Kazakhstan Kagazy Plc & Ors v Zhunus & Ors

A contempt application may proceed in the respondent’s absence where the respondent had notice, sufficient time to attend and participate, no adequate explanation for non-attendance, and an adjournment would not secure participation or serve the interests of justice.

Where contempt consists of a continuing and wilful refusal to comply with an order requiring delivery of property, a custodial sentence may be both punitive and coercive. A sentence of two years may be appropriate in a serious case, subject to the contemnor’s ability to seek variation or discharge by compliance or explanation.

The first to fourth claimants applied to commit the second defendant, Mr Arip, for contempt. He had previously been ordered to deliver up specified wristwatches worth more than £5,000. The order was served with a penal notice, but he delivered none of the watches.

Mr Arip did not attend the committal hearing, had disengaged from the proceedings and was no longer represented. The court had to decide whether to proceed in his absence, whether to sentence immediately, and what sentence was appropriate for the continuing breach.

1. Proceeding in the respondent’s absence. The court proceeded because Mr Arip had been served with the relevant documents and hearing notice, had ample time to prepare and comply, gave no reason for non-attendance, had effectively waived participation, and was unlikely to attend or be represented after an adjournment. Proceeding was fair, expeditious and consistent with the overriding objective. The court applied the factors summarised in Taylor v Van Dutch Marine Holdings Limited, [2016] EWHC 2001 Chancery.
2. Contempt established. The delivery order clearly required delivery of specifically identified watches. The court rejected any arguable defence based on the absence of an alternative option to pay their assessed value. Although CPR 81.4(5) referred to such an option, CPR 83.14(1) permitted enforcement of an order for delivery of specific goods, including by committal, without that alternative.
3. Immediate sentencing. The court declined to adjourn sentence. Mr Arip had entirely disengaged, had failed to attend other enforcement hearings, and was highly unlikely to use a further opportunity to make representations or comply. The court relied on the approach in JCS BTA Bank v Solodchenko, [2011] EWHC 1613 Chancery.
4. Sentence. The breach was flagrant and unexplained. It concerned enforcement of a judgment for approximately US$300 million, and followed withdrawal from representation after the delivery order. Applying the distinction between punitive and coercive contempt sentences explained in Lightfoot v Lightfoot, [1989] FLR 414, and the approach in JSC BTA Bank v Stepanov, [2010] EWHC 794 Chancery, the court imposed two years’ imprisonment. Mr Arip was permitted to apply to vary or discharge the order if he complied, wholly or partly, or explained his inability to comply.

The judgment describes earlier enforcement proceedings, including a judgment entered by Picken J and a delivery order made by Jacobs J, but states no appellate history.