“(iv) The difficulties are of the claimant’s own making in that she has entered into funding arrangements with a funder who apparently cannot provide funds in this jurisdiction. Evidence which I have seen previously indicates (if it is true) that the trustee was not involved in the change of funder and she says she has no knowledge of how the funder is to be remunerated (the agreement with her does not provide for any sums to come from her or from the proceeds of the litigation) but even so she has to take the consequences of the negotiations of others.” 7. And: “(x) It has become less, rather than more, clear what funding route will or can be provided. Two anticipated routes (the Hungarian bank and Mr Lyuboshitz’s personal account have now been closed off). It is not clear what will happen about the Dubai route (Mr Elliot says it has not worked, rather than that it cannot be made to work), so the only possibility is the overwhelmed Spanish bank. No further alternative is suggested. No indication is given as to the prospects of that route bearing fruit. (xi) It is not apparent by what date the funding problem can be solved.”
“The defendant should be safeguarded in relation to costs, and so far as possible against extensive delays arising out of trying to find funding routes.”
“The claimant must pay the costs of this application and the costs thrown away as a condition for getting the adjournment. By pay, I mean actually pay. The way of achieving that is by my making an order that those costs, which I shall assess, shall be paid by 31 August, failing which the action will stand dismissed. I appreciate that this means that the (or a) funding route must be available by then but I require it nonetheless.”
“Third, the claimant is not to have an extended time to get the fund routing in place. There must be a date by which it is apparent whether a funding route is in place or not, and there must be a reasonable amount of clarity and transparency about the ability of the claimant to take the case to trial in terms of funding. I shall therefore make an order that the claimant must, by 31 August, certify through her solicitors that funding arrangements are in place to allow the October trial to take place and providing details of the banking route through which it will be provided. I will not allow this trial to be adjourned on a “let’s see what happens by the date of the trial” basis. I appreciate that this is an unusual order but the circumstances of this case justify it. I make it clear that it is the banking route that has to be provided, and a general certificate to the effect that funds are available, not full details of the source of the funding. If that certificate is not provided then again the action will stand dismissed.”
“The Claimant shall, by31 August 2024 , pay (i) the First Defendant’s costs of the Adjournment Application, and (ii) the wasted costs of the Original Trial (together the “Costs”), such Costs to be assessed on paper by Sir Anthony Mann following the filing of the documents set out in paragraph 3 below.”
“The Claimant shall, by31 August 2024 , file and serve a certificate (through her solicitors) stating (i) that funding arrangements are in place to allow the Adjourned Trial to take place and (ii) providing details of the banking route by way of which such funding order will be provided (the “certificate”).”
“In the event that the Claimant does not, by31 August 2024 , pay the Costs and/or file and serve the Certificate, the claim shall stand automatically dismissed without further order.”
“Pursuant to paragraph 4 of the order of Sir Anthony Mann dated28 June 2024 , we certify and confirm on behalf of the Claimant that: 1. funding arrangements are in place to allow the trial in these proceedings to take place; and 2. the route for the funding will be provided by Cezar Consulting Law Firm LLC, the Claimant’s funder, using the bank account of its owner, Mr Lyuboshits, at Raiffeissen Bank ZAO (Formerly) 17/1 Troickaya UL, Moscow, Russia to transfer funds directly to this firm.”
“I am not prepared to find that the certificate was false and inaccurate in relation to the matters in paragraph 1.”
“Mr Nurtdinov is important because he has an important liaison and probably lawyerly role. He has been described by Mr Lyuboshits in the past as “a dispute resolution lawyer with over a decade of experience in leading Russian law firms and family offices” who was “to manage the day-to-day running of the Financial Manager’s litigation and will be responsible for liaising between the Financial Manager [viz Ms Kireeva] and her English solicitors.”
“I do not think it quite right to reject his evidence and say that he knew of RB’s change of policy before he signed the certificate.”
“However, if that is right then another fact flows from it which is this. If Mr Elliot did not know, it was because he was not told. If that is right then both Mr Lyuboshits and Mr Nurtdinov must have effectively misled him by not telling him, and/or telling him that the direct route would be available, and allowing him to give a false certificate. The significance of this appears below.”
“I do not consider that I have to try to resolve any conflict which might exist between these cases for at least two reasons. First, the cases concern documents and compliance complaints which are different from the document in the present case and second, in any event, I consider that if bad faith is necessary, it has been established.”
“I consider that this document was not honestly provided.”
“If, contrary to my finding, the certificate was technically valid for some reason, nonetheless, reliance on it is an abuse of process because it should never have been provided.”
