Vadim Don Benyatov v Credit Suisse Securities (Europe) Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division
JudgeRoger ter Haar
Judgment Date22 January 2020
Neutral Citation[2020] EWHC 85 (QB)
Docket NumberClaim No. QB-2018-001043
Date22 January 2020

[2020] EWHC 85 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Roger Ter Haar Q.C. SITTING AS A DEPUTY HIGH COURT JUDGE

Claim No. QB-2018-001043

Between:
Vadim Don Benyatov
Claimant
and
Credit Suisse Securities (Europe) Ltd
Defendant

Charles Ciumei Q.C., Andrew Legg and Naomi Hart (instructed by Scott+Scott UK LLP) for the Claimant

Paul Goulding Q.C., Paul Skinner and Emma Foubister (instructed by Cahill Gordon & Reindel (UK) LLP) for the Defendant

Hearing dates: 9, 10 and 11 December 2019

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.

Roger ter Haar Q.C.:

Table of contents

Paragraph

The Facts

4

Procedural history in this Court

34

Summary judgment

Proper approach and legal test

47

Meaning of “No real prospect of succeeding”

50

Meaning of “No other compelling reason [for] a trial”

55

Strike out

57

No reasonable grounds for bringing the claim

60

Abuse of process or otherwise likely to obstruct just disposal

61

Overlap between summary judgment and strike out

63

Timing of any such application

64

Procedural objections to the application to strike out and for summary judgment

66

Mandatory injunction and specific performance

91

The Pleaded Causes of Action

93

Obligations under the contract of employment with the Defendant

96

Indemnity

97

Obligation of Trust and Confidence

159

Paragraphs 19.3 to 19.6 of the Particulars of Claim

174

Paragraph 19.7 of the Particulars of Claim

179

Obligations under the contract of employment with the Defendant: conclusions

189

Obligations arising under the letter dated 1 December 2014

191

Obligations arising from oral assurances

200

Duties of care in tort

204

Breach

240

Causation

242

Remoteness

250

Proposed Amendment

252

Strike out and Summary Judgment: Conclusions

260

Conditional Order

262

Security for Costs

271

1

This is the judgment on the Defendant's application under CPR 3.4(2)(a) to strike out the Claimant's claim and/or for summary judgment under CPR 24.2. In the alternative to the dismissal of the claim, the Defendant seeks a conditional order for £1.15 million and/or an order for security for costs.

2

The Claimant claims over £46 million by way of loss of earnings, following his conviction in 2013 in Romania where he worked for the Defendant. The Claimant, who is now resident in the United States of America, claims this sum by way of (i) implied or equitable indemnity; and/or (ii) damages for breach of (a) implied duties in his contract of employment; and/or (b) a duty of care to protect him from economic losses and criminal conviction arising from the performance of his duties as an employee; and/or (c) assurances of support.

3

The application before me lasted two and a half days. Over seventy cases or textbook extracts were cited to me. The length of this judgment is an indication of the difficulty of many of the issues raised. On any view, this is an unusual application for a strike out or summary judgment.

The Facts

4

The Claimant commenced employment on 15 December 1997 as an investment banker with Credit Suisse Group as Head of Russian Oil and Gas, based in Moscow.

5

In 2000 he returned to London to run European Emerging Markets Utilities for the Defendant.

6

In 2001 the Claimant started travelling to Romania for Credit Suisse business.

7

In 2005 the Claimant entered into the contract of employment in effect at all material times. His job title was “Managing Director (class of 2005)”. He was to work within the European Energy Group, Corporate & Investment Banking Division.

8

According to paragraphs 27 and 28 of his witness statement the Claimant worked on the privatisation of three companies in Romania before the transaction which led to his downfall.

9

From about 2005 the Claimant began working for the Defendant on the privatisation of the Romanian state-owned S.C. Electrica Muntenia Sud SA. The Claimant and the Defendant were working for a prospective purchaser, Enel SpA, an Italian company. According to the Claimant:

“This was a standard “buy-side” mandate where we offered support to our Italian colleagues in their work for our client, Enel, primarily by way of on the ground advice. This included, for instance, regular updates on the latest developments in the thinking at the Ministry of Energy, advice on bidding strategy and weekly phone calls to discuss the competitive landscape. In large part due to our advice, Enel won the auction, and were close to completing the purchase at the end of 2006.”

10

In about May 2006 the Claimant was promoted to Head of European Emerging Markets. For further background in respect of the period up to his arrest, see paragraphs 26 to 29 of the Particulars of Claim which I have set out at paragraph 94 below.

11

The Claimant described the circumstances of his arrest and detention in paragraphs 38 to 40 of his witness statement:

“38. In November 2006 I had travelled to Bucharest for two reasons: first to discuss the Romgas and Romtelecom privatisation mandates, and second to help Ministry of Energy officials with their presentation to the new government on the privatisation of Petrom that had taken place a few years previously.

