Summary
On summary judgment and jurisdiction applications, the court may determine a legal or construction issue without a trial where the evidence is sufficient and the claim has no real prospect of success. A claimant must plead coherently each element of the applicable foreign-law cause of action. A claim cannot succeed where the pleaded loss depends on contractual rights that had already been terminated, or where the alleged acts did not cause the loss claimed. An amendment introducing a materially different factual basis is a new cause of action and may be refused if time-barred or lacking a real prospect of success. Freezing relief requires a good arguable case as well as a sufficient risk of dissipation.
Factual background
Tatneft brought claims under article 1064 of the Russian Civil Code as assignee of Kompaniya Suvar-Kazan LLC, alleging that the defendants had dishonestly diverted payments for oil supplied to a Ukrainian refinery and procured the bankruptcy of intermediary companies.
The defendants sought summary judgment, strike-out, orders setting aside permission to serve out, and discharge of a worldwide freezing order. Tatneft sought permission to amend its Particulars of Claim. The central issues were the scope of the 2015 Compensation Agreement, the viability and causation of the article 1064 claim, limitation, the proposed amendments, abuse of process and the freezing order.
Held
The applications by Mr Kolomoisky and Mr Ovcharenko to set aside permission to serve out succeeded because there was no serious issue to be tried. The applications by Mr Bogolyubov and Mr Yaroslavsky for summary judgment succeeded because the claims had no real prospect of success.
The 2015 Compensation Agreement was construed under article 431 of the Russian Civil Code. Its clear language assigned claims connected with the 2008 Assignment Agreement, the Tatarstan Judgment and the Russian Enforcement Order. It did not assign the different claim pleaded in the existing Particulars of Claim, which assumed that the earlier contractual chain remained operative.
A claim under article 1064 required harm, an unlawful act, causation and guilt. The existing claim failed at the pleading and merits stages. The 2008 Assignment Agreement had terminated the payment obligations of Avto, Taiz and Tekhnoprogress. The defendants therefore could not have caused breaches of those obligations or deprived S-K of contractual claims against Avto that no longer existed.
The causation case also failed. On Tatneft’s own pleading, UTN had stopped paying for the oil before the alleged 2009 scheme and would not have paid S-K irrespective of the alleged diversion. The alleged acts therefore did not cause the pleaded harm.
The proposed amendments introduced a new cause of action based on failure to pay S-K directly under the 2008 Assignment Agreement. They were not mere particularisation. The new claim was time-barred and, in any event, suffered the same causation defect. Permission to amend was refused. The claim against Mr Yaroslavsky was additionally deficient because involvement or financial benefit did not identify an unlawful act committed by him personally.
The limitation issue was not finally determined because the evidence concerning S-K’s actual and constructive knowledge required a trial. The abuse of process argument was rejected.
Because there was no serious issue to be tried, Tatneft had no good arguable case for freezing relief. The worldwide freezing order was discharged. The court nevertheless observed that, had the merits threshold been met, the alleged scheme and surrounding circumstances would have established a sufficient risk of dissipation.
The court’s approach to earlier authorities
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Appellate history
First-instance decision. The judgment records no prior appellate decision.
Appeal route
- This judgment [2016] EWHC 2816 (Comm) High Court (Commercial Court)
- Appealed to[2017] EWCA Civ 1581Outcomeappeal allowed on issues 1, 2, 4 and 5; issue 3 would have been allowed if necessary
Key cases cited
19 authorities cited.
- AK Investment CJSC v Kyrgyz Mobil Tel Limited and others (Isle of Man) [2011] UKPC 7
- Johnson v Gore Wood & Co [2002] 2 AC 1
- Three Rivers District Council v. Governor and Company of the Bank of England [2001] UKHL 16
- McIlkenny v Chief Constable of the West Midlands (Walker v Chief Constable of the West Midlands, Power v Chief Constable of the Lancashire Police Force, Hunter v Chief Constable of the Lancashire Police Force) [1982] AC 529
- Brownlie v Four Seasons Holdings Incorporated [2015] EWCA Civ 665
- Calland v Financial Conduct Authority [2015] EWCA Civ 192
- Mercer Limited & Anor v Ballinger & Anor [2014] EWCA Civ 996
- Kazakhstan Kagazy Plc & Ors v Arip [2014] EWCA Civ 381
- Co-Operative Group Ltd v Birse Developments Ltd & Ors [2013] EWCA Civ 474
- AC Ward & Son v Catlin (Five) Ltd & Ors [2009] EWCA Civ 1098
- Thane Investments Ltd & Ors v Tomlinson & Ors [2003] EWCA Civ 1272
- Paragon Finance Plc v D B Thakerar & Co (A Firm); Thimbleby & Co v Paragon Finance Plc [1998] EWCA Civ 1249
- National Bank Trust v Yurov & Ors [2016] EWHC 1913 (Comm)
- Holyoake & Anor v Candy & Ors [2016] EWHC 970 (Ch)
- OJSC TNK-BP Holding v Beppler v Jacobson Limited (in provisional liquidation) & Ors [2012] EWHC 3286 (Ch)
- Fiona Trust & Holding Corporation Ors v Privalov Ors [2010] EWHC 3199 (Comm)
- Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch)
- Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350
- Ninemia Maritime Corpn v Trave Schiffahrtsgesellschaft mbH und Co KG (Niedersachsen, The) [1983] 1 WLR 1412
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Cases citing this case
1 later case · 1 positive
Most senior citing decisions:
- Gulf Air BSC(C) v One Inflight Ltd & Ors [2018] EWHC 1019 (Comm) applied
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