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

The parties have produced a document dated 13 October 2025 called List of Issues for Determination, which identifies the issues for determination on the face of the CO, the WFO and the DDO. At the same time they also circulated new versions of the CO, the WFO and the DDO together with further supplementary written submissions (from which it is apparent that some of the points in the parties’ skeletons for the hearing have fallen away, while some different ones have emerged). All of this material, which has also been supplemented by further correspondence, was produced after the conclusion of the Second Consequentials hearing. I had hoped that the issues would have been narrowed much more than has proved to be the case and that it would be possible simply to accept or refuse to accept particular forms of words so that the order could then be sealed. Unfortunately the number and nature of issues in dispute means that this is not practicable and so a yet further version of the CO, the WFO and the DDO will have to be drawn up, having regard to the points of principle which I shall now determine.

Some of the matters still in issue on the latest draft of the CO have been resolved by determinations made elsewhere in this judgment (e.g. the precise amounts of the judgment sum and interest). The remaining outstanding points on the CO relate to the ring-fencing proposals and the stay more generally, to which I can now turn.

The first question arises on one of the recitals and is whether Mr Bogolyubov should be required to undertake (a) to use all reasonable endeavours or (b) to use best endeavours to take the steps identified in the penultimate recital to the CO. In broad terms this recital relates to the procedures he is to adopt for the transfer of cash and the proceeds of other assets to what is called the New Enyo Account. In my view the appropriate language is “all reasonable endeavours”, recognising that in this particular context that may require Mr Bogolyubov to incur reasonable expenditure to ensure that the steps he has undertaken to take are indeed taken.

The next question relates to the time periods within which Mr Bogolyubov will undertake to liquidate certain assets and transfer the proceeds of them into the New Enyo Account (also referred to in the penultimate recital to the CO). The Bank seeks 21 days, while Mr Bogolyubov seeks 28 days for three listed categories of asset and 36 days for assets held with UBP Switzerland and ING Bank. While I appreciate that Mr Bogolyubov has had the benefit of the period until the CO is made in order to make arrangements for the transfer, I accept that it is possible that there may be difficulties if a sealed order is not available particularly in respect of assets subject to freezing orders in local jurisdictions and the need for consent from the local regulatory bodies. The evidence as to this is not fully particularised, but there is enough to justify the longer periods sought by Mr Bogolyubov.

I have already explained my determination on interest for the purposes of paragraphs 2 and 3 of the draft CO. As I do not propose to grant a general stay, the proposals to extend time for payment of the judgment sum until after determination of the appeal will not be included in the CO and so the question of whether they should be 14 or 28 days thereafter do not arise. At the beginning of this judgment I explained that I could see no good reason to extend the standard period for payment of the judgment sum beyond the 14 days for which provision is made by CPR 40.11.

The next issue relates to living expenses being the first purpose for which the ring-fenced funds are to be used (CO, paragraph 3E(2)(a)). This is also an issue which arises on the form of WFO. The version of the WFO made by the Court of Appeal earlier in these proceedings allowed Mr Bogolyubov £151,600 per month. The court is required to consider what is just when setting the right figure, although the burden of persuasion is on Mr Bogolyubov as the facts relevant to his assets and spending requirements are within his own knowledge and not that of the Bank. The court must make its assessment having regard to a range of factors including whether there are assets not caught by the freezing order which could be used to make the relevant payments, and whether the Court has received complete disclosure of Mr Bogolyubov’s asset position.

The Bank also submitted that there was reason to believe that Mr Bogolyubov has been spending funds well in excess of this allowance and has not disclosed where the resources used to discharge those living expenses have been paid from. I accept that there is evidence to that effect, although I do not think it is either necessary or appropriate to make detailed findings as to the respects in which he personally might have expended more than the Court of Appeal’s allowance since the order was made in 2019. It suffices to say that there are credible indications that he may have done so, not least because the source of the cash said to have been used to pay many of his expenses to date is opaque and the means by which he has funded the maintenance of some of his assets such as the ‘Lauren L’ and a flat in Cyprus is difficult to understand.

Nonetheless, having regard to the concerns the court has about the incomplete nature of the information on the way Mr Bogolyubov has been funding his lifestyle since the WFO was first made, the only question is what is a reasonable figure taking into account the fact that he is now a judgment debtor with enormous undischarged liabilities, albeit subject to an application for permission to appeal. In my view the right figure is £30,000 per month, which is significantly less than the amount which Mr Bogolyubov was originally permitted to spend, but is in my judgment appropriate in light of the evidence and the stage which the proceedings have reached. This will therefore be the figure for inclusion in both the CO and the WFO.

The next issue relates to the total amount that has been ring-fenced for legal fees and expenses and what Ms Montgomery called “the specificity which is required in order to identify payments that can come out of the ring-fenced amount”. There are a number of aspects to this and the differences between the parties are identified in the draft of the CO at paragraphs 3E(2)(b) and 3E(3).

