“the vulnerable situation on the oil market and a possibility of attraction of investment on conditions of not less than 15% annual interest make questionable the economic efficiency of the whole project”
“Charter capital of the Company consists of nominal value of its participants shares and is equal to the amount of 100,000 roubles”
“In December 2003 the Company increased its share in Sibneft-Yugra up to 99% for the nominal consideration”
“115 Sibir is wrong to suggest that the principle of double actionability does not apply to equitable claims. On the contrary, whilst the Court of Appeal rejected “full blown double actionability”, it did not tenuously suggest that “double actionability” did not apply. The judgment in Grupo Torras is wholly inconsistent with Sibir’s current position. 116 The result of applying the rule is that Russian law must be the proper law of the dishonest assistance claim, as it was entirely in Russia that the assistance was rendered. It is not denied that in Russia the BVI defendants are under no civil liability.”
“In the instant case all the connecting factors are with Russian law. These are listed by the Respondents as follows: – Russia is the country where the enrichment (in the sense of both immediate receipt and of the place of enjoyment of the ultimate benefit) took place; – Russia is the country where the Claimant suffered its alleged loss (where its participation interests were allegedly diminished); – Russia is the country of habitual residence and centre of operations of both the Claimant (which does business only in Russia) and all of the Defendants (all of which operate solely in Russia and have Russian directors); – Russia is the country where any allegedly fiduciary relationship (or its Russian equivalent) was created and Russian law was the law governing any such relationship (i.e. by virtue of the alleged JV Agreement and/or the appointment of Matevosov as director of Yugraneft); – Russia is the country where any original “constructive trust” or “equity” (or its Russian equivalent) arose (by virtue of the alleged breach of the alleged JV Agreement in Russia); – Russia is the country where the original fiduciary relationship (or its Russian equivalent) was alleged to have been breached (by virtue of the alleged breach of the alleged JV Agreement); – Russia is the country where the “participation interests” were issued and hence where the disposal and loss was allegedly caused; – Russia is the country of incorporation of the company in respect of the alleged loss of whose participation interest the Claimant seeks restitution (Sibneft-Yugra is Russian company, as is Yugraneft).”
“……the situation in the instant case is as uncomplicated as clarity could desire. As shown by the respondents’ listing of connecting factors, all connections are with Russia. …In the instant case there are no factual circumstances and particular issues that could possibly permit the application of any other law but Russian law. It seems clear to me that whatever reference point may be chosen, the law that has the closest connection (indeed, any connection) with the claim or the issue is Russian law.”
“[Mr] Matevosov, being the person forming the management functions in the commercial organisation Yugraneft…together with other persons forming the organised group, used his powers contrary to the lawful interests of the organisation with the aim of gaining profit and advantage for himself and other persons and to harm other person, which caused serious property damage to Yugraneft and its shareholders”
“104. Further or alternatively, Millhouse Capital has been guilty of dishonest procurement of and assistance in the breaches of fiduciary duty by Mr Davidovich and Mr Matevosov set out above. More particularly: (1) Their acts were part of a scheme orchestrated by Millhouse Capital to steal and dispose of the interest in Sibneft-Yugra stolen from Yugraneft; and (2) The conduct of Mr Davidovich was part of his role as head of the Moscow Representative Office of Millhouse Capital and Executive Investment Manager of Millhouse Capital in managing Mr Abramovich’s investments, including Mr Abramovich’s controlling shareholding in Sibneft; and (3) Millhouse Capital has orchestrated the sale of Yugraneft’s interest in Gazprom and the holding and reinvestment of the proceeds. 105. Mr Abramovich is vicariously liable for the conduct of Millhouse Capital as aforesaid. 106. Further or alternatively, since the dilution scheme would only have been implemented with (at the least) Mr Abramovich’s prior approval, he is liable in his own right for dishonestly procuring the breaches of fiduciary duty of Mr Matevosov and Mr Davidovich as aforesaid.”
“Harm caused to the person or property of an individual, and harm caused to the property of a legal entity shall be subject to full compensation by the person who caused the damage.”
“all of the claims … are premised upon alleged crimes in Russian law or alleged breaches of fiduciary duties in Russian law against individuals (Mr Davidovich and Mr Matevosov) that are citizens of, and resident of Russia where they are alleged to have committed the crimes or breaches of fiduciary duties under that foreign law. It is obviously wrong that a Claimant should be permitted to bring such claims in circumstances where (a) in a host of claims and applications, the courts and criminal authorities of the foreign jurisdiction have consistently held that these individuals’ conduct was lawful and ruled that there is no evidence that they have committed any crimes; (b) in further proceedings brought in another jurisdiction (the BVI) the Claimant (or its privy) conceded and relied upon the assertion that there were no valid civil claim against those individuals and (c) to the extent that any of the civil claims (or crimes) alleged to exist under the foreign law have not been specifically adjudicated upon by the foreign courts that is purely because the Claimant has chosen not to bring those specific claims in the proper jurisdiction or has chosen not to appeal. In all these circumstances, this claim is an instance of forum shopping and an abuse of process.”
