JSC BTA Bank v Ablyazov and Others (No 4)
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE TEARE,Mr. Justice Teare |
| Judgment Date | 10 February 2011 |
| Neutral Citation | [2011] EWHC 202 (Comm) |
| Docket Number | Claim Nos: 2009 Folio 1099 2010 Folio 362 2010 Folio 706 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 10 February 2011 |
[2011] EWHC 202 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Teare
Claim Nos: 2009 Folio 1099
2010 Folio 93
2010 Folio 362
2010 Folio 706
Stephen Smith QC and Simon Adamyk (instructed by Hogan Lovells International LLP) for the Claimant
Anthony Trace QC, Benjamin John and James Sheehan (instructed by Stephenson Harwood) for the DefendantsMr. Ablyazov, Mr. Solodchenko and Drey Associates Limited
Paul Girolami QC and Hugh Norbury (instructed by Peters & Peters Solicitors LLP) for the Defendant Mr. Zharimbetov
Hearing dates: 31 January and 1 February 2011
Approved Judgment
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.
Mr. Justice Teare:
This is my judgment on part of an application by the Claimant ("the Bank") to dismiss applications by Mr. Ablyazov and three other defendants to stay four actions in this court (the "Stay Applications"). On 2 August 2010 I ordered that the following issues be tried, namely, (i) whether the Stay Applications raise issues which are not justiciable by this court and (ii) whether it is arguable that the actions involve the indirect enforcement of a foreign penal, revenue or other public law. Having determined those two issues it will then be possible to consider how what remains of the Stay Applications should be dealt with.
In my judgment dated 16 July 2010 [2010] EWHC 1779 Comm ("the receivership judgment") I summarised the claims in these actions and the response of Mr. Ablyazov to them as follows:
"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. The Bank's accounts for the year ending 31 December 2008 recorded a negative equity of about US$6.1 billion. Its debts, which are said to amount to US$12 billion, are being restructured pursuant to the law of Kazakhstan.
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. His evidence paints a chilling picture of life in Kazakhstan where power resides with the President and the members of his family and close associates, where the rule of law is not respected and where dissent is ruthlessly eliminated. In 2003 Mr. Ablyazov was arrested and imprisoned and his assets seized after what he and others have said was a politically motivated trial. Whilst imprisoned on what he says were "trumped-up" charges he says that he was subjected to mistreatment, torture and an unsuccessful plot to assassinate him and that his assets were "distributed to the President's coterie". He says that political assassination is used in Kazakhstan as a means of silencing opposition and that there was a further attempt to assassinate him in 2004 in Moscow. His evidence suggests that Kazakhstan has much in common with Ancient Rome."
The Stay Applications were issued on 23 April 2010 (in 2009 Folio 1099, "the Drey proceedings"), on 4 May 2010 (in 2010 Folio 93, "the Chrysopa proceedings" and in 2010 Folio 362, "the Tekhinvest proceedings") and on 3 September 2010 (in 2010 Folio 706, "the Granton proceedings"). Mr. Ablyazov is a defendant to each set of proceedings. Mr. Solodchenko and Drey Associates Limited are defendants to the Drey proceedings. Mr. Ablyazov, Mr. Solodchenko and Drey Associates Limited are all represented by Mr. Trace QC. Mr. Zharimbetov is a defendant to the Drey and Granton proceedings. He is represented by Mr. Girolami QC. There are other defendants to the various proceedings who have not sought a stay.
The grounds of the Stay Applications were described in the applications in similar terms. It was said that Mr. Ablyazov was the victim of an illegal scheme by the Kazakhstan authorities to eliminate him as a political opponent, that a key step in the implementation of the scheme was the forced nationalisation of the Bank and that the implementation of the scheme involved breaches of Kazakh and international law and breaches of human rights. The several reasons for seeking a stay were put in this way:
"(i) As the claim is part of the Scheme, it is an abuse of the process of the English court and/or is oppressive and/or to permit it to proceed would be contrary to public policy.
(ii) To allow the claim to proceed would be to give effect to, or be tantamount to giving effect to, a flagrant breach of international law, namely the Expropriation, which should not be permitted as a matter of English public policy.
(iii) The claim is brought (or brought predominantly) for the collateral purpose of political oppression and/or persecution of the First Defendant and/or the elimination of the First Defendant as a political force in opposition to the present regime in Kazakhstan and is therefore an abuse of the process of the English court.
(iv) The action involves the indirect enforcement of a penal, revenue or other public law of the Republic of Kazakhstan, namely the decree by which the said forced nationalisation was effected and/or the "Financial Stabilisation Law" of 23 October 2008 and/or any and all laws making back-dated legislative changes to legitimise the Expropriation and/or any other law employed by the Kazakhstan authorities to effect the Expropriation and/or to advance the Scheme.
