Key Facts
- •Wintermute Trading Limited (respondent) appealed against an order (the second order) made by Senior Master Cook requiring it to comply with a previous order (the first order) to produce documents for the US SEC's action against Terraform Labs Pte Ltd (applicant).
- •The first order, made under the Evidence (Proceedings in Other Jurisdictions) Act 1975, required Wintermute to produce certain documents, including computer code, by specific deadlines.
- •A dispute arose whether Wintermute had fully complied with the first order.
- •The applicant's solicitors threatened contempt proceedings, leading to the second order being issued without a hearing or notice to the respondent.
- •The second order, lacking a penal notice and clarity on specific document requirements, was made urgently due to upcoming depositions and trial in the US action.
- •The respondent appealed, arguing procedural unfairness and lack of clarity in the second order.
Legal Principles
Court's power to deal with applications without a hearing under CPR 23.8(1)(c).
CPR 23.8(1)(c)
Right to apply to set aside an order made without a hearing under CPR 23.8(3)(a).
CPR 23.8(3)(a)
A party cannot add a penal notice to a court order without applying to the court; the court has discretion whether to include a penal notice.
Re Taray Brokering Ltd [2022] EWHC 2958 (Ch)
Orders must be clear and unambiguous to avoid ambiguity in contempt proceedings.
Gee on Commercial Injunctions (7th Edn), paragraph 4.001
On a committal application, the court may dispense with a penal notice if the contemnor knew the consequences of disobedience.
Serious Organised Crime Agency v Hymans [2011] EWHC 3599 (QB); Business Mortgage Finance 4 Plc v Hussain [2022] EWHC 449 (Ch)
Even without a penal notice, a party can point out potential penal consequences of disobeying an order.
Re Taray Brokering Ltd (at paragraph 22)
Outcomes
The second order was set aside.
The second order was made without a hearing, notice to the respondent, and clarity on what further action was required. It was deemed procedurally unfair and failed to meet the requirements of clear and unambiguous orders. The court found that the appropriate course was to determine the dispute regarding compliance with the first order.
Directions were given for the resolution of the dispute concerning compliance with the first order.
The court determined that the primary issue was whether the respondent had complied with the first order. Until this dispute was resolved, no further progress could be made.