Tugushev v Orlov & Ors

For jurisdictional gateways, the governing standard remains a good arguable case. It requires a plausible evidential basis, a reliable view where possible and, where that is impossible, a plausible contested case. It does not impose a rigid requirement that the claimant have much the better argument. Residence is fact-sensitive: a person may reside in more than one jurisdiction, and the quality, purpose and pattern of visits matter as much as numbers. For the tort gateway, an agreement made in England may be a substantial and efficacious act from which damage results in a conspiracy claim. A viable claim against an English anchor defendant may support joinder where it is reasonable to try and the claims require one investigation. Forum analysis must weigh all relevant connections and avoid fragmentation where inconsistent outcomes may result.

The claimant alleged that he had co-founded the Norebo Group and that the defendants had conspired to misappropriate his shares in CJSC Almor Atlantika and deny his wider interest in the group. He advanced contractual and conspiracy claims for substantial damages, declaratory relief and an account.

On 23 July 2018 Bryan J granted a worldwide freezing order and permission to serve the First Defendant out of the jurisdiction. The First Defendant challenged jurisdiction, arguing that he was domiciled and resident in Russia, that the relevant gateways were unavailable and that Russia was the appropriate forum. The court considered domicile, residence, limitation, the tort gateway, the necessary or proper party gateway and forum conveniens. The present judgment determined the jurisdiction challenge only.

1. Outcome. The jurisdiction challenge failed. The claimant established a good arguable case that the First Defendant was resident and domiciled in England. The court therefore had jurisdiction over his contractual and tort claims as of right under Article 4 of the Recast Regulation. The remaining freezing-order issues were reserved.
2. Good arguable case. Applying Brownlie v Four Seasons Holdings Inc [2017] UKSC 80 and Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV and others [2019] EWCA Civ 10, the court applied the three-limb test: a plausible evidential basis; a reliable determination where possible; and, where no reliable determination could be made, a plausible but contested evidential basis. The test remained one of good arguable case, without a rigid requirement that the claimant have much the better argument.
3. Limitation. Under the Limitation Act 1980, the claimant had a good arguable case that the limitation period was postponed because the defendants’ intention to injure, a necessary ingredient of conspiracy, had been deliberately concealed. Knowledge in 2011 that the shares had been transferred did not necessarily amount to knowledge of that intention. Under Russian law, the better argument was that time began when the claimant discovered the adverse consequences of the transfer, including the denial of his interest and dividends.
4. Residence. Residence meant a settled or usual place of abode. It was not determined by a numbers game. Applying Levene v Commissioners of Inland Revenue [1928] AC 217, Varsani v Relfo Ltd [2010] EWCA Civ 560 and Bestolov v Povarenkin [2017] EWHC 1968 (Comm), the court considered the quality and purpose of visits, their regular pattern, the Wharf flat, family connections and immigration evidence. The First Defendant could reside in both Russia and England.
5. Alternative gateways and forum. A conspiratorial agreement made in England could constitute a substantial and efficacious act for the tort gateway, applying JSC BTA Bank v Khrapunov [2018] UKSC 19. The necessary or proper party gateway was also satisfied: the claim against the anchor defendant was viable and reasonable to try, and the First Defendant was a proper party to a single investigation with the other alleged conspirator. Applying The Spiliada [1987] AC 460, the court held that England was clearly and distinctly the most appropriate forum. The need to avoid fragmented proceedings and inconsistent outcomes outweighed the substantial Russian connections.

1. High Court (Commercial Court): Bryan J granted permission to serve out and made a worldwide freezing order on 23 July 2018. In the present first-instance judgment, Carr J dismissed the First Defendant’s jurisdiction challenge. The remaining freezing-order issues were left for a further hearing.