PSJC Commercial Bank Privatbank v Kolomoisky & Ors

An ancillary asset-disclosure order supporting a freezing order must be strictly construed and confined to information necessary to police the injunction. The court may require information or documents that identifies the nature and extent of an asset, and enables the claimant to decide whether further protective steps are required. Disclosure of transactional documents is not automatically required for contractual choses in action. Basic identifying information, repayment dates, security, impairment, realised payments and their destination may be required where relevant to value or enforcement. The court must avoid turning ancillary disclosure into substantive disclosure for investigating the underlying claim.

The claimant bank held a worldwide freezing order against the defendants. It applied for further disclosure from the sixth to eighth defendants concerning loans receivable and trade receivables. The bank sought transactional documents and information about contract dates, underlying goods or services, repayment dates, security, realisable value, payments and destination accounts.

The defendants contended that the existing disclosure was sufficient and that the application improperly pursued the substantive fraud claim. The central issues were the meaning of “value, location and details” in the freezing order and the extent of the court’s ancillary jurisdiction under section 37(1) of the Senior Courts Act 1981.

1. Disclosure jurisdiction. A freezing order carries an ancillary jurisdiction to require information necessary to make it effective. Disclosure must be directed to policing the injunction, including enabling the claimant to identify and preserve assets and decide whether further steps are needed. It must not be used to investigate the substantive claim. Confidentiality alone does not justify withholding relevant information.
2. Strict construction. The words “value, location and details” had to be construed strictly because breach of a freezing order may have penal consequences and the order restricts commercial freedom. The words did not require disclosure of all transactional documents. The application for the loan agreements and trade receivables contracts was therefore dismissed.
3. Identifying details. The defendants were ordered to provide the dates of the contracts and high-level information about the goods or services underlying the trade receivables. This information fell within “details” because it assisted identification of assets, particularly where the same counterparty was involved in more than one transaction.
4. Repayment and value. Repayment dates were directly relevant to the value of the choses in action. The defendants had to identify those dates where possible and explain, by reference to each asset, why a date was unavailable or unspecified. For overdue or undated contracts, they had to provide information about payment, alternative dates, security, estimated realisable value and known impairment. For future-dated contracts, they had to provide information about security and any reason to believe the asset was impaired.
5. Payments. Information about payments already made, including the destination account, was required to police the order. The court declined to require advance disclosure of accounts into which future payments might be made, or explanations for non-payment beyond the information already ordered.
6. The orders were made as clarification or addition to the freezing order, under section 37(1) of the Senior Courts Act 1981 and, alternatively, on the just and convenient basis. Consequential confidentiality arrangements under CPR 31.22(2), redactions and costs were left for further submissions.