In a further phase in the long running Deutsche Bank (DB)/Sebastian Holdings Inc (SHI) litigation, Moulder J has now committed SHI’s former director, Mr Alexander Vik, to prison for 20-months, suspended on extensive conditions of future compliance.
Earlier in the year, following a heavily contested multi-week committal application, Moulder J found DB had shown beyond all reasonable doubt that Mr Vik had committed multiple breaches a CPR 71 Order requiring him to provide information on the means of SHI ( EWHC 1599 (Comm))
Mr Vik’s contempts included knowingly giving false evidence under oath and deliberately failing to provide documents required by the order.
As the Judge held in her sentencing remarks  EWHC 2057 (Comm) at : “Mr Vik continued his pattern of failing to tell the true position at the committal hearing. Although the judgment was against SHI, Mr Vik for his part continues to do what he can to thwart the DBAG’s entitlement to enforce the Judgment Debt obtained so many years ago”.
In determining the appropriate penalty, Moulder J began by considering the harm caused by and Mr Vik’s culpability for the breaches found. She held that, as well as the inherent damage to the administration of justice (at ) the penalty had to be considered against a background where a judgment debt of over US$340m was still unpaid by SHI after 9 years (at ), to which Mr Vik “played a significant contributory factor” (at ). Mr Vik’s breaches were deliberate, in that he had knowingly failed to comply with the CPR 71 order and provided evidence he did not believe to be true to the court (at ). Moulder J therefore found that Mr Vik’s contempts “caused significant harm to DB” (at ).
As to his culpability, the Judge rejected Mr Vik’s suggestion that, because he had attended the CPR 71 hearing and provided partial disclosure, his culpability was towards the lower end of the scale. She held that this was “a complete mischaracterisation of what has occurred and ignores the findings of the judgment” (at ), noting that Mr Vik had deliberately chosen not to produce documents (at -) and lied to the court when giving evidence, both in 2015 and during the committal hearing (at -). Moulder J concluded that “Mr Vik’s overall culpability is very high” (at ) and, when taken with the harm caused, this “placed the offending towards the top of the range” (at ).
The Judge held that Mr Vik had provided little relevant mitigation and refused to accept the court’s judgment or responsibility for what he had done. She considered that little weight was to be placed on the damage to his reputation, the financial cost of the committal litigation or the personal burden and strain of long running allegations. The damage to his reputation (such as it was, against a background where Mr Vik admitted a “readiness not to tell the truth in his business dealings” (at )) was “entirely of his own making” (at ), whilst payment of indemnity costs to DB “was the price of losing” contested committal proceedings (at ). The Judge did not accept that Mr Vik had suffered any particular burden or strain from the committal proceedings (noting her previous finding he was “unfazed” by four days of cross examination during the hearing (at )), but that in any event Mr Vik was primary cause of for any delay as a result of the interlocutory challenges he had made (at ).
Finally, as to Mr Vik’s willingness to cooperate, against the background of her findings at the hearing, Moulder J noted her “strong doubts as to whether or not this is a genuine willingness” (at ). There was therefore “little or no mitigation” which would serve to reduce the appropriate sentence (at ).
In all, the Judge held that “Mr Vik has committed serious breaches of the court order which he committed deliberately with the intent to frustrate the location of assets of SHI to satisfy the judgment obtained in 2013” (at ). It was therefore appropriate to commit him to prison for 20 months in respect of the dishonest evidence, to be served concurrently with 10 months’ imprisonment in respect of the failure to produce documents, the presence of the second contempt charge aggravating the first (at ). Moulder J indicated that 10 months of the sentence was to be considered punishment for the breaches and to be served in any event, while 10 months was coercive, to ensure future compliance with the CPR 71 Order (at ).
As to the question of suspension, Moulder J held that whilst she had “no great confidence as to whether or not these conditions will lead to progress” (at ), “the authorities would urge me and encourage me to suspend” (at ). Even though the question of suspension here was a “difficult one” (at ), Moulder J ruled that the committal was to be suspended on conditions that Mr Vik attend court in person for further examination as to the means of SHI as well as to provide a variety of specific documents (at ).
Moulder J’s sentencing judgment can be found here.
Sonia Tolaney QC, James MacDonald QC and Matthew Hoyle acted for DB, instructed by Freshfields Bruckhaus Deringer LLP.