On 19 June 2018, the Court of Appeal dismissed the appeal of National Bank of Kazakhstan (“NBK”) and the Republic of Kazakhstan (“ROK”) in a dispute arising out of the freezing of assets comprising part of the National Fund of Kazakhstan.
In 2013, a Mr Stati and others (“the Stati Parties”) obtained an arbitral award against ROK for over half a billion US dollars. In 2017, the Stati parties obtained attachment orders in the Netherlands and in Belgium with a view to enforcing the award, and served those orders on The Bank of New York Mellon SA/NV (“BNYM”), a bank incorporated in Belgium which had a branch in London.
BNYM subsequently froze assets which it held under a Global Custody Agreement (“the GCA”) through which its London branch provided banking and custody services to NBK in respect of the National Fund of Kazakhstan. BNYM relied upon a clause in the GCA which provided that BNYM would not be liable for any delay or failure in the performance of any obligation arising out of any circumstances beyond its direct and reasonable control, including “any order … imposed by any … judicial … authority”.
NBK and ROK brought proceedings seeking declarations that BNYM was in breach, contending that the clause was not engaged by foreign court orders which were not recognisable in England or under English law. NBK’s and ROK’s claim failed at first instance. Their appeal to the Court of Appeal was dismissed on the grounds that both the language of the clause and the context in which the GCA was entered into led to the clear conclusion that NBK’s and ROK’s construction of the clause should be rejected.
A copy of the judgment can be found here.