BL-2017-000665 - [2025] EWHC 2909 (Ch)

The first issue on the DDO is whether the Individual Defendants should be required to deliver up share certificates and stock transfer forms to be held by the Bank’s solicitors and if so whether what the Bank says should be an absolute obligation should be qualified as one to use all reasonable endeavours? There is also a question as to whether Mr Bogolyubov should be required to do so by 5 December 2025 or 5 February 2026 with Mr Kolomoisky being required to comply two months later.

The justification for this relief is that the evidence establishes that nominees for some at least of the Individual Defendants’ shareholdings have given them documents (including declarations of trust and blank stock transfer forms) which evidence the nominees’ obligations to act in accordance with their instructions. In the case of Mr Bogolyubov I was shown material demonstrating that the nominees had undertaken not to transfer, deal with or dispose of those shares save as they may from time to time direct and which indicated that the relevant share certificate together with a blank transfer form has been deposited with Mr Bogolyubov as the true owner. Neither of the Individual Defendants have asserted that the share certificates and stock transfer forms do not exist, but the correspondence with the Individual Defendants’ solicitors relating to the disclosure and delivery up of this material has stalled and their location and how the documents are now held remains opaque.

Mr Bogolyubov objects that the relief proposed by the Bank is extremely intrusive and goes beyond freezing assets within the hands of the Individual Defendants and even beyond freezing relief by way of receivership in which the documents might be held by an independent officer of the court. It is said that actively handing over documents to the Bank's own solicitors requires particular justification and none has been offered.

The Bank recognises and indeed asserts that the order it seeks does not in itself grant any form of proprietary or security interest in the documentation or more importantly the underlying asset. That is only achievable by a process of enforcement in the jurisdictions in which the relevant documentation is held and/or the relevant asset is located. Notwithstanding, it is said on behalf of Mr Bogolyubov that it amounts to the first steps in executing the judgment debt against the Individual Defendants, which goes beyond the purpose of freezing relief and has become a process of equitable execution. Indeed it is asserted that the Bank’s evidence suggests that is exactly what is intended. Mr Morrison also submitted that there may be sanctions-related questions around the ability of the Bank to return the documentation to the Individual Defendants if the court were ultimately to order their return, whether in consequence of a successful appeal or otherwise.

I accept that the order sought amounts to an interference with the Individual Defendants’ rights to do as they please with their own property, but it seems to me that on the facts of this case, preservation of their interests in the companies to which this nominee documentation relates is required in the form which the Bank seeks. I agree with the Bank’s submissions on this point and, subject to questions of comity and the timing issue to which I will revert shortly, I consider that an order should be made in the Bank's form of words set out in paragraphs 1 to 3 of the draft DDO. I also agree that this is an appropriate mechanism at this stage of the proceedings for preserving assets (i.e. the shares themselves) over which the Bank might be entitled to execute in due course and that the documentation referred to in the draft is likely to have come into existence in the first place to facilitate the rapid transfer of assets on the instruction of the Individual Defendants. The underlying assets are therefore at particular risk of dissipation, a risk which is illustrated by the Bank’s evidence to the effect that changes in the structures within which both of the Individual Defendants’ assets are held have continued in circumstances in which there have been disputes as to whether or not the proposed changes were prevented by the WFO.

I also take into account the fact that Mr Kolomoisky’s imprisonment may make it more difficult for him to comply with the order than would otherwise be the case. Nonetheless nothing that has been said satisfies me that he is unable to give the relatively simple instructions to others which will enable him to comply. I shall revert to the question of timing later.

In reaching that conclusion I have given careful consideration to Mr Morrison’s argument that the order sought was an inappropriate use of WFO relief because it amounted to facilitation of enforcement, which in the case of documentation held abroad was exorbitant in terms of jurisdiction. In his oral argument he submitted that the decision of the Court of Appeal in SAS Institute Inc v World Programming Ltd. [2020] EWCA Civ 599 (“SAS”) supported his position. This case was the converse of the current case because it was concerned with the question of whether the English court should permit an in personam enforcement order made by a court in California to be given effect in England (through the assertion of subject matter jurisdiction over English debts) even though enforcement of the original North Carolina judgment on which the California enforcement order had been based had already been refused by the English courts on the grounds of issue estoppel, abuse of process and public policy.

In his judgment, Males LJ (at [70] to [71]) explained that the English court will give effect to the principles established by Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30 that, when making orders for the enforcement of its own judgments, it should respect the territorial jurisdiction of a foreign court over assets located in that jurisdiction. The execution of a judgment is an exercise of sovereign authority and it is a general principle of international law that one sovereign state should not trespass upon the authority of another, by attempting to seize assets situated within the jurisdiction of the foreign state.

