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	England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Asia Islamic Trade Finance Fund Ltd v Drum Risk Management Ltd & Ors [2015] EWHC 3590 (Comm) (04 December 2015) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2015/3590.html Cite as: [2015] EWHC 3590 (Comm)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Rolls Building Friday, 4th December 2015

MR. JUSTICE POPPLEWELL:

1. This is the hearing of an application issued by the claimant, Asia Islamic Trade Finance Fund Ltd ("AITFF"), on 25 September 2015, for declarations that the second defendant, Arex LLP ("Arex"), the third defendant, ASD Enerji Madencilik Petrol Ürünleri Sanayi ve dis Ticaret Anonim Sirketi ("ASD"), and the fourth defendant, Mr. Atilla Dogan, are in contempt of court, and for the imposition of penalties, for failing to comply with the disclosure provisions in paragraphs 11 and 12 of a Without Notice Freezing Order granted by Flaux J on 25 June 2015.
2. Disputes have arisen between AITFF and the defendants in relation to sums which are due and owing by Arex to AITFF under a Sharia compliant Master Murabaha Financing Agreement dated 9 July 2013 in respect of finance provided by AITFF for the purpose of the sale and purchase of coal by Arex. AITFF has obtained default judgment in respect of that claim, because Arex was served with proceedings within the jurisdiction and failed to acknowledge service.
3. The second aspect of the dispute involves the disappearance of about 35,000 metric tonnes of coal which was held, or was to be held, as AITFF's security for sums advanced under the Murabaha Financing Agreement. AITFF maintains that the coal was misappropriated by one or more of the defendants and has, therefore, brought claims for breach of a number of agreements (known as the Collateral Management Agreements or "CMAs") and claims in conversion, trespass, negligence, conspiracy, bailment and for procuring breach of contract, and seeking proprietary remedies.
4. Mr. Dogan is the controlling shareholder and de facto alter ego of ASD. Arex is a limited liability partnership, which is ultimately beneficially owned by Mr. Dogan and controlled by him.
5. The claim form was issued on 26 June 2015. It was served on each of the defendants, by email and courier, between 26 and 30 June 2015. Formal service on ASD and Mr. Dogan in Turkey has not yet taken place. Attempts are continuing on the part of AITFF to effect such formal service through the court's foreign process section.
6. On 6 August 2015 AITFF filed Particulars of Claim which were subsequently served on the defendants by email and courier. Except for the first defendant, Drum Risk Management Limited ("Drum"), none of the defendants has acknowledged service or served a defence.
7. On 25 June 2015, Flaux J granted a Without Notice Freezing Order restraining Arex, ASD and Mr. Dogan from disposing of, dealing with or diminishing the value of their worldwide assets up to the value of US $6,299,614. That order contained disclosure provisions at paragraphs 11 and 12 in the following terms.

"11(a) Unless paragraph 11(b) applies, each Respondent must within 72 hours of service of this order and to the best of his ability inform the Applicant's solicitors of all his assets worldwide exceeding US$20,000 in value, whether in his own name or not and whether solely or jointly owned, giving the value, location and details of all such assets. In the case of any bank, building society or similar account that Respondent must give the name(s) in which such account is held, the name of the bank, building society or other entity, the address of the branch at which the account is held, the number of the account, and the balance of the account.

(b) If the provision of any of this information is likely to incriminate a Respondent that Respondent may be entitled to refuse to provide it, but is recommended to take legal advice before refusing to provide the information. Wrongful refusal to provide the information is contempt of court and may render the Respondent liable to be imprisoned, fined or have his assets seized.

12. Within five London working days after being served with this order, each Respondent must swear and serve on the Applicant's solicitors an affidavit setting out the above information, and stating in particular to the best of the Respondent's information, knowledge and belief,

(a) what has happened to the coal which is the subject of this application;

(b) the current location of that coal;

(c) the amount of the proceeds of sale of any coal which is the subject of this application;

(d) the location of those proceeds, identifying with precision any bank account into which they have been paid."

