Mukhtar Ablyazov v Jsc Bta Bank (No 7)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GROSS,LORD JUSTICE MOSES,THE CHANCELLOR OF THE HIGH COURT |
| Judgment Date | 28 November 2011 |
| Neutral Citation | [2011] EWCA Civ 1386 |
| Docket Number | Case No: A3/2011/1892 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 November 2011 |
[2011] EWCA Civ 1386
The Chancellor of the High Court
Lord Justice Moses
and
Lord Justice Gross
Case No: A3/2011/1892
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Queen's Bench Division,
Commercial Court
Mr Justice Teare
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Duncan Matthews QC and Mr George Hayman (instructed by Addleshaw Goddard LLP) for the Appellant
Mr Stephen Smith QC and Mr Tim Akkouh (instructed by Hogan Lovells International LLP) for the Respondent
Hearing dates : 16 th November 2011
INTRODUCTION
The Appellant ("Mr. Ablyazov") appeals from a Judgment, Ruling and Order of Teare J, dated the 21 st June, 2011 and the 28 th June, 2011 respectively ("the judgment", "the ruling" and "the order", as appropriate), giving directions for the hearing of a contempt of court application brought by the Respondent ("the Bank"), against Mr. Ablyazov. In a nutshell, Teare J granted permission to the Bank to proceed against Mr. Ablyazov in respect of a limited number of allegations of contempt of court, without requiring the Bank to abandon other allegations of contempt which it had raised. Further, Teare J approved the Bank's selection of the allegations to form the subject of the hearing ("the contempt application"), notwithstanding a degree of overlap between the contempt allegations to be proceeded with and substantive trials fixed or anticipated for late 2012 or 2013.
At the conclusion of the appeal, the Court indicated that the appeal would be dismissed for reasons to be given in due course. These are my reasons for reaching that conclusion.
At the outset of the appeal, Mr. Matthews QC, for Mr. Ablyazov, invited the Court to hear the appeal in private, given the background to this litigation (see further, below). The Court was not persuaded to take this exceptional step but indicated that the following safeguards were in place or would be made the subject of an order of this Court:
i) As provided by para. 15 of the freezing order dated 12 th November, 2009 (as amended), the restriction on the distribution of certain information furnished by or on behalf of Mr. Ablyazov, would remain in place.
ii) The Court would make such orders as appropriate under CPR 3.1(1)(m), to ensure that the material on the Court file would not be open for inspection, save with the leave of the Court and that any reference to material in a witness statement would not trigger the operation of CPR 32.12(2)(c). The precise drafting of such an order has been entrusted to counsel; the order should be incorporated in the order made at the conclusion of this appeal.
The background to the litigation, of which the present appeal forms part, was well summarised by Teare J in JSC BTA Bank v Mukhtar Ablyazov [2010] EWHC 1779 (Comm), one of several interlocutory judgments he has already given in this long running dispute:
" 1. This is an extraordinary case.
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 according 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……..
5. In late January 2009 Mr. Ablyazov was forced to leave Kazakhstan hurriedly. He arrived in London where he now lives with his wife and three of his four children…."
It may be noted that the application by the Appellant, to strike out or stay the English proceedings on the ground that the process of this Court was being abused by the Respondent at the behest of the President of Kazakhstan to promote his political fortunes, was dismissed by Teare J: see, [2011] EWHC 1136 (Comm), at [54–55]. Although the learned Judge held that it was arguable that the President of Kazakhstan had persuaded the Bank to sue Mr. Ablyazov for that purpose, he concluded (loc cit) that the Bank had a good arguable case against Mr. Ablyazov and a legitimate interest in taking proceedings against him—namely, to recover the assets it alleges were misappropriated. Moreover, the Bank was contractually obliged to pursue its claims, pursuant to a complex restructuring and negotiations with its creditors. Accordingly, even if there was a collateral purpose behind these proceedings, they did not amount to an abuse of process. It is unnecessary to say more as to these swirling cross-currents touching on Kazakhstan politics, other than to record that each party fundamentally disputes the allegations made by the other.
On the 21 st August, 2009, Teare J granted the Bank an ex parte interim freezing order against Mr. Ablyazov and others, on the basis that without such relief there was a risk that Mr. Ablyazov would dissipate his assets. That order ("the freezing order") has since been continued inter partes and amended from time to time. Dating back to 2009, there have been continual skirmishes as to the disclosure provisions included in the freezing order. In the light of the inadequacies in disclosure, as held by Teare J ( [2009] EWHC 2833 (QB)), Mr. Ablyazov was directed to attend for cross-examination and was cross-examined before Teare J in late 2009. Subsequent concerns led to the making of a receivership order in August 2010, a decision upheld by this Court: see, [2010] EWCA Civ 1141.
The Bank complains that Mr. Ablyazov has "routinely flouted" the panoply of court orders in place—the freezing order, including the order/s for disclosure and the receivership order.
Against this background, by Application Notice dated 16 th May, 2011, the Bank applied to have Mr. Ablyazov committed to prison for contempt and for various other relief, including debarring him from defending the proceedings in the absence of full compliance with certain of the orders sought. Further, the Bank applied for permission to bring proceedings for contempt of court pursuant to CPR r.32.14, to be ruled upon (amongst other matters) at a directions hearing. Some 35 allegations of contempt of court were then advanced.
THE JUDGMENT, THE RULING AND THE ORDER UNDER APPEAL
The judgment: On the 10 th June, 2011, the directions hearing came before Teare J who, as already underlined, was thoroughly immersed in this litigation.
In advance of the hearing, Teare J canvassed with the parties the need for the number of allegations for contempt to be reduced, for case management reasons. Complex directions had already been given for the trial of (what are known as) the Drey, Chrysopa and Granton actions to commence in November 2012. As the Judge observed (judgment, at [6]):
" It would be undesirable to disrupt those directions by ordering that a long contempt hearing involving many allegations should take place during the period when the parties should be preparing for the trial of the actions."
Considerations of fairness towards Mr. Ablyazov pointed likewise to the limitation of the number of contempt allegations to be dealt with at the contempt application.
In the event, Teare J held (judgment, at [9]) that the contempt application should be limited to 3 allegations, one from each of the several categories of contempt relied upon, namely:
i) A failure to disclose;
ii) A failure to tell the truth on oath;
iii) A wrongful dealing with assets.
It was not appropriate for the Court to make the selection; that was a matter for the Bank.
Teare J considered that the contempt application, thus limited, would neither unduly disrupt the substantive trial nor cause unfairness to Mr. Ablyazov. The Judge appreciated that Mr. Ablyazov's credibility would be in issue on the contempt application "but that will often be the case where breaches of a freezing order are alleged": judgment, at [10]. So too, the determination of the contempt application might involve determination of one or more issues in the trial of one or more of the actions. Such considerations could mean that the hearing of the contempt application should be delayed until after the trial of the actions but that was not necessarily so. Here (loc cit):
" … having regard to the limited number of contempt allegations to be heard and to the importance to the Bank of the efficacy of the freezing order, I consider that the potential overlap of issues...
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