It is said that it follows that, to the extent that assets over which the Bank wishes to enforce are located in a foreign jurisdiction, this court should not take steps towards enforcement over those assets. That would be to affect property abroad over which this court does not have subject matter jurisdiction, and is only permissible if the order is recognised and enforced by the courts in the state where the property is situated (see SAS at [74]). It was submitted that this principle would as a matter of substance be breached if this court were to make an order requiring the delivery up of share certificates and stock transfer forms to solicitors in England where those documents are not currently within the jurisdiction of the English court.

The Bank's answer to these submissions was that the order sought did not in any sense amount to enforcement or execution or even a step to that end. It simply operates as an order for the further preservation of assets to which the relevant documents relate, those assets themselves being located in a foreign jurisdiction, i.e., the place in which the shares in the relevant companies are located, which will almost certainly be the place of their incorporation. I accept this submission, because holding the documents concerned to the order of the court is simply restricting one of the means by which the underlying assets might be disposed of. It gives the Bank no proprietary or security interest in the shares and does not of itself amount to a step by way of enforcement over the shares.

It seems to me that this conclusion is subject only to one possible point of principle. It is said on behalf of Mr Bogolyubov that one of the reasons it amounts to a step in enforcement is that it will enable the Bank to collect the documents in England thereby facilitating enforcement in due course when, as matters currently stand, the Bank would have to go to the jurisdiction in which the documentation is currently held to obtain appropriate relief. In reply Mr Akkouh submitted that this is not correct because, if in due course the Bank were to apply by way of execution for an order that share transfer documentation now located in England be filled in by Hogan Lovells (or indeed another officer of the court) as part of the process of seeking and enforcing a charging order over the shares, that could be resisted at that stage on the grounds that it was an attempt to procure the English court to take enforcement steps over an asset (the shares) located elsewhere.

I agree. As matters currently stand, the relief sought is simply an appropriate form of asset preservation order which, in the light of what is directed against the Individual Defendants, does not infringe the principles of comity with which the decision in SAS was concerned. It does not exceed the permissible territorial limits discussed in the judgment of Lawrence Collins LJ in Masri v Consolidated Contractors International Co SAL [2008] EWCA Civ 303, because the only effect of the order is to fortify the existing restrictions on disposition without any interference with the obligation of the Bank to go to the jurisdiction in which the shares themselves are located if and when it seeks to enforce against those shares in due course.

The Bank has adduced evidence from Mr Lewis, which explains how the documentation will be held by Hogan Lovells to the court’s order, and has confirmed (as is apparent from the language of the order itself) that it is not permitted to do anything with the share certificates or stock transfer forms. I note that the Individual Defendants’ own solicitors have not indicated that they are prepared to hold the documentation to the court’s order and I am satisfied that the arrangements which have been put in place are sufficient for the purpose.

I do not accept the argument that there are sanctions-based reasons why the material should not be handed over to the custody of Hogan Lovells, because of the risk that the documents concerned cannot then be returned to the Individual Defendants in the event that this court directs that this is what should occur. For the reasons that I have already considered in the context of the application for a stay, I do not agree.

There is also some dispute about the time within which the documentation ought to be provided. Mr Bogolyubov now seeks 5 February 2026 (having originally proposed a deadline of 5 December 2025). The Bank still seeks 5 December. Having revisited Mr Maling’s original evidence on the point and considered what Mr Morrison has said on instructions I think that the right date is 5 January 2026. I also consider that the right date for compliance by Mr Kolomoisky is 5 February 2026. In both cases the order will be to use all reasonable endeavours recognising as before that this may require them to incur reasonable expenditure to ensure that the steps are indeed taken and that the timescale within which it may be reasonable for Mr Kolomoisky to take any step may be affected by his imprisonment.

The next issue relates to the specific disclosure to be given by Mr Kolomoisky in accordance with the Bank’s proposed paragraph 4 of the draft DDO as particularised in Annex 2. I am satisfied that the documentation is reasonably required by the Bank. It relates to very valuable assets in respect of which it is to be expected that the Bank is entitled to enforce its judgment and in my view it is proportionate for the specific disclosure to be made. However, I agree that the time within which specific compliance is sought by the Bank is unrealistic in the light of the enquiries which the order contemplates are to be made. I also accept (as contemplated by the language of paragraph 4(d) of the draft DDO) that it may not be possible for Mr Kolomoisky to act personally and that he may have to give instructions to others to comply on his behalf. In order to make the position clear the words “either personally or by direction to his solicitors” are to be inserted after the word “required” in the first line of paragraph 4(a).