(v) In all the circumstances, it will be impossible to have a fair trial of this action in breach of the Applicants' rights at common law and under Article 6 of the European Convention on Human Rights. In particular, the Applicants will not have a reasonable opportunity of presenting their case to the court under conditions which do not place them at a substantial disadvantage vis-à-vis the Claimant by reason of the illegal and/or illegitimate activities of the Kazakhstan authorities and/or the abuse by the Kazakhstan authorities of their powers in Kazakhstan in relation to the availability or willingness of witnesses to give evidence and the availability of documents, information and/or disclosure and otherwise."
On 9 July 2010 (in the Drey, Chrysopa and Tekhinvest proceedings) and 11 November 2010 (in the Granton proceedings) the Claimant sought to dismiss the Stay Applications on six grounds, one of which was that the issues raised were non-justiciable and another was that the actions in this court did not involve the indirect enforcement of a foreign penal, revenue or other public law.
On 2 August 2010 I ordered that the Defendants serve their evidence in support of their applications and particularise the allegations they were seeking to prove by 30 September 2010. Permission to adduce evidence from a banking expert was given. I ordered that the non-justiciablity issue and the issue regarding the enforcement of a foreign penal, revenue or public law be determined on 21 and 22 October 2010.
On 28 September 2010 I extended the time for service of the evidence and particulars until 25 November 2010 and relisted the hearing of the two issues for 31 January and 1 February 2011.
Particulars of the allegations made in support of the Stay Applications were served by Mr. Ablyazov and considerable evidence contained in many lever arch files (over twenty I was told) was served in support. In addition expert evidence was also served, some of which was served out of time and without leave.
The Particulars run to some 16 pages. Mr. Trace, in his Skeleton Argument, summarised the allegations as follows:
"10. The central allegation on which the Applicants rely is that Mr Ablyazov is the victim and principal target of the Scheme, a continuing oppressive and illegal scheme carefully orchestrated by the Kazakhstan authorities, the purpose of which is to expropriate Mr Ablyazov's assets and/or to destroy their value, and to eliminate him as a political force in opposition to the present regime in Kazakhstan, headed by Nazarbayev.
11. Since late 2001, Mr Ablyazov has been a democratic political force in opposition to Nazarbayev's increasingly authoritarian regime, in particular through significant political and financial support for the pro-reform movement, the DCK. Through his continued political activity, and his wealth (the major source of which was, by the time of the Expropriation, BTA), Mr Ablyazov was and remains a major threat to Nazarbayev's dictatorial hold on power.
12. All significant power in Kazakhstan is concentrated in the hands of, and exercised by or at the direction of Nazarbayev, who maintains that power by controlling not just the organs of state (including the courts) but also major business and industrial assets in Kazakhstan, including its major banks.
13. From as far back as 2000–2001, pressure was repeatedly applied to Mr Ablyazov by Nazarbayev and his accomplices to...
To continue reading
Request your trial
-
Yukos Capital S.a.r.L (a company incorporated in the Luxembourg) v OJSC Rosneft Oil Company (a company incorporated in the Russian Federation)
...that the courts of England will not adjudicate upon the validity of acts done abroad by virtue of foreign sovereign authority”) and JSC BTA Bank v Ablyazov [2011] EWHC 202 (Comm) at [37] and [55.i] (“the act of state doctrine prevents the court from enquiring into the validity of a foreign......
-
Bank St Petersburg and Another v Vitaly Arkhangelsky and Another Oslo Marine Ports LLC (Part 20 Claimant)
...should exercise judicial restraint: Yukos Capital v OJSC Rosneft Oil [2013] 3 WLR 1329 at paras [40 to 104] and JSC Bank v Ablyazov [2011] EWHC 202 (Comm). And see generally Dicey, Morris & Collins, The Conflict of Laws (15 th Edn.), paras. 5–043 to 5–053. 70 Since it is capable, if correct......
-
Jsc Bta Bank (Respondent / Claimant) v Mukhtar Ablyazov
...not arguable that the process of the court was being abused. On the other hand, that was despite the judge being prepared to assume that Mr Ablyazov's case concerning the President's political animus against him was arguable, even if unlikely. The judge said ( JSC BTA Bank v. Ablyazov (No 6......
-
JSC Bta Bank v Mukhtar Ablyazov and Others
...in his scheme to eliminate Mr. Ablyazov as a political opponent. I refer to paragraphs 1–15 of my earlier judgment reported at [2011] EWHC 202 (Comm) for the background to this application. The law as to abuse of process on the grounds of collateral purpose 2 It is first necessary to consi......