JSC VTB Bank v Skurikhin & Ors

Summary judgment is appropriate where a defence has no realistic prospect of success and no compelling reason requires a trial. The court must assess the evidence without conducting a mini-trial, but may reject assertions that are contradicted by contemporaneous material or lack factual substance.

A final foreign judgment is ordinarily conclusive and cannot be impeached for errors of fact or law. The recognised exceptions are fraud, public policy, natural justice and penalties. Defences available in the foreign proceedings should generally be raised there; deliberate withholding requires a clear and persuasive explanation. A foreign judgment may nevertheless be unenforceable to the extent that it imposes a penal sum or manifestly excessive interest contrary to domestic public policy.

VTB sought summary judgment under CPR Part 24.2 to enforce 16 final Russian judgments against Mr Skurikhin as guarantor of loans made to companies in the SAHO group. The judgments were subject to Russian law and jurisdiction.

Mr Skurikhin alleged that the judgments formed part of a fraudulent corporate raid and raised fraud, public policy, natural justice and fair-trial objections. He also argued that sums described as penalties or default interest were unenforceable. The central questions were whether those defences had a realistic prospect of success or created a compelling reason for trial, and whether the alleged penalties could be enforced.

1. Summary judgment. The court applied the principles in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). The question was whether the proposed defence was realistic rather than fanciful, while avoiding a mini-trial. The court could nevertheless analyse whether factual assertions had real substance, taking account of contemporaneous documents and evidence reasonably expected at trial.
2. Foreign judgments. Final and conclusive foreign judgments are enforceable and unimpeachable as to matters adjudicated upon, subject to the recognised exceptions of fraud, public policy, natural justice and penalties. Defences available in the foreign proceedings should ordinarily have been raised there. The explanations for withholding them were inconsistent and unsupported.
3. Fraud, public policy and natural justice. The alleged corporate raid did not make commercial or evidential sense. There was no realistic basis for alleging conscious, deliberate and material dishonesty by VTB, fraudulent representations to the Russian courts, or concealment which caused the judgments. The public policy and natural justice objections depended on the same unsupported factual case and therefore failed. The alleged inability to defend in Russia was not a coherent explanation, and the Article 6 point added nothing.
4. Penalties. The sums described as penalties or default interest represented about 20.26 per cent of the claim. It was arguable that they were punitive in effect and therefore unenforceable, notwithstanding that they were payable to a private claimant rather than the State.
5. VTB obtained judgment for the principal sums and contractual interest. The claims characterised as penalties were not suitable for summary determination and remained arguable.