JSC BTA Bank v Ablyazov

The High Court may vary a receivership order where changed circumstances make additional powers just and convenient to preserve assets and make the receivership effective. This includes appointing receivers as managers of holding companies where existing directors pose a risk of dissipation, extending information-gathering powers to disclosed assets, clarifying the companies within the order, and bringing identified properties within its scope. A receiver and manager does not dissolve the company, but the company’s powers to conduct business or dispose of assets placed under the receiver’s control are suspended.

JSC BTA Bank applied without notice to amend a receivership order made in August 2010 against Mukhtar Ablyazov. The application followed findings of deliberate contempts of court, Mr Ablyazov’s disappearance, alleged attempts to deal with assets subject to the freezing and receivership orders, and concerns about the protection of valuable properties.

The proposed amendments included appointing the receivers as managers of specified holding companies, extending information powers, clarifying the companies and assets covered, adding three United Kingdom properties, and making consequential corrections.

1. The application was granted. The court’s jurisdiction arose under section 37(1) of the Senior Courts Act 1981, which permits the High Court to grant an injunction or appoint a receiver where it is just and convenient to do so. The power to appoint a receiver and manager also derives from that provision, as illustrated by Hart v Emelkirk [1983] 1 WLR 1289 and Parker v Camden London Borough Council [1986] 1 Ch 162.
2. A receiver and manager may be appointed where the receiver is required not only to receive rents, profits or property, but also to carry on or supervise a business or undertaking. The appointment does not dissolve or annihilate the company. However, it places the relevant business and assets under the receiver and manager’s control, leaving the company’s corresponding powers in abeyance. The court applied the explanation in Moss SS Co Ltd v Whinney [1912] AC 254.
3. The changed circumstances established a real need for the additional powers. Mr Ablyazov’s disappearance meant that the cooperation and jurisdictional control forming important parts of the original receivership structure could no longer be relied upon. The recent conduct of his nominee created a risk that receivership assets would be dissipated or removed.
4. It was therefore just and convenient to appoint the receivers as managers of the specified holding companies, extend their information powers to disclosed assets, identify disclosed companies in Schedule 3, clarify the limitation concerning local operating companies, and extend the order to the three properties found to belong to Mr Ablyazov.
5. Service of the amended order could be delayed until 22 March 2012 to facilitate recognition overseas. The court also authorised delayed filing, overseas enforcement, and production of appropriately certified copies and certificates.