Hogan Lovells Secures Major High Court Victory for BTA Bank in US $6bn Fraud Case

LONDON, 24 August 2018 – Hogan Lovells has achieved a further landmark judgment for BTA Bank in one of the biggest fraud cases to have ever come before the English courts.

In a High Court judgment made public this week, the Court ruled in favour of BTA, finding Ilyas Khrapunov liable for conspiring with BTA's former chairman, Mukhtar Ablyazov, to deal with assets in breach of a freezing order.

His Honour Judge Waksman ordered Mr Khrapunov to pay damages of over US$500m (US$424,110,000 + interest of US$75,851,783.01).

The judgment comes after the UK Supreme Court ruled in March that the English court had jurisdiction to hear BTA's claims of unlawful means conspiracy against Mr Khrapunov.

Hogan Lovells partner Richard Lewis said:

'This is an important decision, a key step forward in BTA's attempts to recover the huge sums that have been misappropriated from it and the culmination of three years of intense litigation against Mr Khrapunov, including important decisions in the Court of Appeal and Supreme Court that are likely to make it easier for fraud claimants to obtain redress in the English courts in the future.'

The full judgment is available here.

Background to the case

  • BTA Bank commenced legal proceedings against Mukhtar Ablyazov and others in 2009 after auditors identified a massive hole in the Bank’s balance sheet. This led to the discovery of a large-scale fraud committed by Mukhtar Ablyazov while he was Chairman of the Bank.
  • The legal proceedings in England consist of 11 claims filed by BTA Bank in the English High Court seeking to recover the funds misappropriated by Mr Ablyazov. The Bank has secured judgments for more than US$4.5 billion and is in the process of seeking to enforce those judgments.
  • Mr Ablyazov was found guilty of contempt of court in February 2012 and sentenced to three concurrent 22 month prison sentences. Mr Ablyazov fled the jurisdiction before sentencing and was subsequently debarred from defending various claims brought against him by BTA Bank. His appeals against the contempt and debarral orders were dismissed by the Court of Appeal in November 2012, with Lord Justice Maurice Kay observing that "it is difficult to imagine a party to commercial litigation who has acted with more cynicism, opportunism and deviousness towards court orders than Mr. Ablyazov". On 26 February 2013, the Supreme Court refused Mr Ablyazov's application for permission to appeal the debarral judgment.

The legal line-up:

For the claimant, JSC BTA Bank

Stephen Smith QC and Tim Akkouh of Erskine Chambers, instructed by Hogan Lovells partner Richard Lewis and associate Will Moir

For the defendant / respondent, Ilyas Khrapunov

Charles Samek QC and Mark Delehanty of Littleton Chambers, instructed by Hughmans Solicitors

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