Franek Jan Sodzawiczny v Gerald Martin Smith

It is necessary to focus upon “the substance of the dispute”, taking into account defences which reasonably foreseeably will be raised (FamilyMart, [58-59]; Mozambique, [72-73]).

An Arbitral Matter need not encompass the whole dispute raised in court proceedings (FamilyMart, [60]; Mozambique, [74]).

An Arbitral Matter must be “a substantial issue” which is “legally relevant to a claim or defence, or foreseeable defence” and be susceptible to determination “as a discrete dispute”. It must be an essential element of the claim or defence, and not simply a “mere issue or question” that might fall for decision (FamilyMart,[61]; Mozambique, [75])).

Identification of an Arbitral Matter requires judgement and common sense, and is not a mechanistic exercise (FamilyMart, [65]; Mozambique, [77]).

It is necessary to have regard to “the context in which the matter arises in the legal proceedings” (Mozambique, [78]). That last requirement is particularly important here.

“Were it otherwise that part of the court's supervisory jurisdiction referred to by Lord Hoffmann would usually be subject to a stay pursuant to section 9 of the Act. Moreover, whilst the parties have agreed that disputes between them should be referred to arbitration they have also agreed, by reason of the seat of the arbitration being England, that the English court is the forum which can exercise a supervisory jurisdiction in support of the arbitration …”

“This expression connotes that the parties agreed that the matters must be referred to arbitration. The objective of s.9 is to ensure that the parties' arbitration agreement is observed and enforced, and a party to an arbitration agreement is entitled to a stay to this end. However, by making the arbitration agreements Nomihold and MTSF also agreed to the supervisory jurisdiction of the English court. So long as its application seeks relief in accordance with that part of the agreements, Nomihold cannot be said to be acting in breach of the arbitration agreements.

The point is explained precisely by Raphael in The Anti-Suit Injunction (2008) in paragraph 7-38, with which I agree … :‘…, although claims that foreign proceedings are in breach of the obligation to arbitrate do generally fall within the scope of arbitration clauses, nevertheless, by contracting for arbitration in England under English law, the parties have impliedly agreed that the usual ancillary proceedings may be brought before the English court to assist and protect the arbitration. These include claims for an anti-suit injunction, which are therefore not a breach of even broadly worded arbitration clauses. This implied agreement operates as an exception to the general scope of the arbitration clause, and permits the court and the arbitrations to exercise a concurrent jurisdiction.’”

“If MTSF's application is one to which the section applies, the court has no residual discretion to refuse a stay under section 9(4). The only basis upon which a stay can be refused is under the statutory exception because ‘the arbitration agreement is null and void, inoperative, or incapable of being performed’.”

where the pursuit of the arbitration infringes the applicant’s legal or equitable rights; and

where the pursuit of the arbitration is “vexatious and oppressive”, and thereby engages the jurisdiction of the English court to prevent the wrong of vexatious, oppressive and unconscionable conduct;

(Elektrim SA v Vivendi Universal SA [2007] EWHC 571 (Comm); [2007] 1 CLC 227, [56]; Claxton Engineering Services Ltd v TXM Olaj Es Gazukato Kft [2011] 345 (Comm), [34]; Sabbagh v Khoury [2019] EW CA Civ 1219, [50]).

An AAI does not involve even indirect interference with a foreign court, with the result that considerations of comity bear less heavily: Convoy Collateral Ltd v Broad Idea International Ltd [2021] UKPC 24, [47] (“anti-arbitration injunctions will be granted somewhat more readily, as no question of interference with a foreign court is involved”).

It has been suggested that delay in seeking relief may have less impact that when the effect of the delay has involved the unnecessary use of foreign court resources: Tyson International Company Limited v Partner Reinsurance Europe Se [2023] EWHC 3243 (Comm), [66-67]).

In Claxton Engineering Services Ltd v TXM Olaj Es Gazukato Lft [2011] EWHC 345 (Comm), [35], an AAI was granted to restrain the pursuit of an arbitration which had been commenced after it had been determined by the English court in a prior application that the claims in question were subject to an exclusive English jurisdiction clause.

