IPJSC United Company Rusal v Whiteleave Holdings Ltd

Hearing date: 10 July 2025

Approved Judgment

A. INTRODUCTION

There are before me today two applications brought by the Claimant, IPJSC United Company Rusal (“Rusal”) on what is the first case management conference in this action (the “Proceedings”). The Proceedings involve allegations of breaches of a shareholders' agreement dated 10 December 2012 (as varied by various deeds of substitution and side letters) (the “Framework Agreement”) in relation to the governance of PJSC MMC Norilsk Nickel (“NN”), the Claimants and the Defendants are all parties to the Framework Agreement.

The first application that is before me is an application for alternative service (the “Alternative Service Application”) upon the Fourth Defendant, Mr Roman Abramovich. The Claimants have taken steps to serve Mr Abramovich with the Proceedings but he has not engaged with the Proceedings. Pursuant to an order of Cockerill J dated 11 April 2024 (the “Cockerill Order”), the parties were excused from serving documents on Mr Abramovich, save where orders were sought against him, pending this first Case Management Conference (“CMC1”). The Cockerill Order is clear on its face that it expires at CMC1, so the question of service of documents upon Mr Abramovich (so that he is aware of the progress of the Proceedings and is in a position to take part as he sees fit), is a matter that needs to be considered afresh. The application is not opposed by the First to Third Defendants (Whiteleave Holdings Limited, Vladimir Potanin and Crispian Investments Limited, respectively).

In the second application Rusal seeks permission to re-amend its Re-Re-Amended Particulars of Claim (“2RAPOC”) (the “Amendment Application”). The amendments sought by Rusal in the Amendment Application are largely agreed to by the First to Third Defendants save that the First and Second Defendants object to a plea in one paragraph of the proposed draft amendment.

The applications have been addressed in the respective application notices, supporting evidence and correspondence, as well as in the parties' submission. I decided at the outset of CMC1 that it was appropriate for me to rule upon each of these applications at this hearing, and in advance of case management matters on the CMC, so as to progress matters, as far as possible, at this hearing and in the furtherance of the overriding objective.

B. BACKGROUND

Before turning to the applications, it is first necessary to set out the background to the Proceedings, which is of relevance in the context of the various issues that arise on the applications and on this CMC.

The parties are all shareholders (direct or indirect) of, or the ultimate beneficial owners of shares in, Norilsk Nickel (NN), or, on the Third Defendant's case, it was formerly such a shareholder. NN is a Russian company which, together with its subsidiaries (collectively the “NN Group”), is one of the world's largest producers of nickel, palladium, platinum, rhodium, copper and cobalt. NN's operations are centred in and around the town of Norilsk, which is in a remote part of northern Siberia.

The Claimant (Rusal) is a Russian company and (together with its subsidiaries) one of the world's largest producers of aluminium and alumina. It has been a major shareholder in NN since 2008.

The First Defendant (“Whiteleave”) is part of a group (the “Interros Group”), and is owned and controlled by the Second Defendant (“Mr Potanin”). Mr Potanin has, through various Interros Group entities, been a major beneficial owner of shares in NN since 1995.

The Third Defendant (“Crispian”) is a Cypriot company which acquired a shareholding in 2013 as part of an arrangement by which the Fourth Defendant (“Mr Abramovich”, who, at least at that time, owned and controlled Crispian) was to take on the role of “peacemaker” between Whiteleave and Mr Potanin, and Rusal (and, as at that time, Mr Deripaska).

Rusal brings claims for breaches of the written “Framework Agreement” (the “FA”). The FA was entered into on 10 December 2012 as part of the settlement of certain long-running disputes between Rusal and Interros as to the management of NN, and has subsequently been amended by a number of “Side Letters” incorporated into its terms. It is governed by English law and disputes are subject to the jurisdiction of the English courts. Some of the background to, and approach to construction of, the FA has previously been considered by this Court in prior litigation between Rusal, Whiteleave and Crispian, namely UC Rusal PLC v Crispian Investments Limited and Whiteleave Holdings Limited [2018] EWHC 2415 (Comm); [2019] BCC 237.

