Court orders respondent to worldwide freezing order to disclose how his legal expenses are being funded

The claimant bank obtained a worldwide freezing order ("WFO") against the first defendant (Mr Ablyazov) and the second defendant, in order to restrain dealings which would prevent the claimant from recovering assets to satisfy earlier judgments which it had obtained against Mr Ablyazov.

The WFO contained the usual provision that the second defendant could spend a certain amount on legal advice and representation, "But before spending any money the Respondent must tell the Applicant’s legal representatives where the money is to come from". The second defendant has spent a substantial amount on legal expenses and told the claimant that his mother was funding those expenses. The bank suspected that his mother was in turn being funded by Mr Ablyazov (out of frozen assets) or that the second defendant was using his own concealed assets . It therefore applied for an order that the second defendant provide full and proper disclosure about how his legal expenses were being funded.

The judge held that the appropriate test for such an order is that that there are "adequate grounds" for making the order and that prior caselaw had required only a real (and not fanciful) risk of a breach of the WFO. She summarised that "Whilst, in principle, the Court will be alert to the need to police its own orders effectively, it must also be astute to prevent a WFO becoming an instrument of oppression".

In evaluating that risk, the court is entitled to take into account the substance of the underlying evidence as set out in prior judgments (although it cannot rely on a bare finding of a court in a matter to which the second defendant was not a party). She held that Okritie v Gersamia [2015] had not established a wider approach that the court can arrive at the same conclusions of an earlier court without exercising its own judgment.

On the facts, the judge concluded that it was not oppressive for the second defendant to be expected to provide the disclosure that was sought: "Whilst it may be that the response that will be obtained is that [the second defendant] does not know and his mother refuses to tell him from where she is sourcing the funds, if that is the answer it will be open to the [claimant] to test that answer in cross-examination".

On a more general note, in a case which is frequently before the courts, the judge cautioned against parties assuming "that successive judges can somehow magically acquire, as if by osmosis, the knowledge of the case which those judges who have dealt with it on previous occasions have acquired. Both sides need to remind themselves of the importance of encapsulating, in a manageable form, everything that is necessary to a given decision, by a given judge, on a given occasion".