SENIOR COURTS COSTS OFFICE
Strand, London, WC2A 2LL
B e f o r e :
| (1) KANAT SHAIKHANOVICH ASSAUBAYEV
(2) MARUSYA MARALOVNA ASSAUBAYEV
(3) BAURZHAN KANATOVICH ASSAUBAYEV
(4) AIDAR KANATOVICH ASSAUBAYEV
(5) SANZHAR KANATOVICH ASSAUBAYEV
(6) HAWKINSON CAPITAL INC.
(a company incorporated in the British Virgin islands )
(7) JSC CREDIT ALTYN BANK (in the management of the FMSC)
|- and -
|MICHAEL WILSON & PARTNERS, LTD.
(instructed by Reed Smith) for the First to Sixth Clamiants
Mr David Holland QC and Mr Paul Joseph
(instructed under the Public Access Scheme) for the Defendant
Hearing dates: 21st and 24th June 2012
Crown Copyright ©
"Pursuant to section 9 of the Arbitration Act 1996 and/or inherent jurisdiction of the court, all further proceedings in this action be stayed".
"Michael Wilson contend that they are legal advisers. In that capacity, Michael Wilson advised all seven Claimants in significant disputes with various entities including OJSC Polyus Gold, Polygus International, Jenington International Inc, Kazakhgold Group Ltd and their various subsidiaries, related companies and affiliates. The Claimants are all residents in Kazakhstan and all were parties to an engagement letter dated 2 July 2010 which set out the terms on which Michael Wilson would be retained on their behalf. According to Mr Patrick Beale, Mr Bacon's instructing solicitor, Michael Wilson handled "a very major piece of commercial litigation" on the Claimants' behalf (see his first witness statement dated 15 August 2009), in respect of which the firm issued 26 invoices amounting to $8,605,030.03 for its work. The Claimants have objected to the invoices. In their view, the engagement letter (and a further separate letter of engagement dated 24 August 2010 between Michael Wilson and the Fourth Claimant) are unfair, unreasonable and should be set aside. The Claimants further assert that the fees charged by Michael Wilson are excessive and they wish to exercise their statutory rights under Section 61(1) and Section 61(2) Solicitors Act 1974, before they pay Michael Wilson any more money."
i) Arbitration proceedings initiated by MWP against all the Claimants and also against Gold Lion Holdings Limited ("GLH") under LCIA Arbitration number UN111913;
ii) These proceedings under the Act initiated by the Claimants for the relief set out in paragraph 4 of Campbell 1 namely :- (a) for an order pursuant to Section 61(2) of the Act that the letter of engagement (which they consider to be a contentious business agreement) dated 2 July 2012, be set aside as being unfair and unreasonable; (b) for an order pursuant to Section 68 of the Solicitors Act 1974 that MWP deliver a bill of costs to the Claimants; and/or (c) for an order for the detailed assessment of MWP's bill (whether as delivered or of the invoices already issued by MWP).
"1. In this action the Claimants make claims for recovery of what is alleged to be fraudulently obtained property and for damages amounting in total to over US$ 400 million. Peter Smith J granted a worldwide freezing order made against the Defendants on 23rd June 2010 and at the same time ordered the Defendants to disclose the whereabouts and details of their assets in support of that freezing order….
4. It would not be an exaggeration to say that the Claimants' applications have resulted thus far in a huge amount of litigation activity since 23rd June 2010, including some fourteen hearing days, including today. Indeed Mr John Wardell QC, leading counsel for [Kanat, Marusya and Sanzhar Assaubayev] told me that his clients had already incurred more than GBP £1 million in legal costs in their efforts to comply with the court's orders."
"... The three individual defendants concerned are (1) the first defendant, Mr Kanat Shaikhanovich Assaubayev, whom I shall call "Kanat", (2) the second defendant Mrs Marusya Maralovna Assaubayev, whom I shall call "Marusya", Kanat's wife and (3) the fourth defendant, Mr Sanzhar Kanatovich Assaubayev whom I shall call "Sanzhar", who is the son of Kanat and Marusya …"
"(2) The defendants have shown themselves keen, if not desperate, to obtain the return of their passports. I make no complaint about that…"
THE ENGAGEMENT LETTER AND SECOND ENGAGEMENT LETTER
"Dear Madam and Sirs
Letter of Engagement
This letter sets out the terms and conditions of our engagement.
