Polegoshko & Ors v Ibragimov & Ors

An English court should not restrain a party from continuing proceedings before the court of another Convention state where the order would interfere with that court’s jurisdiction. Parallel proceedings do not justify one-sided relief, particularly where the foreign court is already seised and can regulate representation and stays. An application seeking a litigation advantage in foreign proceedings may constitute an abuse of process, including as a collateral attack or pursuit of an ulterior purpose. The absence of a cross-undertaking in damages is an additional reason to refuse interim relief.

The claim concerned the alleged beneficial ownership and membership of Fingood LLP. The defendants applied to vary an existing order so as to prevent the claimants from taking steps in foreign proceedings brought by or against Fingood, except as directed by the English court.

Several Lithuanian proceedings were pending concerning corporate documents, representation, insolvency-related issues, alleged misappropriation of assets and related criminal proceedings. The Lithuanian courts were already seised of those matters. The central issues were jurisdiction, balance of convenience, abuse of process and the absence of a cross-undertaking in damages.

1. Application dismissed. The court refused to restrain the claimants from participating in the Lithuanian proceedings.
2. The principles in Turner v Grovit [2005] 1AC 101 applied. An injunction restraining proceedings before the court of another Convention state would interfere with that court’s jurisdiction. Lithuania was a Convention state, and the Lithuanian courts were already seised of the relevant disputes. The judge stated that he would have dismissed the application on that ground alone.
3. The Lithuanian Civil Code gave the Lithuanian courts relevant powers. Article 137 addressed whether proceedings had been initiated by an authorised person. Article 164 permitted suspension of proceedings where the court considered it necessary.
4. The balance of convenience strongly favoured refusal. The proposed order would restrain only the claimants while leaving the defendants free to participate, give evidence and make applications. Such one-sided relief was inappropriate while the English court had made no final determination of Fingood’s beneficial ownership.
5. The application was also an abuse of process. Applying Johnson v Gore Wood & Co (No 1) [2002] 2AC p1, it would constitute a collateral attack insofar as it sought to undermine decisions already made by the Lithuanian courts concerning representation. Following JSC BTA Bank v Ablyazov (No 6) [2011] 1 WLR 2996, the application pursued a litigation advantage in the Lithuanian proceedings.
6. The absence of a cross-undertaking in damages supplied a further reason to refuse relief. The judge indicated that, if asset protection were required, a receivership application under section 37 of the Senior Courts Act might have been appropriate, but expressed no view on whether such an application should be made.

First-instance application. The judgment records earlier interim orders made by Proudman J and Floyd J, neither of which had been appealed, but does not state any appellate decision concerning the present application.