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Akhmedova v Akhmedov & Ors (Injunctive Relief) [2019] EWHC 1705 (Fam)

An application for injuctive relief relating to a Liechtenstein establishment.

Knowles J's judgment granting a wife, Ms Akhmedova ('W') mandatory and prohibitory injunctions against one of the ciphers / alter-egos of her husband, Mr Akhmetov: "Straight" (the 6th respondent in the substantive proceedings). The judge also granted W's application to name the de facto directors of straight in a penal notice for enforcement purposes.

Thomas Acquinas famously said, "If the highest aim of a captain were to preserve his ship, he would keep it in port forever". In this case that aim certainly rings true as W sought the English court's aid to preserve the only one of H's assets against which there will be any enforcement in the near future. This asset being a vessel worth €250 million under arrest in Dubai ('the vessel'). Straight is the current title holder of the vessel. W had a live application in the Marshall Islands to have the vessel registered in her name. If W succeeded in having the vessel registered in her name and it remained in Dubai then W would be able to take control of it.

The prohibitory injunctions sought were to (a) prevent Straight from permitting any voyage or movement of the vessel from Dubai and from encumbering it or disposing of it in any way that would frustrate or complicate the right to transfer it to W; and (b) prevent Straight doing anything to reduce the value of the vessel. The mandatory injunctions were sought to ensure that the prohibitory injunctions came to the attention of all relevant 3rd parties.

W submitted that while the orders if made may not be enforceable in Dubai or Liechtenstein that their practical utility derived from the de facto directors being lawyers and business people who would not wish to be the subjects of committal proceedings by the English court.

The background is that in December 2016, W was granted an award with a value equal to £453,576,152 at the conclusion of financial remedy proceedings following the breakdown of her marriage to H. The award included a modern art collection worth just over £90 million, a house and contents worth £12.5 million, a car worth £350,000 and a cash sum of £350 million. Save for around £5 million, the award remains outstanding in its entirety.

Since the award was made in 2016, H had done everything possible to frustrate W's attempts to enforce the award. The main thrust of his attempt to preclude payment to W were moving his key assets, including the art collection and the vessel, through various corporate entities.

At the time of the award, the vessel was held by an Isle of Man company. Following the award and in breach of freezing orders, the vessel was transferred through two separate Panamanian off-shore companies and finally to Straight, the current title holder. H had also re-registered as a Marshall Islands vessel (it was previously a Cayman registered vessel).

At the time of W's application, the English court had at an earlier hearing made her the legal and beneficial order of the vessel. The corporate veil was pierced and Straight had been made jointly and severally liable for W's financial remedy award. The vessel was under arrest in Dubai (arrest order granted by the Dubai Court of First Instance) where W was appealing a decision of the Dubai Court of First Instance not to recognise the English orders.

The urgency of W's application for further injunctive relief in this jurisdiction in respect of the vessel was that should her appeal in Dubai be unsuccessful, the arrest of the vessel would likely be lifted and H through Straight could attempt to move the vessel from Dubai. Even if the Marshall Island court registered the vessel in her name, the vessel may by that time have been put out of her reach. This would likely have the impact of making it practically impossible for W to enforce her ownership or realise the 2016 financial remedy award.

W, the court was told, had applied for injunctive relief in Liechtenstein where the directors of Straight were domiciled and where the company was incorporated. However, the Liechtenstein court required CHF 5 million as security before the injunctive relief could be served on H. This being a sum that W could not afford. W was appealing that decision but the time that appeal could take might render the applications redundant if H in the interim moved the vessel. Knowles J determined that the proceedings in Liechtenstein were no barrier to her granting the relief sought in this jurisdiction. The possibility of inconsistency between the orders in the separate jurisdictions insufficient to deny W the relief sought.

The judgment contains in-depth analysis of the rules on service overseas and the application of penal notices on directors of corporate bodies. In this case, Knowles J found that W's solicitors had done everything possible to bring the application to the attention of Straight and the interested parties. These steps constituted good service and the application. The court could not avoid compliance by simply refusing to engage and the court should take whatever steps it could to make the earlier orders effective. As a result, the application was treated as being on full notice. Penal notices were made against those individuals found by the court to be de factor directors of Straight. This the court considered would place those individuals on notice of the consequences if they failed to comply with the orders or caused straight to breach the orders made.

Case summary by Rachel Cooper, barrister, Coram Chambers

Full judgment: Akhmedova v Akhmedov & Ors (Injunctive Relief) [2019] EWHC 1705 (Fam) on BAILII