ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE HONOURABLE MR JUSTICE EDER
Strand, London, WC2A 2LL
B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE LONGMORE
THE RIGHT HONOURABLE LORD JUSTICE MOORE-BICK
| OTKRITIE INTERNATIONAL INVESTMENT MANAGEMENT LTD
OTKRITIE SECURITIES LTD
JSC OTKRITIE FINANCIAL CORPORATION
OTKRITIE FINANCE (JSC)
OTKRITIE FINANCE LIMITED
|- and -
|MR GEORGE URUMOV
(Transcript of the Handed Down Judgment of
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Mr George Urumov in person
Hearing dates: 30th July 2014
Crown Copyright ©
Lord Justice Longmore:
1) Knowingly and deliberately giving false information in response to and in breach of orders for disclosure of assets contained in or ancillary to a freezing order made against him;
2) Breaching the terms of the freezing order by dissipation of assets after having notice of the freezing order;
3) Making knowingly false statements in his statement of defence in contravention of the statement of truth contained in that document; and
4) Making a false disclosure statement in the lead-up to the trial, knowing that the relevant statement of truth signed by him was false.
Otkritie need the permission of the court to institute the proceedings under heads (3) and (4) but not the proceedings under (1) and (2). The findings of the judge in his trial judgment are much relied on.
1) that a fair-minded and well-informed observer would think that the judge had already decided the committal application against Mr Urumov in the light of the many adverse findings in the judgment;
2) that the judge had unnecessarily expressed many of his findings in the judgment to a high level of certainty (e.g. by saying he "had no reasonable doubt") which again showed he had pre-judged the committal proceedings;
3) that the judge had not been even-handed in his criticisms because he had failed to hold that Otkritie had themselves been in breach of their disclosure obligations and had procured their witnesses (including their solicitor Mr Neil Dooley) to commit perjury;
4) that the judge had, in particular, been highly critical of Mr Urumov's failure to disclose that he had possession or control of documents and USB sticks found in what was called the Dunant box in December 2012 when, as the judge knew, it had by then been seized by the Swiss prosecutor in the course of criminal proceedings instituted by the claimants in Switzerland; and
5) that the judge had deliberately mistaken "centuries old principles and law governing early termination" of the trading instruments or financial derivatives which were at the heart of the allegations of fraud.
"so serious that the appropriate course is that I should recuse myself."
He handed this judgment down on 29th April 2014 and, on the same date, he gave Otkritie permission to appeal his decision saying not only that Otkritie had a real prospect of success but also that he would welcome his decision being overturned; no further steps have been taken in the committal applications meanwhile either against Mr Urumov or against other defendants.
Application to set aside grant of permission to appeal
"12. The position of Mr Urumov in relation to that application for permission to appeal as set out in an e-mail, was that he had had insufficient notice of that application and that I should adjourn that application for leave to appeal. He has not appeared today. A further e-mail, again received earlier this morning, was to the effect that he was having to look after his wife Miss Yulia Balk. In any event, he had previously indicated, quite apart from that, that he had taken the decision not to appear today.
13. In these circumstances, I saw and see no reason why I should not deal today with the application for leave to appeal and, having considered the grounds of appeal, I have no hesitation whatsoever in granting that leave to appeal. In my view, that leave to appeal is justified because the claimants have indeed a real prospect of success. I should make it plain that, as far as I am concerned, I would welcome my earlier decision being overturned because, as I have said previously, the allegations of actual bias against me are, in my view, entirely spurious. For the reasons set out by Lord Clarke in Summers v Fairclough Homes Limited in the Supreme Court, it seems to me that I am the best person to deal with all these applications and, if I can, also with the substantive proceedings if I were to grant such permission, as to which I keep an open mind.
14. There is a second point as well which seems to be important and why there is good reason for granting leave to appeal. In particular, it seems to me that applications of this kind for permission to bring committal proceedings following a trial are becoming more common. A good illustration of this practice, of this modern trend, perhaps, is reflected in the judgment of Andrew Smith J given last week in Dar Al Arkan Read Estate Development Company and another v Al Rafai and others  EWHC 1055 (Comm). As appears from the judgment in that case Andrew Smith J decided to recuse himself. If this type of application is reflective of a recent trend, it seems to me that it would be extremely beneficial for the Court of Appeal to consider what is the proper approach in cases of this kind."
