Lolita Vladimirovna Danilina v Vladimir Anatolevich Chernukhin and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 05 December 2017 |
| Neutral Citation | [2017] EWHC 3052 (Comm) |
| Docket Number | Case No: CL-2017-000117 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 05 December 2017 |
[2017] EWHC 3052 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Mr. Justice Teare
Case No: CL-2017-000117
Paul Stanley QC (instructed by Byrne and Partners LLP) for the Claimant
Jonathan Crow QC and James Weale (instructed by Clifford Chance LLP) for the Defendants
Hearing date: 10 November 2017
Judgment Approved
This is another application by a party to litigation in this court to be released from the collateral use prohibition on documents disclosed in the litigation. The application is brought pursuant to CPR 31.22(1)(b); see The Libyan Investment Authority v Societe Generale SA [2017] EWHC 2631 for a recent illustration of this jurisdiction.
The applicant is Ms. Lolita Vladimirovna Danilina. She has commenced proceedings in this court against the respondent, Mr. Vladimir Chernukhin, seeking declaratory relief that she is the beneficial owner of Navigator Equities Limited with the result that she, not Mr. Chernukhin, is party to a Shareholders' Agreement ("SHA") with Mr. Oleg Deripaska. Upon the assumption that a report by SC Strategy Limited dated 8 September 2016 ("the Report") was disclosed to her in these proceedings she seeks permission from the court to use the Report in "(a) correspondence with SC Strategy or its professional advisers and (b) correspondence with, or a complaint to, the Information Commissioner". The Report suggests that Ms. Danilina wrongly accepted large sums of money to assist Mr. Deripaska in defending a claim brought against him in arbitration by Mr. Chernukhin. Ms. Danilina maintains that the suggestions have no proper factual basis.
Ms. Danilina considers that the Report contains "personal data" within the meaning of the Data Protection Act 1998 ("the Act") and that SC Strategy "processed" that personal data within the meaning of the Act. She has therefore submitted a subject access request to SC Strategy requesting details of all her personal data held by SC Strategy. She did so on 22 March 2017. But, by letter dated 3 April 2017, SC Strategy has rejected the request and maintains that its activities do not fall within the Act. If she is to probe SC Strategy's statement that they do not "process data" she needs to be able to refer to the Report in correspondence with SC Strategy. And if she is to complain to the Information Commissioner that SC Strategy has failed to comply with the Act she also needs to be able to refer to the Report. Those, in short form, are the reasons for this application.
The circumstances in which Ms. Danilina received a copy of the Report are not transparent. The respondent to this application, Mr. Chernukhin, suggests that Ms. Danilina was given a copy of the Report by Mr. Deripaska. If that is so then it is difficult to see why she needs the permission of the court to use the Report in the manner intended. However, I am told that the parties are content to treat the Report as having been disclosed to her by Mr. Chernukhin. On that agreed but apparently fictitious basis the applicant needs the permission of this court to use the document in the manner intended.
The background to this application, like many proceedings in this court, involves a dispute between two wealthy Russian businessmen. It is necessary to note the background because Mr. Crow QC on behalf of Mr. Chernukhin says that it is relevant to the determination of the application and in any event the background sets the application in its factual context. In order to recount the background it is necessary to refer to a London arbitration award issued in arbitration proceedings commenced by Mr. Chernukhin against Mr. Deripaska. I am assured by counsel that notwithstanding the usual confidentiality of arbitration proceedings I may properly refer to that award. That is because both Mr. Chernukhin and Mr. Deripaska, the parties to the arbitration, have agreed that documents from the arbitration, including the arbitration award, may be used in these proceedings.
Mr. Deripaska and (according to Mr. Chernukhin) Mr. Chernukhin were parties to a joint venture, the subject matter of which was a valuable real estate site in central Moscow. On 31 May 2005 the SHA was agreed. The joint venture vehicles were Navigator and Filatona, each of which held 50% of Navio Holdings Limited, a special purpose vehicle which held the parties' stake in TGM, the owner of the real estate. At the time Mr. Chernukhin had left Russia and was resident in the UK. Ms. Danilina, who was in a close relationship with Mr. Chernukhin, was named as party to the SHA. It is the case of Mr. Chernukhin that she was, to the knowledge of Mr. Deripaska, a nominee for Mr. Chernukhin. She, however, maintains that she was the beneficial owner of Navigator and hence party to the SHA in her own right.
