Kazakhstan Kagazy plc and others v Zhunus and others.

Posted on 21/11/2015 · Posted in Expert Witness, Financial Litigation

The claimants in this case are a group of companies previously owned and controlled by Messrs Zhunus and Arip (‘Z‘ and ‘A‘), the first and second defendants. The defendants are alleged to have defrauded the claimants of very large sums of money. A global injunction was granted over the assets of Z and A – some £72m. A further fraud was alleged and the claimants believed that US$45m had been misappropriated by them and therefore applied to amend their original particulars of claim to include this sum involving a third, fourth and fifth defendant.

The amendment application was a heavy one involving 1 ½ days court time and a day of pre-reading. It was unsuccessful and the claimants were ordered to pay the defendants’ costs. The statement of costs presented to the court was some £945,000 which the claimants considered out of proportion to the matter in hand and unreasonable. They requested an application to the court for a detailed assessment of the costs.

Whoever is careless with the truth in small matters cannot be trusted with important matters.”
Albert Einstein

Mr Justice Leggatt of the Commercial Court noted that the hearing requested was not in accordance with the terms of the court order and would not be appropriate. He stated that when deciding what costs were recoverable from another party, expenses could not be unreasonably sustained or excessive in amount: “A sense of perspective is … necessary.”. Further, the fact that the costs were disproportionate should not affect (whether by increase or decrease) any sum which it is reasonable to order the claimants to pay on account. The amount recoverable should be “the lowest amount which [a party] could reasonably have been expected to spend in order to have its case conducted and presented proficiently, having regard to all the relevant circumstances.” He ordered the Claimants to pay £120,000 on account of the defendants’ costs.

His Honour Judge Waksman QC (sitting as a Judge of the High Court) in a subsequent case in October dismissed the the Defendants’ various applications.

Expert Evidence Limited is a professional firm concentrating on the four main areas of dispute resolution; acting as expert witnesses in financial litigation, mediation, arbitration and adjudication. The firm has a civil, criminal and international practice and has advised in many recent cases. Areas of specialisation include banking, lending, regulation, investment, and tax.

Link: Kazakhstan Kagazy Plc & Ors v Zhunus & Ors [2015] EWHC 404 (Comm) (20 February 2015)

Link: Kazakhstan Kagazy Plc & Ors v Zhunus & Ors [2015] EWHC 3059 (Comm) (27 October 2015)

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