Tsareva & Ors v Ananyev & Ors

A company is not liable for another’s tort merely because it is an intermediate holding company in the ownership structure through which the alleged tortfeasor controls an operating business. There must be an arguable case that the company itself committed an unlawful act or omission, or participated in the relevant combination with the necessary knowledge.

For jurisdiction, a co-defendant gateway cannot be founded on a hopeless claim against an anchor defendant. Loss caused by inducing a claimant in Russia to part with funds held there is suffered in Russia, even if the relevant investment documents contemplate payments elsewhere. A claimant who acquired only an account entry through an intermediary bank does not thereby acquire contractual privity with the issuer or guarantors.

Russian investors brought two related claims concerning notes issued by a Cayman company and guaranteed by associated companies. They alleged that the notes had been mis-sold by employees of Promsvyaz Bank and that the Ananyev brothers and corporate defendants had participated in a conspiracy.

The claimants relied on the Brussels Regulation (Recast) and the Civil Procedure Rules 1998 gateways to establish jurisdiction over EU and non-EU defendants. They also sought freezing orders and, in one claim, relief against non-cause-of-action defendants under the Chabra jurisdiction.

The central issues were whether there was a viable claim against the English holding companies, where the alleged tortious loss was suffered, whether the investors had contractual claims against the issuer or guarantors, and whether any claim or interim relief could proceed in England.

1. Claims against the English companies. The claims against the English companies and Menrela had no proper foundation and were struck out. Their existence as intermediate holding companies did not make them liable for alleged wrongdoing by the Ananyevs. There was no arguable evidence that they had participated in the notes’ issue, marketing, sale, guarantee, or alleged mis-selling. Even if the Ananyevs were treated as their directing minds, that did not establish liability without arguable company conduct.
2. Co-defendant gateways. Article 8(1) of the Brussels Regulation (Recast) could not be used because the English companies were not viable anchor defendants. The same deficiency prevented reliance on CPR PD 6B para 3.1(3). The court accepted, following the majority view described in Sabbagh v Khoury [2017] EWCA Civ 1120, that a hopeless anchor claim or one raising no serious issue to be tried cannot found Article 8(1) jurisdiction.
3. Tort gateways. The investors suffered loss when they parted with funds held on deposit in Russia. They did not suffer the relevant loss in London merely because the notes contemplated payments to Citibank in London. The tort gateways in Article 7(2) and CPR PD 6B para 3.1(9) therefore did not apply.
4. Contract gateway. The investors had no arguable contractual privity with the issuer or guarantors. Their interests were represented by entries in securities accounts at PSB, while Citibank was the contractual noteholder under the trust deed. The English contract gateway in CPR PD 6B para 3.1(6) was therefore unavailable.
5. Interim relief and final orders. No substantive claim survived to support freezing orders or Chabra relief. The freezing-order applications and joinder applications were dismissed. The proceedings against the other defendants were set aside. Funds paid into court by Dmitri Ananyev were to be returned, subject to submissions on the appropriate formal order.

First-instance judgment in the High Court (Commercial Court). No prior appellate decision is stated in the judgment.