In Huyton SA v Peter Cremer GmbH & Co [1999] CLC 230, an AAI was granted to prevent the defendant from pursuing a GAFTA arbitration in breach of a settlement agreement. There had been no final determination of the existence of the obligation not to arbitrate in advance of the AAI application. Mr Justice Mance determined the respondent’s defences of duress and undue influence as part of the AAI application, and no one appears to have suggested that they be left to the determination of the arbitral tribunal.

In Whitworths Limited v Synergy Food Ingredients and Processing BV [2014] EWHC 4239 QB (Comm), Mr Justice Cooke granted a final AAI at the trial to restrain arbitration proceedings in the Netherlands under the NZV rules of arbitration, in circumstances in which he found that the parties had agreed to arbitration in England under the CENTA Rules.

It is well -established that parties who agree to arbitrate with a seat in England and Wales agree to the supervisory jurisdiction of the English courts and, as a result, agree that any challenge to an award can only be made in the courts of England and Wales in accordance with the provisions of the 1996 Act: A v B [2007] 1 Lloyd’s Rep 237, [111]; C v D [2007] EWHC 1541 (Comm), [27], [29]; [2007] EWCA Civ 1282, [17]; Minister of Finance (Incorporated) 1Malaysia Development Berhad v International Petroleum Investment Company Aabar Investments PJS [2019] EWCA Civ 2080, [57].

In Noble Assurance v Gerling-Konzern [2007] EWHC 253 (Comm); [2007] 1 CLC 85, Mr Justice Toulson held that this obligation was breached when the respondent commenced proceedings before a Vermont court to vacate an award made by an arbitral tribunal with a London seat (although no ASI was granted on the facts of that case). In C v D, supra, an ASI was granted to restrain the breach of an arbitration agreement in similar circumstances.

In Sheffield United Football Club v West Ham United Football Club Plc [2008] EWHC 2855 (Comm), an injunction was granted to prevent a party to an arbitration seated in England and Wales from seeking to challenge the award before the ICAS, in effect an arbitral body.

In Nomihold Securities Inc v Mobile Telesystems Finance SA [2012] EWHC 130 (Comm), [31], Mr Justice Andrew Smith observed that “it is a breach of an arbitration agreement to bring proceedings to make ‘an unlawful attempt to invalidate the award’ … or to make a ‘collateral attack on a binding judgment or award of a properly constituted tribunal’” and, but for certain undertakings, would have granted an AAI to restrain an attempt to challenge a decision reached by an arbitral tribunal appointed on the basis of one of a suite of agreements between the parties by way of a fresh arbitration under another of those agreements.

While the cases in the preceding paragraph address the contractual right of a party who has agreed to arbitrate with a seat in England and Wales that Non-Compliant Challenges will not be brought, it has been held that the 1996 Act also confers a legal right to be able to pursue the challenges the 1996 Act confers, and that the court can grant an AAI to restrain the pursuit of an arbitration which would infringe that right.

This follows from the Court of Appeal decision in Minister of Finance (Incorporated) 1Malaysia Development Berhad v International Petroleum Investment Company Aabar Investments PJS [2019] EWCA Civ 2080, in which the AAI applicant had brought challenges under both ss.67 and 68 of the 1996 Act to an LCIA consent award entered pursuant to a settlement agreement (and was, therefore, necessarily challenging the jurisdiction of the arbitral tribunal), and had sought to restrain the pursuit of an arbitration commenced by the respondent pursuant to a separate provision for LCIA arbitration in the settlement agreement. The Court of Appeal noted at [38] that:

The court referred to the claimant’s “undoubted legal right to pursue the court applications under sections 67 and 68” and stated that the second arbitration was part of:

No doubt such relief could, in principle, be available against a party who had participated in the arbitration under a jurisdictional objection, who then sought to challenge any kompetenz-kompetenz decision by the tribunal before some other arbitration tribunal rather than in accordance with s.67 of the 1996 Act.