"the bail money had been lodged by Ms Bacon pursuant to a "corrupt agreement" or a "conspiratorial arrangement" between a number of persons including [Livesey] aimed at achieving Sellers' release on bail by depositing $10,000 which was in truth his own money or money which was available to him."
"a fair-minded observer might entertain a reasonable apprehension of bias by reason of prejudgment if a judge sits to hear a case at first instance after he has, in a previous case, expressed clear views either about a question of fact which constitutes a live and sufficient issue in the subsequent case or about the credit of a witness whose evidence is of significance on such a question of fact."
It was important that Livesey was not a party to Ms Bacon's original application nor does it appear that he had himself given evidence to the first tribunal.
"I accept that it must always be open to a judge to decline to proceed further with the hearing of any matter on the grounds that he is personally embarrassed by, for example, an appearance of bias. Subject to that, I have no doubt that it was the duty of (the trial judge) having heard and determined the issues in the action, himself to determine all applications as to the costs of the action the fact that a judge has determined the issues in the action and in doing so has expressed views on the conduct of the parties and of the witnesses, neither constitutes bias nor the appearance of bias in relation to subsequent applications in the action If the application can only be sustained by proof of serious misconduct or crime, the standard of proof should be higher than would otherwise be the case, but, subject to that, the application should be dealt with the same way as would any other application for costs against a solicitor."
Parker LJ dissented as to the result on the particular facts of the case, but agreed as to the principle, saying at page 1343G:
"Save in exceptional circumstances, it will be for the judge, who heard the case to determine the matter on a subsequent hearing there can be no doubt of this, the judge is dealing with the costs of an action which he has himself heard."
Balcombe LJ agreed with Sir John Donaldson, saying at page 1346D:-
"I accept that the judge has a discretion to direct that the application be heard by another judge, but the discretion is a judicial one, to be exercised in accordance with settled principles, of which one is undoubtedly that the application should be tried by the judge who heard the action unless there are compelling reasons to the contrary. A judge properly exercising his judicial function, e.g. by criticising the conduct of a party's solicitor in the course of his judgment on a matter which he considers relevant to his decision, cannot by that process be said to be biased. Bias is the antithesis of the proper exercise of a judicial function. If such an application has to be heard by another judge, the procedure will lose its summary character. It will become even more expensive and time consuming than it is already, and the defendants are justified in their contention that the remedy of the party damnified by the solicitor's misconduct will become illusory"."
This authority was followed in Re P (A Barrister)  1 C.A.R. 207.
" Most, if not all, of the cases in which this test has been discussed have been cases of modest dimensions. We know of no case approaching the scale of this where a charge of apparent bias has been made. That makes it the more important to recognise, as we understand to be agreed, that the hypothetical observer is not one who makes his judgment after a brief visit to the court but one who is familiar with the detailed history of the proceedings and with the way in which cases of this kind are tried. We find assistance in observations made in the Supreme Court of New South Wales by Mahoney JA in Vakauta v Kelly (1988) 13 NSWLR 502, 513A: "In considering the content of the apprehended bias principle the court must look to, inter alia, two things: what are the norms or standards relevant to the kind of case before it; and whether, on the facts, the requirements have been fulfilled."
Sir Thomas Bingham MR also said this, at p 355:-
"In a case such as this, in which interlocutory applications proliferate, it may well be that one side fares more successfully, perhaps much more successfully, than the other. There are a number of possible explanations for this, the most obvious being that the successful party has shown greater judgment, determination and knowledge of the rules than its opponent. Mr Ross-Munro accepted, as we understood, that no inference of apparent bias could be drawn from the fact that most, or all interlocutory applications had been decided against Dr Hashim. We agree. He also disclaimed any attack on the correctness of Chadwick J's interlocutory decisions. This we find puzzling. It must, we think, be hard to show consistent unfairness in the absence of consistent error."
