Madison Pacific Trust Limited v Sergiy Mykolayovch Groza & Anor

A court which has jurisdiction to make an order has jurisdiction to enforce it by committal where committal is a necessary incident of that order. Permission to serve a contempt application out of the jurisdiction is therefore unnecessary where the respondent is already subject to the court’s jurisdiction.

Personal service of a disclosure order or contempt application may be dispensed with retrospectively where the material terms and proceedings were effectively communicated, the respondent had actual knowledge, and no injustice resulted. Alternative service may be authorised where there is good reason, including the need for expedition in exceptional circumstances.

Contempt by breach of an order requires knowledge of the order, breach, and knowledge of the facts constituting the breach. Deliberate non-compliance is sufficient; an intention to breach, reasonable excuse, re-opening the merits of the order, or a pending challenge to it does not provide a defence.

The claimant, a facility agent and international security trustee, applied to commit two defendants for deliberate non-compliance with a disclosure order made ancillary to a worldwide freezing order. The defendants applied for a declaration that the court lacked jurisdiction because permission to serve the contempt application out of the jurisdiction had not been obtained.

The defendants did not attend the hearing. The court first considered whether to proceed in their absence, then determined the jurisdiction challenge, service issues, and the substantive contempt application. The central issues were whether committal jurisdiction was incidental to the disclosure order, whether personal service could be dispensed with, and whether the defendants had established any defence to their admitted failure to provide the ordered disclosure.

1. Proceeding in absence. The court proceeded in the absence of both defendants. Applying the caution required in contempt proceedings and the factors identified in Sanchez v Oboz, the defendants had sufficient notice, access to a hybrid hearing, and the opportunity to obtain representation. D2 had voluntarily absented himself. D1 had provided no proper medical adjournment application or adequate medical evidence. Delay would prejudice the claimant and the forensic process would not be unfairly affected.
2. Jurisdiction. The court had jurisdiction to make the disclosure order under its supervisory jurisdiction over the London-seated arbitration. Committal for breach was a necessary incident of that order. Following Deutsche Bank AG v Sebastian Holdings (No 2), upheld in Vik v Deutsche Bank AG, no permission was required to serve the contempt application out of the jurisdiction. Dar Al Arkan Real Estate Developments Co v Refai was distinguishable because jurisdiction over the relevant person had not previously been established in that case.
3. Service. Personal service of the disclosure order and contempt application was dispensed with retrospectively. The defendants had actual knowledge of the orders and proceedings through service at the London address they had supplied, email and other communications, and had suffered no prejudice. Service at the London address was valid. Alternative service was authorised in any event because there was good reason, including the defendants’ uncertain whereabouts, the practical difficulty and delay of treaty service, and the need for expeditious enforcement.
4. Contempt. The criminal standard of proof applied. The court was sure that each defendant knew the disclosure order and its terms, failed to provide any of the ordered disclosure by the deadline, and knew the facts constituting the breach. The order remained extant and had to be obeyed. The defendants could not rely on alleged ambiguity, privilege, foreign criminal risk, complaints about disclosure in the arbitration, repayment of the debt, or an unissued or pending challenge to the freezing and disclosure orders.
5. The jurisdiction application was dismissed. Both defendants were declared to have committed contempt of court. Sentence was adjourned to 4 October 2024 to permit mitigation.

First-instance decision. No appellate history was stated in the judgment.