Sokol Iankov v Kosta Kantchev & Ors

The court decided a suite of interlocutory applications in related proceedings concerning alleged co‑founder rights and ownership of entities and tokens in the Nexo crypto business. Key legal principles applied included the Part 6B jurisdictional gateways (including gateways 2, 3, 4A, 12C, 12E, 15 and 15B), the two‑stage test of jurisdiction and forum conveniens (Spiliada and subsequent authorities), the strike‑out test under CPR r.3.4.2(a) and the limits of relief under Companies Act 2006 s.125(3).

The court struck out the pleaded claim against the English company NPEM because there was no real and present dispute between NPEM and the claimant and the proposed Companies Act rectification route could not substantively convert that absence into a justiciable claim. The court rejected the claimant's multiple reliance on Part 6B gateways to found jurisdiction in England (including injunction gateway 2 and the various trust/fiduciary gateways) because the pleaded facts did not show acts creating trusts or breaches within the jurisdiction, the mechanics of share transfer did not require acts to be done in England, and the pleaded case was not formulated to support the new factual routes urged at the hearing. Consolidation with the earlier Shulev proceedings was refused as an improper means of circumventing jurisdictional hurdles and because exceptional circumstances to depart from the gateways were not made out. The alternative service order against Mr Kantchev would, had it been live, have been set aside.

The claimant commenced Part 7 proceedings asserting that he was entitled to 20% beneficial ownership of the Nexo group (including a UK company, NPEM) by reason of alleged oral shareholding/founder agreements and related trusts, and sought specific performance, declarations, an account and recovery of founder tokens. Those proceedings were brought after related Part 7 proceedings by Mr Shulev (the "Shulev Proceedings") had been ongoing in this court; the two sets of proceedings overlapped in parties and factual allegations.

Nature of the applications:

• challenge to jurisdiction by several defendants (the "Jurisdiction Applications");
• strike out of the claim against the English company NPEM under CPR r.3.4.2(a) (the "Strike‑Out Application");
• application to set aside an order allowing alternative service on Mr Kantchev (the "Set‑Aside Application"); and
• application to consolidate the Iankov Proceedings with the Shulev Proceedings (the "Consolidation Applications").

Issues framed by the court:

• whether the claim against NPEM disclosed a cause of action or was a permissible vehicle to found service out (including by rectification under Companies Act 2006 s.125(3));
• whether any Part 6B gateway justified England as the forum for the Iankov claim (including gateways for injunctions to act in the jurisdiction, trusts/fiduciary breaches in the jurisdiction, constructive trust claims, property in the jurisdiction and closely connected claims via gateway 4A);
• whether consolidation with the Shulev Proceedings could properly be used to establish jurisdiction or avoid jurisdictional requirements; and
• whether the earlier order for alternative service on Mr Kantchev should be set aside.

Court’s reasoning and disposition:

• The pleaded claim against NPEM did not disclose a real dispute between NPEM and the claimant: NPEM had no pleaded acts or omissions said to give rise to liability and the requested declarations were not shown to be of utility against that company. The proposed reliance on s.125(3) Companies Act as a route to rectification could not be used to convert an untried beneficial ownership allegation into a present right to rectification; Nilon v Royal Westminster Investments was relied on as analogous. The Strike‑Out Application therefore succeeded.
• Because the NPEM anchor fell, the claimant could not rely upon a chain of parasitic jurisdictional arguments. The injunction gateway (gateway 2) failed because the acts necessary to effect transfer of shares could be performed outside England and no single act was shown to require performance in England. Trust‑based gateways (12C, 12E, 15 and 15B) failed because the pleaded trust foundations were either not laid to show creation or breach in England, and the pleaded constructive trust and fiduciary claims did not concern acts or assets clearly situated in the jurisdiction.
• The claimant’s novel contention that gateway 4A could be used merely because the facts were closely connected to those in the separate Shulev Proceedings (a distinct action) was rejected: 4A is properly directed to adding claims within the same proceedings against the same defendant, not to importing an independent action by reference to separate proceedings in which the defendant already litigates. Consolidation was also refused as an improper route to circumvent jurisdictional code save in rare and tightly circumscribed cases; the authorities permitting early consolidation were distinguished on their facts.
• The Set‑Aside Application was moot on service grounds but, had it been live, the court would have set aside the alternative service order for lack of exceptional justification.

The judgment emphasises the limits on using domestic procedural devices to circumvent the structured Part 6B gateway regime and reiterates the court’s strict approach to founding jurisdiction on a real and present dispute with an English anchor defendant.

First instance: The court struck out the claim against the English company NPEM and allowed the defendants' jurisdictional challenges so that the Iankov Proceedings could not be maintained in England on the bases advanced; the consolidation applications were dismissed; the set‑aside application (alternative service) was moot but would have succeeded. Rationale: the NPEM claim disclosed no real dispute or utilitarian basis and could not be rescued by s.125(3); none of the Part 6B gateways (including injunction, trust and fiduciary gateways) were established on the pleaded facts; gateway 4A cannot be used to import an independent claim by reference to separate proceedings; and consolidation could not be used to circumvent the jurisdictional code.