Akhmedova v Akhmedov & Ors (Rev 1)

Transactions at an undervalue fall within Insolvency Act 1986, s 423 where putting assets beyond a claimant’s reach or prejudicing the claimant is a purpose of the transaction. That purpose need not be sole, dominant or substantial, and the transaction need not itself make enforcement impossible. The provision applies to arrangements implemented through companies and permits wide-ranging relief against subsequent recipients. Under Matrimonial Causes Act 1973, s 37, frustration or impediment of enforcement is sufficient; the transfer need not reduce assets below the judgment debt. Foreign location of assets does not prevent an English court determining personal liability where there is a sufficient connection with England.

The applicant wife sought relief against trustees, her adult son and a company in respect of transfers said to form part of the husband’s attempts to defeat enforcement of a financial remedies award. In December 2016, AAZ v BBZ & Ors [2016] EWHC 3234 (Fam) awarded her approximately £453 million and set aside earlier dispositions. The present claims concerned monetary assets transferred through Liechtenstein trusts, payments to the son, the transfer of a Moscow property, and a payment to a Cypriot company. The respondents relied on lack of purpose, consideration, good faith, foreign law, comity, futility and lack of prejudice. The central questions were whether the statutory conditions under ss 423–425 of the Insolvency Act 1986 and s 37 of the Matrimonial Causes Act 1973 were satisfied, and what relief was just.

1. Disposition. The wife’s claims against Counselor, Sobaldo, Temur and Borderedge succeeded. Judgment was entered for the sums identified in the conclusion, including US$98,999,998 against Temur, RUB 531,560,331 in respect of the Moscow property, and €27,500,021.38 against Borderedge. Temur’s counterclaim for breach of confidence and privacy was dismissed.
2. Section 423 of the Insolvency Act 1986 requires a debtor, a transaction, an undervalue and a prohibited purpose. The statutory concept of transaction is broad and includes arrangements implemented through a company or procured by the debtor through another person. The prohibited purpose need not be sole, dominant or substantial, and the transaction need not itself achieve prejudice. The court rejected the proposed solvency gateway, applying JSC BTA Bank v Ablyazov [2018] EWCA Civ 116 and Hill v Spread Trustee Co Ltd [2008] EWCA Civ 542.
3. Section 37 of the Matrimonial Causes Act 1973 is a distinct, divorce-specific jurisdiction. It captures dispositions intended to frustrate or impede enforcement, including by making enforcement slower or more difficult. It does not require an undervalue or proof that the debtor was left unable to meet the award. The statutory exceptions require valuable consideration, good faith and absence of actual or constructive notice.
4. The court had a sufficient connection with England because the transactions were deliberately structured to evade an English claim by an English-resident spouse. The court distinguished adjudication of personal liability from later enforcement against foreign assets. Foreign law, non-recognition abroad and possible difficulty of enforcement did not make a money judgment futile or exorbitant.
5. The evidence established a coordinated scheme. The Liechtenstein transfers were intended to place assets beyond reach; Temur knowingly assisted and received gratuitous transfers; the Moscow property was transferred to him at a massive undervalue; and Borderedge was a nominee-controlled vehicle whose knowledge was informed by those directing the transaction. Subsequent trading losses and alleged change of position did not justify reducing relief.
6. The documents concerning Temur revealed iniquity and misconduct and were used under the court’s authority. The wife’s rights to pursue and enforce her judgment outweighed Temur’s privacy interests under arts 6 and 8 of the Convention and art 1 of Protocol 1.

• High Court (Family Division). The present judgment determined the wife’s claims at first instance.
• Earlier financial-remedy proceedings. AAZ v BBZ & Ors [2016] EWHC 3234 (Fam) awarded the wife approximately £453 million. Subsequent orders set aside dispositions and joined nominee entities.
• Current proceedings. The court granted relief against the Liechtenstein trustees, Temur and Borderedge and dismissed Temur’s remaining counterclaim.