Global aviation leasing firm BOC Aviation Limited has secured a temporary High Court order freezing the assets of a Russian-owned logistics company.
BOC, which is based in Singapore, secured the interim freezing orders, known as Mareva orders, that prevent the Dutch-registered Volga-Dnepr Logistics BV from reducing, lowering or dissipating its assets below a value of $406 million (€378 million).
The order was one of several granted on an ex-parte basis in favour of BOC against the defendant by Mr Justice Brian O’Moore on Friday.
BOC sought freezing orders, which are recognised globally, because it claims the defendant is taking steps to move assets in an attempt to frustrate a judgment the leasing company obtained last April in a New York court against the defendant for $406 million.
The Dublin court also granted BOC, which was represented in the action by Bernard Dunleavy SC and Ross Aylward, an order appointing a receiver over the defendant’s 68.7 per cent shareholding in its Irish subsidiary Volga-Dnepr (Ireland).
That order was also sought to prevent the shares, which the court heard cover an estimated $236 million in assets, from being dissipated, transferred or moved beyond BOC’s reach.
[ High Court order winds up two Russian aircraft leasing firms worth estimated €4.1bn ]
The court heard that the Irish subsidiary’s assets include three Antonov cargo aircraft located in Leipzig-Halle Airport in Germany, aircraft engines and various bank accounts held in Dublin, London and Frankfurt.
The judge further granted BOC an order allowing it to serve the defendant, which is located outside of the jurisdiction, with the proceedings.
The judge declined to make an order requiring the defendant to make certain disclosures about the company’s income, assets and liabilities to the plaintiff.
The judge said that it was not practical nor beneficial to BOC to make such orders at this stage of the proceedings, when the matter will return before the courts in the coming weeks.
The matter will return before the court later this month.
The judge also said he was granting the defendant company permission to come to court and seek to have the orders granted varied or removed, on 36 hours’ notice to BOC’s lawyers.
Seeking the orders, Mr Dunleavy said that his client had a fleet of 635 aircraft, leased to 86 airlines in 39 different countries, and total assets of $22 billion.
The defendant, counsel said, is an air cargo firm which is at the head of a complex group of logistics companies whose ultimate owner is wealthy Russian businessman Alexey Isaykin, who is the subject of international sanctions following Russia’s invasion of Ukraine in February 2022.
[ AerCap says aircraft delivery delays boosting leases, sales ]
The Volga-Dnepr group is believed to have assets of approximately $3.5 billion, $1.5 billion of which are held by the defendant company itself.
Counsel said BOC sued a Russian subsidiary of the Dutch company, which acted as guarantor on behalf of the subsidiary, over alleged breaches of leasing agreements the parties had entered into for three aircraft and 12 engines.
Last April, a New York court awarded BOC damages of $406 million against the defendant and its subsidiary.
The defendant has appealed that decision but did not seek to have a stay placed on the enforcement of the New York judgment.
Counsel said that, following the imposition of the sanctions, significant changes occurred within the Volga-Dnepr group.
BOC claims that these changes were made to put assets beyond the reach of it and others.
These steps include the placing of several former subsidiaries, including shares in an airline, into the direct ownership of Mr Isaykin and his associate, Ivanovich Shkiyanik, and other members of the group’s management.
In March 2022, the defendant company also paid a dividend of $126 million to a Luxembourg company believed to be owned by Mr Isaykin, which then entered into a loan agreement with a UAE-based firm also alleged to be part of the Volga-Dnepr group.
It was this pattern of activity, which counsel said began before and during the hearing of the action before the New York court, which led to his client’s concerns assets were being removed from the defendant in order to prevent his client from effectively enforcing its judgment.
It was the primary reason why his client was seeking to appoint insolvency practitioner Declan Taite as receiver over the defendant’s shareholding in the Irish subsidiary.
[ SMBC Aviation Capital seeks occupier for offices at new Dublin HQ ]
Counsel said that in order to enforce the US judgment against the defendant, which is part of a complex group of companies dispersed over multiple jurisdictions, BOC looked to identify various assets of the group, and where it should bring its proceedings.
Counsel said that BOC opted to bring an action before the Irish courts as the Irish subsidiary has, in accounts published in 2020, “assets of significant value”.
Attainable assets of the Dutch company are already the subject of court orders obtained in proceedings not involving BOC, counsel said.
In his ruling, Mr Justice O’Moore said while the application was an unusual one that involves complex issues. he was satisfied to make the freezing orders and appoint Mr Taite as receiver.
Not appointing the receiver, he added, would render BOC “toothless” in its attempts to have the defendant’s assets frozen.
The court noted allegations of significant amounts of money being moved by the entities linked to the defendant from the EU to the UAE, and of aircraft BOC had leased to the defendant being moved from airports in China and Hong Kong to Russia after sanctions came into being last year.
The defendant, he said, had in its application acted in “a proper and controlled way”.
The judge also said it was significant that the defendant had not sought to lodge money with the New York courts that would have enabled it to obtain a stay on the $406 million judgment pending the outcome of the appeal.
It was also significant that the defendant company had been the subject of fines imposed by the New York court after it failed to comply with various orders that court made over assets leased by BOC to the defendant, the judge added.
