“A Russian “state corporation”, a non-profit organisation established by the Russian state for the benefit of the public welfare and accountable, amongst other things, to the Russian Central Bank (the Central Bank). The DIA’s primary purpose is to maintain and operate a deposit insurance scheme to protect individual depositors of failed Russian banks. In addition, it also acts as the liquidator, in certain circumstances, of such banks.”
“5. Until the return date or further order of the court the Respondent must not – (1) remove from England and Wales any of his assets which are in England and Wales up to the value of [£1.1 billion ] (2) in any way dispose of, deal with or diminish the value of any of his assets whether they are in or outside England and Wales up to the same value (3) if the Respondent has assets outside England and Wales, dispose or deal with those assets outside England and Wales unless the value of his assets in England and Wales remains above [£1.1 billion ] (4) in respect of bodies corporate which are directly or indirectly owned and/or controlled by the Respondent and have no substantial trading activities … procure or permit those bodies corporate to deal with any of their respective assets unless the value of his assets in England and Wales … remains above [£1.1 billion ]… 6. Paragraph 5 applies to all the Respondent’s assets whether or not they are in his own name and whether they are solely or jointly owned and whether the Respondent is interested in them legally, beneficially or otherwise. For the purposes of this order the Respondent’s assets include any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. The Respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with his direct or indirect instructions. 7. This prohibition includes the following assets in particular: … (c) any interest under any trust or similar entity including any interest which may arise by virtue of the exercise of any power of appointment, discretion or otherwise howsoever. … 9. (1) … the Respondent must … inform the Applicants’ solicitors of his assets worldwide exceeding£10,000 in value as at the time this order is served whether in his own name or not and whether solely or jointly owned, giving the value, location and details of all such assets. ”
“SP is one of a class of discretionary beneficiaries under the following New Zealand based trusts: 43.1 London Residence Trust 43.2 Kea Three Trust 43.3 Green Residence Trust 43.4 Riviera Residence Trust 43.5 Wiltshire Residence Trust”
“… swear… an affidavit setting out to the best of his ability (i) the identity of the trustee(s), settlor(s), any protector(s), and the beneficiaries of, and any other person carrying on some or all of the functions of a protector or trustee under another title in relation to the trusts referred to in paragraphs 43.1 to 43.5 of the schedule of assets … and (ii) details of the assets which were subject to those trusts at as …14 July 2014 (including their value and location).”
“… with a view to enabling the claimants … to take a view on the true nature of the trusts, the nature of Mr Pugachev’s interests in them and to examine the question of whether any further steps need to be taken to safeguard the position.”
“… the only purpose of [a freezing order] is to prevent the dissipation of assets which would otherwise be available to meet a judgment. The inclusion of trust assets is therefore only justifiable if there are proper grounds for believing that assets ostensibly held by the defendant on trust or as a nominee for a third party in fact belong to him (or to another person whose assets are also frozen). Absent such circumstances, I can see no possible justification for including in the order assets which belong beneficially to a third party and are not therefore the property of the defendant.”
“32. It is necessary to keep in mind the basis upon which a court exercises the Mareva jurisdiction. It is to ensure that the effective enforcement of its judgment (when obtained) is not frustrated by the dissipation of assets which would be available to the claimant in satisfaction of that judgment. It is trite law that the jurisdiction is not exercised in order to provide the claimant with a security for his claim which he may otherwise have. But, as it seems to me, it is equally plain, as a matter of principle, that the jurisdiction is not exercised in order to give the claimant recourse to assets which would not otherwise be available to satisfy the judgment which he may obtain. The court needs to be satisfied of two matters before granting Mareva relief. First, that there is good reason to suppose that the assets in relation to which a freezing order is imposed would become available to satisfy the judgment which the claimant seeks; and, second, that there is good reason to suppose that, absent such relief, there is a real risk that those assets will be dissipated or otherwise put beyond the reach of the claimant. 33. The fact that the potential judgment debtor (the CAD) has substantial control over assets which are held by a party against whom no cause of action is alleged (the NCAD) - say, because the NCAD can be expected to act in accordance with the wishes or directions of the CAD (whether or not it could be compelled to do so) - is likely to be of critical importance in relation to the question whether there is a real risk that the assets will be dissipated or otherwise put beyond the reach of the claimant. But, as it seems to me, the existence of substantial control is not, of itself, enough to meet the first of the two requirements just mentioned. It is not enough that the CAD could, if it chose, cause the assets held by the NCAD to be used to satisfy the judgment. It is necessary that the court be satisfied that there is good reason to suppose either (i) that the CAD can be compelled (through some process of enforcement) to cause the assets held by the NCAD to be used for that purpose; or (ii) that there is some other process of enforcement by which the claimant can obtain recourse to the assets held by the NCAD.”