The first is whether there should be a breakdown on the face of the order of the amounts to be applied in payment of legal costs and expenses relating to particular sets of proceedings, which is the solution for which the Bank contends, or whether a single composite total ought to be included. At the time of the Second Consequentials hearing, Mr Bogolyubov was seeking US$23 million by reference to the nine itemised categories of legal expenditure to September 2026 as described in paragraphs 54 and 55 of Mr Maling’s 19^th witness statement (“Maling 19”) and paragraphs 15(ii) and 15(iii) of Mr Maling’s 21^st witness statement (“Maling 21”). The figure which the Bank says should be allowed as the aggregate of the nine categories of legal expenditure other than the costs of compliance with the CO, WFO and DDO is £14,745,000. Ms Montgomery submitted that the component elements of this figure advanced by the Bank were all reached by what she characterised as an arbitrary reduction in the amounts that had been identified by Mr Maling so as to produce a number that is almost exactly half of what had been asked for. Since the conclusion of the Second Consequentials hearing, Mr Bogolyubov has written to Hogan Lovells and the court seeking a further £1.5 to £2 million to enable him to defend new proceedings which the Bank commenced on 23 October 2025 against Mr Bogolyubov and his brother-in-law, Mr Stanislav Sheykhetov, for declarations relating to the ultimate beneficial ownership of certain interests in Hotel Split.

In my view, the estimates made in Maling 19 and Maling 21 are the appropriate starting point. They are made by a solicitor who has clearly advanced them in good faith, albeit on the basis of estimates produced by other lawyers in relation to proceedings of which he does not have the conduct. Bearing in mind that I cannot rule out the possibility that Mr Bogolyubov may have access to other sources of funding for payment of these fees, I nonetheless think that these estimates should only be reduced if it can be seen that they are overdone. I reach that conclusion in light of the purpose for which the ring-fencing is being introduced (viz., to minimise the potential for prejudice to Mr Bogolyubov pending determination of his proposed appeals).

However, in agreement with the Bank’s submission, I think that permitted expenditure must be identified as having been quantified by reference to the particular categories of legal expenditure identified in the language suggested by the Bank. The reason for this is so that there is no doubt as to how the total has been arrived at. For the avoidance of doubt the amounts to be included in the body of CO paragraph 3E(2)(b) based on Mr Maling’s evidence should be as follows:

The position is more complicated when it comes to the application for an additional ring-fenced fund in relation to the new proceedings against Mr Bogolyubov and Mr Sheykhetov. It is said on behalf of Mr Bogolyubov that it is unsatisfactory that the Bank had not raised the fact that these proceedings were already intended by the time of the Second Consequentials hearing. It is said that, if they had been raised as imminent at that stage, a further sum to be added to the ring-fenced amount would have been sought. By way of response, the Bank pointed out that Enyo have not yet been instructed to act or accept service in relation to these proceedings and it is clear from the correspondence that their estimate is only very approximate. It is also said in the Bank’s further Note to the Court that there may be additional headroom arising out of developments in the Shulman proceedings. Taking into account all of these considerations, I think that at this stage the appropriate course is to add a further £500,000 to the figures to be included in the body of CO paragraph 3E(2)(b).

I should add that the opening words of paragraph 3E(2)(b) of the CO contemplate a single aggregate figure to be identified as the relevant element of the ring-fenced funds either currently in or to be transferred into the New Enyo Account. That amount should be included as a figure in sterling amounting to the aggregate of the nine categories of legal expenditure using an exchange rate for the US$ and € amounts for the day before the order is made.

In light of the fact that the permitted expenditure has been quantified by reference to the allocations I have identified (based as they are on Mr Bogolyubov’s own evidence), I think it is appropriate for the notification provisions in CO, paragraph 3E(2)(b) to extend to an obligation to notify Hogan Lovells of the legal proceedings to which each particular element of expenditure relates. It is accepted that payees should be identified, which in a number of instances will immediately identify the general purpose of the expenditure and I do not see that there is any principled distinction between that situation and the breakdown in relation to Enyo’s fees. I think that this level of policing is justified at this stage, and I do not consider that this limited further information is likely to give rise to any privilege issues. The Bank’s suggested language in the 4^th last line of CO, paragraph 3E(2)(b) should therefore be included although the words “without prejudice to any claim to privilege,” should be inserted between “and” and “where”.

However, the fact that notification of the type sought by the Bank is necessary for some level of control over legal expenditure does not mean to say that Mr Bogolyubov should be restricted by paragraph 3E(3) of the CO from using the funds referred to in one of the sub-paragraphs to 3E(2)(b) on legal costs relating to proceedings described in another of the sub-paragraphs to 3E(2)(b). In my judgment this would be too restrictive and the appropriate balance is struck by the fact that the notification procedures mean that the Bank will know where this has occurred and can apply if it is being abused. This result can be achieved by not including “(i)-(viii)” after (b) in the second line of the 13 October draft of the CO.

