JSC BTA Bank v Ablyazov & Anor (Rev 1)

A court may correct an order under the slip rule where it did not intend to make an undisclosed amendment, and may alternatively vary it under CPR 3.1(7). A maximum-sum freezing order is generally the correct form because it should restrain dealings only up to the value of the claim, interest and costs. An exceptional form may nevertheless be justified where there is a demonstrated risk that overseas assets will be moved beyond effective enforcement. Any wider restraint should be expressed clearly in the operative injunction and remain subject to applications for permission or variation.

The claimant obtained a worldwide freezing order against the defendants. Following judgment on the continuation and discharge applications, the sealed order contained an undisclosed alteration to the standard wording. The alteration restricted dealings with overseas assets unless assets in England and Wales exceeded the maximum sum.

The defendants applied under CPR 40.12 and CPR 3.1(7) to restore the original wording. The claimant sought a variation imposing the amended restriction. The court had to decide whether the accidental alteration should be corrected and whether the wider form of freezing order was justified by the circumstances of the case.

1. Correction and variation. The court had intended to continue the original freezing order except for amendments required by the judgment or specifically drawn to its attention. The undisclosed amendment was therefore an accidental slip. The order could be corrected under CPR 40.12 and, alternatively, varied under CPR 3.1(7), applying Lloyds Investment (Scandinavia) Ltd. v Christen Ager-Hanssen [2003] EWHC 1740 and Collier v Williams [2006] 1 WLR 1945.
2. Maximum-sum principle. Maximum-sum freezing orders are the general rule. They ordinarily restrain dealings only up to the value of the claimant’s claim, interest and costs. The principle was stated particularly clearly by Kerr LJ in Z Ltd. v A-Z and AA-LL [1982] 1 QB 558, although exceptional cases may justify a wider order. The amended wording was inconsistent with the operative restraint because it implicitly prevented dealings with overseas assets exceeding the maximum sum.
3. Exceptional circumstances. The claimant had demonstrated a real risk that overseas assets, held indirectly and capable of rapid movement, could be dealt with so as to make enforcement more difficult. That risk fell within the recognised concept of dissipation in Congentra AG v Sixteen Thirteen Marine SA [2008] EWHC 1615. The wider restraint was therefore just and convenient under section 37 of the Supreme Court Act 1981, despite the general preference for the standard form.
4. Safeguards and orders. The amended restraint had to be made express in the operative paragraph rather than implied through a later explanatory paragraph. The defendants could apply to the court for permission to deal with particular assets or to vary the order if actual prejudice arose. The order was corrected or varied to restore the original wording, and, subject to satisfactory redrafting, the freezing order was further varied to give effect to the claimant’s application.

This was a first-instance Commercial Court decision. The judgment refers to an earlier decision in the same proceedings reported at [2009] EWHC 2840 (Comm), concerning continuation and discharge of the freezing order.