Novoship (UK) Ltd and Others v Vladimir Mikhaylyuk and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Christopher Clarke |
| Judgment Date | 14 December 2012 |
| Neutral Citation | [2012] EWHC 3586 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2006 FOLIO 1267 |
| Date | 14 December 2012 |
[2012] EWHC 3586 (Comm)
Mr Justice Christopher Clarke
Case No: 2006 FOLIO 1267
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Dominic Dowley QC, Charles DoughertyandLaura Crowley (instructed by Ince & Co) for the Claimants
Mr Mikhaylyuk did not attend
Nigel Eaton (instructed by Holman Fenwick Willan) for the 2 nd– 4 th Defendants did not attend
Steven Berry QC and Nathan Pillow (instructed by Lax & Co) for the 6 th– 8 th Defendants
Hearing dates: 16 th, 17 th 21 st– 24 th, 28 th– 31 st May, 12 th and 13 th June, 2 nd– 5 th July
| Subject | Paragraphs |
| The parties | 1 – 10 |
| The claims | 11 – 18 |
| History of the proceedings | 19 – 25 |
| Mirador Shipping and Pulley Shipping | 26 – 69 |
| The Pdvsa Charters and the rival Cases | 70 – 75 |
| The law | 76 – 112 |
| The facts | 113 – 165 |
| The explanations | 166 – 175 |
| Conclusion | 176 |
| Further consideration of Mr Mikhaylyuk'S explanation | 177 – 196 |
| The secret payments made to Mr Ruperti'S companies and the Misha Fu account | 197 –251 |
| The payments to Amon | 252 – 260 |
| The payment to Mirador Shipping | 261 – 268 |
| The payments to Pulley Shipping | 269 – 297 |
| What do the payments Represent | 298 – 300 |
| The underperformance claim and the house purchase | 301 – 307 |
| Explanations for the Amon payments, Discussion and Conclusions | 308 – 404 |
| The claims arising out of the Pdvsa charters | 405 – 418 |
| The damages claim in respect of the Sorokaletie Pobedy | 419 – 449 |
| The claims in respect of the Amon payments | 450 – 452 |
| The Henriot Finance Claims | 453 – 534 |
| The Stena Charter Claims | 535 – 569 |
| The Acm Shipping claim | 570 – 588 |
| The Tula payments | 589 – 605 |
| The Compromise Agreement | 606 – 612 |
| Documents | 613 |
| Summary | 614 – 616 |
| Annex | 1 – 46 |
This action concerns the activities of the First Defendant, Mr Vladimir Mikhaylyuk ("Mr Mikhaylyuk"). He was from 1 September 1997 employed by the First Claimant, Novoship (UK) Ltd ("NOUK"), as its Deputy Chartering Manager and from 1 December 1999 as Commercial Manager. On 18 October 2002 he was appointed Acting General Manager, whilst remaining Commercial Manager, and on 23 May 2003 he was formally appointed General Manager, in which position he remained until 24 March 2006, when he was dismissed. He was appointed a director of NOUK on 5 November 2003 and remained one until his dismissal.
The Claimants
NOUK acted, at the times with which this action is concerned, as the agent and manager of a number of one-ship companies, including the second to fifteenth Claimants. All the Claimants are indirect subsidiaries of JSC Novorossiysk Shipping Company ("NSC" or "Novoship") a company incorporated in the Russian Federation. NOUK's issued share capital is held by Intrigue Shipping Inc ("Intrigue"), a Liberian company, which, itself, is wholly owned by NSC. NSC is now majority owned by OAO Sovcomflot, a shipping company incorporated in the Russian Federation which is wholly owned by the Russian State. The Group has one of the largest tanker fleets in the world.
Personnel at NSC
From November 2001 until 14 October 2005 the President of NSC was Mr Tagir Izmaylov. Mr Vladimir Sakovich was from 27 October 1995 to 12 October 2007 Senior Vice President of NSC responsible for overall supervision of the chartering of the NSC fleet. He was a member of the NSC Executive Board from 24 May 1993 to 12 October 2007, a director of Intrigue from 6 March 2002 to 15 October 2007, and a Director of NOUK from 12 November 2001 to 10 January 2006. Mr Vladimir Oskirko was until the end of December 2003, when he left to join a start up venture, the Vice President of Finance and Planning. He was, also, a member of the NSC Executive Board and a director of Intrigue and NOUK. He returned to NSC in December 2005 and was a Vice President from January 2006.
The Claimants allege that Mr Mikhaylyuk dishonestly solicited and received bribes for himself and others during the course of his employment in connection with four areas of chartering business in respect of which they have the following claims:
a) The PDVSA Charter claims;
b) The Henriot Finance Charter claims
c) The Stena Charter claims
d) The Tula Charter claims.
