Addleshaws demands recusal of Teare J in $6bn Ablyazov dispute

Addleshaw Goddard is in the High Court this afternoon to lodge a recusal application requesting that Mr Justice Teare stands down from the multi-billion dollar dispute between Kazakh JSC BTA Bank and its client Mukhtar Ablyazov.

Mukhtar Ablyazov
Mukhtar Ablyazov

In what is believed to be a last-minute application before the trial begins on 6 November (3 November 2011), Addleshaw Goddard is arguing that Teare J should recuse himself because he has already heard a series of pre-trial hearings between the two parties.

This morning the firm was refused permission to delay the start of the trial. Whether Teare J will stand down or not is to be his own decision and is likely to be announced next week.

It is understood that the defendants want Teare J to stand down because he has already jailed Ablyazov in his absence for being in contempt of court. That case is subject to an appeal.

The November trial is expected to eclipse, both in terms of value and in size of legal teams, that of the major Boris Berezovsky v Roman Abramovich trial in which fees for Addleshaws exceeded £40m (22 October 2012). Such is the magnitude of the case that the court has split it into five tranches (3 January 2011).

The Ablyazov trial will see BTA Bank, which has instructed Hogan Lovells partner Chris Hardman and New Square Chambers’ Stephen Smith QC, attempt to recoup $6bn that, it claims, Ablyazov misappropriated when he was head of the bank (6 February 2012).

In February Teare J jailed Ablyazov for 22 months in his absence after ruling that he was in contempt of court because he failed to disclose the full extent of his assets (16 February 2011). During the committal hearing Smith revealed that Hogan Lovells had amassed costs of £2.6m in bringing the specific claim against Ablyazov.

The arrest warrant could not be effected, however, because Ablyazov fled the country without notifying his lawyers of his whereabouts.

Hogan Lovells then applied to have Abyazov debarred (28 May 2012). The court said it would debar him from defending the proceedings should he be unsuccessful in overturning the committal order at the Court of Appeal (CoA) (17 May 2012).

Sources close to the case said the 6 November trial would go ahead whether or not the CoA ruling on the committal order is handed down.

This could mean that the dispute, which involves 50 leading solicitors, including 22 partners, and 32 barristers, including eight QCs, could go ahead only for Ablyazov to be debarred from the case. Or, if Addleshaws is successful in overturning the committal order, the defendant will be allowed to return to the UK to take part in the trial.

Barclays, HSBC, JPMorgan, Merrill Lynch and Morgan Stanley were all affected by the demise of BTA. The part-nationalised RBS is believed to have lost $1.5bn.

For a High Court judge to recuse him or herself from a trial is a rare occurrence, reserved only for when there is a perception of a conflict of interest.

In 2007 Addleshaws requested that Mr Justice Peter Smith recused himself from Howell v Lees-Millais after it emerged that negotiations for the judge to join the firm had broken down. The firm had argued that Smith J should stand down because he had shown “animosity” towards it (4 July 2007).

That matter went to the CoA, where the then Master of the Rolls Sir Anthony Clarke ruled that Smith J’s actions were “wholly inappropriate” especially in relation to his cross-examination of former Addleshaw partner Simon Twigden and that the court was “quite satisfied that the judge should have recused himself”.