Pavel Sukhoruchkin and Others v Marc Giebels Van Bekestein and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morgan |
| Judgment Date | 11 July 2013 |
| Neutral Citation | [2013] EWHC 1993 (Ch) |
| Docket Number | Case No: 2013 Folio 686 |
| Court | Chancery Division |
| Date | 11 July 2013 |
[2013] EWHC 1993 (Ch)
Mr Justice Morgan
Case No: 2013 Folio 686
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Mr Robert Miles QC, Ms Louise Hutton and Mr James Sheehan (instructed by Herbert Smith Freehills LLP) for the Claimants
Mr Jeffrey Gruder QC, Mr Daniel Lightman, Mr Paul Adams and Mr Thomas Elias (instructed by Mishcon de Reya LLP) for the First to Fifth and Seventh Defendants
Hearing dates: 3 rd, 4 th, 5 th and 8 th July 2013
Introduction
This is an application by the Claimants for an order continuing, until judgment or further order, an injunction first granted by Mr Justice Christopher Clarke on 15 th May 2013.
The order of 15 th May 2013 was made on an ex parte application by four Claimants against five Defendants. The first Claimant was Mr Pavel Sukhoruchkin, who was referred to by both sides as Pavel S. The Second Claimant was a company beneficially owned by Pavel S. The Third Claimant was Mr Pavel Novoselov who was referred to by both sides as Pavel N. The Fourth Claimant was a company beneficially owned by Pavel N.
The First Defendant was Mr Marc Giebels van Bekestein who was referred to by both sides as Marc. The Second Defendant was Mr Sanjit Talukdar who was referred to by both sides as Sanjit. The Third Defendant was a company beneficially owned by Marc and the Fourth Defendant was a company beneficially owned by Sanjit. The Fifth Defendant was Blue Pearl Advisors Ltd ("Blue Pearl"), which was beneficially owned by the Third and Fourth Defendants. I will refer to the four personal parties by their first names as the parties themselves have done. There is a Sixth Defendant to the Claim, Telnic Limited ("Telnic"), but this Defendant is not a Respondent to the application which is before me. The Claimants have also applied to add a Seventh Defendant, Ametista Patrimonial SA who is also to be a Respondent to the application for proprietary and freezing injunctions. There was no opposition to joining Ametista Patrimonial SA as a further Defendant and I will make an order to that effect. In this judgment I will refer to the First to Fifth and Seventh Defendants as "the Defendants" and this phrase will not include Telnic which is not a Respondent to the application which I am considering.
The order of 15 th May 2013 took the form of a proprietary injunction and a worldwide freezing injunction. The proprietary injunction restrained dealings with what were referred to as Trust Assets. This phrase was defined so as to refer, essentially, to sums received by Blue Pearl from two agreements which Blue Pearl had entered into, one in relation to a fund called the Hadar Fund and the other in relation to a fund called the Rio Capital Fund, and any monies derived from such sums. The definition of Trust Assets used in the order of 15 th May 2013 did not extend to a further sum which has been the subject of this dispute, namely, a sum received by Blue Pearl from Telnic, in which the Hadar Fund invested. The freezing injunction was a worldwide injunction restraining dealings with assets up to a value of £13 million. The freezing injunction also included an asset disclosure order and extensive disclosure has been provided by the Defendants pursuant to this order.
The order I am asked to make is essentially to continue the order made on 15 th May 2013 until judgment or further order in the meantime. The draft of the order which has been placed before me has some changes from the earlier order. I am asked to extend the definition of Trust Assets which are to be the subject of the proprietary injunction so that the definition now includes any sum received directly or indirectly by Blue Pearl from Telnic. Further, I am asked to increase the value of the assets frozen from £13 million to £14.5 million.
The requirements for a freezing injunction
There is no real dispute as to the matters in respect of which the court must be satisfied before it will grant a freezing injunction. The Claimants must show that they have a good arguable case. They must have a good arguable case in relation to the legal propositions on which they rely and as to the facts which they allege will entitle them to judgment at the trial. They must show that there are relevant assets to be made the subject of the order. They must show that there are substantial grounds for concluding that there is a real risk of the Defendants' assets being disposed of, so that a judgment in favour of the Claimants would go unsatisfied. It must be just and convenient for such an order to be made.
The requirements for a proprietary injunction
The established view is that the requirements for a proprietary injunction are not identical to those for a freezing injunction. The principles to be applied are the normal American Cyanamid principles. These are that the Claimants must show that there is a serious issue to be tried, that damages would not be an adequate remedy for the Claimants and that the balance of convenience or balance of justice favours the grant of an injunction. This formulation of the relevant principles refers to a claimant showing a serious issue to be tried rather than showing a good arguable case. It is generally understood that a requirement to show a good arguable case is more onerous than showing only a serious issue to be tried. Nonetheless, it has been said in relation to the American Cyanamid principles that where the scales are evenly balanced in relation to the balance of convenience, one can take into account the relative strengths of the parties' cases. For a statement to that effect in a relevant context, see Polly Peck International plc v Nadir (No 2) [1992] 4 All ER 769 at 784 g-h per Scott LJ.
The above statement of the principles, in relation to a claim for a proprietary injunction, does not expressly include a requirement that the Claimants must show that there are substantial grounds for concluding that there is a real risk of the relevant assets being disposed of, so that a judgment in favour of the claimants would go unsatisfied. In this context, the court is considering something which the claimant may establish at the trial is its asset or an asset in which it has an interest and not just the defendant's asset. Nonetheless, the reality of any threat to interfere with the property in which the claimant says that it has a proprietary interest must be relevant to the court's decision whether to intervene by granting an injunction.
Mr Gruder QC on behalf of the Defendants has questioned whether the above approach in relation to a claim to a proprietary injunction is correct. Alternatively, he submitted that the approach ought to be changed. He was minded to accept the established approach in a case where a claimant asserted that it had a pre-existing interest in property before the alleged wrongdoing by the defendant took place and where he was seeking an injunction to prevent an interference with that interest. However, he questioned whether this approach was appropriate where the proprietary interest only came into existence by reason of the defendant's alleged wrongdoing. An example of that happening would be where the alleged wrongdoing involved a fiduciary acquiring an asset from a third party in circumstances which involved a breach of his fiduciary duty. The person to whom the duty was owed could advance a claim to an account of profits, which is a personal claim, or he could claim that he had a proprietary interest in the asset so acquired. Decisions such as Bhullar v Bhullar [2003] 2 BCLC 241 and FHR European Ventures LLP v Mankarious [2013] 3 All ER 29 show the width of the circumstances in which a breach of a fiduciary duty can give rise to a proprietary claim against the fiduciary. Mr Gruder therefore submitted that when the claimant brought proceedings for relief arising out of the alleged wrongdoing, the court should adopt the same approach, whether the claim was for a freezing injunction or a proprietary injunction, as to the strength of the case needed before the court would intervene. In either case, it was submitted, the court should require a claimant to show that it had a good arguable case.
I do not feel able to accept Mr Gruder's submission on this point. It seems to me to be contrary to authority which is binding on me. The rationale which so far has been found acceptable is that an asset freezing injunction involves imposing a restraint on the defendant dealing with his own assets (in which the claimant does not have any interest) whereas a proprietary injunction imposes a restraint on the defendant dealing with the claimant's assets or with assets in which the claimant has an existing proprietary interest. Further, it has hitherto been considered to be irrelevant whether the claimant had a proprietary interest in the asset before the wrongdoing took place or only as a result of the wrongdoing; in either case, the claimant's case will be that it has a proprietary interest in the asset before the claim is made and before the injunction is sought.
Disputes of fact
Mr Gruder made detailed submissions on the facts alleged by the Claimants. He submitted that the Claimants' case on the facts is improbable in a number of different ways. Further, he pointed out that the Claimants contend that they did not know a number of matters and that this lack of knowledge is critical to the way in which the Claimants put their case in a...
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