JSC BTA Bank v Ablyazov & Anor

The discretion to refuse to hear a contemnor depends on the interests of justice in the individual case. The court must consider all the circumstances, including the nature of the proceedings, the consequences for both parties, the importance of allowing a challenge and proportionality. Contempt alone is insufficient, and refusal will be justified only rarely. A weak or absent connection between the contempt and the issue on which the contemnor seeks to be heard weighs strongly against refusal. Where a non-party has not had a proper opportunity to establish a proprietary claim, refusing to hear an appeal concerning that opportunity may be disproportionate. New grounds may be admitted where they are necessary to complete the analysis and the opposing party can fairly answer them.

The Bank obtained a charging order over property alleged to belong beneficially to Mr Ablyazov. Mr Shalabayev, who claimed to be the true beneficial owner, sought to intervene and challenge an earlier finding made in Mr Ablyazov’s committal proceedings. Teare J dismissed the application, holding that the proposed challenge would be an abuse of process and collateral attack. Mr Shalabayev appealed.

While the appeal was pending, Mr Shalabayev was found guilty of contempt of court in unrelated disclosure and travel-restriction matters. The Bank applied for the appeal to be dismissed without being heard because the contempt remained unpurged. The court also considered whether the Bank should be permitted to rely on new arguments based on privity and estoppel by conduct.

Outcome. The court dismissed the Bank’s application to decline to hear Mr Shalabayev’s appeal. The substantive appeal was not determined by this judgment. The court permitted the Bank to rely on its two new grounds and allowed further evidence in response.

1. The discretion to refuse to hear a contemnor is governed by the interests of justice in the individual case. All circumstances must be considered, including the nature of the proceedings, the consequences for both parties, the importance of permitting the contemnor to challenge the decision and the proportionality of refusing a hearing. The discretion is exceptional. The mere fact of contempt is insufficient, and refusal will generally be justified only where the contempt impedes the course of justice. The approach was traced to Hadkinson v Hadkinson [1952] P 285.
2. The absence of a real connection between the contempt and the issue on which the contemnor seeks to be heard is a powerful consideration. Mr Shalabayev’s contempt impeded the ascertainment of truth concerning the Millennium-Proteus transfer, but had little bearing on the beneficial ownership of Alberts Court or enforcement of the charging order.
3. Mr Shalabayev had not previously had a proper opportunity to establish his alleged ownership. Giving evidence in Mr Ablyazov’s committal proceedings did not entitle him to address the court on the conclusion arising from the totality of the evidence. Refusing to hear his appeal would therefore be disproportionate and would create an unsatisfactory inconsistency, particularly because Teare J had heard his submissions below.
4. The Bank’s new grounds were allowed because the abuse-of-process argument required consideration of the alleged identity of interest between the parties and the proposed estoppel. There was no prejudice provided that Mr Shalabayev could answer the arguments with evidence.

• Court of Appeal (Civil Division) — dismissed the Bank’s application that Mr Shalabayev’s appeal should not be heard because of his unpurged contempt, and permitted reliance on two new grounds: [2015] EWCA Civ 70.
• High Court of Justice, Queen’s Bench Division, Commercial Court — Teare J dismissed Mr Shalabayev’s application to be joined to the charging-order proceedings and held that the proposed challenge to the earlier ownership finding would be an abuse of process: [2013] EWCH 1836 (Comm).