“The broad principle should surely be that a person should not be permitted to claim in England in respect of a matter for which civil liability does not exist, or is excluded, under the law of the place where the wrong was committed.”
"It is difficult to see the logic or overall desirability of making a distinction between legal issues and equitable issues when deciding which legal system should govern the contract in question. The making of such a distinction can lead to quite unnecessary difficulties and potential inconsistencies. It would also tend to depart from the general direction in which most legal systems comparable to ours have been moving in recent times. Law and equity should be viewed as a consistent whole. The individual influences of the earlier discrete streams now work together to produce the appropriate outcome. While many doctrines are still recognisable as legal or equitable and an understanding of their historical origins often remains helpful, the focus now should be on their combined influence rather on their originally separate functions. It would be anomalous to apply one system of law to an issue which would have arisen at law, and another to an issue which would have been for the Courts of Equity to deal with. I make these remarks simply to note the point and to endorse the acceptance of the parties that all issues fall to be determined according to English law."
“Equitable claims. It will be apparent from what has been said that there may well be a lack of exact correspondence between the internal divisions of English domestic law and those of the conflict of laws. One area in which the problem of characterisation may be seen to be particularly acute is when an English court is called upon to deal with a claim which, if it were wholly domestic, would be regarded as equitable. When such a case contains a foreign element, the question arises whether there is a category of issue labelled “equitable issues” for the purpose of choice of law. In some cases, such as where an application is made for specific performance of a contract, it will be clear that the issue is contractual, or contractual in part and procedural in part. In others, such as where it is alleged that a defendant has committed a wrong which corresponds to the equitable wrongs of knowingly receiving trust property, or dishonestly assisting another in a breach of trust, it is arguable that the issue of substantive liability is to be characterised as tortious. In still others, such as where it is alleged that a company director owes duties of loyalty to the company, it is arguable that the issue of substantive liability is to be characterised as falling within the category of issues reserved to the law of incorporation. These instances lend no support to the proposition that the term “equitable” has a discrete role to play in the characterisation of issues for the purpose of choice of law.”
“Though it has been said that, as equity acts in personam, equitable claims are governed by the lex fori, this almost certainly means no more than that a court may order equitable remedies in accordance with its own procedural law over a defendant subject to its personal jurisdiction in respect of rights which have been found to arise under the law identified by its choice of law rules. Given the similarity between equitable wrongs on the one hand, and torts, and breaches of contract on the other, it may be appropriate to regard claims which would in domestic law be equitable wrongs as being governed by the choice of law rules applicable to these areas of law, rather than by Rule 230 [the rule for restitution], at least where the measure of recovery is not determined by reference to the enrichment of the defendant.”
“.. encourages forum shopping; bears a parochial appearance; the applicable law would be uncertain until the place of trial had been determined; it can lead to injustice to the defendant who may be liable under English law in a case involving events having little connection with England and which may involve no liability under the law of the country abroad where the relevant events took place.”
“Although both knowing assistance and knowing receipt give rise to the equitable remedy of accountability as a constructive trustee, the two causes of action are very different. Liability for knowing assistance is based upon wrongful conduct, namely knowing participation in a fraudulent breach of trust or fiduciary duty. Its common law analogy is conspiracy to defraud. Liability for knowing receipt is restitutionary based upon the beneficial receipt of money or property known to belong in equity to someone else. The equitable remedy depends upon the existence of a trust or fiduciary duty, but the breach of trust or duty need not have been fraudulent. The nearest common law analogy is money had and received.”
“whether and in what circumstances an English Court ought to recognise and enforce an equitable claim for monetary compensation based on fault where the fault alleged lies wholly in things done or not done in a foreign jurisdiction. This is a question to which the authorities provide no easy answer”
“The second requirement as it seems to me, was that the English Court must have satisfied itself that there is no rule of any relevant foreign law which …would provide a defence to the AMF’s cause of action; or – as it might, perhaps, be put in the context of a Barnes v Addy constructive trust claim – would make it inequitable to hold that an FBC defendant should be treated as if it were a trustee. If, as the authorities show, the basis of such a claim is dishonesty or lack of probity on the part of the defendant, then it must be right to judge honesty or dishonesty in the light of all relevant circumstances; and those circumstances must include relevant provisions of the local law. It follows that I think the appropriate course, in the present case, is to examine the evidence as to Swiss law not for the purposes of identifying any rule of that law which the English court would have been concerned to enforce, but rather for the purposes of deciding whether, having regard to the legal framework within which FNBC and its affiliates were conducting the operation of the numbered accounts at its Geneva branch, there was such dishonesty or lack of probity as would have made it equitable for the English court to treat those defendants as if they were trustees.”
“Lord Wilberforce was, of course, making those observations in the context of a claim for the recovery of damages for personal injury. Although the obligations in the passage cited are general in nature, I am not at all sure that Lord Wilberforce would have taken the view that conduct which was properly to be regarded as dishonest in the light of the relevant provisions of the local law – but, in respect of which the local law gave no civil remedy – ought not to be the subject of a successful Barnes v Addy constructive trust claim in England. That was not a question which he can be taken to have had in mind. It is reasonably clear that Lord Donovan and Lord Pearson would not have taken that view – see, ibid, at pages 383 D and 405F….”
