KB-2023-004010 - [2025] EWHC 2689 (KB)

The background history is complex. It is not necessary for the purpose of the issues before the Court to descend to particularity. It suffices to set out a very broad summary.

Mex Group Worldwide Limited (“MGWL”) is a provider of financial derivatives worldwide. MGWL is the holding company of the MultiBank Group. It is the claimant in the Scottish proceedings and in these proceedings. Mr. Smith is a resident of Luxembourg. He is the founder of CSM.

On 18 October 2023, proceedings were brought in Scotland by MGWL against a number of parties including Mr. Smith and CSM. MGWL sought orders for interim relief (i) pursuant to a ‘summons’ under Scottish procedure, orders for the preservation of assets, broadly akin to a freezing order; and (ii) pursuant to a ‘petition’, orders for the preservation and recovery of evidence, broadly akin to a search order.

On the same day, Lord Sandison granted the orders, having heard extensive submissions from Leading Counsel for MGWL. Central to the Scottish Proceedings is the allegation that the defenders to those proceedings conspired to attempt to cause Mex Securities, which is a Luxembourg based securitisation vehicle, to renege upon a settlement agreement it reached in negotiations in Dubai in December 2020 with MGWL (the “Dubai Agreement”). The Dubai Agreement was subsequently annexed as the schedule to a Tomlin order (the “BVI Consent Order”) by which proceedings in the BVI (which has been described as the “MCL Claim”) were compromised.

It is convenient to set out the next stage of the matter by reference to the way in which MGWL put its case for the purpose of the Contempt Application. In its skeleton argument dated 22 July 2024 as updated on 14 November at paras. 20-28, it said the following:

“B.3. Disputes in Other Jurisdictions

20.

The MCL Claim (Taher 31, paras 20-31, [8/145]). The dispute in the MCL Claim related to financial and other support provided by MGWL to or for the benefit of Mex Securities, at the request of its investment manager VDH AG, another defendant to these proceedings, in sums totalling tens of millions of Euros as part of a joint venture between VDH AG and the MultiBank Group relating to Luxembourg issued notes (the “Notes”). Contrary to assurances and undertakings given by VDH AG, it sought to terminate that relationship early, denying MGWL the opportunity to earn substantial commissions on trading on the Notes.

21.

So far as MGWL was concerned the Dubai Agreement was a genuine settlement of an emerging dispute which was subject to considerable complexity and uncertainty, which settlement was the product of lengthy and intense negotiation. The MCL Claim was settled by the BVI Consent Order.

22.

Proceedings in Luxembourg and the BVI (Taher 3, paras 34-36 and 47 [8/147, 8/150]). Very soon after the Dubai Agreement was entered into, however, Mex Securities (acting through Mr Smith and Mr Volotovskiy, so MGWL alleges) began to take steps to impugn the Dubai Agreement and Consent Order. Those attempts have taken a number of forms and have included proceedings in Luxembourg (in which allegations made, it appears, by Mr Smith were later described as ‘scurrilous’ by Bryan J in proceedings in the Commercial Court; see Hastings 2, paragraph 11 at [4/21]) and further proceedings in the BVI, brought by VDHI (another defendant to these proceedings and a company related to VDH AG by majority common ownership).

23.

The Scottish Proceedings. In the Scottish Proceedings, it is alleged that these attempts to impugn the Dubai Agreement and Consent Order are the result of an unlawful means conspiracy. The summons in the Scottish Proceedings is contained in the bundle at [7/114] for completeness. Mr Smith has appeared in person on three occasions in the Scottish Proceedings, most recently on 17 July 2024. Mr Smith sought permission to act for CSM, which was rejected by the Scottish Court. At the hearing of 17 July 2024, CSM was represented by Scottish counsel.

24.

The English Proceedings (Hastings 2, para 15 [4/22]). On 20 October 2023, MGWL issued Part 8 proceedings in England seeking worldwide freezing injunctions ancillary to the Scottish Proceedings under s.25 of the CJJA against all the defendants to the Scottish Proceedings (apart from D11, Mex Securities, because it is in liquidation).

