Agrofirma Oniks LLC & Anor v ABH Ukraine Limited & Ors [2025] EWHC 2046 (Comm)

[2025] EWHC 2046 (Comm)Case No CL-2024-000082
IN THE HIGH COURT OF JUSTICE
KING’S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, WC4A 1NLDate 31 July 2025
Before
MR JUSTICE BRIGHT
Between
(1) Agrofirma Oniks LLCClaimants(2) Agro UG V LLCClaimant(1) ABH Ukraine LimitedDefendants(2) EMIS Finance BVDefendant(3) Mr Mikhal FriedmanDefendant(4) Sense Bank (formerly PJSC Alfa Bank Ukraine Ltd)Defendant
Stephen Cogley KC (instructed by Fieldfisher LLP) for ClaimantsDavid Quest KC (instructed by Pillsbury Winthrop Shaw Pittman LLP) for First DefendantDavid Head KC (instructed by Napier Sterling Law Limited) for Second DefendantHearing Hearing dates: 31 July 2025
Approved JudgmentThis judgment was handed down remotely at 03:00pm on 31/07/25 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................
[1]This judgment is concerned with the Claimants’ application, by an application notice dated 25 July 2025, that time by which they must provide security for costs be extended from 25 July 2025 to 1 September 2025.[2]The proceedings in which the application is made is concerned with various loan participation notes (“the LPNs”), and advice received by the Claimants in connection with them. The LPNs were instruments issued by the Second Defendant (“EMIS”) for the purpose of funding loans to the First Defendant (“ABHU”).[3]In response to the claim advanced against them in this matter, ABHU and EMIS both issued applications under CPR Part 11, challenging the jurisdiction of the court (“the Jurisdiction Applications”). The Claimants did not initially respond. There having been no engagement by the Claimants, the Jurisdiction Applications were listed to be heard on 4 July 2025.[4]On 27 May 2025, the Claimants issued an application for the Jurisdiction Applications to be adjourned until 19 September 2025, and for directions to be given for the service of evidence (i.e., in effect, they wanted a retrospective extension of time for their own evidence).[5]At the hearing on 4 July 2025, I made an order as follows:
“IT IS ORDERED that: 1 The hearing of the Jurisdiction Applications be adjourned and relisted for a one-day hearing on 4 September 2025. 2 The First and Second Claimants shall file and serve any evidence in response to the Jurisdiction Applications by 4pm on 6 August 2025. 3 The First and Second Defendants shall file and serve any evidence in reply by 4pm on 26 August 2025. 4 The hearing bundle shall be prepared and filed by 28 August 2025. 5 The Parties shall file and exchange their skeleton arguments for the adjourned hearing of the Jurisdiction Applications by no later than 4pm on 1 September 2025. 6 The Claimants shall by 25 July 2025 provide security for each of the First and Second Defendants’ costs of the proceedings in the amount of £250,000 each, by paying the total sum of £500,000 into court or by such other method as agreed between the parties or ordered by the Court. 7 If the parties are unable to agree the method of security the parties have permission to apply with the matter reserved to Mr Justice Bright if possible. 8 Unless the Claimants provide security as required by paragraph 6 above, the Claimants shall not be permitted to adduce evidence under paragraph 2 above, or at all, in response to the Jurisdiction Applications. 9 The costs of the Adjournment and Extension Application are reserved to the adjourned hearing of the Jurisdiction Applications.”
[6]In the course of the hearing, I made it clear that the purpose of paragraphs 6 and 8 was that ABHU and EMIS should know that their costs were secured, before they had to start incurring further substantial costs in relation to the Jurisdiction Applications in response to any evidence from the Claimants.[7]It was not suggested to me at the hearing, or in the period immediately afterwards while a draft of my order was being agreed between the parties, that this posed any problems for the Claimants. I also made it clear at the hearing that, if it were to be proposed that security funds be paid to the Claimants’ solicitors (“Fieldfisher”) and held by them subject to a suitable undertaking, I would expect this to be agreed pursuant to paragraph 6.[8]My understanding is that, on 16 July 2025, it was agreed in principle that the security funds should be held by Fieldfisher; and that, on 23 July 2025, agreement was reached on the terms of the undertaking.[9]Also on 23 July 2025, the Claimants asked for an additional 7 days for payment of the security, which EMIS and ABHU did not agree. On 25 July 2025, the Claimants issued the application I now deal with – in other words, the extension sought by the Claimants increased dramatically. From 4 July to 22 July, no extension was said to be required. From 23 to 24 July, the Claimants said that they needed 7 days. On 25 July, this increased to 5 weeks. At the hearing in front of me, Mr Cogley KC (for the Claimants) asked for 3 weeks from today (i.e., in effect, 4 weeks from the original date).[10]The Claimants say that the fundamental difficulty that they face is that ABHU is subject to sanctions in Ukraine, and the Claimants’ bank in Ukraine has not permitted any funds to be transferred out of Ukraine to Fieldfisher, if they may eventually pass to ABHU. Indeed, they say that their bank has now even refused to transfer funds that may eventually pass to EMIS – which is not sanctioned – because of the perceived relationship between ABHU and EMIS.[11]On behalf of ABHU and EMIS, Mr Quest KC and Mr Head KC (respectively) objected that the Claimants’ evidence was unsatisfactorily sketchy, that the Claimants ought to have foreseen this problem from the outset, that the Claimants seem to have delayed far too long in seeking permission to transfer funds out of Ukraine and that the Claimants have failed to explain in any detail what it is that they now need to do and how long it will take them to do it. All of these objections were well made, and they were based on good grounds.[12]Nevertheless, I am persuaded that the Claimants face a real problem in transferring funds out of Ukraine to Fieldfisher, in so far as those funds are intended to stand as security for the costs of ABHU and EMIS. The problem is not one of the Claimants’ making, albeit they could and should have foreseen it and addressed it much earlier than they did.[13]I will therefore grant an extension. However, because I have no evidence from the Claimants that suggests that an extension of X days will not be sufficient, whereas an extension of Y days might, I cannot decide what extension to grant by reference to what the Claimants need. Instead, I have to proceed on the basis that the Jurisdiction Applications will be heard on 4 September 2025. I must make directions that give the Claimants a little more time in advance of that date, without unfairly prejudicing either the ability of ABHU and EMIS to respond to the Claimants’ evidence, or the ability of the court to determine the Jurisdiction Applications fairly and efficiently.[14]The result is that, as discussed with Counsel, the period granted to the Claimants to provide security will be extended to 16:30 on 14 August 2025, and the other dates will be extended accordingly, as follows: i) Claimants’ security: 16:30 on 14 August 2025. ii) Claimants’ evidence: 14:00 on 15 August 2025 iii) ABHU and EMIS responsive evidence: 10:00 on 1 September 2025 iv) Hearing bundles: 16:00 on 1 September 2025 v) Skeleton arguments: 14:00 on 2 September 2025 vi) Hearing: 4 September 2025.[15]The “unless” effect of paragraph 8 of my order of 4 July 2025 still stands. That is: unless the Claimants provide security by 16:30 on 14 August 2025, they will not be permitted to adduce any evidence in response to the Jurisdiction Applications.[16]However, the amount of the security that must be provided will be increased to £290,000 each, i.e. £580,000 in total. This is to reflect the fact that ABHU and EMIS are entitled to their costs of today, on the indemnity basis, and these costs, too, should be secured.[17]As I understand matters, it remains the case that the parties have agreed that the security funds will be paid by Fieldfisher, and held by Fieldfisher on the basis of their undertaking to retain them for the payment of the costs of ABHU and EMIS in relation to the Jurisdiction Applications, if the court should later order that either ABHU or EMIS is entitled to be paid such costs.[18]I therefore emphasize the following: i) The purpose of the payment that the Claimants must make is to provide security, as ordered by this court. ii) As agreed by the parties, the funds will be paid to the Claimants’ own English lawyers, Fieldfisher. iii) If the Claimants’ bank now permits funds to be transferred to Fieldfisher as required by the order that I have made today, those funds will be retained by Fieldfisher unless and until this court make a further order. iv) Such funds will not be released by Fieldfisher unless and until this court permits and/or requires them to be released. That will only happen after the court has first given all the parties, including the Claimants, the opportunity to make submissions. v) In particular, no funds will be released to ABHU or EMIS or any other person who is or may be affected by sanctions, without the approval of the court; and then only after the court has taken into account whatever the Claimants may wish to say. vi) However, if the Claimants are unable to make the required payment, they will not be allowed to serve any evidence in relation to the Jurisdiction Applications.