PJSC Tatneft v Bogolyubov
| Jurisdiction | England & Wales |
| Neutral Citation | [2017] EWCA Civ 1581 |
| Date | 2017 |
| Year | 2017 |
| Court | Court of Appeal (Civil Division) |
Practice - Pleadings - Amendment - Claimant bringing claim in High Court for compensation under Russian Civil Code - Russian law applying to claim pursuant to Council Regulation - Claimant subsequently applying for permission to amend particulars of claim - Defendants contending amendments raising new cause of action and time-barred - Whether English law or Russian law governing question of whether amendments raising new cause of action - Whether jurisdiction to permit amendments if time-barred -
The claimant, acting as the assignee of a Russian company, brought a claim in the High Court claiming compensation under the Russian Civil Code against the defendants, four Ukrainian businessmen, on the grounds that they had taken part in a dishonest scheme to misappropriate very substantial sums owed to the assignor. The second and fourth defendants applied to set aside the order permitting them to be served outside the jurisdiction on the basis that there was no serious issue to be tried, and the first and third defendants, who had submitted to the jurisdiction, sought summary judgment on the basis that the claim had no real prospect of success. The claimant then applied for permission to amend its particulars of claim. The judge, having held that the question whether the draft amendments involved the assertion of a new and time-barred cause of action was to be determined as a matter of English law, refused the claimant’s application and allowed the defendants’ applications. The claimant appealed.
On the claimant’s appeal—
Held, allowing the appeal, that, although by virtue of Parliament and Council Regulation (EC) No 864/2007 Russian law applied to the substance of the claims, the question of whether or not the draft amendments raised a new cause of action was a procedural matter which fell to be decided by the procedural rules of the forum; but that, although the judge had rightly applied that approach, on the facts, and contrary to the judge’s findings, the draft amendments did not involve the addition of essential facts to an existing cause of action; that, therefore, the draft amendments did not as a matter of English law raise a new cause of action that was time-barred, and the application to make the amendments ought to have been allowed; and that, further, the judge had erred in finding that there was no serious issue to be tried as against the second and fourth defendants and that the claim against the first and third defendants had no real prospect of success (post, paras 27, 32–33, 59, 64–65, 88–91, 95, 103–104).
Per curiam. The English court has jurisdiction under CPR r 17.4 to permit the addition of a new claim which is barred by limitation pursuant to a governing law identified by Regulation (EC) No 864/2007. Since in such circumstances that Regulation is the enactment by reason of which the foreign limitation period applies, it is a relevant “enactment” within CPR r 17.4(1)(b)(iii). The same applies if the governing law is identified by Parliament and Council Regulation (EC) No 593/2008 (post, paras 83–84).
APPEAL from Picken J
The claimant, PJSC Tatneft, acting as the assignee of a Russian company, Kompaniya Suvar-Kazan llc, brought a claim in the High Court claiming compensation under the Russian Civil Code against the defendants, Gennday Bogolyubov, Igor Kolomoisky, Alexander Yaroslavsky and Pavel Ovcharenko, on the grounds that they had taken part in a dishonest scheme to misappropriate very substantial sums owed to the assignor. The second and fourth defendants applied to set aside the order permitting them to be served outside the jurisdiction on the basis that there was no serious issue to be tried; and the first and third defendants, who had submitted to the jurisdiction, sought summary judgment on the basis that the claims had no real prospect of success. The claimant applied for permission to amend its particulars of claim. By a decision dated 8 November 2016 Picken J, sitting in the Commercial Court of the Queen’s Bench Division [
By application for permission to appeal at the rolled up hearing before the Court of Appeal on 25 July 2017, and with the court’s permission, the claimant appealed.
The facts are stated in the judgment of Longmore LJ, post, paras 1–10.
Lord Goldsmith QC, Richard Millett QC, Paul McGrath QC and David Davies (instructed by Akin Gump llp) for the claimant.
Ali Malek QC, Matthew Parker and Philip Hinks (instructed by Skadden, Arps, Slate, Meagher & Flom (UK) llp) for the first defendant.
Mark Howard QC, Jonathan Adkin QC, Ruth Den Besten and Tom Ford (instructed by Fieldfisher llp) for the second defendant.
Kenneth MacLean QC and Owain Draper (instructed by Mishcon de Reya llp) for the third defendant.
Tom Weisselberg QC (instructed by Byrne & Partners llp) for the fourth defendant.
The court took time for consideration.
18 October 2017. LONGMORE LJ handed down the following judgment of the court.
Introduction1 This is the judgment of the court to which all members of the court have contributed.