“…it makes it clear that "the Respondent's assets" can include assets held by a foreign trust or a Liechtenstein Anstalt when the defendant retains beneficial ownership or effective control of the asset.” (Emphasis added)
“…[makes] it clear that "his assets" include assets held by a third party in respect of which the defendant retains beneficial ownership or control.” (Emphasis added)
“Where the words used clearly and unequivocally lead to the conclusion that the term "asset" includes that which cannot be the subject of execution, effect must be given to the words. Where they do not, the purpose of such orders will be a significant factor in determining the meaning of the term "asset" in this context, and a pointer against including the particular right under consideration.”
“any interest under any trust or similar entity including any interest which may arise by virtue of the exercise of any power of appointment, discretion or otherwise howsoever”
“The DIA believes that the trust was simply a façade put in place, in the light of Russian law restrictions on the commercial interests of members of parliament, in order to conceal Mr Pugachev’s continued ownership and control of the Bank. There is extensive evidence that, notwithstanding the purported trust, Mr Pugachev continued to closely control the Bank’s activities and, in reality, remained the ultimate beneficial owner of the Bank (as well as other assets purportedly held in a similar way).”
“The trusts appear to have been wound up, and the OPK Trust Company was removed from the register in New Zealand in the course of 2011. Formally at least, the trust assets are said to have been distributed to Mr Pugachev’s two adult sons. In reality, however, the DIA believes that Mr Pugachev remained the ultimate beneficial owner of the relevant assets. Indeed the evidence points to Mr Pugachev subsidising his children, rather than vice-versa, long after the purported trusts were established.”
“… the (at best) opaque manner in which [Mr Pugachev’s] assets are held (often involving the use of off-shore companies and nominees to distance himself from the assets in question)…”
“… the DIA believes that the evidence presently available strongly points to the purported trust arrangements being no more than a façade to conceal Mr Pugachev’s continued ownership and control of the relevant assets.”
“Assets were placed into the Trusts.”
“Neither I nor Ms Hopkins is aware of any basis on which it could be said that the Trusts are shams.”
“… that there were good grounds for thinking, as indicated above, that the underlying assets were not directly held by the trustees but were held in a corporate structure, with the trustees holding the shares in the companies at the top of those structures. The claimants did not dispute that there could be no dealings in the shares in those top companies without the knowledge of the trustees and in particular of Mr Patterson. But it is their contention that there is good reason to believe that Mr Pugachev controls the assets held by companies within the corporate structure over which the trustees themselves do not or may well not have direct control. Without knowing the corporate structure and the directors of the companies within it, it is of course not possible to be certain about this.”
“The first and, in my opinion, the only really correct sense of the expression that the Court has no jurisdiction is that it has no power to deal with and decide the dispute as to the subject matter before it, no matter in what form or by whom it is raised. But there is another sense in which it is often used, i.e., that, although the Court has power to decide the question it will not according to its settled practice do so except in a certain way and under certain circumstances.”
“It seems to me clear that Park J had jurisdiction, in the strict sense, to grant an injunction against Mr Le Roux and Fintrade. Both were within the territorial jurisdiction of the court at the time the freezing order was made. Both were, shortly after the freezing order had been made, served with an originating summons in which relief in the form of the freezing order was sought. There is no challenge to the propriety or the efficacy of the service on them. The power of a judge sitting in the High Court to grant an injunction against a party to proceedings properly served is confirmed by, but does not derive from,section 37 of the Supreme Court Act 1981 and its statutory predecessors. It derives from the preJudicature Act 1873 powers of the Chancery courts, and other courts, to grant injunctions (sees.16 of the 1873 Act ands.19(2)(b) of the 1981 Act ). The issue is, in my opinion, not whether Park J had jurisdiction, in the strict sense, to make the freezing order but whether it was proper, in the circumstances as they stood at the time he made the order, for him to make it. This question does not in the least involve a review of the area of discretion available to any judge who is asked to grant injunctive relief. It involves an examination of the restrictions and limitations which have been placed by a combination of judicial precedent and rules of court on the circumstances in which the injunctive relief in question can properly be granted.”
“an order directing a party to provide information about the location of relevant property or assets or to provide information about relevant property or assets which are or may be the subject of an application for a freezing injunction.” (Emphasis added)
“… it seems to me that it is dealing with a situation where there is either an application for a freezing injunction on foot or one where it is at least likely that there will be such an application. In other words, the provision assumes that there is some credible material on which such an application might be based.”
“The likelihood … is not one that has to be demonstrated to any very high degree and certainly does not amount to a likelihood on the balance of probabilities.
“But I do accept … that 25.1 (1)(g) is intended to provide machinery, in a suitable case, for the provision of information in advance of an application for a freezing injunction. Plainly a provision of that nature would lose its utility if it were necessary to demonstrate at that stage that a freezing order would, in due course, be granted. It is only necessary to show that a freezing order may be applied for, and whether or not the application would be successful is not a matter on which the court can form a view at this stage; it need only be satisfied that there are credible grounds for making an application if so advised.”