1. Engagement of scope of work
We are pleased that all of the above persons and entities, acting jointly and severally and accepting joint and several liability for all fees and costs, have selected Michael Wilson and Partners Limited (MWP) with effect from 2nd July 2010, to provide you and your affiliates ("you") with legal services in relation to the Kazakhstani aspects of the issues in dispute that have arisen ……(collectively hereafter referred to as "Polyus") relating to and involving whether directly or indirectly, Kazakh Gold Plc and KazakhAltyn JS, and its businesses, affairs assets and liabilities (the "Project"), together with such other services as you may request MWP to carry out, from time to time…
3. Billing, Payment and Success fees.
Details of the basis of our fees and disbursements are set out in schedule 2 attached to this letter.
MWP will issue bills at frequent intervals (usually monthly). MWP require our bills to be paid promptly and in any event within ten(10) days after they are issued….
We have also agreed that MWP will be entitled to bill, charge and be paid a success-fee equivalent to fifty percent (50%) of its professional fees, plus disbursements at 7.5% of such fees and VAT at 12% on such fees in the first, in the event of success being achieved for your (sic) in relation to the Project with such "success" being defined as any one or more of the following …
8. Governing Law and Disputes.
This letter shall be governed by and construed in accordance with the substantive laws of England and Wales, in force from time to time…
At the absolute discretion of MWP, any dispute may be referred to mediation conducted under London Court of International Arbitration ("LCIA") Mediation Procedure then in force. The mediator shall be agreed by the Parties within fifteen (15) calendar days after the date of referral of the dispute to the LCIA, or, in default of agreement, shall be appointed by the LCIA.
If the dispute is not settled by mediation within sixty (60) calendar days of the appointment of a mediator, or such further period as the parties shall agree in writing, or MWP does not wish to mediate the Dispute in any event, the Dispute shall be settled at MWP absolute discretion either by (i)The courts of Kazakhstan or (ii) The courts of the country where your registered office or principal place of business is situated (or the country of your domicile or residence if you are individual) or (iii) arbitration before the London Court of International Arbitration…..If MWP chooses arbitration then at the election of MWP there shall either be a sole (1) arbitrator or three (3) arbitrators…..
The place of mediation or arbitration shall be London, England, the English language shall be used throughout the mediation or arbitration proceedings and the mediator and arbitrator(s) must be fluent in the English language....
Summary of Key Personnel
Michael E Wilson
Michael is the founding partner of an international law firm with a large presence in CIS and has been permanently resident in Kazakhstan since 1995….Education: Manchester University,UK,1980, Chester Law School, UK, 1981..Business Associates ..Member of the Law Society of England and Wales…
Richard A Chudzynski
Native English speaker….admitted as a solicitor in England and Wales in 2005….
Schedule of fees and charges
5. Payment by wire transfer in US dollars Please remit to the following account:
Account Name: Michael Wilson Partners...
Bank Address PO Box 181, 27-32 Poultry London EC2P 2BX…."
Letter of Engagement
This letter sets out the terms and conditions of our engagement.
Engagement and Scope of Work
We are pleased that you have selected MWP to act for you personally ("you") with effect from 24th August 2010 with respect to your involvement as a Defendant in claim No: HC10C02125 before the Chancery Division of the English High Court in relation to the issues and dispute that have arisen with and involving Jenington International Inc, Kazakh Gold PLC and KazakhAltyn MMC JSC (the "Project") together with such other services that you may request MWP to carry out from time to time....
8. Governing Law and Disputes
This letter shall be governed by and construed in accordance with the substantive laws of England and Wales, in force from time to time…[the same clause relating to mediation and arbitration in the engagement letter is then set out]"
"....by mistake and have since been removed from it. MWP's Request for Arbitration referred only to MWP's claims against all the Claimants and GLH under the Engagement Letter, and not to any claims it may have against Third Claimant [Aidar], pursuant to the Separate Engagement Letter concluded with him alone".
"9.- Stay of legal proceedings
(1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties in the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.
(4) On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed."
