Alliance Bank JSC v Aquanta Corporation and Others

JurisdictionEngland & Wales
Judgment Date14 December 2011
Neutral Citation[2011] EWHC 3281 (Comm)
Docket NumberCase No: 2011 Folio 428
CourtQueen's Bench Division (Commercial Court)
Date14 December 2011

[2011] EWHC 3281 (Comm)




Royal Courts of Justice

Strand, London, WC2A 2LL


Mr Justice Burton

Case No: 2011 Folio 428

Alliance Bank JSC
(1) Aquanta Corporation
(2) Bazora Corporation
(3) Serbina Ltd
(4) Xilliana Ltd
(5) Terpia Ltd (formerly Audina Management Services Ltd)
(6) Mr Margulan Kaliyevich Seisembayev
(7) Mr Erlan Kaliyevich Seisembayev
(8) Mr Askar Kaliyevich Galin
(9) Seimar Alliance Financial Corporation Jsc
(10) Mr Aleksei Ageyev
(11) Mr Zhomart Zhadygeruly Ertayev
(12) Mr Dauren Kereibayev
(13) Ms Irina Viktorovna Ivanova
(14) Mr Erik Sultankulov
(15) Mr Anuar Beisebayev

MR K MacLEAN QC and MR N SLOBODA (instructed by Slaughter and May) for the Claimant

MR S THOMPSON (instructed by Fox Williams LLP) for the First and Second Defendants

MR R SLADE QC (instructed by Klein Solicitors) for the Third and Fourth Defendants

MR R MORGAN QC and MR T MUNBY (instructed by Dewey & LeBoeuf) for the Sixth Defendant

MR H MATOVU QC (instructed by Memery Crystal LLP) for the Seventh and Eighth Defendants

MS R FOSKETT (instructed by Stevens & Bolton LLP) for the Ninth Defendant

Approved Judgment

Hearing dates: 7, 8, 9, 10, 14, 15, 16, 17, 18, 21, 22 November, 2011

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.


This has been the hearing of a series of applications, arising out of the grant ex parte by Teare J on 5 April 2011, in favour of the Claimant, Alliance Bank JSC, a large Kazakhstan bank, against a number of Defendants, primarily three brothers, the Sixth, Seventh and Eighth Defendants (collectively referred to as "the Brothers"), of permission to serve proceedings out of the jurisdiction and of a worldwide freezing order. The ex parte order has been continued over this hearing, and a number of Defendants have appeared to set it aside. The Fifth Defendant originally so applied, but has not pursued its application, which must fall away, while the Tenth, Eleventh, Thirteenth and Fifteenth Defendants ("the Inactive Defendants") have not entered an appearance and taken no part in this challenge, and the Twelve and Fourteenth Defendants have not been served. Accordingly, the parties in the hearing, which lasted ten days, have been:

i) the Claimant, represented by Mr MacLean QC and Mr Sloboda:

ii) the Sixth Defendant, a Kazakh who was previously Chairman of the Board of Directors of the Claimant, represented by Mr Morgan QC and Mr Munby:

iii) his brothers, the Seventh and Eight Defendants, also Kazakhs, but now resident in Dubai in circumstances to which I will refer, represented by Mr Matovu QC:

iv) the Ninth Defendant ("SAFC"), a Kazakh company, previously owned as to one third by each of the Brothers (although the Sixth Defendant has, prior to these proceedings, in unexplained circumstances, sold his holding to two Sharjah-based companies), apparently originally a public company called Seimar Investment Group ("SIG"), which was "transformed" (the Ninth Defendant's description) into SAFC in December 2006, which was, at the material time, on the Claimant's case not simply owned but controlled by the Brothers, for whom Miss Foskett appeared:

v) the First and Second Defendants, both BVI companies (incorporated in Autumn 2006), for whom Mr Thompson has appeared, and the Third and Fourth Defendants, respectively a Samoan and BVI company, each incorporated in 2004–5, represented by Mr Slade QC, collectively the "Offshore Companies", of each of which the Fifth Defendant, a Liechtenstein-based company, was the nominee corporate director, and all of which are admitted to be beneficially owned by the Sixth Defendant, but asserted by the Claimant to be so owned by all the Brothers.