In 2009 a dispute between Mr. Chernukhin and Mr. Deripaska resulted in, according to Mr. Chernukhin, a forcible takeover of TGM's business premises by Mr. Deripaska on 14 December 2010. Thereafter, and following protracted negotiations, Mr. Chernukhin and Mr. Deripaska shook hands in Davos on a proposed deal whereby Mr. Deripaska would buy out Mr. Chernukhin's interest for US$100 million. But that never happened and so Mr. Chernukhin commenced arbitration proceedings in London pursuant to the terms of the SHA.
Mr. Deripaska disputed that Mr. Chernukhin was party to the SHA. There was to be a preliminary issue hearing at which that issue was to be resolved. Before that hearing Mr. Chernukhin had reason to believe that Mr. Deripaska had bribed Ms. Danilina not to cooperate with Mr. Chernukhin in relation to the dispute. Mr. Chernukhin commissioned the Report from SC Strategy (an "international strategic company" founded by Sir John Scarlett KCMG OBE and Lord Carlisle of Berriew CBE QC) which referred to "intelligence" on that subject. The Report was deployed before the tribunal in support of an application for an adjournment of the preliminary issue hearing so that Mr. Chernukhin would have more time to marshal his evidence regarding the alleged bribe. However, the adjournment was refused.
The preliminary issue was determined by the arbitration tribunal in an award dated 16 November 2016. The tribunal held that Mr. Chernukhin was party to the SHA and that Mr. Deripaska had put forward a case which he knew to be untrue. The tribunal also held that the takeover of TGM's premises had been carried out by persons acting on behalf of Mr. Deripaska. The tribunal said in terms that it had not had regard to the Report.
By two agreements dated 23 December 2016 Mr. Deripaska agreed to pay Ms. Danilina US$2 million in consideration of Ms. Danilina (i) producing evidence in support of Mr. Deripaska's case in the arbitration, (ii) not cooperating with Mr. Chernukhin and (iii) instituting proceedings against Mr. Chernukhin for the purpose of establishing that Ms. Danilina, not Mr. Chernukhin, was the beneficial owner of Navigator. Mr. Deripaska agreed to finance those proceedings. In the event that Ms. Danilina established title to Navigator he promised to pay her a further $10 million. The proceedings were commenced in this court on 22 February 2017.
The substantive arbitration hearing took place in March 2017 and in a further award dated 20 July 2017 the tribunal held that Mr. Deripaska had acted oppressively towards Mr. Chernukhin and ordered Mr. Deripaska to buy out Mr. Chernukhin's interest in Navio for $95,181,285.
Ms. Danilina is not party to the arbitration and so is not bound by the findings of the tribunal. She maintains that she is the beneficial owner of Navigator and therefore the real party to the SHA. That contention, which has been resolved in favour of Mr. Chernukhin by the tribunal, will be fought out in the proceedings in this court between Ms. Danilina and Mr. Chernukhin. It is striking that those proceedings will be financed by Mr. Deripaska, notwithstanding that the case being advanced in those proceedings has been rejected by the tribunal before whom he gave evidence.
There is no dispute as to the principles by reference to which the court's discretion under CPR 31.22 should be exercised. The starting point is that collateral use of disclosed documents is not permitted. The onus is on the party seeking to be released from the collateral use prohibition to justify such release. Such release will only be permitted if there are special circumstances constituting a cogent reason for doing...
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Lolita Vladimirovna Danilina v (1) Vladimir Anatolevich Chernukhin
...overlap. 2 The factual background to these claims and to this application can be found in more detail in the judgments of Teare J at [2017] EWHC 3052 (Comm) and Miss Sonia Tolaney QC (sitting as a Deputy Judge) at [2017] EWHC 2740 (Comm). 3 For present purposes I need only recite the follo......