The defendant, Mr Pugachev, founded the claimant bank in the 1990s in Russia. The bank was put into liquidation in 2010 as a result, so the claimants alleged, of actions taken by or on the instruction of Mr Pugachev, who is said to have been the bank's ultimate beneficial owner and controller at the relevant times. The second claimant, Deposit Insurance Agency (DIA), was appointed by the Russian state as the bank's liquidator.

The claimants brought proceedings in Russia and in England (where Mr Pugachev currently resides) alleging fraud of over $2 billion. On 11 July 2014, the High Court granted a worldwide freezing order in support of the Russian proceedings. The freezing order was granted under section 25 of the Civil Jurisdiction and Judgments Act 1982, which allows the English court to grant interim relief in aid of foreign proceedings.

The freezing order covered assets that Mr Pugachev had the power (directly or indirectly) to dispose of or deal with as his own, including assets held or controlled by a third party in accordance with Mr Pugachev's instructions, up to the value of £1.17 billion. Paragraph 7(c) of the freezing order extended to "any interest under any trust or similar entity including any interest which may arise by virtue of the exercise of any power of appointment, discretion or otherwise howsoever". The freezing order required Mr Pugachev to disclose all his assets worldwide that exceeded £10,000 in value.

Mr Pugachev disclosed that he was one of a class of discretionary beneficiaries under five discretionary trusts. He refused to provide further details even though his London houses were known to be owned by the trusts and he had said that he was dependent on the trusts to pay his day-to-day expenses. The stated value of the other assets disclosed by Mr Pugachev was relatively low in the context of his reputed wealth.

On 25 July 2014, the claimants obtained a disclosure order requiring Mr Pugachev to provide further information about the trusts, including the identities of the trustees, the terms of the trusts and the trust assets. Mr Pugachev was granted permission to appeal the disclosure order. Separately, the trustees of the trusts applied to have the disclosure order set aside. The High Court refused the trustees' application, but gave them permission to appeal.

The issue before the Court of Appeal was whether the court had jurisdiction to order a member of a class of discretionary beneficiaries to disclose details of the trust and the trust assets and, if so, in what circumstances.

Mr Pugachev and the trustees argued that Mr Pugachev's interest as a discretionary beneficiary was outside the scope of paragraph 7(c) of the freezing order. They asserted that a respondent to a freezing injunction should not be compelled to disclose information about assets unless there is good reason to suppose that those assets will be available for the enforcement of a future judgment. They argued that, here, the assets of the trusts would not be available for execution because Mr Pugachev is merely one of a class of discretionary beneficiaries, and he would not be able to compel that the assets are available for execution.

The claimants responded that the disclosure order should be upheld to enable them to ascertain the true nature of the trusts and Mr Pugachev's interest in them.

In deciding in favour of the claimants, the Court of Appeal followed a line of cases that have ensured that assets are preserved (see box "The law on worldwide freezing injunctions"). It found that Mr Pugachev's interests under the trusts were caught by paragraph 7(c). It therefore considered whether Mr Pugachev could be compelled to provide the additional information sought by the disclosure order.

The court found that the courts have the power to make whatever ancillary orders are necessary to make a freezing order effective, and that the High Court had jurisdiction to make the disclosure order in this case. That power derives primarily from judicial precedent, but the court also considered Part 25.1(1)(g) of the Civil Procedure Rules, which enables a court to order that information is to be provided about assets that are, or may be, the subject of an application for a freezing injunction. The threshold for exercising this jurisdiction required "some credible material".

The court concluded that the High Court had both jurisdiction to make the disclosure order, and to refuse to set it aside, and that this discretion had been exercised permissibly in both cases. In the circumstances, the claimants should be allowed the opportunity to ascertain the true nature of Mr Pugachev's interest in the trusts. The court said that to deny further disclosure could allow "sophisticated and wily operators to make themselves immune to the courts' orders". The court acknowledged that, depending on what was disclosed under the disclosure order, there may be a good reason to suppose that, by one means or another, the trust assets would be susceptible to enforcement.

The Court of Appeal also upheld the requirement for DIA to provide an unlimited undertaking in damages in support of the freezing order, although it confirmed the principle that the court has discretion to accept an undertaking in damages from liquidators and other officeholders limited to the value of the insolvency estate. The court also allowed DIA's appeal of the order to fortify the undertaking in damages, reinforcing the principle that fortification should only be required if there was proper evidence of a significant risk of loss likely to result from the freezing injunction. The court found virtually no evidence of likely loss in this case.

This judgment is an important precedent that will have widespread application in freezing order cases, and affirms the English courts' broad powers to make ancillary orders to ensure the efficacy of freezing orders. The wording in paragraph 7(c) is not standard wording but it may become more widely used to ensure the efficacy of freezing orders in cross-border fraud cases.