"1. Qualifications for practising as solicitor.
No person shall be qualified to act as a solicitor unless—
(a) he has been admitted as a solicitor, and
(b) his name is on the roll, and
(c) he has in force a certificate issued by the Society in accordance with the provisions of this Part authorising him to practise as a solicitor (in this Act referred to as a "practising certificate") ...
20 Unqualified person not to act as solicitor
(1) No unqualified person is to act as a solicitor.
(2) Any person who contravenes subsection (1) is guilty of an offence and liable on conviction on indictment to imprisonment for not more than 2 years or to a fine, or to both....
21 Unqualified person not to pretend to be a solicitor.
Any unqualified person who wilfully pretends to be, or takes or uses any name, title, addition or description implying that he is, qualified or recognised by law as qualified to act as a solicitor shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fourth level on the standard scale ...
24 Application of penal provisions to body corporate.
(1) If any act is done by a body corporate, or by any director, officer or servant of a body corporate, and is of such a nature or is done in such a manner as to be calculated to imply that the body corporate is qualified or recognised by law as qualified to act as a solicitor—
(a) the body corporate shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fourth level on the standard scale, and
(b) in the case of an act done by a director, officer or servant of the body corporate, he also shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fourth level on the standard scale.
(2) For the avoidance of doubt it is hereby declared that in section 20 the reference to an unqualified person and the reference to a person both include a reference to a body corporate.
25 Costs where unqualified person acts as solicitor.
(1) No costs in respect of anything done by any unqualified person acting as a solicitor shall be recoverable by him, or by any other person, in any action, suit or matter.
(2) Nothing in subsection (1) shall prevent the recovery of money paid or to be paid by a solicitor on behalf of a client in respect of anything done by the solicitor while acting for the client without holding a practising certificate in force if that money would have been recoverable if he had held such a certificate when so acting.
50. Jurisdiction of Senior Courts over solicitors.
(1) Any person duly admitted as a solicitor shall be an officer of the Senior Courts:
(2) Subject to the provisions of this Act, the High Court, the Crown Court and the Court of Appeal respectively, or any division or judge of those courts, may exercise the same jurisdiction in respect of solicitors as any one of the superior courts of law or equity from which the Senior Courts were constituted might have exercised immediately before the passing of the Supreme Court of Judicature Act 1873 in respect of any solicitor, attorney or proctor admitted to practise there.
57 Non–contentious business agreements.
(1) Whether or not any order is in force under section 56, a solicitor and his client may, before or after or in the course of the transaction of any non–contentious business by the solicitor, make an agreement as to his remuneration in respect of that business...
(3) The agreement shall be in writing and signed by the person to be bound by it or his agent in that behalf.
59 Contentious business agreements
(1) Subject to subsection (2) a solicitor may make an agreement in writing with his client as to his remuneration in respect of any contentious business done or to be done by him (in this Act referred to as a "contentious business agreement") providing that he shall be remunerated by a gross sum (or by reference to an hourly rate) or by a salary or by otherwise and whether at a higher or lower rate than that which he would otherwise have been entitled to be remunerated...
[the matters referred to in subsection (2) are not relevant here].
60 Effect of contentious business agreements.
(1) Subject to the provisions of this section and to sections 61 to 63, the costs of a solicitor in any case where a contentious business agreement has been made shall not be subject to taxation or (except in the case of an agreement which provides for the solicitor to be remunerated by reference to an hourly rate) to the provisions of section 69.
(2) Subject to subsection (3), a contentious business agreement shall not affect the amount of, or any rights or remedies for the recovery of, any costs payable by the client to, or to the client by, any person other than the solicitor, and that person may, unless he has otherwise agreed, require any such costs to be taxed according to the rules for their taxation for the time being in force.
(3) A client shall not be entitled to recover from any other person under an order for the payment of any costs to which a contentious business agreement relates more than the amount payable by him to his solicitor in respect of those costs under the agreement.
(4) A contentious business agreement shall be deemed to exclude any claim by the solicitor in respect of the business to which it relates other than—
(a) a claim for the agreed costs; or
(b) a claim for such costs as are expressly excepted from the agreement.
