Home Information Cases JSC BTA Bank v Mukhtar Ablyazov & 6 Ors (29 February 2012)

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JSC BTA Bank v Mukhtar Ablyazov & 6 Ors (29 February 2012)

Summary

Where the court had issued a warrant for the committal of a contemnor and he had gone into hiding, it was just and convenient to issue a mandatory injunction, pursuant to the Senior Courts Act 1981 s.37(1), ordering him to surrender himself to the tipstaff so that the latter could execute the warrant of committal.

Facts

(1) The Senior Courts Act 1981 s.37(1) empowered the court to grant an injunction when it appeared to be just and convenient to do so. Where the court had issued a warrant for the committal of a contemnor and he had gone into hiding, being careful whilst giving instructions to his solicitors not to reveal his whereabouts to them, it was just and convenient to issue a mandatory injunction ordering him to surrender himself so that the tipstaff could execute the warrant of committal. There was, therefore, jurisdiction to make the order sought pursuant to s.37. If that was wrong, the court had inherent jurisdiction to issue ancillary orders designed to make effective orders which it has previously issued, AJ Bekhor & Co Ltd v Bilton [1981] Q.B. 923Maclaine Watson & Co Ltd v International Tin Council (No.2) [1989] Ch. 286 and JSC BTA Bank v Solodchenko [2011] EWHC 2163 (Ch), [2012] 1 All E.R. 735 applied. X was in hiding so it was unlikely that the warrant could be executed. If X surrendered then the warrant could be executed. The order was therefore appropriate and necessary (see paras 16, 19-20, 23 of judgment). (2) X had determined to not disclose all of his assets, to lie about his ownership of assets and to deal with his assets in breach of the freezing order. There was thus ample justification for ordering him again to file an affidavit of his assets (paras 32-33). (3) The unless order was sought in order to bring further pressure on X to comply with the disclosure order. That was legitimate in principle, Derby & Co Ltd v Weldon (Nos.3 and 4) [1990] Ch. 65JSC BTA Bank v Ablyazov [2010] EWHC 2219 (QB), [2011] 1 All E.R. (Comm) 1093 and JSC BTA Bank v Shalabayev [2011] EWHC 2903 (Ch) applied. There was a risk that if an unless order was refused, J's ultimate recovery would be restricted. If ultimately J's claims failed, X would have been compelled to disclose information as to his assets. That was unlikely to be prejudicial to him, given that the information provided would be subject to the usual implied obligation of confidentiality and to any necessary regime of restricted information. Thus, in the interests of overall fairness, the unless order would be granted in respect of the disclosure obligation. However, if the court acceded to J's application for judgment on the basis that X had not disclosed the assets which were the subject of the contempt hearing, preparation for the three-month trial of the action, commencing later in the year, would stop. Thus, the court would make the orders sought by J but the unless order would operate in the following way. A date would be fixed for the service of a further affidavit of assets by X. If he failed to give full disclosure of assets by that date, his defence would be struck out and J could enter judgment. However, if X exercised his right of appeal against the contempt judgment, his defence would not be struck out and J could not enter judgment until seven days after the determination of his appeal. If the court dismissed the appeal then if J considered that X's affidavit did not give full disclosure of his assets, it could apply for judgment on the basis that the defence had been struck out seven days after the determination of the appeal (paras 51, 65-66, 69, 73-75). (4) If X's defences were struck out and judgment entered for J, the sum it paid into court would be paid out to it unless X filed a statement evidencing the facts and matters which might nevertheless cause the undertaking to be called upon (para.81).

Applications granted

Held

The applicant bank (J) applied for an injunction requiring the respondent (X), its former chairman, who had been sentenced to 22 months' imprisonment for contempt of court but had gone into hiding, to surrender himself to the tipstaff of the High Court.

J had brought several actions against X for allegedly misappropriating its funds. It successfully applied for the committal of X, who had since disappeared. J therefore sought the mandatory injunction for X to surrender and to file a full and proper disclosure affidavit of assets. It also sought an order that, unless he did so, his defence to the actions should be struck out and it would be entitled to enter judgment against him. The issues were whether (i) the court had jurisdiction to order X to surrender to the tipstaff and, if so, whether that was appropriate; (ii) it was appropriate to order the disclosure of assets, when an order for disclosure had already been made; (iii) it was appropriate to make either order an unless order; (iv) the sum of £45 million paid into court by J by way of fortification of its undertaking in damages should be paid out to it.

Queen's Bench Division
Teare J
Judgment date
29 February 2012
References

​LTL 20/3/2012 : [2012] EWHC 455 (Comm)