In a unanimous decision, the Supreme Court has confirmed that the right to draw down under loan agreements is caught by the expanded definition of “asset” contained in the current standard Commercial Court form of freezing order which includes “any asset which it (the respondent) has the power, directly or indirectly, to dispose of or deal with as if it were its own”: JSC BTA Bank v Ablyazov [2015] UKSC 64. The decision helpfully clarifies that:

  • freezing orders will be construed strictly in accordance with what the words in fact mean;
  • in the absence of the expanded wording now contained in the standard form of order, the right to draw down loans will not be frozen; and
  • the expanded wording does widen the scope of the order meaningfully and can include assets not “owned” by the respondent.

From a practical perspective, great care needs to be taken when drafting freezing orders to ensure that assets which the respondent is suspected of having are clearly within the scope of the order. It will be dangerous to assume that the word “assets” will necessarily have its everyday meaning in the context of a freezing order.


This decision arose in the course of the long-running litigation between Kazakhstan’s JSC BTA Bank and its former chairman and majority shareholder, Mr Mukhtar Ablyazov (“the Respondent”). Following the Bank’s nationalisation in February 2009, the Respondent fled from Kazakhstan to England. The Bank alleges that, during his time as Chairman, the Respondent misappropriated US$10 billion of the Bank’s monies for his own personal gain. The Bank commenced proceedings in England and successfully obtained a number of judgments against the Respondent.

The appeal in question concerned a freezing order made against the Respondent in November 2009. The order included the following wording, which is part of the current standard Commercial Court freezing order (though the second sentence, shown in bold below, was not part of the pre-2002 standard form of freezing order that is considered in much of the case law):

The order “applies to all the respondents’ assets whether or not they are in their own name and whether they are solely or jointly owned and whether or not the respondent asserts a beneficial interest in them. For the purpose of this Order the respondents’ assets include any asset which they have power, directly or indirectly, to dispose of, or deal with as if it were their own….”

The question arose as to whether rights under various loan agreements entered into by the Respondent in 2009 and 2010 (after the order had been granted) should be treated as “assets” for the purposes of the order. The Respondent had drawn down approximately US$40 million pursuant to the loan agreements and directed that monies be paid directly to third parties (as permitted under the loan agreements). The Bank argued that the rights to draw down under the loan agreements should be treated as “assets” and that, accordingly, the Respondent had breached the freezing order.


The Supreme Court found that the right to draw down loans would not qualify as an “asset” for the purposes of the standard pre-2002 form freezing order, without the expanded wording shown in bold above. Although the right to drawdown the monies was a chose-in-action (and therefore, on the face of it, an asset of the Respondent) which was capable of being the subject of a freezing order, there was a “settled understanding” in case law, that borrowings were not an asset of the respondent within the scope of the pre-2002 freezing order. The Supreme Court noted that it was open to it to overturn this previous case law, but declined to do so on the basis of clarity and certainty.

However, the Supreme Court held that the expanded wording (covering any asset which the respondents had “power, directly or indirectly, to dispose of, or deal with as if it were their own”) did include assets which were not owned by the Respondent, such as the right to draw down under a loan. Whilst the monies capable of being borrowed were not an asset of the Respondent, the Court held that “an instruction to a lender to pay the lender’s money … to a third party is dealing with the lender’s assets as if they were his own”.  Accordingly, the right to give instructions under the loan agreements was caught by the expanded wording.

In this aspect of the appeal, the Supreme Court rejected the Court of Appeal’s findings as to the meaning of the expanded wording in the freezing order. The Court of Appeal had given a narrow interpretation of the wording and held that the expanded wording did not capture the rights under the loan agreements. The Supreme Court made clear that this wording is designed to widen the scope of the freezing order and catch rights which would not otherwise have been caught. The Court stated that: “… the focus of the second sentence … is not on assets which the respondent owns (whether legally or beneficially) but on assets which he does not own but which he has power to dispose of or deal with as if he did.”

By way of general comment, the Supreme Court stressed that, because of the potential penal consequences of a breach, freezing orders remain subject to strict interpretation. When construing freezing orders, the court should focus on what the order in fact means, without considering the merits of a broader interpretation. If, based on the merits, it is considered that a freezing order should have a broader meaning than it in fact has, the correct solution is to vary the order, rather than expand its meaning.