On 21 October 2015, the Supreme Court handed down its decision in JSC BTA Bank v Mukhtar Ablyazov and Others [2015] UKSC 64. The judgment adds to the ever expanding  volume of case law generated by this long running litigation, in this instance giving clarity to when loans become assets within the meaning of a freezing order.


JSC BTA Bank (“the Bank”)obtained a worldwide Freezing Order against Mr Ablyazov in November 2009 (“the Freezing Order”). With his assets frozen Mr Ablyazov entered into various loan agreements with third parties(“the Loan Agreements”) and then drew down fully under those agreements in order to fund his lifestyle and pay his lawyers and other corporate service providers. At the time of the decision, the Bank had obtained judgments against Mr Ablyazov for more than US $4.4 billion, none of which he had satisfied.

The Bank applied for a declaration that the loan sums were “assets” for the purposes of the Order, relying in particular on the wording at paragraph 5 of the Freezing Order (taken from the current Commercial Court standard form order), which provides:

“Paragraph 4 applies to all the respondents’ assets whether or not they are in their own name and whether they are solely or jointly owned and whether or not the respondent asserts a beneficial interest in them. For the purpose of this Order the respondents’ assets include any asset which they have power, directly or indirectly, to dispose of, or deal with as if it were their own. The respondents are to be regarded as having such power if a third party holds or controls the assets in accordance with their direct or indirect instructions.”

The Bank’s application was dismissed at first instance and by the Court of Appeal on the basis that the rights under the Loan Agreements did not fall within the definition of assets in the Freezing Order.

The issues

The issues before the Supreme Court were:

  1.  whether the respondent’s right to draw down under certain loan agreements is an “asset” within the meaning of the Freezing Order;
  2. if so, whether the exercise of that right by directing the lender to pay the sum to a third party constitutes “disposing of” or “dealing with” or “diminishing the value” of an “asset”; and

whether the proceeds of the loan agreements were “assets” within the meaning of the extended definition in paragraph 5 of the Freezing Order on the basis that the respondent had power “directly or indirectly to dispose of, or deal with [the proceeds] as if they were his own”.

The decision

The Supreme Court considered that the sole question was what the Freezing Order in fact meant making clear at the offset that “If it is desirable that a broader meaning should be given to it than is appropriate applying ordinary principles, the solution is not to give it a meaning which it does not have but to vary the order (and the relevant standard form of order) appropriately for the future.” Lord Clarke said that whilst the expression “assets” is capable of having a wider meaning, for example a chose in action, a freezing order must be construed in its context and there is a settled understanding that borrowings are not covered. Therefore, in relation to issues (1) and (2) the respondent’s right to draw down under the Loan Agreements did not qualify as an asset within the meaning of the Freezing Order (without reference to the extended definition in the second sentence of paragraph 5), and therefore the exercise of that right did not amount to disposing of, dealing with or diminishing the value of an asset.  However, the Supreme Court allowed the appeal on issue (3) determining that the proceeds of the Loan Agreements were “assets” within the meaning of this particular freezing order. Lord Clarke said that Mr Ablyazov had the power to “directly or indirectly dispose of, or deal with [the proceeds] as if they were his own” such that an instruction to the lender to pay the lender’s money to the a third party is dealing with the lender’s assets as if they were his own.


Whilst it should be borne in mind that Mr Ablyasov is already in contempt of court for numerous breaches of court orders and the Supreme Court’s approach is likely to have been influenced by this fact, the decision serves to emphasise the importance of ensuring that the wording in a freezing order must be clear and leave no room whatsoever for ambiguity. Freezing orders will be construed strictly in accordance with what the words in fact mean and legal analysis will not stretch the scope of the order. Legal representatives should be particularly alert to the terms of funding arrangements in place for payment of their fees in order to ensure that receipt does not breach the terms of the freezing order that the client is subject to.