In yet another action by JSC BTA Bank against Mr. Khrapunov, the English Court of Appeal refused to set aside an order made by Justice Phillips, compelling Mr. Khrapunov to attend court in England and be cross-examined despite fresh evidence that the Appellant could be detained in England and extradited to Ukraine if he were to attend Court in England.
The Bank successfully applied to have the Appellant attend court for cross examination as to the whereabouts of funds that the Bank alleged he had dissipated in contempt of a freezing order made against him. However, the Appellant did not attend the hearing and instead sought to have the order varied so that he would be allowed him to give evidence via video link from Switzerland. The High Court refused to vary the order and Mr. Khrapunov appealed that refusal.
The Court of Appeal found that, in light of the new evidence showing a risk of extradition, the Court needed to balance the risk of Mr. Khrapunov being extradited if he attended the trial against any prejudice that would be done to the Bank in having to conduct cross-examination by video-link if Mr. Khrapunov remained in Switzerland.
The Court then went on to assess the process for giving evidence in Switzerland and found that it would afford the Court too little control over its processes. It held that the Appellant’s undertakings to comply fully with the Court’s rules of cross-examination while in Switzerland could be illegal under Swiss law, which would have the effect of violating comity. The Court further opined that it had a duty to ensure that Freezing Orders remained an effective mechanism of protecting assets and that cross-examination in Switzerland would unlikely be an effective means of obtaining useful information from the Appellant which could assist in the enforcement of the freezing order.
The Court of Appeal concluded that while the Appellant’s concerns of extradition were more than fanciful they were not serious enough to displace the concerns over the ability to conduct effective cross examination of Mr. Khrapunov if he were to give evidence by video link whilst in Switzerland. This hardline approach is likely to be welcomed by creditors and demonstrates the Court’s overriding intention to force compliance with freezing orders.