These can all be seen as instances in which a statutory right provides the basis for an anti-suit relief (cf. Petter v EMC Europe Ltd [2015] EWCA Civ 828).

“I am fortified in that view by my conclusion that, were the arbitrators now to proceed to an award on the merits in favour of Istil, the court would be bound to accede to an application to set aside any such award. Furthermore it is the more reasonable for the court to enjoin further pursuit of the arbitration in circumstances where Istil decline to comply with costs orders made in these proceedings both by this court and by the Court of Appeal. If the court were to decline now to intervene it would simply condemn ROK to the expenditure of yet further costs which they may have grave difficulty in recovering having regard to the corporate location of Istil and Metalsukraine and the various corporate reorganisations which have evidently taken place.”

Applications of this kind have a long history. In Kitts v Moore [1895] 1 QB 253, the court granted an AAI where the applicant denied that there was a binding arbitration agreement. By contrast, the courts did not grant injunctive relief to applicants who brought a different kind of jurisdictional challenge – where the existence of the arbitration agreement was not disputed, but it was denied that there was an arbitral dispute (North London Railway Co v Great Northern Railway Co 11 QBD 30). Injunctions were also used as a means of addressing challenges to the conduct of the arbitration – for example to restrain arbitration before a biased arbitrator (Malmesbury Railway Co v Budd 2 Ch D 113).

The 1996 Act has brought court orders of the latter kind to an end, but it has also had significant implications for the former kind of order as well.

First, s.30 of the 1996 Act enshrined the competence of an arbitral tribunal to rule on its own jurisdiction, albeit not on a basis which would necessarily be determinative, raising the issue of when it would be right for the court to defer the initial decision on jurisdiction to the tribunal. In Fiona Trust and Holding Corp v Privalov [2007] EWCA Civ 20, [34], Longmore LJ referred to the relevant provisions of the 1996 Act and noted:

Second, the 1996 Act carefully delineated the means by which issues of jurisdiction would be determined by the court: under s.32 (during the arbitral proceedings with the agreement of the parties or with the permission of the tribunal); under s.67 (by way of a challenge to the award, to be brought within a strict time limit) or under s.72, which was only available to a party “who takes no part in proceedings.” In addition, it is implicit in s.9 of the 1996 Act as it has been construed that the court will determine whether the arbitral tribunal would have jurisdiction when determining whether to grant a s.9 stay (as opposed to a stay under its inherent jurisdiction).

The court is generally hostile to attempts to obtain a decision from the court on jurisdiction by other means. Thus in ABB Lummus Global Ltd v Keppel Fells Ltd [1999] 2 Lloyd’s Rep 24, 30, Mr Justice Clarke referred to these provisions, and said:

Finally, s.72(1) (which only applies to arbitrations seated in England and Wales or Northern Ireland) provides that a person “alleged to be a party to arbitral proceedings but who takes no part in the proceedings” may seek a determination as to the jurisdiction of the arbitral tribunal “by proceedings in the court for a declaration or injunction or other appropriate relief”. The express reference to injunctive relief in that provision raises the issue of whether such relief would be available to a party who disputes the tribunal’s jurisdiction, but who wishes to reserve the right to take part in the arbitration.

In Claxton Engineering Services Ltd v TXM Olaj-Es Gazukato Kft [2011] EWHC 345 (Comm), [41], Mr Justice Hamblen stated:

In that case, the court had already determined prior to the commencement of the arbitration that the parties had agreed to the exclusive jurisdiction of the English courts.

In Weissfisch v Julius [2006] EWCA Civ 218, one party to an agreement providing for arbitration by a named arbitrator with a Swiss seat sought an AAI against the arbitrator rather than the arbitrating party. The Court of Appeal referred to the principles under-pinning the 1996 Act, before noting at [33(iv)-(v)] that “for the English court to restrain an arbitrator under an agreement providing for arbitration with its seat in a foreign jurisdiction to which the parties unquestionably agreed would infringe those principles”, albeit “exceptional circumstances may, nonetheless, justify the English court in taking such action.” In Sabbagh v Khoury [2019] EWCA Civ 1279, [74], it was noted this was a “very unusual application” because the AAI was sought against the arbitrator personally.

