Addleshaws wins right to protect Ablyazov whereabouts

Addleshaw Goddard will not be forced to disclose the whereabouts of its client Mukhtar Ablyazov, the Kazakh billionaire accused of embezzling funds worth billions of dollars out of the Kazakh-nationalised JSC BTA Bank.

The ruling comes as the Court of Appeal separately accepted Addleshaws’ attempt to challenge a committal order against Ablyazov, with a full appeal hearing scheduled for early July.

The $5bn dispute between JSC BTA Bank and its legal team at Hogan Lovells and Ablyazov and his team at Addleshaw Goddard is verging on all-out war in the build up to the six-month trial scheduled for November (3 January 2011).

In March the High Court said it would debar Ablyazov from defending the proceedings (1 March 2012) if he failed to overturn a committal order against him (16 February 2011).

Ablyazov was sentenced to time in prison in his absence in February when the High Court ruled the former billionaire to be in contempt of court. Ruling in favour of JSC BTA Bank, the court said he should be jailed for 22 months after he was found to have broken a worldwide freezing order against him.

Pushing the case further, Hogan Lovells then applied to have Ablyazov debarred from the proceedings. The court said it would oblige should the defendant lose the July appeal against the committal order.

Hogan Lovells had also applied to have the court force Addleshaws to disclose Ablyazov’s whereabouts after he failed to turn up to court on the day the committal order was handed down (5 March 2012).

Addleshaw instructed Fountain Court’s Tim Dutton QC to defend the claim in which judgment was delivered yesterday. Dutton contended that to force Addleshaws to disclose all “historic and current contact details” would inhibit Ablyazov’s fundamental right to legal privilege.

According to Mr Justice Teare’s ruling Dutton argued that “whilst the court may have jurisdiction to make ancillary orders for the disclosure of information to ensure the effectiveness of an injunction the court does not have an unrestricted jurisdiction to make orders which may impinge upon the right to confidential and privileged legal advice”.

New Square Chambers Stephen Smith QC, instructed by Hogan Lovells partner Chris Hardman, argued that Ablyazov had “shown a remarkable determination to defend the claims brought against him”. Should the court endorse the order against Addleshaws, he said, Ablyazov would “find alternative methods of communicating with his solicitors”.

Ruling, Teare J agreed that the defendant was a “contemnor who has gone into hiding in order to frustrate the court’s orders. His is in an unattractive position and not deserving of sympathy”. However, upholding Addleshaws’ defence, he added: “If ever anyone needed legal advice it is the first defendant.”

The judge concluded: “It is not just and convenient to make the order sought because the conference call facility and email facility are protected by legal professional privilege. Further, it is not just and convenient to make the order sought because the foreseeable consequence of the order sought will be to deprive the first defendant of his right of access to AG for the purposes of seeking and obtaining confidential and privileged legal advice.”

The legal line up:

JSC BTA Bank v (1) Ablyazov; (2) Addleshaw Goddard (15 May 2012)

For the claimant JSC BTA Bank

New Square Chambers’ Stephen Smith QC to lead New Square Chambers’ Tim Akkouh instructed by Hogan Lovells partner Chris Hardman

For the respondent Addleshaw Goddard

Fountain Court’s Timothy Dutton QC instructed directly by Addleshaw Goddard

JSC BTA Bank v (1) Ablyazov (16 May 2012)

For the claimant/respondent JSC BTA Bank

New Square Chambers’ Stephen Smith QC to lead New Square Chambers’ Tim Akkouh instructed by Hogan Lovells partner Chris Hardman

For the defendant/appellant

Fountain Court’s Charles Béar QC to lead Maitland Chambers’ James Sheehan instructed by Addleshaw Goddard partners Ian Hargreaves and Richard Leedham