Lyubov Andreevna Kireeva v Alina Zolotova & Anor

A certificate required by an unless order must be construed in its factual and procedural context. Where the order requires details of a funding route, a certification that funds will be transferred “directly” identifies a material route and is not mere surplusage. An intermediary is inconsistent with that certification.

A certificate provided to enable proceedings to continue in the face of known funding difficulties must be honestly given. Bad faith by persons authorised to manage funding and compliance may taint the certificate even where the solicitor signing it is not personally dishonest. Reliance on an invalid certificate, or on a certificate whose essential premise never existed, may also constitute an abuse of process. The court must assess abuse first and then determine the proportionate remedy.

The claimant, a trustee in bankruptcy, pursued claims concerning ownership of a share in the second defendant and alleged dispositions under section 423 of the Insolvency Act 1986. The trial had been adjourned because of difficulties in obtaining litigation funding from Russia.

As a condition of the adjournment, the claimant was required to pay specified costs and file a solicitor’s certificate confirming that funding arrangements were in place and giving details of the banking route by which funding would be provided. The claimant filed a certificate stating that funds would be transferred directly from the funder’s account at Raiffeisen Bank in Moscow to the solicitors.

The first defendant applied for dismissal or strike-out, alleging that the certificate was materially false and that reliance on it was an abuse of process. The central issues were the meaning and effect of the certificate, the relevance of bad faith, and the appropriate consequence of non-compliance.

1. The claim was dismissed, alternatively struck out. The certificate was not a valid or effective certificate for the purposes of the order.
2. The word “directly” was material. The order required a route by which funds could leave Russia and reach the solicitors. A transfer through an agent involved an intermediate step and was not a direct bank-to-bank transfer. The word therefore identified the required route; without it, the certificate merely identified a source of funds.
3. The second limb of the certificate was materially false. At the relevant date, no direct route from the specified account to the solicitors had been established. The alleged alternative route through an unspecified agent did not satisfy the certificate.
4. The court was not prepared to find that the first limb, certifying that funding arrangements were in place, was itself false. The certificate was tested as at the date it was given, and the later failure of funds to arrive did not conclusively establish that no arrangements had then existed.
5. The court did not need to resolve the apparent conflict between the authorities on whether falsity alone defeats compliance with an unless order. It held that bad faith would necessarily invalidate this certificate. The funders and their representatives knew, or must have known, that the specified route was unavailable and either withheld that information or encouraged the solicitor to provide the certificate. Their conduct tainted the certificate.
6. Alternatively, if the certificate was technically valid, providing it and thereafter relying on it was an abuse of process. Applying the two-stage approach identified in Cable v Liverpool Victoria Insurance Co Ltd, the conduct was abusive and strike-out was proportionate. The certificate was central to preventing wasted court resources and an unrealistically funded trial. No timely extension or relief application had been made.