25.

An ex parte hearing took place on 20 October 2023 before Mr Justice Lavender, and the WFO was granted as against all the respondents to it including the Contempt Defendants. The WFO [5/33] contained the following material provisions:

(1)

It contained the usual orders for the provision of information relating to the respondents’ assets (para 11), and for the confirmation of that information by affidavit (para 12);

(2)

It granted permission to MGWL to serve the WFO out of the jurisdiction on all the respondents2 (para 26); and

(3)

It granted permission pursuant to CPR 6.15/6.27 to serve “the Claim Form, [the WFO], the application materials, evidence, skeleton argument, transcript of hearing and any other documents requiring service” on the respondents by an alternative method, specifically by email to addresses set out in the WFO (para 27).

26.

The WFO was served on the Contempt Defendants as set out in Hastings 2, paras 17-18[4/22] and the ‘Schedule of Service’ [5/55 – the relevant pages being 59-60, 66-67 and 74-75], and ‘read receipts’ (or the equivalent) which demonstrate that the documents so served were ‘delivered’ electronically (as opposed to ‘bouncing back’ or being recorded as undeliverable) (Hastings 2, para 19 [4/23]). The emails effecting service of the Order are at [5/76-84].

27.

The WFO was continued on 2 November 2023 at an inter partes first return date hearing by Mr Justice Jay [5/85] with a substantive return date in relation to certain of the defendants being anticipated in December 2023 (Hastings 2, para 21 [4/23]). That Order pushed back the time for compliance with para 12 of the WFO to 6 November 2023. The order of 2 November 2023 was served on the Contempt Defendants by email [5/89-91].

28.

On 16 November 2023, three of the respondents to the WFO, Mr Gollits, VDH AG and VDH Invest SA applied to discharge it. That challenge was heard in December 2023 before Mr Simon Tinkler sitting as a Deputy High Court Judge. After a 3-day hearing the Judge gave an oral judgment discharging the freezing injunctions as against those three respondents on 15 December 2023. MGWL has sought and obtained permission to appeal the decision of Mr Tinkler, and permission was granted by order of Andrews LJ on 14 March 2024. The hearing is listed for 22-24 July 2024. Other respondents have subsequently applied to set aside the WFO, but those applications have been stayed pending resolution of the Scottish Proceedings at a final hearing and those respondents have agreed to pay MGWL’s costs of responding to those (effectively abandoned) applications.”

On 22 March 2024, the Contempt Application was issued.

Within the application notice for the Contempt Application, MGWL sought the following relief, that:

MGWL further sought orders for service out of the jurisdiction and by an alternative method. On 23 April 2024, that application came before Mr Charles Morrison, sitting as a Deputy Judge of the High Court, who made an order granting MGWL permission to serve the Contempt Application on the Contempt Defendants (1) out of the jurisdiction and (2) by an alternative method, specifically email, with a number of email addresses specified in paragraph 2 of the order (being the same email addresses which were identified in the original WFO).

The third witness statement of Mr Hastings sets out the subsequent steps to effect service of the Contempt Application, and otherwise to draw this hearing to the attention of the Contempt Defendants, including:

As noted in the second and third witness statements of Mr Hastings, however, and quite apart from the fact of service of the documentation, it is clear that at least Mr Smith and through him CSM, (the company which he owns and operates) have been aware of the WFO and the Contempt Application for some time:

As set out above, more recently each of Mr Smith, CSM and Mr Volotovskiy has responded to the proceedings.

Having previously ignored the WFO and the Contempt Application, Mr Smith emailed the Court on 11 June 2024, the day before the date of the final hearing. Mr Smith stated:

“Because I wish to appear in person, I need a lot of time to prepare for the case, I have seen that there are many lawyers acting for the applicant and there are thousands of documents to study. Please advise how I can request the court to grant me sufficient time to prepare to defend the application for contempt of court.”