JSC Bta Bank v Mukhtar Ablyazov & 6 Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE TEARE |
| Judgment Date | 29 February 2012 |
| Neutral Citation | [2012] EWHC 455 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | No: 2009-1099 |
| Date | 29 February 2012 |
[2012] EWHC 455 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
The Rolls Building
Fetter Lane
London
Mr Justice Teare
No: 2009-1099
STEPHEN SMITH QC and TIM AKKOUH, CALEY WRIGHT (instructed by Hogan Lovells) appeared on behalf of the Claimant.
DUNCAN MATTHEWS QC, IAN WINTER QC, GEORGE HAYMAN and JAMES SHEEHAN (instructed by Addleshaw Goddard) appeared on behalf of the Defendant.
This is an application by the claimant, the Bank, for a mandatory injunction requiring the defendant, Mr Ablyazov, to surrender himself to the tipstaff and to file a full and proper disclosure affidavit of assets and also for an order that, unless he does so, his defence to the several actions brought against him in this court shall be struck out and the Bank will be entitled to enter judgment against him.
The sums claimed in those actions amount to several billion dollars. The application is opposed by Mr Ablyazov. His counsel, Duncan Matthews Queen's Counsel, has described the orders sought as, "varying from the silly to the inappropriate".
The immediate history to this application is as follows: On 21 December 2011 I reserved judgment in a committal application brought by the Bank against Mr Ablyazov. The hearing had lasted over two weeks. I asked Mr Ablyazov through his counsel whether he would be present when judgment was given and for an undertaking that he would attend the judgment. In response his counsel, "Confirmed that he will be present."
Mr Stephen Smith Queen's Counsel, counsel for the Bank, submits that Mr Ablyazov undertook to be present at the judgment. Mr Matthews submits that Mr Ablyazov did not give such an undertaking.
If one construes my question and request as separate then Mr Ablyazov responded to the question by confirming that he would attend the judgment but did not respond to the request. If one construes my question and request as one, namely whether Mr Ablyazov undertook to attend the judgment then he answered that question in the affirmative. Both are possible interpretations but, since breaches of undertakings to the court can have certain consequences, I consider that any doubt should be resolved in favour of Mr Ablyazov.
However, the distinction does not seem to me to be of much significance in the context of the present application. It is undeniable that Mr Ablyazov gave a clear and unequivocal confirmation to the court in answer to a specific question from the court that he would attend the judgment. In the event, he did not attend court when judgment was given on 16 February 2012. He gave no notice to the court, to the Bank or to his own lawyers that he would not attend the judgment. His own counsel's skeleton argument for the judgment hearing stated that Mr Ablyazov would attend the judgment.
Mr Ablyazov was found to have acted in contempt of court. He was sentenced to 22 months' imprisonment for contempt of court in his absence. Since then he has gone into hiding. Not even his own solicitors, who continue to act for him in this matter and to receive instructions from him, know where he is. They have told me, through Mr Matthews, that they do not even know whether he is within or without the jurisdiction.
It was in those circumstances that the Bank issued the present application. It was issued with the minimum of notice required by this court and the Bank was only able to have it heard on 24 February 2012 because the Bank had another application against Mr Ablyazov fixed for hearing on that day which was settled.
A time estimate of two hours was given. Because time estimates in this case are rarely accurate, the court sat at 9.30 am to allow three and a half hours for the application, but it was not completed by 1 pm. The court had other applications in other actions in the afternoon and so the hearing was adjourned.
The hearing resumed today, 29 February 2012, and has now been completed. Rather than cause further delay in the determination of this application, which the Bank regards as urgent, I have decided to give judgment today rather than to reserve my judgment. My reasons will be shorter than they would have been had I reserved judgment, but since I have reached a clear conclusion as to how the application should be determined it is right that the parties should be informed of my decision today and without further delay.
The argument between the parties has focused on four matters.
First, whether the court has jurisdiction to make an order requiring Mr Ablyazov to surrender to the tipstaff and, if so, whether it is appropriate to make such an order.
