Baturina v Chistyakov

In a forum conveniens application, the court must identify an available foreign forum that is clearly or distinctly more appropriate, having regard to the parties’ interests and the ends of justice. A contractual choice of English law is a significant factor where a misrepresentation claim is closely linked to the contract it induced; under Private International Law (Miscellaneous Provisions) Act 1995 section 12, it may displace the general rule pointing to another law. A shareholder cannot recover company loan losses as personal losses where the company has been made whole. Any personal indirect loss must be pleaded and proved. A claim should not be stayed abroad where the pleaded monetary claim is unsustainable under English law.

Elena Baturina appealed against Walker J’s decision to stay her proceedings in favour of the Russian courts. She claimed rescission, repayment, damages for deceit and damages for breach of an agreement concerning Moroccan development projects. The pleaded monetary loss was based on loans made by a company and later assigned to her.

The appeal concerned the appropriate forum, the law governing the alleged misrepresentations, the possible effect of Russian conflict rules and limitation provisions, and whether the pleaded claim was maintainable under English law. The central issue was whether Russia was clearly or distinctly the more appropriate forum for the claim as pleaded.

1. Disposition. Christopher Clarke LJ gave the judgment of the court, with Lewison and Rimer LJJ agreeing. The appeal was allowed, the stay was set aside and the matter was remitted to the Commercial Court.
2. Forum. The governing principles were those in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460. A defendant served within the jurisdiction must show that another available forum with competent jurisdiction is clearly or distinctly more appropriate. Although the case had strong Russian connections, the pleaded claim could not properly be exported to Russia on the assumption that it was a viable claim.
3. Applicable law. Under sections 11 and 12 of the Private International Law (Miscellaneous Provisions) Act 1995, the general rule could be displaced where another law was substantially more appropriate. The Agreement’s express choice of English law, and the close link between representations inducing a contract and the contractual terms, made English law substantially more appropriate for the deceit claim. The Russian law governing the loans was of peripheral relevance.
4. Loss and shareholder claims. Johnson v Gore Wood [2002] 2 AC 1 supported the distinction between company loss and a shareholder’s own indirect loss. Inteco had made the loans and had been paid full value when it assigned them to Ms Baturina. She had not pleaded a personal loss, diminution in share value or other recoverable detriment. The monetary claim as pleaded was therefore unsustainable, although a differently formulated claim might be viable.
5. Future proceedings. Any application to amend, strike out or stay would have to be determined on the pleadings then standing, this judgment and any further expert evidence. A limitation undertaking could be relevant if a further stay application were made.

• Court of Appeal (Civil Division). Appeal allowed; the order staying the action in favour of Russia was set aside and the case was remitted to the Commercial Court.
• High Court, Queen’s Bench Division, Commercial Court. Walker J granted a stay of the proceedings in favour of the Russian courts: [2013] EWHC 3537 (Comm).