Loudmila Bourlakova & Ors v The Estate of Oleg Bourlakov & Ors

Applications for strike-out, reverse summary judgment and injunctive relief require the court to distinguish adjudicative authority from the discretionary exercise of jurisdiction. A novel subject-matter jurisdiction objection, particularly one involving foreign companies and shares, may require determination at trial where its legal basis and scope are uncertain.

Foreign law is treated as a question of fact on summary judgment. The court must decide whether the claim has a realistic prospect of success without conducting a mini-trial. Novel, disputed and insufficiently explained foreign-law issues ordinarily provide a compelling reason for trial.

A proprietary injunction may protect an arguable interest in shares and the value of a subsidiary’s assets without proof of dissipation. A freezing injunction requires solid evidence of a real, unjustified risk that assets will be put beyond enforcement.

The claimants alleged that a worldwide fraud had deprived Loudmila Bourlakova and Veronica Bourlakova of ownership and control of shares in two Panamanian companies, Gatiabe Business Inc and Edelweiss Investments Inc. They sought declarations, damages and interim relief.

The relevant defendants applied under Civil Procedure Rules 1998, Parts 3.4 and 24 for strike-out or reverse summary judgment on the bearer-share claims. They argued that the English court lacked subject-matter jurisdiction, that the claims had no real prospect of success under Panamanian Law 47, and that the English proceedings were an abuse of process because related proceedings had occurred in Panama.

The claimants also sought proprietary and asset-freezing relief concerning Edelweiss’ shares and assets. The central issues were whether the claims should be summarily disposed of, whether they were abusive, and what form of interim protection was justified.

1. Summary disposal refused. The subject-matter jurisdiction objection could not sensibly be determined summarily. The authorities concerned foreign asset seizure, enforcement or compulsion of persons abroad. The present claims sought declarations determining ownership under Panamanian law. It was unclear whether the asserted principle extended to this new category of case. The issue was therefore appropriate for trial.
2. Under WWRT v Zhevago, foreign law is treated as fact for summary judgment purposes. The court must ask whether the claim has a real, rather than fanciful, prospect of success, while avoiding a mini-trial. The evidence did not sufficiently explain the meaning and scope of the political and economic rights referred to in Article 21 of Law 47, whether those rights were exhaustive, or whether late compliance with the custody regime was possible. The Panamanian judgments concerned the validity of particular corporate acts and did not finally determine ownership or all questions arising under Law 47.
3. The abuse-of-process application failed. The Panamanian oral-process proceedings concerned corporate resolutions, not finally the ownership or validity of the bearer shares. The ordinary proceedings concerning ownership remained unresolved. Abuse in the absence of issue estoppel is rare, and the defendants had not met the high threshold required.
4. The court had jurisdiction to grant proprietary interim relief under Civil Procedure Rules 1998, Part 25. The claim to the shares was a proprietary claim, and the arguable proprietary interest extended to preserving the value of Edelweiss’ assets. A risk of dissipation was not required for proprietary relief. The balance of convenience favoured restraining dealings with Hemaren’s purported shares and preventing disposal or diminution of Edelweiss’ assets, subject to ordinary-course and specified funding exceptions.
5. Asset-freezing relief was refused. The claimants had not shown, on solid evidence, a current real risk of unjustified dissipation. Historical transactions, ordinary-course investments, loans and payments did not establish that risk, particularly in light of delay, continuing undertakings and the freezing of a substantial portfolio in the Bahamas.
6. The parties were directed to use further undertakings in lieu of an injunction order, with appropriate disclosure and fortified cross-undertakings to be addressed consequentially.

First-instance decision. The judgment records an earlier amendment decision permitting the claimants to advance the ownership claims: [2023] EWHC 2233 (Ch).