Aleksej Gubarev v Orbis Business Intelligence Ltd

JurisdictionEngland & Wales
JudgeMr Justice Warby
Judgment Date30 October 2020
Neutral Citation[2020] EWHC 2912 (QB)
CourtQueen's Bench Division
Docket NumberCase No: QB-2017-002808
Date30 October 2020

[2020] EWHC 2912 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

MEDIA AND COMMUNICATIONS LIST

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Warby

Case No: QB-2017-002808

Between:
(1) Aleksej Gubarev
(3) Webzilla Limited
Claimants
and
(1) Orbis Business Intelligence Limited
(2) Christopher Steele
Defendants

Andrew Caldecott QC, Ian Helme and Chloe Strong (instructed by McDermott Will & Emery LLP) for the Claimants

Gavin Millar QC and Edward Craven (instructed by Reynolds Porter Chamberlain LLP) for the Defendants

Hearing dates: 20–24 July 2020

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Warby

INDEX

Section

Paragraphs

The claim

1–9

The issues

10–11

The evidence

12–19

Meaning

20–36

Serious harm

The law

37–45

The claim

46–52

The evidence

53–66

Discussion and findings of fact

67–88

Conclusions

89

Responsibility for publication

The factual context

90

The rival contentions

91–102

The Aven case

103–105

Legal principles

106–119

Assessment

120–147

Main findings

148–149

Remedies

150

Summary of conclusions and disposal

151

Appendix A: The BuzzFeed Article

Appendix B: The December Memorandum

Appendix C: Agreed Chronology

Appendix D: Corporate structure of the XBT Group

Mr Justice Warby

The claim

1

This is the second case to come before this Court as a result of an article published by BuzzFeed Inc on its news website on 10 January 2017, under the headline “These Reports Allege Trump Has Deep Ties To Russia” (“the BuzzFeed Article”). The first case was Aven & Others v Orbis Business Intelligence Ltd, (“the Aven case”), where the claims were for inaccuracy, under data protection law. I gave judgment on those claims earlier this year: [2020] EWHC 1812 (QB). The case I am dealing with now is a claim for libel.

2

The first claimant (“Mr Gubarev”) is a businessman and entrepreneur, born and brought up in Russia, but currently resident in Cyprus. Mr Gubarev is the ultimate beneficial owner of approximately two thirds of the XBT Group of companies. The main business of the XBT Group is the provision of server capacity to individual and corporate customers. This is a worldwide business, carried on by a network of companies in Europe, America, and Asia. The corporate claimant (“Webzilla Ltd”) is a member of the XBT Group. Webzilla Ltd was incorporated in Cyprus in 2005, as an enterprise hosting company.

3

Mr Gubarev and Webzilla Ltd seek damages and other remedies in respect of words contained in a document published alongside the BuzzFeed Article. The article referred to “A dossier, compiled by a person who has claimed to be a former British intelligence official, [which] alleges Russia has compromising information on Trump.” The “dossier” of “reports” referred to was embedded in the article by means of a document viewer. The reports took the form of numbered Intelligence Memoranda. Sixteen of them pre-dated the Presidential election of 8 November 2016. These will be referred to as the pre-election memoranda or “PEM”. The final memorandum, Number 2016/166, was produced between the election and the President's inauguration. It was dated 13 December 2016. It is this one that made reference to Mr Gubarev and to Webzilla Ltd, and which contains the words complained of in this case. I will refer to it as “the December Memorandum”.

4

The full text of the BuzzFeed Article is set out in Appendix A to this judgment. The full text of the December Memorandum is set out in Appendix B. The words complained of are as follows:

“[redacted] reported that over the period March-September 2016 a company called XBT/Webzilla and its affiliates had been using botnets and porn traffic to transmit viruses, plant bugs, steal data and conduct “altering operations” against the Democratic Party leadership. Entities linked to one Alexei GUBAROV were involved and he and another hacking expert, both recruited under duress by the FSB, Seva KAPSUGOVICH, were significant players in this operation. In Prague, COHEN agreed contingency plans for various scenarios to protect the operations, but in particular what was to be done in the event that Hillary CLINTON won the presidency. It was important in this event that all cash payments owed were made quickly and discreetly and that cyber and other operators were stood down / able to go effectively to ground to cover their traces.”

