Avonwick Holdings Ltd v Azitio Holdings Ltd & Ors [2020] EWHC 1844 (Comm)

“if I were to refer to and comment upon each and every point made by counsel this judgment would be of an intolerable length”

“Speaking from my own experience I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives and to the overall probabilities can be of very great assistance to a judge in ascertaining the truth.”

“And it is not to be forgotten that, in the present case, the Judge was faced with the task of assessing the evidence of witnesses about telephone conversations which had taken place over five years before. In such a case, memories may very well be unreliable; and it is of crucial importance for the Judge to have regard to the contemporary documents and to the overall probabilities.”

“…the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. However, its value lies largely, as I see it, in the opportunity which crossexamination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

“I find it difficult to rule out the possibility that, in contrast with recollection of events such as an accident, there may still be some major matters (as for example the person with whom a witness struck a deal, or the person for whom the witness acted over a period of time) of which the witness may have some real and reliable recollection.”

“The dispute between the two men has to be evaluated against the sometimes turbulent political and economic backcloth of Russia in the late 1990s and early 2000s, and in the context of the deterioration of their relationship. Nonetheless, the dispute is in essence a commercial one, which, like any other tried in this court, has to be decided on the factual evidence, both oral and documentary, relating to the specific transactions in issue. And, although this court necessarily views that evidence ‘Under Western Eyes’, it has to be careful about applying what it might regard as conventional Western European business standards to judge the conduct of businessmen operating in the very different, and largely unregulated, commercial and political environment of Russia at the material times. As I remind myself: ‘… this is not a story of the West of Europe’.”

“An English judge may have, or thinks that he has, a shrewd idea how a Lloyd's broker, or a Bristol wholesaler, or a Norfolk farmer, might react in some situation which is canvassed in the course of a case but he may, and I think should, feel very much more uncertain about the reactions of a Nigerian merchant, or an Indian ship's engineer, or a Jugoslav banker. Or even, to take a more homely example, a Sikh shopkeeper trading in Bradford. No judge worth his salt could possibly assume that men of different nationalities, educations, trades, experience, creeds and temperaments would act as he might think he would have done or even - which might be quite different - in accordance with his concept of what a reasonable man would have done.”

“In this case the probabilities must be assessed, as best this court can, in the light of the collapse of the USSR, the emergence of private enterprise in Russia, the accumulation of huge wealth by a few individuals, the manner in which ‘oligarchs’ do business with each other, the importance of support from those in power, the loyalties which huge wealth can generate and the use of offshore companies and trusts to hold (and hide) such wealth.”

“what did stop me was that we were asked not to do that … We were asked to stay in our corner of the room”

“Following repeated requests, including from the Chairman of VEB, Mr Taruta ultimately agreed to meet with the investigator Mr Miniahmetov, in Minsk in July 2018 … The meeting took place at a restaurant over lunch, and lasted around one and a half hours … He left Minsk later that day.”

“About 40% belonged to me, 34% to Gaiduk, and 26% to O.A. Mkrtchan. The shares belonging to Mkrtchan were transferred to him by me without compensation in connection with our friendship.”

“(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action. (2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness's absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

“Wisniewski is not authority for the proposition that there is an obligation to draw an adverse inference where the four principles are engaged. As the first principle adequately makes plain, there is a discretion i.e. ‘the court is entitled [emphasis added] to draw adverse inferences’.”

“(1) Unless otherwise provided for in this Regulation, the law applicable to a noncontractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur. (2) However, where the person claimed to be liable and the person sustaining the damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply. (3) Where it is clear from all the circumstances of the case that the tort / delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.”

“The starting point with any Article 4(3) argument is that it represents an ‘exceptional’ route: (See Recital 18 of Rome II and p.12 of the Commission's Proposal for Rome II … To avail itself of this route a party seeking to invoke it must overcome a ‘high hurdle’: Pan Oceanic at [206] and Committeri v Club Méditerranée [2016] EWHC 1510 at [36] and [57]. The conclusion has to be reached against all the circumstances, which can include the event or events which give rise to damage, whether direct or indirect, factors relating to the parties, and possibly also factors relating to the consequences of the event or events Dicey, Morris & Collins [35-032]).”

“…[Art 4(3) Rome II] is only to be used on an exceptional basis. The defendants rely upon [35–032] of Dicey, Morris & Collins: The Conflict of Laws which states that Article 4(3) should only be applied where there is a ‘clear preponderance of factors’ pointing to another country than that indicated by Articles 4(1) and (2). The Explanatory Memorandum refers to the ‘centre of gravity’ of the tort.”

“It is also common ground that article 4(3) imposes a ‘high hurdle’ in the path of a party seeking to displace the law indicated by articles 4(1) or 4(2), and that it is necessary to show that the ‘centre of gravity’ of the case is with the suggested applicable law. In this case there are a number of circumstances which, in my judgment, make it clear that the tort/delict is manifestly more closely connected with France than England and Wales. These are: first that both Mr Marshall and Mr Pickard were hit by the French car driven by Ms Bivard, a national of France, on a French motorway. Any claims made by Mr Marshall and Mr Pickard against Ms Bivard, her insurers (or the FdG as she had no insurers) are governed by the laws of France; secondly the collision by Ms Bivard with Mr Marshall and Mr Pickard was, as a matter of fact and regardless of issues of fault or applicable law, the cause of the accident, the injuries suffered by Mr Marshall and Mr Pickard and the subsequent collisions; and thirdly any claims that Mr Marshall and Mr Pickard have against Generali, as insurers of the vehicle recovery truck, are also governed by the laws of France.”

“The law applicable to a non-contractual obligation arising out of dealings prior to the conclusion of a contract, regardless of whether the contract was actually concluded or not, shall be the law that applies to the contract or that would have been applicable to it had it been entered into.”

“According to Recital (30) to the Regulation culpa in contradendo is an autonomous concept and should not necessarily be interpreted within the meaning of national law. The Recital goes on to point out that it should include ‘the violation of the duty of disclosure and the break-down of contractual negotiations’. But, Art. 12 ‘covers only non-contractual obligations presenting a direct link with the dealings prior to the conclusion of a contract. The means that if, while a contract is being negotiated, a person suffers personal injury, Art.4 or other relevant provisions of this Regulation should apply’. The terminology and these various observations suggest that Art.12 will apply to fault based claims, for example, to non-disclosure, fraudulent or negligent misrepresentations and duress which occur during the negotiation of a contract. Accordingly other types of claim, for example a claim for the value of services provided in anticipation of a contract, may fall outside Art.12, and within other provisions of the Regulation (notably, Art.10 dealing with unjust enrichment). Equally, however, these observations emphasise that the ‘culpa’ in whatever form must occur in the context of negotiations with a view to concluding a contract. Thus Art.12 would not, it seems, apply in a case where (for example) a misrepresentation is made outside contractual negotiations or where a third party relies on a representation made in connection with a contract concluded between the representor and a different party. Such cases will fall, normally, within Art.4. Finally, as the principal connecting factor under Art.12 is the law applicable to a contract (or putative contract), its application may be restricted to claims between the parties (or prospective parties) to that contract, and not against any third party (e.g. an agent) involved in the pre-contractual dealings.”

“As the primary connecting factor within Art 12 is the law applicable to a contract, either concluded or contemplated, there is a strong argument for restricting its scope to claims between the (intended) parties to the contract so as to exclude (for example) a claim for damages by one of the parties against the issuer of securities that he has purchased on the market or the agent of another for misrepresentation or as a false procurator. There may, of course, be good reasons for concluding that claims against an agent, whether in contract or in tort/delict, should be governed under the Rome I Regime or Art 4 of the Rome II Regulation by the law of the contract (lex contractus), especially if he has taken an active part in negotiations conducted on the basis of drafts containing a choice of law provision. Art 12, however, would appear to contemplate an existing or contemplated contractual relationship between the parties to the non-contractual obligation. That view is consistent, for example, with the approach taken under English law to liability for misrepresentation, providing a separate claim for damages as between the contracting parties only. …”

“The language of Recital (30) … reduces the significance of comparative analysis of this kind, which in any event is inconclusive. On balance, therefore, claims by or against the representatives of negotiating or contracting parties should be considered to fall outside Art 12, although the contract or supposed contract to which the agent's conduct relates should be considered as a circumstance to be taken into account in applying a flexible rule of displacement such as that in Art 4(3) of the Rome II Regulation or in identifying the law applicable under the Rome I Regime to any contract between agent and counterparty.”

“i) The defendant makes a false representation to the claimant. ii) The defendant knows that the representation is false, alternatively he is reckless as to whether it is true or false. iii) The defendant intends that the claimant should act in reliance on it. iv) The claimant does act in reliance on the representation and in consequence suffers loss.”

“Ingredient (i) describes what the defendant does. Ingredients (ii) and (iii) describe the defendant’s state of mind. Ingredient (iv) describes what the claimant does.”

“In determining whether there has been an express representation, and to what effect, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used. In determining what, if any, implied representation has been made, the court has to perform a similar task, except that it has to consider what a reasonable person would have inferred was being implicitly represented by the representor’s words and conduct in their context.”

“In a deceit case it is also necessary that the representor should understand that he is making the implied representation and that it had the misleading sense alleged. A person cannot make a fraudulent statement unless he is aware that he is making that statement. To establish liability in deceit it is necessary ‘to show that the representor intended his statement to be understood by the representee in the sense in which it was false’ … . In other cases of misrepresentation this is not a requirement, but one would generally expect it to be reasonably apparent to both representor and representee that the implied representation alleged was being made.”

“The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence … Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation. Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established.”

“In the light of these authorities it seems to me that the law at the end of the nineteenth century had assimilated the requirement of inducement in the tort of deceit and in actions for rescission for fraudulent misrepresentation and could be stated as being that the representee had to prove he had been materially ‘influenced’ by the representations in the sense that it was ‘actively present to his mind’ to use Bowen LJ’s phrase; that, whereas there is a presumption that a statement, likely to induce a representee to enter into a contract, did so induce him, that is merely a presumption of fact which is to be taken into account along with all the evidence. There was no requirement as a matter of law, that the representee should state in terms that he would not have made the contract but for the misrepresentation but the absence of such a statement was part of the overall evidential picture from which the judge had to ascertain whether there was inducement or not. The fact that there were other reasons (besides the representation) for the claimant to have made the contract did not mean that he was not induced by the representation made. Insofar as Reynell v Sprye had said that there was no need for evidence from the claimant or that it was sufficient if the claimant ‘might’ have made the contract, if there had been no representation, that did not represent the law at any rate if ‘might’ meant something different from ‘influencing’ his decision in deciding whether to make the contract.” 191. Longmore LJ went on at [45] to say this: “I have already pointed out the ambiguity in the word ‘might’ which was in fact used in Barton v Armstrong. If it means no more than being actively present in the mind of the representee to repeat the phrase of Bowen LJ, it is perhaps a convenient shorthand. However, if it means that the court cannot make up its mind on inducement and, therefore, decides as a matter of law to give the representee the benefit of the doubt, it is not a helpful concept because that would be contrary to the law as I conceive it to be, see para 32 above, which requires the representee to prove inducement albeit with the assistance of a presumption that ‘will be very difficult to rebut’. To some extent this is a matter of terminology but terminology can be important in some cases.”

“This to my mind shows that if a representor fraudulently intends his words to be taken in a certain sense and the representee understands them in that sense and enters into a contract, it is likely to be inferred that the representee was induced to enter into the contract on the faith of the representor’s statement. It is fair to call this a presumption of inducement. However, it is a presumption of fact which can be rebutted, not a presumption of law which cannot be rebutted or can only be rebutted in a particular way. The tribunal of fact has to make up its mind on the question whether the representee was induced by the representation on the basis of all the evidence available to it.”

“4. A meeting took place at the office of Mr Gaiduk in Kiev in June 2009 to discuss terms for a sale. At the start of the meeting Mr Taruta attended by telephone and indicated that Mr Mkrtchan would be speaking on his behalf. After the call with Mr Taruta ended, Mr Mkrtchan explained to Mr Gaiduk and Mr Petrov that he and Mr Taruta had found a buyer who wished to acquire a controlling interest in IUD, and that the buyer was a Russian entity that wished its identity to remain confidential. 5. Mr Mkrtchan proposed that a transaction be structured as follows: the Claimant would sell its 33.84% interest in IUD to Azitio and Dargamo. They would in tum (at about the same time) sell that stake plus approximately 8.5% of each of their own participation interests in IUD to the Russian Buyer, thus providing it with a controlling interest of 50% plus two shares. 6.Mr Mkrtchan represented orally to Mr Gaiduk and Mr Petrov that … the price paid to the Claimant for its 33.84% participation interest would represent the same ‘price per share’ as paid by the Russian Buyer to the Defendants for the combined 50% plus two shares (‘the Price Representation’) … 7. The Price Representation and/or the First Asset Representation ( or words to similar effect) was repeated to Mr Gaiduk and/or Mr Petrov on various occasions by Mr Mkrtchan and/or Mr Taruta (acting at all material times on behalf of Azitio and Dargamo respectively) during the negotiations for the sale of the Claimant's interest in the period June - December 2009. During the same period, Mr Gaiduk and/or Mr Petrov were also told by Mr Mkrtchan and/or Mr Taruta that the Russian Buyer also required Mr Gaiduk wife’s stake in the Hyatt Hotel in Kiev as a condition of acquiring the IUD interest (the ‘Second Asset Representation’ and, together with the First Asset Representation, the ‘Asset Representations’). In particular, Mr Mkrtchan and Mr Taruta separately and repeatedly emphasised to Mr Gaiduk and/or Mr Petrov that the price that they were offering (which was less than the Claimant had hoped for) was determined by the position taken by the Russian Buyer, and that since the Defendants were getting the same price per share, all of them were in the same position.”

“My Lord, this does not contradict or is not inconsistent at all. Can I just go back to the meeting that the counsel was referring to? Mr Mkrtchan was saying that the Russian Buyer wants the majority stake … He said, apart from my share, the Russian Buyer was also buying their partial share. So there was no inconsistency that the majority share could have been purchased like that. When it turned out that the Russian Buyer wanted a controlling stake holding, controlling shareholding, it became clear that it was impossible to do directly. The partners first had to buy my share, so that having owned 100% they would have sold a controlling shareholding … At my first meeting, Mkrtchan said ‘majority shareholding’ and nothing about a controlling package. You can have a majority stake holding in an asset without having control over it. They are completely separate things. … MR WOLFSON: At the time of the June meeting, did you or did you not understand that Avonwick would have a direct contract between itself and the Russian Buyer; yes or no? A: During the first June meeting I understood that we shall have a direct contract because it allowed that to happen, because the majority shareholding could have been purchased in different ways or could have been obtained in different ways.”

“in June 2009, a meeting took place at the office of Mr Gaiduk in Kiev to discuss terms for a sale of the Claimant’s stake in IUD. The Claimant’s recollection is that Mr Mkrtchan, who was acting on behalf of Mr Taruta, explained to Mr Gaiduk and Mr Petrov that he and Mr Taruta had found a buyer who wished to acquire a controlling interest in IUD, and that the buyer was a Russian entity that wished its identity to remain confidential”

“The Claimant recalls that Mr Mkrtchan proposed a transaction whereby the Claimant would sell its 33.84% interest in IUD to Azitio and Dargamo. They would in turn (at the same time) sell that stake plus approximately 8.5% of each of their own participation interests in IUD to the Russian Buyer, thus providing it with a controlling interest of 50% plus two shares and leaving Azitio and Dargamo as minority shareholders.”

