Verlox International Ltd v Igor Antoshin
| Jurisdiction | England & Wales |
| Judge | Mr Justice Foxton |
| Judgment Date | 20 January 2023 |
| Neutral Citation | [2023] EWHC 86 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2016-000831 |
[2023] EWHC 86 (Comm)
Mr Justice Foxton
Case No: CL-2016-000831
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Mr Sychev in person
Richard Eschwege (instructed by Simmons & Simmons LLP) for the First Defendant
Helen Morton (instructed by PCB Byrne LLP) for the Fourth Defendant
Hearing date: 13 January 2023.
Judgment Approved
by the court for handing down (subject to editorial corrections)
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HONOURABLE Mr Justice Foxton
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Friday 20 January 2023 at 10:00am.
The Honourable
Introduction
On 8 July 2022, Committal Applications were issued by the Claimants against:
i) Edward Crosse, a partner in Simmons & Simmons LLP who act for the First Defendant ( Mr Antoshin);
ii) Vladimir Yarkov, a Russian lawyer who was retained as an expert witness by Mr Antoshin; and
iii) Anthony Riem, a partner in PCB Byrne LLP who act for the Fourth Defendant ( PhosAgro).
( the 8 July Applications).
On 22 August 2022, a further Committal Application was issued in the name of Mr Sychev against Mr Antoshin) ( the 22 August Application).
The committal applications against Mr Crosse and Mr Riem have been served.
At this hearing:
i) Mr Sychev asks the court to grant permission to issue the 8 July Applications. It is accepted that permission is required for those applications under CPR 81.3(5)(b), on the basis that the contempt alleged is “an allegation of knowingly making a false statement in any affidavit, affirmation or other document verified by a statement of truth ….”.
ii) The First and Fourth Defendants submit that permission is required under the same provision to issue the 22 August Application, and invite the court to refuse permission for all four applications. If the 22 August Application does not fall within CPR 81.3(5)(b), they ask the Court to stay or strike out the committal application under its inherent jurisdiction.
iii) Mr Sychev seeks orders which will enable the applications against Professor Yarkov and Mr Antoshin to be served.
The background
I can take a summary of the background to the case from the judgment of Mr Justice Picken, in Verlox International Ltd and Sychev v Antoshin and others [2022] EWHC 2667 (Comm).
In late December 2016, the First Claimant ( Verlox) and Mr Sychev issued proceedings against Mr Antoshin, PhosAgro and the Fifth Defendant ( Mr Guryev) bringing, inter alia, claims said to arise out of an alleged oral agreement ( the Share Agreement), made on or around 16 May 2011 and governed by Russian law. Verlox is a Belize shell company with no apparent assets of its own. It is presently controlled entirely by Mr Sychev.
From 2002 until February 2013, Mr Sychev was employed by entities affiliated with PhosAgro, and in particular RBC PhosAgro LLC which is a subsidiary of PhosAgro. Verlox's claim related to remuneration for work alleged to have been carried out by Mr Sychev which it was said fell outside the scope of his employment contract, and for which it is said he was entitled to remuneration over and above the amounts payable under the employment contracts in the sum of $13m and a 1% shareholding in PhosAgro. The work in question related to tax litigation involving the PhosAgro companies, and in particular work in defending substantial tax claims brought by the Russian authorities against a company called Apatit.
Those claims for remuneration were assigned by Mr Sychev to Verlox, which was also asserting claims against the Second and Third Defendants. Verlox's claim was for a declaration that loans purportedly entered into between Verlox and those companies were invalid, because the amounts purportedly “loaned” were in fact part-payments of the amounts due to Mr Sychev under the Share Agreement. A perceived benefit of assigning the claims under the Share Agreement to Verlox appears to have been that it would provide a basis for this court having jurisdiction over those claims, relying on the “necessary or proper party” service out gateway and the alleged factual overlap between Verlox's own claims against the Second and Third Defendants, and the assigned claims asserted against the other Defendants.