2 The claimant (“Tatneft”) appeals against the decision of Picken J dated 8 November 2016 by which he held that:
(1) The applications of the second defendant, Mr Kolomoisky, and the fourth defendant, Mr Ovcharenko, to set aside the order permitting service outside the jurisdiction succeeded on the basis that there was “no serious issue to be tried”.
(2) The applications of the first defendant, Mr Bogolyubov, and the third defendant, Mr Yaroslavsky, for summary judgment succeeded on the basis that Tatneft’s claims have “no real prospect of success”.
(3) Tatneft’s application for an amendment to the particulars of claim be refused as it raised a “new and time-barred cause of action”.
(4) The defendants’ application for discharge of the worldwide freezing order (“WFO”) granted against them succeeded.
3 Tatneft also makes an application to amend its grounds of appeal and to file a supplementary skeleton argument and further applications (which were not pressed at the hearing) to adduce further evidence of Russian law and to rely on further materials.
4 The appeal hearing was a rolled-up hearing for permission to appeal and, if permission was given, of the appeal. We give permission to appeal.
Background5 The judge set out the factual background at paras 3–12 of the judgment [2017] 1 All (Comm) 833. His detailed summary was derived from a case memorandum produced by the defendants as well as the skeleton arguments produced by Tatneft. We adopt his detailed summary for the purpose of this judgment. What follows is therefore a brief summary of the salient facts.
6 Tatneft is one of the largest oil producers in Russia with 33·6% of its shareholding owned by the Government of Tatarstan, Russia. Tatneft supplied oil to a refinery owned by a Ukrainian company, PJSC Transnational Financial and Industrial Company “Ukrtatnafta” (“UTN”). This oil was delivered directly to UTN’s oil refinery but was sold by Tatneft through a chain of intermediary companies:
(1) Tatneft sold the oil to its commissioning agent, a Russian company called Kompaniya Suvar-Kazan LLC (“S-K”), pursuant to a “Suvar-Tatneft commission agreement” dated 26 January 2007.
(2) S-K then sold the oil on to a Ukrainian company, Private Multi-Sector Production—Commercial Enterprise AVTO (“Avto”), pursuant to a “Suvar-Avto framework contract” dated 23 April 2007.
(3) Avto was commissioning agent for a Ukrainian company, Taiz LLC (“Taiz”). This arrangement was governed by a “Taiz-Avto commission agreement” dated 19 April 2007; Taiz then either sold the oil directly to UTN (under what was referred to as the “Taiz-UTN contracts”) or via another intermediary company, “Tekhnoprogress” under the “Tekhnoprogress-UTN Contracts”.
7 The respondents to this appeal are four businessmen: (i) Mr Bogolyubov, a Ukrainian businessman; (ii) Mr Kolomoisky, a Ukrainian-Israeli businessman; (iii) Mr Yaroslavsky, a Ukrainian businessman; and (iv) Mr Ovcharenko. Mr Ovcharenko became chairman of UTN’s management board in 2007. In February 2010, Mr Bogolyubov and Mr Kolomoisky were elected to UTN’s supervisory board. At around the same time, Mr Yaroslavsky also joined UTN’s supervisory board.
8 Shortly after Mr Ovcharenko became chairman, UTN’s payments for the oil delivered to it ceased. On 26 November 2007, S-K commenced proceedings in the International Commercial Arbitration Court at the chamber of Commerce and Industry of the Russian Federation (“ICAC”) in Russia against Avto for non-payment of sums due under the Suvar-Avto Framework Contract. Avto was not, however, in any position to pay given that it had not received payments pursuant to the contractual chain. On 18 April 2008 S-K entered into an agreement with Avto, Taiz and Tekhnoprogress pursuant to which Avto’s obligation to pay S-K was terminated and the rights of Taiz and Tekhnoprogress to receive payment from UTN were assigned to S-K. This agreement is referred to as “the 2008 assignment agreement”.
9 Further to the 2008 assignment agreement, S-K gave notice of the assignment to UTN and made a demand against UTN for 2,128,818,965·50 Ukrainian Hryvnia (“UAH”). S-K then issued proceedings against UTN in the Arbitrazh Court of the Republic of Tatarstan. By a written judgment dated 5 September 2008 (“the Tatarstan judgment”) the Arbitrazh Court concluded that UTN had given consent to the assignment and gave judgment for S-K, a decision that was upheld on appeal on 24 November 2008. Pursuant to the Tatarstan judgment, UTN was required to pay UAH 2,458,138,279·34 to S-K.
10 UTN, however, brought proceedings against S-K, Avto, Taiz and...
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