gave the Bank a good arguable case that his purported disclosure was dishonest or incomplete. Teare J therefore ordered him to attend the High Court for cross-examination, while permitting a timely application for examination by video link.

The appellant applied shortly before the scheduled hearing to be examined from Switzerland under the Hague Evidence Convention. Phillips J dismissed that application because its unexplained lateness frustrated the existing order. He alternatively found no real extradition risk and considered the Swiss procedure less effective. His decision was reported at [2016] EWHC 1346 (Comm).

New evidence later showed that Ukraine had commenced criminal proceedings, issued an Interpol Red Notice and sought the appellant’s extradition. The Court of Appeal considered both the appeal and whether that change justified varying the cross-examination order under the Civil Procedure Rules 1998.

1. The appeal and application to vary were dismissed. Phillips J was entitled to dismiss the appellant’s application because it had been issued without adequate explanation at a time that prevented the proposed video-link arrangements from being resolved before the scheduled cross-examination. The judge understood both his power to adjourn or vary the order and the overriding objective. He was entitled to emphasise enforcement of compliance with court orders. His case-management decision was neither wrong nor perverse.

2. The Bank’s inadvertent failure to disclose the Ukrainian criminal complaint did not amount to a serious procedural irregularity. On an ordinary inter partes application, its duty was not deliberately to mislead the court. The appeal consequently remained a review. The fresh evidence could not have affected Phillips J’s primary reason, although it was relevant to a possible variation under CPR Part 3.1(7).

3. Finality, avoidance of repeated attempts to litigate the same issue and protection of the appellate process substantially constrain the power to vary or revoke an order. The Ukrainian proceedings and Red Notice nevertheless represented a material change of circumstances. The court therefore reassessed the competing detriments and the requirements of justice at proportionate cost.

4. The appellant faced a real risk of arrest and temporary restriction in England, but the eventual risk of extradition was low. By contrast, examination in Switzerland under articles 17 and 21 of the Hague Evidence Convention would lack effective compulsion. The appellant could refuse to participate or answer, and undertakings would provide no practical sanction. Swiss authorisation was also uncertain, and comity precluded an English judge from participating in a coercive regime without specific Swiss approval.

5. Polanski v Condé Nast Publications Ltd [2005] UKHL 10 did not establish that any risk of detention requires video evidence. Its rule concerned effective participation by a litigant vindicating civil rights. The present order instead secured the effectiveness of a freezing order. The strong public interest in effective enforcement outweighed the comparatively limited extradition risk.

6. The costs appeal was dismissed. The court maintained the requirement for cross-examination in London, accepted the Bank’s representatives’ confidentiality undertakings, and directed the parties to agree directions and a confidential timetable.

1. Court of Appeal (Civil Division): Permission to appeal was granted at the rolled-up hearing. The appeal from [2016] EWHC 1346 (Comm) and the application to vary the earlier cross-examination order were dismissed.

2. Court of Appeal permission stage: Longmore LJ initially refused permission and certified the application as totally without merit. Gloster LJ subsequently permitted reopening after fresh evidence concerning Ukrainian criminal proceedings emerged.

3. High Court, Commercial Court: Phillips J, in [2016] EWHC 1346 (Comm), dismissed the late application to replace attendance in London with examination by video link from Switzerland and ordered the appellant to pay the costs.