JSC Bta Bank v Roman Vladimirovich Solodchenko and Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BRIGGS |
| Judgment Date | 27 June 2011 |
| Neutral Citation | [2011] EWHC 2908 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: IHC 70/11 |
| Date | 27 June 2011 |
[2011] EWHC 2908 (Ch)
Mr Justice Briggs
Case No: IHC 70/11
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
MR S SMITH QC and Ms E Gillett (instructed by Hogan Lovells) appeared on behalf of the Claimant/Applicant
MR I SMITH (instructed by Clyde & Co) appeared on behalf of Mr Shalabayev
I must now consider the sentence to be imposed on Mr Shalabayev in his absence for the contempts which I found that he had committed in my judgment on 17 May last. It will be recalled that Mr Shalabayev was served with a freezing order on I think 5 November last. It contained detailed provisions in paragraphs 9, 10 and 11 for the provision of information. Paragraph 9 was provision of information about his assets. In paragraph 6, his assets were described as including:
"…all his assets, whether or not they are in his own name or whether or not they are solely or jointly owned, and whether the respondent is interested in them legally or beneficially or otherwise. For the purpose of this order, the respondent's assets include any asset which he had power, directly or indirectly, to dispose of or to deal with as if it were his/its own. The respondent is to be regarded as having such power if the third party holds or controls the asset in accordance with his/its direct or indirect instructions."
Paragraph 10 was for the provision of answers to questions set out in schedule D to the freezing order, which required Mr Shalabayev to give a detailed explanation of the movement of moneys which the bank claimed represented the proceeds of assets misapplied by other defendants in the proceedings.
Paragraph 11 required the information to be verified by affidavit.
There were time limits of seven working days under paragraphs 9 and 10, and a 10 working days after service provision in relation to the affidavit.
In paragraph 15 of my judgment on 17 May, I found that the contempt was proved beyond reasonable doubt. I said:
"The evidence clearly demonstrates both personal service of the freezing order endorsed with the appropriate penal notice, together with a covering letter warning of the consequences of breach, and proves the complete failure by Mr Shalabayev, without explanation or excuse, to provide the disclosure ordered, either in time or at all. The contempt is both serious and continuing. It is particularly serious because, on the evidence before the court, Mr Shalabayev played a central role in the concealment of the proceeds of the realisation of the bank's assets and may be supposed to be likely to have disclosable information of the highest value to the bank in tracing its property."
That conclusion, namely as to the vital nature of the information which Mr Shalabayev should have provided pursuant to the freezing order, arises in particular from the fact that Mr Shalabayev was one of four holders of a power of attorney in relation to a number of offshore corporations, most of them in the BVI, one of them in the Seychelles, which the claimants claim have been used to launder its assets. The upper limit in the freezing order is some £200 million.
Some of the documents which have been obtained by the claimants, in part from searching emails coming to and from Mr Shalabayev, pursuant to an earlier order of the court, in part from the execution of an Anton Pillar order, and in part from the Land Registry, show Mr Shalabayev as being described as the ultimate beneficial owner of some of those offshore companies, whether or not that is true. They also show him giving instructions and taking a part in the administration of those companies' ostensible assets, which suggests that the plaintiffs need the valuable information to find out what has become of their property, not merely pursuant to compliance by Mr Shalabayev with paragraph 10 of the freezing order in answering the questions raised, but also by providing information as to the whereabouts of his assets, bearing in mind the great breadth of the definition of his assets in paragraph 6 of the order which I have summarised.
Since my finding of contempt has been communicated to Mr Shalabayev, he has on two subsequent occasions, including this morning, sought to seek an adjournment of the sentencing hearing, without success today but with the obtaining of a seven day adjournment when he made a similar application last week. He is quite plainly aware both of the freezing order, of which there is evidence of personal service, and indeed of the judgment that he is in contempt, although it appears from the instructions which his counsel Mr Ian Smith described as having been given to him this morning that he does not even now appear to accept that he is in contempt in relation to the order.
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Julie Anne Palmer and Nicholas Edward Reed (Joint Liquidators of Changtel Solutions UK Ltd ((in Liquidation))) (Applicants) JI-Chuen Jason Tsai (Respondent)
...two year maximum when the contemnor was in continuing and wilful breach of court orders. In JSC BTA Bank v Solodchenko and others [2011] EWHC 2908 (Ch) Briggs J imposed a sentence of 18 months' imprisonment for breaches of provisions of an order requiring Mr Syrym Shalabayev to provide inf......
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...to which the judge had been referred. Mr Matthews referred to not only the Kythreotis case, but also JSC BTA Bank v. Shalabayev [2011] EWHC 2908 (Ch), where there was a sentence of 18 months; JSC BTA Bank v. Stepanov [2010] EWHC 794 (Ch), where a 2 year sentence was imposed; Daltel v. Makki......