“46. This Claim concerns two conspiracies which between them involve all of the Defendants, and which each involve other persons acting or purporting to act on behalf of the Russian State and unknown others (the “Hostile Parties” and the “Conspiracies”). The Conspiracies had and have as their ultimate objective the wresting of assets from Mr Magomedov or obtaining them for less than their fair value, and for the sole benefit of the Hostile Parties (including Transneft and ROSATOM, each of which are companies owned by the Russian State) and/or some of them and/or those that control them.” ‘’’ “48. The Conspiracies form part of a campaign waged against Mr Magomedov (and Magomed Magomedov) by and on behalf of the Russian state for political reasons. The imprisonment of the Magomedovs is a further part of the same political campaign. 49. Such assets as remained in Mr Magomedov’s hands have been arrested and confiscated by orders of Russian Courts, on applications by Russian prosecuting authorities and FESCO. These arrests and confiscations form part of the Conspiracies and have the same ultimate aim, i.e. the wresting of assets from Mr Magomedov for the benefit of the Hostile Parties (and/or some of them) and the Russian state.”
“In particular, no case is run that (i) that the FESCO Conspiracy involves (i.e. as conspirators) persons acting or purporting to act on behalf of the Russian State; (ii) that Russian prosecutors were parties to the FESCO Conspiracy; or (iii) the parties to the FESCO conspiracy include members of the Russian State.”
“The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman[2001] 2 All ER 91 . ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8]. iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman. iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]. v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 . vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd[2007] FSR 63 . vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .”
“…the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: e.g. Carvill America Inc v Camperdown UK Ltd[2005] 2 Lloyd’s Rep 457 , para 24.”
“41. For the amendments to be allowed the Appellants need to show that they have a real as opposed to fanciful prospect of success which is one that is more than merely arguable and carries some degree of conviction: ED&F Man Liquid Products Ltd v Patel[2003] EWCA Civ 472 . A claim does not have such a prospect where (a) it is possible to say with confidence that the factual basis for the claim is fanciful because it is entirely without substance; (b) the claimant does not have material to support at least a prima facie case that the allegations are correct; and/or (c) the claim has pleaded insufficient facts in support of their case to entitle the Court to draw the necessary inferences: Three Rivers District Council v Bank of England (No3)[2003] 2 AC 1 . 42. The court is entitled to reject a version of the facts which is implausible, self-contradictory or not supported by the contemporaneous documents and it is appropriate for the court to consider whether the proposed pleading is coherent and contains the properly particularised elements of the cause of action relied upon.”
“22. …Where… there are particulars of claim, the analytical focus should be on the particulars of claim and whether, on the basis that the facts there alleged are true, the cause of action asserted has a real prospect of success. Any particulars of claim or witness statement setting out details of the claim will be supported by a statement of truth. Save in cases where allegations of fact are demonstrably untrue or unsupportable, it is generally not appropriate for a defendant to dispute the facts alleged through evidence of its own. Doing so may well just show that there is a triable issue.” … “103. This was a jurisdiction challenge and concerned whether it was appropriate to grant permission to serve proceedings out of the jurisdiction on a foreign defendant. Those proceedings were meant to be as defined in the particulars of claim for which permission to serve out was sought. In this case the challenge was made on the grounds that the claimants had no arguable case against the anchor defendant. Where, as in this case, there are particulars of claim, that is an issue which should ordinarily fall to be addressed by reference to the pleaded case. 104. If the issues are addressed by reference to the pleaded case, then the focus of the inquiry is clearly circumscribed and problems of lack of proportionality should generally be avoided. 105. In the present case, not only did the parties choose to swamp the court with evidence, but it appears that the claimants chose not to update their pleadings to reflect the evidence. We were told that this is because they wanted to avoid producing various iterations of the pleading, but if they wanted to advance a case which was not reflected by their existing pleading then they should have amended it. In that way the proper focus of the inquiry can be maintained. Whilst one can understand that this may not have been possible in relation to documents produced during the appeal hearing, the claimants’ laissez-faire attitude to the pleadings set in long before that.”
“An attempt to clarify the practical implications of these principles was made by the Court of Appeal in Canada Trust Co v Stolzenberg (No 2)[1998] 1 WLR 547 . Waller LJ, delivering the leading judgment observed, at p 555: “‘Good arguable case’ reflects … that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i.e. of the court being satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which allow the court to take jurisdiction.” …In my opinion it is a serviceable test, provided that it is correctly understood. The reference to “a much better argument on the material available” is not a reversion to the civil burden of proof which the House of Lords had rejected in Vitkovice. What is meant is (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it. I do not believe that anything is gained by the word “much”, which suggests a superior standard of conviction that is both uncertain and unwarranted in this context.” “‘Good arguable case’ reflects … that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i.e. of the court being satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which allow the court to take jurisdiction.”
“(6) A claim is made in respect of a contract where the contract– … (c) is governed by the law of England and Wales.” … (c) is governed by the law of England and Wales.”
“In my judgment, at least in respect of contractual claims, some relevant legal connection between the claim and the other contract is required. If that contract needs to be referred to and relied upon in order to assert the relevant cause of action then that requirement is likely to be satisfied since it will be a necessary part of the cause of action. However, a mere factual connection between the two contracts is not enough.”
“The jurisdictional gateways relied upon are… [t]hat the conspiracy claims are each “a claim in respect of” the Cecil and Bentham contract (the latter of which was made within the jurisdiction and/or is governed by English law, as above), 6BPD3 .1(6) (a) and (c), and the Grinling contract. The claims are to deprive them of their contractual benefits and the contract does form a necessary part of that cause of action, although it is not its legal foundation. As such, I would, if necessary, be prepared to hold that the Cecil and Bentham claims are sufficiently connected to their contract to fall within this jurisdictional gateway, and likewise Grinling with his contract. This, however, would not assist Lehmkuhl. As far he is concerned the conspiracy is in respect of his contract, not that of Cecil and Bentham or Grinling. His contract was neither made in the jurisdiction nor subject to English law.”
“What the judge said about the claim in conspiracy falling within gateway (6)(a) and (c) was I think strictly obiter, since he also concluded that each claim qualified as a claim in tort where damage was sustained within the jurisdiction and so fell within the tort gateway, gateway (9). Moreover, of the three parties to the conspiracy upon whom he permitted service out of the jurisdiction, two, Bayat and TSI, were parties to relevant contracts with the claimants. The nature of the conspiracy was said to be to ensure that the claimants did not receive the shares to which they were entitled under those contracts. The third defendant out of the jurisdiction upon whom he permitted service in this respect, Warner, was not a party to those contracts, but the conduct alleged against him was that, in agreement with Bayat, he wrongly disposed of shares which he was holding on trust for the claimants. He was holding the shares on trust for the claimants because they were constituted shareholders by the agreement to which the claimants, Bayat and TSI, were party. It was therefore conduct closely related to the implementation of the contracts which it was the purpose of the action to enforce. Hamblen J’s preparedness, albeit obiter, to treat the conspiracy claim against Warner as a claim ‘in respect of a contract’ notwithstanding Warner was not a party to that contract is I think the high-water mark of the assistance afforded to Mr Toledano by the authorities. Longmore LJ in the Greene Wood & McLean case spoke in broad terms of a claim having a connection with a contract as rendering it, for these purposes, a claim in respect of that contract, but he was speaking only in the context of a contract to which the intended defendant was party.”
“[69] It would I think be similarly anomalous were jurisdiction here to be established against Ds 6–9 in reliance upon contracts to which they are not party. The nature of the required connection between the claim and the contract in respect of which it is made is the more elusive in circumstances where the intended defendant is not party to the relevant contract. GWM was relying upon the contract between Templeton and the miners as generating the right to contribution under the 1978 Act, because it was the instrument under which Templeton was liable to the miners in the same way as GWM was liable to the miners. That is a straightforward connection. [70] Furthermore, like Rix LJ in the Global 5000 case at [64], I wonder what is the relevance of sub-r (d) of para 3.1(6) of the Practice Direction unless it is implicit that the intended defendant is bound by that term and that agreement. Indeed I would go a little further, in that I wonder what is the relevance, for the purpose of founding jurisdiction, of the circumstance that the contract has been made within the jurisdiction, or made by or through an agent trading or residing within the jurisdiction, unless it is the intended defendant who has ‘come into’ the jurisdiction to make the contract, or has used the services of an agent trading or residing within the jurisdiction for the purpose of making the contract. [71] Notwithstanding the width of the language used by Longmore LJ in the Greene Wood & McLean case, plainly that case does not compel us to decide that connection of a claim with a contract to which an intended defendant is not party is a qualifying jurisdictional link under gateway (6). That point was left open. I am for my part attracted by the argument that a claim is not for that purpose properly described as ‘made in respect of a contract’ where the contract in question is not one to which the defendant is party. For my part I see great force in the argument that it is implicit in the rule that the contract upon which reliance is placed must be one to which the intended defendant is party. I am also attracted by Mr Morgan’s formulation which I would tentatively restate as follows: unless the claimant is suing in order to assert a contractual right or a right which has arisen as a result of the non-performance of a contract, his claim is not in this context properly to be regarded as one made in respect of a contract. I think it likely that ordinarily such claims can only be made in respect of contracts to which the intended defendant is party. However the case of the intended defendant, Warner, considered by Hamblen J in Cecil v Bayat may show that that will not always be so. It is sufficient to dispose of the point in this case to indicate that the required connection between claim and contract must inevitably be the more difficult to establish in a case where the intended defendant is not party to the contract upon which reliance is placed than in a case where he is party to it. Longmore LJ was able to say in the Greene Wood & McLean case[2009] 1 WLR 2013 that the claim for contribution clearly had a connection with the Templeton contract which established the liability of Templeton to the miners, because that (contractual) liability was a prerequisite to Greene Wood claiming contribution from Templeton. Here there is in my judgment no clear connection, or no connection with any real content, between the claims in tort or delict against Ds 6–9 and the Reachcom loan agreements. Those agreements may be an incidental product of the conspiracy but it puts the cart before the horse to describe the claim in respect of the conspiracy as a claim in respect of the contracts to which it may, incidentally, have given rise. It would be more natural, but still in my judgment artificial, to regard the claim as made in respect of the contracts of guarantee between Alliance and Reachcom rather than the loan agreements between Reachcom and Ds 3 and 4, since it was by the former that Alliance was deprived of its money. Similarly, I consider that the claims in unjust enrichment against the wrongdoers who allegedly participated in the scheme to divert Alliance’s assets and the equitable claims for dishonest assistance and knowing receipt arising from the breach of fiduciary duty that arguably occurred when the contracts of guarantee were executed have a closer affinity to those contracts than to the contracts of loan. In these cases too however the necessary connection between the claim and the contracts is in my view lacking. In none of these formulations is Alliance suing Ds 6–9 in order to assert a contractual right or a right which has arisen as a result of the non-performance of a contract. [72] Where then does this leave the non-contractual claims against Ds 3 and 4? It is the claims in contract against Ds 3 and 4 which are brought in order to assert contractual rights under the contracts of implied indemnity. Nor is the conspiracy claim brought in order to assert a right arising as a result of non-performance of the implied contracts of indemnity. The essence of the conspiracy allegation is that the conspirators, including Ds 3 and 4, used contracts such as the Alliance guarantees as instruments pursuant to which they extorted money from Alliance. Adopting the analysis which I have favoured, I do not think that these claims can properly be said to be made in respect of the implied contracts of indemnity. The implied contracts of indemnity are merely incidental products of the conspiracy. The claims made in respect of those contracts are the contractual claims made under them.”
“… this is a situation where the relevant defendants are not party to the agreements concerned. I consider it would be a very rare case indeed where the gateway could be used in those circumstances. I am not satisfied that the matters identified by him suffice in order to meet the requirements of that gateway.”
“… it is clear that an alternative forum is not available (in the relevant sense) unless it is open to the plaintiff to institute proceedings as of right in that forum (for the law as it stood in 1999 see Dicey and Morris, The Conflict of Laws 13th (2000) edition, para. 12–023). But this topic has recently been reviewed (as noted in the second supplement to Dicey and Morris, para. 12–023) by the House of Lords in Lubbe v Cape plc[2000] 1 WLR 1545 . The House upheld the general principle that an available forum must be one in which the plaintiff can sue as of right, but treated an undertaking to submit to the alternative jurisdiction (in that case, an undertaking by the English holding company to submit to the jurisdiction of the South African court) as sufficient to show that the forum is available even though given after the application for a stay.”
“[41] … The question is, whether the courts of another country can be said to offer an "available forum" to a plaintiff who cannot bring proceedings there, without the defendant's consent.”
“Whether the court’s jurisdiction will become effective depends on the defendant’s willingness to submit to it: the antithesis of jurisdiction asserted “as of right”.”
“In Societe du Gaz de Paris v. Societe Anonyme de Navigation "Les Armateurs Francais," 1925 S.C. 332, 347 the Lord Justice-Clerk, Lord Alness, said that the result of the cases was that it must be plain that "another forum is open to the parties." His analysis of the law was approved by Lord Dunedin, 1926 S.C. (H.L.) 13, 18, in your Lordships' House. There is no indication here or in any of the other Scottish cases that this matter ought to be approached on any other basis than that this is a requirement that must be satisfied in a practical manner when the question of forum non conveniens is being considered by the court.”
“In order to establish a real risk of injustice, the claimant must adduce “positive and cogent evidence”: The Abidin Daver[1984] AC 398 , 411B-D; Cherney v Deripaska (Court of Appeal) [60]; AK Investment CJSC v Kyrgyz Mobil Tel Ltd[2011] UKPC 7 [89-102]; Dynasty Co for Oil and Gas Trading Ltd v Kurdistan Regional Government of Iraq[2022] QB 246 [173]-[178]; Bazhanov & Anr v Fosman & Ors[2017] EWHC 3404 (Comm) [96]-[105]. It is not sufficient for a claimant to make “broad and conclusory allegations” about the judicial system in the contractual forum, but the claimant may be able to identify specific features of the claim which give rise to a real risk of injustice: Cherney v Deripaska (Christopher Clarke J) at [238]-[248].”
“A conspiracy to injure by unlawful means is actionable where the claimant proves that he has suffered loss or damage as a result of unlawful action taken pursuant to a combination or agreement between the defendant and another person or persons to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do so. ”
“94. The elements of the cause of action are as follows: i) A combination, arrangement or understanding between two or more people. It is not necessary for the conspirators all to join the conspiracy at the same time, but the parties to it must be sufficiently aware of the surrounding circumstances and share the same object for it properly to be said that they were acting in concert at the time of the acts complained of: Kuwait Oil Tanker at [111]. ii) An intention to injure another individual or separate legal entity, albeit with no need for that to be the sole or predominant intention: Kuwait Oil Tanker at [108]. Moreover: a) The necessary intent can be inferred, and often will need to be inferred, from the primary facts – see Kuwait Oil Tanker at [120-121], citing Bourgoin SA v Minister of Agriculture [1986] 1 QB: “… [i]f an act is done deliberately and with knowledge of the consequences, I do not think that the actor can say that he did not ‘intend’ the consequences or that the act was not ‘aimed’ at the person who, it is known, will suffer them”. b) Where conspirators intentionally injure the claimant and use unlawful means to do so, it is no defence for them to show that their primary purpose was to further or protect their own interests: Lonrho Plc v Fayed[1992] 1 AC 448 , 465-466; see also OBG Ltd v Allan[2008] 1 AC 1 at [164-165]. c) Foresight that his unlawful conduct may or will probably damage the claimant cannot be equated with intention: OBG at [166]. iii) In some cases, there may be no specific intent but intention to injure results from the inevitability of loss: see Lord Nicholls at [167] in OBG v Allan, referring to cases where: “The defendant’s gain and the claimant's loss are, to the defendant's knowledge, inseparably linked. The defendant cannot obtain the one without bringing about the other. If the defendant goes ahead in such a case in order to obtain the gain he seeks, his state of mind will satisfy the mental ingredient of the unlawful interference tort.” iv) Concerted action (in the sense of active participation) consequent upon the combination or understanding: McGrath [Commercial Fraud in Civil Practice (2nd ed.)] at [7.57]. v) Use of unlawful means as part of the concerted action. There is no requirement that the unlawful means themselves are independently actionable: Revenue and Customs Commissioners v Total Network[2008] 1 AC 1174 at [104]. vi) Loss being caused to the target of the conspiracy. 95. However, a person is not liable in conspiracy if the causative act is something which the party doing it believes he has a lawful right to do: Meretz Investments NV v ACP Ltd[2007] EWCA Civ 1303 ;[2008] Ch 244 , per Arden LJ (paragraphs [126]- [127]) and Toulson LJ (paragraph [174]); Digicel v Cable & Wireless[2010] EWHC 774 (Ch) at Annex I, paragraphs [117]-[118] (Morgan J).” “… [i]f an act is done deliberately and with knowledge of the consequences, I do not think that the actor can say that he did not ‘intend’ the consequences or that the act was not ‘aimed’ at the person who, it is known, will suffer them”. “The defendant’s gain and the claimant's loss are, to the defendant's knowledge, inseparably linked. The defendant cannot obtain the one without bringing about the other. If the defendant goes ahead in such a case in order to obtain the gain he seeks, his state of mind will satisfy the mental ingredient of the unlawful interference tort.”
“… the parties to it must be sufficiently aware of the surrounding circumstances and share the same object for it properly to be said that they were acting in concert at the time of the acts complained of.”
“Two men, who pull the oars of a boat, do it by an agreement or convention, tho' they have never given promises to each other.”
“In my judgment, before a court can determine whether a defendant has been a party to a combination, it is necessary to identify what the combination is said to be and what part the defendant played in that combination. I can see that if a defendant is in a position of authority over other persons and those other persons want to feel that they have the defendant's authority to proceed before they do proceed, then the defendant's omission to stop their activity might be regarded as a sufficient signal to them that they have the defendant's backing in what they are doing. Such a defendant could be held to be participating in the combination. However, I do not think that the passage quoted above [from R v Siracusa] is authority for saying that every person who knows unlawful acts are being committed and who does nothing to stop those acts, is a party to a combination to carry out those acts.”
“… where a bit-player in a multifaceted fraud knows only of one aspect of the fraud, and is ignorant of the others, he may not be liable for anything more than the loss properly attributable to that part of the fraud of which he is aware. 847. In my judgment there is no simple doctrinaire answer to the conundrum presented by such a case. The answer lies in a painstaking analysis of the extent to which the particular defendant shared a common objective with the primary fraudsters, and the extent to which the achievement of that objective was to the particular defendant's knowledge to be achieved by unlawful means intended to injure the claimant.”
“The claimant does not have to plead primary facts which are only consistent with dishonesty. The correct test is whether or not, on the basis of the primary facts pleaded, an inference of dishonesty is more likely than one of innocence or negligence. As Lord Millett put it [in Three Rivers District Council v Governor and Company of the Bank of England (No.3)[2003] 2 AC 1 , at [186]], there must be some fact “which tilts the balance and justifies an inference of dishonesty”
“What the cases do not say is that one can jumble together a vast array of different, apparently trivial or marginally suspicious facts relating to different matters and turn them into a valid pleading of fraud.”
“Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter.”
“… best to avoid compartmentalising particular points relied upon, or treating points in “silos”, or adopting a piecemeal approach to evidence relied upon.”
“I have also taken the approach that, in cases in which I have found there to be a good arguable case against a Defendant, it is best not then to give any much more detailed analysis of the strengths and weaknesses of the case made against that Defendant, unless necessary to deal with the position of another Defendant. Any such analysis would be likely to be overtaken by what will emerge during the course of the case and/or, as it was put by Knox J in In Re a Company 005009 of 1987[1988] 4 BCC 424 , be such as ‘merely [to] embarrass the judge who will have to determine the question at the trial’. That was said in the context of a strike out, and the relevant considerations are not identical, but it nevertheless appears to me to be apt in the present context, and to be, as was said by Lloyd J in Bank of America Trust v Morris (22 October 1988 ), ‘wise guidance’.”
“Within the framework of the completed transaction on the sale of my block of shares in OAO NCSP and the consequent need to pay individual income tax…”
“I am not certain what, if any, complaint of wrongdoing is being made against me personally in relation to paragraph 82 of the APOC As I have noted, and as Mr Dougherty KC made clear at the hearing, the Claimants do not in fact allege any wrongdoing on the part of Ms Mammad Zade, as regards her involvement in receiving the Threat and/or Representations from Mr Tokarev, and then passing them to Mr Magomedov. , but I also wish to make clear that Transneft did not ever indicate to me, and I did not convey to Mr Magomedov, that Transneft had the power to negotiate with Mr Putin so as to procure Mr Magomedov’s release from prison.”
“It has long been established that a company is normally bound in a matter which is intra vires the company by a resolution of the shareholders in general meeting. Authorisation in advance of the directors’ act or ratification after the event by the shareholders in general meeting, after full disclosure, results in the treatment of the directors act as the act of the company, on principles of the law of agency, and therefore eliminates the possibility of the company bringing a claim against the directors for breach of their duties to the company.”
“I understand from one of MM’s lawyers in Russia that MM’s representative in these discussions was Ms Galina Medvedeva (“Ms Medvedeva”). MM has told ZM that he believes that Ms Medvedeva was pressured by “vice-presidents of Transneft” (this is the description relayed to ZM, and he understands it to include at least Mr Grishanin) to support the transaction and help the deal go through at USD 750 million.”
“Breach of fiduciary obligation, therefore, connotes disloyalty or infidelity. Mere incompetence is not enough. A servant who loyally does his incompetent best for his master is not unfaithful and is not guilty of a breach of fiduciary duty.”
“28. It is the Claimants’ case that it is most likely that Ms Mammad Zade directly procured Mr Karmokov’s signing of the Omirico SPA for the reduced price, knowing that it had not been approved or negotiated; or at the very least, having put forward the deal, stood by, contrary to her obligations to Port Petrovsk, and permitted Mr Karmokov to sign it in those circumstances. Given what is set out above, the obvious inference is that she colluded with Transneft so as to ensure that the transaction proceeded at the lower price and different terms. Her motivation for doing so was personal profit and/or seeking to protect or promote her personal position vis-à-vis the Russian authorities. To those ends, Ms Mammad Zade was willing to undermine ZM’s business interests and to procure or permit Mr Karmokov’s breach of his duties as director of Port Petrovsk.”
“92. As to Ms Mammad Zade: (1) if Ms Mammad Zade instructed and/or pressured Mr Karmokov to sign the Omirico SPA on behalf of Port Petrovsk, that was a breach by Ms Mammad Zade of her fiduciary duties owed to Port Petrovsk; and (2) in any event, it was a breach of the same fiduciary duties for Ms Mammad Zade not to prevent (or to take any steps to prevent) Mr Karmokov from doing so.”
“47. As to Ms Mammad Zade, ZM firmly believes that she was part of the NCSP Conspiracy by this point. ZM does not know how precisely she influenced events in relation to execution of the transaction. ZM believes she could have instructed or pressured Mr Karmokov to sign for Port-Petrovsk or that, if not, she would likely have had the opportunity to step in and dissuade Mr Karmokov from acting on the threat; it would have been inconceivable for Mr Karmokov to have taken such a step without speaking to Ms Mammad Zade. If so, then either by acting (by instructing or pressuring Mr Karmokov) or by not acting (by not stepping in to prevent the transaction), Ms Mammad Zade would have furthered the conspiracy. As described above ZM understands (and believes) that Ms Medvedeva was pressured. At the very least, this suggests that Transneft was willing to take untoward steps to bring about this transaction. ZM believes that improper pressures or incentives were brought to bear on Ms Mammad Zade.”
“ZM believes that various directors and representatives of ZM and MM-owned companies, including Ms Medvedeva and Mr Zaur Karmokov…, at least initially, would have feared being arrested and prosecuted since the Russian government is generally known to use such tools to achieve its goals”
“26.2 The Claimants have made several attempts to obtain evidence from Mr Karmokov regarding the Claimants but without success. ZM believes that Mr Karmokov (as well as others) is afraid of becoming involved with the proceedings in case of reprisals from the Russian state. He has repeated his belief 7 that Mr Karmokov (who, so far as I am aware, is based in Russia) was likely told by Ms Mammad Zade (or otherwise feared) that he could be arrested if he did not co-operate by authorising the transaction with Transneft, and that he was in any event influenced by the threat from Transneft that ZM would remain in prison if the deal was not agreed on their terms.”
“18. Ms Mammad Zade owed fiduciary duties to members of the SGS Branch and to Port Petrovsk, by virtue of her management position, and/or because she was a de facto and/or a shadow director of each of those companies.”
“On the basis of the analysis above, I would summarise as follows the principles to be applied in determining in proceedings under the 1986 Act whether the defendant was a de facto director. (1) The touchstone is whether the defendant was part of the corporate governing structure. (2) Inherent in that touchstone is the distinction between someone who participates, or has the right to participate, in collective decision making on corporate policy and strategy and its implementation, on the one hand, and others who may advise or act on behalf of, or otherwise for the benefit of, the company, but do not participate in decision making as part of the corporate governance of the company. Accordingly, the test is not satisfied by someone who was at all times and in all material decisions subordinate to the de jure directors. (3) The defendant may have been a de facto director even though he or she did not have day-to-day control of the company’s affairs, and even though he or she was only involved in part of the company’s activities. (4) The issue is to be determined objectively on the basis of all relevant facts. Whether the defendant was held out by the company, or claimed or purported, to be a director, and whether the defendant had access or the ability to obtain access to relevant company information is likely to be highly relevant and may be decisive. Factors such as a family relationship with other admitted directors and the defendant’s financial interest in the company may also be relevant, sometimes supporting and sometimes negating the allegation that the defendant was a de facto director. (5) De facto directorships and shadow directorships are alternatives, although there may be cases, particularly where the defendant’s influence in the corporate governance was partly concealed and partly open, where it may not be entirely straightforward which of the two descriptions is most apposite.”
“54. The leading authority on shadow directors is Secretary of State for Trade v Deverell[2001] Ch 340 . The principles set out in the judgment of Morritt LJ can be summarised as follows: i) The definition of a shadow director is to be construed in the normal way to give effect to the parliamentary intention ascertainable from the mischief to be dealt with and the words used. It should not be strictly construed; ii) The purpose of the legislation is to identify those, other than professional advisers, with real influence in the corporate affairs of the company. But it is not necessary that such influence should be exercised over the whole field of its corporate activities; iii) Whether any particular communication from the alleged shadow director, whether by words or conduct, is to be classified as a direction or instruction must be objectively ascertained by the court in the light of all the evidence; iv) Non-professional advice may come within that statutory description; v) It is sufficient to show that in the face of “directions or instructions” from the alleged shadow director the properly appointed directors or some of them cast themselves in a subservient role or surrendered their respective discretions. But it is not necessary to do so in all cases.”
“22. Governing Law and Jurisdiction 22.1 This Agreement and any non-contractual obligations arising out of or in connection with this Agreement shall be governed by, and interpreted in accordance with, English law, without giving effect to any choice or conflict of law provision or rule (whether of England or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than England. 22.2 Any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.”
“(d) except for any liability in respect of a breach of this Agreement, no Party or any of its Connected Persons) shall owe any duty of care or have any liability in tort or otherwise to the other Party (or its respective Connected Persons) in relation to the transaction.”
“16.2 Without prejudice to any provision of this Agreement and with effect from Closing, a Party, both for itself and on behalf of its respective Affiliates, hereby releases the other Party (including in relation to the Purchaser, Transneft) or its respective Affiliates from, and waives, any claims against, and liabilities of, such persons that may have potentially arisen during the period prior to the date of this Agreement (or may arise in future), whether in contract, tort or otherwise, in connect with, or relating to, such Party holding its respective shares in Omirico and/or the such Party or its Affiliates participating in management of Omirico, the Omirico Subsidiary and/or the NCSP Group…”
“Article 4 General rule 1. Unless otherwise provided for in this Regulation, the law applicable to a non-contractual 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 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 preexisting relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.”
“Article 10. Limits on Exercising Civil Rights 1. Civil rights cannot be exercised solely with the intent to harm another person, to circumvent the law for illegal purposes, or in other clearly dishonest ways (abuse of rights). Civil rights cannot be used to restrict competition or to abuse a dominant market position. 2. If the requirements of paragraph 1 of this article are not met, the court, arbitrazh court, or tribunal will, considering the nature and consequences of the abuse, deny the person protection of their rights, either fully or partially. The court may also apply other measures provided by law. 3. If the abuse of rights involves actions taken to circumvent the law for illegal purposes, the consequences outlined in paragraph 2 of this article will apply, unless other consequences for such actions are specified in this Code. 4. If the abuse of rights results in the violation of another person s rights, that person has the right to demand compensation for the damages caused. 5. The good faith and reasonableness of participants in civil legal relations are presumed..”
“Private international law is founded on principles of comity and mutual respect and on the recognition that in many areas of law different approaches may be reasonably taken. That is obviously true in the field of limitation law, which involves striking a balance between allowing claimants to assert their legal rights and protecting defendants against stale claims. Different legal systems may legitimately strike this balance in different ways. An English court should for this reason be very slow to substitute its own view for the solution adopted by the foreign legislature.”
“61. Fourthly, although counsel for Senior argued that it was desirable to locate the direct damage caused by misuse of confidential information in a single country, that is contrary to the approach laid down by both Article 4 and Article 6. This was the legislative intention: the European Commission's Explanatory Memorandum accompanying the proposal for the Rome II Regulation stated at page 11 that the rule in what is now Article 4(1) "entails, where damage is sustained in several countries, that the laws of all the countries concerned will have to be applied on a distributive basis, applying what is known as 'Mosaikbetrachtung' in German law". Similarly, it stated at page 16 what is now Article 6 "provides for connection to the law of … the market where competitors are seeking to gain the customer's favour". It went on to state that it was important that "only the direct substantial effects of an act of unfair competition" should be taken into account in international situations "since anti-competitive conduct commonly has impact on several markets and gives rise to the distributive application of the laws involved".”
“… torts which have horizontal multi-jurisdictional effects, and those which have vertical multi-jurisdictional effects. The publication of a libellous tweet which is read and causes loss in a number of jurisdictions, or the use of confidential information to sell infringing products in a variety of countries, may present a rather stronger case for a “Mosaikbetrachtung” of applicable laws than a case such as the present, in which the defendants began causing loss to the claimant in one country, but adjusted their modus operandi so as to continue causing loss of essentially the same kind to the same claimant in another country”
“The Claimants’ costs of defending the various claims and of advancing their conspiracy claims are primarily funded by an entity outside of the SGS Branch and not party to the proceedings, but entirely owned and controlled by ZM. This entity in turn is funded from a number of other sources of funding controlled by ZM. Ultimately, the Claimants are liable to the funding entity for the costs incurred in resisting the Conspiracies, and it is on this basis that the claimants claim the costs of proceedings, as well as the costs of investigating and defending themselves from the acts comprising the Conspiracies more generally.”
“… in late August 2020, before the term sheet was finalised, Mr Chemarda contacted Mr Gadzhiev by telephone to inform him that DP World would not be proceeding with the deal they had been negotiating. Mr Chemarda explained that Mr Alexei Likhachev, the Director General of ROSATOM (D17), and Sultan Ahmed Bin Sulayem, the CEO of DP World, had spoken and that DP World now wished to form a joint venture in Russia with ROSATOM, through which they wished to acquire SGS’s and Felix’s entire stakes in FESCO.”
“Mr Gadzhiev specifically recalls him using the Russian equivalent of the phrase “hostile takeover”
“146. As described in the POC at paragraphs 148-149, between 11 and18 September 2020 , 13 of the 14 individuals that the SGS Branch had put forward (long before, on24 February 2020 ) as nominated candidates for the FESCO Board (i.e. all of them save for Mr Gadzhiev), suddenly and without prior warning to SGS, wrote to Ms Mammad Zade withdrawing their consent to being nominated to the FESCO Board at the upcoming AGSM {SJB-1/4019-4044}. I understand from Mr Gadzhiev that he spoke to one nominee and at the time a director on the boards of Intimere, Hellicorp and Sian (C3 to C5), Mr Bill Shor (“Mr Shor”), who told him that Ms Mammad Zade had asked to speak to him urgently. By this point (which Mr Gadzhiev believes was on or around14 September 2020 ), some SGS candidates had already given notice to withdraw their consent and so, understanding this was the reason Ms Mammad Zade wanted to speak to him, Mr Gadzhiev suggested he ignored her requests. 147. Mr Gadzhiev informs me that on or around18 September 2020 Mr Shor told him that that he had had a telephone conversation with Ms Mammad Zade who had stressed to him how, due to FESCO’s allegedly perilous financial situation around the time of the AGSM, were he to take up his role as a director of FESCO he would be held personally liable for FESCO’s debts in the event of a subsequent FESCO insolvency. It is the Claimants’ case that this was an attempt to threaten Mr Shor because this is specifically how Mr Gadzhiev recalls Mr Shor describing the call to him previously. Indeed, Mr Shor promptly withdrew his consent to nomination as a FESCO director following the call. So one way or the other he was deterred. In a recent conversation with my partner, Mr Keillor, Mr Shor confirmed that he had spoken with Ms Mammad Zade (as maintained by Mr Gadzhiev and the Claimants) but when specifically asked whether he was either threatened or felt threatened as a result of his call with Ms Mammad Zade, Mr Shor denied that he received any threat or felt threatened. Whilst Mr Shor was previously comfortable with the suggestion that he was threatened or intimidated, he is now evidently resiling from that position, and Mr Gadzhiev has informed me that he believes that is because he no longer wants to get drawn into this dispute, for fear of the personal consequences. This seems to me to be an entirely reasonable inference. 148. Mr Gadzhiev is also aware from others that they received threats from representatives of FESCO, including threats of litigation and referral to the criminal authorities with accusations of complicity with ZM’s alleged crimes (which as explained above had nothing to do with FESCO). Mr Gadzhiev has asked me not to name these others out of respect for their wish to discontinue their involvement with the Claimants as a result of the threats they received, and because to the extent they remain in Russia they are vulnerable to reprisals.”
“I also note that various sweeping allegations are made against me to say that I threatened proposed members of the FESCO Board (including Mr Shor)…. This is completely untrue. I did not threaten anyone. In relation to the Board decision on 3 September, the loans were due and owing to FESCO and, as part of our duties to the company as directors to act in its best interest, we had to take steps in order to recover the sums owing. I was concerned that if the Board did nothing, the directors would be in breach of their duties to the company and risked being personally liable. This belief came from legal advice received at the time, as I have set out above. I completely reject the allegation that I took this position in order to improperly threaten or pressure other members of the Board. Nor was I trying to maintain control: I had already tendered my resignation, but I was obliged to carry out my duties properly in the meantime. I note that the only example of my apparent threatening that the Claimants rely upon is in respect of Mr Shor, which even on their own case Mr Shor confirmed did not happen…”
“134. Halimeda asserted to the Cypriot Court that the Cypriot Injunctions were necessary so as to prevent the Cypriot Respondents from causing FESCO to destroy its ability to recover the Maple Ridge Disputed Loans. However, the relief obtained by Halimeda pursuant to the Cypriot Injunctions – purportedly pursuant to the Chabra jurisdiction – went so far as to prohibit the Cypriot Respondents from exercising any voting rights at the Annual General Shareholders’ Meeting (“AGSM”) of FESCO. Indeed, in a filing before the Insolvency Court in relation to the application described at paragraph 125 This application was in the Sian BVI Proceedings , above, witness evidence specifically stated that the purpose of the injunction “was to ensure that the management of FESCO is not replaced with new people” – something that is the right of the shareholders by law. 135. The effect of the Cypriot Injunctions was indeed to prevent the Cypriot Respondents from electing their preferred candidates for the FESCO Board notwithstanding the fact that they together controlled 49.9997% of the shares in FESCO. As a result, the Cypriot Injunctions handed practical control of FESCO to Domidias (which owned shares in FESCO through its subsidiaries in the Domidias Branch), Novator and Nautilius, and those of the Hostile Parties that controlled them (including, from time to time, Mr Garber, Mr Severilov and Mr Rabinovich, as pleaded above) notwithstanding Domidias’, Novator's and Nautilius’ much smaller shareholdings.”
“153. However, Cleary (on the instructions of TPG) deliberately stalled the process. In particular: (1) In an email dated21 September 2020 and (after that email went unanswered) a further email the next day, SGS emphasised that Smartilicious and Enviartia needed to provide all the signed documents, notarised and apostilled, on28 September 2020 at the latest in order to vote at the AGSM. (2) By its emails to SGS dated 22 and23 September 2020 , Cleary requested information on a peripheral issue (namely the formalities and status of the appointment of new directors to Maple Ridge) and appeared to be looking for obstacles rather than taking the necessary action to ensure that Smartilicious and Enviartia were able to take part in the AGSM. 154. On the same day as Cleary’s email dated23 September 2020 , Halimeda submitted an application seeking the Cypriot Injunctions (see section E.4 above). It is to be inferred that: (1) TPG knew that the FESCO Board members party to the FESCO Conspiracy (at that time being at least Ms Mammad Zade, Mr Kuzovkov and Mr Garber) planned to act to prevent Smartilicious and Enviartia taking part in the AGSM, and supported those aims by stalling the placement of new SGS nominee directors to the boards of Smartilicious and Enviartia ahead of the AGSM scheduled for 30 September. (2) In deliberately stalling the process to appoint to new SGS-nominated directors to Smartilicious and Enviartia, TPG acted in concert with Halimeda, Ms Mammad Zade and those directors of the FESCO Board who supported Ms Mammad Zade.” (1) In an email dated21 September 2020 and (after that email went unanswered) a further email the next day, SGS emphasised that Smartilicious and Enviartia needed to provide all the signed documents, notarised and apostilled, on28 September 2020 at the latest in order to vote at the AGSM. (2) By its emails to SGS dated 22 and23 September 2020 , Cleary requested information on a peripheral issue (namely the formalities and status of the appointment of new directors to Maple Ridge) and appeared to be looking for obstacles rather than taking the necessary action to ensure that Smartilicious and Enviartia were able to take part in the AGSM. (1) TPG knew that the FESCO Board members party to the FESCO Conspiracy (at that time being at least Ms Mammad Zade, Mr Kuzovkov and Mr Garber) planned to act to prevent Smartilicious and Enviartia taking part in the AGSM, and supported those aims by stalling the placement of new SGS nominee directors to the boards of Smartilicious and Enviartia ahead of the AGSM scheduled for 30 September. (2) In deliberately stalling the process to appoint to new SGS-nominated directors to Smartilicious and Enviartia, TPG acted in concert with Halimeda, Ms Mammad Zade and those directors of the FESCO Board who supported Ms Mammad Zade.”
“107. Whilst it might at first be surprising that a statement by a regulatory body such as the FAS that a transaction should be suspended does not itself produce legal effects, ultimately the Tribunal prefers the evidence of Ms Akimova [who, per paragraph 106, concluded that there would be no breach of Russian law if SGS proceeded with the ROFO Transaction notwithstanding the FAS Suspension Letter].”
“Fourth, your team engaged in the ROFO process quite slowly and in a way which we found confusing and irregular. After your team did not engage for weeks to move a deal forward, it was suggested that a third party, identified as Mr Evdokimov, buy our shares, rather than SGS. We made clear we could only sell to SGS per the terms of our contract, but your team insisted we sell to Mr. Evdokhimov. When at last your team agreed that SGS would be the buyer, we repeatedly requested that its bank account and funding be identified, as we must in order for us to comply with our AML procedures, but our requests were ignored. As the deadline for your purchase under the ROFO neared, your team at the last minute team decided to send us, without prior warning, without first identifying the bank being used, without providing the documentation we had asked for, and without having any contract with us in place,$35 million to our US bank account. Per TPG compliance procedures and on the instructions of our counsel based on AML risks, we returned these funds immediately to the small Armenian bank from which they originated. Finally, as I assume you must be aware, SGS and TPG have now each received a letter from the Russian Federal Anti-monopoly Service stating that our transaction cannot proceed without the approval of the Foreign Strategic Investment Committee, and should it proceed without that approval, then it would be void. This is not something that we have any control over, or any part in. If the approval is timely issued, then we are prepared to make the sale to SGS so long as SGS complies with the terms of the documentation. This has been the position of our team throughout and remains the case today.”
“Third, the question whether D2 is a proper party is answered by asking: supposing both parties had been within the jurisdiction would they both have been proper parties to the action? : Massey v Heynes & Co 21 QBD 330, 338, per Lord Esher MR. D2 will be a proper party if the claims against D1and D2involve one investigation: Massey v Heynes & Co, p 338, per Lindley LJ; applied in Petroleo Brasiliero SA v Mellitus Shipping Inc (The Baltic Flame) [2001] 1 Lloyd s Rep 203, para 33 and in Carvill America Inc v Camperdown UK Ltd [2005] 2 Lloyd s Rep 457, para 48, where Clarke LJ also used, or approved, in this connection the expressions closely bound up and a common thread : at paras 46, 49/”
“I conclude that the circumstances in which a party is a “proper” party to proceedings already commenced or to be commenced against an anchor defendant are significantly wider than those contended for by the Defendants. I consider the test simply to be whether the foreign defendant could, if within the jurisdiction, properly have been joined pursuant toCPR Part 19 .”
“I believe that anyone who has been involved, as counsel, in very heavy litigation of this kind, with a number of experts on both sides and difficult scientific questions involved, knows only too well what the learning curve is like; how much information and knowledge has to be, and is, absorbed, not only by the lawyers but really by the whole team, including both lawyers and experts, as they learn about the interrelation of law, fact and scientific knowledge, having regard to the contentions advanced by both sides in the case, and identify in their minds the crucial matters on which attention has to be focused, why these are the crucial matters, and how they are to be assessed. The judge in the present case has considerable experience of litigation of this kind, and is well aware of what is involved. He was, in my judgment, entitled to take the view (as he did) that this matter was not merely of advantage to the shipowners, but also constituted an advantage which was not balanced by a countervailing equal disadvantage to Cansulex; and (more pertinently) further to take the view that having experienced teams of lawyers and experts available on both sides of the litigation, who had prepared for and fought a substantial part of the Cambridgeshire action for Cansulex (among others) on one side and the relevant owners on the other, would contribute to efficiency, expedition and economy—and he could have added, in my opinion, both to assisting the court to reach a just resolution, and to promoting a possibility of settlement, in the present case. This is not simply a matter, as Oliver LJ suggested, of financial advantage to the shipowners; it is a matter which can, and should, properly be taken into account, in a case of this kind, in the objective interests of justice.”