WWRT Limited v Kostiantyn Valentynovych Zhevago
| Court | Queen's Bench Division (Commercial Court) |
| Judge | Mr Justice Jacobs |
| Neutral Citation | [2024] EWHC 122 (Comm) |
| Date | 26 January 2024 |
| Year | 2024 |
| Counsel | Nathan Pillow Kc,Stephen Donnelly,James Sheehan,Katherine Ratcliffe |
Neutral Citation Number: [2024] EWHC 122 (Comm)
Case No: CL-2021-000731
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 26/01/2024
Before :
MR JUSTICE JACOBS
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Between :
WWRT LIMITED Claimant
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KOSTIANTYN VALENTYNOVYCH ZHEVAGO Defendant
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Nathan Pillow KC and Stephen Donnelly (instructed by Rosling King LLP) for the
Claimant
James Sheehan and Katherine Ratcliffe (instructed by Reynolds Porter Chamberlain LLP)
for the Defendant
Hearing dates: 18th – 19th December 2023
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Approved Judgment
This judgment was handed down remotely at 3:30pm on Friday 26th January 2024 by
circulation to the parties or their representatives by e-mail and by release to the National
Archives
(see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).
.............................
MR JUSTICE JACOBS
MR JUSTICE JACOBS
Approved Judgment
WWRT v Zhevago
MR JUSTICE JACOBS:
A: Introduction
A1: The parties and the proceedings
The application
1. This is an application by the Defendant (“Mr Zhevago”) to challenge the jurisdiction
of the English court in relation to proceedings brought against him by the Claimant
(“WWRT”). Mr Zhevago is a Ukrainian citizen, and the present proceedings concern
his alleged conduct concerning a Ukrainian bank. WWRT is an English company,
albeit owned as to 80% by another Ukrainian citizen and a Ukrainian qualified
lawyer, Ms Olga Gutovska.
2. By an application notice dated 15 September 2022, Mr Zhevago seeks declarations
and orders that:
(1) The court has no jurisdiction, or alternatively will not exercise its jurisdiction
(and the claim will be stayed), in relation to the claim brought by WWRT;
(2) The Order of Moulder J dated 20 May 2022 granting WWRT permission to
serve its claim out of the jurisdiction and for alternative service be set aside.
The parties
3. WWRT brings the present proceedings as the ultimate assignee of PJSC Finance &
Credit Bank (“the Bank”), which is a Ukrainian entity. WWRT is itself an English
company, and it is owned as to 80% by Ms Gutovska and as to 20% by a partner in
Rosling King LLP, WWRT’s solicitors. WWRT is a special purpose vehicle
incorporated on 26 February 2020, which is long after the conduct which forms the
subject of its present claims. There is no evidence of any connection between WWRT
and either the Bank or Mr Zhevago.
4. Since September 2015, the Bank has been insolvent and its business taken over by the
Deposit Guarantee Fund of Ukraine (“the DGF”). WWRT’s claim derives from two
assignments. The initial assignment was from the DGF to Financial Company
Horizon LLC (“Horizon”), and there was then a further onward assignment from
Horizon to WWRT.
5. The effect of the DGF/Horizon assignment is a critical question in the context of
whether there is a “serious issue to be tried”. This is because Mr Zhevago contends
that this assignment did not effect a transfer to Horizon of the claims which WWRT
seeks to bring in these proceedings. If there was no such transfer to Horizon under the
first assignment, WWRT cannot have acquired, under the second assignment, rights
which Horizon did not have. This issue is addressed in Section B below.
6. Mr Zhevago’s background is described in the witness statement of his solicitor, Mr
Daniel Wyatt, who is a partner in Reynolds Porter Chamberlain LLP (“RPC”). He
describes Mr Zhevago as a very successful Ukrainian entrepreneur, with substantial
management and investment experience gained over a 30-year business career in
Ukraine. Since 1996, Mr Zhevago has developed diverse worldwide business interests
MR JUSTICE JACOBS
Approved Judgment
WWRT v Zhevago
across multiple sectors, including in the fields of metallurgy, ferrous deposits and
ferromagnetic ore, engineering, transport, manufacturing, food, pharmaceuticals,
shipbuilding, energy and banking, employing thousands of workers in Ukraine and
elsewhere. Aged 35, he was the first Ukrainian national to list a company, now
Ferrexpo plc (“Ferrexpo”), an iron ore miner and trader, to a major international stock
exchange in 2007. It is Swiss headquartered with its operating base in central Ukraine,
with several large institutional investors as shareholders, and as at 15 September 2022
had a market capitalisation of approximately £887m.
7. Mr Zhevago had a 95% indirect shareholding in the Bank. In September 2015, the
National Bank of Ukraine placed the Bank into administration, and then into
liquidation in December 2015, putting the DGF in control of its operations. On 7
November 2019 the DGF assigned the Bank’s rights under certain loan agreements to
Horizon. On 12 January 2021, Horizon assigned its rights to WWRT.
The proceedings and the evidence served by the parties
8. The present claim was issued by WWRT on 13 December 2021. The four-month
period of validity of the claim form for service in the jurisdiction therefore expired on
13 April 2022. WWRT was unable to serve Mr Zhevago within the jurisdiction, and
the evidence indicates that this is because he has not in fact come to England at any
time since the claim was issued. WWRT therefore, on 12 May 2022, sought
permission to serve him out of the jurisdiction. The application for permission to
serve out was supported by a witness statement of Ms Gutovska. Her statement
exhibited a statement on Ukrainian law from Dr Vadim Tsiura, a Ukrainian attorney,
who is a Doctor of Laws and a Professor of Civil Law at the School of Law of Taras
Shevchenko National University of Kyiv in Ukraine. His statement addressed issues
of substantive Ukrainian law.
9. On 20 May 2022, Moulder J granted permission to serve out, and also granted an
application for alternative service. The methods for alternative service included
service on RPC. Moulder J’s order was therefore made just under 3 months after the
Russian invasion of Ukraine. The effect of that invasion on the Ukrainian court
system is a central issue on the forum conveniens issues addressed by the parties.
10. Mr Zhevago’s application challenging jurisdiction was issued in September 2022. The
evidence in support of the jurisdictional challenge comprised a witness statement
from Mr Wyatt, based upon information obtained from Mr Zhevago and/or others
assisting him, and expert evidence from Mr Oleg Alyoshin. Mr Alyoshin is a
Ukrainian lawyer and a partner in the firm of Vasil Kisil & Partners. Mr Alyoshin
addressed a large number of issues of Ukrainian law, as well as questions concerning
the functioning of the Ukrainian court system following the February 2022 Russian
invasion.
11. WWRT’s responsive evidence comprised a further witness statement from Ms
Gutovska, a responsive report from Dr Tsiura, and a report from Mr Vadim
Medvedev. Mr Medvedev is a practising Ukrainian lawyer, and his report addressed
the availability and functioning of the Ukrainian courts following the Russian
invasion and various related matters relevant to the forum non conveniens argument.
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