Canada Inc v Sovereign Finance Holdings Limited & Ors
[2024] EWHC 2170 (Comm)
JSC Commercial Bank Privatbank v Igot Valeryvich Kolomoisky & Ors.
31 January 2023
[2023] EWHC 165 (Ch)
High Court
Imagine a court order freezing someone's assets. The person who got the order wants more information to make sure the other person isn't hiding or moving money. The court said the person with the order can get more information, but only if they try their best to get it, and only for important things.
Key Facts
- •Claimant JSC Commercial Bank Privatbank sought to enforce a worldwide freezing order (WFO) against the defendants.
- •The application included a request for further disclosure of income and bank account details.
- •Three issues remained outstanding regarding the form of the disclosure order.
- •The WFO was originally made by Nugee J on 19 December 2017 and remade by the Court of Appeal on 15 October 2019.
- •The dispute centered on the scope of disclosure regarding income from assets and bank accounts exceeding £1 million.
Legal Principles
A freezing order is ineffective without disclosure; disclosure gives the WFO the necessary 'teeth'.
Motorola Credit Corpn v Uzan [2002] EWCA 989 at [29] and [37]
Disclosure is an effective form of policing a freezing order, making breach less likely and assisting compliance.
Kazakhstan Kagazy Plc v Zhunus [2018] EWHC 369 (Comm)
The court should consider the risk of dissipation increasing closer to trial, requiring flexible and robust policing mechanisms.
JSC BTA Bank v Ablyazov (No 10) [2015] 1 WLR 4754 and Arcadia Petroleum Ltd v Bosworth [2015] EWHC 3700 (Comm)
The court must balance necessity, practicality, proportionality, and prejudice when considering further disclosure.
JSC Mezhdunarodniv Promyshlenniy Bank v Pugachev (No 2) [2016] 1 WLR 781 at [38]-[40] and The Public Institution for Social Security v Al Rajaan [2020] EWHC 1498 (Comm) at [24]
The wording of the order must be clear and unequivocal.
JSC BTA Bank v Ablyazov (No 10) [2015] 1 WLR 4754
Outcomes
The court granted the claimant's request for further disclosure of income and bank account details, largely in the form sought.
The disclosure was deemed necessary to police the WFO effectively, given the complexity of the defendants' asset structures and the ongoing risk of dissipation. The burden on the defendants did not outweigh the benefits of ensuring the order's enforcement.
The obligation to disclose was qualified to require ‘all reasonable steps and all reasonable enquiries’ rather than an absolute obligation.
This provides sufficient protection for the defendants against the impossibility of compliance despite reasonable efforts.
The court rejected the defendants' arguments that the disclosure sought was unduly onerous or exceeded the scope of the original WFO.
The court found the definition of assets in the WFO applied to both freezing and disclosure, and that the additional disclosure was necessary to account for the evolution of the case and the defendants’ complex structures.