In Albon Naza Motor Trading Sdn Bhd [2007] EWCA Civ 1124, the claimant commenced court proceedings seeking substantive relief, and the defendant subsequently commenced arbitration in Malaysia, relying on an alleged arbitration agreement which the claimant alleged had been forged in response to the English proceedings. The Court of Appeal observed that “in the ordinary case, there would be much to be said” for the view that “it should be for the arbitrators, not the English court, to decide whether the arbitration should proceed pending the resolution of the genuineness” of the arbitration agreement” ([16-17]), but that an AAI was appropriate as the parties had agreed that the English court should first determine the issue, and it was arguable that the agreement to arbitrate had been forged to defeat the English proceedings.

In AmTrust Europe Ltd v Trust Risk Group SpA [2015] EWHC 1927 (Comm), where the English court had determined that there was a good arguable case that the parties had agreed to the exclusive jurisdiction of the English courts in respect of a particular dispute, but had yet to reach a final ruling, the Court refused an application for an AAI to prevent the pursuit of an arbitral reference in respect of the same dispute in Italy. In that case, the existence of both the jurisdiction and arbitration agreements was not in dispute, but the issue was whether a particular dispute fell within one of those agreements, or the other. At [26], Mr Justice Andrew Smith stated of applications for an AAI in respect of a foreign-seated arbitration:

In Sabbagh v Khoury [2019] EWCA Civ 1219, the Court of Appeal noted at [111-112]:

An anti-arbitration injunction does not involve an interference with the jurisdiction of a foreign court, except in the very indirect way of relieving it of its role as the supervisory court for the arbitration—but that is a role that is entirely dependent on the continuation of the arbitration. There can be no question, in the case of an anti-suit injunction, of the court saying that the foreign court lacks jurisdiction (save in the case of exclusive jurisdiction agreements), whereas the lack of the arbitral tribunal's jurisdiction, because there is no arbitration agreement or because the agreement does not cover the matter in issue, is the basis of an anti-arbitration injunction.

An anti-arbitration injunction involves an interference with a different principle, namely the fundamental principle of international arbitration that courts should uphold, and therefore not interfere with, arbitration agreements. Where it is clear that the dispute is within the terms of a valid arbitration agreement, then the courts should not interfere. When the converse is true, ‘either because it is common ground between the parties or because of a previous determination’ (per Andrew Smith J in AmTrust Ltd v Trust Risk Group SpA (No 2) [2015] 2 Lloyd’s Rep 231, para 25), the court may grant an anti-suit injunction but only if the circumstances of the case require it. Save perhaps in the case of exclusive jurisdiction agreements, the grant of an anti-arbitration [injunction] remains an exceptional step.”

Once again, injunctions of this kind have a long history: for example in Glasgow and South Western Railway Co v Boyd & Forrest 1918 SC (HL) 14, the House of Lords on a Scottish appeal granted an interdict against proceeding with an arbitration on matters which were held to be res judicata.

However, this category of AAI applications raise particular difficulties, because it is now established that arguments of res judicata or other doctrines of preclusion do not raise issues going to the jurisdiction of an arbitral tribunal, but a defence which can be pleaded in the arbitration, albeit one of a kind which is sometimes said to raise an issue of “admissibility”: see BTN v BTP [2020] SGCA 105, [68-72].

Where the prior determination is that of an arbitral tribunal, it is possible to characterise the attempt to re-litigate the issue as a breach of the implied promise to honour the earlier award (cf. Lord Hobhouse in Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] 1 WLR 1041, [9]), and Mr Caplan invited me to adopt that characterisation here. However, there are real difficulties in treating the preclusive effect of an arbitral determination as a contractual obligation which can be enforced before the court through conventional contractual remedies (see PJSC National Bank Trust v Mints [2022] EWHC 871 (Comm), [23-25] and [2022] JBL 459, 468-470). A contractual analysis would also suggest that this species of AAI should benefit from the strong presumption of contract-enforcement AAIs (see [65] above), but this is not how cases of this kind have been treated, nor does it seem intuitively correct.