8. Between 25 and 29 June 2015, the Without Notice Freezing Order and the associated documents were served on Arex, ASD and Mr. Dogan by email and courier. No substantive response was received from any of them following service of the order. In particular, no disclosure was provided as required by paragraphs 11 and 12 of the order.
9. On 9 July 2015, at the return date, Flaux J continued the Without Notice Freezing Order until final judgment or further order. Although the relevant defendants had been given notice, and, indeed, Mr. Dogan had indicated orally that he intended to instruct solicitors to attend on his behalf, none of the relevant defendants - that is to say ADS,Arex or Mr. Dogan - attended the hearing.
10. Between 9 and 10 July 2015 the Final Freezing Order was served on Arex, ASD and Mr. Dogan by email and courier.
11. On 30 July and 19 August 2015 attempts were made to effect personal service of the Freezing Orders on Mr. Dogan at Mr. Dogan's residential address and at ASD's business address. On the first occasion, Mr. Dogan was found but expressly refused service. On the second occasion, persons present at the address at which service was attempted spoke, or appeared to speak, to Mr. Dogan over the telephone, who gave instructions not to accept service of the documents. Therefore, in accordance with Turkish law, on each occasion the documents were left with the local Mukhtars, that is to say local headmen. The Mukhtars have subsequently confirmed that Mr. Dogan has duly collected the documents.
12. On 12 August 2015, AITFF's solicitors emailed the Freezing Orders to Turkish lawyers, Celik Law and Consultancy ("Celik Law"), who were instructed on behalf of ASD and Mr. Dogan.
13. In addition to service of the Freezing Orders in the way I have indicated, AITFF's solicitors have written to Arex, ASD and Mr. Dogan on numerous occasions drawing attention to the penal notices on the Freezing Orders, explaining the effect of the orders, specifically pointing out the disclosure obligations, urging compliance and reiterating the consequences of continued non-compliance. In particular, they did so in letters or emails of 25 June, 6 July, 8 July and 12 July 2015.
14. There was also a meeting on 7 August 2015 between AITFF's solicitors and Celik Law at which AITFF's solicitors reiterated the nature of the obligations of Arex, ASD and Mr. Dogan under the Freezing Orders, particularly in relation to disclosure and the consequences of continued non-compliance. At the meeting Celik Law acknowledged that ASD and Mr. Dogan are aware of the Freezing Orders. Celik Law stated that the respective defendants have refused to comply with the terms on the basis that there are Turkish bankruptcy proceedings in place against ASD which somehow prevent compliance. As I shall explain in due course, there is, in fact, no such impediment by reason of any Turkish bankruptcy proceedings.
15. In the above circumstances, on 25 September 2015, AITFF issued the present application seeking orders declaring Arex, ASD and Mr. Dogan to be in contempt of court and seeking the imposition of penalties. A first hearing was fixed, potentially for directions, to be heard on 9 October 2015.
16. Between 29 September and 3 October 2015, this committal application was sent to the relevant defendants by email and courier to their respective addresses; it was sent to Celik Law; and it was sent to the lawyers representing ASD in the Turkish bankruptcy proceedings.
17. On 8 October 2015, the day before the hearing for directions which had been listed to be heard by me, a statement of Mr. Dogan, which referred to the defendants only as ASD and Mr. Dogan, not Arex, was handed into court by an unknown female individual. No copy was sent to the claimant's solicitors and it only found its way to AITFF's solicitors when it came to my attention through court channels and I directed that a copy be sent to them. In that statement, Mr. Dogan said that he did not deny that he was in debt to the claimant, but he denied any role in the disappearance of the coal, blaming Drum for misappropriating it and claiming that Drum had not provided any information as to where the coal had gone. He also referred to a number of properties. I will return in due course to the content of that statement, but, as I will explain, it fell well short of compliance or even purported compliance with the disclosure requirements of Flaux J's order.
18. At the hearing on 9 October 2015, which, despite having been on notice, was not attended by Mr. Dogan, Arex or ASD, I made a number of orders and directions. I ordered that, pursuant to CPR 81.8 and 81.24, personal service of the Freezing Orders was dispensed with and service by the alternative means already effected was to be good service. I granted permission to serve the committal application and associated documents on ASD and Mr. Dogan out of the jurisdiction and, pursuant to CPR 81.8, 81.10(5), 81.24 and 81.26(5), I dispensed with personal service and ordered that service was to be permitted by the alternative means used - that is to say email and courier - to the various addresses, including those of the Turkish lawyers.
19. I determined that the relevant defendants were to be given a further final opportunity to provide the disclosure which had originally been required by the Freezing Orders by a further final deadline; and I ordered Mr. Dogan also to provide the documents in Turkish to which he had referred in the statement which was handed into the court on 8 October.
20. Paragraphs 8 and 9 of my order were in the following terms.

