Ziyavudin Magomedov & Ors v TPG Group Holdings (SBS), LP & Ors

Freezing and notification injunctions require three cumulative inquiries: a good arguable case, a real risk that judgment will go unsatisfied through unjustified dissipation, and justice and convenience.

The good arguable case threshold is more than a barely arguable case, but the court must avoid a mini-trial. The risk of dissipation must be established by solid, respondent-specific evidence. Alleged dishonesty, conspiracy, offshore structures, enforcement difficulties, historical disposals and assets located abroad do not automatically establish that risk.

A notification injunction is subject to the same essential test as a worldwide freezing order and may be at least as onerous. The court must consider the strength of the underlying case, respectable defences, delay, prejudice and whether the order would serve a useful purpose.

The claimants brought proceedings alleging conspiracies concerning their interests in FESCO, including alleged breaches of option arrangements, a right of first offer, and FESCO’s governance. They sought notification injunctions against Halimeda, ROSATOM, FESCO and Transneft, and worldwide freezing orders against other defendants.

The application concerning the NCSP conspiracy and Transneft was adjourned. The present hearing concerned the alleged FESCO conspiracy. The court considered whether the claimants had shown a good arguable case against each respondent, a real risk of unjustified dissipation of assets, and that relief was just and convenient.

1. Applicable framework. The court identified three requirements: a good arguable case on the merits; a real, objectively judged risk that a future judgment would go unsatisfied because of unjustified dissipation; and justice and convenience. A good arguable case requires more than a case barely capable of serious argument, but does not require a better than 50 per cent prospect of success. The court must assess apparent strength and plausibility without conducting a mini-trial.
2. Risk of dissipation. The risk had to be supported by solid evidence and assessed separately against each respondent. Dishonesty or conspiracy allegations did not themselves establish the risk. The court had to consider whether the alleged conduct indicated future disposal or concealment of assets, whether the defendant had respectable defences, the nature and location of assets, conduct after notice of the claim, and whether delay militated against the application. Difficulties of enforcement because assets were remote, illiquid or located in Russia were not enough.
3. Notification injunctions. The essential test was the same as for a worldwide freezing order. A notification injunction could be more onerous than a conventional freezing order, particularly where framed in wide terms.
4. Application. Good arguable cases were found against some defendants, including Mr Rabinovich, Ermenossa, Mr Severilov and ROSATOM, principally on evidence of coordination and threats. That did not establish a real risk of dissipation. No good arguable case was shown against Mr Garber, GHP or Mr Kuzovkov. The anonymised and late evidence concerning the alleged bribe to Mr Kuzovkov could not fairly be relied upon at this stage.
5. Disposition. The evidence did not establish a real risk of dissipation against any respondent. The proposed injunctions would also be disproportionate or otherwise unjust and inconvenient. The injunctions were refused against all respondent defendants.

First-instance decision. The judgment records related proceedings in the BVI, Cyprus and arbitral tribunals, but no appeal from this decision.