Psjc Commercial Bank Privatbank v Igor Valeryevich Kolomoisky and Others
| Jurisdiction | England & Wales |
| Judge | DEPUTY JUDGE,Joanna Smith QC |
| Judgment Date | 12 March 2018 |
| Neutral Citation | [2018] EWHC 482 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: BL-217-000065 |
| Date | 12 March 2018 |
In the Matter of
[2018] EWHC 482 (Ch)
Miss Joanna Smith QC
sitting as a Deputy Judge of the High Court
Claim No: BL-217-000065
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
The High Court of Justice
Rolls Building
Fetter Lane
London EC4A 1NL
Mr Tim Akkouh (instructed by Hogan Lovells International LLP represented the Claimant.
Mr Thomas Plewman QC and Mr Marc Delehanty (instructed by Pinsent Masons LLP) represented the Third to Eighth Defendants
Introduction
Further to a worldwide freezing order dated 19 December 2017 the claimant bank by its application dated 13 February 2018 now seeks disclosure of information from the sixth to eighth defendants on the grounds that those defendants have not complied with the worldwide freezing order's disclosure provisions, alternatively on the grounds that it would be just and convenient to order disclosure.
Originally the bank also sought an order in relation to the provision of information as to the identity of beneficial owners referred to in the disclosure letters and disclosure affidavits. However, this application has been resolved and no longer troubles the court.
Background Facts
The worldwide freezing order (" WFO") was granted against the background of allegations by the bank of fraud on the part of the defendants involving the transfer of circa 1.9 billion US dollars by the bank to 46 Ukrainian borrowers pursuant to sham loan agreements. It is said that money was then transferred to the third to eighth defendants pursuant to further sham agreements for the supply of vast quantities of commodities and industrial equipment.
Mr Akkouh, acting on behalf of the bank, showed me extracts from the particulars of claim but for the purposes of this application I need not concern myself with the underlying merits of this case. I am aware that directions have been given for the hearing of applications on the part of the defendants, first contesting the jurisdiction of the English court and, second, to challenge the WFO, and hearing dates for those applications have been fixed.
The WFO granted by Mr Justice Nugee precluded removal of assets from this jurisdiction up to the relevant maximum sum, which for each of the third to eighth defendants was defined as the sum of 2.6 billion US dollars. It contained familiar disclosure provisions including the following:
"[8(a)] the respondent must by 4 pm on the 10th working day after service of this order and to the best of his ability inform the applicant solicitors in writing of all his assets exceeding £25,000 in value as at the date of this order, giving the value, location and detail of all such assets."
Paragraph 6 of the WFO makes it clear that the term "assets" includes a chose in action.
Paragraph 8(b) sets out various classes of asset to which the order applies, together with the information required in respect of those assets, to satisfy the requirement for information as to "value, location and details". This list does not include a chose in action such that there is no guidance to be found in the order itself as to what is to be provided by way of information in relation to a chose in action.
Paragraph 9 of the order provides that:
"By 4 pm on the 15th working day after service of this order the respondent must swear and serve on the applicant's solicitors an affidavit confirming (and if necessary updating) the information to be provided pursuant to paragraph 8 above."
Since the WFO was made, the third to eighth defendants have provided disclosure letters pursuant to paragraph 8(a) of the WFO dated 12 January 2018. The letters from the sixth to eighth defendants, with which I am concerned for this application, are all in very similar form. In particular, they all record that "our investigations are continuing" and they then set out details of the respective assets of each of these defendants exceeding 25,000 US dollars. In summary, and insofar as is relevant for the purposes of this application:
The sixth defendant identifies nine loans receivable in the total sum of circa [] US dollars and six trade receivables in the total sum of circa [] US dollars. The identity of the debtors and the counterparties in respect of the trade receivables is identified or has since been identified. However, the dates of the various transactions identified are not specified nor are the dates on which the sums will become due and owing to the sixth defendant.
The seventh defendant identifies seven loans receivable in the total sum of circa [] US dollars. The identity of the debtors is identified or has since been identified. However, the dates of the various transactions identified are not specified nor are the dates on which the sums will become due and owing to the seventh defendant.
The eighth defendant identifies nine loans receivable in the total sum of circa [] US dollars and five trade receivables in the total sum of circa [] US dollars. The identity of the debtors in respect of the trade receivables is identified or has since been identified. Again, the dates of the various transactions identified are not specified nor are the dates on which the sums will become due and owing to the eighth defendant.
On 14 January Mr Stuart McNeill, a partner at Pinsent Masons LLP, solicitors for the third to eighth defendant, provided a witness statement in support of an application to extend time for service of affidavits verifying the asset disclosure. In paragraph 6.3 Mr McNeill explained the steps that his firm needed to take in order to ensure that each defendant was accurately disclosing its asset position. Amongst other things, he explained that his firm "wished to determine whether there are any qualifications that need to be made to any of the asset disclosures in respect of liabilities that operate to reduce the value of the assets, as well as qualifications on the likely recovery of the same. For example, I have been told that a number of counterparties to Milbert transactions have been placed in liquidation." Milbert Ventures Inc is the seventh defendant.