(5) A provision in a contentious business agreement that the solicitor shall not be liable for his negligence, or that of any employee of his, shall be void if the client is a natural person who, in entering that agreement, is acting for purposes which are outside his trade, business or profession.
(6) A provision in a contentious business agreement that the solicitor shall be relieved from any responsibility to which he would otherwise be subject as a solicitor shall be void.
61 Enforcement of contentious business agreements
(1) no action shall be brought on any contentious business agreement, but on the application of any person who – (a) is a party to the agreement or the representative of such a party: or (b) is or is alleged to be liable to pay, or is or claims to be entitled to be paid, the costs due or alleged to be due in respect of the business to which the agreement relates, the court may enforce or set aside the agreement and determine every question as to its validity or effect.
(2) On any application under subsection (1) the court-(a) if it is of the opinion that the agreement is in all respects fair and reasonable, may enforce it (b) if it is of the opinion the agreement is in any respect unfair or unreasonable, may set it aside and order the costs covered by it to be assessed as if it had never been made; (c) in any case, may make such order as to costs of the application as it thinks fit....
68 Power of the court to order a solicitor to deliver bill etc
(1) The jurisdiction of the High Court to make orders for the delivery by a solicitor of a bill of costs and for the delivery up or otherwise in relation to, any documents in his possession, custody or power, is hereby declared to extend to cases in which no business has been done by him in the High Court….
69 Action to recover solicitor's costs.
(1) Subject to the provisions of this Act, no action shall be brought to recover any costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the requirements mentioned in subsection (2); but if there is probable cause for believing that the party chargeable with the costs—
(a) is about to quit England and Wales, to become bankrupt or to compound with his creditors, or
(b) is about to do any other act which would tend to prevent or delay the solicitor obtaining payment,
the High Court may, notwithstanding that one month has not expired from the delivery of the bill, order that the solicitor be at liberty to commence an action to recover his costs and may order that those costs be taxed.
(2) The requirements referred to in subsection (1) are that the bill must be—
(a) signed in accordance with subsection (2A), and
(b) delivered in accordance with subsection (2C).
(2A) A bill is signed in accordance with this subsection if it is—
(a) signed by the solicitor or on his behalf by an employee of the solicitor authorised by him to sign, or
(b) enclosed in, or accompanied by, a letter which is signed as mentioned in paragraph (a) and refers to the bill.
70 Assessment on application of party chargeable or solicitor.
(1) Where before the expiration of one month from the delivery of a solicitor's bill an application is made by the party chargeable with the bill, the High Court shall, without requiring any sum to be paid into court, order that the bill be assessed and that no action be commenced on the bill until the assessment is completed.
(2) Where no such application is made before the expiration of the period mentioned in subsection (1), then, on an application being made by the solicitor or, subject to subsections (3) and (4), by the party chargeable with the bill, the court may on such terms, if any, as it thinks fit (not being terms as to the costs of the assessment), order—
(a) that the bill be assessed; and
(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed.
(3) Where an application under subsection (2) is made by the party chargeable with the bill—
(a) after the expiration of 12 months from the delivery of the bill, or
(b) after a judgment has been obtained for the recovery of the costs covered by the bill, or
(c) after the bill has been paid, but before the expiration of 12 months from the payment of the bill.
no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the assessment as the court may think fit.
(1) In this Act, except where the context otherwise requires,—
- "contentious business" means business done, whether as solicitor or advocate, in or for the purposes of proceedings begun before a court or before an arbitrator . ., not being business which falls within the definition of non–contentious or common form probate business contained in section 128 of the Senior Courts Act 1981
- "contentious business agreement" means an agreement made in pursuance of section 59;
- "non–contentious business" means any business done as a solicitor which is not contentious business as defined by this subsection;
- "the roll" means the list of solicitors of the Senior Courts kept by the Society under section 6;
- "solicitor" means solicitor of the Senior Courts;"
26. I was also referred to the following sections of the Legal Services Act 2007:-
"12. Meaning of "reserved legal activity" and "legal activity"
(1) In this Act "reserved legal activity" means—
(a) the exercise of a right of audience;
(b) the conduct of litigation;
(c) reserved instrument activities;
(d) probate activities;
(e) notarial activities;
(f) the administration of oaths.
