The High Court has said there is ‘no merit whatsoever’ in claims by a Kazakhstani man accused over his part in a $6bn (£4.6bn) alleged fraud alongside his former banking executive father-in-law that returning to the UK for questioning would put him at risk of extradition.
In a ruling published this week, His Honour Judge David Waksman said there was no risk that Ilyas Khrapunov would be extradited from his current base in Switzerland to either Kazakhstan or Russia.
Waksman granted a default judgment in favour of BTA, finding Khrapunov liable for conspiring with Mukhtar Ablyazov. Khrapunov has been ordered to pay more than $424m (£229m), plus $75m interest.
Khrapunov is the son-in-law of the former chief executive of BTA Bank Ablyazov. He is accused of conspiring with Ablyazov to remove funds out of the reach of a previously granted freezing order.
According to Hogan Lovells, which represented BTA Bank, the case is one of the biggest fraud cases to have ever come before the English courts.
Khrapunov had previously been asked to attend court for questioning but declined citing extradition fears. Addressing those fears, Waksman wrote: ‘The truth of the matter is Khrapunov has the means and the ability to come here, if he wished, to object to this judgment…but he has not done anything of that kind. There is, therefore, no obstacle at all to my making the judgment in default as requested by the claimant.’
Richard Lewis, partner at Hogan Lovells, said: ‘This is an important decision, a key step forward in BTA’s attempts to recover the huge sums that have been misappropriated from it and the culmination of three years of intense litigation against Khrapunov, including important decisions in the Court of Appeal and Supreme Court that are likely to make it easier for fraud claimants to obtain redress in the English courts in the future.’
In March, the UK Supreme Court ruled that the English courts had jurisdiction to hear BTA’s claims. It dismissed Khrapunov’s claims that, as he is domiciled in Switzerland, the English courts had no jurisdiction over him.
However, the court cited the Lugano Convention, to which both the UK and Switzerland are parties, and which allows a claim to be pursued in the jurisdiction ‘where the harmful event occurred or may occur’. As the agreement between Khrapunov and Ablyazov was entered into in England, even though the breaches took place elsewhere, the court said the English courts could have jurisdiction.
The legal proceedings in England consist of 11 claims filed by BTA Bank in the High Court seeking to recover the funds misappropriated by Ablyazov. The bank has previously secured judgments for more than US$4.5 billion and is in the process of seeking to enforce those judgments.
Acting for BTA Bank Hogan Lovells instructed Stephen Smith QC and Tim Akkouh of Erskine Chambers. Hughmans Solicitors, which instructed Littleton Chambers’ Charles Samek QC and Mark Delehanty acted for Khrapunov.