“….. content to assume that [counsel] is correct in his submission that the AMF would not have succeeded against the AMF Defendants in the English court if it were established that the conduct complained of was not actionable as a civil wrong under Swiss law. For the reasons which I shall explain below I am satisfied that the conduct of [the defendant] in relation to the operation of the numbered accounts…in relation to the disposal of those accounts – would have been actionable as a civil wrong in the Swiss courts. It is unnecessary, therefore, to decide whether that was a necessary requirement.”
“Rix J did not find it necessary to go further into the appropriateness of double actionability to a claim for dishonest assistance, since he had no evidence of Dubai law (and it is therefore reasonable to infer that this point was not raised on the pleadings).”
“ Chadwick J expressly rejected as irrelevant to a dishonest assistance claim whether or not the relevant foreign law recognised the concept of proprietary rights under a trust: see p.42. A dishonest assistance claim is based on fault, and is not a claim to enforce a proprietary interest against the holder of the fund. The approach taken by Chadwick J at pp.45-46 [i.e. to judge honesty or dishonesty in the light of, inter alia, relevant provisions of the local law] was adopted by Rix J in Dubai Aluminium Ltd v Salaam [1999] 1 Ll Rep 415 at pp. 452-453. The alternative approach, which Chadwick J identified and evidently did not prefer (although on the facts before him, he did not have to decide whether it was correct) would require full actionability under the relevant foreign law as well as under English law. I call this the full double actionability approach. I propose, sitting at first instance, simply to follow the view which Chadwick J preferred and Rix J adopted in these two previous first instance cases. But in this case also, it seems to me unlikely that the difference between that and the full double actionability approach would be decisive. In judging whether there is any role at all for foreign law, it seems appropriate to apply a similar ‘substance’ test to that applicable in tort. Mr Folchi’s assistance was in substance rendered in Spain, although his activity in Geneva on 2/3 October 1990 was significant. Having regard to what I have said earlier in this judgment about his conduct, his knowledge and attitude, the conclusion which I reach is his conduct would be regarded as displaying a lack of honesty or probity in Spain.”
“Mr Davies accepted that Mr Folchi would, on the judge’s findings, have been liable to civil proceedings brought in Spain for breaches of his contractual duty as GT’s lawyer.”
“ 142 ……Neither side challenged the judge’s inevitable finding that Mr Folchi’s assistance was substantially rendered in Spain, or his fining as to where the conspiracies were carried out (Croesus and Wardbase in Spain, Oakthorn I and II in England, Pincinco in Switzerland). Neither side sought to use the latter findings as a basis for varying the usual non-statutory tort rule cf rule 203(2) in the 12th and 205 (3) in the 13th editions of Dicey and Morris... The position which Mr Davies most stoutly defended , and sought to hold to the last, was his point as to the need for individual liability and a sufficient causal link between individual fault and the ensuing loss. 143. This was a point which Mr Davies had already taken in relation to an accessory liability for dishonest assistance under English law, regardless of any foreign element. We have already considered and rejected it, so far as English law is concerned (para 119). 144. However, the point become rather more formidable, at any rate as a theoretical point, when the Spanish dimension is added. Mr Folchi’s putative liability under Spanish law would be for loss caused by breaches of his individual contractual duty to GT. It would not, on the judge’s findings as to Spanish law, be an accessory liability for the wrongdoing of the conspirators. The need for a sufficient causal link between the defendant’s fault and the claimant’s loss cannot be regarded as a procedural rather than a substantive matter. The line of reasoning (based on The Halley) which led Lord Pearson in Boys v Chaplin, to award general as well as special damages, seems not to have prevailed over the alternative line of reasoning followed by Lord Wilberforce and adopted and extended by the Privy Council in Red Sea Insurance. 145. However in s V.1 (f) of his judgment, dealing with Spanish law, the judge did make a clear finding about Mr Folchi’s individual responsibility for loss suffered by GT…”
“(i) What is the proper law which governs the relationship between the Defendant and the person for whose benefit those powers have been conferred, (ii) what, under that law, are the duties to which the Defendant is subject in relation to those powers, (iii) is the nature of those duties such that they would be regarded by an English court as fiduciary duties, and (iv) if so, is it unconscionable for the Defendant to retain those assets.”
