Our client, Salim Shalabayev, was a witness in contempt
proceedings against his brother-in-law, Mr Ablyazov. He was
present to give evidence that he beneficially owned a property in
North West London (the 'Property') and that it was not the
property of Mr Ablyazov, who was the subject of large scale fraud
proceedings. Teare J disbelieved Mr Shalabayev, finding him an
unreliable witness and ruling that Mr Ablyazov was in contempt in
respect of non-disclosure of his assets. The Judge
established that, on the criminal standard, the Property belonged
to Mr Ablyazov.
JSC BTA Bank then applied for a charging order over the
Property. Mr Shalabayev tried to intervene, arguing the court
had no jurisdiction to grant a charging order in the bank's
favour over a property he beneficially owned but he was refused
permission to do so. The same judge (Teare J) considered Mr
Shalabayev's position to be an attempt to re-litigate an issue
- the findings from the committal proceedings - which had
previously been decided by another competent court (a
'collateral attack'), bringing the administration of
justice into disrepute and being an abuse of the court's
The Court of Appeal ruled that Teare J was mistaken and that Mr
Shalabayev should be given a proper opportunity to resist the
claims of the bank (who were represented in the appeal by Steven
Smith QC and Hogan Lovells International LLP) in relation to the
Property. In particular:
Mr Shalabayev had not had a proper forum to put forward his
case in the proceedings – being a witness in someone
else's committal proceedings was very different to being a
participant as an alleged contemnor. The judge's analysis was
significantly and inappropriately influenced by his adverse views
of Mr Shalabayev and Mr Ablyazov's credibility overall but this
did not mean Mr Shalabayev was not telling the truth on the
particular issue of ownership of the Property.
Mr Shalabayev's attempts to defend the bank's claim to
deprive him of his beneficial interest in the Property was not an
abuse of process and proceedings properly constituted as between
the bank and Mr Shalabayev in respect of the Property ownership
would not bring the administration of justice into disrepute.
A different Commercial Court judge should rule on the issues
concerning the ownership of the Property.
This decision highlights the necessity for justice to be done:
the Judge had incorrectly applied his overall view of Mr Shalabayev
and Mr Ablyazov to a distinct and separate issue (being the
ownership of the Property) meaning that Mr Shalabayev was deprived
of a fair chance to present his case.
The principle of collateral attack may apply where a party to
current proceedings was only a witness (rather than a party) in
previous proceedings but the practical reality is that it may be
difficult to run this particularly where, as here, the two
proceedings were notably different – the bank's
application for a committal order and its subsequent application
for a charging order – meaning there was no abuse of process.
The decision sets an important precedent and guidance as to
abuse of process by virtue of a collateral attack.
Case reference: Salim Shalabayev v JSC BTA Bank  EWCA
James Sheehan instructed by Withers LLP for the Appellant
and Steven Smith QC instructed by Hogan Lovells International LLP
for the Respondent.
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