5

Lawyers acting for the claimants promptly sent letters of claim to BuzzFeed, and on 3 February 2017, Mr Gubarev and two XBT Group companies brought defamation proceedings in the United States (Florida) against the operator of the BuzzFeed website, BuzzFeed Inc, and its editor, Benjamin Smith (“the Florida Proceedings”). Later the same day, BuzzFeed redacted references to Mr Gubarev and the XBT Group companies from the article, and made a public apology for including them. On 19 December 2018, the Court entered summary judgment for the defendants in the Florida Proceedings, on First Amendment grounds. On 13 March 2020, the US Court of Appeals, 11 th circuit, remitted the case for a re-hearing, which is pending at the time of this judgment.

6

Letters of claim were also sent to the defendants in the present case, Orbis Business Intelligence Ltd (“Orbis”), and Christopher Steele (“Mr Steele”). The claim was issued on the same day as the Florida Proceedings, 3 February 2017. Originally, there were four claimants: Mr Gubarev, Webzilla Ltd, and two other XBT Group companies, XBT Holding SA and Webzilla BV. The other companies have since discontinued their claims in this Court. The claim is brought in respect of the publication of the BuzzFeed Article within the European Union. It is not against BuzzFeed or Mr Smith, but against Orbis and Mr Steele only.

7

Mr Steele is the person who created the memoranda in the “Dossier”, which is why it has become known as “the Steele Dossier”. Mr Steele is a former Crown servant, a British citizen, resident in England. In compiling the Dossier, he was acting in his capacity as a director and/or employee of Orbis, a company incorporated in England and Wales which provides corporate intelligence services. The PEM were created pursuant to a commission from a Washington DC consultancy called Fusion GPS (“Fusion”), which was acting on the instructions of a law firm, Perkins Coie LLP. The ultimate client was a person or body in the upper echelons of the Democratic Party. The December Memorandum was produced by Orbis outside the scope of that commission.

8

The case pleaded in paragraph 6 of the Particulars of Claim is that the defendants “published and/or caused to be published to the world at large, and thereby to vast (and unquantifiable) numbers of people across the European Union”, the words set out above. The claimants' case is that those words bore the following natural and ordinary meaning:

“that the Claimants had deliberately and without consent hacked into the IT systems of the leadership of the United States Democratic Party and had used such unlawful access to transmit viruses, plant bugs, steal data and alter files and programs.”

9

The claimants allege that there was widespread publication in the EU of the words complained of, conveying this imputation, and causing each of them serious reputational harm. Mr Gubarev complains of hurt and distress. At one stage, Webzilla Ltd advanced a substantial claim for special damages. After four amendments of the Particulars of Claim, that is no longer pursued. Webzilla Ltd does however maintain a claim for general damages, reflecting what it contends is serious financial loss.

The issues

10

It is not in dispute that the words complained of referred to both claimants, bore meanings defamatory of both of them, and caused Mr Gubarev serious reputational harm. No issues of foreign law have arisen. (In principle, a claimant suing for libel in respect of words published abroad must establish that the offending words are civilly actionable in each foreign jurisdiction relied on; but the trial was sensibly conducted, and I proceed, on the common assumption that foreign law is no different from English law (reflecting the so-called “presumption”)). The defendants do not advance any substantive defences to the claim: they do not maintain that any defamatory meaning which the offending words might convey about the claimants was true, or an expression of honest opinion, or a reasonable publication on a matter of public interest. At one stage a defence of qualified privilege was relied upon, but a change in the way the claimants put their case has led to that issue falling away.

11

By the end of the trial, there were only four main issues:

(1) Liability for publication. Are the defendants legally responsible for the publication of the December Memorandum on the BuzzFeed website? This is staunchly denied by the defendants. This is the principal issue, and the one to which most of the evidence and argument have been devoted.

(2) Meaning. What was the natural and ordinary meaning of the words complained of? The defendants contend for a lesser defamatory meaning than the one alleged by the Claimants.

(3) Serious harm to Webzilla Ltd. As I have made clear, there is no dispute that the publication bore a meaning defamatory of both claimants, and seriously harmed Mr Gubarev's reputation. But there is an issue as to whether Webzilla Ltd has shown that the case meets the threshold...

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