PJSC BANK “FINANCE AND CREDIT” & Anor v KOSTYANTIN VALENTYNOVICH ZHEVAGO & Ors

A director may be served under section 1140 of the Companies Act 2006 at a registered address within the jurisdiction, even when resident abroad. A simultaneous alternative strike-out application does not constitute submission to the jurisdiction unless the defendant’s conduct unequivocally abandons the jurisdictional objection.

A forum non conveniens stay is ordinarily granted where another available forum is clearly more appropriate, unless cogent evidence shows that justice nevertheless requires trial in England. Relevant connections include the governing law, witnesses, documents, related proceedings, expense and avoidance of inconsistent judgments. Procedural differences or a foreign judiciary’s lesser experience do not without more establish a real risk of injustice.

The claimants alleged that the defendants had participated in fraudulent schemes by which more than US$500 million was extracted from a Ukrainian bank before its liquidation. The claims were brought in delict and unjust enrichment under Ukrainian law.

The first to fourth defendants challenged jurisdiction and sought a stay in favour of Ukraine. The fifth defendant also sought a stay or, alternatively, strike-out of the claim against him. The claimants applied for a worldwide freezing injunction. The court had to decide whether the first defendant had been validly served under section 1140 of the Companies Act 2006, whether the fifth defendant had submitted to English jurisdiction, and whether Ukraine was clearly the more appropriate forum.

1. Service was valid. Section 1140 of the Companies Act 2006 permits service on a director at a registered address within England and Wales even when the director is resident and physically present abroad. Subsection (8) preserves the requirement for permission where the registered address itself is outside the jurisdiction; it does not prevent domestic service at a registered English address. The first defendant was therefore properly served.

2. The fifth defendant had not submitted to the jurisdiction. The question is whether his words or conduct amounted to a wholly unequivocal representation that the jurisdictional objection was not maintained. That is the same test as asking whether the step was useful or necessary only if the objection had been waived. Seeking strike-out in the alternative to a jurisdictional challenge was, at most, equivocal and did not constitute submission.

3. The stay applications were granted. Applying Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, Ukraine was overwhelmingly the more appropriate forum. The principal witnesses, documentary evidence, alleged losses and disputed internal management were centred in Ukraine. Every claim was governed by Ukrainian law, which raised complex and developing questions better determined by Ukrainian courts. Related Ukrainian proceedings created risks of inconsistent findings and double recovery. Trial in Ukraine would also avoid extensive translation and be less expensive.

4. The claimants failed to establish by cogent evidence that justice nevertheless required trial in England. Differences in disclosure, cross-examination and the drawing of adverse inferences were common features of civil-law systems and did not demonstrate substantial injustice. Nor was there cogent evidence that the first defendant would improperly influence the Ukrainian judiciary or that it would succumb to influence. Any concern about submission, participation and subsequent enforcement could be addressed by undertakings from the defendants.

5. The freezing application was dismissed because the proceedings were stayed. Obiter, the claimants had shown a good arguable case and a real risk of unjustified dissipation. The alleged wrongdoing, use of offshore entities, flight from Ukraine, possible destruction of documents and arguably false asset declaration cumulatively justified that conclusion. A freezing injunction would have required an unlimited cross-undertaking in damages.

6. The strike-out application was academic. Obiter, it would have been dismissed. A Ukrainian-law claim sufficiently pleading the relevant foreign-law elements need not also satisfy English pleading requirements for distinct English torts. Any defect in the dishonesty particulars could in any event have been cured by amendment.

This was a first-instance decision. Marcus Smith J had previously made procedural orders governing evidence and applications under CPR Part 11. The present court granted the defendants’ applications to stay the proceedings in favour of Ukraine.