The next question is what should be ring-fenced for the purposes of paying legal costs fees and disbursements required to comply with the CO, the WFO, the DDO and any other order made in these proceedings (CO, paragraph 3E(2)(c)). At the time of the oral argument at the Second Consequentials hearing the issue was should it be £12 million (Mr Bogolyubov’s position) or should it be £2.9 million (the Bank’s position)? At first blush Mr Bogolyubov’s figure seemed to be extraordinarily high. Ms Montgomery submitted that it was all down to the very large number of foreign asset-holding corporate entities (306 of them) which needed to be kept alive to ensure compliance with the terms of the WFO. She illustrated this by reference to a schedule that those fees included such work as an annual monitoring fee charged by the agent and annual fees for the provision of a registered agent, a registered office address, a secretary, a director and two nominee shareholders for an identified period.

Having regard to the nature and extent of the relief sought by the Bank, the new version of the WFO and the DDO and also taking into account the underlying purpose of the ring-fencing provisions, I have reached the clear, albeit reluctant, conclusion that Mr Bogolyubov’s figure is the right one to include, subject only to the fact that I disagree with Mr Bogolyubov’s proposal in relation to the Emmetica Holdings £500,000. I recognise that the amount seems extravagant and I am conscious of the possibility that there may be an element of overcharging and that there may be other readily available sources from which the outstanding fees and the fees to be incurred may be capable of being paid. I also considered whether I should apply what would be a little more than an arbitrary reduction to reflect my scepticism of the true costs, but in the end determined that this was not the right way to proceed. In my judgment, it is in no party’s interests for non-payment of what might appear to be the extravagant demands of the CSPs to result in either (a) further obfuscation of a proper understanding of the Individual Defendants’ asset-holding structures or (b) unnecessary argument as to why it has been difficult or even impossible to comply with the terms of the WFO or the DDO. In the absence of clear proof of other liquid resources, payment of these amounts is part of the price for the refusal of a general stay of execution and for facilitating full compliance with the WFO and the DDO.

I should add that, since the conclusion of the Second Consequentials hearing, it has become apparent that Primecap has gone into liquidation and (on 15 October) Hogan Lovells wrote to the court saying that this had an impact on the amount to be set aside for its assistance. They sought a substantial reduction given that £2.1 million of the £12 million related to historic fees due to what was a company now in liquidation and should not have to be paid. The difficulty with this submission is that the liquidators have informed Enyo that they will only assist going forward if the historic debt is discharged. I cannot say that this is a contrived position, and so it seems to me that the intervention of the Primecap liquidation does not affect the right answer.

I determine the remaining points on paragraph 3E of the draft CO as follows:

Paragraph 3F of the draft CO contains a form of words explaining the parties’ intention to agree a charge over the New Enyo Account. The language has very recently been agreed, and I am not therefore asked to resolve any dispute in relation to it.

The figure for interest that I have already determined to be payable by the Corporate Defendants (paragraph 55 above) is to be included in paragraph 4 of the draft CO and the time for payment will be 14 days as anticipated by paragraph 5 of the draft CO.

Paragraph 4C raises an issue on the question of how much of any sums transferred to Fieldfisher's client account in accordance with paragraph 4A should be ring-fenced for Mr Kolomoisky to use to fund legal fees and to enable compliance with the terms of the WFO and the DDO. The amount to be paid in accordance with paragraph 4A is Mr Kolomoisky’s share of certain assets held jointly with Mr Bogolyubov at UBP Switzerland and ING Bank. They are listed in Schedule D to the CO and are three of the four assets identified as “Other assets subject to the Second Defendant’s undertaking” listed in Schedule C to the CO (see paragraph 219 above).

Mr Haydon said that the entirety of the sums transferred should be ring-fenced, while the Bank submitted that the ring-fence should be limited to 50%. Mr Kolomoisky submitted that, if the whole amount was not to be ring-fenced, it should be the first £3 million of any sums transferred. Since the conclusion of the Second Consequentials hearing Fieldfisher have written to explain that 50% of what they understand to be Mr Kolomoisky’s interest in the assets in Schedule C is not enough to cover their outstanding fees and Mr Kolomoisky’s future legal fees and expenses in relation to any appeal in these proceedings and compliance with the CO, the WFO and the DDO and any other orders of the court in these proceedings.

In my judgment the alternative order sought on behalf of Mr Kolomoisky is the correct order and, on such evidence as there was, serves to extinguish any stifling argument there may have been. Mr Kolomoisky should be permitted to use up to £3 million of his share of the Schedule C / D assets to fund Mr Kolomoisky’s legal expenses as described in Fieldfisher’s letter, with any excess to be transferred to Hogan Lovells in partial satisfaction of Mr Kolomoisky’s costs liability under paragraph 9 of the CO.

Paragraphs 9(1) to 9(5) are to be completed to reflect the determinations I made earlier in this judgment. Paragraph 9A is to be deleted. Paragraph 10 is to provide for the parties to have permission to apply on the papers for determination of the costs of the applications made at the Second Consequentials hearing. The parties are urged to make every effort to agree an appropriate order.