Pavel Karpov v William Felix Browder and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Simon |
| Judgment Date | 14 October 2013 |
| Neutral Citation | [2013] EWHC 3071 (QB) |
| Docket Number | Cases No: HQ12DO3133 and HQ12DO1742 |
| Court | Queen's Bench Division |
| Date | 14 October 2013 |
[2013] EWHC 3071 (QB)
Mr Justice Simon
Cases No: HQ12DO3133 and HQ12DO1742
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Antony White QC and Ms Catrin Evans (instructed by HowardKennedyFSi LLP) for the Defendants
Mr Andrew Caldecott QC and Mr Ian Helme (instructed by Olswang LLP) for the Claimant
Hearing dates: 24-25 July 2013
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
On 16 November 2009 Sergei Magnitsky died in prison in Russia. Shortly before his arrest and imprisonment he had been investigating a substantial tax fraud committed against the Russian Federation by a criminal gang. I shall refer to this tax fraud as the Hermitage Fund fraud.
Beyond this short summary, many of the facts in issue between the parties are unknown or controversial, and are subject to stark divisions of opinion.
In North America and Europe, there have been denunciations of what occurred, with individuals and organs of the Russian Federation being accused of complicity in the Hermitage Fund fraud and involvement in the murder of Sergei Magnitsky, including accusations of a cover-up of these crimes. In Russia, although there seem to be differing views, the official position appears to be that what occurred involved a fraud against the state and the death of a Russian citizen in Russia; and that there is no justification for the extensive international response to these events.
Neither this claim, were it to proceed to trial, nor these applications, can be expected to throw significant light on many of the issues raised by the international debate.
The Parties to the present action
The First Defendant ('Mr Browder') is the Co-founder and Chief Executive of the Second Defendant, which is the manager of the Hermitage Fund. The Hermitage Fund was established in 1996 to invest in equity, and equity-related securities, and instruments of companies incorporated in Russia or countries of the former Soviet Union. The Third Defendant is a company providing investment research for the Hermitage Fund; and the Fourth Defendant ('Mr Firestone') is a US attorney who managed a Russian Law firm, Firestone Duncan (CIS) Ltd ('Firestone Duncan'). Sergei Magnitsky was an auditor employed by Firestone Duncan at its Moscow office, which specialised in Russian corporate and tax law.
The Defendants have conducted a forceful international campaign. They contend that a criminal organisation (the Klyuev gang) conspired to take control of certain subsidiaries of the Hermitage Fund and, having done so, procured a very large and unlawful tax refund from the Russian Federation (worth approximately $230m) which was diverted to the conspirators.
The Defendants' campaign and, in particular, its denunciation of the death of Sergei Magnitsky while investigating the Hermitage Fund fraud, has led to reports from numerous international organisations which have condemned what occurred. The culmination of this campaign was the passing by the US Congress of the Sergei Magnitsky Rule of Law and Accountability Act 2012, and the publication by the U.S Treasury of a list of those who are said to have been implicated, ('the Magnitsky list').
At the centre of the campaign is an English language website: http://russian-untouchables. com ('the website'), and a Russian Language version which publishes similar material. Among the material which has been published by the website are 4 videos: episode 1 on 22 June 2010, episode 2 on 12 July 2010, episode 3 on 14 April 2011 and episode 4 on 26 June 2012. These videos remain on the website; and the Claimant complains that each contains material which is defamatory of him. He also complains about the defamatory content of an interview Mr Browder gave to the BBC which was broadcast on 12 September 2011 and an article written in 'Foreign Policy' magazine which was first published online on 1 March 2012.
Until his retirement in July 2012, the Claimant was a policeman in Russia. He worked for the Moscow Police until December 2009, acting as a Senior Investigating Officer for major cases; and, from December 2009 until his retirement, as an Investigator with the Investigation Committee of the Ministry of the Interior. Artem Kuznetsov was the Deputy Head of the Tax Crimes Department of the Ministry of the Interior of the Russian Federation.
The Claimant was named in each of the four episodes published by the Defendants, as he was on the page of the Defendants' website containing the BBC interview and in the 'Foreign Policy' article. The nature of his complaint in the present proceedings can be summarised by reference to certain parts of the videos. This is only a summary because the material is extensive and ultimately the effect of the material has to be seen in context.
Episode 1.
Three years before Sergei [Magnitsky] died the same officers, Lt. Col. Kuznetsov and Major Karpov acting with the same convicted killer, Viktor Markelov, were accused of kidnapping [Fedor] Mikheev in 2006 with an attempt to extort $20,000,000. To cover up their crime they sent [Fedor Mikheev] to prison for 11 years where he is to this day. They should have been stopped then, instead they went on to arrest, torture and kill Sergei Magnitsky to hide their crimes, crimes that they committed against their own Government and the people they were sworn to protect.
Episode 2.
[In 2008], after Sergei Magnitsky testified against the same criminal group for an even larger crime, the same officers arrested, tortured and eventually killed Sergei to hide their crime. Unless they are stopped the same criminal group will continue to murder and steal. It's time for the Russian government to prosecute the officers responsible for the arrest and death of Sergei Magnitsky. Major Pavel Karpov uses his position to steal, destroy lives; he's become a very rich man and believes his uniform makes him untouchable; it's time to prove him wrong.
Episode 3.
Instead of supporting Sergei Magnitsky and recognising him as a hero, the government allowed interior ministry officers, Kuznetsov, Karpov … to arrest, torture and kill him.
In the Particulars of Claim the Claimant has pleaded (see for example §17) that:
In their ordinary and natural meaning and in context, the words and images complained of meant and were understood to mean that the Claimant;
1. Whether himself or through others caused, and is guilty of, the torture and murder of Sergei Magnitsky;
2 Did so in order to prevent exposure of the fact that he was party to a fraud on the Russian State in the sum of $230 million;
3. Had previously fabricated a case against Fedor Mikheev (leading to his wrongful imprisonment for 11 years) in order to cover up the fact he was a party to kidnapping him in an attempt to extort a large sum of money from him; and
4. Unless stopped, would continue to commit or cause murder to cover up his crimes.
It will be necessary to consider the pleaded meanings later when considering the extent to which the Defendants rely on the defence of justification.
Legal proceedings
The Claimant's criminal complaints in Russia
Following the publication of the Episode 1 video in Russia, the Claimant wrote to the Prosecutor-General of the Russian Federation complaining about its contents and the media reporting of it. The letter (dated 12 July 2010) was in the form of an application to the Prosecutor for him to review the facts and to start a criminal defamation action. Defamation was a criminal offence at the time, although it later ceased to be so. According to his witness statement his superiors were discouraging.
Following the publication of Episode 2, he wrote to the Head of the Department of Internal Security of the Russian Ministry of the Interior on 14 July 2010 asking for a criminal file to be opened. By a letter dated 6 August he was notified that his two letters would be attached to the criminal investigation file which had been opened in relation to the Defendants' allegation about the theft of the Hermitage Fund subsidiaries. It appears that the letters were attached to the criminal files of two men who were convicted of the Hermitage Fund fraud.
On 6 September 2010 the Claimant made a further application to the First Deputy Prosecutor General for a criminal case to be opened. This application was denied on 17 September, with an indication that there were no grounds for a separate review. The Claimant has explained that, since the criminal file was concerned with the tax fraud and not with an allegation that he had murdered Sergei Magnitsky, he found the rejection of his application 'deeply frustrating.'
On 27 September he wrote again to the Prosecutor General seeking a review of the 6 August notification.
On 12 October 2010 he appealed the decisions of 6 August and 17 September to the State Justice Counsellor and Acting Chair of the Investigations Committee of the Russian Federation. On 18 October his appeal was denied in the same terms as the original decisions; and at the same time he was notified that his application of 27 September was also denied.
On 2 July 2011 the Claimant initiated a further criminal complaint, which was suspended on 15 September 2011 and then rejected on 22 December 2011.
In these circumstances he decided not to pursue a criminal complaint any further.
The Claimant's civil complaint in Russia
On 6 July 2011 President Medvedev's Human...
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