Kazakhstan Kagazy Plc & Ors v Arip
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- THE RIGHT HONOURABLE LORD JUSTICE LONGMORE
- THE RIGHT HONOURABLE LORD JUSTICE ELIAS
Areas of Law
- Civil Procedure
- Contract Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
The court addressed key legal issues regarding the limitation period under Kazakh law, reflective loss doctrine, and duty of disclosure in the context of a freezing injunction related to alleged fraudulent schemes. The appeal and cross-appeal were dismissed based on findings that there was a good arguable case and proper handling of non-disclosure issues.
Judgment
Lord Justice Longmore:
This is an appeal by Mr Arip (the Second Defendant) against the refusal of HHJ Mackie QC to discharge a freezing injunction which he had himself granted at a without notice hearing on 2 nd August 2013. He did, however, reduce the amount originally frozen by the injunction. There is also a cross appeal. The appeals raise points on the Kazakh law of limitation, the English (and Manx) law of reflective loss and the duty of disclosure on without notice applications. For the reasons that follow I would dismiss both the appeal and cross appeal, insofar as it relates to the issue of reflective loss and costs below.
The parties
The First Claimant (“KK Plc”) is a company registered in the Isle of Man and the ultimate parent company of a substantial group of companies and limited liability partnerships in the business of logistics, recycling, and paper and packaging manufacture in Kazakhstan (“the KK Group”). KK Plc is the ultimate owner of the Second to Seventh Claimants, each of which is incorporated in Kazakhstan. KK Plc is quoted on the main board of the London Stock Exchange. I shall, except where it is necessary to distinguish between the Claimants, call them “KK”. In 2009 Mr Tomas Werner acquired substantial shareholdings in KK, became Chairman of KK Plc and, later Chairman also of KK Jsc.
Mr Zhunus was director and chairman of the board of KK Plc from its incorporation in the Isle of Man on 5th March 2007 until April 2008. He was also indirectly the beneficial owner of 50% of the shares in KK Plc until its IPO in July 2007 and then of 23.9% of the shares until September 2009. He was director and chairman of the board of the Second Claimant (“KK Jsc”) between 2003 and 14th July 2009. He is the First Defendant in the proceedings and the freezing injunction was originally granted against him as well as against Mr Arip but has now been replaced by an undertaking on terms offered by him. He has played no part in the appeal.
Mr Arip, the Second Defendant (and Appellant) was director and CEO of KK Plc from its incorporation until April 2008. He was indirectly the beneficial owner of 50% of the shares in KK Plc until its IPO and then likewise owner of 23.9% of the shares until September 2009. He was director and CEO of KK Jsc between October 2003 and July 2009. Mr Arip is from Kazakhstan but is no longer one of its citizens having acquired dual Cyprus and St Kitts and Nevis nationality.
A Third Defendant Ms Dikhanbayeva was the