The Navigator Rquities V. Deripaska, [2020] EWHC 1798 (Comm)

The Navigator Rquities V. Deripaska, [2020] EWHC 1798 (Comm)

Introduction

In the light of the contempt of court dispute, this is one of recent cases of the United Kingdom that provides strong judicial precedent and guidance for all the cases that is filed under the name nature of dispute. In this particular case, Justice Baker was of extremely critical of the committal proceeding of a quasi-criminal matter and he was of the view that in the past 30 years, the commercial disputes between two parties have become extremely hostile and aggressive and as such to take such recourse in order to provide for one’s vengeance was tagged as being unjust towards the other party of a commercial dispute.

Summary of the Case

The main point of the case arose from an arbitration proceeding that involved Mr. Deripaska and Mr. Vladimir Chernukhin in relation to a property shareholding agreement. Through the arbitration proceeding, it was held that the proceeding shall go in the favor of Mr. Chernukhin and as such Mr. Deripaska and other parties hereto were instructed to buy the Mr. Chernukhin out and a worldwide freezing order was granted against Mr. Deripaska in the year of 2018. In the face of such award, Mr. Deripaska challenged the same under section 67 of the Arbitration Act, 1996 and it was contested that Mr. Chernukhin is not really an interested party of the shareholding agreement and as such Mr. Deripaska shall not be instructed to buy him out. However, in this appeal as well, the decision of the arbitration was upheld and the petition under section 67 was dismissed in the year of 2019.

However, long after the matter was settled by and between the parties and the interference of the court, where Mr. Chernukhin came before the court with a case of contempt of court. It was contended in this particular case that Mr. Deripaska in the year of 2019 was instructed for redomiciling of En+ from Jersey to a recently established Russian Special Administrative Region. However, Mr. Deripaska was thereby charged with the fact that he was failed to do so and as such a contempt of court charge was brough against him.

Legal Issues Involved

In the instant case, the only legal issue that was brought before the court that whether Mr. Deripaska was in a contempt of court or not and whether the instant case involves any contempt of court on behalf of the Mr. Deripaska as he failed to conduct the domiciliation of En+. The core of contempt application essentially alleged that Mr. Deripaska procured the passing of a resolution of the En+ shareholders in favor of the Re-domiciliation, denuding particular shares of Jersey in favor of the Claimant hereto. Under the same, Mr. Deripaska denied the allegation and also denied any kind of breach on behalf of him as well.

Was there any breach of contract?

Relying on the terms of the case of JSC BTA Bank v. Ablyazov , it can be construed strictly that there could not any dispute regarding the applicability of the principle as contended by the claimant herein and in the same way of an injunction thereof, it can be said that any contractual promise shall give effect to a sense of breach if the same promise is not fulfilled by either of the party . Hence, in the absence of any undertaking, no such promise could be established and in the same way no concept of breach would arise as well.

Was there any presence of Contract?

The second point of law that is to be considered in this instant case that whether there was any contract to consider in the first place. In this case, the case of Kensington Housing Trust V. Oliver , could be referred where it was held that once both the parties enter upon a consent order, the intermediate contract thereof seize to exist and as such none of the parties could enforce any contract of any nature in the future .

Was there any contempt of court?

The question of contempt of court is of very distinctive character and as such it provides with a lot of material to think about. Contempt of court is essentially civil proceedings that are quasi-criminal in nature and if a contempt of court appeal is brought before a court of law for an improper purpose thereof, the same shall be strived to be taken down. The same judgement was given in the case of JSC BTA Bank v Ablyazov .

Judgement

In the judgement of the case thereof, all of the three points of law was considered and Andrew Baker J essentially focused on the case of contempt of court application. Relying the abovementioned case law and the rule of law and the relevant doctrine on the same grounds as well, it was held by Justice Baker that in order to provide for a breach of contract, a necessary undertaking by either of the party is necessary and as such in the absence of such undertaking, it cannot be said that any breach happened and either of the party could be held liable for any kind of breach as well.

In the second point of law, it was held that there was no contract between the parties. While this was not a rule of law or forms a precedent thereof and essentially an obiter dictum of the instant case, it was held by Andrew Baker J that once two parties enter into a consent order as it has been under this particular case, no such contention as to the presence of a contract cannot be held tenable and as such it cannot be stated that either party had any contract to deal with. Once two parties have been given an order of the court or an arbitration proceeding and it has been reiterated that both the parties shall do in accordance to the arbitration order only and if one of the parties does not stick by the order of the arbitration, the other party cannot decide that there has been a case of contractual obligation or breach of such contract herein.

For the purpose of deciding the contents of the contempt of court, it was held that the prosecuting another party under the application of contempt of court should be under the proper purpose of inviting the court for the interest of the public justice and as such if the matter is of public interest and the contempt of court has been done in such a view, the court can deliver into the matter with any civil or criminal proceeding herein. Keeping the purpose of the contempt of court application in mind, it was held that in this particular case, the contempt of court was pursued dispassionately and it was held that the same was filed in such a manner that the claimant did not think of the outcome of the judgement under proper light. In the view of Andrew Baker J, it was held that the instant case of contempt of court was done in a manner to retrieve vengeance from the other party and as such the same had been filed in an aggressive and partisan fashion. Also, it was held by the Justice that in the recent times, the cases of commercial disputes have essentially taken the shape of wrestling match and commercial litigation often go to the wrong end of the justice in order to drag the defendant herein.

Thus, in the particular case, the application of contempt of court was struck down as being an abuse of process and the same was dismissed by the Justice as well. Also, in order to clarify the situation better, the case of Henderson v. Henderson was referred by Andrew Baker where the interlocutory relief update was prayed under the contempt of court action and it was held that no application of mind has been provided before granting of such proceeding hereto. Also, it was held that the contempt of court application that was based solely on the ground of the re-domiciliation failure by Mr. Deripaska is essentially not adjacent to the previous arbitration procedural award and as such the same shall not be entertained by the appellate court whatsoever.

Conclusion

This recent case on the contempt of court hence provides with a strong insight on the happening of the recent situation of the court proceeding and how court proceedings are essentially abused to end the necessity of a commercial proceeding. The dismissing of this instant application speaks volume of the stance of the courts in respect to such cases and it shall provide for a strong precedent for all the commercial disputes thereon.