OJSC TNK-BP Holding v Beppler & Jacobson Ltd & 12 Ors (2012)
The obvious natural forum for a claim by a Russian company against a connected company's former employee said to have been involved in bribery was Russia, with the result that it would be appropriate to set aside an order granting the claimant permission to serve proceedings out of the jurisdiction.
Eleven out of 13 defendants sued by the claimant Russian company (O) sought the setting aside of an order granting O permission to serve proceedings on them out of the jurisdiction. An application was also made to set aside a worldwide freezing injunction which had been made against seven of the defendants.
O was a Russian holding company within the TNK-BP group; it held the major assets of TNK-BP within the Russian Federation. TNK-BP was the second largest privately owned Russian crude-oil production company. The second defendant (L) had worked for another company within the TNK-BP group between 2003 and 2012. O alleged that L had solicited corrupt payments from three Russian companies which had done business with TNK-BP and that he had been involved with three other individuals, including his wife, in setting up a corporate structure which was used as a conduit for his fraud. Those individuals were the sixth, seventh and eighth defendants. Five of the corporate defendants were offshore single-purpose companies which held investment land in Montenegro. The first defendant (B) was an English-registered company with interests in property and land in Montenegro; O alleged that it had been used as part of the corporate structure by which corrupt money was ultimately invested in Montenegro. O brought proprietary claims seeking declarations of constructive trusts, claims of unlawful means conspiracy and personal claims seeking an account.
(1) As to service out of the jurisdiction, O had to establish three things: there had to be a serious issue to be tried on the merits; there had to be a good arguable case that the claim fell within one of the "gateways" to jurisdiction in Practice Direction 6B; further, England had clearly and distinctly to be the appropriate forum, and it had to be appropriate in all the circumstances to permit service out. As to the first requirement, all of the claims were governed by Russian law, which was less favourable to O than English law, Fiona Trust & Holding Corp v Privalov  EWHC 3199 (Comm), (2011) 108(3) L.S.G. 17 considered. The factual and legal basis of the claims against L and the corporate defendants was weak; however, it could not be said at this stage in the proceedings that the claims had no real prospect of success such that the court was able to give reverse summary judgment in L and the corporate defendants' favour. O had therefore established a serious issue to be tried in relation to the claims against those defendants. However, the claims against the sixth, seventh and eighth defendants had no real prospect of success under Russian law; O had therefore not established a serious issue to be tried in relation to the claims against them. As to the second requirement, it was plain that B had been sued as anchor defendant solely for the purpose of bringing in the other defendants as necessary or proper parties to the claim and thus ensuring that the claim fell within one of the "gateways" to jurisdiction. For the reasons given in relation to the third requirement, it was not appropriate for the court to exercise its discretion in favour of allowing O to serve the claim on L and the corporate defendants other than B out of the jurisdiction. O had not established that B had played any part in the events said to give rise to the allegations of fraud against L. O had therefore not established a good arguable case that its claim fell within one of the gateways to jurisdiction in Practice Direction 6B. As to the third requirement, the obvious natural forum for the claim was Russia. Among other things, the main protagonists, namely O and L, were both domiciled in Russia. Further, the facts were substantially connected with Russia: what was alleged was a Russian bribery, agreed between Russian businessmen, representing Russian companies, doing business together in Russia. Moreover, O's claims were governed by Russian law, and L's employment contract contained an express choice of Russian law and a jurisdiction clause in favour of the Russian courts. The only connection with England was that B was an English company, but it did not own any English assets and had never carried on business here. (2) It would be appropriate to discharge the worldwide freezing injunction, both because there had been material non-disclosure on O's without-notice application and because O's case against the defendants against whom the injunction had been made was not sufficiently strong to justify the grant of worldwide freezing relief.
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20 Nov 2012
Andrew Sutcliffe QC
LTL 27/11/2012 :  EWHC 3286 (Ch)
Richard Morgan QC