“…from the time that Millhouse Capital was established, there was a clear division of responsibilities between the English office and the Representative Office in Moscow. Any consultancy services with regard to any Russian transactions or investments would be dealt with by employees of Millhouse's Representative Office in Moscow. Already shortly after its establishment, the Representative Office was a much more significant operation with a much larger team of employees than Millhouse Capital in London. All the people who worked for the Representative Office always carried out their duties completely independently from Millhouse Capital in England. No directions or supervision or instructions came from our side. Apart from the obvious fact that the handful of us working at Millhouse Capital in England did not have the requisite background and experience to instruct the Russian employees about Russian business, it would have been impractical if the Representative Office had to answer to or take directions from people in England. Each office had its own remit and carried out its duties and responsibilities independently of the other. In addition, until quite recently, only a few of the Millhouse Capital employees in England spoke any Russian and only very few of the employees of the Representative Office in Moscow had a working command of English. To the limited extent that there has been any communication between the two offices, it has, therefore, at times been rather difficult. The operations of the Representative Office essentially became the operations of a separate Russian company, Millhouse LLC in April 2006. However, little has changed in a practical or operational sense. Mr Tenenbaum and I (and our colleagues at Millhouse Capital) play no role in the duties or operations of Millhouse LLC just as we played no role in the duties or operations of the Representative Office. Neither I, nor, to the best of my knowledge, anybody else at Millhouse Capital in England had, therefore, any involvement in any domestic Russian projects in 2002 or 2003. We certainly had no involvement in anything to do with the Sibneft-Yugra project which, as I understand it, was a Sibneft project in any case. I do not recall any operational or other Sibneft issues being addressed from the office in England.”
“I have searched my files, emails and documents from 2002 to 2004 and I can confirm that I have in my possession no records or documents or other communications that relate to Sibneft-Yugra. I have asked the other officers and employees of Millhouse Capital from the relevant period to do so as well and they have confirmed the same to me”
“(1) The obligation to restore the benefit of an enrichment obtained at another person’s expense is governed by the proper law of the obligation. (2) The proper law of the obligation is (semble) determined as follows: (a) If the obligation arises in connection with a contract, its proper law is the law applicable to the contract. (b) If it arises in connection with a transaction concerning an immovable (land), its proper law is the law of the country where the immovable is situated (lex situs); (c) If it arises in any other circumstances, its proper law is the law of the country where the enrichment occurs.” (a) If the obligation arises in connection with a contract, its proper law is the law applicable to the contract. (b) If it arises in connection with a transaction concerning an immovable (land), its proper law is the law of the country where the immovable is situated (lex situs); (c) If it arises in any other circumstances, its proper law is the law of the country where the enrichment occurs.”
“117 ……There is, however, no decision of the Court of Appeal in which approval of Rule 200(2) (c) Rule 200 was the corresponding rule in the 13th edition. , or the application of a similar principle, is the ratio. Rule 200(2) (c) is a tentative formulation of the application of the basic principle in Rule 200(1) where the parties have no prior connection. There is no decision that Rule 200(2)(c) must be treated as a free-standing rule mechanically applying the law of the place where bank accounts are kept irrespective of the factual circumstances and irrespective of the particular issue. 118 Here parties in Nigeria agreed that one was to sell to the other dollars for delivery in Switzerland in exchange for Nigerian currency in Nigeria. This is just the kind of case where the law of the place of the enrichment will not necessarily give an answer which corresponds to the law which has the closest connection with the claim or with the issue”
“Lawrence Collins J showed in that review that it is not in all instances the law of the place of enrichment will be the proper law and stated so in his conclusion. As I understand the cases this is essentially because the law of the place of enrichment will not invariably be the law that has the closest connection with the claim. Dicey and Morris makes this very point.
“[2 (c)] is not to be applied whenever the centre of gravity of the factors relevant to the obligation indicates that the proper law is different; and this will be more likely when the claim arises in connection with a wrong committed by the defendant against the claimant”
“…first, a disposal of the assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff In that case the tracing was possible because the bank accounts through which the proceeds had passed were charged in equity with the repayment of the claimant’s money. ; and, thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of his fiduciary duty”
“2. Exceptions to s. 1 (1) In any case in which the application of section 1 above would to any extent conflict (whether under subsection (2) below or otherwise) with public policy, that section shall not apply to the extent that its application would so conflict. (2) The application of section 1 above in relation to any action or proceedings shall conflict with public policy to the extent that its application would cause undue hardship to a person who is, or might be made, a party to the action or proceedings...” (1) In any case in which the application of section 1 above would to any extent conflict (whether under subsection (2) below or otherwise) with public policy, that section shall not apply to the extent that its application would so conflict. (2) The application of section 1 above in relation to any action or proceedings shall conflict with public policy to the extent that its application would cause undue hardship to a person who is, or might be made, a party to the action or proceedings...”
“Article 195 The Concept of the Limitation Period The limitation period shall be recognised as the term fixed for the protection of the right by the claim of the person whose right has been violated. Article 196 The General Term of the Limitation Period The general term of the limitation period shall be laid down as three years Article 198 Invalidity of the Agreement on Changing the Terms of the Limitation period The terms of the limitation period and the order of their counting shall not be changed by an agreement between the parties. The grounds for the suspension and the interruption of the proceeding of the terms of the limitation period shall be laid down by the present Code and by the other laws Article 199 Application of Limitation Period Article 196 The General Term of the Limitation Period The general term of the limitation period shall be laid down as three years Article 198 Invalidity of the Agreement on Changing the Terms of the Limitation period Article 199 Application of Limitation Period 1. The court shall accept a claim seeking to protect a right for consideration irrespective of expiration of the limitation period. 2. The limitation period shall be applied by the court only upon the application of the party to the dispute, filed before the court has passed the decision A counterparty to a dispute may demand the application of a limitation period, in which case the court would be bound by such a demand by the defendant and would have to dismiss the claim Article 200 The Start of the Proceedings of the Term of the Limitation Period 1. The proceeding of the term shall start from the day when the person has learned or should have learned about the violation of his right. Exceptions to this rule shall be established by the present Code and by the other laws.”