“17. …I consider that Mr Eschwege is plainly wrong about that. The word in the certificate [ie “directly”] is not immaterial. It imports that there is to be no intermediate step between the RB account and the solicitors’ account. Passing the monies through what is described as an agent is an intermediate step, and is significant in the context of the certificate. The requirement to specify a “route” for the funding arose precisely because at the time I required the certificate it was apparent there was no clear route for monies to leave Russia. The evidence was that attempts were made to engage an Italian and a Hungarian bank, and they failed. They were to have been part of the route. An attempt to transfer the money via some unspecified entity in Dubai was said to have not borne fruit. That is another route that failed. Some monies have been transferred from RB on a sporadic and limited amount basis, and it was not apparent that those transfers were anything other than bank to bank transfers (without an intermediate bank or other entity) but that was proving a problematic method of transfer. No solution had been proposed for how the money was to get from RB to the solicitors in a sufficient quantity. 18. It was in that context that I required the “route” to be specified so that it could be made plain how the money was to get from RB (or another account if that was where the money was) to the solicitors in the face of apparent difficulties in achieving that by a direct (I cannot avoid the use of that word here) transfer. What was required was that it be shown how it was that the money could leave Russia and end up in this jurisdiction when the evidence had indicated that that was very difficult, and the purpose of that was to ascertain whether it really was going to be possible to get the funds here for a trial so as to avoid the prospect of there being no funding for the claimant and that becoming apparent at a time when resources would be wasted in the apparent false expectation of a trial. Any intermediate steps would have to be specified as a part of the route. 19. Accordingly, when the certificate specified that the funds would be transferred “directly” it was making an important statement. It was saying exactly what that word means, which is a direct transfer from bank to bank without any intermediary. An interposed “agent” (whatever that might mean) is not a direct transfer. In fact, the word “directly” is the only thing in paragraph 2 which actually identifies a route at all. If that word were not there, all the paragraph would be doing is specifying a source. The money has to get from that source to the solicitors. That is via a “route”
“I confess to having a very significant degree of scepticism as to whether adequate arrangements were in place. There is more than a strong whiff of uncertainty. However, I do not find the certificate is false in this respect.”
“There was no route which had been ascertained, within the meaning of the certificate. Even at the date of the hearing before me no proper route has been specified other than a generalised statement about an allegedly standard route via an unspecified agent. It is plain that the certificate could not have been properly and accurately provided in terms which would fulfil the requirements of the order as at the date that it was required.”
“There is something to be said for Mr Bradley’s case that the validity of such a document should be tested by a “true or false” test without more, but I do not need to decide that because it is plain that bad faith will invalidate the document.”
“It is well-settled practice that if a court finds itself faced with conflicting statements on affidavit evidence, it is usually in no position to resolve them, and to make findings as to the disputed facts, without first having the benefit of the cross-examination of the witnesses. Nor will it ordinarily attempt to do so.” 42. Although, as is there pointed out: “This is not an inflexible principle: it may in certain circumstances be open to the court to reject an untested piece of such evidence on the basis that it is manifestly incredible, either because it is inherently so or because it is shown to be so by other facts that are admitted or by reliable documents …”
“I find it totally implausible on the facts that Mr Lyuboshits and Mr Nurtdinov did not know of RB’s change of policy on or after 15 August and before the certificate date. Whether or not they saw the actual publicity documents that I have seen, those announcements indicate, not surprisingly, that notification of RB’s change of stance was given to its customers.”
“Outgoing transfers in foreign currency at Raiffeisen Bank will become unavailable to all individual clients from September 2, 2024, the bank’s support service told its customers.”
“It would be particularly pertinent to give notice to Mr Lyuboshits and/or Mr Nurtdinov because they had been actively involved in getting funds out of the country to fund the litigation, and in particular the funds sent out in the last week of August. The need to get funds out of Russia must have been a frequent topic of contacts between the bank and those two individuals, and in that context it is inconceivable that the bank did not tell them that from the end of August it was not going to be possible. Mr Elliot’s evidence, in a witness statement of 11 October, says that in the two months following my order about the certificate, he regularly chased Cezar for funds, reminding them to pay the wasted costs, and he told them that they had to pay his costs by31 August 2024 . It is not surprising that they were chased for funds. Mr Lyuboshits and Mr Nurtdinov must have been investigating how they could have been paid. The assertion of Mr Lyuboshits as to his knowledge, conveyed purely in a hearsay statement, cannot sensibly stand against the overwhelming likelihood of their being told, especially in the context of the August payments which look very much as though they were paid so as to meet the deadline (particularly the£403,000 paid right up against that deadline).”
“I also consider that it taints the certificate. Cezar (and Mr Lyuboshits and Mr Nurtdinov) are not the client, but they are the people apparently authorised by the client to negotiate matters of funding, and compliance with the order, by the client and to act on behalf of the client in that respect. Their conduct therefore taints the certificate and the act of the client’s solicitors. The certificate was a very important document with serious consequences. It and its purpose are fundamentally undermined by such conduct and it cannot be allowed to stand as a genuine certificate.”
“The principal, P, is not liable if P makes a false representation innocently and notwithstanding that an agent knew the true facts.”