National Bank Trust (a company incorporated in Russia) v Ilya Yurov

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMr Justice Bryan
Judgment Date27 February 2020
Neutral Citation[2020] EWHC 757 (Comm)
Docket NumberCase No: CL-2016-000095
Date27 February 2020

[2020] EWHC 757 (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, Fetter Lane

London, EC4A 1NL

Before:

THE HON. Mr Justice Bryan

Case No: CL-2016-000095

Between:
National Bank Trust (a company incorporated in Russia)
Claimant
and
(1) Ilya Yurov
(2) Sergey Belyaev
(3) Nikolay Fetisov
(4) Nataliya Yurova
(5) Irina Belyaeva
(6) Elena Pischulina
Defendants

David Davies (instructed by Steptoe & Johnson UK LLP) for the Claimant

Paul Stanley QC and Alexander Halban (instructed by Gresham Legal Limited) for the First and Fourth Defendants

Tim Penny QC (instructed by Fried, Frank, Harris, Shiver & Jacobson LLP) for the Second and Fifth Defendants

James Willan (instructed by Byrne & Partners) for the Third and Sixth Defendants

Approved Consequentials Judgment

Mr Justice Bryan

A. INTRODUCTION

1

The parties appear before the court today on the hearing of matters consequential upon my judgment of 23 January 2020 reported at [2020] EWHC 100 (Comm) (“the 2020 Judgment”). For the reasons set out in that judgment, the claims of National Bank Trust (“the Bank”) succeeded against the Defendants, namely the First Defendant (“Mr. Yurov”), the Second Defendant (“Mr. Belyaev”), the Third Defendant (“Mr. Fetisov”) (collectively, “the Shareholders”) and their wives (“Mrs. Yurova”, “Mrs. Belyaeva” and “Mrs. Pischulina”, respectively) in the specific respects identified in that judgment.

2

By an order dated 23 January 2020, the court entered judgment for the principal sums due to the Bank by way of damages, being around US$900 million (“the 23 January Order”). The 23 January Order also provided for the release of the funds deposited by the Bank by way of security for costs. All other consequential matters were deferred to this hearing. On this hearing, the Bank relies on the 17th Witness Statement of Mr. Neil Dooley of its solicitors, Steptoe & Johnston UK LLP (“Dooley 17”) which deals with various consequential matters and to which I have had regard. Statements have also been lodged on behalf of Mr. Yurov, Mr. Belyaev and Mrs. Belyaeva, to which I have also had regard.

3

On 30 January 2020, the Bank's solicitors circulated –

(1) A draft order in relation to declaratory relief as well as other consequential matters, including costs and interest (henceforth referred to as “the draft Hearing Order”)

(2) A draft post-judgment worldwide freezing order (henceforth referred to as “the draft post-judgment WFO”)

4

There was a worldwide freezing injunction against the Defendants up to trial. It was made by Leggatt J on 11 February 2016, and subsequently varied and continued (“the 2016 WFO”). The granting of a post-judgment worldwide freezing injunction is not opposed by the Shareholders. This is no doubt in recognition of the fact that (as I am satisfied is the case) it is appropriate to grant such an injunction, in the context of the findings that I have made in relation to the frauds perpetrated by the Shareholders, and the associated dealing with the Bank's assets for the benefit of the Shareholders, and the offshore network of companies ultimately beneficially owned by them.

5

A large number of matters have been agreed between the parties in relation to the draft Hearing Order and draft post-judgment WFO. In this regard, it is agreed that the Bank is entitled to costs on an indemnity basis against the Shareholders in the context of the findings that the court has made in this action in relation to the frauds perpetrated by the Shareholders and the evidence given by them during the course of the trial.

6

Pre- and post-judgment, simple interest has been sought by the Bank on the conservative basis that interest is only payable for the period following 31 December 2015, at a rate of 3%. The Bank has calculated interest conservatively for the simple reason that it recognises that it is unlikely to recover the full US$900 million principal and this interest. I understand the said rates of interest and associated interest calculation has been agreed. Formal declaratory relief has also been discussed between the parties and largely agreed, although certain matters remain for resolution before me today.

7

It is also common ground that there should be up-to-date asset disclosure by the Shareholders, although the precise wording as to what is to be provided remains for determination at this hearing. However, issues remain between the parties in relation to the precise wording of the order, including in particular:

(1) whether (and if so what) allowance should be made for living and legal expenses, and

(2) the appropriate form of relief against the Shareholders' wives.

