Practice - Pre-trial or post-judgment relief - Freezing order

JSC BTA Bank v Ablyazov and others: Queen's Bench Division, Commercial Court (Mr Justice Clarke): 4 October 2011

The instant proceedings concerned two allegedly unlawful schemes under which, the claimant Khazakhstani bank contended that the first defendant had channelled monies to companies ultimately owned and/or controlled by him to a total of around $2.4bn. The claimant alleged, inter alia, that a number of borrowers and intermediaries had used sham contracts to remove money from it. The claimant commenced proceedings against twelve defendants.

In June 2010, the court made a freezing order against, inter alia, the respondents. In December 2010, the court granted relief from sanction to all but the first, second, eighth and eleventh defendants (the respondents), and ordered that judgment be given against them. The claimant applied to have the order granting relief from sanction to the respondents set aside.

The claimant contended that in granting the relief from sanction (the order), the court had been misled by the respondents into believing that they had made a genuine, if belated, effort to comply with the terms of the freezing order. In considering the issue, the court had regard, inter alia, to: the conduct of T, an individual whom, the respondents submitted, had beneficially owned and controlled the respondents; the relationship between parties giving instructions on behalf of the borrowers or intermediaries; the defendants' previous history of non-compliance with court orders; and the fact that the application had been made at the last moment, without proper notice, without evidence supporting it and without adequate opportunity for consideration by the claimant. The application would be allowed.

On the facts, the respondents had been responsible for numerous failures to comply with the freezing order. First, they had misled the court. Secondly, no explanation or expression of regret regarding that misleading had been put forward. Thirdly, no offer had been made to explain the nature of the arrangements involving those parties giving instructions on behalf of the borrowers or intermediaries or to produce any documents. Fourthly, in the circumstances, no useful purpose would be served in ordering T to provide further documents or an affidavit.

Fifthly, there had been a history of con-compliance with orders of the court, and T had actively misled it in the past. Sixthly, the application had been made at the last moment, without proper notice, without evidence supporting it and without adequate opportunity for consideration by the claimant (see [169] of the judgment).

The order granting relief against sanction would be revoked. Judgment would be entered against the respondents (see [180] of the judgment).

Philip Marshall QC and Matthew Morrison (instructed by Hogan Lovells) for the claimant. Saul Lemer (instructed by iLaw) for the respondents.