Dili Advisors Corporation v Production Investment Management Ltd

JurisdictionEngland & Wales
JudgeMrs Justice Moulder
Judgment Date09 October 2020
Neutral Citation[2020] EWHC 2669 (Comm)
Date09 October 2020
Docket NumberCase No: CL-2019-000147
CourtQueen's Bench Division (Commercial Court)

[2020] EWHC 2669 (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

Before:

Mrs Justice Moulder

Case No: CL-2019-000147

Between:
(1) Dili Advisors Corporation
(2) Mr Vadim Shulman
Claimants
and
(1) Production Investment Management Limited
(2) Impool Limited
(3) Addison Alliance Limited
(4) Mr Yuriy Ivanyushchenko
(5) Mr Ivan Avramov
(6) Ms Iryna Ivanyushchenko
Defendants

Ben Hubble QC and Joshua Folkard (instructed by Pillsbury Winthrop Shaw Pittman LLP) for the Claimants

Brian Kennelly QC and Shane Sibbel (instructed by Stephenson Harwood LLP) for the Defendants

Hearing dates: 8 and 9 September 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.

THE HONOURABLE Mrs Justice Moulder

Mrs Justice Moulder Mrs Justice Moulder

Introduction

1

This is the court's reserved judgment on the applications (“the Applications”) to set aside the order for service out of the jurisdiction, the application having been made by the fourth and sixth defendants on 8 October 2019 and by the fifth defendant on 18 November 2019. The fourth defendant is Mr Yuriy Ivanyushchenko (“D4” or “Mr Ivanyushchenko”), the fifth defendant is Mr Ivan Avramov (“D5” or “Mr Avramov”) and the sixth defendant is Ms Iryna Ivanyushchenko (“D6”). In the alternative the Applications are to strike out such claims as the court considers appropriate.

Evidence

2

The court has evidence in the form of a number of witness statements referred to below as well as a number of expert reports on Ukrainian and Monegasque law and the Ukrainian judicial system. The core bundle runs to 683 pages with an exhibits bundle of some 4600 pages. There is also a supplementary bundle of 359 pages and an authorities bundle of 110 documents.

3

In the light of the current pandemic the hearing of the Applications was held remotely but the court had the benefit of full written and oral argument from leading counsel as well as transcripts of the hearing.

Background

4

The claimants in this matter are Dili Advisors Corporation (“Dili”) and Mr Vadim Shulman (“Mr Shulman”). Dili is a company registered in Panama and beneficially owned and controlled by Mr Shulman.

5

There are three sets of claims which fall to be considered separately and these are:

i) the Project Claims;

ii) the Personal Loan Claim; and

iii) the Aircraft Claim.

6

The background to the Project Claims is summarised in the first witness statement of Ms Deborah Ruff, a partner of Pillsbury Winthrop Shaw Pittman LLP (“Pillsbury”) having conduct of the matter on behalf of the claimants from which (largely) I take the following summary.

7

The Project Claims arise from an investment of US$21.8 million (the claimants say made by way of a share purchase and a loan) made by Mr Shulman (through Dili) in May and June 2008 in a project (the “Project”) to acquire and (the claimants say) to develop, land adjacent to the 7 th kilometre industrial market near Odessa, Ukraine (the “Land”).

8

The claimants' case is that in or around May 2008 Mr Shulman and D4 concluded an oral joint-venture agreement in relation to the Project (the “Oral JVA”) and that Mr Shulman was told by Mr Ivanyushchenko and/or Mr Avramov that the Project would be developed through the third defendant, Addison Alliance Limited (“Addison”) which would, directly or indirectly, hold the Land and the other Project assets.

9

Dili entered into a written agreement dated 23 May 2008 with the first defendant, Production Investment Management Limited (“PIML”) for the sale of 40% of the shareholding in Addison for the price of US$21.8 million (the “Sale Agreement”). Notwithstanding the written terms of the Sale Agreement, the claimants' case is that half of Mr Shulman's investment (i.e. US$10.9 million) was made as a loan to Mr Ivanyushchenko with interest at 5% per annum compounded monthly (“the Project Loan”).

10

The Project Loan was repaid by PIML to Dili in instalments between 4 April 2012 and 27 December 2012. That repayment by instalments followed a written agreement for re-sale of the 40% shareholding in Addison to PIML for the full US$21.8 million which had originally been paid (“the Re-Sale Agreement”).

11

The claimants' case is that the Land remains undeveloped farmland, during the relevant period no interest in the Land or other Project assets have shown in Addison's accounts, and that neither Mr Shulman nor Dili have been repaid the full US$21.8 million paid by Mr Shulman.

