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BVI Commercial Court discharges US$3 billion freezing orders

19/06/19

Mr Justice Jack (sitting as a Judge of the BVI Commercial Court) today ruled that three freezing orders granted in Renova Industries Limited and others v Emmerson International Corporation and others should be discharged. The freezing orders were granted by Mr Justice Wallbank at ex parte hearings on 19 November and 31 December 2018, and each freezes assets with a gross value of over US$3 billion. 

The case concerns claims brought by Mr Mikhail Abyzov and certain companies associated with him (collectively, the “Abyzov Parties”) against Mr Viktor Vekselberg and a number of companies within the Renova Group (collectively, the “Renova Parties”). Mr Vekselberg is a prominent Russian businessman. Mr Abyzov is a former Russian government minister and is currently the subject of a criminal investigation in Russia. The Abyzov Parties have brought claims against the Renova Parties in the BVI seeking to recover the value of contributions made to a joint venture relating to Russian electricity generation and distribution assets. 

The orders granted by Mr Justice Wallbank freeze shares in three companies listed on the SIX Swiss Exchange. Mr Justice Jack held that there was no evidence of a real risk of unjustifiable dissipation of assets by Mr Vekselberg or the three Renova Group companies to which the freezing orders are addressed. He rejected an argument that a transfer of certain shares to a number of Cypriot discretionary trusts in May 2018 had no legitimate commercial purpose, and rejected an assertion that those trusts were a sham. He also emphasised that it was inappropriate for the freezing orders to have been granted in light of the delay in the Abyzov Parties seeking freezing relief. In light of his findings, Mr Justice Jack held that there was no basis for the freezing orders.

In any event, Mr Justice Jack held that there had been a number of serious non-disclosures by Emmerson International Corporation (one of the Abyzov Parties) at the ex parte hearings in November and December 2018, including a failure to explain to the Judge the content of certain documents disclosed by Mr Vekselberg pursuant to an asset disclosure order, which were directly relevant to matters addressed in the freezing order applications. Mr Justice Jack held that, even if (contrary to his findings) there was a real risk of dissipation, the freezing orders had to be discharged as a result of those serious non-disclosures.

The judgment can be viewed here.

Michael Bolding (and Paul McGrath QC of Essex Court Chambers) represented the Renova Parties, instructed by DLA Piper and Agon Litigation.

Mark Howard QC and Simon Birt QC also represent the Renova Parties in the proceedings.