Cases in Great Britain
Mr Ablyazov is a citizen of Kazakhstan, and was until February 2009 the chairman and indirect majority owner of JSC BTA Bank (“BTA Bank”). Mr Ablyazov is the leading political opponent of the current regime in Kazakhstan and of its autocratic leader, President Nursultan Nazarbayev. As such Mr Ablyazov believes he is subject to a politically-motivated campaign at the instigation of President Nazarbayev.
Mr Ablyazov belives that the actions of the Nazarbayev regime against Mr Ablyazov culminated in the, politically-motivated nationalisation of the Bank at the beginning of February 2009, by which the Nazarbayev regime (through the Samruk-Kazyna National Welfare Fund) took control of the Bank and effectively expropriated Mr Ablyazov 's interest in it.
The position of the Kazakhstan authorities and the Bank itself is that the authorities had no interest in the Bank until the Government was forced to take it over as a “rescue exercise”. That is strongly denied by Mr Ablyazov.
Mr Ablyazov was granted political asylum in the UK in 2011, when the UK authorities accepted that Mr Ablyazov had a well-founded fear of persecution by the authorities in Kazakhstan.
The Proceedings against Mr Ablyazov in the UK
In spring 2009, one of Mr Ablyazov’s companies which held shares in BTA Bank commenced arbitration proceedings against the Government of Kazakhstan claiming compensation for the unlawful expropriation of its shares in BTA Bank. After those arbitration proceedings were initiated, the new management of the nationalised BTA Bank started its proceedings against Mr Ablyazov personally and against others who were associated with him.
On 13 August 2009 the nationalised BTA Bank obtained a worldwide freezing order over Mr Ablyazov’s assets (“Freezing Order”), pursuant to which Mr Ablyazov gave extensive asset disclosure.
Since 2009, BTA Bank has brought 11 claims (the “Claims”) against Mr Ablyazov (and against varying other parties, depending on the nature of the particular claim), in the English courts. The basis of BTA Bank’s claims is that in breach of his duties allegedly owed under the laws of Kazakhstan, Mr Ablyazov caused BTA Bank to enter into transactions, causing BTA Bank to suffer losses.
Three of the Claims were set down by the court for a consolidated trial which commenced in November 2012. Due to the circumstances identified below, Mr Ablyazov took no part in the trial and his evidence in rebuttal of the allegations made against him by BTA Bank was never considered by the English Courts.
Mr Ablyazov's Position in connection with the Claims
Mr Ablyazov maintains that he is innocent of the alleged frauds and that the claims against him are a politically wielded weapon of Kazakhstan’s President, who continues to try and eliminate Mr Ablyazov as a political opponent. Mr Ablyazov has consistently stated that it was the illegal nationalisation of BTA Bank in 2009 that needlessly brought Kazakhstan’s banking success story to ruin.
Mr Ablyazov's opinion is that the English proceedings are part of a concerted campaign being conducted outside of Kazakhstan by and at the instigation of the Nazarbayev regime, involving both criminal and civil proceedings in Russia and Ukraine, to complete the expropriation of Mr Ablyazov’s assets and to undermine and damage his reputation and standing in those countries and internationally.
Mr Ablyazov's Stay Application
In 2010 Mr Ablyazov attempted to strike out or to permanently stay the Claims (the “Stay Application”) arguing that BTA Bank's actions were, and continued to be, an abuse of the process of the English court, oppressive and contrary to English public policy, as they were the continuation of an illegal scheme by the Kazakhstan Government, the purpose of which was to expropriate Mr Ablyazov's assets and to eliminate him as a political opponent. He argued that the scheme of the Kazakhstan Government involved flagrant breaches of international law and violations of his human rights, and was illegal as a matter of English law. He argued that BTA Bank was not an independent commercial legal entity but, through sovereign wealth fund “Samruk-Kazyna” and the individuals appointed by the Kazakhstan Government to BTA Bank’s management, an instrument of, and under the control of, President Nazarbayev and the Kazakhstan authorities. Mr Ablyazov argued that post-expropriation, BTA Bank is being used by President Nazarbayev and his regime to prosecute Mr Ablyazov for the ultimate purpose of eliminating him as a political force in the opposition to President Nazarbayev.
Mr Ablyazov’s Stay Application was dismissed. The Judge decided that insofar as the stay applications were based on a scheme to eliminate Mr Ablyazov as a political opponent Mr Ablyazov’s arguments in the application were non-justiciable as they invited the court to decide on the validity of an act of an independent sovereign government within its own jurisdiction i.e. whether the nationalisation of BTA Bank was illegal and invalid. The Judge held that it was arguable that the predominant purpose of the proceedings was to achieve the elimination of Mr Ablyazov as a political opponent, but went on to hold that the proceedings were nevertheless not an abuse of process. Importantly, the allegation that it would not be possible for Mr Ablyazov to have a fair trial because the Kazakhstan authorities would take steps, including the persecution of witnesses, to prevent Mr Ablyazov from obtaining evidence, information and documents in support of his defence, was a matter that was held over by the judge for the trial of the Claims. However, as described below, Mr Ablyazov was not allowed to participate in that trial.
Risks to Mr Ablyazov's Life and Surveillance of him and his Family
On 29 January 2011, Mr Ablyazov received a "Notice of Threat to Personal Safety" (more
- Warning in the case of a threat to life and risk of an assassination attempt
- Mostly used in the presence of a real threat but when sufficient evidence is absent
commonly known as an "Osman Warning") from the Metropolitan Police of London. An Osman Warning is a document which formally warns an individual that the police authorities consider a person's personal safety /life to be in danger. In the Osman Warning provided to Mr Ablyazov, the Metropolitan Police Service officer stated that: "you may be subject of a kidnap or physical harm, which may be politically motivated. The Police cannot protect you from this threat on a day-by-day, hour-by-hour basis."
In parallel with the legal proceedings, BTA Bank, though its lawyers “Hogan Lovells”, instructed the intelligence firm “Diligence” to undertake more or less constant surveillance of Mr Ablyazov and his family in England and other countries for an extensive period of time, probably lasting years.
As court proceedings continued, BTA Bank – through its law firm, Hogan Lovells – hired a private investigation firm, Diligence, to carry out the surveillance of Ablyazov and his family.
For example, the Bank’s English lawyers Hogan Lovell have submitted evidence to the Court which demonstrates that in 2011, agents instructed by BTA Bank for months covertly followed and photographed inter alia, Mr Ablyazov’s wife, his then-four-year old daughter, his grown-up daughter, brothers of Mr’s Ablyazov’s wife and their families in Riga, Latvia.
BTA Bank claimed that the purported purpose of this near constant surveillance was to secure the assets subject to the Freezing Order. However, it is not clear how constant surveillance of Mr Ablyazov, his minor children and his family could assist such a task. Mr Ablyazov's position is that the constant surveillance deployed by BTA Bank (effectively acting as a proxy for the Kazakhstan authorities) was nothing short of Soviet style spy operation perpetrated on him and his closest family.
Committal Trial and Consequential Orders
On 16 May 2011, BTA Bank applied for Mr Ablyazov’s committal to prison for contempt of court for allegedly failing to disclose assets and/or dealing with assets in breach of the Freezing Order. Mr Ablyazov denied the accusations. On 16 February 2012 however, Mr Justice Teare found Mr Ablyazov guilty of contempt of the English court. Mr Ablyazov did not appear at the handing down of judgment and was sentenced to 22 months imprisonment for his contempts.
Ablyazov maintains that for BTA to have him and his family followed is nothing short of a “Soviet spy operation”.
Mr Ablyazov did not go to prison because he took the view that if he were imprisoned, he would be in serious danger of assassination (whilst inside prison) as ordered by President Nazarbayev’s regime. Other opponents of the regime in Kazakhstan have been murdered in recent years and Mr Ablyazov himself has survived several assassination attempts. He also considered that if he were to be imprisoned he would be unable to continue to raise the funds which are necessary to pay for his defences to the Claims brought against him, which he would then effectively lose by default. Since February 2012, Mr Ablyazov’s whereabouts have been unknown. He believes that due to his opposition to the regime in Kazakhstan, it is too dangerous for him to make his whereabouts known because the regime seeks to eliminate him as a source of political opposition.
On 29 February 2012, following an application by BTA Bank, the English High Court made an Unless Order against Mr Ablyazov ("Unless Order"). The Unless Order required Mr Ablyazov to surrender to the custody of the court so that he could be imprisoned and to make an affidavit providing up to date disclosure of his assets. Both requirements were made conditions of Mr Ablyazov being able to continue defending himself against the Claims. If Mr Ablyazov did not comply with the Unless Order, his defences to eight sets of court proceedings against him (cumulatively worth US$4.5 billion) would be struck out and BTA Bank would be able to obtain judgment against him without any trial being necessary.
Mr Ablyazov did not surrender and he was debarred from defending the actions against him. On 9 November 2012, Mr Ablyazov’s defences that he submitted to court in eight sets of civil proceedings brought against him by BTA Bank were struck out without a trial having taken place. BTA Bank was then given permission to enter judgment against Mr Ablyazov in those proceedings.