12

The first, second and third defendants are English companies. PIML is owned (indirectly) by D5, D6 and the daughter of D6 through companies, Pallace Limited and Rollexa Limited. The second defendant, Impool Limited (“Impool”) has since 30 November 2009 been a Director of Addison and owns 60% of the share capital of Addison.

13

It is the claimants' position that D5 acted throughout in relation to the Project D4's agent and “right-hand man”.

14

D6 was the wife of D4, the couple having apparently divorced in 2005. It is the claimants' case that D4 told Mr Shulman that D6 would be a shareholder in Addison and that she was present when many of the alleged misrepresentations relating to the Project were made.

Personal Loan Claim

15

The claimants' case is that pursuant to an oral agreement concluded in December 2010, Mr Shulman agreed to lend Mr Ivanyushchenko US$ 6.3m, repayable on reasonable demand (“the Personal Loan Agreement”).

16

Mr Shulman's case is that he demanded repayment of the Personal Loan in July 2013 but has not received any payment of interest or capital.

Aircraft Claim

17

In July 2009, Mr Shulman owned a Bombardier Learjet 60XR aircraft (“the Learjet”) and was considering buying a Bombardier Challenger 605 aircraft (“the Challenger”). It is Mr Shulman's case that he and Mr Ivanyushchenko orally agreed in July 2009 that if Mr Shulman bought the Challenger and allowed Mr Ivanyushchenko to use the Learjet and Challenger 50% of the time, Mr Ivanyushchenko would pay Mr Shulman 50% of the operating expenses of the Learjet and the Challenger, plus 50% of the depreciation value of those aircraft then they were sold (“the Aircraft Agreement”).

18

Mr Shulman claims that despite allowing Mr Ivanyushchenko to use the Learjet and Challenger 50% of the time, Mr Ivanyushchenko has failed to pay Mr Shulman any money towards the operating expenses of both jets, or the 50% of their depreciation.

Procedural history

19

The Claim was issued on 8 March 2019. An amended claim form was filed on 11 June 2019.

20

Permission to serve the Fourth to Sixth Defendants with the Claim Form out of the jurisdiction was granted on the papers by the Order of Mr Justice Jacobs dated 20 June 2019 (the “Service Order”).

21

The particulars of claim (the “Particulars of Claim”) were filed on 29 July 2020.

22

Permission to serve D5 (in Ukraine) by alternative means was granted on the papers by an Order of Phillips J dated 27 August 2019.

23

On 10 September 2019, D4 and D6 filed Acknowledgements of Service indicating an intention to contest jurisdiction and on 21 October 2019 D5 filed an acknowledgment of service to the same effect.

Issues for determination and summary of findings

24

The written skeletons for the hearing of the Applications raised a large number of contested legal and factual issues. The issues raised can be grouped under four headings: serious issue to be tried; jurisdictional “gateways”; is England the proper place in which to bring the claims; and material nondisclosure. As to the last, this was not pursued in oral argument and in my view it is unnecessary to consider that in this judgment.

25

In view of the interrelationship between the various issues and the jurisdictional grounds relied upon, it is convenient and helpful to summarise my conclusions at the outset. I have not found it necessary to resolve all the issues raised in order to determine the Applications and in light of the large number of issues raised have focused on those issues which appeared to me, based on the oral submissions, to be the key areas of dispute between the parties. I have also not considered it to be necessary in this judgment to rehearse all of the submissions advanced but have nevertheless considered all the submissions in reaching my conclusions.

26

The principal focus of the oral submissions was:

i) the alleged existence of oral jurisdiction and governing law agreements made between Mr Shulman and D4 which the claimants say was an agreement as to English law and English jurisdiction in respect of the Project Claims, the Aircraft Claim and the Personal Loan Claim;

ii) whether the claims were time-barred as a matter of the relevant applicable law.

27

In order to establish jurisdiction in respect of the various claims, numerous gateways were relied upon by the claimants but the applicability of the various gateways to the claims is dependent in part on whether the claims would survive a notional summary judgment or strike out application.

28

In my view (for the reasons discussed below) there is no serious issue to be tried in respect of the following claims:

i) the declaration;

ii) the claims which are governed by and time barred under Ukraine and Monegasque law;

iii) the claims against D6;

iv) the implied terms;

v) the claims against PIML in respect of acts alleged post 2008.

29

In respect of the available gateways for the remaining claims (having regard to the findings on the merits), I find...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT