JSC Commercial Bank Privatbank v Igor Valeryevich Kolomoisky & Ors

An ancillary order may be made in support of a worldwide freezing injunction where it is just and convenient to make the injunction effective and to safeguard assets within its scope. The obligation to use reasonable endeavours may require a respondent to incur the full cost of preserving an asset, even where others have separate interests in it. Any resulting equitable claim for contribution does not reduce the respondent’s obligation to the injunction claimant. Indemnity costs require conduct outside ordinary and reasonable litigation conduct. Delay alone is insufficient, but unreasonable and potentially prejudicial delaying tactics, including changing position on whether a hearing is required and asserting a need for evidence which is never served, may justify indemnity costs.

The claimant sought an order requiring the second defendant to use all reasonable endeavours to restore dissolved BVI companies to the register and to provide progress updates. The companies’ assets had become bona vacantia on dissolution and would be unavailable for enforcement unless restoration occurred. Most issues were agreed, but the parties disputed whether the second defendant had to pay all restoration-related fees or only a proportion corresponding to his interest in each company. Costs were also contested, including whether indemnity costs were justified. The application was determined on the papers.

1. Ancillary relief. The court applied the principle that relief supporting a freezing injunction may be granted where it is just and equitable, or just and convenient, to safeguard the assets covered by the injunction and render it effective. The test was satisfied because dissolution had made the relevant assets unavailable for enforcement unless the companies were restored.
2. Reasonable endeavours and costs. The second defendant had a good arguable ability to prevent dissolution by paying relatively small fees or taking steps to appoint alternative registered agents. His obligation to preserve his own interests extended to taking reasonable steps to preserve the assets as a whole, including interests held by others. As against the claimant, reasonable endeavours therefore required payment in full of the agency and registry costs necessary to restore the scheduled companies. A possible equitable right of contribution against another interest-holder did not alter that obligation.
3. Costs. The claimant was the successful party on an application it was required to bring. Indemnity costs were justified by conduct outside the norm, namely changing position on whether a hearing was required and asserting that eight weeks were needed to serve evidence when no evidence was ultimately served. The drawn-out process alone would not have been sufficient.
4. The court summarily assessed the claimant’s costs at £68,821, after deducting £7,692 for the vacated hearing and reducing solicitors’ fees by £5,000 to reflect excessive hourly rates while recognising the complexity of the litigation.