(2) Schedule 2 makes provision about what constitutes each of those activities.
(3) In this Act "legal activity" means—
(a) an activity which is a reserved legal activity within the meaning of this Act as originally enacted, and
(b) any other activity which consists of one or both of the following—
(i) the provision of legal advice or assistance in connection with the application of the law or with any form of resolution of legal disputes;
(ii) the provision of representation in connection with any matter concerning the application of the law or any form of resolution of legal disputes…
18. Authorised persons
(1) For the purposes of this Act "authorised person", in relation to an activity ("the relevant activity") which is a reserved legal activity, means —
(a) a person who is authorised to carry on the relevant activity by a relevant approved regulator in relation to the relevant activity (other than by virtue of a licence under Part 5), or
(b) a licensable body which, by virtue of such a licence, is authorised to carry on the relevant activity by a licensing authority in relation to the reserved legal activity."
27. I was also referred to the Solicitors Code of Conduct 2007 as amended ("the Code"). Where they are relevant, I shall mention the sections when it is appropriate to do so.
This section has no associated Explanatory Notes
This section has no associated Explanatory Notes
THE COURT'S POWERS ON THIS APPLICATION
"In my judgment the language of Section 9 (1) plainly establishes two threshold requirements. The first is that there has been a concluded arbitration agreement and the second is that the issue in the proceedings is a matter which under the arbitration agreement is to be referred to arbitration. The first condition is as to the conclusion and the second is as to the scope of the arbitration agreement. Accordingly unless and until the court is satisfied that both these conditions are satisfied the court cannot grant a stay under section 9."
"…..section 9 (4) assumes that an arbitration agreement has been concluded and provides for situations where issues arise whether that concluded agreement is or may be in law "null and void, inoperative or incapable of being performed." In this context "null and void" means "devoid of legal effect"".
THE SUBMISSIONS FOR MWP
"31. The  Act requires the court first to examine whether or not there is a written arbitration agreement...which covers the subject matter of the action. If there is such an agreement, a stay is mandatory unless the court is "satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed". The onus of satisfying the court lies on the party resisting a stay...
46. As to the burden of proof, it is submitted that where, as here, the applicant can raise an arguable case in its favour of the validity of the arbitration clause, a stay should be granted: see Merkin, Arbitration Law at paragraph 8-33 citing Downing v Al Tameer Establishment (2002) 2 All ER (Comm).
47. The Bank contends that the case comes within the last sentence of para 17 of Lord Hoffman's speech, namely that the agreements, including the arbitration agreement was made without authority.
48. As to that it seems to me, firstly, that in the light of Mr Vataev's evidence it could be said that the agreements, including the arbitration agreement, were entered into without authority, but that it is not said that no agreement and no arbitration agreement with the bank came into existence; only that they are voidable by the court. They are not said to have been avoided by the bank.
49. In those circumstances the applicants have shown that an arbitration agreement was concluded but the Bank has not shown that it is null and void or inoperative or incapable of being performed. It may be that the bank will later establish one or more of these propositions but they have not done so yet. In these circumstances, Tekhinvest has established that there is an arbitration agreement and the Bank has not satisfied me that it is null and void, inoperative or incapable of being performed. That should ordinarily lead to a stay and in this case should do so."
"A proper approach to construction therefore requires the court to give effect, so far as the language used by the parties will permit, to the commercial purpose of the arbitration clause….
13. In my opinion the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator's jurisdiction. As Longmore LJ remarked at paragraph 17 "if any business man did want to exclude disputes about the validity of a contract, it would be comparatively easy to say so."
"A claim is made in respect of a contract where the contract:
(c) is governed by English law."
"34. The Claimants do not dispute that the arbitrator would have power to determine his own jurisdiction (pursuant to section 30 of the Arbitration Act) but consider that the court should determine the issue....
37. The Claimants do not dispute the arbitrator may be capable of determining the validity of the arbitration clause…."
"It is, I think, true that a party cannot achieve by estoppel what it could not achieve by express agreement to the same effect."
