JSC BTA Bank v Mukhtar Ablyazov
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare,MR. JUSTICE TEARE |
| Judgment Date | 16 February 2012 |
| Neutral Citation | [2012] EWHC 237 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2009 FOLIO 1099 |
| Date | 16 February 2012 |
[2012] EWHC 237 (Comm)
Mr. Justice Teare
Case No: 2009 FOLIO 1099
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Stephen Smith QC and Tim Akkouh and Caley Wright (instructed by Hogan Lovells International LLP) for the Claimant
Duncan Matthews QC, Ian Winter QC, George Hayman and James Sheehan (instructed by Addleshaw Goddard LLP) for the Defendant
Hearing dates: 30 November, 1–2, 5–6,8–9,12–16 and 20–21 December 2011
It may assist if I give the following guide to the contents of this judgment:
Introduction
| Introduction: | Paragraphs | 2–20 |
| The respective cases: | Paragraphs | 21–33 |
| Evidential matters: | Paragraphs | 34–39 |
| Claimant's witnesses: | Paragraphs | 40–53 |
| Defendant's witnesses: | Paragraphs | 54–83 |
| Bubris: | Paragraphs | 84–124 |
| Residential property : | Paragraphs | 125–173 |
| Schedule C companies: | Paragraphs | 174–206 |
| Stantis: | Paragraphs | 207–235 |
| Conclusion: | Paragraphs | 236–244 |
This is the judgment of the court upon the hearing of an application by the Claimant ("the Bank") to commit the First Defendant, Mukhtar Ablyazov, for contempt of court and for other associated relief. The application is the latest step in the Bank's relentless campaign to persuade Mr. Ablyazov, as the Bank would put it, to comply with the terms of a worldwide freezing order (the "WFO") made against him in this and related actions. At an earlier stage in this litigation and with the same aim the Bank sought and obtained the appointment of a receiver over Mr. Ablyazov's assets in support of the freezing order; see JSC BTA Bank v Ablyazov [2010] EWHC 1779 (Comm). An appeal from my decision was dismissed; see [2010] EWCA Civ 1141.
The nature of the claims made by the Bank against Mr. Ablyazov in the several actions commenced by the Bank and the nature of his response to them were summarised by me at [2010] EWHC 1779 (Comm) at paragraphs 2–4:
"2. The Claimant ("the Bank") is a bank in Kazakhstan, 75.1% of whose share capital has, since 2 February 2009, been owned by the State of Kazakhstan through a sovereign wealth fund, Samruk-Kazyna. On that date the State effectively took control of the Bank when, according to the evidence of the Bank, there was significant concern as to the ability of the Bank to continue as a going concern. …………
3. The Defendant ("Mr. Ablyazov") is the former chairman of the Bank and is accused by the Bank of "widespread misappropriation of the Bank's funds." It is said that he has treated the Bank "as if it were his own private source of funds". Four claims have now been issued in this jurisdiction against Mr. Ablyazov. The total sum claimed is in excess of US$1.8 billion. Further claims are anticipated which I was told will bring the total sum claimed to US$4 billion.
4. Mr. Ablyazov denies these claims. He states that the claims are an attempt by the President of Kazakhstan, Nursultan Nazarbayev, to take control of his assets in support of a politically motivated claim against Mr. Ablyazov, who is a leading figure in Kazakhstan's democratic opposition. ………."
In short, fraud on an epic scale is alleged. Mr. Ablyazov denies the allegation and says that the allegations are an attempt by the President of Kazakhstan to eliminate him as a political opponent.
On this application the court has to determine three allegations of contempt. The Bank initially advanced no less than 35 allegations but for case management reasons I determined that only three should be heard and gave other directions; see [2011] EWHC 1522 (Comm). An appeal by Mr. Ablyazov from those directions was dismissed; see [2011] EWCA Civ 1386. Mr. Ablyazov denies that he has failed to comply with the freezing order or has otherwise acted in contempt of court. He says that this contempt application, like the entirety of the proceedings against him, is motivated by a desire to eliminate him as a political opponent to the President of Kazakhstan.
