Kazakhstan Kagazy Plc & Ors v Zhunus (Formerly Baglan Abdull) & Ors

This has been the hearing in this court of an application issued by Mrs. Arip on 7th January and given an initial outing before Hildyard J as a duty judge sitting in the vacation the following day, that Mrs. Arip have further time to provide to the claimants the further information as to her assets that was ordered to be provided by 11th January. That was an order made by Mr. Salter QC sitting as a deputy judge in this court on 7th December last year. It followed repeated indications last term, by and on behalf of Mrs.

In those circumstances, Mr. Salter QC was minded rightly to conclude, on the evidence as it then stood and therefore as it still stands today, that it is a fair inference that Mrs. Arip has or may well have substantial additional assets not disclosed. In those circumstances, ancillary to the primary order for disclosure of assets, itself ancillary to and an important part of the enforcement and policing of the worldwide freezing order, Mrs. Arip was ordered by Mr. Salter QC to give disclosure of what had happened to the very large cash sums that she had received, her receipt of which was the subject matter of the evidence previously available to the claimants to which I have just referred.

At what in those circumstances Mr. Howe QC, in my judgment, rightly described as the very last minute, Mrs. Arip has sought to circumvent the order made in early December by requesting a distribution to herself of £13.2 million in cash from a trust referred to as the WS Settlement, of which she claims to be one of the discretionary beneficiaries, for the purpose, she says, then of making a payment into court of that sum so as, she would then further say, to discharge the freezing order and with it any ongoing obligation in relation to disclosure of assets.

In my judgment further Mr. Howe QC, with respect, is correct to characterise what Mrs. Arip is doing, although as with everything in this case its factual detail is more complex than this pithy summary, as in reality a plea to the court that she may be in a position to come into funds that may result in the discharge of the order and upon that basis she should no longer have to comply with the existing orders of the court as to disclosure of assets.

As it happens, the complexity of the particular facts in this case is in a factual sense in part the responsibility of the claimants. The sense in which that is true and which I mean to convey is that the claimants are able to say credibly to the court that it is likely to be the case that there is a very real question to be considered in respect of what is now an application also before the court, for permission for that distribution of funds to be made to Mrs. Arip, that no such permission should be granted.

The claimants are presently hampered by how much they can say in that regard by the fact that Mrs. Arip has obtained and, as things stand, continues to wish to maintain an anti-suit injunction issued in Nicosia, Cyprus, restraining what the claimants can or cannot advance in this court by way of allegation and argument in relation to the WS

In those circumstance something said by Jackson LJ in VTB Capital Plc v Maloleev [2001] EWCA Civ 1252 at the end of paragraph 42 applies absolutely to this case. He said this:

In that case he was referring to an application advanced by the parties subject to a worldwide freezing order for its discharge on either jurisdictional grounds, amounting to one form of argument that the injunction should never have been granted in the first place, or alternatively on the ground that even if originally properly made the freezing order had become no longer necessary.

The point of principle decided by the Court of Appeal in that case was, as it seems me in terms, that an as yet unresolved application to discharge a freezing order is no reason to excuse or delay full compliance with whatever orders as to the disclosure of assets have otherwise been determined to be proper in the circumstances of the case. It seems to me that that is the applicable principle in the present case.

If there is a form of distinction at all, it is only the irrelevant distinction that whereas in VTB Capital there was a pending, as yet undetermined, application in terms for an order discharging the freezing order, whereas in the present case there is an application for permission for a certain event to occur, the occurrence of which, it is said on behalf of Mrs. Arip, would then lead to a prompt discharge of the freezing order.

The position is yet further complicated in this case by the fact that whether the distribution of funds from the WS Settlement, which Mrs. Arip desires to occur, if it then led to a payment into court, would in truth result in the removal of any freezing order and associated disclosure obligations against her is contentious. That is because there may be room even for an argument that if that which the claimants are likely to wish to be able to contend in relation to WS Settlement were ultimately pursued and established, then such payment would not be regarded as adequate automatically to discharge the freeing order; and in any event there will be room for a serious argument in favour of the claimant that the funds that had been used to seek to bring about a discharge of the freezing order had not been in reality Mrs. Arip's funds to use in that way, so that a freezing order should be reimposed with equivalent disclosure obligations in any event.

In those circumstances, it seems to me that the request for not so much an extension of time, but rather for the staying of Mrs. Arip's obligations to provide the disclosure which this court has determined is properly required in the context of the freezing order against her, pending the future determination of the application in relation to a possible distribution of funds by the WS Settlement, is not an application to which the court can accede.

When the matter came before Hildyard J on 8th January the court, as I understand it, was informed that the evidence Mrs. Arip intended to represent her compliance with the further information order of Mr. Salter QC was prepared and ready for service, and Hildyard J was made aware that the matter was returning, that is to say this case more generally was returning, for consideration in this court today, 18th January. In those circumstances he imposed, pending a proper consideration today of the application for, as I have put it, a stay of Mrs. Arip's disclosure obligations, a solution whereby she was still required to file and provide that which she had prepared, but on a basis that it would be sealed and was not to be examined, in particular by the claimants, until the matter had been considered in this court.

In those circumstances, in my judgment the appropriate order now is an order dismissing this aspect of the various applications that have come before the court today, and for the avoidance of doubt making an order in some appropriate terms if I need to as to the unsealing of the evidence that has been served. It may be that that latter is unnecessary as the order of Hildyard J may simply have expired three minutes ago, it now being three minutes past five o'clock. In the normal way I will in any event trust to counsel to put together a workable and coherent form of draft order that reflects the conclusion that I have reached and the order I have indicated should be made.