In Okritie International Investment Management v Gersamia, Eder J committed the two respondents to prison for contempt, and endorsed a useful summary of the case law setting out when a custodial sentence is appropriate.
Vladimir Gersamia and Olessia Jemai had both been involved in a substantial fraud against the applicants. In the judgment in the substantive case in February 2014, Eder J found Mr Gersamia and Ms Jemai to be partly liable for “a cunning and well-orchestrated fraud”, awarding damages in excess of $150 million.
The current application was brought against Mr Gersamia for breach of freezing orders and Ms Jemai for failure to properly comply with disclosure orders.
Mr Gersamia was estimated by Eder J to have received $10 million as a result of the fraud. Mr Gersamia had been subject to numerous freezing orders, and had made multiple transfers in breach of these orders. A small number of the transactions in question could be potentially justified as living expenses, but the larger breaches could not be (for example, a sum of £850,000 which was withdrawn using third parties to disguise its origin and then recycled to pay his solicitors). Eder J stated that Mr Gersamia’s actions showed a “persistent and ingrained attitude of continual non-compliance with the Court’s orders”.
Given the serious nature of the contempt, Eder J considered the appropriate sentence was one “at the very top of the range”, with a starting point of 20 months. Mr Gersamia pleaded in mitigation that he had no previous convictions, showed genuine remorse and had co-operated in the recovery of assets. He also asked that the loss of liberty due to having been deprived of his passport for three years and the serious criminal proceedings still ongoing (relating to the same fraud) should be taken into account. Eder J stated that, given his findings in the main trial, “it would be wrong to say that [Mr Gersamia] was a man of previous good character”, and found his remorse to be “hollow”. However, he stated that he “can and should take into account” the restrictions already placed on Mr Gersamia’s liberty. He gave a credit of two months in respect of the pleaded mitigating factors, and a further one-third reduction on the basis of Mr Gersamia’s admission of the contempts, sentencing him to 12 months’ imprisonment.
Eder J allowed this sentence to be suspended for 120 days, to be discharged if Mr Gersamia was able to repay the remainder of his share of the proceeds, a sum of $3.1 million. Eder J was “very reluctant to accede” to this request, as Mr Gersamia had already had ample opportunity to account and no evidence had been given as to how he might obtain the money. The suspension was granted solely because the applicants made it clear they did not object to this proposal.
Ms Jemai, on the other hand, offered no mitigating factors, and did not participate in the hearing. Eder J stated that she had “deliberately decided to ignore these proceedings”. Ms Jemai was held to be “in persistent, continued and contumacious contempt” as a result of her omissions and misleading and untrue statements in response to the disclosure orders. As she had made “no admissions, no apology and no amends”, she was duly sentenced to 20 months, “a substantial period of imprisonment towards the top end of the range”.
This case reiterates that committal will only be used as a last resort, and mitigating factors will be taken into account even in extreme cases. However non-compliance – particularly persistent and flagrant non-compliance – with court orders can and will result in a custodial sentence. Paul Stanley QC (for the applicants) prepared a helpful note of the principles relevant to sentencing for contempt, which is appended to Eder J’s judgment here.
Okritie International Investment Management and others v Gersamia and another  EWHC 821 (Comm)