“In reality and as a matter of practice, civil claims based on an allegation of fraud Both experts have used “fraud” in this context as meaning fraudulent behaviour which amounts to criminal conduct. can only be brought once a “finding” that such conduct has taken place has been made in criminal proceedings. This is because it is most difficult to persuade a Russian civil court to consider claims based on allegations of criminal conduct unless that conduct has been the subject of a ruling in criminal proceedings or as part of a criminal investigation or is supported by evidence produced in such proceedings or investigations. The civil court’s reluctance in this regard is not based on any substantive provision which prevents then from making such findings. Nor is it based on any procedural requirement to this effect reflected in any provision of the Russian Civil, Arbitration or Criminal Procedural Codes. It is merely a matter of ‘court practice’ that stems from the civil courts’ traditional ‘dislike of trespassing on issues which it considers to be more appropriately the subject of criminal proceedings”
“An individual or a legal entity who pursuant to the Civil Code of the Russian Federation bears liability for damage caused by an offence, may be summoned as a civil defendant”
“As part of the same practice the Russian courts in such cases link the commencement of the limitation period to the date on which the competent authority makes a finding that the relevant activities constituted a crime. This is deemed to be the date on which the person whose rights are infringed became aware or should have become aware of the infringement within the meaning of paragraph 1 of Article 200 of the Civil Code.”
“so much of the relevant law of [Russia] as (in any manner) makes provision with respect to a limitation period being applicable to the bringing of proceedings in respect of that matter in the courts of that country [including]- (a) … so much of that law as relates to, and to the effect of, the application, extension, reduction or interruption of that period.”
“(1) Actions of citizens and legal persons taken exclusively with the intention to cause harm to another are not allowed, nor is abuse of a legal right allowed in other forms … (2) In the case of failure to observe the requirements provided by Paragraph 1 of the present Article, the court, commercial court or court of private arbitration may refuse the person protection of the right belonging to him.”
“Mr Davidovich is an associate of Abramovich, and the managing director of the Moscow representative office of Millhouse Capital Limited (the English company through whichAbramovich owns his beneficial interest in the majority of the issued share capital of Sibneft) and accustomed to act on behalf of and in accordance with the instruction of Abramovich. It is to be inferred that Mr Davidovich voted for the resolutions proposed at each of the September 2002 EGM and the February 2003 EGM on the instructions and/or at the behest of Abramovich.”
“of a general nature (in other words that it granted him the right to undertake any legal actions on behalf of Millhouse Capital in Russia) any votes he cast at the Dilution Meetings for the purposes of advancing the interests of Millhouse Capital would be regarded as actions falling within the scope of such power of attorney”
“It stands to reason that the existence of a general power of attorney means that no question of “ratification” can arise. There are only two possibilities: either (on the Claimant’s case) it could be found that Mr Davidovich in acting at the meetings was acting for Millhouse; alternatively, on the Defendant’s case, it will be found that he was acting for Yugraneft or Sibneft. In the former case (i.e. Davidovich acting for Millhouse) it is obvious that no later ratification would be required or could arise. In the latter case (Davidovich acting for Yugraneft and/or Sibneft), equally no “ratification” by Millhouse would be possible because, ex hypothesi, Mr Davidovich would have been found to have been acting at the meetings as a representative of a different party (viz. Yugraneft and/or Sibneft). If Mr Davidovich were to be found to have been acting at the EGMs for Yugraneft and/or Sibneft rather than Millhouse, the later acts of Millhouse in assisting with the sale of Sibneft’s shares could clearly not alter that finding. I am sure that even Professor Sergeev’s overly broad interpretation of “ratification” could not stretch to encompass later acts retrospectively changing the person for whom a representative has acted.”
“Following is the process of following the same asset as it moves from hand to hand. Tracing is the process of identifying a new asset as the substitute for the old. Where one asset is exchanged for another, a Claimant can elect whether to follow the original asset into the hands of the new owner or to trace its value into the new asset in the hands of the same owner... Tracing is thus neither a claim nor a remedy. It is merely the process by which a Claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property. Tracing is also distinct from claiming. It identifies the traceable proceeds of the Claimants’ property. It enables the Claimant to substitute the traceable proceeds for the original asset as the subject matter of his claim. But it does not affect or establish his claim.”
“The tracing exercise once completed, it can then be asked what rights, if any, the plaintiff can, on his particular facts, assert. It is at that point that it becomes relevant to recall that on some facts those rights will be personal, on others proprietary, on some legal and on others equitable.”