"8. On or before 4 pm on 15 October 2014, the Fourth Defendant is to provide to the Claimant's solicitors a copy in Turkish of:

(1) The decision of the 6^th Istanbul Public Prosecutor's Office; and

(2) The documents relating to the seizure of his assets and properties;

which are referred to in the last paragraph of his statement provided to the Court on 8 October 2015.

9. On or before 4 pm on 15 October 2015, each of the Second, Third and Fourth Defendants is to provide sworn written evidence containing the information required by paragraphs 11 and 12 of the Order of Mr Justice Flaux dated 25 June 2015, stating the position as at (a) 25 June 2015 and (b) the date of filing the sworn written evidence."

21. I also gave directions for the hearing of the committal application. I directed that, following service of any further evidence upon which AITFF wished to rely, the defendants were to file and serve any evidence on which they intended to rely by no later than 3 November 2015.
22. I also ordered that AITFF should send a letter, the terms of which were approved by the court, which reiterated to these defendants in plain language the nature of their disclosure obligations, the consequences of continued non-compliance and a recommendation that legal representation be obtained, with details of who to contact about the possibility of criminal legal aid.
23. In accordance with my order, between 9 and 12 October 2015, the committal application and all relevant documents, including the letter to which I have referred, were duly served on the relevant defendants by email and courier to the addresses specified in the order.
24. On 12 October 2015, Celik Law wrote, by email, to AITFF stating that they had received AITFF's emails but

"due to some translations it will not be possible to send you the attachments before 15 October. Some documents are at Istanbul Public Prosecution Office and they are given by permission. After some translations it will be send to you and to the court."

25. AITFF responded on 13 October by reminding the relevant defendants that, pursuant to my order, any documents could be provided in Turkish and that, in any event, the defendants were required to provide their sworn written evidence on or before 4 pm London time on 15 October. AITFF again emphasised the consequences of non-compliance with that order.
26. The committal applications were listed to be heard by me on 20 November. So far as AITFF and AITFF's solicitors were concerned, nothing more was heard until the day prior to the hearing. However, when I was preparing for the hearing, I caused enquiries to be made as to whether any further documents had been lodged at court and it transpired that they had. A bundle of documents had been lodged at court by an unidentified individual with a short covering letter. The covering letter is signed by Mr. Dogan and, again, identifies the defendants as himself and ASD. The covering letter simply says,

"Documents related to previous petition is attached. I am not able to have Drum's petition and would kindly ask the High Court to order Drum to send the documents to us."

The letter itself is undated and it is unclear exactly when it was lodged at court. It bears a stamp, the date on which is not easy to read and might be 10 or 12 or 18 November. No copy of that evidence was served on AITFF's solicitors, notwithstanding that, after the problem that had arisen on the previous occasion on 8 October, AITFF's solicitors had asked that in future the defendants should ensure that any communications sent to the court should also be copied directly to them.

27. As a result that hearing was adjourned so that AITFF and its legal advisors might consider the material which had been lodged. I shall come back in due course to the content of the documentation.
28. The matter was restored by the claimant for the hearing to take place before me today and the defendants were notified of today's hearing date. The defendants have not filed any more evidence. They have not appeared before me and have not sought to make any further representations.
29. The first question I have to decide is whether it is appropriate to proceed with the application in the absence of the relevant defendants. The correct approach to this question was summarised in a judgment of Briggs J, as he then was, in JSC BTA Bank v. Solodchenko & Others [2011] EWHC 1613 (Ch) at paragraph 13, drawing on the jurisprudence summarised by Roth J in the earlier case of JSC BTA Bank v. Alexander Yu Stepanov [2010] EWHC 794 (Ch). At paragraph 13 Briggs J said this:

