JSC BTA Bank v (1) Mukhtar Ablyazov (2) Ilyas Khrapunov  EWHC 1368 (Comm) concerns an application for full and proper disclosure of the Second Defendant’s method of funding the proceedings. Both Defendants were subject to a worldwide freezing order (WFO). The First Defendant had fled the jurisdiction and the proceedings were fought out between the Claimant Bank and the Second Defendant. Under the terms of the WFO, before paying his solicitors’ fees, the Second Defendant was obliged to explain where the money had come from. The explanation given was that his mother would be meeting his legal expenses. The Second Defendant believed that he was not required, by the terms of the WFO, to provide any explanation beyond that. The Bank’s case was that the Second Defendant’s mother did not have sufficient means of her own to pay the legal expenses and, therefore, believed that there was a real risk that the Second Defendant was using funds subject to, and in breach of, the WFO.
Patricia Robertson QC (sitting as a Judge of the High Court) considered that the issue for the Court to determine was not whether there had been a breach of the WFO but whether the Second Defendant should be ordered to make disclosure because there was a risk that he may be acting in breach of the WFO. Upon consideration of the facts of the case and a number of authorities, the Judge found that it is for the Claimant to establish that there are adequate grounds for making the order by showing that there was a real risk that frozen funds were being used. Once that risk was established, the court must then consider whether there are reasonable grounds for making the order by reference to discretionary factors, which included taking into account the weight of the evidence.
In considering references to the strength of evidence in earlier cases, the Judge said this at para 16 “However, those phrases express the Court’s view of the strength of the evidence before it in those particular cases, rather than setting a threshold which necessarily has to be met before an order can be made. Evidence may be such as to establish a risk which is real, and not fanciful, of a breach of the WFO, without being “strong” or making it “likely” that there is a breach of the WFO. As Christopher Clarke J put it, the strength (or otherwise) of the evidence is then a factor which needs to be weighed with other considerations for and against making an order”.
The Court found that all the applicant need show is that there is a real risk of a breach of the WFO and the Court will be open to consider making a disclosure order in the interests of policing its own orders. In such circumstances, the evidential burden then falls on the respondent. This is not dissimilar to the ‘Pamplin Procedure’ (Pamplin v Express Newspapers Ltd  1 WLR 689) followed in applications for disclosure of retainers in detailed assessment proceedings. Paying parties must first raise a ‘genuine issue’ as to the validity of the retainer. If the Court finds that there is a genuine issue to be answered, the evidential burden then passes to the receiving parties who are put to their election to either disclose the retainer or prove its validity by ‘other evidence’.
In relation to WFOs, it is the need for a suitable mechanism that enables the court to police its own orders that underlies the test applied in those cases. In relation to detailed assessment of costs it is, perhaps, the need for a suitable mechanism that enables the court to police the legal profession that limits the applicant’s burden of proof to the formation of a genuine issue.
In this instance, the Judge found that the Claimant Bank had shown there to be a real risk that the WFOs may be being breached. Applying the discretionary factors, including the Court’s assessment of the evidence, the Judge found in favour of making the disclosure order, even though the evidence did not raise a strong (as opposed to good arguable) case of a breach.