JSC Commercial Bank PrivatBank v Kolomoisky & Others
Mr Justice Trower today handed down judgment in JSC Commercial Bank PrivatBank v Kolomoisky & Others, rejecting an application by the claimant (the “Bank”) to be allowed to cross-examine the First Defendant, Igor Kolomoisky, on his assets.
The Bank has brought a claim for fraud against Mr Kolomoisky and others (due for trial in 2022), alleging that they misappropriated $1.9bn through a series of sham loans and supply contracts. Pending trial, in December 2017 the Bank obtained a freezing order over Mr Kolomoisky’s worldwide assets. In the usual way, Mr Kolomoisky therefore provided a list of his assets and verified it on affidavit.
One asset listed by Mr Kolomoisky was a right under an oral contract described as having the “potential value” of 50,000 Bitcoin or $1bn, whichever was the lesser, in January 2021. The Bank made no enquiries about this asset until January 2021, when it asked for more details. In answer Mr Kolomoisky explained that the right was contingent upon the production by a Bitcoin “mining” operation of enough Bitcoin to leave 50,000 net of expenses. In fact the operation had not been successful, so his rights were much less valuable.
The Bank brought an urgent application challenging this explanation, accusing Mr Kolomoisky of changing his story about the nature of the asset and misleading the Bank, the Court and his own legal team. It sought permission to cross-examine Mr Kolomoisky on his entire asset disclosure. In a reserved judgment Mr Justice Trower rejected the application.
On the law, the Judge held that cross-examination on assets was an exceptional order. It would only be made when (a) the claimant could show serious deficiency in the asset disclosure; (b) other means of enquiry had been exhausted; and (c) the order would further the purpose of the freezing order by enabling the claimant better to police the frozen assets. It was not there to resolve disputes about the ownership of assets via a mini-trial.
On the facts, these tests were not satisfied.
The Judgment is here.
Tom Adam QC, Alec Haydon QC and Tom Foxton acted for Igor Kolomoisky, instructed by Fieldfisher LLP.
Mark Howard QC, Michael Bools QC, Geoffrey Kuehne and Ben Woolgar also act for Mr Kolomoisky in the underlying proceedings.
Thomas Plewman QC acted for the English Defendants in the jurisdiction challenge, instructed by Pinsent Masons.
Daniel Jowell QC and Richard Eschwege act for the Second Defendant in the underlying proceedings, Mr Bogolyubov, instructed by Enyo Law.