In this article, we look at the recent decision in the ongoing and highly publicised divorce case of Akhmedova v Akhmedov. This decision is the latest in a long run of enforcement cases brought by the wife against her former husband, who, in 2016, was ordered to pay her one of the largest reported financial settlements in England. While the judge was critical of the husband’s reorganisation of his assets to put and keep them beyond the wife’s reach, this is not the end of the road for this case. This judgment is simply another stepping-stone towards the wife realising the award she is entitled to.
This matter was initially heard before Mr Justice Haddon-Cave in December 2016, and again in April 2018 in circumstances where the wife had sought freezing orders, avoidance of disposition orders and orders that certain transactions carried out by the husband had been at an undervalue. There was then a further enforcement hearing in September 2019 proceeding in April 2018 in the High Court, when the court considered the issues of:
- extending jurisdiction to Dubai, where the husband’s superyacht was moored, and
- whether de facto directors of a company could be named in the penal notice attached to an injunction (the answer to which is now, yes).
At the hearing in September 2019, there were seven respondents to the proceedings. This October hearing resulted in a further two parties, Counselor Trust and Sobaldo Establishment, both of which were based in Liechtenstein, being joined. Given the number of different respondents now involved in this case, it seems clear that the husband has relied upon professional third parties to help him to avoid having to comply with previous English orders.
There are, in effect, three categories of assets involved in these proceedings. The first is the superyacht, which the husband bought from Roman Abramovich for €260m in February 2014. Initially, he had purchased the yacht in his sole name. However, by the time of this hearing, the yacht was held by a Lichtenstein anstalt (ironically) called Straight, of which Counselor (the latest respondent to be added to this case) is the sole director. The second strand is a collection of artwork acquired by auction and through a private sale at Sotheby’s, which was last held in November 2016 by the fourth respondent to the proceedings, Qubo 1. Qubo 1’s director is Walpart Trust, which also happens to be an affiliate of Counselor.
The third strand is a cash and securities portfolio containing at least €650m as at the end of November 2015, which had previously been held by UBS in Switzerland through a company known as Cotor (the third respondent). Through a series of transactions, this portfolio was found in this judgment to have been transferred to a Lichtenstein based bank. However, by the time the wife had issued criminal proceedings in Lichtenstein, it had already found its way out of there and (it was inferred during these proceedings) into various trusts.
At this hearing, in relation to the cash and securities portfolio, the wife sought three forms of relief:
- The joinder of Counselor Trust and Sobaldo Establishment, which had been found to hold accounts with monies from the previously held UBS portfolio;
- A without notice freezing injunction to avoid or reduce the risk of the cash and securities portfolio being moved again; and
- Directions for the determination of her substantive claims under section 423 Insolvency Act 1986 and/or section 37 Matrimonial Causes Act 1973. These actions should not, by their very nature, be brought without notice, and hence she only sought directions rather than a final determination.
The wife was successful in all three of her applications. The judge summarised why the wife was successful as follows:
- In relation to the wife’s joinder application, in accordance with the rules under Family Procedure Rule 9.26B, the wife was able to show that it was desirable to add Counselor Trust and Sobaldo Establishment as parties to the proceedings so that the court could resolve all matters in dispute; and
- It was found that there was an issue involving the new parties, which were clearly connected to the issues in dispute.
The judge found that the principles as set down in the case of L v K (Freezing Orders: Principles and Safeguards  EWHC 1735 Fam) had been met because:
- It was an appropriately strong case, ie one that had a better than 50% chance of success;
- There was solid evidence of a real risk of dissipation. Given the background to this case, and the husband’s previous behaviour, this was clearly met; and
- It was just and convenient to grant the freezing order.
Directions for claims under section 423 Insolvency Act 1986 and/or section 37 of the Matrimonial Causes Act 1973
The judge concluded that in bringing her application, the wife was seeking to maximise the prospects of enforcement of her claims in Liechtenstein. The judge agreed with this approach and made directions as to what would constitute good service in the context of the husband’s “elaborate and contumacious campaign to evade and frustrate the enforcement of the judgment debt against him”.
Practice points for family lawyers:
- The wife issued criminal proceedings in Liechtenstein, which led to her receiving documents in relation to these new respondents that she would not have otherwise (perhaps) found. If you have a case in which the husband is a serial non-discloser, and there are assets in Liechtenstein, this route should be explored, and quickly.
- The wife also obtained orders in New York, which helped her to discover the names of further previously unknown entities. There had been US dollar transactions to these various entities, even though they were outside the jurisdiction of New York. Again, this enabled the wife’s team to provide the court with a helpful evidence trail, connecting these respondents to proceedings.
- The wife’s counsel rebutted the arguments that these two entities might make against being joined and, therefore, came at the process with ‘clean hands’, which made the judge more readily able to make orders in the wife’s favour.