Erste Group Bank AG (London) v JSC (VMZ Red October) & Ors (2013)


It had been appropriate to permit service of proceedings alleging unlawful means conspiracy on defendants outside the jurisdiction in Russia as there was a serious issue to be tried, the relevant requirements of CPR PD 6B para.3.1 were met, and the claimant had demonstrated that England was the appropriate and proper forum for the dispute's determination.


The applicants (R and L) applied to set aside service of proceedings upon them outside the jurisdiction.

The respondent bank (E) had issued proceedings seeking to recover sums due under a loan agreement. Under the agreement, E could require any dispute to be subject to the exclusive jurisdiction of the English courts. E's case was that the default by the first defendant borrower and second defendant guarantor was engineered deliberately by an unlawful means conspiracy between R, L and the other defendants designed to strip the borrower and the guarantor of their assets and render them insolvent. E also sought an order under the Insolvency Act 1986 s.423. Having found that R and the other parties were necessary and proper parties to the claim under CPR PD 6B para.3.1, the court granted E permission to serve the claim form on them outside the jurisdiction in Russia. E was subsequently granted summary judgment against the borrower and guarantor.

R and L contended that, under Regulation 864/2007 art.4, the governing law of the tort claims in conspiracy and for unlawful interference was Russian law and that since E had only pleaded its tort claim as a matter of English law, no case of Russian law was made out or pleaded so that the case against them was unsustainable and E could not show any serious issue to be tried.


The chronology demonstrated a serious issue to be tried that R and the other defendants had conspired to divert the borrower's and guarantor's assets and put them out of the reach of external creditors, including E. If R or another defendant wished to allege that the applicable law was Russian law and that as a matter of Russian law the ingredients of the relevant delict or civil wrong were different from the position in English law, they would need to plead that in due course and, if E wished at that stage to plead an alternative case in Russian law, it would be in a position to do so, Kuwait Oil Tanker Co SAK v Al-Bader (No.3) [2000] 2 All E.R. (Comm) 271 and VTB Capital Plc v Nutritek International Corp [2012] EWCA Civ 808, [2012] 2 Lloyd's Rep. 313 followed. R and the other defendants were necessary or proper parties within CPR PD 6B para.3.1(3), E's conspiracy and other tort claims were claims made in tort where damage was sustained within the jurisdiction within CPR PD 6B para.3.1(9)(a), and the claim under s.423 was a claim made under an enactment within CPR PD 6B para.3.1(20). It would verge on the perverse for E to have to litigate the conspiracy and other tort claims against companies arguably in the same group as the borrower and the guarantor in Russia, involving as that would involve relitigating the same complex issues of fact with all the attendant waste of costs and risk of inconsistent findings in the two jurisdictions. E had demonstrated that England was the appropriate and proper forum for the dispute's determination, and service of the claim outside the jurisdiction was upheld (see paras 84, 89-91, 156, 231-232 of judgment).

Application refused