Hogan Lovells Achieves Another Milestone Judgment for BTA Bank in Ablyazov Fraud Case
09 December 2013
LONDON, 9 December 2013 - Hogan Lovells has achieved another successful milestone on behalf of BTA Bank in one of the biggest fraud cases to have ever come before the English courts. Last week the English High Court granted a further judgment in favour of BTA Bank against Mukhtar Ablyazov for approximately US$400 million (£245 million) as part of its continuing efforts to recover assets from the Bank's former chairman.
The judgment relates to one of eleven sets of proceedings brought by BTA Bank against Mr Ablyazov and his associates in England. The Court found that in 2008 and early 2009, Mr. Ablyazov orchestrated a series of fraudulent transactions whereby AAA-rated investment bonds held by BTA Bank, worth around US$300 million, were transferred to a series of shell companies in the British Virgin Islands, secretly owned and controlled by Mr. Ablyazov. The Bank received nothing at all in return: the investment bonds were simply stolen by Mr Ablyazov.
The Hogan Lovells team advising BTA Bank was led by London litigation partners Chris Hardman and Alex Sciannaca, supported by senior associate Rebecca Wales and associate James Wise.
Commenting on the judgment, Chris Hardman said:
"We welcome this important new decision from the English courts in relation to the Bank's continuing fight to recover the billions of dollars stolen from it by Mr Ablyazov through proceedings in this jurisdiction.
The court carefully considered the extensive evidence submitted by both sides and concluded that Mr Ablyazov's defence was variously "implausible", "untenable" and "frankly incredible". He has been found to be personally responsible for perpetrating a massive fraud on the Bank at the height of the global financial and this judgment further vindicates the Bank's decision to pursue its claims through the robust English court system. "
Background to the case
Hogan Lovells has been acting for BTA Bank (one of the largest banks in Kazakhstan) since May 2009 in a series of major fraud cases before the English Courts. A total of eleven claims have been issued in the Commercial Court and Chancery Divisions against Mukhtar Ablyazov and others for a total of approximately US$6 billion (including interest).
The Bank's losses, in early 2009, were thought to be in excess of US$10 billion and necessitated a major cross-border restructuring in order to save the Bank. The litigation has involved a number of developments in English law which are of significant importance in the context of cross-border fraud litigation.
Hogan Lovells has been at the centre of the significant asset recovery exercise involved in the BTA case using a team primarily based in London but has also relying heavily on support from its Moscow office. The firm has also managed very extensive litigation in jurisdictions such as Cyprus and the BVI which has been central to the gathering of evidence and the freezing of assets.
Previous milestone decisions in the litigation have included:
- February 2012 – the High Court decision found Mr. Ablyazov guilty of numerous counts of contempt of court and he was given three concurrent sentences of 22 months in prison: http://www.hoganlovells.com/newsmedia/newspubs/detail.aspx?news=2152.
- November 2012 – Mr. Ablyazov was debarred from defending BTA Bank's claims: http://www.hoganlovells.com/newsmedia/newspubs/detail.aspx?news=2446
- March 2013 – a series of judgments against Zhaksylyk Zharimbetov, Usarel Investments Limited and Ildar Khazhaev: http://www.hoganlovells.com/newsmedia/newspubs/detail.aspx?news=2601.
- July 2013 – Mr Ablyazov is arrested near Cannes by French police.