The three allegations may be summarised as follows:
i) Mr. Ablyazov failed, in breach of the WFO, to disclose his beneficial ownership of the shares in Bubris Investments Limited, a company incorporated in the British Virgin Islands.
ii) Mr. Ablyazov, when cross-examined under oath as to his assets, lied to the court when (a) he stated that he was merely the short-term tenant of two properties in London and stated that all the residential properties he owned were included in his schedule of assets and (b) he denied that he was the beneficial owner of shares in FM Company Limited (a company incorporated in the Marshall Islands), Bergtrans Contracts Corp and Carsonway Limited (both being companies incorporated in the BVI).
iii) Mr. Ablyazov, in breach of the WFO, dealt with an asset, namely loans held by Stantis Limited (a company incorporated in Cyprus) by assigning them to Nitnelav Holdings Limited in December 2010.
It is common ground that the burden is on the Bank to satisfy me so that I am sure that Mr. Ablyazov is guilty of the alleged contempts. That is the criminal standard of proof.
It is notable that the Bank's case against Mr. Ablyazov, on the first two allegations of contempt, depends upon inference from such circumstantial facts and matters as the Bank is able to prove. As in any criminal trial circumstantial evidence can be relied on to establish guilt. It is however important to examine the evidence with care to see whether it reveals any other circumstances which are or may be of sufficient reliability and strength to weaken or destroy the Bank's case; see Teper v R [1952] AC 480 per Lord Norman. Further, I respectfully adopt the words of David Richards J. in Daltel v Makki [2005] EWHC 749 (Ch) at paragraph 30: "In particular if, after considering the evidence, the court concludes that there is more than one reasonable inference to be drawn and at least one of them is inconsistent with a finding of contempt, the claimants fail." I accept the submission of Mr. Matthews QC, counsel for Mr. Ablyazov, that where a contempt application is brought on the basis of almost entirely secondary evidence the court should be particularly careful to ensure that any conclusion that a respondent is guilty is based upon cogent and reliable evidence from which a single inference of guilt, and only that inference, can be drawn.
Although there is no burden on Mr. Ablyazov to prove anything on this application he has advanced a case in relation to each of the three alleged contempts. It is a corollary of the burden of proof being upon the Bank that if, after considering the evidence, I consider that Mr. Ablyazov's case is or may be true then the Bank will have failed to establish the alleged contempt.
In support of the application the Bank relied, in the main, on documents it had obtained from disclosure, search and Norwich Pharmacal orders against third parties both here and abroad. The Bank also called evidence from Mr. Anuar Aizhulov who worked for Mr. Ablyazov from about 2005 until 2009. His evidence related to the third allegation of contempt concerning alleged dealings with the assets of Stantis. Counsel for Mr. Ablyazov also wished to cross-examine Mr. Hardman, a solicitor at Hogan Lovells who has spent much of the last two years working on this case and has, by way of affidavits and witness statements, presented the documentary evidence relied upon by the Bank to the court. He was therefore tendered for cross-examination.
Mr. Ablyazov gave evidence and was cross-examined for two and half days. He also adduced oral evidence from Salim Shalabayev (said to be the owner of 17 Albert's Court), his brother Syrym Shalabayev (said to be the owner of Carlton House, Oaklands Park, 79 Elizabeth Court and FM Company) and from Mr. Golovkin, a Russian lawyer who acts for Mr. Sadykov (said to be the owner of Bubris). Salim Shalabayev was cross-examined for a little less than a day and his brother Syrym Shalabayev was cross-examined for over two days.
Several statements in writing were also adduced in evidence.
The determination of just three allegations of contempt took some 13–14 days.
It was put to Mr. Hardman in cross-examination that the purpose of this application was not to "police" the WFO but to "knock out" Mr. Ablyazov, by which I understood counsel to allege that the Bank wished to prevent him from defending the claims which have been brought against him. However, I accept Mr. Hardman's evidence that he, as the solicitor at Hogan Lovells with primary responsibility for pursuing this litigation against Mr. Ablyazov and in particular this contempt application on behalf of the Bank, has brought this application for the purpose of bringing further pressure to bear on Mr. Ablyazov to comply with the WFO. Notwithstanding the determination and aggression with which these proceedings have been pursued I do not consider that there is any reason for me to doubt his evidence on that matter. Whilst the consequences of Mr. Ablyazov being committed for contempt may impede his ability to defend the claims brought against him (as well as being damaging to his financial and political future) I am satisfied that Mr. Hardman's purpose, and the Bank's purpose, in bringing this application, is legitimate. Committal for contempt may bring with it certain consequences but that does not persuade me that the Bank has not brought this contempt application for the legitimate purpose of bringing pressure to bear upon Mr. Ablyazov to comply with the WFO; cf ...
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