"Committal proceedings seeking imprisonment of a respondent are a serious matter.  Although it has a discretion to do so, the court will proceed in the absence of the respondent only in exceptional circumstances.  Committal proceedings are quasi-criminal in nature and are criminal proceedings within the meaning of Article 6 of the Human Rights Convention.  It is, therefore, to the jurisprudence about the discretion to hear criminal proceedings in a defendant's absence that this court will look for guidance in the context of committal.  That jurisprudence was usefully summarised by Roth J, in the contempt context, in recent proceedings, JSC BTA Bank v  Alexander Yu Stepanov [2010] EWHC 794 (Ch) at paragraph 12.

'Contempt proceedings are quasi-criminal proceedings, as Lord Justice Oliver there emphasises, and they are criminal proceedings for the purposes of Article 6 of the European Convention on Human Rights.  I was therefore referred to consideration by the House of Lords as to when a criminal trial can take place in the absence of the defendant. This was in the case of R v Jones (Anthony) [2002] UKHL 5 [2003] I AC 1.  There their Lordships approved, with one qualification, the guidance given in that case in the Court of Appeal in a judgment of the court delivered by Lord Justice Rose, R v Hayward [2001] QB 862.  The Court of Appeal, after noting the general right of a defendant to be present at his trial and indeed to be legally represented, and the discretion of the trial judge to proceed without him, said this (at para.22): 

"That discretion must be exercised with great care and it is only in rare and exceptional cases that it should be exercised in favour of a trial taking place or continuing, particularly if the defendant is unrepresented.  In exercising that discretion fairness to the defence is of prime importance, but fairness to the prosecution must also be taken into account.  The judge must have regard to all the circumstances of the case, including in particular ..."'

The Court of Appeal then set out various factors to be considered, which I read omitting the one that was disapproved by Lord Bingham on appeal in the House of Lords: 

(1) 'The nature and circumstances of the defendant's behaviour in absenting himself from the trial or disrupting it, as the case may be and, in particular, whether his behaviour was deliberate, voluntary and such as plainly waived his right to appear; 

(2) Whether an adjournment might result in the defendant being caught or attending voluntarily and/or not disrupting the proceedings; 

(3)  The likely length of such an adjournment; 

(4)  Whether the defendant, though absent, is, or wishes to be, legally represented at the trial or has, by his conduct, waived his right to representation.'

(5) Concerns an absent defendant's legal representations which does not here apply. 

(6) 'The extent of the disadvantage to the defendant in not being able to give his account of events, having regard to the nature of the evidence against him.'

(7) Concerns the risk of the jury reaching an improper conclusion about the absence of the defendant and so obviously does not apply; and (8) refers to the seriousness of the offence: 

(9) 'The general public interest and the particular interest of victims and witnesses that a trial should take place within a reasonable time of the events to which it relates.'

The remainder are not relevant."