“The simplest case is where a trustee wrongfully misappropriates trust property and uses it exclusively to acquire other property for his own benefit. In such a case the beneficiary is entitled at his option either to assert his beneficial ownership of the proceeds or to bring a personal claim against the trustee for breach of trust and enforce an equitable lien or charge on the proceeds to secure restoration of the trust fund...Both remedies are proprietary and depend on successfully tracing the trust property into its proceeds. A beneficiary's claim against a trustee for breach of trust is a personal claim. It does not entitle him to priority over the trustee’s general creditors unless he can trace the trust property into its product and establish a proprietary interest in the proceeds. If the beneficiary is unable to trace the trust property into its proceeds, he still has a personal claim against the trustee, but his claim will be unsecured. The beneficiary’s proprietary claims to the trust property or its traceable proceeds can be maintained against the wrongdoer and anyone who derives title from him except a bona fide purchaser for value without notice of the breach of trust. The same rules apply even where there have been numerous successive transactions, so long as the tracing exercise is successful and no bona fide purchaser for value without notice has intervened. A more complicated case is where there is a mixed substitution. This occurs where the trust money represents only part of the cost of acquiring the new asset. As Ames pointed out in ‘Following Misappropriated Property into its Product’ (1906) Harvard Law Review 511, consistency requires that, if a trustee buys property partly with his own money and partly with trust money, the beneficiary should have the option of taking a proportionate part of the new property or a lien upon it, as may be most for his advantage. Accordingly, I would state the basic rule as follows. Where a trustee wrongfully uses trust money to provide part of the cost of acquiring an asset, the beneficiary is entitled at his option either to claim a proportionate share of the asset or to enforce a lien upon it to secure his personal claim against the trustee for the amount of the misapplied money. It does not matter whether the trustee mixed the trust money with his own in a single fund before using it to acquire the asset, or made separate payments (whether simultaneously or sequentially) out of the differently owned funds to acquire a single asset.”
“Clearly, DH and Mr Murray can be regarded as trustees of the information and, clearly, Morbaine can be regarded as having been a knowing recipient of it. However, even assuming, first, that confidential information can be treated as property for this purpose and, secondly, that but for the disclosure of the information Morbaine would not have acquired the Brewery Street site, we find it impossible, in knowing receipt, to hold that there was a sufficient basis for subjecting the Brewery Street site to the constructive trust for which Satnam contends. The information cannot be traced into the site and there is no other sufficient nexus between the two.”
“Tracing properly so-called, however, is neither a claim nor a remedy but a process. Moreover, it is not confined to the case where the plaintiff seeks a proprietary remedy; it is equally necessary where he seeks a personal remedy against the knowing recipient or knowing assistant. It is the process by which the plaintiff traces what has happened to his property, identifies the persons who have handled or received it, and justifies his claim that the money which they handled or received (and, if necessary, which they still retain) can properly be regarded as representing his property.”
“..the [claimant] has to establish a basis upon which he is entitled to the money. This (at least, as a general rule) he does by showing that the money is his legal property..If he can do so, he may be entitled to succeed in a claim against the third party for money had and received to his use, though not if the third party has received the money in good faith and for valuable consideration. The cases in which such a claim has succeeded are, I believe, very rare…This is probably because, at common law, property in money, like other fungibles, is lost as such when it is mixed with other money. Furthermore, it appears that in these cases the action for money had and received is not usually founded upon any wrong by the third party, such as conversion; nor is it said to be a case of waiver of tort. It is founded simply upon the fact that, as Lord Mansfield said, the third party cannot in conscience retain the money – or, as we say nowadays, for the third party to retain the money would result in his unjust enrichment at the expense of the owner of the money. So, in the present case, the solicitors seek to show that the money in question was their money at common law. But their claim in the present case for money had and received is nevertheless a personal claim; it is not a proprietary claim, advanced on the basis that money remaining in the hands of the respondents is their property. Of course there is no doubt that, even if legal title to the money did vest in Cass immediately on receipt, nevertheless he would have held it on trust for his partners, who would accordingly have been entitled to trace it in equity into the hands of the respondents. However your Lordships are not concerned with an equitable tracing claim in the present case since no such case is advanced by the solicitors, who have been content to proceed at common law by a personal action, viz an action for money had and received….On this aspect of the case, therefore, the only question is whether the solicitors can establish legal title to the money when received by [the partner] from the bank by drawing cheques on the client account without authority.”
“(1) Has OOL benefited or been enriched? (2) Was the enrichment at the expense of BVC? (3) Was the enrichment unjust? (4) Are there any defences?”
“In those cases where the breach of trust consists of misappropriation of assets, the breach will not end when the assets have initially been removed from the trust fund, but when they have been hidden away, beyond the reach of the beneficiaries who might seek their recovery.”
“the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings”
'Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject-matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase "privity of interest".'