THE SUBMISSIONS FOR THE CLAIMANTS
"In reference to a topic which has been alluded to in the argument, I will say that, if any solicitor tells a client before hand, that he will not undertake his business, if his bill is to be taxed; or if any solicitor, in the progress of a cause, gives his client to understand, that he will go on with it or not go on with it, according as his bills are to be taxed or not to be taxed, I think it my duty to say, that judges of the land will not permit him to be a solicitor in any other cause. I do not believe that any judge would allow a solicitor, who had so acted, to continue on the rolls: and I will not permit it to be intimated, that a solicitor will act, if his bills are not to be taxed, but will not act, if his bills are to be taxed. "
"The principle which, in my view, emerges from this line of authority is as follows. Where it appears that the mischief that Parliament is seeking to remedy is that a situation exists in which the relations of parties cannot properly be left to private contractual regulation, and Parliament therefore provides for statutory regulation, a party cannot contract out of such statutory regulation (albeit exclusively in his own favour), because so to permit would be to reinstate the mischief which the statute was designed to remedy and to render the statutory provision a dead letter."
"One's mind naturally turns to provisions which are often found in contracts providing for a decision of disputes by an arbitrator, the common arbitration clause. After considerable doubt, the position of an arbitration clause appears to have been settled by Scott v Avery [(1856) 5 H.L.C. 811] as being valid, provided that it merely requires as a condition precedent to the bringing of legal proceedings upon the contract that there shall have been an arbitration fixing the amounts to which the parties are entitled; and, on the other hand, that anything which goes beyond that, and attempts to deprive the parties of their right to bring an action is unlawful as an attempt to oust the jurisdiction of the court."
"My Lords, it is well established by a long line of authority that a contracting party will not in normal circumstances, be entitled to take advantage of his own breach as against the other party. In Rede v Farr, (1817) 6 M. & S. 121, Lord Ellenborough C.J. said, at pp.124-125:
"In this case, as to this proviso, it would be contrary to an universal principle of law, that a party shall never take advantage of his own wrong, if we were to hold that a lease, which in terms is a lease for twelve years, should be a lease determinable at the will and pleasure of the lessee: and that a lessee by not paying his rent should be at liberty to say that the lease is void. On this principle, even if it were not borne out so strongly as it is by the current of authorities, it would be sufficient to hold that the lease was only void as against the lessee, not against the lessor."
"Onerous or unusual terms. Although the party receiving the document knows it contains conditions, if the particular conditions relied on is one which is a particularly onerous or unusual term, or is one which involves the abrogation of a right given by statute, the party tendering the document must show that it has been brought anything fairly and reasonably to the other's attention. "Some clauses which I have seen," said Denning LJ, "would need to printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient."
"I would prefer to put the matter more broadly and to say that the question is whether the defendants have discharged the duty which lies upon them of bringing the existence of the clause upon which they rely (and if Mr Charkham is right, of the effect of that particular clause) to the notice of the other party in the circumstances of the particular case.
49. As I have indicated, in some extreme circumstances, even a signature might not be enough. On the other hand, in the present case there was an expressed acknowledgement. It seems to me given the nature of this term and condition and its effect, as relied on by the respondents, it cannot be said that the respondents failed in their duty to bring the existence of that term to the notice of the buyer …"
i) he has misled the court.
ii) he has carried out reserved activities in breach of section 20.
iii) he has given an address for services which is not a business address.
iv) as an officer of the court, the court is entitled to exercise jurisdiction over him.
"History behind MWP going on the Court record for the Third Claimant [Aidar], at the request of Messrs Allen and Overy…..English solicitors in relation to the English proceedings against him and what limited work was actually done "
"19. On or about 12th August 2010, Polyus made an application to debar the third Claimant from defending the proceedings and also for judgment in default to be entered against him…..
20. … In mid August 2010 all of A&O, CGSH, the Claimants and GLH asked MWP if it would be willing to act for and represent the third Claimant, in relation to the English proceedings. When MWP informed them it did not wish to do so because it was fully committed if not overstretched in acting for the Claimants…and also because it is not and never was an English firm of solicitors, does not practice English law and does not have a London office…
22. After continual requests and pressure from A& O, CGSH and the Claimants and GLH and also because they explained that in all likelihood there would be only be one or two hearings involving issues relating to the third Claimant (because the focus was on the other Defendants) before the long summer recess……MWP reluctantly agreed with the requests of A& O CGSH and the Claimants and GLH.
