JSC BTA Bank v Mukhtar Ablyazov & Ors

Cross-examination on affidavits required by a freezing order is a considerable imposition and should be ordered only where it is just and convenient after less burdensome alternatives have been considered. The court must weigh justice, convenience, burden, available alternatives and the practical effect of delay. Such an order is exceptional, but seriously inadequate asset affidavits may justify it where cross-examination is needed to police the injunction. The court may direct that the examination take place before the return hearing where the required information was due earlier and delay would unfairly prejudice the claimant.

The claimant applied for an order requiring the first defendant to attend cross-examination concerning affidavits of assets and answers to Schedule C questions made in connection with a freezing order. The court found the affidavits seriously inadequate and concluded that they did not enable the claimant to police the injunction. The defendant sought to postpone the examination until after the return hearing of the freezing-order application, relying on preparation of his defence and counsel availability. The central issues were whether cross-examination was justified and when it should occur.

1. Order for cross-examination. The court adopted the approach in Yukong Line Ltd of Korea v Rendsburg Investments Corporation of Liberia & Ors [1996] EWCA Civ 759: the question was whether, in all the circumstances, the order was just and convenient. The court had to weigh the burden of cross-examination against less burdensome means of obtaining the necessary information.
2. The court also applied the principle in Den Norske Bank ASA v Antonatos [1998] EWCA Civ 649 that cross-examination on an affidavit sworn pursuant to a Mareva order should be ordered only in exceptional circumstances. The affidavits were extraordinarily inadequate and failed to provide information by which the claimant could police the freezing injunction. Cross-examination was therefore an appropriate alternative means of obtaining that information.
3. Timing. The court rejected postponement until after the return hearing. The earlier order, upheld on appeal, contemplated provision of asset information before that hearing. Although preparation of the defence created some pressure, the court considered that an examination on 27 October would not cause prejudice sufficient to make the order unjust.
4. Costs. The defendant was ordered to pay the claimant’s costs of the application on the standard basis. The costs of the cross-examination hearing were reserved.

The judgment records that an earlier decision requiring asset information before the return hearing had been appealed and that the appeal was dismissed. No citation for that appellate decision is stated. This judgment determined the subsequent application for cross-examination and fixed the hearing for 27 October 2009.