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CROSS-EXAMINATION ON WFO ASSET DISCLOSURE BY VIDEO-LINK

In the long-running BTA Bank v Khrapunov litigation, the Court of Appeal has handed down judgment on the question of whether Mr Khrapunov should be required to attend court in England to be cross-examined on the asset disclosure he gave pursuant to a worldwide freezing order (“WFO”) made against him, or whether he could avail himself of the processes under the Hague Evidence Convention 1970 (“HEC 1970”) be cross-examined by video-link from Switzerland.

Charles Samek QC and Marc Delehanty acted for Mr Khrapunov.  The judgment is here: [2018] EWCA Civ 819.

Background

The Commercial Court had ordered that Mr Khrapunov be cross-examined on asset disclosure which he had given pursuant to the WFO but provided a liberty for him to apply for such cross-examination to take place by video-link from Mr Khrapunov’s country of residence, Switzerland.

Mr Khrapunov made such an application but the Court dismissed it, holding that – contrary to Mr Khrapunov’s contention – there was no real risk of him being subject to extradition proceedings to a third country were he to come to England to be cross-examined and also that the HEC 1970 process would not allow for effective cross-examination

The Court of Appeal refused permission to appeal and there matters would have rested if Mr Khrapunov had not become aware that, as at the time of his application and unbeknownst to him then, Ukraine had initiated criminal proceedings against him and had taken steps internationally to seek his extradition.

In light of this, on Mr Khrapunov’s application, the Court of Appeal took the exceptional step of setting aside the dismissal of Mr Khrapunov’s permission application by Longmore LJ and re-opening the appeal.

The Court of Appeal judgment

The Court of Appeal granted permission to appeal but held that it was within the judge’s discretion on the evidence then before him to refuse to permit HEC 1970 cross-examination by video-link and so dismissed the appeal.

However, in light of the fresh evidence about the Ukrainian criminal proceedings, the Court went on to determine the application to give evidence by video-link exercising the powers of the lower court afresh on the basis that the decision below was a case management one and there had been a material change of circumstances since it was made.

Notwithstanding, the Court then refused to accede to Mr Khrapunov’s renewed application.  The Court accepted that Mr Khrapunov was at risk of detention and extradition were he to come to the UK. But this was not determinative in his favour. The Court referred to difficulties with the English judge being able to control the proposed HEC 1970 cross-examination – a process ultimately subject to Swiss law.  The Court was not satisfied that undertakings offered by Mr Khrapunov (e.g., to take the oath and not to avail himself of privileges under Swiss law to refuse to answer questions) would give sufficient control to the English judge, nor that they did not trespass on issues of comity. 

In this regard, the Court emphasised concerns which would arise were an English judge to be participating in a process effectively at odds with Swiss procedural law. Also of importance was the Court’s ability to exert control over Mr Khrapunov in the cross-examination process, which was a priority given the context of the process being one to achieve the end of policing the freezing order, which was a factor which was in reality considered by the Court to be an overriding one.  

As such, cross-examination on WFO asset disclosure was regarded as being of a different nature to cross-examination on evidence given at trial. On that basis that the Court distinguished the leading case on fugitives from justice being permitted to give evidence by video-link from abroad in civil claims: see Polanksi v Condé Nast Publications [2005] UKHL 10.

In addition, although the Court recognised that Mr Khrapunov could be subjected to extradition proceedings to Ukraine (even if not likely to be ultimately extradited) this was not sufficient prejudice to outweigh the Court’s concern to ensure the WFO was effectively policed.

In summary, this is a hard decision. This was not a case where Mr Khrapunov was seeking to evade the cross-examination order. Rather, he was seeking to comply but at the same time not do anything which might prejudice his liberty. None of this cut any ice with the Court of Appeal. Their decision illustrates a tough approach by the English Court in relation to what the English court regards as giving proper effect to English worldwide freezing orders and to orders (such as asset cross-examination) ancillary thereto.

 

 
Posted: 29.05.2018 at 11:07
Tags:  News  Cases  Commercial Law  International  Dispute Resolution  Asset Tracing and Fraud
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