“39. I was staying in the Hilton Hotel in Bucharest. In the early hours of 22 November 2006, I awoke to knocking at my hotel room door. I got out of bed, went to look through the spyhole in the door and was shocked to see masked men with machine guns on the other side of the door. I ran to the telephone and called the operator, who sent security up to my room. Hotel security confirmed that the individuals outside my door were secret police officers with a warrant for my arrest. I put on some clothes and opened the door. I was arrested and immediately led away from the hotel in handcuffs, without having any opportunity to contact my family, colleagues or the US Embassy.

“40. I was detained in a jail in Bucharest for 56 days, over the Christmas and New year period, during which time I was placed in a cell with serious criminals; two were heroin dealers and another was a serial burglar. After that I was placed under ‘house arrest’ – forbidden from leaving the city of Bucharest – until August 2007.”

12

As set out in that passage, the Claimant was arrested on 22 November 2006. On the same day the Defendant arranged legal representation for him.

13

On 24 November 2006 the Chief Operating Officer and General Counsel of Credit Suisse wrote to the President of Romania and the Romanian Minister of Justice seeking a meeting with the Minister. 1

14

Steps were taken by Credit Suisse to protect their and the Claimant's interests. The Claimant's case is that those steps were inadequate. These steps included the engagement of Clifford Chance Badea (the Romanian associate of the distinguished international law firm) to provide legal services to the Claimant.

15

In August 2007 the Claimant was permitted to leave Romania.

16

In September 2007 the Claimant was charged with espionage and the establishment of an organised criminal group.

17

The Claimant continued in the employment of the Defendant, moving in June 2012 into the Defendant's Fixed Income Division.

18

In November 2013 there were hearings in the Romanian Court, which led to the Claimant's conviction on 3 December 2013. He was then sentenced to 10 years' imprisonment.

19

This was rapidly followed on 5 December 2013 by the revocation by the Financial Conduct Authority in the United Kingdom of the Claimant's status as an approved person.

20

Following the conviction, the Defendant took a number of steps to try to assist the Claimant. These included the engagement of a consultancy firm founded by a former cabinet minister in the last Labour Government. It is a measure of

the perception of the political nature of the problems facing both the Claimant and the Defendant that a recommendation was for the Defendant to engage a US statesperson or former senior member of the US administration to engage with the Romanian government on an informal basis. 2 One of the Claimant's complaints is that this was not done
21

On 1 December 2014 the Defendant wrote to the Claimant and a colleague of the Claimant as follows 3:

“We share your frustration at the process to date, your anxiety regarding the final outcome of the case, and your desire to exhaust every appropriate avenue that could enhance the chances of a positive outcome in the case.

“The bank has examined a range of options to support a positive outcome, including the option you alluded to of having a prominent individual express our concerns regarding the irregularities and due process issues of the case, and the signals a decision to uphold the convictions would send regarding the business and judicial climate in Romania.

“The bank has reached a settled view that this type of intervention is not appropriate in advance of a final verdict. There is significant risk that prior to the conclusion of the case, such an intervention could be misconstrued as attempting to influence the Romanian judicial process, with negative consequences for the case outcome and the reputation of the bank. The current Romanian political climate and government transition heightens this risk. Relevant diplomatic stakeholders have advised on the basis of recent events of a similar nature, that it would be unadvisable to pursue such an intervention.

“However, we are exploring options for additional avenues...

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4 cases
  • Bank of Scotland Plc v Peter Lisney Hoskins
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    • 17 November 2021
    ...concerns striking out, I was referred to the recent decision of Roger ter Haar QC in Benyatov v Credit Suisse Securities (Europe) Ltd [2020] EWHC 85 (QB). There the judge said: “57. As a preliminary matter, the Court of Appeal explained in Partco Group Ltd v Wragg [2002] EWCA Civ 594 at [......
  • Rupert St John Webster v John Francis Penley
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    ...concerns striking out, I was referred to the recent decision of Roger ter Haar QC in Benyatov v Credit Suisse Securities (Europe) Ltd [2020] EWHC 85 (QB). There the judge said: '57. As a preliminary matter, the Court of Appeal explained in Partco Group Ltd v Wragg [2002] EWCA Civ 594 at [......
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    ...that type of fraud. 25 In that regard Mr Sims also referred to the recent decision in Benyatov v Credit Suisse Securities (Europe) Ltd [2020] EWHC 85 (QB), at [56], as a reminder that where the case has or may have wider ramifications beyond its own particular facts then that can provide s......
  • Caledonian Maritime Assets Ltd v HCC International Insurance Company Plc
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    ...[2007] EWCA Civ 725.” 29 In Webster v Penley [2021] EWHC 3386 (Ch), HHJ Matthews QC quoted a later decision, Benyatov v Credit Suisse [2020] EWHC 85 (QB), which added to the passage above that: “Complex claims, cases relying on complex inferences of fact, and cases with issues involving m......

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