In JSC BTA Bank v Ablyazov and others  EWHC 2219 (QB), the High Court made an order that the Respondents would be barred from defending the claim unless they complied with the disclosure obligations set down in a freezing order, despite the fact that they had challenged the court’s jurisdiction.
The Claimants had successfully applied for a freezing order against the Respondents, some of whom were located outside the jurisdiction. The freezing order contained disclosure provisions, which the Respondents failed to comply with. They issued an application challenging the jurisdiction of the English court, and seeking to have the freezing order set aside. The Claimants had, in the meantime, applied for an unless order that the Respondents be barred from defending the claim unless they provided the required disclosure.
The Respondents submitted that an unless order should only be made if breach of the freezing order would affect the overall fairness of the proceedings, or render the further conduct of the proceedings unsatisfactory. This argument was rejected.
The judge commented that in fraud actions such as this one, if an unless order could not be made while a challenge to the jurisdiction was pending, wrongdoers would flourish as the pending challenge would preclude the court from enforcing the disclosure order. An order for contempt of court, especially against those respondents who were located out of the jurisdiction, would be of little value. Without an unless order, the Claimants could make either no or a severely restricted recovery. It was also relevant to take into account the likelihood of the jurisdictional challenge succeeding: in this case, such success was seen to be very unlikely.
The unless order was granted, but in order to avoid rendering the Respondents’ challenge to the jurisdiction nugatory, the order provided that any judgment entered could not be enforced or executed without the Court’s permission, pending the determination of the Respondents’ application.
The Court noted that while the considerations in favour of making the order sought were overwhelming, the prejudice that the Respondents would suffer, if they produced the information and were subsequently successful in their challenge to the jurisdiction, was minimal.