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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> BM-Bank JSC v Chernyakov & Ors  EWHC 2564 (Comm) (19 October 2017)
Cite as:  EWHC 2564 (Comm)
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BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
QUEENS BENCH DIVISION
Fetter Lane, London, EC4A 1NL
B e f o r e :
|(formerly OJSC BANK OF MOSCOW and PJSC BM–BANK)||Claimant|
|ANDREY VALERIEVICH CHERNYAKOV|
|NORWIND SHIPPING LIMITED||Defendants|
|(formerly OJSC BANK OF MOSCOW and PJSC BM-BANK)|
|(a company incorporated in Russia)||Claimant|
The Defendants did not appear
Hearing dates: 10, 11, 12 and 19 October 2017
Crown Copyright ©
Mr Justice Phillips :
The Non-Attendance of the Defendants
The Procedural History
The Freezing Injunctions and Disclosure Orders
i) On 27 November 2015, shortly before the commencement of the main proceedings, Cooke J granted a worldwide freezing injunction against Mr Chernyakov on a without notice basis, freezing his assets up to the value of £150 million and requiring him to disclose all his assets worldwide which exceed £10,000 in value within 2 working days;
ii) On 11 December 2015 Knowles J continued the worldwide freezing injunction against Mr Chernyakov until trial;
iii) On 17 December 2015 Knowles J made a worldwide freezing injunction against Ms Erokhova on a without notice basis, limited to the sum of £4.5m;
iv) On 15 January Knowles J continued the freezing injunction against Ms Erokhova until trial;
v) On 29 June 2016, following cross-examination of Mr Chernyakov as to his assets, Andrew Baker QC (as he then was) made an order requiring Mr Chernyakov to disclose various documents including:a) Copies of bank statements for the period 16 October 2014 until 1 October 2015 in respect of the bank accounts with number AE02040000032090050002 held at Rakbank in Dubai ("A/c 50002");b) Copies of statements for the credit card issued by Rakbank with number 512304xxxxxx4003 for the period from 16 October 2014 until 20 September 2016 ("A/c 4003").
vi) On 28 October 2016, after granting summary judgment, Cranston J continued the worldwide freezing order against Mr Chernyakov until satisfaction of the judgment.
The Grounds of Committal
(i) Failure to Provide Bank Statements: Ground 4(b) against Mr Chernyakov
(ii) Failure to Disclose the Sale Proceeds of the Superyacht: Ground 4(a) against Mr Cherynakov
i) An explanation of what had become of the proceeds of sale of the super yacht known as "St David" and their current location; and
ii) Copies of the bank statements showing where and by whom the proceeds of sale of the super yacht were paid and their current location.
(iii) Failure to Disclose the ICD Bond: Ground 1 against Mr Chernyakov
(iv) The Dubai Safe: Ground 3 against Mr Chernyakov and Ground 1 against Ms Erokhova
(v) CM Property Management Ltd: Ground 5 against Mr Chernyakov
(vi) The Tagore Promissory Note: Ground 6 against Mr Chernyakov
(vi) The Erokhova Promissory Note: Ground 2 against Ms Erokhova
(viii) The Nord Construction Transfer: Ground 8 against Mr Chernyakov
(ix) The Harrods Credit: Grounds 3 & 4 against Ms Erokhova
Conclusion on liability
[After handing down the above Judgment on liability on 19 October 2017 and hearing further submissions]
Sanctions for contempt
i) Freezing orders are made for good reason and in order to prevent the dissipation or spiriting away of assets. Any substantial breach of such an order is a serious, matter which merits condign punishment.
ii) Condign punishment for such contempt normally means a prison sentence. However, there may be circumstances in which a substantial fine is sufficient: for example, if the contempt has been purged and the relevant assets recovered.
iii) Where there is a continuing failure to disclose relevant information the court should consider imposing a long sentence, possibly even the maximum two years, in order to encourage future co-operation by the contemnor.