There is a minor point on the form of Annex 2, which is whether the words “use reasonable endeavours to identify” should be included in paragraph 5 of the annex. In my view they are unnecessary because the whole of Annex 2 is qualified by the language of taking all reasonable steps and making all reasonable enquiries where they appear in the second and third lines of paragraph 4 of the draft DDO.

The date for compliance is to be 9 December 2025 and the nature of the obligation in paragraph 4(a) is to be “all reasonable enquiries” recognising as before that this may require Mr Kolomoisky to incur reasonable expenditure to ensure that the steps are indeed taken and that the extent of the enquiries which it is reasonable for him to make may be affected by his imprisonment. The words “by a month after the deadline” are to be included in paragraph 4(d) and the word to be included in the last sentence of paragraph 4(e) is “fortnightly”.

The substance of the equivalent provision for Mr Bogolyubov (paragraph 5) has been agreed. However the date for compliance and the form of Annex 3 has not. The question is whether he should be required to go into the detail contemplated by paragraph 11 of Annex 3 or whether he should simply be required to provide the source from which he has met his living expenses and the total amount from each source. In my view, the obligation should extend to paragraph 11(1) of the Bank’s draft but including a start date of 19 December 2017 and without including the words in parentheses. The proposed obligation in paragraphs 11(2) is disproportionate at this stage. As to the time within which this obligation must be complied with, I accept that the detail contemplated by paragraph 11 of Annex 3 will take some time to put together. However, I do not think that a further period just short of six weeks is required. In my judgment 28 days (i.e., by 8 December 2025) is sufficient.

The further disclosure to be given in accordance with paragraph 6 of the draft DDO is the next issue in dispute. I am satisfied that it is reasonable for the Bank to be granted this relief in relation to Mr Kolomoisky’s UR and Non-UR Assets notwithstanding his imprisonment. Taking into account Mr Kolomoisky’s imprisonment and the difficulties to which this may give rise for him in complying with the order, I think that the right time for compliance by Mr Kolomoisky is 5 December 2025 in relation to the Non-UR Assets and 5 January 2026 in relation to the UR Assets. Consistently with the language used elsewhere in the DDO, the nature of Mr Kolomoisky’s obligation is to use “all reasonable endeavours” recognising as before that this may require Mr Kolomoisky to incur reasonable expenditure to ensure that the steps are indeed taken and that the extent of what he can do may be affected by his imprisonment. I consider that the position is clearer if paragraph 6(a) is limited to the obligation imposed on Mr Bogolyubov while 6(b) should be limited to the obligation imposed on Mr Kolomoisky.

Mr Bogolyubov’s solicitors (Enyo) have now written to explain some of the difficulties which he is having in complying with what he had previously agreed in relation to the identification of his UR and Non-UR Assets and seeking a further extension from the agreed 5 November 2025 deadline in relation to his Non-UR Assets. The Bank’s solicitors have responded with a compromise involving the provision of an affidavit at this stage explaining the extent of the enquiries so far undertaken. Although I am sceptical about some of the reasoning in Enyo’s letter, in my view the Bank’s suggested rewording does not provide a satisfactory solution. The right answer is that Mr Bogolyubov should have until 5 December for his disclosure obligation in relation to both his UR and his Non-UR Assets.

As to the paragraph 7 obligation, the opening words of the paragraphs are to read “Henceforth, the First Defendant shall use all reasonable endeavours within two weeks and the Second Defendant shall within three days …”

There is then a dispute over the form of paragraph 9 of the draft DDO which is concerned with the period of time which Mr Kolomoisky should have to disclose certain trust deeds, declarations of trust and other written records of trust and nominee arrangements. Again I am satisfied that in all the circumstances of the case, this disclosure is reasonably required by the Bank for the purposes of preserving the assets against which enforcement may be available. The timetable is agreed by Mr Bogolyubov, but not on behalf of Mr Kolomoisky for whom it has been submitted that it is too tight. Taking into account Mr Kolomoisky’s imprisonment and the difficulties to which this may give rise for him in complying with the order, I consider that the obligation should again be to use “all reasonable endeavours” on the same basis as before and the right time for compliance is 5 January 2026 for his Non-UR Assets and 26 January 2026 for his UR Assets.

The next issue relates to the precise wording of the self-incrimination exception in paragraph 11 of the draft DDO. The wording included by the Bank derives from the model form of freezing injunction referred to in CPR 25.14. The wording suggested by Mr Haydon on behalf of Mr Kolomoisky more accurately reflects the language of section 14(1) of the Civil Evidence Act 1968. I doubt that in practice there is very much difference between the two forms of words, but I see no reason to depart from the wording now included in the model form.

The next issue relates to paragraph 11A(a) of the draft DDO. It is in the same form as paragraph 30 of the draft WFO and the same issue arises. I therefore give the same answer on the language to be included (see paragraph 258 above).