5th Apr 2024

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Rowan Pennington-Benton and Nicholas Leah of Counsel (instructed by Madison Legal) for the 12th Defendant


Mr Justice Richard Smith:

Introduction

This ruling relates to two sets of applications which came before me on 26 and 27 March 2024, the first set comprising applications by the First and Fourth Claimants (together, Claimants) for asset freezing and/ or proprietary injunctive relief (Injunction Application) against:-

(a) the Sixth Defendant (Mr Anufriev);
(b) the Seventh and Eighth Defendants (Kazakovs);
(c) the Twelfth Defendant (Edelweiss); and
(d) Hemaren Stiftung (Hemaren).

The second set concerns a number of different orders sought by Mr Anufriev, the Kazakovs and Edelweiss (together, Defendants) against the Claimants relating to the alleged misuse of their confidential, including privileged, information (Confidentiality Applications).

I do not set out here in any detail the background to these proceedings which is noted at some length in my judgment dated 8 September 2023 concerning the amendment of the Claimants’ claims and the joinder of the Fourth Claimant ([2023] EWHC 2233 (Ch)). For present purposes, it suffices to note that these proceedings concern an alleged fraudulent scheme said to involve misrepresentation, forgery and asset misappropriation with a view to putting assets beyond the reach of the Claimants. That scheme is said originally to have been instigated by the (now deceased) First Defendant (Mr Bourlakov), the husband and father of, respectively, the First and Fourth Claimants, allegedly acting in concert with the Kazakovs and Mr Anufriev. Following Mr Bourlakov’s death, Mr Kazakov is said to have continued that scheme, again in concert with others.

Most relevantly for present purposes, one aspect of the alleged fraudulent scheme concerns the ownership of Edelweiss, a Panamanian company. Following the amendments and joinder permitted last year, the Claimants’ primary case is that Edelweiss is owned by the Fourth Claimant, albeit with Mr Kazakov said presently to exercise wrongful control of that entity and its valuable assets through his alleged sole beneficial ownership of Hemaren, a Panamanian foundation (of which Mr Anufriev is Protector). The Claimants have recently applied to have Hemaren joined to these proceedings.

The Injunction Application first came before me on 21 and 22 February 2024, limited then to asset freezing relief against Mr Anufriev, the Kazakovs and Edelweiss. Having been issued on 18 January but not served until 12 February 2024, the Defendants were highly critical that the Claimants had avoided the duty of full and frank disclosure arising on without notice applications by giving the bare minimum of notice which they said was wholly insufficient to allow them fairly to deal with the Injunction Application. The Claimants sought to justify such limited notice on the basis of the risk of asset dissipation. Mr Anufriev, the Kazakovs and Edelweiss applied to adjourn the February hearing, a position not resisted by the Claimants once Mr Kazakov and Edelweiss offered certain undertakings not to dispose of Edelweiss’ assets. These were accepted by the Court and the Injunction Application re-listed to come back before me on 26 and 27 March 2024.

The CT report

At the February hearing, there was an extraordinary turn of events arising from the evidence then relied on by the Claimants in support of the Injunction Application. That evidence included the first affidavit of Ms Naomi Simpson, a partner in Mishcon de Reya LLP, solicitors for the Claimants (MdR), dated 17 January 2024. That affidavit exhibited a report of the same date from a private investigation firm called CT Group (CT). The information in that report was apparently gathered by CT from confidential human sources, including (i) the ‘Field Team’, a group of private investigators comprising former intelligence officers (ii) the ‘Underlying Sources’, individual sources ‘on the ground’ who carry out investigations and obtain information on behalf of the Field Team and (iii) a source with access to a specialised database that aggregates banking data for analytical purposes. The identity of these sources had not been disclosed to MdR.

The report exhibits various documents said to evidence a risk of dissipation. Those documents include e-mails purportedly between Mr Kazakov and Mr Anufriev and substantial banking transfers, including from Edelweiss. Although CT was unable to guarantee the accuracy of the matters identified, it expressed a high degree of confidence in their reliability. Ms Simpson’s affidavit also referred to certain material obtained by CT which might have been subject to legal privilege having been removed from the batch of documents provided to MdR and subject to ‘privilege review’ by counsel with no prior involvement in the proceedings.

Evidence from Mr Kazakov and Mr Anufriev served shortly before the February hearing suggested that the vast majority of bank transfers identified in the CT report never, in fact, occurred and that the e-mails it had obtained were forgeries. Further preliminary analysis of some of the CT report materials, as summarised in the tenth witness statement of Ms Seborg, partner in PCB Byrne LLP, solicitors for the Kazakovs, dated 20 February 2024, was to the same end. Given that evidence, the Claimants confirmed very shortly before the February hearing that they would not rely on the CT report at that hearing but maintained that there was still sufficient evidence of risk of dissipation to warrant the asset freezing relief sought. In the event, as I have said, the February hearing was adjourned, with the Claimants also required to indicate by 27 February 2024 the extent to which they continued to rely on the CT report on the Injunction Application.

On 28 February 2024, the Claimants issued a further application, seeking the joinder of certain additional Defendants, including Hemaren, to these proceedings, further injunctive relief (said to be on a proprietary basis) against Hemaren and Edelweiss (restraining the disposal of Edelweiss’ shares, the exercise of rights as Edelweiss’ shareholder and the disposal of Edelweiss’ assets), and related orders for service out of the jurisdiction. I granted the orders for service out on 5 March 2024.

Continue reading this Judgment here.


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Rowan Pennington-Benton

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Nicholas Leah

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