JSC VTB Bank v Skurikhin & Ors

A receiver by way of equitable execution may be appointed over an asset which is regarded in equity as belonging to the judgment debtor, even where legal title is held through a trust or analogous foreign structure. This includes an asset over which the debtor has a legal right to call for transfer, or de facto control in circumstances where no genuine discretion is exercised by the trustee or fiduciary. The court must be satisfied on the balance of probabilities at the application stage. The overriding consideration is whether appointment is just and convenient. The jurisdiction requires some hindrance or difficulty in ordinary execution and a real prospect that the appointment will assist enforcement, but is not confined by rigid rules.

VTB sought the appointment of receivers under Senior Courts Act 1981, section 37, over the membership interests in Pikeville Investments LLP. The application was made to enforce English judgments obtained against Mr Skurikhin on guarantees securing Russian loans.

The registered LLP members held the interests as nominees for the Berenger Foundation, a Liechtenstein foundation. VTB contended that Mr Skurikhin was nevertheless the beneficial owner or had de facto control because he could procure the transfer of the foundation’s assets. The defendants and respondents had been served but did not appear.

The central issues were whether the membership interests could be treated in equity as Mr Skurikhin’s assets and whether appointment of receivers was just and convenient.

1. The application was granted. Receivers were appointed over the LLP membership interests in Pikeville by way of equitable execution.

2. Under section 37 of the Senior Courts Act 1981, the court’s overriding consideration is the demands of justice. The jurisdiction may develop incrementally and is not limited to assets amenable to execution at law. The court adopted the principles summarised in Masri v Consolidated Contractors (UK) Ltd (No 2) [2009] QB 450 and Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Co (Cayman) Ltd [2012] 1 WLR 1721.

3. Membership interests held through a trust or analogous foreign arrangement may be treated as the judgment debtor’s assets where the debtor has a legal right to call for transfer of the assets, or has de facto control over them. The court accepted that principle by reference to Tasarruf, Blight v Brewster [2012] EWHC 165 (Ch) and JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWCA Civ 139.

4. On the evidence, it was more likely than not that Mr Skurikhin either had a right to call for transfer of the relevant foundation assets or exercised de facto control over them. The membership interests could therefore be treated in equity as his assets.

5. It was just and convenient to appoint receivers. Mr Skurikhin had failed to disclose assets, attend examination or comply with court orders. There was no other obvious practical and realistic means of execution. Following Cruz City 1 Mauritius Holdings v Unitech Ltd [2014] EWHC 3131 (Comm), the court was satisfied that there was a real prospect that receivership would serve a useful purpose and was not fruitless. The alleged debt to Miccros might be rejected in any administration, leaving assets available for creditors.

6. The evidence requirements under CPR Part 69 were satisfied. David Antony Rubin and Stephen Mark Katz were appointed receivers, with the terms of the order to be determined after further submissions.