Shahar v Tsitsekkos & Ors

A shareholder cannot recover a diminution in share value where the alleged loss is not a loss of the company or shareholder recognised on the pleaded case. Where the company holds assets as nominee for the shareholder, loss to those assets does not ordinarily diminish the value of the company’s shares.

Service out of the jurisdiction requires a good arguable case within the relevant gateway, a serious issue to be tried, and England and Wales to be the proper forum. Jurisdictional gateways must be construed restrictively. The Duomatic principle may, in an appropriate case, operate on the informed consent of a beneficial owner, particularly where agency principles apply. Material non-disclosure on a without-notice application does not invariably require discharge of an injunction; proportionality and the interests of justice remain relevant.

Mr Shahar brought two connected Chancery actions concerning the alleged takeover of Teamtrend Limited and assets held through Ukrainian companies. The first action challenged corporate steps taken in relation to Teamtrend and claimed damages for conspiracy and unlawful interference. In the second action, Mr Kolomoisky and Mr Cheklanov sought declarations concerning ownership of Teamtrend’s share, while Mr Shahar counterclaimed against them and Commercial Bank PrivatBank.

The applications concerned service out of the jurisdiction, forum non conveniens, summary judgment, non-disclosure on without-notice applications, the joinder and service of PrivatBank, and permission to amend. A central issue was the consequence of Mr Shahar’s case that Teamtrend held its assets as nominee for him.

1. Service out against the non-Regulation defendants. The pleaded damages claims disclosed no serious issue to be tried. On Mr Shahar’s own case, Teamtrend held the relevant assets as nominee, so their alleged misappropriation could not diminish the value of Teamtrend’s shares. The reflective-loss issue would also have been resolved against him on the material then available. Service out was therefore unavailable.
2. The gateways in CPR 6.20 did not assist. Ground 3 did not apply because Teamtrend was a party only to the corporate-steps claim, not the tort claims. Ground 8 did not apply because the alleged loss resulted from acts concerning assets abroad, not from filing documents at Companies House. Ground 10 did not apply because the subject matter was the stripping of assets held as nominee, not damage to English-situated shares.
3. Jurisdiction over the Greek-domiciled defendant. Article 22(2) of the Judgments Regulation concerned proceedings whose object was the validity of corporate decisions, not tort claims for damages. Article 6(1) could not be used through the merely technical presence of Teamtrend, and Article 5(3) was unavailable because neither the harmful event nor the relevant damage was shown to have occurred in England.
4. Summary judgment. Summary judgment on the corporate steps was refused. The claim that Mr Cheklanov had become beneficial owner of the share could not be dismissed summarily. The court held that the Duomatic principle might, in an appropriate case, operate on the consent or informed participation of a beneficial owner. A final declaration of technical invalidity would also be pointless if the beneficial-owner claim ultimately succeeded.
5. Without-notice injunctions. The nomineeship and defensive measures were material facts which should have been disclosed. Applying the principles in Brink’s Mat Ltd v Elcombe, the non-disclosure was culpable but treated as innocent. The injunctions were nevertheless continued because the proceedings required a trial, the status quo needed preservation, and immediate discharge would have been disproportionate.
6. Forum non conveniens. The conspiracy and related tort counterclaims against Mr Kolomoisky and Mr Cheklanov were not stayed. They substantially overlapped with the issues already requiring trial in England. The alternative subrogation and surplus-return claims were stayed in favour of Ukraine, where the relevant legal and factual issues were more appropriately determined.
7. Service on PrivatBank was set aside. The court construed CPR 6.20, CPR 20.3 and CPR 20.5 so that a counterclaim against a non-party could be treated as the relevant claim for jurisdictional purposes, but the pleaded claims against PrivatBank lacked the necessary basis and were unsuitable for trial in England. The application to amend was dismissed because it was not pursued.