JSC COMMERCIAL BANK PRIVATBANK v IGOR VALERYEVICH KOLOMOISKY & Ors

The court may grant mandatory ancillary relief to preserve assets subject to a freezing order where further steps are just and convenient. The question is the practical effect of the proposed order, not whether it is labelled prohibitory or mandatory. Exceptionality is not a separate threshold.

Relief is justified where there is a real risk that an asset’s preservation or value will otherwise be jeopardised. Orders must be necessary, proportionate and practically useful. They may require reasonable endeavours to realise a precarious contractual receivable, provide relevant information and disclose confidential contact details for preservation purposes. They must not interfere with legitimate ordinary business activity or convert a freezing order into security for the claimant.

The claimant sought ancillary relief in support of a freezing order made in proceedings alleging large-scale fraudulent misappropriation. The application concerned a contingent receivable disclosed by the first defendant, arising from the transfer of an indirect interest in an iron-ore business. A dividend had been declared, but substantial proceeds had not been passed through the corporate structure or fully accounted for.

The claimant sought orders requiring a demand for payment, disclosure of information and correspondence, provision of contact details, and reasonable endeavours to obtain payment of present and future sums due under the agreement. The central issue was whether those orders were necessary and proportionate to preserve the receivable for possible enforcement.

1. Jurisdiction and applicable approach. Section 37 of the Senior Courts Act 1981 empowered the court to grant ancillary injunctions where it was just and convenient to do so. The jurisdiction extends to positive steps needed to make a freezing order effective. The court rejected any separate requirement that mandatory relief be exceptional. The practical consequences of the order were decisive.
2. Limits of the jurisdiction. A freezing order does not provide security for the claimant and must not interfere with legitimate ordinary business activity. That principle did not prevent intervention where failure to act created a real risk that the value or realisation of the asset would be jeopardised.
3. Risk and proportionality. The receivable was precarious because of the delay in realisation, the uncertain counterparty, and the informal and unsecured contractual arrangements. The unexplained failure to procure payment after the declaration of dividends justified concluding that preservation was at risk. The relief was proportionate to the value of the asset and the complexity of enforcing any judgment.
4. Form of relief. The court ordered a demand for sums representing dividends already declared, disclosure of relevant contact details, communications and financial information, and a continuing obligation to provide specified information. The disclosure of confidential contact details was justified because it was necessary for preservation and could be subject to usual protections.
5. Reasonable endeavours. An order to use reasonable endeavours to obtain payment was sufficiently certain and did not require impermissible ongoing supervision. It required efforts to ensure that declared dividends passed through the payment chain promptly, but did not require the defendant to procure the declaration of dividends by exercising retained management powers. Nor did it require acceptance of payment in a different currency at that stage.
6. The parties were directed to agree the form of order, with unresolved difficulties to be dealt with on the papers.

Not stated in the judgment.