A bare trust in a discretionary trust’s clothing

Mezhprom Bank v Pugachev [2017] EWHC 2426 (Ch)

Birss J demonstrated impeccable timing in handing down his decision in Mezhprom Bank v Pugachev [2017] EWHC 2426 (Ch) on 11 October 2017. The case concerned what the judge determined was a failed attempt by a Russian oligarch, Mr Pugachev, to hide from his creditors substantial assets – mostly land in the UK and abroad – in New Zealand trusts. Whilst these trusts might have appeared on first reading to be discretionary trusts, the judge found that Mr Pugachev retained such control over the trusts and the trustees that, when properly interpreted, the trusts amounted to no more than bare trusts for Mr Pugachev.