PJSC National Bank Trust & Anor v Boris Mints & Ors

A defendant who has given undertakings until trial or further order cannot ordinarily obtain release merely by revisiting the merits of the interim order. The undertaking must be construed in the context of the order as a whole. Release generally requires good cause, typically a significant change of circumstances or newly discovered facts which could not reasonably have been known earlier.

In deciding whether to maintain freezing relief, the court assesses each defendant separately. A good arguable case of fraud may strongly support an inference of a real risk of dissipation, although the assessment remains fact-sensitive. The court should avoid turning an interlocutory application into a mini-trial. Alleged non-disclosure must be material to the exercise of the court’s discretion.

The claimants, two Russian banks, sought relief against members of the Mints family arising from alleged fraudulent replacement of valuable loan security with substantially less valuable bonds. A worldwide freezing order was granted against the defendants and was later replaced, following the return hearing before Jacobs J, by undertakings given by the fourth defendant, Igor Mints.

Igor Mints applied to be released from those undertakings. He argued that the application was open to him, that there was no good arguable case or real risk of dissipation against him personally, that the undertakings caused disproportionate harm to associated businesses, and that the claimants had failed to make full and frank disclosure. The central issues were whether the application was an abuse of process and, if not, whether the undertakings should be released.

1. Abuse of process. The application was an abuse of process. The order had to be construed as a whole. Although it recorded the defendant’s intention to seek release without showing good cause, it also preserved the claimants’ right to contend that such an application was abusive. The defendant had not sought an adjournment and had consented to undertakings until trial or further order. The principle in Chanel v Woolworth therefore applied. No significant change of circumstances or other good cause had been shown.
2. Good arguable case. The claimants had established a good arguable case against Igor Mints separately from the other defendants. The evidence was thinner than that against some other defendants, but emails, transaction documents, his participation in discussions and a conference call, and evidence identifying him as an ultimate decision-maker collectively crossed the threshold. The court did not require conclusive evidence and warned against conducting a mini-trial. In a conspiracy claim, the defendant need not have been at the centre of the transaction or involved from its inception.
3. Russian law defence. The proposed defence under article 1068 of the Russian Civil Code remained arguable but depended on disputed expert and factual issues concerning the defendant’s employment status and the capacity in which he acted. It did not remove the good arguable case.
4. Risk of dissipation. The nature of the alleged fraud supported an inference of a real risk of dissipation under the approach summarised in Lakatamia Shipping v Morimoto. The inference was not displaced by the defendant’s personal and business ties to the United Kingdom. The establishment and structure of a family trust, together with the defendant’s role as protector, reinforced rather than removed the concern that enforcement could be made more difficult.
5. Proportionality and prejudice. The undertakings retained practical value because the claim exceeded the trust assets and enforcement against the trust might prove difficult. Although release might assist associated businesses, those businesses were closely connected with the Mints family and the evidence did not show that release would have a transformative effect. The balance favoured maintaining the undertakings.
6. Full and frank disclosure. None of the alleged failures justified release. The possible article 1068 defence was not sufficiently material or reasonably apparent at the without-notice stage. The circumstances in which evidence was obtained, the investigative material and the bank-account error did not materially affect the exercise of discretion. The application was dismissed.