8

An issue also arises as to whether the Bank should be permitted to use information disclosed pursuant to the existing worldwide freezing order in civil enforcement proceedings in this and other jurisdictions. The Bank also seeks the release of funds (US$600,000) provided by way of fortification and cross-undertaking damages, both in these proceedings and in the related Dianthi proceedings, which I do not understand to be controversial.

9

No application for permission to appeal is made before me today by any of the Defendants, save a discrete application for permission to appeal by Mr Belyaev and Mrs Belyaeva, concerning a particular finding made by me as to the terms on which funds with an investment in the name of Mrs. Belyaeva are held. I heard that application after hearing the matters the subject matter of this Consequentials Judgment. At the conclusion of that hearing I refused permission to appeal.

10

I address below the following matters that arose for consideration and determination, as appropriate:

(1) An application by an Austrian Bank (“Bank Winter”), requesting that the Court should attach a disclaimer to the 2020 Judgment to state (amongst other matters) that Bank Winter did not participate in the proceedings.

(2) Particular requests relating to the wording of the draft Hearing Order

(3) The Bank's application to be released from its undertaking in Paragraph 8 Schedule B of the 2016 WFO, in order to use information obtained under compulsion of that WFO in order to enforce judgment.

(4) Ms. Pischulina's request not to be subject to the post-judgment WFO, in exchange for an undertaking ( inter alia) not to dispose or deal with a particular property without the written consent of the Bank or the written permission of the court.

(5) The issue of whether the post-judgment worldwide freezing order should contain any provision for living and/or legal expenses for Mr. Yurov and Mr. Fetisov, and the amount of the living expenses provided for in relation to Mr. Belyaev.

B. BANK WINTER

11

The first matter that arises for determination today is an application made by a non-party: namely an Austrian Bank (“Bank Winter”), which has made written representations to me about references to Bank Winter in the 2020 Judgment. I granted permission to Bank Winter to make written submissions to me and also to appear orally before me today if they wished to do so.

12

Bank Winter is not a party to this action and equally, no witnesses of Bank Winter gave evidence before me. However, there was documentary disclosure before me involving Bank Winter and I heard factual evidence as to transactions involving Bank Winter during the course of the trial, in relation to which it was necessary for me to make factual findings in relation to the transactions involving Bank Winter for the purpose of addressing the allegations made by the Bank against the various Defendants.

13

Bank Winter took up the opportunity to make written submissions before me, and I have given careful consideration to those submissions. In those submissions, Bank Winter identify the specific paragraphs of my Judgment in which I made reference to Bank Winter. Those paragraphs include paragraphs [1491], [1601], [1614] to [1618], [1634] to [1635], [1638], [1651], [1655] and [1656]. It is said that in those paragraphs, I make findings in relation to Bank Winter. Bank Winter is concerned that those findings may be relied upon against it in other ongoing proceedings: in particular, there are ongoing Austrian proceedings in which Bank Winter is the Defendant ( National Bank Trust v Bank Winter & Co AG, 21 Cg 55/19b, “the Austrian Proceedings”). In the Austrian proceedings (in which none of the Defendants to the English proceedings are involved) the Bank, I am told, has relied on the 2020 Judgment extensively in written submissions made on 7 February 2020. It is said that the Bank is relying heavily on the 2020 Judgment in relation to matters which involve Bank Winter.

14

In fact, from the Bank's skeleton argument in response, it appears that Bank Winter has been aware of the English proceedings for many years. Further in in those very Austrian Proceedings, long prior to the 2020 Judgment, Bank Winter itself relied heavily on materials adduced by the Shareholders in these proceedings, including their witness statements and extracts from cross-examination: this evidences a significant degree of cooperation, it is said, between the Shareholders and Bank Winter. It is said that the Shareholders themselves have also relied on part of Bank Winter's pleadings from the Austrian proceedings as indeed is the case: see, for example, footnote 393 of Mr Fetisov's closing submissions.

15

In their written submissions, Bank Winter ask me to issue either what they describe as a “disclaimer” to the 2020 Judgment by means of an addendum, or short supplementary judgment, in order to make clear that Bank Winter was not a participant in the proceedings and that the court at trial did not receive evidence from Bank Winter or hear representations on its behalf. My attention is drawn to an example of a disclaimer which was made by Tugendhat J in ...

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  • PJSC National Bank Trust v Boris Mints
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    • Queen's Bench Division (Commercial Court)
    • 25 November 2020
    ...of the English Order. 38 I was also referred to the fact that in the case of National Bank Trust v Yurov (Consequential Proceedings) [2020] EWHC (Comm) 757 (in the context of releasing the claimants from undertakings that were in place in the context of a worldwide freezing order) I referr......

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