Judgments against Mr Ablyazov
On 23 November 2012, pursuant to the Unless Order that disallowed Mr Ablyazov to participate in the trial, Mr Justice Teare made orders for judgment in default of a
Denied the right to a defence
- Judge Teare denied Ablyazov a defence, citing alleged contempt of court
- The contempt charge was based on failure to disclose all assets and failure to appear in court
- Ablyazov points out that imprisonment would make his defence impossible
- Comparison: Roman Polanski, charged with rape (being a criminal offence, while Ablyazov is involved in civil proceedings) was allowed to enter a defence through his legal team
defence, without a trial, in two of the Claims, known as the DCM and Drey claims, for sums totalling more than US$1.6 billion, and later on 19 April 2013 he made an order for judgment in another of the Claims for approximately US$1.2 billion (Judgments).
Importantly, the trial of three of the Claims that commenced in November 2012 took place without Mr Ablyazov being allowed to be heard, without any consideration of the defences that he had put forward and without any evidence being heard on his behalf. The English High Court did not therefore evaluate or address the arguments presented by Mr Ablyazov.
Had Mr Ablyazov been able to exercise his right to defend the Claims, one of his lines of defence would have been that the allegations being brought against him were unjust, were wholly politically motivated and that he was unable to have a fair trial. As explained, these arguments were never evaluated by the English courts as Mr Ablyazov was denied the right to a fair trial and to have the court properly hear and determine his defences and his fears.
Mr Ablyazov is launching a challenge against the Unless Order to the European Court of Human Rights on the basis the Unless Order breaches his Article 6 right to a fair trial and his Article 1 of the First Protocol right to the enjoyment of his possession. The outcome of the challenge is awaited.
Examples of Extreme Applications within the Proceedings
The BTA Bank has obtained a series of unprecedented orders from the English domestic courts during the course of these proceedings as follows:
- Orders against internet service providers hosting email accounts which the management of BTA Bank suspected were used by people who worked for or with Mr Ablyazov. These orders were made without Mr Ablyazov's knowledge were the equivalent to electronic surveillance by a private party. BTA Bank monitored the various email accounts for around three.
- In November 2010 the English High Court appointed receivers over Mr Ablyazov’s assets to protect BTA Bank from the alleged risk that the assets would be dissipated. From time to time, the English High Court adds more companies into the receivership upon applications made by BTA Bank without notice to Mr Ablyazov. BTA Bank alleges that such companies constitute “Ablyazov's group”, a matter which Mr Ablyazov denies.
- Recently, in December 2012, the Kazakhstan authorities banned independent opposition newspapers “Respublika” and “Vzglyad”, the TV channel “K+”, the news portal “StanTV” and their associated websites for “propaganda of extremism”. Then on 25 January 2013 Mr Justice Teare made an ex-parte order against three companies owned by Kazakhstan opposition politician, Mr Muratbek Ketebayev to (i) freeze them and (ii) appoint receivers over those companies as if they were assets of Mr Ablyazov and belonged to “Ablyazov’s group”. The frozen companies own the opposition TV channel "K+" that for years consistently criticised Nazarbayev's regime in Kazakhstan. Those companies also own Internet domains "Kplus-tv.net", "stan.tv," and "respublika-kz.com". Mr Ketebayev is not a defendant to any of those proceedings, nor has he been called as a witness. At the request of BTA Bank, the English court order was kept secret for almost a month and became public only on 22 February 2013. Also on 22 February 2013, a Kazakhstan court made an unlawful decision to close the newspapers “Respublika” and “Vzglyad”, the TV channel “K+”, the news portal “StanTV” as a "single media" – a concept that does not exist under Kazakhstan law.
Mr Ablyazov's position is that President Nazarbayev considers him to be a threat to the regime and has committed massive state resources with the aim of eliminating him. It is estimated that BTA Bank, who has undergone two restructurings since 2009 and is effectively bankrupt, has spent over £150 million pounds pursuing legal proceedings against Mr Ablyazov and the people associated with him.
The case against Mr Ablyazov is unprecedented. The litigation has now been running for approximately 4 years, spanning, as mentioned earlier, 11 claims in the English Courts. The litigation has been variously described by judges as being on an "epic scale" and waged with vigour akin to "trench warfare". There are now over 35 reported decisions of the English High Court and the English Court of Appeal.
With seemingly unlimited financial resources, BTA Bank’s behaviour in these proceedings was overtly aggressive for a party in commercial litigation. BTA Bank has relentlessly issued applications against Mr Ablyazov, covering the funding of proceedings, the disclosure of information, the disclosure of contact details of various people close to Mr Ablyazov, allegations of breaches of the Freezing Order, and the appointment of a second set of Receivers. BTA Bank has pursued contempt applications against no less than four defendants and one other party who was a witness in the proceedings and was not even a defendant. Mr Ablyazov belives that the strategy that lawyers of BTA Bank adopt, is to attempt to ruin the Bank’s opponents financially by continuously bringing applications against such opponents thereby forcing them to incur enormous legal bills in defending themselves.