WWRT v Serhiy Tyshchenko
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Bacon |
| Judgment Date | 25 January 2023 |
| Neutral Citation | [2023] EWHC 79 (Ch) |
| Docket Number | Case No: BL-2020-001416 |
| Court | Chancery Division |
[2023] EWHC 79 (Ch)
Mrs Justice Bacon
Case No: BL-2020-001416
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building
Fetter Lane
London, EC4A 1NL
Andrew Ayres KC and James Mitchell (instructed by Rosling King LLP) for the Claimant
The Defendants appeared in person
Hearing dates: 20–21 December 2022
Approved Judgment
This judgment was handed down remotely at 9 a.m. on 25 January 2023 by circulation to the parties or their representatives by email and by release to the National Archives.
Introduction
This is the hearing of four applications by the defendants ( Mr and Mrs Tyshchenko) which seek to strike out or stay the claim, or otherwise revoke the worldwide freezing order imposed on the defendants. The claimant ( WWRT) contends that the applications are abusive, in that they repeat arguments already rejected by this court at earlier stages of the proceedings; and that the applications should in any event be dismissed as being totally without merit.
The applications are brought in the context of a fraud claim brought by WWRT in relation to loans made by the Ukrainian bank JSC Fortuna Bank ( the bank) on various dates during the years 2010–2014. WWRT's case is that the borrowing companies were all connected with one or both of the defendants; that the defendants directed, caused and/or procured the borrowing companies to take out the loans with the bank; that the borrowers did not engage in any substantial commercial activity and had no intention of repaying the loans; and that the defendants were beneficiaries of the alleged fraudulent scheme. The claim is brought under Article 1166 of the Civil Code of Ukraine, and it is common ground that the substance of that claim is governed by Ukrainian law.
A worldwide freezing order was initially granted at a hearing in September 2020 without notice to the defendants: [2020] EWHC 2409 (Ch) ( the September 2020 judgment). Both defendants were then served in this jurisdiction. The order was continued following a hearing in March 2021, with judgment handed down in April 2021: [2021] EWHC 939 (Ch) ( the April 2021 judgment).
Numerous further applications have been brought since then by one or both of the defendants, as set out in more detail later in this judgment. The present applications are as follows:
i) Mr Tyshchenko's application dated 19 May 2022 ( the May application) for a stay of proceedings and strike out of the claim, on the basis of judgments of the Ukrainian courts in related proceedings, and complaints about the authenticity of the evidence relied upon by WWRT.
ii) Parts of Mr Tyshchenko's application dated 29 June 2022 ( the June application) for revocation of the worldwide freezing order and an order that the court refuse jurisdiction, on the basis of allegedly false information provided to the court and inconsistency with other judgments.
iii) Mrs Tyshchenko's application dated 8 July 2022 ( the July application) for a stay or strike out of the proceedings on a series of grounds, mainly based on Ukrainian law and decisions of the Ukrainian courts.
iv) An application by both defendants dated 22 October 2022 ( the October application) for a stay or strike out of the proceedings on the grounds of claims brought by the Deposit Guarantee Fund of Ukraine ( DGF) in the Kyiv Commercial Court, and criminal proceedings initially opened in Ukraine but then closed in November 2019.
On 29 July 2022, pursuant to an order dated 1 July 2022, the May and June applications were listed to be heard together at this hearing. The 1 July order also provided for any application by Mrs Tyshchenko on essentially the same grounds as the May application to be listed for the same hearing, if issued and served by 8 July 2022.
The October application was initially listed to be heard in February 2023, but was later directed to be addressed at this hearing in so far as possible, provided that if there was a new argument which WWRT was unable to address, that would be left over for the February hearing. In the event, WWRT has not identified any argument in that application which it is unable to address, and I will therefore consider below the issues in that application alongside the other applications.
On 14 December 2022, less than a week before the start of the present hearing, Mr Tyshchenko applied to adjourn this hearing on the grounds of (in particular) a further judgment which had been handed down by the Kyiv Commercial Court on 28 November 2022, which he said provided a further basis to strike out WWRT's claim in these proceedings. That application could not be accepted by the court, since it was filed in breach of a limited Civil Restraint Order imposed on Mr Tyshchenko on 12 December 2022. The following day, therefore, the adjournment application was refiled by Mrs Tyshchenko. On 16 December directions were given that the adjournment application would be heard at the start of the hearing on 20 December, and that if it was refused then the hearing would proceed as listed.