The applications have been as follows:

i) The Sixth, Seventh, Eighth and Ninth Defendants all seek to set aside the order and, by challenge to the jurisdiction of the Court, to set aside the proceedings against them and service upon them.

ii) The First, Second, Third and Fourth Defendants do so also, but have an application for a stay pending arbitration, by virtue of an arbitration clause upon which they rely in the Loan Agreements into which they entered, insofar as the Claimant, by subrogation, seeks to enforce such agreements against them.

iii) The Claimant has applications which are subsidiary to their main aim of resisting the Defendants' applications. First, the Claimant seeks to amend the Particulars of Claim, so as to plead, in the alternative, that its claims against the Defendants, made in English law by way of conspiracy, dishonest assistance, knowing receipt and unjust enrichment, are sustainable in the alternative at Kazakh law, as unlawful acts in breach of Article 917 of the Civil Code of the Republic of Kazakhstan, together with the joint and several liability imported by Article 932, and as unjust enrichment, pursuant to Articles 953, 955 and 956; and it seeks permission to serve such amended pleading out of the jurisdiction, inter partes, by reference to the same evidence and on the same basis as the original pleading. Secondly, having served the Third Defendant at the address provided for by the Loan Agreement in London, the Claimant now seeks additionally permission to serve the Third Defendant in Samoa, again on the same basis and evidence as relied upon against all the Defendants, but inter partes. I propose to treat the two inter partes applications in the same way as the ex parte orders now challenged before me, save only as to the possible incidence of costs.


The conspiracy which the Claimant alleges (with the concomitant or alternative causes of action referred to above) arises out of the alleged control by the Brothers of the Claimant until 2009, when it was effectively nationalised by the acquisition by a state-owned company, Samruk-Kazyna, of the entire issued share capital of the Claimant bank, including the majority, and controlling, shareholding previously held by the Ninth Defendant, the Brothers' company, as referred to above. The Claimant alleges that it was deprived, by virtue of the conspiracy to which all the Defendants were party, of US$ 1.1bn, extracted from the Claimant in the following way.


Between November 2005 and April 2008 it is alleged that the Claimant was caused by the conspirators to acquire US Treasury Notes called STRIPS, in a total value over the period of US$ 1.1bn, and that, without the knowledge of the balance of the Claimant's Board, they caused such STRIPS to be charged or pledged to two Cypriot banks as security for loans made by those banks to the Offshore Companies, thus enabling US$ 1.1bn loaned by such banks to the Offshore Companies against such security, to be used, as the Claimant alleges, by and for the benefit of the Brothers.


The first series of loans (the "Reachcom loans") was made to the Third and Fourth Defendants by a Cypriot bank (Reachcom Public Ltd ("Reachcom")), a subsidiary of a Russian bank (Renaissance Capital ("Renaissance")). There were in each case Loan Agreements entered into by the Third or Fourth Defendants with Reachcom. The Loan Agreements each provided that they were governed by English law (Clause 25). There was then a provision for arbitration (Clause 26) by a QC in London, but, by Clause 26.4 and Clause 27, there is an option for the Lender to give notice for any dispute to be tried by a court of law: by Clause 27 there was a provision (27.1) for exclusive jurisdiction of the English courts, save that, by Clause 27.3, the Lender had the right to take proceedings in any other court with jurisdiction, and there was, in Clause 27.2, what I called in Deutsche Bank AG v Sebastian Holdings Inc [2010] 1 AER (Comm) 808 an 'FNC Waiver Clause', providing that "the parties agree that thecourts of England are the most appropriate and convenient courts to settle Disputes between them and, accordingly, that they will not argue to the contrary".


The Loans were thus made by Reachcom to the Third and/or Fourth Defendants. The Claimant guaranteed repayment by a Deed of Guarantee and Charge, which was also governed by English law (Clause 17.1) and had a similar provision for London arbitration, but with a 'litigation option' for the Lender, and also exclusive jurisdiction (but with the exemption for the Lender) and an FNC Waiver Clause, in respect of the courts of England. The STRIPS were charged to secure payment under the Guarantee by a Schedule to the Deed.


There were similar arrangements (to which I shall return) in respect of loans by another Cypriot bank (Metropol Cyprus Ltd ("Metropol")), again a subsidiary of a Russian bank, called Metropol, made to the First and/or Second Defendants. The loans were guaranteed by the Claimant by Guarantees, again subject to English law, which were subject to LCIA Arbitration, with no litigation option, and again the Claimant's liability under the Guarantees was secured by the STRIPS.


No reference was made in the Claimant's accounts, audited by Deloittes, to the fact that the asset of US$ 1.1bn worth of STRIPS was 100% encumbered. The case for the Claimant is that this was simply a way of extracting US$ 1.1bn from the Claimant, and that there was never an intention—nor any capability—of the Offshore Companies to repay the loans to the banks. The monies received by the Offshore Companies from the banks were paid out through circuitous routes to or via other offshore companies, owned by one or more of the Brothers or a member of their family, and much of it found its way back to the Ninth Defendant in Kazakhstan: it appears that more than US$ 600m was used to acquire more shares for the Ninth Defendant in the Claimant bank, some of which were sold in...

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