23. This agreement to go on the record for the third Claimant was on the strict condition and understanding that A& O and CGSH would provide MWP, at their cost, with all necessary background information and documents……This included all issues of English law and practice because A&O and CGSH understood that MWP was not and has never been a firm of English solicitors……
24. Accordingly, A&O, with the approval of CGSH, drafted an acknowledgement of service on behalf of the Third Claimant which it asked MWP to sign and which A&O then filed with the Chancery Division of the High Court…..
25. On 27th August 2010, while hearings were underway in relation to the other defendants, there was a short hearing relating to certain limited and relatively small matters involving the Third Claimant ... "
"18. MWP does not have and has never had an office in England and Wales ….
19. For the avoidance of doubt, the address at 25 Grove Road Barnes London was (from late August 2010) the rented family home of Marco Radosavljevic. Marco is an employee of MWP who currently lives and works in London……Although this address has occasionally and as a matter of logistical convenience, been given as a correspondence address it is not and has never been a business address of MWP. It is and has never been an office of MWP".
"The 3rd defendant filed an Acknowledgment of Service on 31 August 2010... The acknowledgment was filed by the solicitors acting for this defendant who have given the following name and address for service of documents: Michael Wilson and Partners 25 Grove Road Barnes London SW13 0HH"
"Re Jenington Intl & ors v Kanat Assaubayev & ors others
We write regarding the above litigation in relation to which you act on behalf of the Claimants. Mr Aidar K Assaubayev the third Defendant in the proceedings has just instructed us to represent him.
As we understand it there is a hearing presently ongoing before Mr Justice Peter Smith in the Chancery Division concerning various applications in these proceedings. These include (or included) at least three applications which were of direct and immediate relevance to the Third Defendant, namely:
(1) an application for third party disclosure against Yahoo! and Microsoft relating to the Third Defendants e-mail accounts
(2) an application for judgment in default of acknowledgment of service and/or defence pursuant to CPR 12.4(2)
(3) an application for an interim payment in the sum of US$ 179 million pursuant to CPR 25.7.
In addition, so far as we can see, the other matters of relevance or concern of the Third Defendant (which are not directly before the Court at this hearing) are the position in relation to the Court's earlier orders against the Third Defendant, particularly as to an affidavit confirming his asset position, as to the delivery up of his Kazakhstan passport and the highly unusual debarring order which was made against the Third Defendant with the effect of preventing him from defending himself in the proceedings….
The position of MWP
Having now been instructed it is our intention to come on the record in the proceedings as soon as we can. As you will appreciate, there is a 5 hour time difference between Almaty and London although this would not ordinarily be a problem, it has created difficulties in circumstances of such urgency where there is a court hearing ongoing…..
We are also in the process of instructing Leading and Junior counsel…..
Acknowledgement of Service.
Having taken instruction from the Third Defendant, we intend to file an acknowledgement of service on his behalf next Tuesday 31st August 2010……
Debarring order/trial timetable
...We will be issuing and serving an application to vary the debarring order, with the intention that this application will be heard at the same time as your client's application for default judgment and/or an interim payment. Our client's evidence will deal with all applications together and the proposed timetable will allow your clients an opportunity to respond in relation to all applications….
Applications for Default Judgment/Interim Payment
….We should, however, point out that in our view and that of Leading Counsel, this is the most extraordinary application. There are serious issues as to whether it appropriately falls within CPR 12.4 (2) at all. As a matter of substance, it appears to be an application for summary judgment. Furthermore there are various serious legal issues as to its subject matter including, in particular, (but without limitation) the obvious election which it involves and the attempt to avoid its consequences, as well as the considerable legal difficulties surrounding the alleged quantification of the Claimants' claims and the apparent attempts to avoid these by assignment……
In any event we propose the current timetable be slightly varied so as to allow ourselves and Counsel to prepare as follows…..
This proposed timetable is of course dependent upon the learned Judge being content for these further and very difficult applications to be treated as vacation business……
Given the urgency and the present procedural position before the Court we have sent a separate copy of this letter to Mr Justice Peter Smith."
FORMAL DECISION AND NEXT STEPS