" a real danger of bias might well be thought to arise if there were personal friendship or animosity between the judge and any member of the public involved in the case; or if the judge were closely acquainted with any member of the public involved in the case, particularly if the credibility of that individual could be significant in the decision of the case; or if, in a case where the credibility of any individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such person's evidence with an open mind on any later occasion; or if on any question at issue in the proceedings before him the judge had expressed views, particularly in the course of the hearing, in such extreme and unbalanced terms as to throw doubt on his ability to try the issue with an objective judicial mind (see Vakauta v Kelly (1989) 167 C.L.R. 569); or if, for any reason, there were real grounds for doubting the ability of the judge to ignore extraneous considerations, prejudices and predilections and bring an objective judgment to bear on the issues before him. The mere fact that a judge, earlier in the same case or in a previous case, had commented adversely on a party or witness, or found the evidence of a party or witness to be unreliable, would not without more found a sustainable objection. In most cases, we think, the answer, one way or the other, will be obvious. But if in any case there is real ground for doubt, that doubt should be resolved in favour of recusal. We repeat: every application must be decided on the facts and circumstances of the individual case."
" We, however, see no difficulty in proceedings by way of contempt in such cases, provided of course that the relevant facts can be proved. It was submitted in the course of argument that there might be difficulties in inviting the trial judge to hear applications for permission to bring proceedings for contempt. However, in the absence of special circumstances, we cannot see any difficulty in the trial judge hearing both the application for permission and, if permission is granted, the proceedings themselves. On the contrary, it seems to us that the trial judge is likely to be best placed to hear both. Such an approach is likely to be both the most economical and the most just way to proceed. The only circumstances in which that would not be the case would be where there was apparent bias on the part of the judge."
" unless the first judge has shown by some judicial error, such as the use of intemperate, let me say unjudicial, language, or some misjudgement which might set up a complaint of the appearance of bias, the fair-minded and informed observer is unlikely to think that the first judge is in any different position from the second judge other than that he is more experienced in the litigation.
70. In this connection, it seems to me that the critical consideration is that what the first judge does he does as part and parcel of his judicial assessment of the litigation before him: he is not "pre-judging" by reference to extraneous matters or predilections or preferences. He is not even bringing to this litigation matters from another case (as may properly occur in the situation discussed in Ex Parte Lewin; In re Ward  NSWR 446, approved in Livesey v New South Wales Bar Association 151 CLR 288). He is judging the matter before him, as he is required by his office to do. If he does so fairly and judicially, I do not see that the fair-minded and informed observer would consider that there was any possibility of bias. I refer to the helpful concept of a judge being "influenced for or against one or other party for reasons extraneous to the legal or factual merits of the case": see Secretary of State for the Home Department v AF (No. 2)  1 WLR 2528, para 53. I have also found assistance in this context in Lord Bingham's concept of the "objective judgment". The judge has been at all times bringing his objective judgment to bear on the material in this case, and he will continue to do so. Any other judge would have to do so, on the same material, which would necessarily include this judge's own judgments."
"7. It is always tempting for a judge against whom criticisms are made to say that he would prefer not to hear further proceedings in which the critic is involved. It is tempting to take that course because the judge will know that the critic is likely to go away with a sense of grievance if the decision goes against him. Rightly or wrongly, a litigant who does not have confidence in the judge who hears his case will feel that, if he loses, he has in some way been discriminated against. But it is important for a judge to resist the temptation to recuse himself simply because it would be more comfortable to do so. The reason is this. If the judges were to recuse themselves whenever a litigant whether it be a represented litigant or a litigant in person criticised them (which sometimes happens not infrequently) we would soon reach the position in which litigants were able to select judges to hear their cases simply by criticising all the judges that they did not want to hear their cases. It would be easy for a litigant to produce a situation in which a judge felt obliged to recuse himself simply because he had been criticised whether that criticism was justified or not. That would apply, not only to the individual judge, but to all judges in this court; if the criticism is indeed that there is no judge of this court who can give Mr Dobbs a fair hearing because he is criticising the system generally, Mr Dobbs' appeal could never be heard.
8. In the circumstances of this case, I have considered carefully whether I should recuse myself. Mr Dobbs has not advanced this morning any reason why I should approach his appeal with a disposition to decide against him; other than that he tells me that he is criticising me in relation to past conduct. That, I am afraid, is not a good reason for me to recuse myself. I do not do so. The other members of the court, who are within the rather wider ambit of Mr Dobbs' application take the same view."
If the judge had been referred to these remarks (reiterated by this court in Ansar v Lloyds TSB Bank Plc  IRLR 211, para 17) he might very well have decided he ought not to recuse himself.
Lord Justice Moore-Bick:
Lord Justice Laws: