JSC VTB Bank v Skurikhin & Anor

The court considered applications for expanded disclosure following a without-notice freezing injunction made under section 25 of the Civil Jurisdiction and Judgments Act 1982 in aid of Russian proceedings. The judge held that, in the particular factual context where the freezing order expressly extended to the defendant's interest in two English LLPs and there was evidence of an opaque offshore structure and a real risk of dissipation, limited further disclosure from the judgment debtor as to the Foundation, the Settlement, and the BVI company Miccros was necessary and proportionate to enable the injunction to be policed and to identify any rights susceptible to equitable execution.

Conversely, the court refused orders requiring disclosure of the underlying assets of Perchwell's foreign subsidiaries, applying the separate corporate personality principle and finding no evidence to justify disregarding the corporate veil. The court granted permission under the Dadourian guidelines to seek recognition and registration (exequatur) of the freezing order in Italy against Pikeville (subject to security), but refused permission to pursue wider enforcement proceedings in Cyprus against Perchwell at this stage.

Background and nature of the applications. VTB, a Russian bank, had made substantial loans to companies in the SAHO group and claimed breaches of guarantees given by Mr Skurikhin. Hamblen J, on a without-notice application and pursuant to s25 of the Civil Jurisdiction and Judgments Act 1982, granted freezing injunctions against Mr Skurikhin and two English LLPs, Pikeville and Perchwell, together with disclosure requirements. VTB sought additional disclosure (Schedule C) from the defendants and permission to enforce the freezing orders in Italy (against Pikeville) and Cyprus (against Perchwell).

Procedural posture. The applications were heard in the Commercial Court prior to a substantive inter partes hearing listed for late November 2012, at which the defendants intended to challenge jurisdiction and to seek discharge of the injunctions.

Issues framed by the court.

• Whether further disclosure by Mr Skurikhin as to the offshore Foundation and Settlement, Shawnee, Miccros and his prior connection to Pikeville and Perchwell should be ordered, and if so to what extent;
• Whether further disclosure should be ordered against Perchwell in respect of the assets of its foreign subsidiaries;
• Whether permission should be given under the Dadourian guidelines to seek enforcement/recognition of the English freezing orders in Italy and/or Cyprus.

Court's reasoning. The judge applied the cautionary principles in Motorola and related authorities, recognising that disclosure orders should ordinarily be co-extensive with freezing orders, but concluded that special circumstances justified targeted further disclosure from Mr Skurikhin. The key considerations were the express inclusion of his "interest and/or rights" in the English LLPs in the injunction; the practical effect that any disposition of those LLP interests would take place within England; evidence suggesting that Mr Skurikhin had been the ultimate beneficial owner of SAHO companies and that assets had been restructured into opaque trust and corporate arrangements; auditors' qualified accounts and uncertainty as to ultimate ownership of Pikeville's assets; and a concession that a loan from Miccros was to be treated as situated in England.

On that basis the judge ordered limited disclosure about the Foundation and the Settlement (incorporation details, constitutional documents, beneficiaries, identity of prior owners of the LLP interests, persons giving instructions and any powers of revocation), disclosure about Miccros' incorporation, registers and accounts and the identity of its owners, and disclosure about prior ownership of Pikeville. Disclosure requests that went further — for example detailed historic transfer documentation and valuation evidence, or the underlying assets of Perchwell's foreign subsidiaries — were refused as disproportionate or not necessary to police the injunction and inconsistent with separate corporate personality principles (Salomon).

On the Dadourian applications the court allowed VTB permission (subject to security) to seek exequatur and registration of the English freezing order in Italy against Pikeville and to register restrictions at the Italian Land Registry, but refused permission to pursue the broader Cyprus enforcement at that stage because VTB's contemplated relief went beyond Perchwell's legal interests and risked oppressive foreign litigation.

The court granted in part VTB’s applications. The judge ordered limited further disclosure by Mr Skurikhin concerning the Foundation, the Settlement, Miccros and prior ownership of Pikeville sufficient to identify and police his asserted rights in the two English LLPs, but declined to order wider historic transfer documentation or disclosure of the underlying assets of Perchwell’s foreign subsidiaries. The court granted permission, subject to security, for VTB to seek recognition and registration (exequatur) of the freezing order in Italy against Pikeville, but refused permission to enforce the order in Cyprus against Perchwell at this stage. The orders were justified by the real jurisdictional nexus to English-registered LLPs, evidence of opaque offshore structuring, and the need to prevent dissipation pending the substantive hearing.