CJSC Alfa Bank (Belarus) v Lek Securities Limited UK

CJSC Alfa Bank (Belarus) v Lek Securities Limited UK

There is a serious issue to be tried as to whether the assets held by the defendant (including those purportedly transferred to Quintet and those subject to the Trust Deed) belong to the claimant as trustee for its customers. The defendant has no beneficial interest in the assets and should be restrained from dealing with them. Damages are not an adequate remedy because the assets are held on trust for third parties. The cross-undertaking in damages, qualified by sanctions law, is appropriate.

Parties
Claimant/applicant: CJSC Alfa Bank (Belarus); Defendant/respondent: Lek Securities UK Limited
Jurisdiction
England and Wales
Judgment Date
26 November 2024
Procedural Posture
Commercial Court Application (proprietary Freezing Order) / Interim Application (without Notice)
Outcome
Interim proprietary injunction granted (without notice)
Legal Topics
Proprietary Injunction, Asset Freezing, Trust Assets, Sanctions Compliance, Breach of Agreement
Commercial Law Trusts Sanctions Proprietary Injunction Asset Freezing Trust Assets Sanctions Compliance Breach of Agreement

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Parties

CJSC Alfa Bank (Belarus)

Claimant/applicant

Lek Securities UK Limited

Defendant/respondent

Procedural Posture

Commercial Court Application (proprietary Freezing Order) / Interim Application (without Notice)

Legal Issues

  1. 1 Whether the defendant is entitled to deal with or dispose of assets held on trust for the claimant
  2. 2 Whether the transfer of assets to Quintet Private Bank Europe SA was lawful and compliant with sanctions and the parties' agreement
  3. 3 Whether the Trust Deed executed unilaterally by the defendant is legally effective

Ratio Decidendi

There is a serious issue to be tried as to whether the assets held by the defendant (including those purportedly transferred to Quintet and those subject to the Trust Deed) belong to the claimant as trustee for its customers. The defendant has no beneficial interest in the assets and should be restrained from dealing with them. Damages are not an adequate remedy because the assets are held on trust for third parties. The cross-undertaking in damages, qualified by sanctions law, is appropriate.

Court Disposition

Interim proprietary injunction granted (without notice)

Orders

  • The defendant is restrained from disposing of, dealing with, or diminishing the value of any asset constituted by or derived from the claimant's assets paid over pursuant to the agreement, including (1) all securities held or transferred to Quintet and (2) the cash balance of approximately $4.6 million held pursuant...
  • The defendant is specifically restrained from giving instructions to Quintet Private Bank Europe SA to dispose of, deal with, or diminish the value of the Quintet assets.