|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> JSC BTA Bank v Ablyazov  EWHC 2543 (Comm) (21 September 2012)
Cite as:  EWHC 2543 (Comm)
[New search] [View without highlighting] [Printable RTF version] [Help]
QUEEN'S BENCH DIVISION
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
B e f o r e :
| JSC BTA Bank
|- and -
Duncan Matthews QC and George Hayman (instructed by Addleshaw Goddard LLP) for the Defendant
Hearing dates: 26, 27 and 30 July 2012
Crown Copyright ©
Mr. Justice Teare :
"The purpose of a freezing order is not to give a claimant security for a possible judgment over the defendant's assets but the more limited one of preventing a judgment from going unsatisfied due to the dissipation by the defendant of his assets. The requirement that the disposal should not be one designed to avoid the satisfaction of a judgment sets the boundaries of protection."
" .But where the defendant chooses to seek guidance or clarification from the court as to whether certain transactions have contravened or will contravene the terms of the injunction, it seems to us that it is incumbent on him to provide the court with the evidence upon which it can properly answer the question posed by the application. Declaratory relief is discretionary and if the applicant is unwilling to do this the judge should simply decline to make the order and leave it to the claimant to decide in due course whether it wishes to pursue committal proceedings of its own the court is not obliged to adjudicate upon the defendant's application compliance or otherwise with its orders on the basis only of whatever material the defendant chooses to put before it."
" If what Mr. A says about the transaction is correct, it would follow that he could have obtained permission to complete the transaction had he applied to the court to do so
..If Mr. A is right about the nature and purpose of the transactions then the breach of the Freezing Order is likely to be a technical one in the sense that permission for the transactions would have been granted ."
" ..But it remains important to ensure that the right balance is preserved between the rights of the parties. The injunction must not be used so as to amount to an instrument of oppression which would bring about the cessation of ordinary trading. On the other hand, the court must have regard to the interests of the plaintiff and consider whether the variation of the injunction would involve a real risk that a judgment or award in his favour would remain unsatisfied. The court must look at all the circumstances of the case in order to try to do justice between the parties ..
..But when it comes to considering the exercise of a discretion and the scope of injunctive relief it is then legitimate to look at all the circumstances and to examine the nature of the debt and the identity of the creditor ."
"(i) The essential test is whether it is in the interests of justice to make the variation sought;
(ii) .it is for the applicant to satisfy the court that it is appropriate to make the variation sought and to adduce any evidence that is necessary to persuade the court that that is so;
(iii) the Court is concerned to examine whether to do so would be consistent with the policy that underpins the jurisdiction, namely that a defendant should be restrained from evading justice by disposing of assets otherwise than in the ordinary course of business with the result that any judgment goes unsatisfied
(iv) The correct test is "to consider objectively the overall justice of allowing the payment to be made including the likely consequence of permitting it on the prospects of a future judgment being left unsatisfied, and bearing in mind that the assets belong to the defendant and that the injunction is not intended to provide the claimant with security for his claim or to create an untouchable pot which will be available to satisfy an eventual judgment": Gee paragraph 20.054;
(vi) Because the court has already been satisfied of a risk of dissipation judges are entitled, on an application to vary, to have a healthy scepticism about the assertions made by the applicant particularly where the applicant, or those to whom his evidence or contentions relate, have been less than frank in dealing with the court or the claimant."
December 2008 until May/June 2010
May/June 2010 until May 2011
"[AMT] shall, within 60 calendar days from the date of entry into force of this Agreement, provide to the [CBR] the security to ensure the fulfilment of obligations under the restructured loan in the amount of the collateral value that shall be not less than the principal amount of the restructured loan by pledging to [CBR] the land plots in the Moscow region."
"The land plots and other security in pledge with [CBR] may be subsequently pledged by the pledgor as agreed with [CBR] in favour of [AMT] against the loans issued previously by [AMT] ."
Summary of pledges
(i) Oceanarium: A pledge of repayment rights and a mortgage over real property were made in favour of AMT on 24 February and 6 April 2010. These were security for repayment of loans required, according to Mr. Ablyazov, to enable the construction of the Oceanarium to continue.
(ii) 1812 Business Centre: A pledge of shares and a mortgage over real property were made in favour of AMT on 28 October 2010 and 7 December 2010. These were security for repayment of loans required, according to Mr. Ablyazov, to enable the claims of Codest, a contractor, to be satisfied. The pledge and mortgage were made after the Court of Appeal's ruling on Mr. Ablyazov's clarification application.
(iii) Paveletskaya: A mortgage over real property and a pledge over repayment rights were made on 10 November 2010 and in May 2011 in favour of AMT. These were required, according to Mr. Ablyazov, by CBR in May/June 2010 as a condition of not calling in its loan to AMT. That was before I gave judgment on the clarification application but the mortgage and pledge were in fact made after the Court of Appeal's ruling on Mr. Ablyazov's clarification application. The security was also required for the short term loan required in September 2010 to demonstrate liquidity. Three further pledges of repayment rights were made in May 2011 to demonstrate liquidity.
(iv) Kaluga Highway: One of the land plots was transferred into the Fleming fund and then the units pledged to CBR on 3 February 2011. This was required by CBR as part of the restructuring of CBR's loan to AMT in the agreement of September 2010. However, as a result of the arrest of land, the pledge was not made until after the Court of Appeal's ruling on Mr. Ablyazov's clarification application.
The Bank's applications
(i) In respect of Paveletskaya, item 1 on the Bank's Schedule 2 to the draft order.
(ii) In respect of the Kaluga Land, items 1 and 2 on the Bank's Schedule 2 to the draft order.
(iii) In respect of the Oceanarium, items 1 and 3 on the Bank's Schedule 2 to the draft order.
(iv) In respect of the 1812 Business Centre, items 1 and 2 on the Bank's Schedule 2 to the draft order.
Mr. Ablyazov's application
The Bank's disclosure application
The application with regard to undisclosed assets
a. Pyshma and Kolpino are part of the Eurasia Logistics group of companies of which in October 2009 Mr. Ablyazov accepted owning a 75% interest. He said he gave that interest to the management. He has since told the Receivers that he had sold his interest to management. He has produced no documentary evidence of this transfer.
b. In February 2011 a Cypriot corporate services provider considered Mr. Shalabayev to be the beneficial owner of Eurasia Logistics. That itself is an indication that Mr. Ablyazov is the true owner; see paragraph 187 of my judgment on the contempt application; JSC BTA Bank v Ablyazov  EWHC 237 (Comm).
c. In December 2010 Mr. Shalabayev gave instructions for the execution of documents approving the grant of security over Kolpino's assets in support of AMT's indebtedness to CBR. That is an indication that Kolpino and AMT are in the common ownership of Mr. Ablyazov.
d. Kolpino and Pyshma were added to the receivership and yet no challenge has been made to their inclusion in the receivership. That is an indication that they are not owned by a third party.
a. the declaration of breach of the Freezing Order should be made (see paragraph 53 above);
b. an order should be issued against Mr. Ablyazov in the terms described in paragraphs 61 and 62 above;
c. orders for disclosure as described in paragraphs 72,73 and 75 above should be made.
a. the declaration of ownership should be made (see paragraph 78 above);
b. the declaration of breach should be made (see paragraph 79 above);
c. an order should be issued against Mr. Ablyazov in the terms described in paragraph 79 above;
d. orders for disclosure as described in paragraph 80 above should be made.