Costs called into question as Supreme Court calls on amicus curiae for Ablyazov battle

4 Stone Buildings’ Jonathan Crow QC has been instructed by the Attorney General’s Office as an amicus curiae to assist the Supreme Court in the next stage of the long-running battle between JSC BTA Bank and its former chairman Mukhtar Ablyazov.

However the question of who will pay for the cost of the case remains unclear a week before the hearing before the Supreme Court next Tuesday (28 July).

The court asked for the amicus curiae as it is the first time the UK’s top court has examined the standard form freezing injunction.

The long-running litigation between Hogan Lovells’ client BTA Bank and Ablyazov has been complex and hard-fought. Currently the former bank manager is challenging an extradition ruling in France that could see him sent to Russia.

In the UK, meanwhile, Ablyazov was sentenced to time in prison in his absence in February 2012 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.

Last October Ablyazov’s lawyers at Addleshaw Goddard stepped away from the case (14 November 2014) leaving him with no legal representation in the UK.

Nevertheless, the battle concerning the freezing order will head to the Supreme Court to be heard by a panel of five justices, including Supreme Court president Lord Neuberger. While Crow is not representing Ablayzov directly he will be in court to counter arguments being pursued by the appellants, BTA Bank.

At issue is whether Ablyazov breached a freezing order put in place by Mr Justice Teare in August 2009 when he entered in four loan facility agreements totalling £40m. Counsel for BTA Bank, Erskine Chambers’ Stephen Smith QC, contends that the loan agreements should be considered as “assets” for the purposes of the freezing order and therefore should comply with the terms of the freezing order.

At the High Court Mr Justice Christopher Clarke dismissed the application.

The Court of Appeal (CoA) threw out the subsequent appeal on the basis that the word “assets” within the freezing order should not be read to include borrowings of this nature, as a loan cannot be readily understood to be an “asset” against which the bank could ultimately enforce its judgments.

As an amicus curiae Crow’s role will be to provide impartial advocacy on the legal questions raised by the case.

It is the fourth time the Supreme Court has requested that the attorney general provide an amicus curiae to assist it.

The others are: R v Waya, over the Proceeds of Crime Act (see judgment 14 November 2012); Barclay Bros v Secretary of State for Justice, which concerned what role, if any, the courts of England and Wales could hold in the legislative process of the island of Sark (see judgment 22 October 2014); and finally, USA v Nolan, which considered whether the Collective Redundancies Directive had no application to the closure of US military bases. The latter was heard by the court last week.

Although there have been four cases with amicus curiae representation in the past, the Ablyazov litigation has a novel aspect: costs.

It is usual practice for the party requesting for the case to continue to bear the costs of an amicus curiae in such situations, whatever the outcome. Yet sources suggest the thorny issue of costs is yet to be decided and the Attorney General’s Office has reserved its position until after the hearing.

It is understood that if BTA were to win the appeal it could seek costs from its opponent – which could mean that the Government ends up shouldering the fees. 

This is a case that has set new law time and time again. Now it’s time for the Supreme Court to get in on the action.

The legal line-up:

For the appellant, JSC BTA Bank

Erskine Chambers’ Stephen Smith QC instructed by Hogan Lovells partners Alex Sciannaca and Chris Hardman

For the respondent, Mukhtar Ablyazov

4 Stone Buildings’ Jonathan Crow QC and Adam Holliman acting as amicus curiae