Loudmila Bourlakova v Oleg Bourlakov
| Jurisdiction | England & Wales |
| Judge | Mr Justice Richard Smith |
| Judgment Date | 08 September 2023 |
| Neutral Citation | [2023] EWHC 2233 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No. BL-2020-001050 |
[2023] EWHC 2233 (Ch)
THE HONOURABLE Mr Justice Richard Smith
Claim No. BL-2020-001050
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES BUSINESS LIST
7 Rolls Building
Fetter Lane,
London, EC4A 1NL
Helen Davies KC, Patrick Harty and Daniel Fletcher (instructed by Mishcon de Reya LLP) for the Claimants
Alan Gourgey KC and Mark Belshaw (instructed by PCB Byrne LLP) for the Seventh and Eighth Defendants
Daniel Feetham KC and Mr Rowan Pennington-Benton (instructed by Madison Legal) for the Ninth to Thirteenth Defendants
Hearing dates: 25, 26 and 27 April 2023
APPROVED JUDGMENT
This judgment was handed down remotely at 10.30am on 8 September 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives
A. Introduction
This judgment concerns four applications by the Claimants for permission to amend their Particulars of Claim ( PoC), including the proposed joinder of an additional claimant. The seventh and eighth Defendants have themselves made three related applications, namely (a) to adjourn the hearing of the Claimants' amendment applications (b) for permission to rely on further evidence and (c) for a stay under Articles 33 or 34 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 ( Brussels Recast) of such amended claims for which the Claimants may be given permission.
The parties
The (existing) Claimants are Mrs Loudmila Bourlakova ( Mrs Bourlakova) and two companies of which she is the ultimate beneficiary, one of which, Hermitage One Limited ( H1), is incorporated in the Isle of Man and the other, Greenbay Invest Holdings Limited ( Greenbay), is incorporated in the Seychelles.
The first Defendant, Mr Oleg Bourlakov ( Mr Bourlakov), died on 21 June 2021, after the commencement of these proceedings but before certain applications to challenge jurisdiction had been made and dismissed by Trower J on 26 May 2022 ( Bourlakova and others v Bourlakov and others [2022] EWHC 1269 (Ch)). The major part of the wealth of Mr Bourlakov and his family derived from the acquisition and subsequent sale in 2007 of a major Russian cement producer for US$1.45 billion.
Both Mrs Bourlakova and Mr Bourlakov are or were Ukrainian, Russian and Canadian nationals, albeit domiciled in Monaco at the material time. They were married in Ukraine in June 1972. The Claimants allege that there had been an irretrievable breakdown in marital relations between Mr Bourlakov and Mrs Bourlakova since late 2017. On 19 December 2018, divorce proceedings were initiated by Mrs Bourlakova in Monaco. They have two daughters, Elena who lives in Canada, and Veronica who lives in London. It is Veronica who now seeks to be added as an additional claimant.
The second to fourth Defendants ( the Leo Defendants) were all involved in the provision of fiduciary corporate services and advice to Mr Bourlakov, together with companies and foundations owned or controlled by him. The second defendant, Mr Daniel Tribaldos, who is domiciled in Switzerland, owns or controls a substantial proportion of the shares in the third Defendant, Leo Services Holding Limited ( Leo Holding), an English company of which Mr Tribaldos is sole director. In turn, Leo Holding owns all the shares in the fourth Defendant, Leo Trust Switzerland AG ( Leo Trust), a company incorporated in Switzerland, and Leo Trust Cyprus Ltd ( Leo Cyprus), a company incorporated in Cyprus. Mr Tribaldos is also a director of both Leo Trust and Leo Cyprus.
The fifth Defendant, Mr Reuwen Schwarz, was a director of Leo Trust until February 2020 and is domiciled in Israel. A family trust associated with Mr Schwarz indirectly holds shares in Leo Holding through a Panamanian company, Rudan Business Holdings SA.
The sixth Defendant, Mr Semen Anufriev, is a relative of Mr Bourlakov and a German qualified lawyer. He was managing director of the Bourlakov family office and, since 2012, has played a central role in the management of Mr Bourlakov's business interests and personal wealth. He is domiciled in Latvia.