On 20 December 2022 I refused the adjournment application and recorded that it was totally without merit, for reasons given in an ex tempore ruling on that date. Mrs Tyshchenko then asked that the hearing of the four listed applications should be adjourned to the following day; that request was refused and the hearing of the applications therefore proceeded as per the directions given on 16 December.
Mrs Tyshchenko drafted the defendants' skeleton argument for the hearing and made submissions at the hearing on behalf of both defendants. Mr Tyshchenko, who speaks only limited English, was present at the hearing and confirmed that he endorsed Mrs Tyshchenko's submissions and had nothing to add to those. As at previous hearings, WWRT was represented by Mr Ayres QC and Mr Mitchell.
Factual background
I have described at §2 above the essence of WWRT's fraud claim against the defendants, relating to loans granted by JSC Fortuna Bank. That claim is summarised in similar terms in the September 2020 and April 2021 judgments granting and continuing the freezing order (respectively).
In 2017 the bank was declared insolvent, and came under the control of the DGF. The DGF auctioned tranches of unpaid loans owed to the bank, and as part of that process the loans that are the subject of the present proceedings were assigned to a Ukrainian company now called Star Investment One LLC ( Star) in February 2019 ( the First Assignment).
There are disputed versions of the translation of that agreement. WWRT's translation of the key clause, clause 1.1, reads:
“1. Subject matter of the Agreement
1.1 In accordance with this Agreement in the order and on conditions agreed by this Agreement, Seller transfers into the ownership of the Buyer, and the Buyer takes ownership of the proprietary rights, which have accrued and/or may accrue in future and which include:
– Right of claim to borrowers, property guarantors and financial guarantors … which accrued due to signed agreements … and/or on other grounds provided in annex no 1 to this Agreement (hereinafter – Rights of claim);
…
– other rights, which are connected to or arise out of the Rights of claim.”
Mr and Mrs Tyshchenko's translation of clause 1.1 reads:
“1.1 Hereunder, on terms and conditions specified herein, the Seller transfers into ownership, and the Buyer accepts into ownership the property rights occurred and/or to be occurred in future and which include:
– receivables from debtors, property surety providers and financial surety providers … occurred under the Agreements concluded … and/or other grounds specified in the Annex No 1 hereto (hereinafter referred to as the Legal claim);
…
– other rights related or arising out of the Legal claims.”
For present purposes I do not consider that anything turns on the specific version of the translation of this clause.
On 23 March 2020 Star sold its rights under the First Assignment to WWRT ( the Second Assignment). That is the basis on which WWRT commenced the present proceedings.
As set out in the September 2020 judgment at §§11–12, the First Assignment, from the DGF to Star, is governed by Ukrainian law, whereas the Second Assignment, from Star to WWRT, is governed by English law.
Procedural background
The procedural background leading up to the present hearing is somewhat complex, but important for the purposes of (in particular) the submissions of WWRT that almost all of the arguments advanced in the present applications should be dismissed as being an abuse of process, on the ground that they either were advanced at previous hearings, or could and should have been advanced at those hearings.
I will therefore summarise the relevant aspects of the present proceedings. There are also ongoing domestic bankruptcy proceedings in relation to both defendants; those bankruptcy proceedings are not, however, relevant to these applications.
Following the grant of the initial freezing injunction at the without notice hearing on 4 September 2020, the defendants were served in this jurisdiction and were initially both represented by solicitors and counsel.
On 30 October 2020 the defendants made an application for extensions of time and directions, which became an application for a trial of preliminary issues of Ukrainian law. That application was rejected by Meade J at a hearing on 3 December 2020: [2020] EWHC 3584 (Ch). He gave directions for the continuation of the injunction and for the defendants' proposed application to contest the jurisdiction of the court.
Mr Tyshchenko then instructed a new solicitor and counsel team, and applied to challenge the jurisdiction of the court and discharge the freezing order. Mrs...
To continue reading
Request your trial
-
WWRT Ltd v Serhiy Tyshchenko
...2409 (Ch), and a judgment dismissing numerous applications by the defendants seeking to strike out or stay the present proceedings [2023] EWHC 79 (Ch). Following recent case management conferences, the trial in these proceedings has now been set down to commence in January 2025, with a tim......