High Court finds it had no power to order a former director of a corporate judgment debtor to be re-examined about the company's assets

The High Court has dismissed an application to re-examine the former director of a corporate judgment debtor about the company's assets, despite the director having been engaged in a long campaign to strip the company of its assets and to prevent enforcement of the debt – including through intentionally deceiving the court in his original examination conducted under CPR 71.2: Deutsche Bank AG v Sebastian Holdings Inc [2025] EWHC 283 (Comm).

The decision shows that there are limits to the steps the courts can take to protect the integrity of its processes and ensure its orders are effective, even in the face of deliberate attempts to frustrate enforcement. It is well established that, where the court has made an order against a person over whom it had validly assumed jurisdiction, it has an inherent power to make incidental or ancillary orders to ensure that its original order is effective. The present decision suggests, however, that an application for the same relief sought in the original order is unlikely to be regarded as ancillary to that order – even if neither the original order nor attempts to punish a breach of that order have been effective.

The judgment also acts as a reminder that the court's power to examine the officers of a corporate judgment debtor about its assets under CPR 71.2 applies only to current officers who are within the court's jurisdiction when both the application and the order are made. It is therefore of limited utility where directors are outside England and Wales or are prepared to resign from office to avoid being subject to examination under the rule.

Background

The present decision arose in the context of long-running litigation between the claimant bank (DB) and the defendant company (SHI) and SHI's former director, Mr Alexander Vik.

DB obtained a substantial judgment against SHI in 2013, but Mr Vik has stripped SHI of over US$1 billion of assets to prevent DB recovering the judgment debt. Including interest, that debt is now over US$360 million. 

In 2015, DB obtained an order under CPR 71.2 requiring Mr Vik, who was then a director of SHI, to attend court for questioning in relation to SHI's means of paying the judgment debt (see our blog post here). That order was served personally on Mr Vik while he was in the jurisdiction. He subsequently resigned as a director of SHI.

Mr Vik attended at court for questioning as required by the order, but DB was not satisfied with his answers. Rather than seeking an adjournment of the examination, DB applied to commit Mr Vik for contempt of court for his failures to comply with the order (see our blog post here).

In June 2022, Moulder J held that Mr Vik was in contempt, having deliberately given false evidence to the court about SHI's assets. She ordered him to be committed to prison for 20 months, but that (simplifying slightly) the committal be suspended until six months from the final determination of any appeal against the order, on the condition that Mr Vik complied with certain conditions scheduled to the order (including that he attend court for a further examination as to SHI's means within nine weeks of the determination of the appeal), after which the order for committal "shall be discharged unless prior to that date an application has been made by DB to lift said suspension".

Mr Vik appealed the committal order, and his appeal was dismissed on 24 February 2023. His further examination was fixed for September 2023, but shortly beforehand Mr Vik's solicitors wrote to DB's solicitors stating that, since the six months from the final determination of Mr Vik's appeal expired on 24 August 2023 and DB had not applied to lift the suspension of sentence, the committal order had been discharged pursuant to the order. Mr Vik also applied for the further examination hearing to be vacated.

In October 2023, Henshaw J held "with regret" that Mr Vik's interpretation of the committal order was correct and the order had been discharged on 24 August 2023. DB was refused permission to appeal.

In February 2024, DB made the present application seeking an order for a further examination of Mr Vik under the court's inherent jurisdiction and/or CPR 71.2. That order was served on Brecher LLP, Mr Vik's solicitors in the underlying proceedings between DB and SHI in which the CPR 71 order had been made. They responded to say they had no instructions to accept service.

Decision

The High Court (Cockerill J) dismissed DB's application.

Cockerill J noted that, as established in Masri v Consolidated Contractors [2009] UKHL 43, the court's power to make an order for examination under CPR 71.2 applies only to an officer of the corporate judgment debtor who is within the jurisdiction at the time that both the application and the order are made. It also applies only to current officers of the judgment debtor (Vitol SA v Capri Marine Ltd [2008] EWHC 378 (Comm), approved in Masri).

Accordingly, it was clear that the court had no power to make an order de novo under CPR 71.2. There was no evidence that Mr Vik was a current officer of SHI, he was not in the jurisdiction when the application was issued, and there was nothing to suggest he would be when any order might be made.

DB's case was that the court had an inherent power to make further incidental or ancillary orders to ensure that its original 2015 order was effective – including making the further proposed Part 71 order. Mr Vik submitted that the court could only make such ancillary orders as are within its power to make, so if an order couldn't be made under CPR 71.2 (because Mr Vik was not an officer of SHI and was not within the jurisdiction) it could not be legitimate to make such an order via the inherent jurisdiction.

The judge concluded that the order was not ancillary, as it was "not directed to doing something on the way to the original order, or different in quality but complementary to it". What was sought was effectively a rerun of the 2015 order, for the same kind of relief as would be granted on any application under CPR 71.2. The effect of the order would not be to breathe new life into the 2015 order or provide some means to enforce it.

The judge commented that it was "very tempting" to take a broad view of what was ancillary in the light of Mr Vik's determined attempts to avoid complying with the court's judgment and the original 2015 order, but it was important to ensure the court did not take "an excessive jurisdiction".

If the proposed order was incidental to anything, it was either the judgment or the committal order, but neither provided a basis for making such an ancillary order because they both had codes for non-compliance – for the judgment, the court's enforcement mechanisms including Part 71, and for the committal order, the suspended sentence.

The judge considered that there was also the risk that a re-examination of Mr Vik, with a view to pursuing him again for contempt of court, would be contrary to the rule against "double jeopardy". She did not accept DB's argument that there would be no double jeopardy because any failures to comply would be a "fresh contempt" – commenting that it would only be a fresh contempt if there were a fresh order, and it was common ground that the court could not make a fresh order under CPR 71.2.

The judge went on to consider whether, if she had the necessary power, she would have exercised it to order Mr Vik to attend a further examination. She would have concluded that, on balance, the discretion should not be exercised, as it "would almost inevitably be an empty gesture" given the repeated efforts that had already been made to get more information from Mr Vik and it would not be appropriate "to devote more of the Court's resources to this futile pursuit".  

In any event, the court found that the CPR 71.2 application had not been validly served on Mr Vik. The fact that he had previously been served with documents relating to the costs proceedings and committal proceedings via Brecher did not mean that that would be valid service for documents relating to these other proceedings.