In Kazakhstan Kagazy plc v Arip, Mr Arip, the director and CEO of the parent company of a substantial group of companies (in the business of logistics and recycling in Kazakhstan) appealed against the Commercial Court’s refusal to discharge a freezing injunction made against him. Mr Arip was accused of participating in two large frauds, stealing in total $135 million.
Mr Arip claimed to have a limitation defence, by virtue of the Foreign Limitation Periods Act 1984, under Article 18 of the Kazakh Civil code which allowed three years from the date when a claimant became (or should have become) aware that their rights had been violated.
In order to maintain a freezing injunction, a claimant must show that they have a good arguable case (not “a much better argument” as HHJ Mackie QC had found in the Commercial Court). The Court of Appeal will only interfere with a decision made by the Commercial Court if an error of law has been made.
In the Court of Appeal, Lord Justice Longmore stressed that applications to discharge freezing injunctions should not become mini-trials and that the actual trial of the underlying matter should not be anticipated. He was critical of the Commercial Court hearing, which had taken three days. The court took the view that it was very unlikely that the position in respect of the Kazakh time limit for fraud could be determined on an interlocutory basis, observing that it was difficult to see at that stage that the claimant “ought to have been aware” of the fraud rather than “ought to have suspected” it. On this basis, the court considered that the claimant satisfied the test of a good arguable case.
Mr Arip also made a number of complaints of non-disclosure against the claimant. The Commercial Court had upheld some limited aspects of the complaints but maintained the injunction in a lesser amount. Longmore LJ observed that issues of non-disclosure on freezing injunctions should be capable of being dealt with “quite concisely”. It was inappropriate to seek to set aside a freezing order where proof of non- disclosure depended on proof of facts which were themselves in issue in the action, unless the facts were so plain that they could be readily and summarily established; otherwise the application was likely to become a preliminary trial. It was also important to maintain a sense of proportion over the relevance and materiality of information. The Court of Appeal declined to interfere with the Commercial Court’s decision, noting that HHJ Mackie QC had a wide margin of discretion and was particularly well placed to make the decision as he had also made the initial freezing order.
Kazakhstan Kagazy plc and others v Arip  EWCA Civ 381