30. Applying those principles, I have little hesitation in concluding that I should proceed in the absence of the relevant defendants. They have been properly served with the Freezing Orders and the committal application. They have had the gravity of the proceedings repeatedly explained to them in the simplest terms and they have been given every possible opportunity to participate in this hearing, to appear and to defend themselves. It is apparent from the history which I have recited that they have taken a deliberate decision to absent themselves from these proceedings. Although Mr. Dogan has indicated that "financially" he was unable to travel to London or to appoint a proxy, he plainly has instructed, and is presumably paying, a Turkish lawyer, and it appears that he continues to deal with the proceedings in Turkey. He was also specifically invited to explore the possibility of obtaining legal aid for the purposes of these proceedings.
31. The steps taken by Mr. Dogan on two occasions to send evidence or submissions to the court by it being handed in anonymously and not copied to the claimant's solicitors suggests an intention not to engage openly with these proceedings but to seek to disrupt them. On any view they reinforce the fact that he is well aware of the proceedings and the committal application.
32. It is, in the light of the history, most unlikely that any further adjournment would result in the defendants' attendance to contest the allegations of contempt. The contempt which is alleged is straightforward and this is not a case in which the absence of the defendants is likely to cause any difficulty in the court fairly and properly being able to determine the merits of the committal application. They are, therefore, at no real disadvantage in choosing not to give their own account of events.
33. I turn, therefore, to the question of whether the defendants are in contempt of court. The only disclosure which has been made which might be capable of fulfilling paragraphs 11 and 12 of the order of Flaux J, comes in the statement of Mr. Dogan of 8 October 2015 and/or in the documents provided to the court shortly before the hearing on 20 November 2015, which I will refer to as the "November documents".
34. In the 8 October statement, Mr. Dogan said a number of things. I refer to it as a "statement", but it was not sworn and it was not, apparently, signed, although each page does bear what look like initials. As I have indicated, it identifies the defendants as ASD and Mr. Dogan himself. It makes no reference to Arex as a defendant. It then says "Atilla Dogan Statement:" and the relevant paragraphs are paragraphs 1, 5, 6, 7 and 8, which read as follows:

"1) I, Atilla Dogan, due to the financial problems both my company and I are dealing with, the fact that all my assets have been seized and a trustee has been appointed to run the company that I own, will not be present at the hearing on 9 October for the lawsuit that was filed against me. The Istanbul 6^th Trade Court has ruled to delay bankruptcy and ruled for an injunction for my company according to its 2015/706 E court case. Due to the injunction decision a trustee has been appointed to audit the accounts of the company and as part of the improvement project its debts have been frozen for a time. Financially, I am unable to travel to London or appoint a proxy. For this reason, without knowing if it is legitimate as part of English law I will have to use the right to defend myself.

…

5) It has been observed by our company and other banks that a large proportion of the property that was entrusted to DRUM through contracts has been destroyed. However, despite numerous attempts at establishing communication, neither the management nor the workers at DRUM have provided any information on where the coal was transported, why the reports were incorrect or how long they have been misinforming both us and the banks and what happened to the coal that has gone missing. The relevant communication is attached (Attachment: 1) The public prosecutor's office in Istanbul has started an inquiry against Drum concerning the missing coal. The case number is 2015/97684. However there has been no progress so far.

6) For as long as we have worked with DRUM the control of the property inside the warehouses was theirs. I also have written permission from Drum to profit from the property that is outside the remit of the contract. The relevant communications is attached (Attachment 2). You will see from these messages that for any property that belongs or does not belong to my company, to change places or for the property to be processed in any way, Drum needs to give permission. When you consider the physical condition of the warehouses and the workers, it is not possible to move the property. During this time it has always been the employees and guards of Drum who have worked at the warehouse 24/7. During the time we worked, it was not possible to enter or exit the warehouse unless we had permission from Drum.

7) The large amount of goods that were stolen from the warehouses, when considering the dates on the reports, would be impossible to transport in 15 or 20 days. This shows that Drum has knowingly and willingly provided false report and is responsible for what has happened to these goods.

8) If you inspect the records and books of the company, which is under inspection in line with Turkish Trade Laws and can be requested from the trustee, you will see that neither I nor my company have anything to do with the disappearance of the goods. On the contrary, because of the missing goods my company is in bankruptcy and my business life is in serious trouble. Almost all of the fake reports that Drum has provided has been included in the file. Drum is the one that needs to provide an explanation. Both me and my company have suffered damages. I have not gone against the freezing injunction of the London courts. All of my personal assets, the flat at address BARAJYOLU CAD ÇAMALTI SIT.A-2 BLK KAT:6 D.23 ATASEHIR, have been seized by Garanti bank, the properties in KARABÜK / SAFRANBOLU / TOKATLI Village have been seized by Isbank, the land in ÍNCÍRLÍ MANDIRASI SULTANKOY M.EREGLÍSÍ-TEKIRDAG has been seized by Ziraat Bank. This can be inquired at the depository of land registries or if given time I can request the files as you see fit."