Second, whether it is appropriate to make the order for disclosure of assets.
Third, whether it is appropriate to make either order an unless order.
Fourth, whether the sum of £45 million paid into court by the Bank by way of fortification of its undertaking in damages should be paid out to the Bank.
I first deal with the question of surrender to the tipstaff. Mr Smith submits that the court has jurisdiction to make the orders sought pursuant to section 37 of the Senior Courts Act 1981 which empowers the court to grant an injunction in all cases in which it appears to be the court to be just and convenient to do so. He also submits that the court has power to make the orders sought pursuant to its inherent jurisdiction to grant ancillary orders to make an order it has already made effective; see Bekhor v Bilton [1981] Queen's Bench 923, Maclaine, Watson & Co Limited v The International Tin Council (No 2) [1989] Chancery 286 and BTA Bank v Solodchenko [2011] EWHC 2163 Chancery.
Mr Smith says that the orders sought will help to ensure the effectiveness of the warrant of committal.
Mr Matthews submits that there is no jurisdiction to make the orders sought. He says that whilst it is accepted that ancillary orders may be made to support injunction orders, it is to strain that principle beyond its proper ambit to make an order that Mr Ablyazov surrender to the tipstaff. He says that section 37 does not cover the situation of making a warrant of committal effective, that the order sought is unprecedented and that no authority has been cited to support the making of such an order.
In my judgment, where the court has issued a warrant for the committal of a contemnor and where the contemnor has gone into hiding, being careful whilst giving instructions to his solicitors not to reveal his whereabouts to them, it is just and convenient to issue a mandatory injunction ordering the contemnor to surrender himself to the tipstaff so that he may execute the warrant of committal. There is, therefore, jurisdiction to make the order sought pursuant to section 37 of the Senior Courts Act 1981. I do not consider that in this context the Bank needs to establish a legal or equitable right.
If that is wrong, then in my judgment the court has inherent jurisdiction to issue ancillary orders designed to make effective orders which it has previously issued. That jurisdiction is confirmed by the authorities to which Mr Smith referred. The court had undoubted jurisdiction to issue the warrant for the committal of Mr Ablyazov. He has decided to go into hiding, either here or abroad and has thereby sought to frustrate the court's order. An order that he surrender to the tipstaff will enable the tipstaff to execute the court's warrant.
Mr Matthews made two further points. First, he said that neither section 37 nor the court's inherent jurisdiction could justify an order designed to deprive a person of his liberty. He described such an order as a "reverse habeas corpus". This point is in my judgment misconceived because it overlooks the circumstance that it is the warrant of committal that seeks to deprive Mr Ablyazov of his liberty. The order sought on the present application is designed to make that order effective.
Second, he said that the order is unnecessary because the court has made all appropriate orders by committing Mr Ablyazov to prison and ordering that a warrant of committal be issued. Mr Matthews submitted that it is for the tipstaff to execute the warrant, a submission which is perhaps encapsulated in the phrase, "Catch me if you can".
The current position is that Mr Ablyazov has gone into hiding and so it is unlikely that the warrant can be executed. If Mr Ablyazov surrenders to the tipstaff then the warrant can be executed. The order is, therefore, appropriate and necessary.
If Mr Ablyazov has fled abroad, which must be a possibility, then surrender is essential because the tipstaff's jurisdiction ends at Dover.
I have therefore concluded that a mandatory injunction should be issued requiring Mr Ablyazov to surrender himself to the tipstaff.
I shall next deal with the disclosure order. There is no dispute that the court has jurisdiction to make the disclosure order. Disclosure of assets is a necessary adjunct of a freezing order to make such order effective. The dispute is whether such an order should be made when an order for disclosure for assets has already been made.
Mr Smith submits that such an order should be made in circumstances where (a) Mr Ablyazov has been found to have acted in contempt of the disclosure order made in August 2009 when the freezing order was granted and (b) when there are reasons to believe that Mr Ablyazov has not disclosed his ownership of assets not included within the contempt application.
Mr Matthews submits that no such order should be made because an order for disclosure having already been made, and...
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