In Sabbagh v Khoury [2019] EWCA Civ 1219, the Court of Appeal accepted the argument that the court should not grant an AAI “in respect of a claim which, if brought in English proceedings, would require the court to grant a stay under s.9 of the 1996 Act”, describing the “logic of this submission” as “irresistible”, and stating that such an injunction would be “wholly contrary to the fundamental principle underpinning the New York Convention and the 1996 Act of respecting and giving effect to arbitration agreements” ([92-93]).The court approved a statement said to represent the converse of the proposition by Mr Justice Popplewell in Golden Ocean Group Ltd v Humpuss Intermoda Transportasi Tbk Ltd [2013] EWHC 1240 (Comm), [47] that the court would not grant permission to serve out if satisfied that it would stay the proceedings on a s.9 application.

That principle is not, on its face, one which is limited to arbitrations with a foreign seat.

That raises the issue of whether the court has power under s.9 to refuse a stay other than because there is no “matter which under the [arbitration] agreement is to be referred to arbitration” or the court is satisfied that “the arbitration agreement is null, void, inoperative or incapable of being performed”. As outlined at [59-61] above, that might once have been thought to be a challenging proposition, but it has recently received support at the highest level.

“not to advance in [the new arbitrations] (a) any claim for a declaration (i) that MTSF is not obliged to carry out [the award] and (ii) that so far as the award is concerned MTSF is not bound by LCIA rule 26.9 or (b) a claim for an order that MTSF be released from any obligation to pay the purchase price of US$179m to be paid under the option agreement.”

The core relief sought in the Smith RFA is the setting aside of the Pro Vinci Award (at [35(b)]; and the TPA and the Final Award (at [35(d)]).

The Smith RFA also seeks orders the substantive effect of which would be (and is clearly intended to be) that Mr Sodzawiczny would be prevented from enforcing the rights arising under the Three Awards (at [35(g)-(i)]). For example, it is alleged that proceedings brought by Mr Sodzawiczny by way of enforcement of the Three Awards are a breach of the settlement and release provisions in the Settlement Agreement (at [32(a)]) and there is an attempt to recover the costs of those arbitrations ([35(j)-(k)]).

The circumstances in which the Smith RFA was issued also confirm that this is, in substance, a Non-Compliant Challenge to the Three Awards. As I have stated, Dr Smith initially brought the Smith Court Claim which is in very similar terms to the Smith RFA, but ultimately accepted after taking legal advice that this amounted to a Non-Compliant Challenge to the TPA and the Final Awards, and that he could not satisfy the time limits for a compliant challenge. The Smith RFA was issued very shortly after the Smith Court Claim was struck out, in what was clearly an attempt to avoid the application of those time limits.

Not only does this relief infringe Mr Sodzawiczny’s rights under the 1996 Act, but any tribunal appointed in the Smith RFA would not have jurisdiction to set aside or restrain enforcement of the Three Awards, which is not an Arbitral Matter (see [54] above) and Dr Smith was not even a party to the Pro Vinci arbitration.

Mr Sodzawiczny has not taken part in the arbitration commenced by the Smith RFA, with the result that injunctive relief of the type recognised by s.72(1) of the 1996 Act is, in principle, available to him.

I have already decided to grant an AAI in relation to the Smith RFA, to the extent that it amounts to a Non-Compliant Challenge to the Three Awards.

To the extent this is a relevant consideration, the Smith RFA concerns an arbitration seated in England and Wales.

The Smith RFA was clearly a response to the striking-out of the Smith Court Claim, something identified as a factor justifying AAI relief by the Court of Appeal in Albon: see [71(iii)] above.