The seventh and eight Defendants ( the Kazakovs) are Mr Bourlakov's brother-in-law, Mr Nikolai Kazakov, and his wife, Mr Bourlakov's sister, Mrs Vera Kazakova. Although Mr Kazakov initially said on the jurisdiction applications that he was domiciled in Monaco, he later withdrew his evidence to that effect and accepted that, at the material time, he was domiciled within the EU, in Estonia. Trower J found the same in relation to Mrs Kazakova.
The ninth to thirteenth Defendants, Columbus Holdings and Enterprises SA ( Columbus), Finco Financial Inc ( Finco), Gatiabe Business Inc ( Gatiabe), Edelweiss Investments Inc ( Edelweiss) and IPEC International Petroleum Co Inc ( IPEC) (together, the Panamanian Companies), are companies incorporated in Panama. The precise ownership of the Panamanian Companies and how they came to be owned or controlled by the protagonists to this dispute are amongst the issues with which these proceedings are concerned, including a number of the Claimants' proposed related amendments.
B. Representation at the hearing/ the Kazakovs' adjournment application
The Claimants (and Veronica) were represented at the hearing by Ms Davies KC, Mr Harty and Mr Fletcher. The Kazakovs were represented by Mr Gourgey KC and Mr Belshaw. The Panamanian Companies were represented by Mr Feetham KC and Mr Pennington-Benton. Mr Anufriev lodged a written skeleton argument but did not make oral submissions.
Although Mr Bourlakov died in June 2021, a representative has not yet been appointed on behalf of his estate in these proceedings, whether under CPR, Part 19.12 or otherwise. Shortly before the hearing, the Kazakovs applied to adjourn the amendment applications on the basis of that lack of representation. I heard that application at the start of the hearing and refused it then, with reasons to follow, as they do below. Although I have not summarised here all the parties' arguments, I took them fully into account in reaching my decision.
As a preliminary matter, the position of the parties as to why no representative had yet been appointed was polarised, the Kazakovs pointing the finger of delay firmly at the Claimants (despite previous assurances to this court that the matter was in hand), also suggesting tactical motivations for that delay, namely to obtain an advantage through a succession proceeding in Latvia. The Claimants denied this, saying that the Latvian proceeding was unconnected and explaining “ the great difficulties” experienced in appointing a representative willing to act given the Russian invasion of Ukraine, associated sanctions measures and issues in arranging payment of any representative.
In this highly tactical case, spawning multiple disputes beyond these English proceedings, it is not possible for me to make conclusive determinations on the machinations suggested by the parties. Nor is it necessary for me to do so. Suffice to say that I am satisfied of the following: (a) despite the limited evidence about the Claimants' efforts to appoint a representative, I accept that it would not have been a straightforward matter to secure the engagement of a representative given the jurisdictional connections of the relevant parties and the potential sanctions concerns arising, even if not themselves sanctioned individuals (b) although the question of the representation of Mr Bourlakov's estate was raised at the two earlier hearings, the parties (including the other Defendants) were not preparing for this hearing on the basis that the representation issue had to or would be resolved beforehand (c) if it was to be suggested that the amendment applications could not be heard absent representation of Mr Bourlakov's estate, the Kazakovs should have said so much earlier than shortly before the hearing and (d) in any event, based on the Kazakovs' stance in relation to the identity of any representative, namely that an administrator appointed by the Monaco court should take the role, it is unlikely that the representation issue could have been resolved beforehand, even if it had been possible for the Claimants to accelerate their efforts to that end. Accordingly, the adjournment application was made very late.
Having regard to the way in which the amendment applications unfolded procedurally prior to the hearing, particularly in terms of the burgeoning body of evidence, I was also satisfied that what should have been relatively straightforward applications (already listed for two days) would, if delayed, become even more ‘bogged down’ and spawn yet further unsolicited evidence as the parties sought to refine the arguments further. That outcome would have been most undesirable. In this regard, I remind myself of Lord Templeman's admonition in Spiliada Maritime Corp v Cansulex Ltd (The Spiliada) [1987] A.C. 460) about the desirability of the submissions in jurisdiction applications being measured in hours, not days. Although this is an application for permission to amend, with jurisdiction being but one issue arising, it seems to me that the same approach should obtain here as well.
Turning to matters of substance, I accept that the amendment applications should be looked at on a defendant-by-defendant basis, the...
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