PJSC Tatneft v Bogolyubov & Ors, Court of Appeal - Commercial Court, November 23, 2018, [2018] EWHC 3249 (Comm)

Resolution Date:November 23, 2018
Issuing Organization:Commercial Court
Actores:PJSC Tatneft v Bogolyubov & Ors
 
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Case No: CL-2016-000172

Neutral Citation Number: [2018] EWHC 3249 (Comm)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS

OF ENGLAND AND WALES

COMMERCIAL COURT (QBD)

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Date: 23 November 2018

Before :

Mrs Justice Moulder

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Between :

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Paul McGrath QC, James Sheehan, Bibek Mukherjee (instructed by Akin Gump LLP) for the Claimant

Matthew Parker, Philip Hinks (instructed by Enyo Law LLP) for the 1st Respondent

James Collins QC, Ruth den Besten (instructed by Fieldfisher LLP) for the 2nd Respondent

Kenneth MacLean QC, Timothy Goldfarb (instructed by Mischcon de Reya LLP) for the 2nd defendant

Harry Adamson (instructed by Byrne & Partners LLP) for the 4th Respondent

Hearing dates: 23rd November 2018

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JUDGMENT

Friday 23 November 2018

MRS JUSTICE MOULDER

(14.27 pm)

Ruling by MRS JUSTICE MOULDER

  1. At the CMC on 25 and 26 September 2018 Mr Justice Andrew Baker made an order for standard disclosure in relation to numbered points in the agreed list of issues. He also provided for disclosure to be made in relation to any further issues agreed or directed pursuant to an application for disclosure in relation to other issues in the agreed list of issues or arising out of the statements of case.

  2. The order provided for any such application to be issued and served by 12 October 2018.

  3. The claimant made such an application on 15 October 2018.

  4. The claimant now seeks disclosure on issues raised which the claimant says arise out of the statements of case and are important to the determination of the claimant's claim at trial.

  5. The application was heard last Friday on 16 November and with insufficient time allowed for judgment, the hearing was adjourned for judgment to be given.

  6. The background to this matter is that in essence the claimant asserts that a fraud was perpetrated by the defendants against a company known as "SK", which was Tatneft's commission agent for the supply and sale of oil.

  7. The claimant's case is (as set out in paragraphs 55 to 80 E of the amended particulars of claim) that there was a scheme defined as the "Oil Payment Siphoning Scheme". This involved the alleged misappropriation of payments made by the Ukrainian company UTN for oil sold by SK to UTN. In particular the claimant asserts that the scheme involved:

    (i) the defendants taking control of intermediary companies, Taiz, Tekhnoprogress and Avto;

    (ii) orchestrating a series of sham (sale and purchase) transactions to siphon sums into offshore companies controlled by the defendants; and

    (iii) subsequently arranging for the three intermediary companies to be put into bankruptcy.

  8. The claimant claims pursuant to article 1064 of the Russian civil code that the unlawful acts caused harm to SK because it did not receive payment for the oil to which it was entitled. Tatneft claims as assignee from SK.

  9. The issues before the court which fall for determination were:

    (i) whether the disclosure sought by the claimant on the outstanding issues identified (and as narrowed in correspondence) should be ordered;

    (ii) whether the issues on which disclosure should be ordered should be set out by way of an amendment to the list of issues or through a separate list.

  10. Turning to the legal framework, at the CMC Mr Justice Andrew Baker made an order for standard disclosure to be given in relation to specific issues and provided in the order for the claimant to make an application for disclosure in relation to other issues.

  11. The disclosure order by reference to the issues was then to be standard disclosure.

  12. CPR 31.5(7) provides for the court to determine the appropriate orders for disclosure having regard to the overriding objective and the need to limit disclosure to that which is necessary to deal with the case justly.

  13. In this case an order is sought in relation to certain issues.

  14. In deciding whether to order disclosure the court has to decide whether disclosure is necessary in order to deal with the case justly. Counsel for the claimant submitted that if disclosure is ordered as sought by claimant, the defendants could come back to court if the disclosure exercise turned out to be disproportionate, and further that it is a matter for the trial judge to decide whether the evidence impacts on the trial as "distortion or distraction". I do not accept that this is the correct approach. It is for this court to determine whether disclosure should be ordered on the particular issues and that must be by reference to the overriding objective.

  15. In oral submissions counsel for the claimant stressed the importance of circumstantial evidence in a case of fraud and the need to piece together evidence in such cases.

  16. Counsel for the claimant also submitted that it was important to have regard to other findings...

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