Good news for judgment creditors (at least in part)

Getting judgment in a commercial case is one thing. Extracting hard cash from a seriously bloody-minded defendant is another. But for judgment creditors there was at least some good news today from Teare J in the Commercial Court.

Mukhtar Ablyazov, the defendant in JSC BTA Bank v Ablyazov & Anor [2016] EWHC 230 (Comm), is a colourful Kazakh politician, dissident and businessman who used to run the biggest bank in Kazakhstan. A little time ago the bank got judgment against him in the English courts in the modest sum of US$4.6 billion, together with the usual paraphernalia of worldwide freezing orders. But for some little time Mr Ablyazov, like Macavity, hasn’t been there. In 2012 he fled England (where he had been granted asylum) with the prospect of imprisonment for contempt hanging over him. Since then he has been elusive, save for a brief time last year being entertained for free courtesy of the French police, and allegedly busy moving assets around where they can’t be found.

Not having extracted much worthwhile from Mr Ablyazov, the bank then turned to a pal of his, Ilyas Khrapunov, who had allegedly helped him hide, move and spirit away assets subject to the worldwide freezing order. They sued him in tort, alleging that the above acts amounted to unlawful means and could thus engender civil liability for the economic tort of causing loss by unlawful means. Mr Khrapunov applied to strike, arguing that if (as is clear) contempt of court cannot give rise to damages, the bank shouldn’t be allowed to get a similar remedy by the back door.

Teare J held that the bank had at least an arguable cause of action. This is significant. Big-time debtors need people to help them evade judgment creditors: this salutary judgment not only gives creditors someone else to sue, but more importantly will give anyone contemplating helping a fugitive tycoons something to worry about.

Why only partly good news? The answer is Euro-law on jurisdiction. The assets were abroad, and neither Mr Ablyazov nor Mr Khrapunov was resident here (Mr Ablyazov seemed to be in Switzerland). Moreover, the damage alleged was held to have occurred abroad, even though it related to the frustration of an English judgment. It followed that the only head of jurisdiction under the Lugano Convention was such loss as might be proved to have been caused by acts, if any, committed by Mr Khrapunov in England before Mr Ablyazov left in haste.

Oh well, you can’t have it all. After all, what’s a billion or so between friends? In any case one suspects we haven’t heard the last of this.

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