JSC BTA Bank v Ablyazov & Ors

Under Civil Procedure Rules 1998, r 25.7, an interim payment may be ordered where the defendant has admitted liability for a sum, or where the court is satisfied on the balance of probabilities that the claimant would obtain judgment for a substantial amount at trial. For alternative claims, the court need not decide which claim will succeed if each realistic outcome would yield a substantial recovery. The payment must represent a reasonable proportion of the likely final judgment.

The claimant bank sought an interim payment of US$65 million from the fourth defendant in proceedings concerning an alleged improper US$120 million loan. The defendant’s defence had been struck out after failures to comply with disclosure and other orders, and it was not represented at the hearing.

The bank relied on an admission that interest due under the loan remained unpaid. It also advanced alternative claims for compensation, invalidation of the loan agreement and repayment of interest. The court had to determine whether the statutory conditions for an interim payment were satisfied and whether US$65 million was a reasonable proportion of the likely recovery.

1. Jurisdiction. The court could order an interim payment under CPR 25.7(1)(a) because the defendant had admitted that it was in default in paying interest due under the loan agreement and that sums were owing.
2. CPR 25.7(1)(c) was also satisfied. The claimant bore the burden of proof and had to establish the relevant conditions on the balance of probabilities. The court had to put itself in the hypothetical position of the trial judge and ask whether, on the material before it, the claimant would obtain judgment for a substantial amount of money.
3. Where alternative claims are advanced, the court need not decide at the interim stage which claim will succeed. It is sufficient that the claimant will recover a substantial sum under one or other realistic alternative. The principle stated in Schott Kem Limited v Bentley & Others [1991] 1 QB 61 applied.
4. On the evidence, the bank would either recover the loan sum on its primary claims or recover the accrued interest on its alternative claim. The absence of any substantive defence, following the strike-out, made success on one or other claim particularly clear.
5. The court’s discretion under CPR 25.7(4) was properly exercised. US$65 million was a reasonable proportion of the likely judgment, having regard to the amounts claimed and the allowance made for a possible six-month interest waiver. The application was granted.