“Q. Now, in 2008 you had teams of both internal and external advisers, didn’t you? A. Yes, that’s correct. Q. Including Mr Kravets, who was very experienced in corporate finance; correct? A. Yes, that’s correct. Q. And your external advisers included PwC, UBS and Allen & Overy, didn’t they? A. Yes, that’s correct. Q. You confirmed to Mr Foxton that -- he was asking you about a time in November 2007 when you asked for a price of $3.5 billion for your family stake; you confirmed to Mr Foxton that you had a very good feel for the value of IUD. That is right, isn’t it?... A. Yes, that is correct. Q. With the information available to you, sir, you and your advisers could easily have produced an approximate valuation of both IUD and Evraz, couldn’t you? A. Yes. Q. So you could easily have calculated the approximate value of the 27.5% stake in the merged entity that Mr Mkrtchan and Mr Taruta were seeking under the proposed deal with Evraz? You could have done that, couldn’t you? A. Yes. It was difficult, but theoretically I think it could have been done. Q. If you had been at all interested in the consideration which Mr Mkrtchan and Mr Taruta were seeking in the Evraz merger deal, you would have instructed your advisers to do that calculation, wouldn’t you? A. It was possible, but I didn’t need that.”

“Q. I am asking you please to answer my question, it was a very simple question, which is: there was nothing to stop you, was there, from telling Mr Gaiduk at your meeting in June 2009 that you were going to be paid 2.75 billion by the Russian Buyer? A. If Mr Gaiduk had asked me, I would have told him. I never concealed that. It was not a secret.”

“You see, Mr Taruta, as soon as somebody is told these two critical pieces of information at a meeting, firstly, there is a Russian Buyer for your shares who wishes to remain confidential, and secondly, that the price that is being offered to you by your fellow shareholders was determined by the position of the Russian Buyer, what would be your very first question? He gave what can only be described as a non-answer to this question: “The first question I would have asked would have been the following, ‘I want to withdraw. My dear fellow partners, how much are you happy to pay me? If I am happy, I will accept the price. If I am not, I will try to identify an alternative buyer.’ I have been working in the metallurgical business since 1980, and I know very well how transactions were done and put together, and so here is what I would have said if I had been in Mr Gaiduk’s shoes.”

“Yes. What you would say, Mr Taruta, is ‘What price is the Russian Buyer paying?’ wouldn’t you? That would be your first question, ‘What price is the Russian Buyer paying?’”

“No. If I am selling, why would I ask them that question? After all, the follow-on sale was a very sophisticated and multi-component one. You cannot establish a link between the Russian transaction and the transaction with Gaiduk. The nature of the pricing of those transactions is entirely different and distinct from each other.”

“I told you the absolute truth. I promise you that I had seen lots of transactions in the former Soviet Union and in western Europe, and I take it upon myself to tell you, sir, that this is what any seller would have done, any seller who had achieved at least some success in their business.”

“So if you are told that your shares are going to be sold on to a Russian Buyer, that they are going to be sold through your partners’ companies and then moved to the Russian Buyer, you are saying in those circumstances you wouldn’t be interested in what the Russian Buyer was paying; is that right, is that your evidence?”

“If we visualise the situation whereby I am selling directly, then I would have been a party to the negotiations. I would have never delegated my negotiating authority or power to anyone. But, if I am selling, then it is up to me to decide whether I accept the terms and conditions or I do not. Now what happens afterwards, downstream, in terms of what my partners will do with the assets that I have sold to them, is of no consequence to me.”

“Of course, if you had told Mr Gaiduk the price that the Russian Buyers were paying, he would have had a whole list of questions for you, wouldn't he, such as, ‘Where does the 750 million price come from?’”

“The 750 million price is very straightforward. It is four times worth the assets of metallurgical companies. That was the multiple. That was the thing we were operating on the basis of, and also considering that the company was in default and that the company would never have been able to handle all those issues and cope with them on its own.”

“He would want to know what profit are you and Mr Mkrtchan making on the onsale, wouldn’t he?”

“No, this is not profit; it’s the consideration that we received from the Russians. That is the money that we still had to repay. There is no profit element in here.”

“All right, let’s use your word. He would want to know what consideration are you receiving from the Russians for the on-sale.”

“Definitely. He would have liked to know. But up until 2016 never ever did he raise the question of the price, whether or not it was a just and fair price. He had sufficient information available to him to understand what the level of the transaction was.”

“Q. There is not any document, is there, which says that you would get the same price per share as Mr Mkrtchan and Mr Taruta? Is there? A. That’s correct. Q. You never recorded it or even jotted it down on a piece of paper, did you? A. No, I didn’t jot it down. Q. And we don’t have any document from any of your advisers which records or references this fact either, do we? A. That’s right.”

“Mr Petrov said that the representatives of Mr Mkrtchan and Taruta looked like they were dragging on and stalling or wasting time in negotiations, because they carried on arguing or discussing relatively minor and technical matters. Representatives, yes.”

“On Monday the three current principals of [IUD] met to resolve the outstanding differences within the SPA. The outcome of this meeting is that the Ukrainian pledge will be allowed (including the possibility of enforcement through English courts). No personal guarantee of [Mr Gaiduk] will be provided, based on his oral representations to [Mr Mkrtchan and Mr Taruta] that he ([Mr Gaiduk]) will maintain his interest, directly or indirectly, in the BVI vehicle and will assure, through a separate memorandum, that in the event that an auction takes place outside of the escrow agreement, he will procure that the auction procedure is carried out in accordance with that described in the SPA.”

“Each Party acknowledges that in agreeing to enter into this agreement and the other Transaction Documents it has not relied on any express or implied representation, warranty, collateral contract or other assurance (except those stated in the Transaction Documents) made by or on behalf of any other Party before entering into this agreement. Each Party waives all rights and remedies which, but for this Clause 12.2, might otherwise be available to it in respect of any such representation, warranty, collateral contract or other assurance.”

“formally you purchased [Mr Gaiduk’s] shares in IUD and then sold them to Russians, didn’t you?”

“In fact, it all was done within one transaction. If we had not engaged in that transaction, we would have had no money to implement it”

“With respect to the transaction per se, definitely the transaction would have been possible with Gaiduk only on the premise that a transaction was going to be entered into with the Russian Buyer. That makes perfect sense.”

“I can confirm that my family has sold all of our IUD shares to our partners: Mr Taruta and Mr Mkrtchan. I have nothing to do with any subsequent transactions.”

“The fact is my partners bought my share. I really did not take part in further negotiations, and it was only from the media that I later learned that Alexander Katunin had headed the pool of investors. I’m not aware of who the final buyers are, as this lies outside my competence. I sold my shares to my partners. That’s it.”

“MR FOXTON: So if the Russian Buyer was making an offer to Mr Gaiduk, why didn’t you say ‘Well, we are all in the same boat, Mr Mkrtchan, we’ll sign up to the same deal with the Russian Buyer you’ve already negotiated’? A. Because we understood that we are a shareholder who is leaving completely, whereas they would continue. The conditions and terms would be much more complicated for them, including the agreements of who was going to be managing the company. Mr Mkrtchan never tried to hide his desire to manage the company jointly with Mr Taruta. So naturally our agreements would be different from their agreement.”

“Avonwick will only warrant as to its capacity, the title to its shares in Castlerose, that Castlerose holds the 33.84% participation interest in ISD and that the shares and the participation interest are unencumbered - note: the warranties in India [the abortive 2008 transaction] were slightly wider than just capacity eg no material breach of applicable law.”

“All information relating to the [IUD] Group which is known to or would after reasonable inquiry be known to the Sellers and which would reasonably be expected to materially affect a Purchaser’s decision to purchase the applicable Sale Shares for valuable consideration on arm's length terms has been disclosed by or on behalf of the Sellers to the Purchasers in writing.”

“The individual Sellers who hold key positions on the Company’s Board of Directors and in its management shall remain at the Company (retain a shareholder’s stake) and perform their duties for at least three to five years after the conclusion of the Deal.”

“Having reviewed them, we are willing to agree with Clauses No. 5 and No. 12. We are not willing to accept the remaining clauses, as they have already been approved by all the parties, including Vnesheconombank. Joint discussions were held on each of them, with a substantiation of the position of each party, and the corresponding agreements were reached. A change to these clauses will lead to a fundamental review of all the material parameters of the deal, including the purchase price and the structure for closing the deal.”

“... as is not unfamiliar in litigation, regret over what happened has led to a search for those who might be blamed, and has tinted the spectacles through which the events are now viewed. It is a form of 'litigation wishful thinking'. So [the representatives of the Claimant] have forgotten they were content with the original deal, and meetings at which they discussed things with [the solicitor] have turned into false recollections of advice that was not given. This does not amount to a deliberately fabricated case, but it does not create a good one either.”

“MR FOXTON: Mr Gaiduk, I want to ask you a little bit more about your evidence you have given, that you took steps to understand how such a price could be, and that you spoke, I think you said, to experts. I would like you to tell me more about who carried out these enquiries and when they were carried out? A. We discussed it with Mr Kravets, who had quite good informal relations with many representatives of different sector companies, industry companies, including Usmanov’s, Lisin’s, Severstal’s staff. We had no information about any potential interest from Ukrainians such as Mr Akhmetov, Mr Kolomoisky. So from the industry perspective, from the industry companies, potential industry buyers at the time, as far as our information told us, there were no interested parties. Therefore, the price, the potential price, there could be quite a big spread of potential prices because of the crisis. So it all depended on who the buyer would be. So it could be the price Mr Mkrtchan was stating; it could be different. But a different price, unfortunately, was not confirmed by any interest expressed. Q. When did these enquiries take place? A. After our first meeting with Mr Mkrtchan. Q. And you asked Mr Kravets to make the enquiries, did you? A. We discussed, Mr Kravets and myself, and he said yes, he was talking to everyone and he had no information about anybody having any talks with the IUD and anybody having any interest in buying. Q. Did you ask Mr Kravets to consider the appropriateness of the price which you say Mr Mkrtchan suggested at the first meeting of $750 million for your 33.85% share? A. I don’t remember personally asking Mr Kravets, but I think he and Mr Petrov must have discussed it. I remember that by the time I spoke to him, Mr Kravets was ready to comment on it. Q. Is it your evidence that Mr Kravets spoke to other knowledgeable people in the market about this issue? A. I think he did, yes. According to his information, this was the case.”

“A. We did discuss after our meeting with Mr Mkrtchan, we discussed this matter with Mr Kravets and Gaiduk, and as far as I remember Mr Kravets, based on the models that he used in the past and they used in calculations, he looked at what was the corridor, the price corridor, the range. We thought that the range was quite wide, different indicators had to be taken into consideration, so we decided that, given certain variables and certain assumptions, that today’s market would probably reflect that price. That’s all I remember how we discussed it and how we tried to analyse whether this price was adequate and acceptable.”

“… I basically did two things, and that probably took me maybe a day, maybe half of a day (sic), maybe two days, but it was something very short and I was not very much into that. So two things were probably the following: I did look at the sale analyst’s research as to the industry to get the update …, and I did a quick re-run of the sensitivities of the 2007 model, which was used in the other transaction called Laguna, to see what the outcome would be. Basically, the result for me, if I may say, was kind of a glimpse of what the high level viability of the transaction could be, and that was as much as it went.”

“attached is the very preliminary draft of the presentation to be given during the alllender meeting in London on December 21, 2009. Please note that some elements of this presentation will need to be changed substantially, as JP Morgan may not possess the necessary level of detail in respect of the deal.”

“Had I known the sum or the amount the Russian Buyer was actually paying my partners, there would have been three possible options. First, I would have demanded that there should be a proportional sum, as has been mentioned, similar to the others. Or I would have been ready to sell one-third of my stake and remain in the company, if proportionality depended on that. If neither, I would have just refused to go through with the deal. But I wasn’t given any options.”

“In order to ground relief to a person who has entered into a contract as a result of a misrepresentation, it is normally necessary that the misrepresentation should have been made either by the other party to the contract, or by his agent acting within the scope of his authority, or that the other party had notice of the misrepresentation; notice may be actual or constructive. A person who has been induced to enter into a contract with A as a result of a misrepresentation made to him by B and of which A had no notice has no ground of relief against A unless B was A’s agent. It is, however, not necessary to show that the misrepresentor was the agent of the other contracting party for the purpose of concluding the contract, or even for the purpose of conducting negotiations; it is sufficient if the misrepresentor was the agent of the other contracting party simply for the purpose of passing on the misrepresentation to the misrepresentee.”

“… a person may be liable in deceit as a joint tortfeasor if he is a knowing and active party to a scheme to defraud, even if he has not himself said anything and the actual representation has been made by someone else.”

“To establish accessory liability in tort it is not enough to show that D did acts which facilitated P's commission of the tort. D will be jointly liable with P if they combined to do or secure the doing of acts which constituted a tort. This requires proof of two elements. D must have acted in a way which furthered the commission of the tort by P; and D must have done so in pursuance of a common design to do or secure the doing of the acts which constituted the tort. I do not consider it necessary or desirable to gloss the principle further.”

“The court should not impose an agency analysis upon a relationship which may better be analysed in other terms, in particular where the intermediary … has its own interest in the transaction as a principal.”

“It follows, therefore, that Mr Saini QC was right when he submitted that a person may be an agent where he acts on behalf of a principal but has no authority to affect the principal's relations with third parties and that it is not a sine qua non that an agent should owe his principal a fiduciary duty. It would be quite wrong, however, to approach matters on the footing that the absence of these features is immaterial, the more so when both features are absent, since to do so could result in a finding that there is an agency relationship in situations where such a finding would be wholly inappropriate.”

“The basis on which a principal becomes responsible for the statements of an agent (who is neither an employee or partner stricto sensu) is, as Bowstead & Reynolds on Agency 20th ed) observes at paragraph 8-182, ‘somewhat limited’ and is confined to cases where: ‘… the function entrusted is that of representing the person who requests his performance in a transaction with others, so that the very service to be performed consists in standing in his place and assuming to act in his right and not in an independent capacity.’ … .”

“…I said to him ‘We are on a loudspeaker’, and I wanted to ask him two straightforward questions: number (1) is he aware of the proposal and (b) will he confirm that Mr Mkrtchan has the authority to talk on behalf of both of you as opposed to just one of you? Because Mr Mkrtchan told me he is talking on behalf of both of them. All I needed to hear from Mr Taruta is the confirmation.”

“At the start of the meeting Mr Taruta attended by telephone and indicated that Mr Mkrtchan would be speaking on his behalf.”

“… where in the case of any action for which a period of limitation is prescribed by this Act, either – (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant; … the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it. References in this subsection to the defendant include references to the defendant’s agent and to any person through whom the defendant claims and his agent.”

