Asia Islamic Trade Finance Fund Ltd v Drum Risk Management Ltd & Ors

Factual and Procedural Background

On 4th December 2015, the court found the second, third, and fourth defendants (referred to as "Arex", "ASD", and "Mr. Dogan") in contempt of court for failing to comply with disclosure provisions in a freezing order made by Judge Flaux on 25th June 2015. Sentence and penalties were adjourned until the date of the current hearing. The judgment of 4 December detailed the history of the proceedings and the contempts, and was served on Mr. Dogan along with the order and notice of the hearing.

On the day before the hearing, a representative of Mr. Dogan filed documents at the Rolls Building, some of which were in Turkish and had not been provided to the claimant's solicitors despite repeated admonishments. The court inferred that this last-minute filing, without prior service to the claimant, was intended to disrupt the sentencing hearing. The documents did not comply with the disclosure requirements of the freezing order, lacking affidavits and full disclosure of assets.

Mr. Dogan was aware of the hearing but chose not to attend or be represented and has not complied with the disclosure provisions, remaining in contempt. The court proceeded to sentence based on the contempts found on 4 December 2015, excluding the newly filed documents, while allowing the defendants liberty to apply for variation or remission of the sentence if they purge their contempt in accordance with procedural rules.

Legal Issues Presented

1. Whether the defendants, including Mr. Dogan, were in contempt of court for failing to comply with disclosure provisions of the freezing order.
2. The appropriate sentence for contempt, considering the nature and seriousness of the breaches.
3. The conditions under which the sentence may be varied or remitted if compliance is subsequently achieved.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Crystal Mews Limited v Metterick & Others [2006] EWHC 3087 (Ch)	Factors affecting seriousness of contempt, including prejudice, culpability, cooperation, and acceptance of responsibility.	Used to identify factors influencing the gravity of contempt and sentencing considerations.
Trafigura Pte Ltd v Emirates General Petroleum Corporation [2010] EWHC 3007 (Comm)	Principles governing contempt penalties and their coercive and punitive functions.	Supported the court’s approach to sentencing for contempt of freezing orders.
JSC BTA Bank v Solodchenko [2011] EWHC 2908 (Ch) and (No 2) [2012] 1 WLR 350	Guidance on sentencing for contempt, including consideration of imprisonment necessity and length.	Informed the sentencing framework applied by the court.
Templeton Insurance Limited v Thomas & Panesar [2013] EWCA (Civ) 35	Considerations on contempt penalties and their purposes.	Referenced in outlining sentencing principles.
JSC VTB Bank v Skurikhin [2014] EWHC 4613 (Comm)	Sentencing approach for continuing breaches of court orders.	Supported imposition of potentially long sentences for ongoing contempt.
ADM Rice Inc v Corporacion Comercializadora de Granos Basicos SA [2015] EWHC 2448 (QB)	Principles on sentencing and remission related to contempt.	Used to explain the court’s discretion in remitting sentences upon compliance.

Court's Reasoning and Analysis

The court analyzed the defendants’ failure to comply with the disclosure provisions of the freezing order and found the breaches to be deliberate and serious. The court noted that Mr. Dogan was fully aware of the requirements and the consequences of non-compliance, having had the benefit of legal advice. The late submission of documents in Turkish, without service on the claimant’s solicitors, was viewed as a tactical attempt to disrupt proceedings and did not amount to compliance.

The court applied established principles from cited authorities, emphasizing that contempt penalties serve both punitive and coercive functions. It considered factors such as prejudice to the claimant, the deliberate nature of the breach, and the contemnor’s awareness and cooperation. The court concluded that immediate imprisonment was appropriate, reflecting the seriousness of the contempt and the need to uphold the administration of justice.

The court also acknowledged the possibility of varying or remitting the sentence if the defendants fully comply with the order in the future, provided any application is made in accordance with procedural rules and supported by evidence served on the claimant’s solicitors.

Holding and Implications

The court IMPOSED AN 18-MONTH IMPRISONMENT SENTENCE on Mr. Dogan for contempt of court, specifically for failing to comply with the disclosure provisions of the freezing order. The sentence was passed based on the contempts found on 4 December 2015, excluding the late-filed documents.

The court allowed the defendants liberty to apply for variation or remission of the sentence if they purge their contempt by complying fully with the order. Any such application must comply with the Civil Procedure Rules and include service of all evidence on the claimant’s solicitors. The court emphasized the seriousness of the breaches and urged prompt and full compliance.

No new legal precedent was established; the decision applies existing principles to the facts of this case, underscoring the court’s firm stance against deliberate non-compliance with freezing orders.