JSC BTA Bank v Ablyazov

Findings of fact in an earlier judgment may be considered in later proceedings where fairness permits. The later court must decide the case for itself, using the evidence before it and giving earlier findings such weight as appropriate. Reliance on those findings is permissible where the opposing party has a fair opportunity to challenge the underlying evidence, including by calling available witnesses. The rule against treating earlier judicial findings as evidence of facts is therefore founded on trial fairness, not an absolute exclusionary principle.

The Bank sought a declaration that Bensbourogh Trading Inc and a London flat were beneficially owned by Mukhtar Ablyazov, rather than by Salim Shalabayev, and directions for the receivers to transfer the assets. The trial followed the Court of Appeal’s order in JSC BTA Bank v Ablyazov [2016] EWCA Civ 987, which required a fresh evaluation of the evidence concerning ownership.

Mr Shalabayev challenged reliance on findings made in earlier proceedings, invoking Hollington v F Hewthorn & Co [1943] KB 587. The central procedural issue was whether findings concerning the ownership of companies used to fund the purchase could be admitted and given weight.

1. The Bank succeeded. The court declared that Mr Shalabayev was not the ultimate beneficial owner of Alberts Court or Bensbourogh Trading Inc, and that both assets were beneficially owned by Mr Ablyazov. The receivers were directed to transfer the assets as the Bank directed, in partial satisfaction of its judgments.

2. The rule in Hollington v F Hewthorn & Co [1943] KB 587 turned on fairness. Earlier judgments could not determine the later case, because the trial judge had to decide the case on the evidence received in the later proceedings. However, statements of fact in an earlier judgment could be considered as factual evidence and given such weight as appropriate.

3. The court applied the approach in Rogers v Hoyle [2015] QB 265. There was no unfairness in giving considerable weight to earlier findings that Sunstone Ventures Ltd and FM Company Ltd were beneficially owned by Mr Ablyazov. The underlying evidence had been heard previously, the relevant witnesses were available, and Mr Shalabayev could have called them in the present proceedings.

4. The court declined to adopt the interpretation advanced by reference to Otkritie International v Gersamia [2015] EWHC 821 (Comm) if “matters of primary fact” meant the earlier judge’s findings rather than the factual evidence recorded in the earlier case.

5. The evidence showed that Mr Shalabayev’s account of the source of the purchase funds, the acquisition of Bensbourogh and his relationship with the companies involved was untruthful and unsupported. The purchase money came from companies beneficially owned by Mr Ablyazov. The Bank therefore established beneficial ownership to the appropriate standard.

The trial followed an order of the Court of Appeal dated 7 October 2016. The Court of Appeal directed a judge other than Teare J to evaluate the entirety of the evidence concerning ownership in its chronological framework. The present court then determined the issue at first instance.