“The meaning of this expression was considered in Beaman v ARTS Ltd [[1949] 1 K.B. 550, Denning J; [1949] 1 All E.R. 465, CA] The claimant entrusted property to the defendants to look after. During the Second World War the defendants, believing that the claimant could not be traced and being fearful for the safety of the goods during the Blitz, gave the property away. After the War the claimant reappeared and demanded the return of her goods. She sued the defendants in conversion when they were unable to comply with this demand. They pleaded that the cause of action arose in 1940 when they disposed of the goods (on which assumption the action was out of time) but the claimant argued that the disposal of the goods was ‘fraud’ within what is now s.32(1)(a), so that time did not start to run until she discovered the loss in 1946. Both Denning J and the Court of Appeal held that the action was not based on fraud, although their approaches to the definition of fraud in this context were different. Denning J held that there was no fraud where the defendant honestly believed that the owner had consented to the disposal or that he would have done so had it been possible to contact him and seek his approval. The Court of Appeal laid down a more general test applicable to any case in which s.32(1)(a) is pleaded. An action is ‘based on fraud’ for this purpose when (and only when) fraud is an essential element of the claimant’s claim.21 This requirement was not satisfied here, since the action was pleaded in conversion, a tort which can be committed without any fraud (though of course it may involve fraud).”

“Section 32(1)(a) of the Limitation Act 1980 provides that where the action is based upon the fraud of the defendant, the period of limitation shall not begin to run until the claimant has discovered the fraud or could with reasonable diligence have discovered it. This provision is, however, of limited scope because it only covers cases where the cause of action requires the allegation and proof of fraud in the strict sense, e.g. as in actions for fraudulent misrepresentation or deceit.

“Where actual discovery is relied on, discovery does not connote knowledge for certain and beyond possibility of contradiction but suspicion is not enough: reasonable belief suffices. In a case of fraud by deceit, it seems that knowledge is needed of the precise deceit practised and that knowledge of fraud ‘in a more general sense’ does not start time running.”

“The question is not whether the Plaintiffs should have discovered the fraud sooner; but whether they could with reasonable diligence have done so. The burden of proof is on them. They must establish that they could not have discovered the fraud without exceptional measures which they could not reasonably have been expected to take […] [T]he test [is] how a person carrying on a business of the relevant kind would act if he had adequate but not unlimited staff and resources and were motivated by a reasonable but not excessive sense of urgency.”

“it followed from Millett LJ’s construction of section 32(1) that there must be an assumption that the claimant desires to discover whether or not there had been a fraud committed on him. Not to make such an assumption would rob the word ‘could’ in the section of much of its significance. Moreover, the concept of ‘reasonable diligence’ carried with it the notion of a desire to know and, indeed, to investigate.”

“Neuberger LJ added that ‘one must be very careful about implying words into a statutory provision’, but he said that the judge had not been seeking to imply words, or a new concept, into the statutory provision. He was merely ‘explaining what was involved in the process of deciding whether a claimant could, with reasonable diligence, have discovered the fraud which it now seeks to plead’. I respectfully agree. Another way of making the same point, as I suggested in argument, might be that the ‘assumption’ referred to by Neuberger LJ is an assumption on the part of the draftsman of section 32(1), because the concept of ‘reasonable diligence’ only makes sense if there is something to put the claimant on notice of the need to investigate whether there has been a fraud, concealment or mistake (as the case may be).”

“The burden of proof that the claimant both lacked the relevant knowledge and could not have made the discovery earlier than he did rests on him.”

“Who is this buyer? At that kind of a price I could go and negotiate the sale myself”

“Q. Mr Gaiduk, do you see the third paragraph there, a reference to “it is estimated that the Russians paid US$2 billion for 50% plus 2 ... shares ”

“… the question of causation was a separate legal question from the issue of inducement. Whilst there might be an overlap on the facts relevant to both questions, a favourable answer to the Claimants on inducement did not enable the Claimants to bypass the question of causation.”

“It seems to be the normal rule that, where a party has entered a contract after a misrepresentation has been made to him, he will not have a remedy unless he would not have entered the contract (or at least not on the same terms) but for the misrepresentation. Certainly this is the case when the misrepresentee claims damages in tort for negligent misstatement; and it seems also to be required if damages are claimed for fraud.”

“It is sufficient if the relevant loss can be said to be caused by the representation, and it is not necessary to show that the loss is attributable to that which made the representation wrongful. In that sense the test is a relatively generous one, in that the misrepresenting party may have thrown upon it risks unrelated to the representation. However, there is still the requirement that the loss flow from the representation, and it seems to me impossible to conclude that it does so flow if one concludes that quite apart from the representation the appellant would have entered into a transaction bringing with it the very risk which eventuated in the relevant transaction and which can be seen as the cause of the loss which the appellant seeks to recover. There may be an element of impression in all this.”

“Mr Petrov introduced amendments in the memorandum, and on the 14th, and then dated 15th, he sent it to Mr Tkachenko automatically all the partners. So he introduced the changes or the agreements that we had struck, what we had agreed, the Dubyna and other aspects, all the components.”

“Mr Taruta also wishes to clarify the following in relation to paragraphs 73 and 80 of his second witness statement, which should be read as a new paragraph 73A: ‘In my second witness statement I said that, although it is difficult for me to now recall exactly, I am almost certain that I did not meet with Mr Gaiduk in December 2009. Since then, I have seen a couple of family photographs from a celebration of my eldest daughter’s birthday on 13 December 2009. The photographs indicate I was at the celebration, which was held in the Hyatt Hotel in Kyiv. Previously I hadn’t remembered being in Kyiv in December 2009. Considering I was in fact in Kyiv then, it might be the case that I did meet with Mr Gaiduk and/or Mr Mkrtchan at that time, although I cannot specifically recall a meeting taking place. My handwritten annotations on the version of the 2009 MoU Amendment circulated by Mr Petrov (CD-00005675) also suggest that there may have been a meeting at or around this time.’”

“Q. Now I am completely lost, Mr Taruta, as to what your evidence is to his Lordship. You now seem to be saying that there was an agreement on 14 and 15 December, what, between who, between Mr Mkrtchan and Mr Gaiduk, is that your evidence? A. Between Mkrtchan, Gaiduk, and possibly I was there at the meeting as well, because the photos -- we provided the photos, and recently I was looking through them whether I could have been there as well or not, and I saw that there was a birthday party and at that birthday party on 13 December I was at the daughter’s, and most likely on the 14th or the 13th when we had a meeting we were together as well.”

“A contract shall be governed by the law chosen by the parties. The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or a part only of the contract.” 483. Article 4(1) states that: “To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected. Nevertheless, a severable part of the contract which has a closer connection with any country may by way of exception be governed by the law of that other country.” 484. Article 4(2), then, provides: “it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporate, its central administration.”

“A contract shall be governed by the law chosen by the parties. The choice shall be made expressly or clearly demonstrated by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or to part only of the contract.”

“the contract shall be governed by the law of the country where the party required to effect the characteristic performance of the contract has his habitual residence.”

“the contract shall be governed by the law of the country with which it is most closely connected.”

“The circumstances which may be taken into account when deciding whether the parties have made an implied choice of law… range more widely in certain respects than the considerations applicable to the implication of a term into a written agreement.”

“a previous course of dealing between the parties under contracts containing an express choice of law may leave the court in no doubt that the contract in question is to be governed by the law previously chosen where the choice of law clause has been omitted in circumstances which do not indicate a deliberate change of policy by the parties.”

“The Commission Agreement follows on from the two shipbuilding contracts. The Commission Agreement concerns the sale of the two vessels which are the subject matter of the two shipbuilding contracts. The Commission Agreement would not have come into existence if those two contracts had not existed and if the two vessels were not there to be sold, having been built. To my mind it is obvious that these contracts are all of a series. There has been a previous course of dealing between the same parties, and the Commission Agreement is closely associated with those other two contracts. There is nothing in either of the terms of the Commission Agreement or in the surrounding circumstances to lead away from the conclusion that the parties did silently, as it were, choose English law.”

“Logically there may be a certain artificiality in attributing to the parties a tacit choice in circumstances which do not suggest that they gave actual thought to the matter, as Redfern and Hunter comment in their book on International Arbitration, 5th Edition, 2009, at para 3.206. However, one can see the justice of inferring a choice of law in circumstances where it would not reasonably have occurred to the parties to suppose that a different law might apply. It would lack practical sense to require that they should have contemplated that which would not reasonably have occurred to them.”

“The objective nature of the test means that the party asserting an implied choice of law has to satisfy the court to the required standard that, on an objective view, the parties must have taken it without saying that their contract should be governed by that law – or, in Lord Diplock’s formulation, that the contract taken as a whole points ineluctably to the conclusion that the parties intended it to be governed by that law. He does not have to prove that there was in fact a subjective conscious choice (for, as I have said, evidence of subjective intention would be inadmissible), but he does have to satisfy the court that the only reasonable conclusion to be drawn from the circumstances is that the parties should be taken to have intended the putative law to apply.”

“the English court should be entitled to take subsequent conduct into account, at least to the extent that it sheds light on the intention of the parties … at the time the contract was concluded.”

“There is no objection in principle to different parts of the contract being subject to different laws for the purpose, for example, of interpretation: it is in theory possible (although in practice inconvenient, and infrequent) for one part of a contract to be construed in accordance with the principles of English law, and for another part to be construed in accordance with the principles of French law. However, there is an objection in principle to what has been called “the general obligation” of a contract being governed by more than one law. Even if different parts of a contract are said to be governed by different laws, it would be highly inconvenient and contrary to principle for such issues as whether the contract is discharged by frustration, or whether the innocent party may terminate or withhold performance on account of the other party’s breach, not to be governed by a single law.” 500. That said, the Report emphasises that it: “did not adopt the idea that the judge can use a partial choice of law as the basis for a presumption in favour of one law invoked to govern the contract in its entirety. Such an idea might be conducive to error in situations in which the parties had reached agreement on the choice of law solely on a specific point. Recourse must be had to Article 4 in the case of partial choice.”

“This Deed and any non-contractual obligations arising out of or in connection with it shall be governed by English law.”

“if a party, which receives an offer, suggests alternative terms to those offered, the initial offer is deemed to have been rejected and the new proposal constitutes a new offer which can be accepted or rejected.”

“If the person that received an offer to enter into a contract does, within a response period, any act pursuant to the contractual terms specified in that offer (ships goods, provides services, carries out work, pays a relevant sum of money, etc), which act shows that such person is desirous of entering into the contract, such act constitutes acceptance of that offer, unless otherwise specified in the offer or provided by law.”

“A transaction may be made orally or in writing (electronically). Parties may choose the form of their transaction, unless otherwise prescribed by law.”

“A contract may be concluded in any form if the requirements as to the form of the contract are not prescribed by law.”

“A transaction shall be considered to be in writing if it is contained in one or more documents (including electronic ones) or in letters or telegrams exchanged between the parties. A transaction shall be considered to be in writing if the parties’ will is expressed by means of teletype, electronic or other communications equipment.”

“Failure by parties to comply with the statutory written form requirement applicable to a transaction shall not result in its invalidity, unless otherwise prescribed by law.”

“A contract or an act intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in Article 11 under which that contract or act is formally valid, provided that such mode of proof can be administered by the forum.”

“the English court will always apply its own rules of procedure and will, moreover, refuse to apply any foreign rule which in its view is procedural.”

“The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement.”

“although certain terms of economic significance to the parties were not agreed, neither party intended agreement of those terms to be a precondition to a concluded agreement. The parties regarded them as relatively minor details which could be sorted out without difficulty once a bargain was struck. The parties agreed to bind themselves to agreed terms, leaving certain subsidiary and legally inessential terms to be decided later.”

“The proper approach is, I think, to ask how a reasonable man, versed in the business, would have understood the exchange between the parties. Nor is there any legal reason that the parties should not conclude a contract while intending later to reduce their contract to writing and expecting that the written document should contain more detailed definition of the parties’ commitment that had previously been agreed.”

“Although the formation of contract is conventionally analysed in terms of whether a contractual offer was accepted, the law does not require rigorous compliance with an analysis along these lines. Nor does it require that any particular communication or act must in itself manifest that the party intends to contract: the court will, if appropriate, assess a person’s conduct over a period of time and decide whether its cumulative effect is that he has evinced an intention to make the contract.”

“The oral agreement in principle that had been reached, i.e. the core terms, did not cover everything that would have been expected in due course to be dealt with in a formal written contract. It must have been expected, for example, that Mrs LisleMainwaring would have wanted some provision to be included in the formal contract regarding the reasonably expeditious commencement and progress of the development and, also, some security and timetable for the payment of the appellant's share of the excess over £24 million of the gross proceeds of sale. The nature of the transaction would plainly have excluded reliance on a vendor’s lien. Mr Cobbe, for his part, would probably have wanted some contractual assurance as to the timing of the availability of vacant possession of the block of flats. These would not have been expected to have been difficult matters on which to reach agreement but were all matters for future discussion, and the outcome of future negotiations has always an inherent uncertainty.”

“It is well established that when deciding whether a contract has been made during the course of negotiations the court will look at the whole course of those negotiations.”

“In deciding whether the parties have reached agreement, the whole course of the parties’ negotiations must be considered and an objective test must be applied … Once the parties have to all outward appearances agreed in the same terms on the same subject matter, usually by a process of offer and acceptance, a contract will have been formed. The subjective reservations of one party do not prevent the formation of a binding contract. Further, it is perfectly possible for the parties to conclude a binding contract, even though it is understood between them that a formal document recording or even adding to the terms agreed will need to be executed subsequently. Whether they do intend to be bound in such circumstances, or only as and when the formal document is executed, depends on an objective appraisal of their words and conduct.”

“The fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no intention to enter into legal relations.”

“… ‘letters of intent’ or ‘letters of comfort’ may lack the force of legally binding contracts. The assumption in all these cases was that the parties had reached agreement, but lack of contractual intention prevented that agreement from having legal effect.”

“Further, it is perfectly possible for the parties to conclude a binding contract, even though it is understood between them that a formal document recording or even adding to the terms agreed will need to be executed subsequently. Whether they do intend to be bound in such circumstances, or only as and when the formal document is executed, depends on an objective appraisal of their words and conduct.”

“Q. So can I just understand. The written documents that you say contain the terms of your agreement with Mr Gaiduk and Mr Mkrtchan are, what, which documents? Which documents do you point to as containing the terms of your agreement? A These are MOUs and the sale and purchase agreements during 2008 and 2009. It was one transaction which started from the moment of the receipt of the letter of Vizavi, and until the closure of the deal on 30 December. Q. So you say, do you, that the terms of the agreement that were reached with Mr Gaiduk can be found in the 2008 MOUs? A. In 2008 we clearly set out the price, which was the most important factor, and we set out the terms, the dates, which were renegotiated based on the circumstances which occurred on the metallurgical market. Q. I am just going to ask you the question once more, Mr Taruta. I am trying to understand your case as to which agreements contain the terms of your deal with Mr Gaiduk. Do you say that the terms of the 2008 MOU are part of the binding agreement that you reached with Mr Gaiduk? A. Yes, that is so. All memoranda were binding. They were the agreements and we, on our part, were performing all the requirements which Mr Gaiduk was putting to me and to Mr Mkrtchan. We were providing pledges; we re-registered companies, based on the MOUs which, from the very start, on the initiative of Mr Kravets and Mr Petrov, were formed, and they were binding, to be performed by all the parties.”

“Q. So it is your case, is it, that the terms of the agreement are to be found exclusively in the 2009 memoranda of 18 December. Is that your case? A Not only in those memoranda. There were also pledge agreements, re-registration of shares agreements, agreements of sale and purchase of the option, and in 2009 -- and at the end of 2009 they were derivatives of the agreements we reached and reflected in our agreements.”

“… agreement under which, inter alia, Mr Mkrtchan and Mr Taruta were to buy (i) Mr Gaiduk's indirect interest in ISD for US$750m and (ii) Mr Gaiduk's indirect interest in a number of other assets.”

“Q. There was nothing unusual in Ukraine at that point in time in the fact that the bonus arrangement was agreed orally but not documented, was there? A At that point in time, in our relationships that was fine, that was okay. Q. But presumably you understood that the agreement to pay you a bonus represented a binding commitment. A. Yes, my Lord.”

“when we used the word ‘memorandum of understanding’ I mean something to remember, aide-memoire, to remember what we agreed upon during our previous dealings and agreed with”; “[Mr Petrov] just recorded what the partners had agreed on. The next amendment would be introduced only after the partners had agreed on something”; and “what is noted in the MOUs is what the partners agreed, came to an agreement about.”

“All memoranda were binding. They were the agreements and we, on our part, were performing all the requirements which Mr Gaiduk was putting to me and to Mr Mkrtchan. We were providing pledges; we re-registered companies, based on the MoUs which, from the very start, on the initiative of Mr Kravets and Mr Petrov, were formed, and they were binding, to be performed by all the parties.”

“This Memorandum shall enter into force from the moment it is signed by the Parties, and shall remain valid until the Parties fulfil the obligations assumed herein. The Parties shall make every effort to achieve the goals established by this Memorandum. Unilateral amendment to the terms of this Memorandum or unilateral refusal to perform obligations under this Memorandum is not allowed. This Memorandum is composed in Russian in four original copies with equal legal force, one copy for each Party.”

“Q. But on your approach to these documents, you were legally obliged to pay Mr Gaiduk $3 billion in cash, which you didn’t have. That is correct, isn’t it? A. Correct. Q. Mr Gaiduk, if he had wanted to, on your approach, could have sued you for that money and you would be forced either to sell your interest in IUD in order to pay him; that would be one option, would it not? A. Possibly so. Q. And even if you had sold your interest in IUD, you would probably still owe him money because your interest and Mr Mkrtchan’s interests together would probably not have been worth $3 billion; correct? A. It would be worth much less than that. Q. Or Mr Gaiduk could have taken your share and Mr Mkrtchan’s share in IUD from you, and sold the whole of IUD to a third party. That would be another option which he could have done, isn’t it? A. Yes. That would have been possible. Q. Over and above that, he could have sold CIG, taken his share, as well as a $300 million penalty, leaving you and Mr Mkrtchan with whatever might be left over after that. That is also correct, isn’t it? A. Yes, that is true. Q. So the fact is, on this approach, Mr Taruta, that you and Mr Mkrtchan were on the brink of losing almost everything you had, and Mr Gaiduk was entitled to $3 billion in cash. That is correct, isn’t it? A. Yes. Q. But as you have already agreed, you didn’t pay him $3 billion at this time, you actually paid him $750 million in December 2009. Correct? A. Yes, that had been the agreement that was reached at that time, to lower the price, to go down. Q. Because you don’t say, do you, that you and Mr Mkrtchan still owe Mr Gaiduk $2.3 billion, do you? A. I’m not saying that. When we signed the next agreement, it had an express provision that we had renegotiated the terms and the price had changed. Q. What your position boils down to, Mr Taruta, doesn’t it, is that during the course of 2009 Mr Gaiduk voluntarily gave up his legally binding contractual entitlement to $2.3 billion. That is right, isn’t it? A. Yes.”

“Q. What we don’t see in the documents leading up to this email at the end of January 2009 is any evidence of, first, Mr Gaiduk demanding to be paid $3 billion or the $300 million penalty. We don’t see that, do we? A. No, there wasn’t this document, and this memorandum shows the amendments of our understandings. Q. Nor do we see Mr Gaiduk telling you and Mr Mkrtchan that you are in breach of contract with him. We don’t see that either, do we? A. Yes, I agree. Q. Nor do we see any discussion between you and Mr Mkrtchan saying ‘Oh my Lord, we owe Mr Gaiduk $3.5 billion and we haven’t got the money to pay it, what are we going to do?’ We don’t see that either, do we? A. No, it didn’t happen. Q. Because you don’t suggest, do you, that any of those three things took place, do you? A. No, I do not suggest that.”

“WHEREAS, in this Memorandum No. 2 the Parties intend to determine [also translated as ‘formalise’] their relationship for management of the Consortium for the period until execution of the Contract or at the end of five (5) [months] after the signing of Memorandum No. 1 … 2. Not later than 15 calendar days from the date of execution of the Contract, the Selling Shareholder undertakes to take all of the necessary actions to transfer the interest in the Consortium back to the Buying Shareholders. If the Contract has not been executed at the end of five (5) months after the signing of the agreements for sale and purchase of interests in the charter fund of the Consortium, in that case the Selling Shareholder undertakes to sell all of the Consortium’s assets within twelve (12) calendar months from the end date of that five (5) month period. Such sale shall be accomplished through the international investment bank agreed upon with the Buying Shareholders. The proceeds from the sale shall be distributed among the Parties in proportion to their initial participatory (before transfer) interest in the Consortium. In addition, the amount payable to the Buying Shareholders in proportion to their participatory interest in the Consortium will be reduced in favour of the Selling Shareholder by USD 300 (three hundred) million.”

“The MOU dated 16 April 2008 set out the commercial terms of the agreement reached between the parties whereby Mr. Gayduk … will sell his participation interest in the corporation …”

“On April 16, 2008 all the shareholders have signed a Memorandum of Understanding, which outlines major commercial agreements regarding such Buyout. It is further envisaged that within the next 4 months, the parties to the Memorandum will enter into a definitive agreement, which will govern the Buy-out.”

“WHEREAS, the Parties have not entered into the Agreement for the sale and purchase of the Selling Shareholder’s participatory interest in ISD within the agreedupon period; WHEREAS, the Purchasing Shareholders are obligated to pay a penalty in the amount of US$300 million under the terms of Memoranda No. 1 and No. 2; WHEREAS, Industrial Group Consortium (CIG) has been registered in the names of the Selling Shareholders’ entities with deferred payment; WHEREAS, the Purchasing Shareholders collectively spent US$140 million for personal use in 2008 out of ISD’s mutual funds – ‘Dividends’; WHEREAS, the Purchasing Shareholders collectively spent 16 million US hryvnias [sic] in 2008 on financing the media group belonging to the Purchasing Shareholders; WHEREAS, the world financial crisis has affected ISD’s financial position, NOW, THEREFORE, the Parties have collectively agreed as follows: 1. The amount of penalties has been reduced from US$ 300 million to US$ 50 million. 2. Penalties in the amount of US$50 million shall be paid to the Selling Shareholder no later than 15 December 2009. 3. The Purchasing Shareholder must arrange the payment of ‘Dividends’ to the Selling Shareholder in the amount of US$70 million. This will ensure the balance of ‘Dividends’ received by each of the three ISD shareholders for 2008. … 5. In the event of the late performance by the Purchasing Shareholders of their obligations under this agreement, penalties shall be charged at the rate of 20% per annum on the overdue amounts. If such obligations, including penalties, are not discharged by the end of 2009, the Selling Shareholder shall be obligated to sell the assets of Industrial Group Consortium within 6 months. The monetary funds received from such sale shall be distributed among the Parties in proportion to their original participatory interests in the Consortium. In such event, the amount payable to the Purchasing Shareholders shall be reduced in favor of Selling Shareholder by the amount of the obligations, including penalties, under this Agreement. The funds that are supposed to be paid by the Selling Shareholder under the agreement for the sale and purchase of participatory interests in the Consortium shall be considered technical and due to be refunded to the Selling Shareholder within 5 days from the time of such payment. … 7. If the Purchasing Shareholders have performed their obligations by the end of 2009 or by the time of the sale of the Consortium’s assets, then the Selling Shareholder shall take all the necessary steps to re-register their participatory interests in the Consortium back to the Purchasing Shareholders.”

“In addition to the obligations of the parties under the SPA, Vitaly Gayduk will transfer or procure the transfer to Oleg Mkrtchan and Sergiy Taruta of the assets listed in the schedule to this Letter…”

“The Parties agree that the Transfer shall take place on the [•] day following the Completion.”

“On the date of completion of the Transfer Vitaly Gayduk will execute instruments of transfer, notifications of change of ownership and such other documents with each of Oleg Mkrtchan and Serhiy Taruta as may be required to effect the Transfer.”

“This Letter is intended to be legally binding.”

“Needless to say, depending on what the assets are, there are a number of other issues we may want to deal with in more detail, including: Tax/structuring issues AMC/other regulatory consents pre-emption rights/waivers Transfer formalities (for example in relation to transfers of property) Pre-closing restrictions (there are none for the moment) Warranties (beyond the basic absence of encumbrances, there are none for the moment) If there are companies involved, issues such as removal of directors/change of account mandates/etc on transfer.”

“Q. But they were not going to rely on those draft MOUs as the contract to transfer Mr Gaiduk’s assets other than the Castlerose SPA, because they instructed an English law firm to draft a formal contract, didn’t they? A. Yes, in order to draft the SPA. Q. Now let’s just have a look at this and imagine that you are Mr Tkachenko, because he's not here to answer questions so I’ve got to put them to you. Let’s just think about what the position would be if you and Mr Mkrtchan did intend the draft MOU to become legally binding, and believed that it would be legally binding. Let’s just think through how that would work out. Okay? The first point is that Mr Tkachenko, who is your most senior in-house lawyer, is instructing Linklaters, no doubt at some cost, to produce a legally binding English law contract to transfer those assets, despite knowing that you, Mr Mkrtchan and Mr Gaiduk propose to sign the MOU, which, on this basis, would be a binding contract for the transfer of those same assets. Are you suggesting that Mr Tkachenko therefore misunderstood the basis on which he was instructing Linklaters? A. No. He understood correctly. It seems that he received instructions from Mr Mkrtchan that we had the SPA prior to that in the summer, and it needed to be just renewed and the new amount to be included. Apparently this is what Mr Mkrtchan told Tkachenko, and Tkachenko gave these instructions to Pisarevsky and to our lawyers.”

“At the level of the shareholders, at our level, we continued having meetings and exchanging MoUs.”

“This version was approved in the summer; now amendments will be made concerning dividend amounts; certain assets will be added; and I think the order of payments will be changed.”

“I’d like to bring to your attention that it is very important to receive an updated version of the memorandum as soon as possible, because, as far as I understand, the document has to be definitively approved and signed before day X.”

“V.A Haiduk, hereinafter referred to as the Selling Shareholder, as the party of the first part, and also S.A Taruta and O.A. Mkrtchan, referred to as the Buying Shareholders, as the party of the second part, all together referred to as the Parties, have entered into this agreement as follows:”

“WHEREAS The Parties did not execute the Agreement for Sale and Purchase of the Selling Shareholder’s stake in ISD within the agreed timescale. WHEREAS The Buying Shareholders are obligated to pay a fine of USD 300 million according to Memoranda No. 1 and No. 2. WHEREAS Industrial Group Consortium has been transferred to the structures of the Selling Shareholder with deferred paymentWHEREAS In 2008 the Buying Shareholders together spent USD 184 million from profits of ISD on private purposes – the ‘Dividends’. WHEREAS In 2008 the Buying Shareholders together spent UAH 16 million on financing the media group owned by the Buying Shareholders. WHEREAS The global financial crisis has affected the financial condition of ISD”

“1. The total indebtedness of the Buying Shareholders to the Selling Shareholder taking into account its share of the “Dividends” for 2008, adjusted penalties and expenses for financing the media group is USD 119,000,000. 2. Thus, the Buying Shareholders shall pay the Selling Shareholder USD 119,000,000. 3. The Parties have valued the Hyatt Hotel as USD 173.3 million minus the debt to IFC (USD 23.3 million as at January 1, 2009). The total net value of the Hyatt Hotel is equal to USD 150 million. The share of the Buying Shareholders is two thirds of the value of the Hyatt Hotel, which is USD 100 million. 4. The Parties have decided that as partial payment of the debts mentioned in Clause 1 hereof the Buying Shareholders will transfer their shares in the Hyatt Hotel free of charge to the Selling Shareholder. It will be considered that the Buying Shareholders have settled with the Selling Shareholder in the amount of USD 100 million. The funds that may be technically paid by the Selling Shareholder under the agreement for sale and purchase of shares of the Hyatt Hotel shall be considered ‘technical’ and shall be returned to the Selling Shareholder within five days of such payment. After transferring the shares in the Hyatt Hotel to the Selling Shareholder, the Parties will sign the following agreements: - Agreement (option) for buyback of shares in the Hyatt Hotel in favour of each of the Buying Shareholders, under which each of the Buying Shareholders may, by August 1, 2010, buy back one third of all the Hyatt shares at a price of USD 173.3 million for 100% of the shares, minus Hyatt’s financial debts at the time of the buyback. The buyback cannot be done if the indebtedness under Clause 10 hereof has not been discharged. The Selling Shareholder undertakes not to change the operator of the Hyatt Hotel during the term of the option. - Agreements terminating the agreements for sale and purchase of interests in the charter fund of IG Consortium in accordance with which the ownership title to such interests will be returned and re-registered to Azovinteks LLC and Region LLC. 5. The Buying Shareholders shall pay the outstanding indebtedness of USD 19 million at the time of buyout of the ISD interests from the Selling Shareholder. 6. In addition, the Parties hereby intend to document their existing arrangements regarding division of offices, which shall occur as follows: - The office located at the address ul. Panasa Mirnogo, Kyiv, which is on the balance sheet of UGMK, and the office that is on the balance sheet of Industrial Group Consortium and is located at the address 42-B ul. Ivana Franka, Kyiv, shall go to the Selling Shareholder. - The offices located at the address 14-B ul. Yaroslavov Val, Kyiv, and the office that is on the balance sheet of SAM Travel Agency and is located at the address 40-B ul. Ivana Franka, Kyiv, shall go to the Buying Shareholders. 7. The Parties hereby set a new timescale and conditions for entering into the agreement for sale and purchase of the Stake in ISD: - The price of the Selling Shareholder’s Stake in ISD is USD 750 million (hereinafter, the Stake Price); - The payment date for the Stake shall be on or before January 1, 2010; - Ownership title to the Stake (shares in the non-resident company) shall pass on the day the Stake Price is credited to the bank account of the Selling Shareholder; - If the Stake is not paid in full by the above-mentioned date, such sale and purchase agreement for the Stake shall terminate. 8. The Parties hereby specify that the Stake Price also includes the price of the shares of the Selling Shareholder in the following companies: - Kuibyshey Kramatorsk Metallurgical Plant OJSC; - Dnieper Pipe Plant OJSC; - Yalta Intourist Hotel Complex OJSC and Donbass resort; - UGMK OJSC; - United Steel Industries FZC, Fujairah, United Arab Emirates. - Kuban Holding Company CJSC and Armavir Metallurgical Plant CJSC - Metallurgival plant in Pakistan 8. The Parties have agreed that under the agreement for sale and purchase of the Stake in ISD the following may be paid: - 100% of shares in the Hyatt Hotel. The 100% shares in the Hyatt Hotel are valued at USD 173.3 million as at December 14, 2009, minus the debt to IFC (USD 20.7 million as at September 30, 2009), for a total of USD 152.6 million; - The stake of the Selling Shareholder in Argo Holding: USD 15 million; - The stake of OV in ISD: USD 15 million; - The stake of LOK Aivozovskoye [sic]: USD 2 million; 10. The Parties have hereby specified the following Payment Procedure for the Stake Price and payments of indebtedness according to Clauses 5, 8 and 9 hereof: - Buyout of the shares of the non-resident directly holding the Stake in ISD: USD 953.6 million (comprised of 750+19+152.6+15+15+2). 11. The Parties hereby specify that if the Stake in ISD is not bought according to Clause 9 hereof, the obligations of the Buying Shareholders mentioned in Clauses 1 and 2 hereof will be increased by the amount of additional penalties and will be USD 142.75 million. In that case, USD 100 million shall be repaid according to Clause 4 hereof. The remaining USD 42.75 million shall be repaid by August 1, 2010, but no later than the buyback date of the Hyatt Hotel shares. 12. As of the signing of this Agreement the Parties shall keep the proposed transaction confidential and shall not disclose or provide information to third parties.”

“Q. I suggest what Mr Petrov was doing was making amendments to reflect what you had told him you were doing with your partners? A. No, that’s not the case. Mr Petrov was trying to reflect what we discussed with my partners. Q. Look at clause 1, the reference to 119 million, that figure was one you had agreed with your partners, wasn’t it? A. Yes, my Lord, that is exactly what we agreed with my partners. Q. If we look over to clause 9, for example, the figure there of 15 million for Agro Holding was a figure you had agreed with your partners, wasn’t it? A. Yes, my Lord, that is the case.”

“Q. I suggest that what happened after this document we have been looking at was produced, is that there was a meeting between you, Mr Mkrtchan and Mr Taruta, in Kiev, at which you had a physical copy of the document we have just been looking at. A. My Lord, we have never worked with a paper copy of the document which we are looking at right now. Q. Can we have a look, and my Lord it will be necessary to go to a Russian version … I wonder if we can go over to the second page of that document …. Mr Gaiduk, do you see on the second page there is some handwriting? A. Yes, I can see that. Q. Do you recognise whose handwriting it is? A. I believe it is Mr Taruta’s handwriting. Q. Can you see in clause 10, underneath the figure of 953.6, there is a handwritten figure ‘950’? A. Yes, I do. Q. I suggest what happened is that at this meeting in Kiev the three of you agreed that the figure that would go into the Castlerose SPA would be rounded to 950 million. A. Yes. Yes, we agreed that. Q. Of that 950 million, 750 million was in respect of the interest in IUD, wasn’t it? A. To my share, to my interest in IUD, yes. Q. And I suggest that the terms we see recorded in this Document, with the adjustment to 950 million, represented the final agreement that you had reached with your partners. A. Yes, that’s true.”

“Q. Now, on the first of those two questions I want to ask you: did you have a meeting with Mr Mkrtchan and Mr Taruta in Kiev between 15 and 18 December 2009? A. My Lord, the meeting, the last meeting we held was no later than 13 December. I don’t remember the exact date but it was no later than 13 December. As a result of that meeting, Mr Petrov introduced amendments in the memorandum, and on the 14th, with the date as of the 15th, he sent it to Mr Tkachenko automatically to all the partners. So he introduced the changes or the agreements that we had struck, what we had agreed, the Dubyna and other aspects, all the components. And I think it was at the same meeting on the 13th, or before the 13th, we rounded up the sum, the amount. I don’t exactly remember when, but I can tell you exactly that starting from 13 December until the appearance of the memorandum we had no meetings, neither with Mr Taruta nor with Mr Mkrtchan, not separately, not together. … MR CALVER: At the time, Mr Gaiduk, did you see this track changed document that we see on the screen? A. No, my Lord. This document was never sent to me. It was put together after the meeting we had. So it was never addressed to me, never sent to me. Q. Did you ever signify to anyone else that you agreed to what was in that document? A. Well, it states here what we had agreed upon, de facto. This has recorded what had been discussed by us, and it was then compiled, it was drafted after the meeting finished. Q. Then after the MoU is compiled, after the meeting, what then would happen for you to signify that you agreed to what was in the MoU? What would need to happen? A. Well, my Lord, I had never seen the MoU and therefore there is only - - there was no need for me or for anybody else to monitor what was in the MoU, because we had discussed it all. Q. We can see there are lots of changes, in track changes, Mr Gaiduk, to this document. A. My Lord, the document with track changes, not made by Petrov. Because the 14 or 15 December, it is the continuation of the MoU that we had in July, and so on and so forth. So the document, maybe you mentioned the document that Mr Novak had sent with track changes. We had never seen it and nobody had ever sent it to us. Or maybe it was Mr Tkachenko, you mean Mr Tkachenko? I don’t know which of them had done that. Q. We know there was a further version on 18 December; did you see the version on 18 December? A. We never saw that version. It was never sent to us. Neither to me or nor to Mr Petrov.”

“Each Party warrants and represents to the other that he has the legal right and full power and authority to enter into and perform this Deed, and any other documents to be executed by it pursuant to or in connection with this Deed and this Deed and such documents will, when executed, constitute valid and binding obligations on such Party, in accordance with their respective terms.”

“This Deed may be entered into in any number of counterparts, all of which taken together shall constitute one and the same instrument. Each Party may enter into this Deed by signing any such counterpart.”

“Any dispute arising out of or connected with this Deed, including a dispute as to the validity or existence of this Deed and/or this Clause, shall be resolved by arbitration in London conducted in English by a single arbitrator pursuant to the rules of the London Court of International Arbitration… .”

“This Deed and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.”

“V.A. Gayduk hereinafter referred to as the ‘Selling Shareholder’, being one party hereto, as well as S.A. Taruta and O.A. Mkrtchan, hereinafter referred to as the ‘Buying Shareholders’, being all other party hereto, hereinafter referred to jointly as the ‘Parties’, enter into this Agreement to the following effect: WHEREAS the Parties have not entered into the Sale and Purchase Contract for the Selling Shareholder’s Interest in ISD within the specified period. WHEREAS the Buying Shareholders must pay a fine to the amount of USD 300 million pursuant to Memoranda No. 1 and No. 2. WHEREAS ‘Industrial Group Consortium’ has been re-registered to the Selling shareholder’s Shareholder’s structures with deferment of payment. WHEREAS in 2008 the Buying Shareholders jointly spent for their personal aims from the profit of ISD to the amount of [circled by hand USD 195 approximately USD 184 million – the ‘Dividends’. WHEREAS in 2008 the Buying Shareholders jointly spent for the financing of the media group owned by the Buying Shareholders UAH 16 million. WHEREAS the global financial crisis has affected the financial position of ISD.”

“NOW THEREFORE, the Parties jointly agree to do the following: 1. The Buying Shareholders’ aggregate debt to the Selling Shareholder, including his share of the ‘Dividends’ for 2008, adjusted penalties and the expenses for the financing of the media group is USD 119,000,000. The amount of the penalties has been redueced from USD 300 million to USD 50 million. 2. The Buying Shareholders shall ensure payment of the “Dividends” for 2008 to the Selling Shareholder to the amount of USD 97.5 million. Thus, a balance of the “Dividends” received by each of the three ISD Shareholders for 2008 shall be obtained 3. The Parties agree that the ISD Group shall secure the financing of the media group owned by the Selling Shareholder to the amount of UAH 8 million. The funds shall be paid in equal instalments by September 2009. 4. 2. Thus, the Buying shareholders shall pay the Selling Shareholder USD 119,000,000 USD 147.5 million and UAH 8 million. 5. 3. The Parties have appraised shares in New Engineering Technologies CJSC, which is the owner of the building in All Tarasova Street in the city of Kiev where the Hyatt Regency Kyiv Hotel Hyatt Hotel is situated at USD 173.3 million, The Parties agree with the fact of the existence of less debt of New Engineering Technologies CJSC to IFC (as at 1 January 2009: USD 23.3 million) and deem it to be accessary to account for this fact when appraising the shares of New Engineering Technologies CJSC. Thus, The total net value of shares in New Engineering Technologies CJSC the Hyatt Hotel is USD 150 million. Furthermore, the interest of the Buying Shareholders comprises 2/3 two thirds of the above net value of shares in the Hyatt Hotel, which comprises USD 100 million. 6. 4. The Parties have decided that as part-payment of the outstanding amounts specified in paragraph 1 hereof the Buying Shareholders shall transfer their shares in New Engineering Technologies CJSC the Hyatt Hotel to the Selling Shareholder free of charge. Furthermore, the Buying Shareholders shall be deemed to have paid the debt to made settlements with the Selling Shareholder in the amount of USD 100 million. The funds that may technically be paid by the Selling Shareholder under a sale and purchase contract for shares in New Engineering Technologies CJSC the Hyatt Hotel shall be deemed to be ‘technical’ and subject to being returned to the Selling Shareholder within 5 days of such payment. After the registration of shares in New Engineering Technologies CJSC the Hyatt Hotel to the Selling Shareholder, the Parties shall sign the following agreements: • Repurchase Agreement (Option) for shares in New Engineering Technologies CJSC the Hyatt Hotel in favour of each one of the Buying Shareholders, under which each one of the Buying Shareholders may buy back by 1 August 2010 one third one-third (1/3) of all the shares in New Engineering Technologies CJSC Hyatt based on the price for 100% of shares being USD 173.3 million less financial debts debt of Hyatt to IFC at the time of purchase. Furthermore, no purchase may take place unless debt has been repaid pursuant to clause 10 7 hereof. The Selling Shareholder shall not change the operator of Hyatt the Hyatt Regency Kyiv during the term of the option. • Termination Agreements to the Sales and Purchase Contracts for stakes in the shareholder capital of IG Consortium, under which title to such stakes shall be returned and re-registered to Azovintex LLC and Region LLC. 7. 5. As for the rest of the outstanding amount of USD 47.5 19 million, the Buying Shareholders shall pay it at the time of the purchase of the stakes in ISD from the Selling Shareholder, by 1 August 2010. If the Buying Shareholders delay performance of their obligations hereunder, penalties shall accrue at 20% per annum on the overdue amounts. 6. The Parties further intend by this Agreement to record the existing arrangements with regard to the division of office premises, which shall be carried out as follows: • The Selling Shareholder shall be given the office premises located at Panas Myrny Street, city of Kiev, which is listed on the books of Ukrainian Mining and Metallurgical Company UGMK OJSC, as well as the office premises at 42-B Ivan Franko Street, city of Kiev, which is on the books of Industrial Group Consortium. • The Buying Shareholders shall be given the office premises at 14-B Yaroslaviv Val Street, city of Kiev, as well as the office premises at 40-B Ivan Franko Street, city of Kiev, which is on the books of SAM Travel Firm. 7. The Parties hereby set the new dates and terms for entering into the ISD Interest Sale and Purchase Contract: • The price of the Selling Shareholder’s Interest in ISD shall be USD 750 million (hereinafter referred to as the ‘Interest Price’); • The Interest payment date shall be no later than 1 January 2010; • The transition of title to the Interest (shares in the non-resident company) shall be on the date of the Interest Price being credited to the Selling Shareholder’s bank account; • If the Interest is not paid for in full by the above date, such Interest Sale and Purchase Contract shall be terminated. [number circled in pen]8. The Parties hereby determine that the Interest Price shall also include the price of the Selling Shareholder’s Stakes (shares) in the following enterprises: • Kramatorsk Metallurgy Plant names after Kuybyshev OJSC; • Dnipropetrovsk Pipe Plant OJSC; • Yalta Intourist Hotel Complex OJSC and Donbass Guesthouse; • UGMK OJSC; • United Steel Industries FZC, Fujairah, UAE; • Kuban Holding Company CJSC and Armavir Metallyrgy Plant CJSC; • a metallurgy plant in Pakistan 9. The Parties agree that the following may be paid for under the ISD Interest Sale and Purchase Contract: • 100% of shares in the New Engineering Technologies CJSC the Hyatt Hotel, The Value of 100% shares in New Engineering Technologies CJSC Hyatt as at 14 December 2009 is USD 173.3 million less debt to IFC (as at 30 September 2009; USD 20.7 million) – a total of USD 152.6 million; • The Selling Shareholder’s interest in Argo Holding is USD 15 million; • OV’s interest in ISD -USD 15 million; • Ayvozovskoye Treatment and Rehabilitation Complex’s interest – USD 2 million. 10. The Parties hereby determine the following Procedure for Payment of the Interest Price and Debt pursuant to paragraph 5, paragraph 8 and paragraph 9 hereof:  Buyout of the shares of the non-resident that owns the interest in ISD directly: USD 953.6 million (consisting of 750 + 19 + 152.6 + 15 + 15 + 2). 11. The Parties hereby determine that if the Interests in ISD are not bought out pursuant to paragraph 9 hereof, the obligations of the Buying Shareholders set out in paragraph 1 and paragraph 2 shall be increased by the amount of additional penalties and comprise USD 142.75 million. Furthermore, USD 100 million shall be repaid pursuant to paragraph 4 hereof. The remaining USD 42.75 million shall be repaid by 1 August 2010 but no later than the date of the reverse purchase of shares in New Engineering Technologies CJSC the Hyatt Hotel. 8. 12.As of the signing hereof, the Parties shall keep confidential the proposed transaction and not disclose or supply information to third parties.”

“What ground is there then for saying that the purchasers who were entitled to break off negotiations have thereby lost the deposit? It is said that they could not seriously enter into these negotiations and then break them off without reason, but that is not for us to consider. That they were entitled not to complete the purchase seems clear, and I do not accept the view that the purchasers were paying the deposit as a guarantee or earnest of good faith that they would complete the purchase, because they could have revoked what had up to that time been agreed upon at any moment. It seems to me that when once the negotiations came to an end the rights of the parties were gone, and the purchasers were entitled to receive their money back.”

“In the first place, [the defendant] says that the document itself acknowledges the payment of the deposit, but in my opinion the payment of the deposit is a neutral fact, and assists neither party. It may be paid by way of guarantee that the purchaser will not break off negotiations without good cause, or it may be paid, as [the claimant] contends, in anticipation of a binding contract. In any event, the mere fact that a deposit has been paid does not help me. Then it is said that in contemporaneous documents the parties refer to the document as an agreement for sale, but when you know from the document itself that it is not an agreement for sale, the mere reference to it as such in the other documents does not make it so. Therefore neither the payment of deposit nor the reference to the document as an agreement for sale is sufficient to alter the prima facie meaning of the document of July 10, 1922. It has been undoubted ever since the decision of Sir George Jessel in Winn v. Bull 36 that the words ‘subject to the preparation and approval of a formal contract’ in a document prevented the document from being held to be a final agreement.”

