JSC Commercial Bank Privatbank v Kolomoisky & Ors

Cross-examination in aid of a freezing order is exceptional relief. It requires a significant or serious deficiency in existing asset disclosure, and the order must be just, convenient, proportionate and directed to making the freezing order effective.

The process is not intended to investigate every aspect of a defendant’s transactions, resolve disputed ownership or contractual terms, conduct a mini-trial, or obtain material for contempt proceedings. The claimant should first seek focused further information where that is reasonably necessary to identify or preserve the asset. Cross-examination should generally follow only when less intrusive enquiries have proved inadequate.

The claimant alleged that its former majority shareholders had misappropriated approximately US$1.9 billion and obtained a worldwide freezing order against them. The first defendant disclosed an alleged Bitcoin investment, described as a right to receive the lesser of 50,000 Bitcoin or US$1 billion in January 2021.

After further enquiries, the defendant explained that the arrangement was contingent on the success of a Bitcoin-mining venture and that the asset was substantially different from the initial impression. The claimant applied under section 37(1) of the Senior Courts Act 1981 and/or the inherent jurisdiction for the defendant to be cross-examined about his assets. The central issue was whether the disclosure deficiencies and surrounding evidence made such exceptional relief just and convenient.

1. Application refused. The court had jurisdiction to order oral or written asset disclosure in aid of a freezing order, but cross-examination remained exceptional relief.
2. The governing principles were those summarised in Jenington International v Assaubayev [2010] EWHC 2351: the discretion is broad and unfettered; cross-examination is normally the exception; it must further the proper purpose of the freezing order; it must be proportionate and not oppressive or directed to an ulterior purpose; and significant or serious deficiencies will normally be required. The purpose is solely to discover assets so that the freezing order can be made effective, as explained in Great Future International Ltd v Sealand Housing Corporation and Motorola Credit Corporation v Uzan & Ors (No 2) [2004] 1 WLR 113.
3. Disclosure should identify an asset sufficiently to enable it to be preserved. In the case of contractual rights, the claimant is ordinarily entitled to a reasonable degree of information about the terms and counterparty if requested, but not all collateral arrangements or the underlying commercial dispute. The relevant asset was the defendant’s chose in action against Mr Kuchukhidze, not every detail of the mining venture that funded or facilitated it.
4. The original description was incomplete and gave an impression different from the fuller account later provided. However, the deficiencies were not significant or serious. The reference to potential value indicated that the right might be contingent, and the disclosure list was a summary rather than a full contractual analysis.
5. The court rejected the claimant’s attempt to use cross-examination to test competing accounts, investigate the commerciality of the Bitcoin arrangements, or conduct what would effectively be a mini-trial. The evidence did not justify material adverse inferences, and focused written requests remained available where genuinely necessary for preservation.
6. The claimant had delayed making detailed enquiries and had sought relief before assessing the subsequent written evidence. Cross-examination would be disproportionate, intrusive and oppressive, and was not just and convenient.

• Court of Appeal: The defendants’ jurisdiction challenge had previously succeeded before the High Court but was reversed on 15 October 2019. The decision is referred to as PJSC Commercial Bank Privatbank v Kolomoisky [2020] 2 WLR 993.
• High Court (Chancery Division): The present application for cross-examination in aid of the freezing order was refused.