V Ships Limited v Luna Management Corporation & Ors

In contempt proceedings, the court may proceed in a defendant’s absence where the defendant had effective notice, a fair opportunity to participate and deliberately waived attendance. An adjournment is inappropriate where it would create a real risk of serious injustice to the claimant and only a speculative prospect of participation later.

A person charged with contempt may decline to give oral evidence. Where the case calls for an answer, however, the court may draw an adverse inference from a deliberate refusal to submit a written account to cross-examination. A corporate contempt may also be attributed to its de facto directing mind where that person knowingly directed the relevant conduct.

V Ships Limited applied for contempt findings against Luna Management Corporation and Lambros Stravelakis. Luna was subject to an anti-suit injunction requiring it to terminate Greek proceedings and prohibiting further civil claims arising from a ship management agreement except by arbitration.

Luna continued prosecuting the Greek proceedings and did not participate in the English contempt proceedings. Lambros sought an adjournment following the death of Stefanos Stravelakis, who had formally become Luna’s director. The central issues were whether the hearing should proceed despite the adjournment application and Luna’s absence, and whether Lambros was Luna’s de facto directing mind responsible for its disobedience.

1. Adjournment. The application was refused. The contempt allegation concerned past conduct, and Lambros could receive a fair hearing on the evidence already available. Stefanos’s death did not alter the position because Luna had already deliberately chosen not to participate, and any prospect that an adjournment would secure participation was speculative. Delay created a real risk of serious injustice to V Ships given the continuing Greek proceedings.
2. Luna’s absence. The court proceeded against Luna. It had been duly served, given ample opportunity to defend the allegation and deliberately waived its right to be represented. There was no material disadvantage to Luna in proceeding, whereas adjournment risked serious injustice to V Ships. The principles summarised in Sanchez v Oboz, [2015] EWHC 235 (Fam), were accepted and applied.
3. Adverse inference. A person charged with contempt may decline to give oral evidence. Where the case calls for an answer, the court may infer that a deliberate refusal to submit a witness statement to cross-examination reflects an inability to withstand scrutiny. The weight of the inference remains a matter for judgment. The court applied that principle to Lambros’s refusal to attend trial.
4. Responsibility for corporate contempt. The court was sure that Lambros remained Luna’s true directing mind and will despite the formal appointment of Stefanos as director. The decisions to commence and continue the Greek proceedings, and to disobey the anti-suit injunction and the arbitral award, were Lambros’s decisions. His knowledge constituted Luna’s knowledge for these purposes.
5. Findings and orders. Luna and Lambros were each found guilty of contempt. Personal service of the injunction was dispensed with because alternative service had effectively conveyed its terms and reasonable steps had been taken to achieve personal service. Sentence was adjourned. Ending the Greek proceedings would constitute substantial mitigation, but all sentencing options remained open, including immediate custody for Lambros.

First-instance contempt applications determined by the High Court (Commercial Court). No prior appellate decision is stated in the judgment.