Following a short extension of time the sixth to eighth defendants filed and served disclosure affidavits pursuant to paragraph 9 of the WFO on 26 January 2018. Again, these affidavits are all in very similar form. Each individual providing the affidavits confirms that the asset disclosure given in the disclosure letters and in the affidavits has been provided to the best of his/her ability within the time permitted, that it is true to the best of his/her knowledge and belief, and that it has not been the subject of comprehensive audit and the disclosed assets have not been professionally valued.
Each affidavit goes on to say that "the realisable values of the disclosed assets, including any disputes and rights of set off and the financial capacity of the debtors, remain under investigation". Further, the affidavit sworn on behalf of the sixth defendant makes it clear that "by way of example" the director of the sixth defendant swearing the affidavit is aware that one of the debtors has filed for bankruptcy. The affidavits sworn on behalf of the seventh and eighth defendants make it clear that "by way of example" the directors of those defendants swearing those affidavits are aware that one of the debtors common to them both is subject to proceedings under chapter 15 of the United States Code in the New York Southern Bankruptcy Court.
The bank's solicitors were unhappy with the disclosure letters and the disclosure affidavits and sent letters criticising those documents on 18 January and 31 January 2018 respectively. Those letters set out various categories of information which the bank maintained it was entitled to pursuant to the provisions of the asset disclosure order in the WFO and which now form the basis for the categories of information sought in this application.
By a letter dated 7 February 2018 the defendants' solicitors responded, providing some additional information. In particular, the sixth and eighth defendants provided additional information in schedule form in respect of the various transactions identified in the disclosure letters.
Insofar as the sixth defendant is concerned, the schedule (i) identified the date of two out of nine of the loan agreements (apparently so as to differentiate between those agreements which involved the same counterparty); (ii) identified the full name of each counterparty to the loans and the trade receivables transactions; (iii) identified the jurisdiction for each of these transactions; (iv) identified the sum involved; and (v) in a column headed "Repayment date" identified the relevant repayment date for some but not all of the transactions.
The repayment date for six of the transactions had already passed (four, worth together approximately [] US dollars on [] and two, worth together approximately [] US dollars, on [] and [] respectively). One of the loans due on [] in the sum of just over [] US dollars was due to the sixth defendant from the seventh defendant. The repayment date for seven transactions was said to be "not specified" and for the remaining transaction "not available". Only one transaction has a repayment date that is said to fall in the future.
Insofar as the eighth defendant is concerned, the schedule (i) now identified 14 (as opposed to 9) loans receivable, apparently because loans to the same entity had been separated out; (ii) identified the full name of each counterparty...
To continue reading
Request your trial
-
FM Capital Partners Ltd v Frédéric Marino
...steps should be taken to protect its position (as Ms Joanna Smith QC, sitting as a Deputy High Court Judge, said in PSJC Commercial Bank Privatbank v Kolomoisky [2018] EWHC 482 (Ch), para. 33, 71 Mr Akkouh submitted that on the facts of this case the disclosure order sought is justified be......
-
ADM International SARL v Grain House International S.A. (Formerly known as Compagnie Agricole De Commercialisation Et De Conditionnement Des Cereales Et De Legumeineuses S.A.)
...Commercial Injunctions (now in the 7 th edn at 21–036) and applied by Ms Joanna Smith QC in PJSC Commercial Privatbank v Komoloisky [2018] EWHC 482 (Ch) at [36] to [38], that “value” there meant unencumbered value, because what was to be frozen was what was intended to be available for exe......
-
ADM International Sarl (a company incorporated in Switzerland) v Grain House International S.A. (Formerly known as Compagnie Agricole De Commercialisation Et De Conditionnement Des Cereales ET Legumineuses S.A.) (a company incorporated in Morocco)
...identifying assets against which enforcement can be made. Reliance is also placed on PJSC Commercial Bank Privatbank v Kolomoisky [2018] EWHC 482 (Ch) at [36] to 71 The Defendants say the analogy is a false one in that these references are considering the meaning of “value” in the context ......
-
WWRT Ltd v Serhiy Tyshchenko
...information that is necessary for the purposes of policing the injunction (see e.g. PSJC Commercial Bank Privatbank v Kolomoisky [2018] EWHC 482 (Ch), §33(5)). While Mr Mather accepted that an order for disclosure of documents could be made if required to enable a claimant to identify the ......
-
Freezing Orders - PSJC Commercial Bank V Kolomoisky
...Alert - [2018] EWHC 482 (Ch) Judge rules on what must be disclosed by the respondent following the grant of a freezing The worldwide freezing order ("WFO") granted against the respondents contained the standard disclosure obligation to inform the applicant in writing "of all his assets exce......
-
Commercial Dispute Resolution Newsletter - April 2018
...enforcement" prohibited by Article 47(3) (even if they contain a penal notice). PSJC Commercial Bank Privatbank v Kolomoisky & Ors [2018] EWHC 482 (Ch) Judge rules on what must be disclosed by the respondent following the grant of a freezing A worldwide freezing order ("WFO") granted ag......