“In case your company indeed was engaged for the purposes of sale of Hyatt Regency Kiev hotel we urge you to suspend the performance of any activity related to this matter until the receipt of written instructions from all the beneficiaries”

“MOA’s companies have re-registered in their name VAG’s entire stake (26.6720%) which was supposed to be registered in equal shares (13.336% each) between MOA’ and TSA’s companies, in their own name. MOA’s companies currently hold 60.8359% of shares, while TSA’s companies hold 34.1639% of shares.”

“Equalizing MOA’s and TSA’s ownership rights in UGMK at 50%/50% by buying out part of the participatory interest (half of GAV’s interest) from MOA’s company.”

“On behalf of Sergey Aleksevich, I request a meeting to discuss the issues of the registration of ownership on the following objects: UGMK Transport Holding BAS.”

“As previously agreed and as I promised at the meeting on the 09th August concerning the settlement of pending issues on transfer of the assets that were paid as part of the transaction on V. A. Gaiduk's share buyout in IUD (the ‘Transaction’), as well as the assets, whose distribution was agreed upon after the Transaction, I hereby send the copies of draft Agreement on Amendments to Memorandums of Understanding No. 1 and No.2, which were discussed in 2009 and during the meeting dated the 09th August.”

“S.A. Taruta saw this document prior to the transaction, because there are several drafts of the Agreement containing his notes in his archives, the first of which (and there were several of them) are dated 2 February 2009, the draft Agreement dated 15 December 2009 in the track changes mode, in which you can see a change in the date from 2 February 2009 to 15 December 2009, and the draft Agreement dated 18 December 2009 in the track changes mode, in which you can see that the date of 15 December 2009 was changed to 18 December 2009. It’s significant that the difference in time between the two drafts of the Agreement is 3 days. That indicates that starting from February 2009 and throughout the whole of 2009, including directly prior to the transaction itself, the Shareholders held negotiations on the terms of the buyout from V.A. Gaiduk not only of the interest in IUD, but also of the other assets specified in clause 8 of the Agreement and which formed part of the IUD Interest with a value of 750 million dollars, and of the assets specified in clause 9 of the Agreement, which were included in total in the value of the IUD Interest of 950 million dollars. I have all the drafts of the Agreements with me and you can have a look at them, including the draft of the Agreement dated 15 December 2009 and the draft of the Agreement dated 18 December 2009.”

“to vary the 2009 Shareholders’ Agreement so far as concerned the Office Premises, such that the Gaiduk Parties would instead purchase (or cause or procure the purchase of) the interest of each of the Taruta Parties and the Mkrtchan Parties in the premises at 14-B Yaroslavov Val, for US$15.83 million each, to be paid at the same time as the transfers of the Other Assets [i.e. the Included Assets and Additional Assets to which Mr Taruta claims to be entitled under the alleged 2009 Shareholders’ Agreement] were effected.”

“The Further Shareholders’ Agreement was (in part) a variation of the 2009 Shareholders’ Agreement (insofar as it concerned the Office Premises). The other obligations it imposed were also closely bound up with the obligations in the 2009 Shareholders’ Agreement, in that they put into further effect the division of assets parties started in that agreement as part of the ongoing ‘divorce’ process which the 2009 Shareholders’ Agreement had begun.”

“the close relationship between the 2009 Shareholders’ Agreement and the Further Shareholders’ Agreement is such that they were (to quote Lurssen Werft) “all of a series”, with the result that the Further Shareholders’ Agreement “would not have come into existence” but for the 2009 Shareholders’ Agreement.”

“In respect of obligations with a specific period of performance, the limitation period shall begin to run upon expiry of that period. In respect of obligations with no specified period for performance or where it is determined by the moment of demand, the limitation period shall begin to run from the date on which the creditor becomes entitled to demand performance of the obligation. If a debtor is given a grace period to satisfy such a demand, the limitation period shall begin to run upon expiry of that period.”

“If no period (deadline) for the performance of an obligation by a debtor is fixed or if it is determined by the moment of demand, a creditor has the right to demand its performance at any time. The debtor must perform such obligation within a period of seven days from the date of demand, unless immediate performance is implied by the contract or civil statutes.”

“In respect of obligations for which the time period for performance is undefined or which is defined with reference to the moment of demand, the limitation period shall begin to run from the day that the right to demand performance of the obligation arose with the creditor (Article 261.5, paragraph 2 of the Civil Code of Ukraine), i.e. upon the expiry of either: the 7-day period following a demand prescribed by Article 530.2 of the Civil Code of Ukraine; or [the expiry] of another grace period prescribed by statute or the contract for performance of the debtor’s obligation. The exception to this rule is a case where it follows from the law or the contract that the obligation shall be performed immediately; in such a case the limitation period shall start to run from the date of the creditor’s demand.”

“that time period for TOV ‘Dubko’ apply to the court with request about returning paid funds started on 01.01.2014 and finished on 31.12.2016, while the claimant applied to the court on 16.05.2017, thus with omission of three-year time period of legal limitation determined by Article 257 of the Civil Code of Ukraine.”

“Application of periods of legal limitations has several important purposes, namely: to ensure legal certainty and completeness, to protect potential respondents against delayed requests and to prevent unfairness, which can occur in case, if courts will be forced to solve cases about events, which took place long time ago, based on evidences, which could already lost accurate and complete with time passage.”

“Policy issues arise in two major contexts. The first concerns the justification for having statutes of limitation at all and the particular limits that presently exist. The second concerns the procedural rules that apply after an action has been commenced. Arguments with regard to the policy underlying statutes of limitation fall into three main types. The first relates to the position of the defendant. It is said to be unfair that a defendant should have a claim hanging over him for an indefinite period and it is in this context that such enactments are sometimes described as ‘statutes of peace’. The second looks at the matter from a more objective point of view. It suggests that a timelimit is necessary because with the lapse of time, proof of a claim becomes more difficult—documentary evidence is likely to have been destroyed and the memories of witnesses will fade. The third relates to the conduct of the claimant, it being thought right that a person who does not promptly act to enforce his rights should lose them.”

“If a share purchase agreement were performable on demand, the court could be faced with a claim under an oral agreement, many decades, even centuries, old. There might be no existing evidence at all, never mind evidence which has grown stale.”

“Duration of a limitation period shall commence as of the day when a person became aware of or could have become aware of a violation of his/her right or of a person that violated the right.”

“I think it is a matter of construction and interpretation of specific agreement. Of course if agreement is drafted in a way which provides obligation to perform immediately, and this is in the agreement or it actually, I would say, emanates from the provision of agreement, because if literal words cannot provide to the court clear answer it may go and find meaning of the agreement by other means under Article 213, then of course it is possible scenario.”

“The 2009 Shareholders’ Agreement and the Further Shareholders’ Agreements were effective to vest equitable ownership of 50% of the Gaiduk Parties’ interests in each of DPP, UGMK, Agro Holding, NET and Transport Holding in the Taruta Parties. Accordingly, by transferring the relevant interests in those assets other than to the Taruta Parties (as set out above), the Gaiduk Parties acted in breach of trust and are accountable to the Taruta Parties for the proceeds of the onwards sales made in breach of trust.”

“Although the position cannot be stated with confidence, it is tentatively suggested that given that the consequences of nullity of a ‘contract’ fall within the ambit of the Rome I Regulation [under Article 12(1)(e)], so too do the consequences of breach and frustration. This ensures that a single law determines whether a contract has been breached or frustrated and the consequences of this event.”

“the causal link between the right to restitution and the contractual relationship is sufficient to bring the action for restitution within the scope of matters relating to a contract.”

“Where there is a contract between the parties relating to the benefit transferred, no claim in unjust enrichment will generally lie while the contract is subsisting.”

“The third question arises because the payee cannot be said to have been unjustly enriched if he was entitled to receive the sum paid to him. The payer may have been mistaken as to the grounds on which the sum was due to the payee, but his mistake will not provide a ground for its recovery if the payee can show that he was entitled to it on some other ground.”

“It accords with the basis of dealing, and contractual arrangements, between the appellants and the respondent to regard that part of the net total amount of each invoice referable to the ‘tobacco licence fees’ as a severable part of the consideration, which has failed. There is no conceptual objection to this. For the reasons already given, the tax component of the net total wholesale cost was treated as a distinct and separate element by the parties. It was externally imposed. It was not agreed by negotiation. It was not like the discounts, which might differ between retailers, just as the wholesale list price would vary from time to time in accordance with market conditions. To permit recovery of the tax component would not result in confusion between rights of compensation and restitution, or between enforcing a contract and claiming a right by reason of events which have occurred in relation to a contract.”

“was not a case of breach of contract on the part of the defendant where the compensatory principle of the law of contract was engaged. The restitutionary claim did not cut across the contractual charter of the parties’ rights and obligations.”

“Failure of basis, or failure of consideration as it has been generally called, does not necessarily require failure to a promise counter-performance; it may consist of the failure of a state of affairs on which the agreement was premised." He, then, referred at [107] to what he described as a “succinct summary of the meaning of failure of consideration” as having been given by Professor Birks in his ‘An Introduction to the Law of Restitution’ (1989) at page 223 (as approved in Sharma v Simposh Ltd [2013] Ch 23 at [24]): “Failure of consideration for a payment … means that the state of affairs contemplated as the basis of reason for the payment has failed to materialise or, if it did exist, has failed to sustain itself.”

“The point that a failure of consideration may consist of the failure of a nonpromissory event or state of affairs is reiterated in Burrows’ Restatement at pp86-87. He states that consideration which fails may have been ‘an event or a state of affairs that was not promised’, and he cites the decision of the High Court of Australia in Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 as an example of a failure of a non-promissory condition as to the future.” 786. Going on to discuss Roxborough, Lord Toulson said this at [113]: “Gummow J held … that there had been no failure in the performance by Rothmans of any promise made by them, but that there had been a ‘failure of consideration’ in the ‘failure to sustain itself of the state of affairs contemplated as a basis for the payments the appellants seek to recover.’”

“Similarly, in the present case the receiver agreed to accept the burden of management of the companies on the basis that he would be entitled to take his remuneration and expenses from the companies’ assets, and that state of affairs which was fundamental to the agreement has failed to sustain itself.”

“In the present case there was a total failure of consideration in relation to the receiver’s rights over the companies’ assets, which was fundamental to the basis on which the receiver was requested by the CPS and agreed to act. I use the expression ‘fundamental to the basis’ because it should not be thought that mere failure of an expectation which motivated a party to enter into a contract may give rise to a restitutionary claim. Most contracts are entered into with intentions or expectations which may not be fulfilled, and the allocation of the risk of their non-fulfilment is a function of the contract. However, in the present case the expectation that the receiver would have a legal right to recover his remuneration and expenses was not just a motivating factor. Nobody envisaged that the receiver should provide his services in managing the company as a volunteer; those services were to be in return for his right to recover his remuneration and expenses from the assets of the companies, such as they might be. The agreement between the CPS and the receiver so provided, and that provision was incorporated into the order of the court.”

“I would hold that the CPS fulfilled its contractual obligations to the receiver by ensuring that the order appointing him conformed with the terms of the underlying agreement between them, but that the receiver is entitled to recover his proper remuneration and expenses from the CPS because the work done and expenses incurred by the receiver were at the request of the CPS and there has been a failure of the basis on which the receiver and was asked and agreed to do so.”

“obvious counter-balance in this situation is to treat the insured employer, GGLCL or now IEG, as a self-insurer for the remainder of the 27-year period in respect of which it can show no insurance capable of affording contribution. Nothing obliged GGLCL to maintain its liability insurance with any particular insurer. However, in so far as it chose not to take out any insurance or chose to insure with another insurer, that should in common sense be at its risk. It should not be able to avoid the consequences of that risk by electing to pursue Zurich.”

“The answer to this in my view is that a mere need to refer to the insurance contracts is not fatal to a recoupment claim. It does not involve contradicting or acting inconsistently with such contracts. On the contrary, it is accepting their implications, and relying on matters independent of them. It is relying on GGLCL’s decision not to insure with Midland for 21 years and its decision, so far as appears, to go without insurance for up to 19 of such years. These are matters that are not touched by, and are outside, the terms and scope of the Zurich and Excess policies. They ground an equity that IEG should contribute proportionately to a loss arising from risks of exposure continuing throughout the whole 27 years.”

“operate where, contrary to the general position, there is no policy inconsistency in granting the claimant restitution of the enrichment even though the defendant is legally entitled to it.”

“Without seeking to question the necessity of adopting Lord Mance’s approach in the IEG case, I respectfully share this last concern. While recognising a ‘broad equitable right’ of contribution between insurers may be regarded as an extension of existing principle, giving an insurer an equitable right to recoup part of the insured loss from its insured is not just close to inconsistent, but is clearly inconsistent, with the contract between the parties as it was interpreted by the majority in IEG. As Lord Sumption observed, at para 183: ‘If the insured is contractually entitled to the whole amount, there cannot be a parallel right of recoupment in equity on the footing that it is inequitable for the insured to have more than part of it.’.”

“Although Lord Mance sought to rely on a thesis of Professor Andrew Burrows to suggest that there are exceptions to the general rule that a claimant will not be entitled to restitution where the defendant is legally entitled to the enrichment, commentators have convincingly argued that the authorities relied on do not support this thesis and that there is no legal principle which allows a claim to recoup money based on equity or unjust enrichment to override an unconditional contractual right to be paid the sum in question: see R Merkin ‘Insurance and reinsurance in the Fairchild enclave’ (2016) 36 Legal Studies 302; KV Krishnaprasad, ‘Unjust enrichment in the 'Fairchild enclave': International Energy Group Ltd v Zurich Insurance Plc’ (2017) 80 MLR 1150 ; R Stevens, ‘The Unjust Enrichment Disaster’ (2018) 134 LQR 574 , 597-8. As Lord Sumption put it at para 183: ‘The basis of the suggested right of recoupment is that it is unjust for the insurer to have to bear the whole loss. However, I do not understand by what standard it is said to be unjust when the parties have agreed that it should be so.’”

“The response of allowing an equitable principle or restitutionary claim to override a valid and binding contract should in my view be regarded as an absolutely last resort, if not a counsel of despair.”

“Although strictly speaking this part of Lord Mance JSC’s judgment was obiter, it was clearly intended as a definitive statement of English law which would guide the insurance market in dealing with mesothelioma claims on EL policies. Mr Colin Edelman QC for Equitas did not suggest, either before the judge-arbitrator or on appeal before us, that Lord Mance JSC’s judgment should not be followed. On the contrary this submission was that it was an accurate statement of the law as it applies at the insurance level, but that a different solution to the problems thrown up by Fairchild jurisprudence is needed at the reinsurance level.”

“Then on the basis that the contract that the contract is conditional, what is the result of the payment of the deposit? One obvious object of such payment was that it should form a deposit in the ordinary way if and when the contemplated definite contract was subsequently signed and exchanged. Is it necessary to assume any additional object, such as that the purchaser was giving an interim guarantee that he would enter into a reasonable contract? In my judgment that is not common sense. The parties were not agreeing that they would enter into a reasonable contract, but that they would enter into such a contract, if any, as they might ultimately agree and sign. I look on the whole payment as being sufficiently explained as being an anticipatory payment intended only to fulfil the ordinary purpose of a deposit if and when the contemplated agreement should be arrived at.”

“It seems to me plain that Mr Cobbe is entitled to a quantum meruit payment for his services in obtaining the planning permission. He did not intend to provide his services gratuitously, nor did Mrs Lisle-Mainwaring understand the contrary. She knew he was providing his services in the expectation of becoming purchaser of the property under an enforceable contract. So no fee was agreed. In the event the expected contract did not materialise but a quantum meruit for his services is a common law remedy to which Mr Cobbe is entitled.”

“… the parties were both people of commerce, unrelated, and such people do not pay hundreds of thousands of dollars out of the goodness of their hearts, they expect some commercial return and when the commercial return is not forthcoming there is no reason why they should not demand their money back … .”

“Where it is possible to apportion different parts of a contractual price to the performance of different contractual duties under a contract it is not in my judgment inconsistent with the proposition that there may be a total failure to perform contractual duties in respect of which payment is due that there has been performance of part or all of contractual duties in respect of which the payment is not due.”

“Since Aspect’s cause of action arises from payment and is only for repayment, it is, whether analysed in implied contractual or restitutionary terms, a cause of action which could be brought at any time within six years after the date of payment to Higgins, ie after 6 August 2009. For this purpose an independent restitutionary claim falls to be regarded as ‘founded on simple contract’ within section 5 of the Limitation Act … .”

“Limitation periods generally run from the date when the claimant’s cause of action accrues, and a cause of action in unjust enrichment normally accrues at the date when the defendant receives a benefit from the claimant … However, this rule probably does not apply in cases where benefits are transferred on a basis that subsequently fails: here the cause of action is not complete until the failure of basis occurs, and so this is most probably the date at which time starts to run.”

“… one must be looking to the time when both parties would be reasonably considered to have taken the position that the arrangement between them was finally and definitely not going to proceed. Only at that time did it, to use the modern jargon, become unjust, or, to use the ancient jargon, become inequitable for the person who received the money to retain it.”

“… a shared intention to enter into a contract should be taken to have ended if a contract has not been concluded by the time impliedly envisaged by the shared intention and there is, in an objective sense, no sufficient evidentiary basis for a finding that the mutual commitment continued beyond that time. Unless the parties’ conduct shows some contrary consensus, the envisaged time for the making of the contract will be the time that is reasonable in the circumstances of the case.”

“Q. Did you want those assets to be transferred to you quickly or did you not really care when they were transferred to you? A. Time-wise I understood it was a very complex matter, I mean all those transactions. So my understanding was that there were some assets that it would be more difficult to transfer, others that would be more easy to transfer . But my understanding was that over the next two to three years all of them would be transferred.”

“Since none of the claims for the protection of ownership rights and other rights in rem in Chapters 29-31 CC are one of the claims provided for in Articles 258(2)-(4) to which a special limitation period applies, the general three-year limitation period provided for by Article 257 CC applies to them.”

“However, although the cases to which Mr Davey drew our attention demonstrate that specific performance may be refused on the grounds of laches well before the expiration of the ordinary six-year limitation period, I do not think they provide as much assistance as he suggested. In some of them (Cowell v Watts 2 H&T 224, Pollard v Clayton 1 K&J 462 and Glasbrook v Richardson 23 WR 51), the court was prepared to infer that the defendant had altered his position on the understanding that he would not be required to perform the contract. In such cases it is not difficult to see why the court should have considered that relief should be withheld on equitable grounds regardless of any limitation period. In others (Barclay v Messenger 43 LJ Ch 449 and perhaps Watson v Reid 1 Russ & My 236, though the report of the case is so brief as to be uninformative) greater emphasis is placed on the plaintiffs failure to act with the necessary diligence, but in the absence of any discussion of this question I do not think that one can derive any principle from these decisions other than that the court will withhold relief whenever it considers that it would be unjust in all the circumstances to grant it.”

“The equitable doctrine of laches … provides the court with ample power to refuse relief when delay on the claimant’s part would make it inequitable to grant it and I should be surprised if there were many cases in which, in the absence of fraud, the court would be willing to grant relief by way of specific performance if the claim had not been made within six years after the contract was due to be performed.”

“That doctrine is not based, however, on the mere fact of delay. Something more than mere delay, more even than extremely lengthy delay, is required before B will be denied equitable rights under the doctrine of laches, as the question is whether the lapse of time has given rise to circumstances that now mean it would not be inequitable to deny relief to B. The principal example occurs where, perhaps as a result of having relied on a mistaken belief that B has no relevant right, A would now suffer an irreversible detriment, as a result of B’s delay, if B were permitted relief.”

“… the general principle is that there must be something which makes it inequitable to enforce the claim. This might be reasonable and detrimental reliance by others on, or some sort of prejudice arising from, the fact that no remedy has been sought for a period of time; or it might be evidence of acquiescence by the landowner in the current state of affairs…”

“…. requires a very much broader approach which is directed at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which knowingly, or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour.”

“adds anything to estoppel and laches. The classic example of proprietary estoppel, standing by whilst one’s neighbour builds on one’s land believing it to be his property, can be characterised as acquiescence … Similarly, laches, failing to raise or enforce an equitable right for a long period, can be characterised as acquiescence.”

“In around 2006 or 2007, Mr Taruta had lent Mr Mkrtchan US$50 million for the purchase of part of Mr Gaiduk’s interest in IUD. In around 2008, Mr Taruta lent Mr Mkrtchan a further US$50 million, to enable Mr Mkrtchan to repay debts to Mr Gaiduk. The said loans are referred to herein as the ‘Mkrtchan Loans’.”

“Demands for the repayment of the debts owed to Mr Taruta by Mr Mkrtchan under the Mkrtchan Loans were made by or on behalf of Mr Taruta: 55.1. at a meeting between Mr Mkrtchan and Mr Taruta’s authorised representatives in November 2015; and 55.2. in writing by letter to Mr Mkrtchan dated 6 September 2016.”

“However, Mr Mkrtchan has since failed and/or refused in breach of the said contracts to re-pay the amounts due (or any amounts); and Mr Taruta has thereby suffered loss in those amounts. In the premises, Mr Taruta is entitled to and claims from Mr Mkrtchan US$100 million in respect of the Mkrtchan Loans (alternatively, damages in that amount).”

“If or to the extent that Mr Mkrtchan and Etmor fail unequivocally and irrevocably to confirm that, contrary to the said demand, Parborio is not liable to Etmor under the Purported Etmor-Parborio Loan (or otherwise), Mr Taruta claims in respect of the Mkrtchan Loans as follows.”

“Mr Mkrtchan caused or procured the Etmor Payment. Mr Taruta agreed to it on the basis that it would be treated as part repayment of the total sum owed by Mr Mkrtchan to Mr Taruta pursuant to the Mkrtchan Loans (of US$100 million) and the sum payable under the Settlement Agreement (of US$281 million).”

“Mr Mkrtchan caused or procured the Etmor Payment. Mr Taruta agreed to it on the basis that it would be treated as part repayment of the total sum owed by Mr Mkrtchan to Mr Taruta pursuant to the Mkrtchan Loans (of US$100 million, plus interest) and the sum payable under the Settlement Agreement (of US$281 million).”

“Mr Mkrtchan and I agreed that he would fund my share of the initial consideration (US$105,825,000) in part-payment of his outstanding debts to me. Mr Mkrtchan agreed to do this. I recall a very clear discussion with Mr Mkrtchan about this where I told him that I considered this as repayment of US$100,000,000 due to me in respect of his purchase of 17% of IUD from Mr Gaiduk in 2006 and that he could treat the US$5,825,000 as interest on that loan. Mr Mkrtchan agreed.”

“I did not calculate the interest rate. When I took out the loan from Mr Schlosberg, I agreed with Mkrtchan that I would take out the loan at 20% per annum. He was aware of that. … So I said that I had paid 20% interest per annum to Misha, so it is 105 million, so we will include the 5 million as interest. But no one actually did the calculation, neither myself nor Mr Mkrtchan.”

“Q. If you are borrowing money at 20% over two years from Mr Schlosberg, and you are getting back from Mr Mkrtchan 5.825 million, from your perspective that is a pretty bad bargain, isn’t it? A. Correct. It’s not a very pretty -- it's not a very good bargain.”

“USD105,825,000 … shall be deemed to be the proper fulfilment of the obligations by Mr Mkrtchan under the Settlement Agreement in the amount of USD105,825,000 … and this amount shall be offset and deducted from Mr Mkrtchan’s obligations under para. 2.1 of the Settlement Agreement.”

“I am hereby forwarding you the March correspondence on elaboration of the Deed of Set-Off document (which was initiated by us). As a result of this correspondence the VEB lawyers should have elaborated the document which would be of comfort to all parties of the process on resolving of issues related to absence of claims from all parties.”

“In the course of discussion between MOA and TCA a question arose that VEB required making of funds transfers within the frames of mutual settlements of accounts between Etmor and Parborio. Having analysed the correspondence on the whole it is possible to conclude that it is a principle for VEB that we sign the documents on absence of any claims between us. I hereby forward the March correspondence on elaboration of document Deed of SetOff (which was initiated by us). As a result of this correspondence the VEB lawyers should have elaborated the document which would be of comfort to all parties of the process on resolving of issues related to absence of claims from all parties. It was already in the pack of documents of 1 October 2012 … .”

“In around 2006 or 2007, Mr Taruta had lent Mr Mkrtchan US$50 million for the purchase of part of Mr Gaiduk’s interest in IUD.”

“I cannot now exactly recall how the US$50 million loan in 2006-2007 was paid, save that it was in cash. But I do remember that by lending Mr Mkrtchan this money I created some liquidity problems for myself.”

“The Parties have agreed, for the purposes of effecting the payments referenced in Clause 1 of this Memorandum, to distribute dividends of 150 million USD from the company FMTG to Party 2 [Mr Gaiduk]. For this purpose, Party 1 [Mr Taruta] shall be deemed to have extended a loan to Party 3 [Mr Mkrtchan] for 50 million USD on the terms set out under Clause 1 hereof; and that Party 3 [Mr Mkrtchan] has paid 100 million USD to Party 2 [Mr Gaiduk] to pay its outstanding debt for previously purchased Ukrainian assets.” 944. These provisions followed recitals in these terms: “WHEREAS, FMTG has undistributed earnings of 150 million USD, and therefore the beneficial owners have unanimously elected to distribute profits in the form of dividends proportional to their ownership interests; AND WHEREAS, Party 3 [Mr Mkrtchan] owes Party 2 [Mr Gaiduk] for earlier purchased Ukrainian assets, and wishes to repay part of that debt to Party 2 [Mr Gaiduk]. Party 1 [Mr Taruta] has elected to extend a loan facility of 50 million USD to Party 3 [Mr Mkrtchan], for a term of --- years and annual interest rate of --- %. Party 3 [Mr Mkrtchan] has elected to partially pay off its debts to Party 2 [Mr Gaiduk] for previously purchased Ukrainian assets, by transfer of 100 million USD.”

“The first issue I want to ask you about is how much Mr Mkrtchan paid you to acquire 17% of IUD from you?”

“As an assurance that [the alleged debt for the Taruta Share] would be repaid, Mr Mkrtchan and I agreed that I would take a stake in Region (just under 17%) by way of security, documented in board minutes dated 27 December 2006.”

“RESOLVED: To accept Azovimpex Limited Liability Foreign Trade Company (EDRPOU [Unified State Register of Enterprises and Organizations of Ukraine] code 23605421) as a member of Region LTC. To increase Region LLC's registered capital to 11 325.30 UAR (eleven thousand three hundred twenty-five UAR 30 kopecks) through the 1 925.30 UAR (one thousand nine hundred twenty-five UAR 30 kopecks) capital contribution of the new member of Region LLC, Azovimpex Limited Liability Foreign Trade Company. To approve capital contributions of members and reallocation of ownership interest in Region LLC as follows: Oleh Artushevych Mkrtchan 83% Azovimpex 17%.”

“Q. If you had refused to give the Region shares back to Mr Mkrtchan after he had paid you $750 million, is there anything in these minutes which Mr Mkrtchan could use to force you to give him back the shares? A. No. Q. I suggest that this is a very odd form of security interest, because the truth is it wasn’t a security interest at all. That’s right, isn’t it? A. I disagree with that. If you read the memorandum and articles of Region, it’s clearly set out that that was a security.”

“Although I continued to hold a share in Region through Azovimpex, the real value of this was about to dramatically decrease as Region was about to be replaced as a shareholder in IUD. I should note that at no stage did Mr Mkrtchan and I agree that I would give up my 17% stake in Region. I still considered that was some security notwithstanding the new arrangements.”

“Q. At any point from 2006 to December 2009 did you ever receive any dividends or profits in respect of that 5.62% indirect interest in IUD? A. No, never. And also the same applies to Region.”

“We refer to the re-examination of Mr Taruta by Mr Foxton QC on day 15 of the trial, in which Mr Taruta confirmed that he had never received any dividends or profits as a result of his 17% interest in Region LLC via Azovimpex LLC (see transcript page 162). We now enclose a letter from Azovimpex LLC confirming that during the period in which it was a shareholder in Region LLC (27 December 2006 to 28 December 2016), it never received dividends or any other financial support (amongst other things) from Region LLC.”

“… it was implied here that as between the individuals, not between the corporates, but it was an agreement as between the individuals here, and that’s why no one took into account the fact that there was my interest within Mkrtchan’s shareholding here. We did not specify that here.”

“There are no documents in the disclosure where either you or any of your advisers ask for this debt to be repaid, are there?”

“Wrong. No, the settlement agreement in September 2008 with respect to the 750 million, and then in December 2009 with respect to the 281 million, precisely provides for the settlement to be made with respect to my 17%.”

“I’m not going to go over that discussion with you again, Mr Taruta. But after the VEB sale and the settlement agreement, you never made any request for a repayment of this debt, did you?”

“That is wrong. Of course I did. There was a timeline, April, provided for April.”

“Do you mean payment under the settlement agreement or payment for this alleged debt, for the one-sixth share in IUD?”

“The contract provides for 281 million.”

“Yes. Are you saying that you demanded repayment of a debt for the transfer of a one-sixth interest in IUD or are you saying that you demanded repayment of the price due under the settlement agreement? Which of those are you talking about?”

“I am referring to the 281 million.”

“Immediately prior to the Capital Increase (as defined below) the Parties and Vitaliy Anatolievich Gayduk (‘Mr Gayduk’) together controlled Corporation Industrial Union of Donbass (‘ISD’) through a number of holding companies in the manner and proportions summarised in Schedule 1. At such time the proportions in which Mr Mkrtchan and Mr Taruta held their interests in ISD (directly or indirectly) relative to each other were as follows: - Mr Mkrtchan 41.5% - Mr Taruta 58.5% (the ‘Previous Proportions’).”

“On the date of this Agreement three Cyprus companies, controlled by the Parties and Mr Gayduk (‘Cyprus SPVs’) have agreed to make contributions to the charter capital of ISD on terms agreed between companies controlled by the Parties and Mr Gayduk, with the result that ISD will be controlled by the Parties and Mr Gayduk in the manner and proportions summarised in Schedule 2 (the ‘Capital Increase’).”

“As a result of the Capital Increase, the proportions in which Mr Mkrtchan and Mr Taruta hold their interests in ISD (directly or indirectly) relative to each other are as follows: - Mr Mkrtchan 49.9% - Mr Taruta 50.1%”

“In consideration for Mr Taruta procuring that companies controlled by him comply with their obligations under the Capital Increase, Mr Mkrtchan agrees to pay Mr Taruta the sum of US$281,000,000 not later than 30.04.2010 (the ‘Payment Date’) (the ‘Capital Increase Price’).”

“In consideration for and conditional upon Mr Taruta procuring that companies controlled by him will comply with their obligations under the Ukrainian Buyout and the Ukrainian Buyout completing, Mr Mkrtchan agrees to pay to Mr Taruta, or to any other person nominated in writing by Mr Taruta, an additional sum of US$ 1 (one) (the ‘Ukrainian Buyout Price’ and in aggregate with the Capital Increase Price, the ‘Price’) on or before the Payment Date.”

“… What I put to you, Mr Taruta, is that there would be nothing in this settlement agreement which Mr Mkrtchan could point to and say, ‘Just a minute, that debt from December 2006 was repaid when I paid you the $750 million under the settlement agreement’. That’s right, isn’t it? There is nothing in here which would enable Mr Mkrtchan to say that.”

“No, this is not the case. Mr Mkrtchan knew that my word always was an agreement and it was always agreed, it was always followed. He did not need to do anything else to formalise anything else in some document. My word always meant obligations.”

“So is the answer to my question: yes, there is nothing in the agreement, that Mr Mkrtchan was going to rely on your word. Is that your evidence?”

“Yes, based on my words. He received the share at IUD, and for him it was extremely generous move on my part, and he knew that.”

“Q. Mr Taruta, I would suggest to you that if those had been the instructions given to Linklaters, the document they came up with would be a very strange document indeed, because it does not record anywhere the debt from 2006, the transfer in 2006, and nor does it settle that debt, does it, as you have just confirmed to me? A. Yes. Q. What I suggest, Mr Taruta, is that, faced with the contradiction between what Linklaters have drafted and what you say they were told to draft, the truth is that your evidence as to what this agreement was meant to be doing is false, is it not? A. Of course not. Q. There [are] only two choices, Mr Taruta. Either your evidence is wrong or Linklaters' were incredibly negligent. Are you saying it's the second of those possibilities? A. No, they were not negligent. They have explained the indebtedness of Mr Mkrtchan to me, and between Mr Mkrtchan and Mr Bakai there were no agreements whatsoever, and that didn’t stop to settle and to receive the share. And the same as between the two of us. Mr Mkrtchan had not a company that was able to pay that debt, so he personally made that offer and I agreed with him…”

“In any event, due to your very close friendship with Mr Mkrtchan, compared to his friendship with Mr Gaiduk, he agrees to pay you 7.5 times the amount he had paid Mr Gaiduk, on the basis that he had paid him, as I suggest he had, $100 million. Correct?”

“Apparently so. But again, one doesn’t have to look at how much he paid Gaiduk but rather one has to go by the amount of the assets that he acquires by way of the 17%. That was the kind of calculation that was going through our minds at that time.”

“… That was a negotiation when Mr Mkrtchan said 150, I said 361, after that he said ‘Well, I am ready to do 200’, and I said ‘No, 320’. Then he said 280, I said, ‘All right, then neither for you, not for me, a small satisfaction of 281’. And Mr Bakai wasn’t negotiating, he was simply being present. However, you see, it turns out that there was a coincidence even with the math. But then we did not look at the maths, and we were all heated up and we certainly did not look at the maths.”

“As my relationship with O.A. Mkrtchan developed, we became partners in a common business project related to the company Industrial Union of Donbass, hereinafter IUD, and O.A. Mkrtchan, S.V. Gaiduk and I became shareholders of this company. About 40% belonged to me, 34% to Gaiduk, and 26% to O.A. Mkrtchan. The shares belonging to Mkrtchan were transferred to him by me without compensation in connection with our friendship.”

“Q. You told the Russian prosecutor, did you not, that you had transferred shares in IUD to Mr Mkrtchan for no compensation. That’s right, isn’t it? A. Without payment. I said ‘without payment’, and they wrote ‘without compensation’, but that was not the main topic. But for 11% Mr Mkrtchan did not pay me. Therefore, so far it was without consideration. … MR JUSTICE PICKEN: Why did you say anything about compensation or payment then, if it wasn’t the point of the conversation? Sorry, carry on. A. No, I told him that he did not pay to that day, that so far it was without compensation.”

“In consideration for Mr Taruta procuring that companies controlled by him comply with their obligations under the Capital Increase, Mr Mkrtchan agrees to pay Mr Taruta the sum of US$281,000,000 not later than 30.04.2010 (the ‘Payment Date’) (the ‘Capital Increase Price’).”

“In consideration for and conditional upon Mr Taruta procuring that companies controlled by him will comply with their obligations under the Ukrainian Buyout and the Ukrainian Buyout completing, Mr Mkrtchan agrees to pay to Mr Taruta, or to any other person nominated in writing by Mr Taruta, an additional sum of US$ 1 (one) (the ‘Ukrainian Buyout Price’ and in aggregate with the Capital Increase Price, the ‘Price’) on or before the Payment Date.”

“The parties agree that if Mr Mkrtchan fails to pay the Capital Increase Price and (if payable) the Ukrainian Buyout Price on or before the Payment Date, the Parties shall procure, as Mr Taruta’s sole and exclusive remedy, that the Parties shall be returned, to the fullest extent possible, to the economic and legal position relative to each other which they would have held if their relative interests in ISD or Elba had at all times been held in the Previous Proportions.”

“Mr Mkrtchan shall procure the transfer of sufficient shares in either the Cyprus SPV controlled by him or its sole shareholder or any other company holding ISD participation interests or Elba shares for Mr Mkrtchan, in order to procure that Mr Taruta’s and Mr Mkrtchan’s interests in ISD or Elba relative to each other are returned to the Previous Proportions.” 1028. Clause 3.1.2, then, provides: “Mr Mkrtchan shall pay Mr Taruta a proportion of all sums received by Mr Mkrtchan between the date of this Agreement and the date of payment pursuant to this Clause, as a result of his holding shares in ISD or Elba (whether in the form of dividends or otherwise) including any cash consideration paid to Mr Mkrtchan pursuant to the Elba Merger and including any sums received from Elba or its controlling shareholder by way of loan (‘Benefits’). The sum payable by Mr Mkrtchan shall be calculated as the Benefits actually received by Mr Mkrtchan less the Benefits Mr Mkrtchan would have received if Mr Taruta's and Mr Mkrtchan's interests in ISD or Elba relative to each other were held in the Previous Proportions at the time of such receipt;”

“In the vast majority of cases an action for damages, or as the case may be, in debt, will amply vindicate the claimant’s rights … Nevertheless, there is no doubt that on principle the remedy is available for money obligations. It thus can be had in special cases where a simple action in debt or damages will not do, as with promises to pay annuities and pensions, and for agreements to pay money where the payment is intended to provide a vital injection of cash into a joint venture … Although most of the above cases concern special instances of obligations to pay money, it nonetheless seems clear that the court may equally give an order of specific performance whose only effect is to require payment of a given sum by the defendant to the claimant, and where an action of debt would lie just as well. Thus, where a contract of sale is specifically enforceable at the suit of the purchaser, it is equally so enforceable at the instance of the vendor even if the latter has already performed, so that the only obligation left unperformed is payment of the price.”

“In most cases a monetary remedy of damages or the action for an agreed sum will be an adequate remedy for breach of contract for the payment of money, but in exceptional cases such a contract may be specifically enforced. This may occur where the action for an agreed sum would be unavailable or unsuitable, such as where the contract is to pay a third party, so that the damages recoverable by the contracting party would be merely nominal, or where the contract is to make periodical payments, requiring a multiplicity of actions at law to enforce payment. Although the third party cannot himself sue on the contract, he can enforce any order for specific performance which the contracting party obtains. More controversially, in what has been described as an ‘awkward exception’ to the normal requirement that damages should be inadequate, in contracts for the sale of land, the vendor is readily warded specific performance even though his interest in performance is purely financial and thus damages or the action for an agreed sum would (other than in exceptional cases) be an adequate remedy. This is commonly justified on the basis of mutuality, but this principle is no longer given the weight it traditionally was and, in any event, the purchaser’s entitlement to specific performance against the vendor may no longer be absolute.”

“Generally speaking, the rescission of the contract puts an end to the primary obligations of the party not in default to perform any of his contractual promises which he has not already performed by the time of the rescission. It deprives him of any right as against the other party to continue to perform them. It does not give rise to any secondary obligation in substitution for a primary obligation which has come to an end. The primary obligations of the party in default to perform any of the promises made by him and remaining unperformed likewise come to an end as does his right to continue to perform them. However, for his primary obligations there is substituted by operation of law a secondary obligation to pay to the other party a sum of money to compensate him for the loss he has sustained as a result of the failure to perform the primary obligations.”

“… where a contract contains an obligation on one party to perform an act, and also provides that, if he does not perform it, he will pay the other party a specified sum of money, the obligation to pay the specified sum is a secondary obligation which is capable of being a penalty; but if the contract does not impose (expressly or impliedly) an obligation to perform the act, but simply provides that, if one party does not perform, he will pay the other party a specified sum, the obligation to pay the specified sum is a conditional primary obligation and cannot be a penalty.”

“It is essential to the decision of that question to have in mind the legal nature of demurrage: both what it is and what it is not. I deal first with what demurrage is not. It is not money payable by a charterer as the consideration for the exercise by him of a right to detain a chartered ship beyond the stipulated lay days. If demurrage were that, it would be a liability sounding in debt. I deal next with what demurrage is. It is a liability in damages to which a charterer becomes subject because, by detaining the chartered ship beyond the stipulated lay days, he is in breach of his contract. Most, if not all, voyage charters contain a demurrage clause, which prescribes a daily rate at which the damages for such detention are to be quantified. The effect of such a clause is to liquidate the damages payable: it does not alter the nature of the charterer’s liability, which is and remains a liability for damages, albeit liquidated damages. In the absence of any provision to the contrary in the charter the charterer’s liability for demurrage accrues de die in diem from the moment when, after the lay days have expired, the detention of the ship by him begins.” 1061. Lord Brandon went on to say this: “Once it is recognised that a claim for demurrage sounds in damages rather than in debt, it becomes apparent that the two concepts, first, of a contractual date for the payment of such damages, and, secondly, of a claim for damages for breach of contract in not paying them by such date, have no basis in law. As I said earlier an owner’s cause of action for demurrage, being one for damages, albeit liquidated damages, accrues de die in diem from the moment when the ship is detained beyond the stipulated lay days. There is no such thing as a cause of action in damages for late payment of damages.”

“A cause of action for ordinary failure to build in accordance with the contract normally arises at practical completion. A cause of action for failure to comply with defects liability obligations normally arises at such later date after practical completion as the contract prescribes for carrying out those obligations.”

“takes away, no doubt, the right of the solicitor to bring an action directly the work is done, but does not take way his right to payment for it, which is the cause of action. The Statute of Limitations itself does not affect the right to payment, but only affects the procedure for enforcing it in the event of dispute or refusal to pay. Similarly, I think s. 37 of the Solicitors Act, 1843, deals, not with the right of the solicitor, but with the procedure to enforce that right.”

“It is no doubt true that, because there has to be a general settlement of accounts between the charterer and the shipowner after the completion of the charter voyage, and because time is needed to agree the calculation of the amount of demurrage where a liability for it has been incurred, demurrage will not in practice be settled and paid for until a reasonable time, which may well be of the order of two months, has elapsed after the completion of discharge. This circumstance, however, does not afford a basis for implying a term that the charterer's liability to pay demurrage does not accrue until such a reasonable time has elapsed.”

“shall not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief, except in so far as any such time limit may be applied by the court by analogy in like manner as the corresponding time limit under any enactment repealed by the Limitation Act 1939 was applied before 1st July 1940.”

“are all cases in which the facts giving rise to the claim were sufficient to found an action at law and a suit in equity and in which substantially identical relief (an account in the first two cases and damages or equitable compensation in the third) was available in each case. In such circumstances one can well see why equity took the view that the limitation period applicable to a claim at law should also apply to a claim in equity. To hold otherwise, even at a time in the 19th century when the jurisdictions of the common law courts and the courts of equity were separate, would have undermined the statutory provisions; in the modern legal world, in which the same courts apply the rules of both law and equity, the consequences would be even more anomalous and unacceptable. However, in cases where the facts capable of supporting a claim for equitable relief differ from those capable of supporting a claim at law, or where the equitable remedy differs in a material respect from that available at law, there is not the same reason to deprive the court of the power to grant equitable relief in an appropriate case by adopting the statutory limitation period by analogy.”

“No doubt it is true that most claims for specific performance are made in response to an existing breach of contract, but as Hasham v Zenab [1960] AC 316 shows, an accrued right of action for breach of contract is not a necessary precondition to obtaining relief of that kind. It is, therefore, wrong in principle to treat specific performance as merely an equitable remedy for an existing breach of contract. Moreover, since a claim for specific performance may be made as soon as the contract has been entered into, it is very arguable that, if the limitation period were to be applied by analogy, it would be necessary to regard the cause of action as accruing at that moment with the unfortunate result that the claim could become timebarred before any need for relief had arisen. This lends further support to the conclusion that the application of the limitation period by analogy is not appropriate in relation to claims for specific performance.”

“In my view that question must be answered by reference to the nature of the remedy and the circumstances in which it is available. Both factors point to the conclusion that claims for specific performance fall outside the scope of the principle identified by Lord Westbury in Knox v Gye LR 5 HL 656 and applied by this court in Cia de Seguros Imperio v Heath (REBX) Ltd [2001] 1 WLR 112 : the remedy is available in circumstances where no cause of action exists at law, so the factual circumstances giving rise to a claim need not be the same as those which would support a claim for breach of contract, and no comparable remedy is available at law. It follows that despite the powerful arguments put forward by Colman J [2005] 1 WLR 3733 in favour of holding that the same limitation period applies to claims for specific performance as to claims for damages for breach of contract, I think he was wrong in reaching the conclusion that P & O’s claim was time-barred as a result of the application by analogy of the limitation period contained in section 5 of the Limitation Act 1980. Moreover, with all respect to the judge this is not in my view such an implausible position when one bears in mind that in general under English law limitation bars the remedy and not the right itself. Nor does it mean that claimants can delay with impunity safe in the knowledge that, although their claims for damages may become time-barred, their right to obtain specific performance can still be asserted. As one can see from the cases mentioned earlier, one can find many examples of the court’s refusing relief by way of specific performance as a result of delay far shorter than is necessary to bar a claim for damages. The equitable doctrine of laches, to which I shall turn in a moment, provides the court with ample power to refuse relief when delay on the claimant’s part would make it inequitable to grant it and I should be surprised if there were many cases in which, in the absence of fraud, the court would be willing to grant relief by way of specific performance if the claim had not been made within six years after the contract was due to be performed.”