35. So far as the November documents are concerned, there were five documents. The first was a document in Turkish which, from the translation procured by AITFF, appears to be an extract from an entry at a Land Registry in Turkey made on 29 June 2015, which, so far as AITFF's solicitors have been able to tell, concerns five separate properties, one in the Hacikoy locality of the Sakarya/Ferizli district and four in the Balikli locality of the Sakarya/Ferizli district, and shows the ownership history and the charges against each. It shows that on the date that it was produced ASD were the owners of one property that was subject to provisional attachments in favour of multiple banks dated between 19 and 25 June 2015; that Mr. Dogan's wife owned one property that was also subject to three such provisional attachments in favour of banks dated 24 to 25 June 2015; that Mr. Dogan's wife had transferred her ownership of two other properties to individuals called Samet Durna and Gulderen Akkaya, both on 17 June 2015; and that Mr. Dogan had sold one property which he owned to a buyer whose identity is not clear from the document, also on 17 June 2015.
36. Mr. Dogan had earlier in the course of the dispute provided to AITFF on 19 July 2013 a statement of his assets. That statement listed a number of properties, but none of the properties referred to in the document provided in November of this year appears to coincide with that on the July 2013 statement of assets.
37. The second of the November documents was a document which was already in the possession of AITFF's solicitors and had already been exhibited to an affidavit which had been put before Flaux J on the application to continue the Freezing Order. It was an order in relation to enforcement or attachments against ASD. The effect of the order was that enforcement proceedings and attachments against ASD were stayed, that repossession and sale of any assets which ASD had pledged to other creditors was stayed and that goods were to be returned to ASD, which was to hold them as trustee. There is nothing in that order which has any bearing on the ability of the defendants to comply with the disclosure provisions. Nor does that document purport to record the assets of ASD at 25 June 2015.
38. The third of the November documents, although it is referred to as "Document 5" in Mr. Skeet's seventh affidavit, appears to be the court application document by which ASD applied for that order. On p.4 it indicates that at that date Mr. Dogan owned all of ASD's shares, said to amount to the equivalent of about £2.9 million; and it also indicates that Mr. Dogan owns 100 per cent of the shares in a company called Atay, amounting to the equivalent of about £690,000. Those may be nominal values rather than market values.
39. Fourth there was a document headed "To the Chief Public Prosecutor's Office of Istanbul", which appears to be some sort of court application by ASD and Mr. Dogan to prosecuting authorities reporting alleged theft and fraud by Drum. It appears to have nothing at all to do with the details of the relevant defendants' assets or their whereabouts.
40. Finally, the fifth of the documents, referred to by Mr. Skeet as "Document 3", is a new English translation of substantially the same document which was the statement lodged at court on 8 October. In the November documents no Turkish version of that statement was provided, but there does appear to be one relevant difference of substance between the English versions, in that there is an additional reference to "my land in BALIKLI MEVKIÍ SINANOGLU KÖYÜ FERIZLI / SAKARYA", as Mr. Skeet identifies in paragraph 20 of his seventh affidavit.
41. That is the extent of the disclosure.
42. I am satisfied to the criminal standard that Arex, ASD and Mr. Dogan are in contempt in the following respects. First, there has been no sworn affidavit from any of the defendants. Secondly, there has been no information in relation to assets or the whereabouts of the coal from Arex, the limited liability partnership. Thirdly, so far as ASD's assets are concerned, some evidence of assets has emerged, but not in a form which is or purports to be an account of all such assets falling within paragraph 11. What has been revealed is self-evidently not complete, does not purport to be complete and does not purport to identify the position as at 25 June 2015. Fourthly so far as Mr. Dogan's assets are concerned, the position is the same as that for ASD. There is some evidence of some of his assets but it is not in a form which is or even purports to be a detailed account of all of his assets falling within the terms of paragraph 11 of the order. It is patently not complete; it does not purport to be complete; and does not reveal a full or accurate position of such assets at 25 June 2015.
43. As to the details required by paragraph 12 of Flaux J's order in relation to the whereabouts of the coal, what happened to it or the amount or location of any proceeds, Mr. Dogan does give some indication in the 8 October statement that Drum has not told him what has happened to the coal, but there is no sworn affidavit from him as to those matters, nor, indeed, has he stated in terms that he has no knowledge of what has happened to the coal or of its present whereabouts or the amount or location of any proceeds.
44. Mr. Dogan is guilty of contempt in his personal capacity in those ways. He is also guilty of contempt by reason of the failures by ASD and Arex to comply. That is on one or other or both of two bases. First, under CPR 81.4, proceedings for committal for contempt may be brought against a person required by a judgment or order to do an act who has not done it within the time fixed and rule 81.4(3) provides that, if that person is a company or other corporation, the committal order may be made against any director or other officer of that company or corporation.
45. Mr. Akka QC has submitted that Mr. Dogan should be treated as a director or other officer of both ASD and Arex. So far as ASD is concerned, that submission is made good to the relevant criminal standard. The evidence is that he is the Chairman of the Executive Committee of ASD and is, therefore, an officer. So far as Arex is concerned, although there is evidence that he is, effectively, the party exercising control of the affairs of Arex LLP, I am not satisfied to the criminal standard that he falls within the definition of a director or other officer of that limited liability partnership for the purposes of CPR 81.4(3). However, as regards both ASD and Arex, the evidence does establish to the criminal standard that the breaches of paragraphs 11 and 12 of Flaux J' s order of 25 June by both Arex and ASD have been brought about, procured and assisted in by Mr. Dogan himself. He is the person who has been responsible for conducting the affairs of those companies and it is clear that it is his refusal to comply with those orders on behalf of ASD and Arex which has caused Arex and ASD to be in contempt. On that basis, he is, himself, guilty of contempt by reason of the breaches of Arex and ASD.
46. I conclude, therefore, that, in the respects I have identified, the second, third and fourth defendants have each deliberately and wilfully chosen not to comply with the terms of the Freezing Orders and are in contempt of court. I will, therefore, make declarations in the terms sought in the draft order as follows.
47. The second defendant is guilty of the following contempts of court:

Contempt 1: in breach of paragraph 11 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the second defendant failed to provide information as to "all its assets worldwide exceeding US$20,000 in value, whether in [its] own name or not and whether solely or jointly owned, giving the value, location and details of all such assets" by 28 June 2015 or at all.

Contempt 2: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the second defendant failed to swear and serve on the applicant's solicitors an affidavit setting out the information to be provided pursuant to paragraph 11 of the Without Notice Freezing Order by 2 July 2015 or at all.

Contempt 3: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the second defendant failed to swear and serve on the applicant's solicitors an affidavit stating (a) what has happened to the coal which is the subject of this application; (b) the current location of that coal; (c) the amount of the proceeds of sale of any coal which is the subject of this application; (d) the location of those proceeds, identifying with precision any bank account into which they have been paid by 2 July 2015 or at all.

The third defendant is guilty of the following contempts of court:

Contempt 4: in breach of paragraph 11 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the third defendant has failed to provide information as to "all its assets worldwide exceeding US$20,000 in value, whether in [its] own name or not and whether solely or jointly owned, giving the value, location and details of all such assets" by 28 June 2015 or at all.

Contempt 5: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the third defendant failed to swear and serve on the applicant's solicitors an affidavit setting out the information to be provided pursuant to paragraph 11 of the Without Notice Freezing Order by 2 July 2015 or at all.

Contempt 6: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the third defendant failed to swear and serve on the applicant's solicitors an affidavit stating (a) what has happened to the coal which is the subject of this application; (b) the current location of that coal; (c) the amount of the proceeds of sale of any coal which is the subject of this application; (d) the location of those proceeds, identifying with precision any bank account into which they had been paid by 2 July 2015 or at all.

The fourth defendant is guilty of the following contempts of court:

Contempt 7: in breach of paragraph 11 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the fourth defendant failed to provide information as to "all his assets worldwide exceeding US$20,000 in value, whether in his own name or not and whether solely or jointly owned, giving the value, location and details of all such assets" by 28 June 2015 or at all.

Contempt 8: in breach of paragraph 11 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the fourth defendant procured and assisted the second defendant to fail to provide information as to "all [the second defendant's] assets worldwide exceeding US$20,000 in value, whether in [its] own name or not and whether solely or jointly owned, giving the value, location and details of all such assets" by 28 June 2015 or at all.

