IPJSC United Company Rusal v Whiteleave Holdings Limited & Ors

The court considered two contested interlocutory applications at the first case management conference in complex contractual litigation under a written Framework Agreement governed by English law: (a) an application for alternative service on the Fourth Defendant (Mr Roman Abramovich) under CPR r.6.27 / r.6.15 and related company law provisions; and (b) an application for permission to re-amend the Re‑Re‑Amended Particulars of Claim. The court held that good reason existed to permit alternative service by serving (i) at the Fordstam address in the United Kingdom pursuant to Companies Act 2006 s.1140 (in the context of registrable persons under ss.790K and 790M), and (ii) on senior lawyers at Kobre & Kim LLP (including by secure electronic file link and specified email addresses), because those means gave the best prospect of bringing the proceedings to the defendant's actual attention.

The court granted permission to make the proposed amendments to the particulars of claim, including the insertion that overcharging by a supplier (PSL) is to be inferred to be continuing, but ordered Rusal to provide further particulars of the basis for that inference within 28 days. The court refused the defendants' invitation to order a split trial of liability and quantum/remedy, concluding that a combined trial of liability, quantum and remedies (with remediation left for later if necessary) better accorded with the overriding objective and avoided likely duplication, delay and increased costs.

Background and parties: The proceedings concern alleged breaches of a shareholders' Framework Agreement dated 10 December 2012 (as amended) governing governance of PJSC MMC Norilsk Nickel (NN). The claimant, Rusal, and the first to third defendants (Whiteleave, Mr Potanin and Crispian) are parties to the Framework Agreement; the fourth defendant is Mr Roman Abramovich. Rusal pleads a range of claims said to arise from an alleged continuing "Diversion Scheme", including diversion of assets, diversion of cashflows (AF and Altan claims), improper charitable payments, breaches relating to industrial accidents, interference with key contractual remedies (Part of Shares Block), and diversion of digital-asset related value.

Procedural posture and relief sought: At the first case management conference Rusal sought (i) an order for alternative service on Mr Abramovich under CPR r.6.27 (the Alternative Service Application), and (ii) permission to re-amend the Re‑Re‑Amended Particulars of Claim (the Amendment Application). The first to third defendants did not oppose most of the amendments; the First and Second Defendants objected to the addition of the words "which it is to be inferred is continuing" in para.42.3 of the draft particulars. The First and Second Defendants also applied for a split trial of liability and quantum/remedy.

Issues framed: The court framed and decided: (1) whether there was good reason to permit alternative service on Mr Abramovich (including whether service under the Hague Service Convention was engaged and whether "exceptional circumstances" were required); (2) whether to give permission to amend the particulars and, if so, whether further particularisation should be ordered; and (3) whether the trial should be split between liability and quantum/remedy.

Reasoning on alternative service: The court applied CPR r.6.15 / r.6.27 principles and company law provisions (ss.790K, 790M and s.1140 Companies Act 2006). The court accepted that the Fordstam address remained a valid domestic address for service under s.1140 but identified real uncertainties (Fordstam may be a shell, the registered address is residential, Companies House filings are overdue and the registrable-person status could change). Those factors plus the practical delay of service abroad under the Hague Service Convention meant there was good reason to permit alternative service. The court found strong evidence that Kobre & Kim LLP represented Mr Abramovich and that service on them would likely bring the proceedings to his attention. The court therefore ordered the alternative service described in the claimant's draft order, including secure electronic delivery and service on identified Kobre & Kim addresses.

Reasoning on amendment: The court applied CPR 17.1(2)(b) and the overriding objective, considering whether the amendment was arguable, coherent, late, and the balance of prejudice. The court found the pleaded inference of continuing overcharging sat within the pleaded Diversion Scheme and was supported by existing allegations (notably paras.2 and 105 and related amendments to which the defendants consented). The court granted permission to amend but directed Rusal to provide further and better particulars of the basis for inferring continuation within 28 days, and ordered that costs occasioned by the amendments be those of the defendants in any event.

Reasoning on split trial: Applying established case management principles (including guidance in Electrical Waste Recycling, Daimler and related authorities), the court concluded a split trial would be unlikely to save time or costs, would risk duplication of disclosure and expert evidence, and could produce sequential appeals and prolonged delay. The court therefore refused the application to split liability and quantum/remedy and ordered a combined trial of liability, quantum and remedies (remediation reserved).

Subsidiary findings: The court recorded that it did not consider the "exceptional circumstances" threshold for Hague Convention cases engaged on the facts, but held that even if it had been engaged it would have been satisfied. The court emphasised that the scope of disclosure will be determined at the next case management hearing and that the grant of permission to amend does not dictate any particular disclosure scope.

At first instance the court (Bryan J) made the following dispositive orders at CMC1: (1) The Alternative Service Application succeeds. The court authorised service on Mr Abramovich by (a) leaving or posting documents at the Fordstam address in the United Kingdom (Companies Act 2006 s.1140) and (b) by alternative service on senior lawyers at Kobre & Kim LLP (including secure electronic file‑sharing and specified email addresses), because those means give good reason to bring the proceedings to his attention. The court considered but did not find it necessary to apply the "exceptional circumstances" test under the Hague Service Convention; (2) The Amendment Application succeeds. Permission was granted to re‑amend the Re‑Re‑Amended Particulars of Claim in the form before the court, including the contested wording that PSL's overcharging "is to be inferred [as] continuing", but Rusal must provide further particulars of the basis for that inference within 28 days; costs of and occasioned by the amendments to be those of the defendants in any event; (3) The proposed split trial was refused. The trial will proceed as a combined trial of liability, quantum and remedies (remediation reserved), because a split would be likely to increase costs, cause delay, lead to duplication of disclosure and expert evidence, and be inconsistent with the overriding objective.