“The wide form of order, for which the Bank contends, is therefore likely in many cases to provide it with an opportunity of investigating the truth of the claim that the assets are held on trust before they are released from the injunction and its accompanying disclosure obligations.” (Emphasis added)
“For convenience I would summarise the position as follows: (i) Where a plaintiff invites the court to include within the scope of a Mareva injunction assets which appear on their face to belong to a third party, e.g. a bank account in the name of a third party, the court should not accede to the invitation without good reason for supposing that the assets are in truth the assets of the defendant. (ii) Where the defendant asserts that the assets belong to a third party, the court is not obliged to accept that assertion without inquiry, but may do so depending on the circumstances. The same applies where it is the third party who makes the assertion, on an application to intervene. (iii) In deciding whether to accept the assertion of a defendant or a third party, without further inquiry, the court will be guided by what is just and convenient, not only between the plaintiff and the defendant, but also between the plaintiff, the defendant and the third party. (iv) Where the court decides not to accept the assertion without further inquiry, it may order an issue to be tried between the plaintiff and the third party in advance of the main action, or it may order that the issue await the outcome of the main action, again depending in each case on what is just and convenient. (v) On the facts of the present case the judge was in my view plainly right to hold that he could not decide the matter without further inquiry…”
“… the court will, on appropriate occasions, take drastic action and will not allow its orders to be evaded by the manipulation of shadowy offshore trusts and companies formed in jurisdictions where secrecy is highly prized and official regulation is at a low level.”
“It is not, so far as I am aware, the practice of the court to require an undertaking in damages in respect of an order for disclosure, whether against a party or a third party. For example, if, as commonly occurs, banks and other persons are required to provide information to claimants seeking to trace assets or obtain evidence of wrongdoing, it is not I think usual to include an undertaking in damages in the order, as opposed to an undertaking to pay the cost of compliance with the order. There might be circumstances in which this was appropriate but only if there was evidence which indicated that there was a real risk of loss. As a general practice, undertakings in damages are required only in respect of injunctions in the ordinarily understood sense of that word, that is an order that a party either refrain from taking a step which they assert they are entitled to take or take a step which they assert they are not required to take.”
“The Applicant will pay the reasonable costs of anyone other than the Respondent which have been incurred as a result of this order including the costs of finding out whether that person holds any of the Respondent's assets and if the court later finds that this order has caused such person loss, and decides that such person should be compensated for that loss, the Applicant will comply with any order the court may make.”
“The present case seems to me a very different situation from that which arose in the DPR Futures case. First, it is clear on the evidence that there are major creditors who are very substantial entities including the central bank of Russia. Further, behind the DIA lies the Russian state. The only evidence as to why those creditors cannot support the cross-undertaking is a rather vague statement in the witness statement of Mr Roberts where he says; “The DIA understands that major creditors are not willing to expose themselves to further potential losses.”
“It may well be that creditors would prefer not to expose themselves to further potential losses, but that does not answer the question whether that kind of indemnity should be a condition of continuing in force this wide-ranging freezing order. There is no evidence here that the DIA have tried to obtain insurance to support a cross-undertaking or whether they have sought an indemnity from the creditors for an unlimited cross-undertaking. There is no danger here of individual liquidators putting their personal assets at risk as in DPR Futures. Therefore, at present, there is no evidence before me to justify the imposition of a cap on the undertaking in damages.”
“The purpose of a cross-undertaking in favour of a defendant is to cover the possibility of loss in the event that the grant of an injunction proves to have been inappropriate. To refuse to require a cross-undertaking because it appears, however strongly, unlikely ever to be capable of being invoked misses the point. The remoteness of the possibility of loss might indeed be thought to be a reason why the public authority would be unlikely to be inhibited from seeking injunctive relief by fear that public funds may be exposed to claims for compensation.”
“In private litigation, a claimant acts in its own interests and has a choice whether to commit its assets and energies to doing so. If it seeks interim relief which may, if unjustified, cause loss or expense to the defendant, it is usually fair to require the claimant to be ready to accept responsibility for the loss or expense. Particularly in the commercial context in which freezing orders commonly originate, a claimant should be prepared to back its own interests with its own assets against the event that it obtains unjustifiably an injunction which harms another's interests.”
“There is no danger here of individual liquidators putting their personal assets at risk as in DPR Futures.”
“…in cases with a lot of small creditors it is not practicable for the administrators to obtain an indemnity from the creditors for whose benefit they are bringing the claim, but by inference where large and substantial creditors exist the position may be different.”
“However, the court should consider not only whether the plaintiff company can provide security out of its own resources to continue the litigation, but also whether it can raise the amount needed from its directors, shareholders or other backers or interested persons. As this is likely to be peculiarly within the knowledge of the plaintiff company, it is for the plaintiff to satisfy the court that it would be prevented by an order for security from continuing the litigation.”
“The second factor that is material is that the creditors in the present case are substantial undertakings - banks. Unlike the administrators, the litigation is being brought for their benefit. Unlike the position facing the administrators in DPR Futures, it is entirely realistic for the administrators in the present case to seek an indemnity from these creditors, and for the creditors to give one. They are being kept informed of progress, yet it does not appear that the issue of an indemnity has even been raised with them in the period when this application has been awaiting a hearing. In a case where one finds, as I have, that a defendant is at risk of significant harm if it turns out that a freezing order has been wrongly granted, it is material to enquire whether there is any corresponding harm to the claimant if fortification is ordered. This is not a case, like Allen v Jambo Holdings where to require fortification beyond the claimant's immediate assets would be likely to stifle the action. Nor is it even one like DPR Futures where the administrators are being asked to accept an unreasonable personal risk. Whilst Mr McQuater movingly suggested that the creditors had suffered enough at the hands of Mr Holyoake, and should not even be approached to fortify the cross undertaking, I do not think that is an adequate response. Quite apart from it being based on a one-sided evaluation of the merits of the case, if a party is going to suggest some difficulty with providing security (be it security for costs or security on the cross-undertaking) it is incumbent on it to produce some evidence of that difficulty. Here, there is none.”
“It is quite correct that normally fortification of a cross-undertaking is only required on a foreign plaintiff who has no assets here. That is quite correct in the sense that the majority of applications for fortification of a cross-undertaking are likely to be applications where the plaintiff is a foreign plaintiff with no assets here. …The essential question is whether there are assets readily available to satisfy any liability under the cross-undertaking. …the key question is whether there are assets within the jurisdiction…”
“…first, that the court has made an intelligent estimate of the likely amount of loss which might result to a defendant by reason of the injunction; secondly, that the applicant for fortification has shown a sufficient level of risk of loss to require fortification; and, thirdly, that the contemplated loss would be caused by the grant of the injunction.”
“What is the loss that Mr Pugachev alleges that he will suffer here? He says that he will suffer, or might suffer, very substantial loss because his business dealings have been stifled, if not brought to a halt, by this freezing injunction. The assets disclosed pursuant to the obligations under the freezing injunction are worth tens of millions. The injunction prevents him from investing in new business ventures. He does business [on] an extremely large scale and the injunction applies to all his assets.”
“It is not easy at this stage definitively to relate many of these instances to the preventive or coercive effects of the order. Nevertheless I think it is realistic to suppose that the existence of the freezing order could cause significant damage to Mr Holyoake. Firstly, it is clear from the evidence that Mr Holyoake has an extensive asset portfolio. It is almost inevitable that the existence of the freezing order will cause him loss. The assets discussed in the evidence are worth millions of pounds. It is entirely reasonable to suppose that damage will be incurred on a commensurate scale by Mr Holyoake if he is unable to deal freely and properly with his assets. Secondly, the freezing order is a very extensive one, and does not relate solely to one or two assets. As Mann J observed in Sinclair v Cushnie, it will be easier to foresee a risk of loss in such cases.”
“Mr Pugachev, like Mr Holyoake, is a man with considerable assets who is used to dealing with his portfolio of assets in a flexible manner to take advantage of substantial business opportunities as and when they arise, wherever they arise in the world. In my judgment the same comments that Floyd J made in the Holyoake case apply in this case too.”
“In my judgment it is clear that there is sufficient risk of Mr Pugachev suffering significant loss of the kind referred to by Floyd J in the Holyoake case. A person who generally conducts business on a very large scale does not usually rely on reservoirs of cash sitting in bank accounts in his personal name. But that does not mean that he has no intention of continuing his business activities or that he does not have the where-with-all to do so. He is prevented by the injunction from operating his funds to conduct his business and that injunction attaches to funds once they come into his hands.”
“In my judgment the approach adopted by the judges of first instance in these cases has been entirely appropriate and in accordance with principle.”
“… disclosure relating to the trusts for the purpose of ascertaining the true position, in particular as to the extent, if any, of Mr Pugachev's control of assets held within the trust structures. Where uncertainty exists as to the true position of the assets owned or controlled by a defendant, the court has power to order the cross-examination of the defendant on his affidavits of disclosure. This is not a means of building a case for committal for contempt of court in failing to comply with the court's order for disclosure but is essentially a form of oral discovery. A defendant may be cross-examined as to his possible ownership or control of assets, which have not been disclosed by him, where there is good reason to do so. Equally, in my view, the court has jurisdiction to order written disclosure.” order: [15]. That was the most hotly contested issue before the judge and the principal issue before us.
Showing the 50 most senior of 53.