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Charles Samek QC and Marc Delehanty in Ablyazov jurisdiction dispute: Court of Appeal to decide issue

Charles Samek QC and Marc
Delehanty
, instructed
by Peter Black and Matthew Jenkins of Hughmans Solicitors, represented Mr
Khrapunov, the son-in-law of Mukhtar Ablyazov, on a CPR Part 11 Application. Mr
Khrapunov challenges the jurisdiction of the English Court in respect of proceedings
brought by BTA Bank for an alleged unlawful means conspiracy to injure by breaching
English Court orders. The present proceedings, issued in July 2015, are the
latest in the long-running Ablyazov litigation in the Commercial Court.

JSC BTA Bank v (1) Ablyazov (2) Khrapunov [2016] EWHC 230 (Comm)

Summary

The Bank’s claim concerns allegations of
dealings with assets in breach of a freezing order made against Mr Ablyazov in
previous proceedings – said to have been done by Mr Ablyazov with the
assistance of Mr Khrapunov. The Bank’s issued claim is for the tortious wrong
of unlawful means conspiracy, pleading the alleged breaches as the unlawful
means.

Mr Khrapunov is resident in Switzerland.
Mr Ablyazov has been detained in a prison in France since 2013, having left
England in 2012 in breach of a court order before he was sentenced to prison
for contempt in previous proceedings.

Mr Khrapunov challenged jurisdiction, and
sought to set aside a worldwide freezing order made against him, on the basis
that:

  • The Bank’s cause of action was bad in law because breaches of
    orders in contempt of court cannot constitute unlawful means for the purposes
    of the tort of unlawful means conspiracy;
  • On an application of Article 5(3) of the Lugano Convention,
    the English Court does not have jurisdiction because, even on the Bank’s case,
    the alleged conspiracy would have been executed outside England and the damage
    caused by the alleged conspiracy would have been suffered outside England; and,
  • Mr Ablyazov is not to be treated as domiciled in England
    (notwithstanding the circumstances of his current residence in France) and, therefore
    , because there is no jurisdiction to sue him,
    there can be no jurisdiction to sue Mr Khrapunov as a co-defendant under
    Article 6(1) of the Lugano Convention.

The application was heard before Teare
J across three days in January 2016. Mr Ablyazov took no part in it.

Key
points from the Judgment

On 11 February
2016, Teare J handed down judgment, holding that the English Court only had
jurisdiction to try part of the Bank’s claim, limited to that part of the
alleged conspiracy implemented prior to Mr Ablyazov’s departure from London in
February 2012.

The following
findings in the judgment will be of significant interest to commercial fraud
practitioners:

  • It was held to be arguable that
    contempts of court could constitute unlawful means for the purposes of the tort
    of unlawful means conspiracy, notwithstanding that the Court does not have the
    power to award damages for contempts of court.
  • Applying the first limb of the
    test from Case 21/76
    Bier [1978] 1 QB
    708 for jurisdiction under Article 5(3), Lugano Convention (Article 7(2), Brussels
    I Regulation (recast)) to the tort of unlawful means conspiracy, Teare J held that
    the place of the event giving rise to the damage is
    not the place of the
    formation of the conspiracy – accepting the submission on behalf of Mr
    Khrapunov. He went on to hold that the relevant place was the place of
    ‘implementation’ of the conspiracy and found that this was the place from where
    instructions would have been given by Mr Ablyazov. This finding has
    consequences for the scope of the Bank’s claim because Teare J held that the
    Court does not have jurisdiction in respect of that part of the Bank’s claim
    concerning the period after Mr Ablyazov had left England in 2012.
  • Applying the second limb of the Bier test, and accepting the submission
    on behalf of Mr Khrapunov, Teare J held that where harm is caused by asset
    dissipation in breach of a freezing order, the place where the damage occurred
    is the place where the assets are no longer available for execution against and
    not the place of the
    situs of the
    judgment debts in respect of which asset execution is sought.
  • Finally, Teare J accepted the
    submission on behalf of Mr Khrapunov that the fact that a person’s departure
    from England was prohibited by a Court order does not mean that that person
    should continue to be treated as domiciled in England, within the meaning of Article
    2, Lugano Convention (Article 4, Brussels I Regulation (recast)). Accordingly,
    as Mr Ablyazov was not domiciled in England there could be no jurisdiction over Mr Khrapunov as a co-defendant
    under Article 6(1), Lugano
    Convention (Article 8(1), Brussels I Regulation (recast)).

At a hearing of consequential
matters on 24 February 2016, Teare J gave the Bank permission to appeal against
his findings on Article 6(1) and Article 5(3) and gave Mr Khrapunov permission
to appeal against his findings on Article 5(3) and the cause of action.

A further hearing
of consequential matters is listed for on 23 March 2016.

The full text of
the judgment, in which Teare J
commented that the response to the Bank’s claim on Mr Khrapunov’s behalf was one
of “vigour”, can be found here.

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