The FA (as subsequently amended) regulated relations between the principal shareholders in, and governance of, the NN Group. Its features included the following:

(1) Mr Abramovich, through Crispian, acquired a 5.87% shareholding in NN, for the purpose (at least in part) of acting as a “peacemaker” (as noted above).

(2) Whiteleave, Rusal and Crispian are defined as “investors” under the FA.

(3) Mr Potanin became General Director of NN, a position equivalent to CEO, with executive authority to manage NN and select individuals for key positions.

(4) Mr Potanin, it is said, became subject to various duties set out in the FA, which were enforceable by (amongst other things) a series of contractual remedies.

(5) Each of Rusal, Whiteleave and Crispian acquired a “Veto Right” in respect of certain “Reserved Matters”. The Reserved Matters, as defined in the FA, included transactions disposing of NN group assets that exceeded certain values.

(6) The FA provided for various contractual remedies for a breach of the rights and duties set out therein. These included the FA providing that:

(a) certain breaches constitute “Material Breaches”, which would potentially entitle the other Investors to certain compulsory purchase rights, including in certain circumstances the right to acquire the breaching party's “Part of Shares Block” (a portion of shares transferred to Crispian which would stand as security for that party's compliance with key provisions of the FA);

(b) certain breaches of Mr Potanin's duties (defined as “Indemnity Breaches”) give rise to a duty to indemnify Rusal in accordance with a contractual formula;

(c) certain breaches by Mr Potanin give rise to a duty to account for benefits received by Mr Potanin or related parties; and

(d) certain breaches may result in the termination of Mr Potanin's powers, and his replacement, as General Director of NN.

Clause 4.4 of the FA provides that the FA ceased to have effect on 1 January 2023. There is a dispute as to which (if any) of the parties' obligations under the FA survive after that date.

By way of these proceedings, Rusal asserts a number of claims arising from alleged breaches of the FA by Mr Potanin and Whiteleave. I should say at the outset that all the claims are hotly contested. What follows is a summary of the claims as advanced by Rusal:

(1) First, the “ Diversion Scheme”: it is alleged Mr Potanin and Whiteleave engaged in a dishonest scheme to divert strategic business assets out of the control of NN and into the control of third parties connected with them; to divert cashflows and profits out of the NN Group into the hands of Mr Potanin and/or his associates, and to divest the NN Group of critical business functions so as to make it dependent on Mr Potanin's goodwill.

(2) Second, the AF and Altan Claims: it is alleged that Mr Potanin and/or affiliated companies received the benefit of substantial sums which were fraudulently diverted from the NN group.

(3) Third, the Charities Claims: it is alleged that various substantial payments by the NN Group, which were fraudulently presented as charitable donations were, in fact, gifts for the benefit of Mr Potanin and/or his associates.

(4) Fourth, the Industrial Accidents Claims: It is alleged that Mr Potanin breached his duty to exercise reasonable skill and care in the management of the NN Group, leading to the development and perpetuation of dangerous approaches to investment and risk management, which have led to two serious industrial accidents.

(5) Fifth, the PoSB Claims: If liability is established, one of the remedies provided for under the FA is a right by Rusal compulsorily to purchase certain shares in NN, ultimately owned by Whiteleave, which Crispian is obliged to hold as security for such liability. These shares are referred to in the FA as Whiteleave's “Part of Shares Block” (POSB). In June 2022, Whiteleave and Crispian failed to procure that the POSB was re-transferred back to Crispian, following a temporary transfer out of Crispian's custody for a dividend record date. Rusal alleges that this was a breach of each of D1 to D4's obligations and wrongly neutered what is said to be a key remedy contractually available to Rusal.

(6) Sixth, the Digital Assets Claims: it is alleged that NN Group's resources were used to develop a blockchain exchange platform called Atomyze, with the true intent of Mr Potanin's interest in this concealed....