Contempt 9: in breach of paragraph 11 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the fourth defendant procured and assisted the third defendant to fail and, in his capacity as an officer of the third defendant failed, to provide information as to "all [the third defendant's] assets worldwide exceeding US$20,000 in value, whether in [its] own name or not and whether solely or jointly owned, giving the value, location and details of all such assets" by 28 June 2015 or at all.

Contempt 10: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the fourth defendant failed to swear and serve on the applicant's solicitors an affidavit setting out the information as to all his assets to be provided pursuant to paragraph 11 of the Without Notice Freezing Order by 2 July 2015 or at all.

Contempt 11: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the fourth defendant procured and assisted the second defendant to fail to swear and serve on the applicant's solicitors an affidavit setting out the information as to all the second defendant's assets, to be provided pursuant to paragraph 11 of the Without Notice Freezing Order by 2 July 2015 or at all.

Contempt 12: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the fourth defendant, procured and assisted the third defendant to fail and, in his capacity as an officer of the third defendant failed, to swear and serve on the applicant's solicitors an affidavit setting out the information as to all the third defendant's assets, to be provided pursuant to paragraph 11 of the Without Notice Freezing Order by 2 July 2015 or at all.

Contempt 13: in breach of paragraph 12 of the Without Notice Freezing Order (as continued by the Final Freezing Order), the fourth defendant procured or assisted the second and third defendants to fail, and (acting in his personal capacity and as an officer of the third defendant) failed, to swear and serve on the applicant's solicitors an affidavit stating (a) what has happened to the coal which is the subject of this application; (b) the current location of that coal; (c) the amount of the proceeds of sale of any coal which is the subject of this application; (d) the location of those proceeds, identifying with precision any bank account into which they have been paid by 2 July 2015 or at all.

48. The next question which arises is whether I should proceed to sentence and impose penalties and sanctions for the contempts which I have found proved.
49. In the Solodchenko case, Briggs J, as he then was, said at paragraph 16,

"In a case where a serious contempt has been proved in a respondent's absence, it is, in my judgment, appropriate for the court to pause before proceeding immediately to sentence and to consider whether the matter should, in the alternative, be adjourned. There are a number of reasons for this:

(a) In ordinary criminal proceedings, a decision to proceed to trial in the defendant's absence by no means leads automatically to sentencing in his absence, as well.  Although I profess no expertise in criminal procedure, my understanding is that, in such circumstances, a criminal court will frequently afford a defendant an opportunity to attend to mitigate, all the more so where a custodial sentence is on the cards.

(b) The balance of factors which, as here, lead to a conclusion that an absent defendant will suffer no injustice if contempt is proved in his absence may well not lead to the same conclusion in relation to sentence. Liability may, as here, be straightforward, but the possibility of purging contempt or other mitigation may well mean that an immediate sentence could cause, or at least risk, injustice or unfairness.

(c) An adjournment during which the respondent is notified that a serious contempt has been proved and that there is a real likelihood of his being imprisoned may serve the beneficial purpose of bringing him to his senses and ensuring compliance.  Alternatively, it may simply be fair to afford him that opportunity."

50. In that case, Briggs J did adjourn the committal proceedings for a brief period before proceeding to sentence and coupled such adjournment with the issue of a bench warrant, requiring attendance at the adjourned sentence hearing. I am persuaded that it would be right to take the same course in this case. The contempts which I have found are serious. It is clear from my judgment, and I wish to make it clear to Mr. Dogan and to the other defendants, that the contempts I have found are so serious that there is a real likelihood of a significant term of imprisonment being imposed, which may be in excess of a year. It is, as it seems to me, desirable that Mr. Dogan should have the opportunity to reflect on that fact, to have the further opportunity to remedy his failures so as to purge his contempt, and or to put before the court any other matters of mitigation before I proceed to a sentence.
51. Accordingly, I will hear submissions about the appropriate date for an adjourned hearing and I will issue a bench warrant requiring Mr. Dogan's attendance at that sentencing hearing.
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