Kazakhstan Kagazy Plc & Ors v Zhunus (Formerly Baglan Abdull) & Ors

An unresolved application to discharge a worldwide freezing order does not excuse or delay compliance with existing asset-disclosure obligations. The same principle applies where the proposed event is a distribution from a trust which, if permitted, may lead to an application to discharge the order. The court must assess the position under the orders currently in force. Potential future discharge, uncertainty about ownership of the proposed funds, or a pending application concerning those funds does not justify staying disclosure obligations.

The claimants sought further information about Mrs Arip’s assets pursuant to orders made in the context of a worldwide freezing order. Mrs Arip applied for her disclosure obligations to be stayed or extended pending an application for permission to receive £13.2 million from the WS Settlement and pay that sum into court, potentially seeking discharge of the freezing order.

The court considered whether the pending distribution application and the possible future discharge of the freezing order justified withholding or delaying compliance with the existing disclosure order.

1. Application dismissed. Mrs Arip’s request to stay or extend her obligation to provide further asset disclosure was refused.
2. The disclosure order was ancillary to, and an important part of the enforcement and policing of, the worldwide freezing order. The evidence supported a fair inference that Mrs Arip had, or might have, substantial undisclosed assets.
3. Per Andrew Baker J, the principle decided by the Court of Appeal in VTB Capital Plc v Maloleev [2001] EWCA Civ 1252 was applicable: an unresolved application to discharge a freezing order provides no reason to excuse or delay full compliance with otherwise proper asset-disclosure orders. The same reasoning applied although the pending application concerned permission for a distribution which might later lead to an application for discharge, rather than an application expressly seeking discharge already before the court.
4. The court rejected the practical basis of the application. It was uncertain whether the proposed distribution would result in discharge, whether the funds were in reality Mrs Arip’s funds, and whether equivalent freezing and disclosure obligations might need to be imposed again. Those matters strengthened, rather than displaced, the need to comply with the existing order.
5. Evidence filed under an interim sealing arrangement was to be dealt with by a workable order reflecting the dismissal of the application and the expiry or operation of the earlier sealing direction.