The Defendants
Mr Mikhaylyuk
The Defendants may be divided into three groups. First there is Mr Mikhaylyuk. He is resident in this country. He has filed extensive pleadings and several statements, which appear to have been professionally drafted. He also submitted a response to the Claimants' opening. But, although he appeared at a directions hearing shortly before the trial, he has not been present at any stage during the trial itself. He claimed to be unwell but he has declined to seek an adjournment of the trial or to provide any medical evidence. He has put in his witness statements but has not been prepared to be cross examined on them. Whilst I have had regard to what is said in those statements, they are worth very little in circumstances where his evidence raises many questions and he has denied the Claimants the opportunity of asking any of them.
The Ruperti defendants
Next there are Mr Wilmer Ruperti, the Second Defendant and two Panamanian corporations of which he is the beneficial owner and controller namely Sea Pioneer Shipping Corporation ("Sea Pioneer"), a Panamanian company, which is the Third Defendant, and PMI Trading Inc ("PMI Trading"), also a Panamanian company, which is the Fourth Defendant. Mr Ruperti is a Venezuelan businessman who owns and controls a number of companies including Maroil Trading Inc, Nautica Shipbrokers C.A., Interpetrol & Trafigura de Venezuela S.A., which in late 2004 became Interpetrol S.A. and Wisteria Enterprises Ltd. Other Ruperti companies are Suramericana de Transporte Petroleo S.A. and Global Shipmangement Inc. Another company is Maritima Altair-Petromar ("Maritima"), which appears to have been related to Mr Ruperti in some way and to have acted either as an intermediary between Mr Ruperti or his companies and PDVSA (see para 11 (ii) below) or as a broker for PDVSA. The Ruperti defendants have filed extensive pleadings and supplied (but not put in evidence) witness statements. But none of them has taken any part in the trial.
The Nikitin defendants
Thirdly, there is Mr Yuri Nikitin, the Sixth Defendant, and two British Virgin Island companies owned and controlled by him, being Amon International Inc ("Amon") and Henriot Finance Ltd ("Henriot"). Henriot is a wholly owned subsidiary of Standard Maritime Holding Corp, a British Virgin Islands company owned and controlled by Mr Nikitin. Another such company is Premium Nafta Products ("PNP") of which Henriot is said to be a sub-division.
Mr Nikitin has sought refuge in this country. He is the subject of criminal proceedings in Russia which have been proceeding for some 6 years but are still at the investigative stage. He has successfully resisted extradition to Russia as has Mr Mikhaylyuk.
According to a report for the Board of NSC dated 2 September 2005 prepared by Mr Sakovich, as from April 1999 several cargoes owned by PNP were transported on Novoship vessels from the Baltic to various destinations (including the USA). Between 1999 and 2003, some 36 vessel chartering agreements were concluded and executed. During the same period, PNP time chartered a number of Sovcomflot vessels, transferring some of its cargoes to them. In late 2002, PNP informed Novoship of its intention to time charter additional tonnage under the same scheme. There was talk of PNP time chartering a product tanker of 40,000 tonnes. Mr Sakovich said that there were no doubts on the market that PNP was a first class charterer as a result of which NSC sanctioned NOUK's negotiations about the time charter for The Trogir (see para 13).
As will become apparent the Nikitin defendants rely on these matters as an indication of a reason why Mr Ruperti should seek an introduction to someone like Mr Nikitin. He was a name in the Russian oil cargo market.
Summary of the claims
The PDVSA charter claims
The Claimants contend as follows:
i) Mr Mikhaylyuk solicited and received bribes in connection with the charters of five vessels, namely (the Marshal Chuykov, (ithe Moscow Kremlin, (iithe Moscow Stars, (iv) the Sorokaletie Pobedy and (v) the Adygeja ('the PDVSA vessels'). These vessels were owned by the Second, Third, Fourth, Ninth and Tenth Claimants, which are all Liberian companies and wholly owned subsidiaries of Intrigue. Bribes were paid by or on behalf of the Ruperti Defendants:
a) to a Nevis company called Mirador Shipping Inc ('Mirador Shipping') in the sum of $ 217,100;
b) to another Nevis company called Pulley Shipping Limited ('Pulley Shipping'), which is said to be beneficially owned and controlled by Mr Mikhaylyuk in amounts totalling $ 1,491,000; and
c) to the Seventh Defendant, Amon, Mr Nikitin's company, incorporated in the British Virgin Islands, in sums totalling some $ 410,379.
These are the payments which the Claimants have identified. The Claimants contend 1 that the payments made were in fact likely to have been very much greater, but they have not been able to discover how or when such further payments were made. They claim that the arrangement in respect of Mr Nikitin was that Mr Ruperti would pay
him 1.25% of the hire on the PDVSA vessels and they claim to recover that amount.The defendants contend that any payments to Amon were payments for introductions effected, or to be effected, by Mr...
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