“The loss claimed by Sibir was on the face of it bound to be reflective of loss suffered by Yugraneft”
“… abuse of the process of the High Court… concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied …”
“The policies supporting judicial estoppel are different from those that support the more common doctrines of issue preclusion, equitable and collateral estoppel. Courts apply equitable estoppel to prevent a party from contradicting a position taken in a prior judicial proceeding…. Equitable estoppel enables a party to avoid litigating, in the second proceeding, claims which are plainly inconsistent with those litigated in the first proceeding. Because the doctrine is intended to ensure fair dealing between the parties, the courts will apply the doctrine only if the party asserting the estoppel was a party in the prior proceeding and if that party has detrimentally relied upon his opponent's prior position. See Id. at 689-90. Collateral estoppel prevents relitigation of factual matters that were fully considered and decided in a prior proceeding. Thus, collateral estoppel operates to prevent repetitive litigation. …. The doctrine of judicial estoppel applies to a party who has successfully and unequivocally asserted a position in a prior proceeding; he is estopped from asserting an inconsistent position in a subsequent proceeding…. Unlike equitable estoppel, judicial estoppel may be applied even if detrimental reliance or privity does not exist. …. This distinction reflects the difference in the policies served by the two rules. Equitable estoppel protects litigants from less than scrupulous opponents. Judicial estoppel, however, is intended to protect the integrity of the judicial process. … Scarano v. Central R. Co., 203 F.2d 510, 512-13 (3rd Cir. 1953) ("such use of inconsistent positions would most flagrantly exemplify that playing 'fast and loose with the courts' which has been emphasized as an evil the court should not tolerate.") The essential function of judicial estoppel is to prevent intentional inconsistency; the object of the rule is to protect the judiciary, as an institution, from the perversion of judicial machinery. … Collateral estoppel is essentially a finality rule, which serves to conserve judicial resources by precluding the litigation of issues previously decided. Judicial estoppel addresses the incongruity of allowing a party to assert a position in one tribunal and the opposite in another tribunal. If the second tribunal adopted the party's inconsistent position, then at least one court has probably been misled. ….”
“41 (3) Subject to subsection (5), an individual is domiciled in a particular part of the United Kingdom if and only if— (a) he is resident in that part; and (b) the nature and circumstances of his residence Indicate that he has a substantial connection with that part. ………… (a) he is resident in that part; and (b) the nature and circumstances of his residence Indicate that he has a substantial connection with that part. (6) In the case of an individual who— (a) is resident in the United Kingdom, or in a particular part of the United Kingdom; and (b) has been so resident for the last three months or more, the requirements of subsection (2)(b) or, as the case may be, subsection (3)(b) shall be presumed to be fulfilled unless the contrary is proved.”
“42 The legal protection of persons established in the Community would also be undermined [if a stay was possible]. First, a defendant, who is generally better placed to conduct his defence before the courts of his domicile, would not be able, in circumstances such as those of the main proceedings, reasonably to foresee before which other court he could be sued.”
“Although there was some discussion before us on what is meant by the word resident ins 41 of the Civil Jurisdiction and Judgments Act 1982 , it seemed to me that the parties were really little apart on this aspect of the case. The leading case is Levene v Commissioners of Inland Revenue[1928] AC 217 . Although this was a tax case, it is clear that the meaning given to the word in that case was its ordinary meaning, uncoloured by the fact that it was used in a revenue context: see the case itself and Shah v Barnet London Borough Council[1983] 2 AC 309 ,[1983] 1 All ER 226 at 341 of the former report. Mr Pickering QC for Mr Abbas suggested that although the present case is not a Convention case, since s 41 was applicable to Convention cases, it would be correct to have regard to European sources in ascertaining the meaning of the word in this section. I would not necessarily dissent from this, but since there appears to be nothing in these sources to suggest that the ordinary English meaning of the word should be displaced or modified, the suggestion carries the matter no further. On the basis of Levene it seems to me that a person is resident for the purposes of s 41 (3) in a particular part of the United Kingdom if that part is for him a settled or usual place of abode. A settled or usual place of abode of course connotes some degree of permanence or continuity. In his judgment Potter J said that s 41(6) suggested that the threshold for residence under the 1982 Act was low. With respect, I do not find any such suggestion in this sub-section. It is true that the sub-section provides a rebuttable presumption of substantial connection if the residence has lasted for the last three months or more, but it provides no guidance on the question whether or not the person has become resident. Depending on the circumstances of the particular case time may or may not play an important part in determining residence. For example, a person who comes to this country to retire and who buys a house for that purpose and moves into it, selling all his foreign possessions and cutting all his foreign ties, would to my mind be likely to be held to have become immediately resident here. In other cases it may be necessary to look at how long the person concerned has been here and to balance that factor with his connections abroad. Since the answer to the question depends on the circumstances of each case, I did not find the other authorities cited to us of any real assistance.”
“[10] Mr Deripaska… owns two valuable homes in this jurisdiction, one in Weybridge and the other in Belgrave Square. He acquired the Weybridge property in September 2001 and Belgrave Square in April 2003. I am told that currently they are together worth approximately£40m . Although they are owned through a corporate structure, largely for reasons concerned with inheritance tax, there is no dispute that Mr Deripaska is beneficially entitled and responsible for the outgoings. [11] It is an important part of the evidence that Mr Deripaska is extremely wealthy, his financial worth being measured in hundreds of millions of pounds. He is one of the world's most wealthy individuals and has substantial interests in a number of businesses, most particularly Rusal. Moreover, it is also an important part of the background that he has homes in other parts of the world. There are houses under construction in Beijing and Kiev and land acquired with a view to building in Montenegro. There are several homes in Russia itself. There are two houses in France and a further one under construction. There is another in Sardinia and a house under lease in New Delhi. I am told that there are, either completed or under construction, a total of over 20 houses in various parts of the world. It is thus clear that the background circumstances against which my conclusions have to be reached are unusual.”
“[24] Mr Hunter accepted that the matter of residence is not to be judged according to 'a numbers game', and that it is appropriate to address the quality and nature of the visits in question. Mr Deripaska is, if I may say so, very much a modern phenomenon. It makes it very difficult to draw useful comparisons with precedents from a different era. He is truly an international businessman and jets about the world for frequent and brief business meetings. Miss Page may have hit the nail on the head when she considered the ordinary meaning of 'residence'. While it may make sense to speak of Mr Cadwallader being resident in Scotland for the months of August and September, or of Mr Theron being resident during his monthly visits, it hardly rings true to say of Mr Deripaska that he was resident for (say) last Tuesday afternoon or next Thursday morning. It would be a misuse of language.”
“[45] In agreement with Eady J, I do not accept this submission. It is not a numbers game, although the numbers hardly support Mr Cherney's case. The 'quality' of the use of the house is, I think, equally important. In many ways its use by Mr Deripaska resembles that of a private hotel. It is infrequent, intermittent, and generally fleeting. The house has the character of continuity and permanence; its use does not. It cannot, I think, in any normal sense of those words, be described as a 'settled or usual place of abode' of Mr Deripaska. In my judgment, as at26 November 2006 , Mr Cherney has failed to show a good arguable case that Mr Deripaska was resident at 5, Belgrave Square and so domiciled there for the purposes of the Jurisdiction Regulation and Judgment Order. It is therefore unnecessary to consider the second limb of para 9(2) of the Judgment Order (para 13) but it requires the nature and circumstances of the 'residence' to indicate a substantial connection with this country and so on my findings cannot be fulfilled. The same applies to para 9(6).”
“In each the House saw itself as seeking the natural and ordinary meaning of the words. In Levene v Inland Revenue[1928] AC 217 , 255, Viscount Cave, LC said: “I think that [ordinary residence] connotes residence in a place with some degree of continuity and apart from accidental or temporary absences”
“I think the converse to “ordinarily” is “extraordinarily” and that part of the regular order of a man’s life, adopted voluntarily and for settled purposes, is not “extraordinarily”, In Levene’s case …Lord Warrington said: “I do not attempt to give any definition of the word “resident”
“A group of core shareholders in Sibneft will entrust management of an extensive portfolio of assets spanning key sectors of the Russian economy to a newly created asset management group, Millhouse Capital. The assets will include an 88% stake in Sibneft ….The company will also manage a series of other investments held by Sibneft’s core shareholders, including investments in the airline, electricity, automobile, pulp and paper processing, insurance and banking industries. Millhouse Capital will manage assets, but will not own significant assets itself …”
“In 2005, Dresdner Kleinwort acted as a sole financial adviser to Gazprom on the largest Russian M&A transaction to-date. OAO Gazprom acquired 72.66% stake in OAO NK Sibneft from Millhouse for approximately US$13.1 billion in cash. In addition, Dresdner Kleinwort jointly led the acquisition financing for the transaction acting as Coordinating Mandated Lead Arranger, Joint Bookrunner and Facility Agent ...”
“Russia’s West Siberian Depositary nominally holds 72.54% in Sibneft. Roman Abramovich, probably Russia’s richest man, is widely believed to control the stake through its offshore company Millhouse. Deutsche Bank nominally holds 20% in the company. Russian oil major YUKOS is a beneficial owner of a 20% stake.” (b) Euromoney’s EuroWeek for30th September 2005 : “Russia to pay$10 bn early, Gazprom secures Sibneft .... Gazprom, the state-controlled gas utility, this week bought outright control of Russia’s fifth largest oil producing company, Sibneft, in a deal worth$13.1 bn – making it the biggest ever M&A deal in the country. Gazprom will acquire 72.7% of Sibneft from Millhouse – an offshore investment company controlled by Chelsea football club owner Roman Abramovich – taking its holding to 75.7% ...” (c) Associated Press Online for29th September 2005 : “Russia’s state gas monopoly Gazprom struck a deal Wednesday to pay$13.01 billion for control of the private Sibneft oil company ... Gazprom signed the agreement Wednesday with Sibneft’s owner, Millhouse – a holding company controlled by Chelsea soccer club owner, billionaire Roman Abramovich, believed to be among a handful of tycoons on good terms with the Kremlin ...”
“for an account of all the monies and assets of Mr Abramovich and/or all of the monies and assets controlled by Millhouse Capital which derive from the interest stolen from Yugraneft… and a declaration that such monies and assets and any product thereof or accretions thereto are subject to a constructive trust and/or equitable proprietary lien in favour of Yugraneft” (PoC para 128). In addition, it claims to be entitled to a declaration that such a constructive trust or lien binds Millhouse, and to the appointment of a receiver over the assets controlled by Millhouse Capital (PoC para 129). The personal ‘receipt based’ claims 162. English law