JSC BTA Bank v Ablyazov & Ors

A freezing order may be continued where the claimant has a good arguable case and the evidence establishes a real risk of dissipation. Alleged political or legal conditions in a foreign state do not prevent that inference where the circumstances, viewed in context, support it. Non-disclosure must be material and deliberate, or sufficiently serious to justify refusing relief; an omission may instead require the order’s terms or amount to be reviewed. A claimant offering undertakings need not investigate speculative risks of their breach without a clear indication that misuse is likely. Restrictions on disclosure and passports must remain proportionate and no more extensive than necessary.

The Bank sought continuation of a freezing order granted without notice against seven defendants. It alleged that the first three defendants had participated in the misappropriation of more than US$295 million and that the fourth defendant had received the funds, while the fifth to seventh defendants had acted as nominee directors or held relevant assets.

The defendants opposed continuation on grounds including absence of a real risk of dissipation, material non-disclosure, lack of proportionality, and the allegedly political context of the dispute. The court also considered restrictions on disclosure of asset information and the retention of passports.

1. Continuation of the freezing order. The Bank had a good arguable case, which was not disputed, and had established a real risk of dissipation against the first to third defendants. The alleged misappropriation, rapid movement of funds, opaque beneficial ownership, use of nominees and evasive asset information were cumulatively sufficient. The circumstances in Kazakhstan did not prevent the court drawing the inference of risk.
2. Non-disclosure. The Bank had given sufficient context and a fair presentation of its case. It was not required to investigate whether information supplied under the order might reach the prosecuting authorities absent a clear indication that the undertaking would be breached. The possible breach of an injunction by a company of which the Bank’s representative had been a director was not material without evidence that he authorised it. The Bank should nevertheless have investigated whether assets seized in Kazakhstan secured the present claim; that omission did not justify discharge, although the amount or terms of the order might later require adjustment.
3. Just and convenient relief. The political background did not make the order inappropriate. The case was distinguishable from Tajik Aluminium Plant v Ermatov, because the parties to the present dispute were before the court and the Bank’s claim was properly arguable.
4. Other defendants and safeguards. The order was continued against the fourth to seventh defendants. The risk concerning the fifth to seventh defendants was not fanciful while relevant shareholdings remained unexplained, but the order was to be kept under review to avoid oppression. Disclosure of asset information remained restricted to the Bank’s counsel and solicitors. Retention of passports was continued pending completion of relevant cross-examination, consistently with the principle in Bayer v Winter that such a restriction should last no longer than strictly necessary.

The Freezing Order was continued.