JSC BTA Bank v Ablyazov

An allegation of contempt based on circumstantial or secondary evidence succeeds only where the evidence is cogent and reliable and the only reasonable inference is guilt. A reasonable alternative inconsistent with contempt defeats the application. A worldwide freezing order extends to assets held through nominees and companies where the respondent can indirectly dispose of them as his own. Deliberate non-disclosure of such an asset, or knowingly false evidence intended to impede the administration of justice, is contempt. It is unnecessary to prove that the respondent appreciated that the conduct constituted a breach of the order. A later assignment cannot be justified by fabricated documents purporting to give effect to an earlier agreement.

The Bank applied to commit Mukhtar Ablyazov for contempt of court and sought associated relief for alleged breaches of a worldwide freezing order. The allegations concerned failure to disclose beneficial ownership of Bubris Investments Limited, false evidence about four English properties and three Schedule C companies, and dealings with loan repayment rights held by Stantis Limited.

Mr. Ablyazov denied ownership and relied on nominee arrangements, evidence from associates and alleged pre-existing agreements. The central issues were whether the Bank had proved the alleged ownership and dealings to the criminal standard, whether the assets fell within the freezing order, and whether the evidence and documents relied on in response were genuine.

1. Proof and governing principles. The Bank bore the burden of proving each contempt so that the court was sure. Circumstantial evidence was permissible, but had to be examined for reliable circumstances weakening the allegation. If more than one reasonable inference remained and one was inconsistent with contempt, the application failed. The judge applied the approach in Teper v R [1952] AC 480 and adopted the formulation in Daltel v Makki [2005] EWHC 749 (Ch) at paragraph 30.
2. Scope of the freezing order. Assets held through nominees and corporate chains were within the order where the respondent could indirectly dispose of them as if they were his own. The court was entitled to determine beneficial ownership in the contempt proceedings despite related ownership issues arising elsewhere.
3. Findings. The court was sure that Mr. Ablyazov beneficially owned Bubris, Carlton House, Oaklands Park and Alberts Court, and the shares in FM Company, Bergtrans and Carsonway. His non-disclosures and false evidence were deliberate and intended to impede the administration of justice. The Elizabeth Court allegation was not proved because the evidence left a reasonable doubt.
4. Stantis. Stantis was a holding vehicle for assets controlled by Mr. Ablyazov. The long form of the 2007 agreement, the June 2009 agreement and the related demands were fabricated. The December 2010 novations therefore constituted dealings with frozen assets. Their backdating supported the conclusion that they were intended to frustrate the receivership. The dealings were deliberate.
5. Mental element and disposition. Following Masri v Consolidated Contractors International [2011] EWHC 1024 (Comm), it was unnecessary to prove that Mr. Ablyazov appreciated that his conduct was a breach of the order. The judge did not regard Irtelli v Squatriti [1993] QB 83 as deciding otherwise. The application succeeded in part. Penalty was reserved for further submissions.

This was a first-instance committal application. The judgment described earlier freezing-order and receivership proceedings, including the receivership decision at [2010] EWHC 1779 (Comm) and its appeal at [2010] EWCA Civ 1141 .