This section summarises orders granted to prohibit the disposal of funds held in a Liechtenstein bank.
In May 2017, Tatiana filed a criminal complaint with the Public Prosecutor against the Farkhad, Cotor Investments SA and persons unknown based on a suspicion that the offence of prevention of enforcement had been committed contrary to section 162 of the Liechtenstein Criminal Code. That section makes it an offence punishable by imprisonment for a debtor to conceal, discard, dispose of or forfeit any part of his assets, or to acknowledge a non-existent liability, or otherwise to actually reduce the appearance of his assets, thereby preventing or reducing the satisfaction of a creditor by way of foreclosure in pending proceedings. Essentially the complaint was that Farkhad and Cotor Investments SA had transferred the Artwork and the Monetary Assets away from Cotor Investments SA knowing that enforcement proceedings may take place in view of the pending court proceedings in England.
The Liechtenstein courts thus opened a criminal case and, during the course of his investigation, certain orders were granted to the Public Prosecutor.
The first tranche of these orders prohibited another Liechtenstein bank, Bendura Bank AG [“Bendura”] from disposing of funds held in certain accounts held in the name of (a) Sobaldo in its capacity as trustee of the Longlaster Trust and (b) Counselor in its capacity as trustee of the Carnation Trust, in each case up to the amount of £350 million. These orders were made under section 97a of the Liechtenstein Criminal Procedure Code which permits the court, on the request of the Public Prosecutor, to freeze assets where it is feared that, otherwise, steps might be taken which would jeopardise a subsequent order for the forfeiture of assets obtained for or under the commission of a criminal offence.
Source: judgment of Mrs Justice Knowles dated 2 October 2019 at [21]-[22]
There have however been substantial losses of the $350 million frozen by the Liechtenstein freezing order in the criminal proceedings. The Wife’s inspection of the criminal files in Liechtenstein has revealed that of that amount, as at June 2020 the Liechtenstein trusts have lost just under £300 million through poor investment.
Source: judgment of Mrs Justice Knowles dated 14 August 2020 at [111]