At inception, therefore, while Verlox and Mr Sychev were both claimants, the primary claim was made by Verlox, with only a claim in the alternative (presumably if the assignment was held to be invalid) by Mr Sychev. On 23 June 2017, the Claimants (then represented by Fieldfisher LLP) applied for permission to serve the proceedings out of the jurisdiction, and for an extension of time to effect service. Mr Justice Teare directed that the application for permission to serve out should be made at an oral hearing rather than (as is usually the case) on paper. The skeleton argument filed for that hearing identified no claim by Mr Sychev, and advanced no basis on which it was said that there was a basis for serving any claim by Mr Sychev under the Share Agreement out of this jurisdiction. The head of jurisdiction relied upon – the “necessary or proper party gateway” – would not have been available in respect of claims asserted by Mr Sychev.
While Mr Justice Teare expressed certain reservations regarding the connection between the claims and England, describing the connection with this jurisdiction as “tenuous”, he nonetheless granted permission to serve out and an extension of time for service until 30 June 2018. For reasons which it is not necessary to go into, it took some time to effect service. Once this has been done, on 16 April 2021, Mr Antoshin lodged a jurisdiction application, challenging the jurisdiction of the English Court. PhosAgro and Mr Guryev also lodged jurisdiction challenges.
The evidence filed in support of those jurisdictional challenges included the material which gives rise to today's application.
On 14 April 2021, Mr Alec Cairney of Asserson Law Offices served a witness statement in support of Mr Antoshin's jurisdiction challenge. That statement alleged that there had been a breach of the duty of full and frank disclosure at the “without notice” hearing before Mr Justice Teare because there had been a failure to disclose a copy of Mr Sychev's employment agreement and job description ( the Disputed Document). The same document was relied upon in support of the contention that there was no “serious issue to be tried”. Paragraph 6 stated that the exhibits (which included the Disputed Document) were “true copies”. Mr Cairney said that Mr Antoshin had authorised him to file the witness statement. Mr Cairney signed the statement of truth. Mr Sychev contends that the Disputed Document is a forgery, and this forms the basis of his committal application against Mr Antoshin.
On 14 April 2021, Mr Antoshin served the expert report of Professor Yarkov, a Russian lawyer ( the Yarkov First Report):
i) At paragraph 47 of that report, Professor Yarkov gave evidence that a Russian court would have jurisdiction to hear the claims brought by Verlox. He stated that, in reaching this conclusion:
“I do not assess the existence or absence of any contractual relations between the parties, the nature of such claims is not determined, and neither those relations, nor the issues of their performance or non-performance are assessed. When referring to the rules of para 6, Part 3, Art 402 of the CC RF, the Claimants' claims are taken as a basis in the form they are stated in the claim. At the stage of accepting a claim for hearing, the Russian court is guided by formal criteria relying on the claims formulated by the claimant, without assessing them”.
ii) At paragraph 50, he stated:
“Since obligations under the agreement, as follows from the Claimants' statements, should have been performed on the Russian territory, the jurisdiction of the Russian court in respect of this claim follows from paragraph 6, Part 3, Art 402 of the CC RF”.
On 8 March 2022, Professor Yarkov served a second report ( the Second Yarkov Report) stating:
“Thus, my conclusion about the claims of the Claimants being governed by Russian law not only follows from the detailed legal analysis I have presented but also follows from the documents submitted by the Claimants”
(the preceding paragraphs referring to the fact that the Particulars of Claim had pleaded “the agreements referred to above were governed by Russian law” and pleaded various provisions of Russian law, as had the skeleton argument filed before Teare J).
These paragraphs form the basis of the committal application against Professor Yarkov.
On 8 March 2022, Mr Crosse served a reply witness statement responding, inter alia, to the allegation of forgery ( Crosse 2):
i) At paragraph 43, he stated “the allegation of forgery is another assertion of dishonesty made by Mr Sychev, which is unsupported by evidence. Needless to say, it is denied by my client. I am instructed that my client was not, in any event, responsible for drafting or executing the job description. He received a copy via his Russian attorneys from Mr Sychev's former employer”.
ii) At paragraph 49A, he referred to paragraphs 298–304 of Mr Sychev's third witness statement, and stated that in this paragraph Mr Sychev “repeats his allegation that his job description is a forgery, but does not provide any evidence in support”.
iii) Paragraph 70...
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Richard Achille v Philip Calcutt
...and 27 November 2017 (being a few days after the date on the Defence in that action). 20 In Verlox International Ltd v. Antoshin [2023] EWHC 86 (Comm), Foxton J considered an allegation of contempt that the defendant had authorised and caused his solicitor to make a false statement. The ju......