It is clear that the overall intent and effect of the Smith RFA is to attempt to bring a Non-Compliant Challenge, and thereby infringe Mr Sodzawiczny’s rights under the 1996 Act. In these circumstances, and having concluded that the core claims are being pursued in breach of Mr Sodzawiczny’s rights under the 1996 Act, I do not consider it would be appropriate to leave this overlapping but fundamental objection to Dr Smith’s claims under the Smith RFA to the kompetenz-kompetenz jurisdiction of the arbitral tribunal.

The request to set aside the alleged agreement between Mr Sodzawiczny and Mr Ruhan, Mr Ruhan not being party to the Settlement Agreement and, absent some link to the Settlement Agreement, the claim for a declaration as to the status of that agreement.

The order requiring Mr Sodzawiczny to account for profits allegedly received from the Orb Claimants or the Sentrum Group.

As to the former, Mr Justice Popplewell expressly reserved all questions of costs in the stay application to the Second LCIA Arbitration. In the Final Award, Dr Smith was ordered to pay Mr Sodzawiczny’s costs. As a result, the claim for costs arising from the 2018 Proceedings has already been dealt with, and the claim appears to be a Non-Compliant Challenge to that determination.

I would, in any event, note that Dr Smith does not appear to have incurred any legal costs – he did not participate in the stay hearing or instruct lawyers, but filed a letter as a litigant in person, and he did not submit any costs schedules.

Nor does he identify any disparaging statements made in the 2018 Proceedings, but in any event these would be privileged statements and not actionable.

Finally the reality is that these assertions are inconsequential fringe claims included within the Smith RFA whose overall purpose is to bring a Non-Compliant Challenge to the Three Awards. If the court were to permit these claims to proceed, it would bring no legitimate benefit to Dr Smith, but simply provide a vehicle through which he would seek to pursue his idée fixe of challenging the TPA and Final Awards by any means possible.

Pursuant to Article 8 of the Bankruptcy (Désastre) (Jersey) Law 1990 (“the Law”), save for property held by a debtor on trust, all property of a debtor and the capacity to take proceedings in relation to such property vest in the Viscount of Jersey immediately upon the declaration of désastre.

Pursuant to Article 24 of the Law, a debtor during the period of désastre is not permitted to act as a trustee, and if they are a trustee when declared en désastre they must resign forthwith. Contravention of these rules is an imprisonable offence.

Article 9 of the Law provides a mechanism for the Viscount to gather in “after-acquired property” (i.e. property acquired by the debtor after the date of the désastre) by serving a written notice within a specified period; and Article 18 of the Law requires a debtor to disclose such after-acquired property and assign it to the Viscount. Failure to do so is an imprisonable offence.

A debtor lacks capacity to bring claims that are vested in the Viscount, and any such claims purportedly brought by the debtor would be void.

I found that the relevant corporations were held by SMA as trustee for the Orb Claimants, and I have since ordered SMA to transfer its legal title in the transferred assets to new trustees (SMA Investment Holdings v Harbour Fund II LP and ors [2023] EWHC 428 (Comm), [100]).

The only asset which I found Dr Cochrane had received as trustee by way of transfer from Messrs Cooper and McNally was some £13m which had then been applied to acquire a number of assets (see Directed Trial Judgment, [422(iv)], [647] and [649]-[651])). However, I held that these amounts were held subject to the Harbour Trust, over which I have appointed new trustees (Serious Fraud Office v Litigation Capital and ors [2022] EWGC 3053 (Comm), [96]). Further, I have already held that payments wrongfully made from the various corporations held in the Isle of Man structure are assets of the companies, with the claims vested in the Joint Liquidators appointed over those companies (Directed Trial Judgment, [652-654]).

On this basis, it is wholly unclear to me how Dr Cochrane is said to retain a position as trustee in some way relevant to the rights to be asserted in the Smith RFA.

The request to set aside the alleged agreement between Mr Sodzawiczny and Mr Ruhan, Mr Ruhan not being party to the Settlement Agreement and, absent some link to the Settlement Agreement, the claim for a declaration as to the status of that agreement.

The order requiring Mr Sodzawiczny to account for profits allegedly received from the Orb Claimants or the Sentrum Group.

that the core and essential relief sought in the Smith RFA infringes Mr Sodzawiczny’s legal right under the 1996 Act that the Three Awards should not be subject to any Non-Compliant Challenge;

the overall intent and effect of the Smith RFA is to attempt to bring a Non-Compliant Challenge, and an infringement of Mr Sodzawiczny’s rights under the 1996 Act ([89(iv)-(v)] above; and

for reasons I explain at [103] below, I am satisfied that it is Dr Smith who is the moving spirit behind the Smith RFA, using Dr Cochrane’s name to assist his cause;

I am satisfied that I should grant AAI relief in relation to claims transferred to the Viscount on the basis that the arbitral tribunal would have no jurisdiction to determine them.

The claim for an order that Mr Sodzawiczny account for funds he obtained from Dr Cochrane. However, nothing was payable by Dr Cochrane to Mr Sodzawiczny under the Settlement Agreement, only by Pro Vinci.

The legally incoherent claim to “set aside” and “declare void” the recitals to the Settlement Agreement but not the Settlement Agreement itself.

The claim for the declaration that the Settlement Agreement is final and binding in circumstances in which there is no dispute as to this state of affairs.

A claim that the 2018 Proceedings were a breach of contract, and for costs resulting from them. However, Dr Cochrane has no such claim because she was not party to those proceedings.

A claim that Mr Sodzawiczny has made disparaging statements about Dr Cochrane in unidentified legal proceedings, which would be legally privileged in any event (and in circumstances in which Dr Cochrane was not party to the 2018 Proceedings).

“Dr Smith has a track record of seeking to disguise his interest in assets behind Dr Cochrane. The investigations brought by the SFO in connection with the Izodia Theft identified a ski chalet held through a corporate vehicle of which Dr Cochrane was a director and the transfer of his luxury car collection into Dr Cochrane's name shortly after the Izodia Theft came to light.

Although notionally assetless, Dr Smith has been able to live ‘high on the hog’ (in his own phrase) off assets notionally owned by Dr Cochrane, spending those assets in accordance with Dr Smith's idiosyncratic tastes (including a commissioned water clock and artwork chosen by Dr Smith) or for his personal benefit (for example on private jet travel, much of which involved Dr Smith travelling alone). While I accept that much of the money spent by Dr Smith belonged to others, the freedom with which he dissipated assets notionally in Dr Cochrane's ownership is relevant when considering whether such interest as Dr Cochrane had in those assets was held in her own right, or as Dr Smith's nominee.

Dr Cochrane has on a number of occasions proclaimed that she is a ‘busy GP with two young daughters and no real business experience’, with minimal knowledge of Dr Smith's business activities. Dr Smith has himself accepted that Dr Cochrane lacked ‘any independent experience of the world of business, the world of property deals’. The vast network of companies which she apparently owns, and the complex web of dealings in which those companies have engaged, strongly support the suggestion that her involvement is nothing more than as a cipher, and that Dr Smith – with his extensive track-record of complex, contrived and dishonest business dealings – is ‘calling the shots’.

Dr Cochrane has no obvious sources of independent wealth from which she might have acquired these assets independently of Dr Smith. In 2005 , according to her own evidence, she was close to destitution, and in 2014 and 2016, she gave accounts of her assets and wealth which identified no substantial assets beyond those transferred under the IOM Settlement.

The confiscation order made against Dr Smith gave him every incentive to hide his ownership of assets behind a nominee owner who he could trust to follow his directions. It is clear that Dr Smith has acted at all times since the Confiscation Order was made with a view to making it appear as if he has no assets – for example his Deed of Separation with Dr Cochrane of 11 March 2014 sought to give Dr Smith all the benefits of certain properties, while transferring no property for the SFO to attach.”