Battle lines

The ongoing battle between Kazakhstan-bank JSC BTA Bank and its former chairman Mukhtar Ablyazov could find its way to the Supreme Court after Ablyazov’s lawyers at Addleshaw Goddard said yesterday they would fight the court’s decision to debar him from the case.


Mukhtar Ablyazov
Mukhtar Ablyazov

This has been a long and bitterly fought case and the substantive hearing against the remaining defendants has only just begun.

The Court of Appeal (CoA) was damning in its verdict of Addleshaws’ client, with Lord Justice Kay stating in the judgment: “It’s difficult to imagine a party to commercial litigation who has acted with more cynicism, opportunism and deviousness towards court orders than Mr Ablyazov.”

Yet this is a litigant who had thrown appeal after appeal at the case during the run up to the trial, despite allegedly absconding from the country in February to avoid the committal order that was the subject of the appeal.

In February Mr Justice Teare, who Addleshaws contends should recuse himself, jailed Ablyazov in his absence for 22 months for being in contempt of court. Teare J has overseen the case from the start and in his recusal ruling last week (1 November 2012) revealed that he has delivered 23 judgments in the case so far. That doesn’t include yesterday’s CoA decision.

Hogan Lovells, which is acting for BTA Bank in its pursuit of the $6bn claim against Ablyazov (6 February 2012 ), applied to have Ablyazov debarred from the main proceedings should he fail to overturn the committal order (1 March 2012).

The dispute has been a huge undertaking for Addleshaws, which inherited the case last summer from Stephenson Harwood (19 September 2011 ). It was not the first time that Ablyazov had switched legal teams, having dumped Clyde & Co for Stephenson Harwood in December 2009.

According to sources close Addleshaws it had a team of 40 working on disclosure matters related to the case. Yet the court believes the defendant has evaded court orders in failing to disclose the extent of his assets. In his ruling Kay LJ said that Addleshaws’ client appeared to be a “contemnor in denial”.

This is reminiscent of what the court said about another Addleshaws client, Russian oligarch Boris Berezovsky, although that bears no direct connection to this matter. In that case Mrs Justice Gloster didn’t hold back, stating that Berezovsky had “deluded himself into believing his own version of events” (31 August 2012 ).

With Ablyazov, however, the CoA said the courts had been hit with appeals on the most minute points. Referring to arguments advanced on whether he actually owned properties in the UK – he claimed not to, but Hogan Lovells said he did – the CoA said: “This roll-call of these submissions again demonstrate that this appeal goes to practically every finding and comment of the judge, both those of importance in the structure of his analysis and those of much lesser importance.”

It isn’t the first time the CoA has heard appeals from Ablyazov over his assets. Back in September 2009 Clydes and Fountain Court’s Brian Doctor QC failed to challenge Teare J’s original disclosure order against him and seven co-defendants. In that case the judge referred to Ablyazov’s claims that he was subject to political persecution in Kazakhstan.

It hardly bodes well for another outing in the appellate court over whether Teare J should stand down from the case. The judge had refused to accept that he could appear biased against Addleshaws’ client to the “fair-minded observer”.

Yet in appealing every point decided by Teare J, Addleshaws is certainly making it seem that the battle ground has shifted and the lines have been drawn between the defendant and the judge. Should the CoA accept the appeal and stand Teare J down it will be a blunt victory.

The case is in danger of descending into farce, if it hasn’t already.