Ziyavudin Magomedov & Others v Konstantin Kuzovkov & Others

Hearing dates: 20 th – 21 st August 2024

Approved Judgment

This judgment was handed down remotely at 10.30am on Friday 4 th October 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).

A: The parties and the application

A1: The parties and the procedural background

The 1 ^st – 10 ^th Claimants (“the Applicants”) in these proceedings apply for “Norwich Pharmacal” relief against three financial services companies which share the brand “1291”. None of the three Respondents to the application is party to the underlying proceedings, which were commenced in 2023 and have already led to a number of judgments of the Commercial Court including a lengthy judgment of Butcher J dismissing the Claimants' application for various freezing orders: see [2023] EWHC 2655 (Comm).

The 1 ^st Respondent is a Liechtenstein company, 1291 Private Office Ltd (“1291 Private Office”). The 2 ^nd Respondent is a DIFC (Dubai International Financial Centre) company, 1291 Group (DIFC) Ltd (“1291 Dubai”). The 3 ^rd Respondent is an English company, 1291 Group Europe (UK) Ltd (“1291 UK”).

On 26 March 2024, Foxton J granted a without notice application made by the Applicants for permission to serve the application for Norwich Pharmacal relief (referred to in Foxton J's Order (“the Order”), and herein, as the “NP Application”), and any other documents in these proceedings, out of the jurisdiction on 1291 Private Office and 1291 Dubai. He also gave permission to serve the NP Application and any other documents in these proceedings on 1291 Private Office and 1291 Dubai by the following alternative methods of service, set out in paragraphs 2 (a) – (c) of the Order:

(a) On 1291 Private Office, by email to a firm of Liechtenstein lawyers which had been engaged by1291 Private Office, namely BWB Legal: the e-mail address identified in the Order was Ralph.Wanger@bwb.legal;

(b) On 1291 Dubai by email to a firm of Dubai lawyers, Global Advocates: the email address identified in the Order was Patric.McGonigal@globaladvocates.net;

(c) On both 1291 Private Office and 1291 Dubai, by post to the registered address of 1291 UK at 73 Cornhill, London, EC3V 3QQ.

Paragraph 3 of the Order contained provision for when documents served pursuant to the Order were deemed served.Paragraph 4 provided that the Respondents had the right to make an application to set aside or vary the Order under CPR r. 23.10. The time limit for the making of such an application in CPR r. 23.10 is 7 days following service of the Order.

The application which led to the Order was supported by a lengthy witness statement (his Second Witness statement – “Bushell 2”) of Mr Simon Bushell, the senior partner of Seladore Legal Ltd, the Applicants' solicitors. Foxton J was also provided with a 25-page skeleton argument, signed by leading counsel (not then Mr Morgan KC) and junior counsel, which set out the legal and factual basis for the NP Application itself, as well as for the orders for service out and alternative service which the Applicants sought.

At the time that Foxton J made the Order, he gave a direction which was communicated to the Applicants (and later to the Respondents) as follows. This features in the arguments of 1291 Private Office and 1291 Dubai. The directions were as follows:

“1. The application is to be listed for an expedited directions hearing once AOS have been filed at which the court will consider further directions including the issue of expedition.

Applications for expedition and listing of the Ds' jurisdiction challenge and SJ applications

1. This is a complex case and the issues relating to expedition and an appropriate time estimate cannot be resolved on paper.

2. There is to be a 2 hour directions hearing listed as soon as possible next term to consider the requests for expedition. Skeletons for that hearing are not to exceed 8 pages plus a 1 page timetable for the jurisdiction/SJ hearing showing how time would be allocated between the parties on that parties' estimates.

3. Parties should come armed with counsels' diaries for that directions hearing”

The directions hearing took place before Bright J on 7 May 2024. The Applicants, 1291 Private Office and 1291 UK were represented by counsel, and the judge read a letter from the solicitors for 1291 Dubai. Bright J decided to expedite the hearing of the application, and he gave directions for the service of evidence leading to a 1-day hearing in the week commencing 24 June 2024. In a later order dated 5 June 2024, the timetable for service of evidence was adjusted.

On the same day (5 June 2024), 1291 Private Office issued an application to set aside the orders made by Foxton J concerning alternative service in so far as it concerned that company. The basis of the application was that paragraph 2 (a) contravened CPR 6.40 (4), that it was not appropriate to order alternative service in England, and also that paragraphs 2 (a) and (c) were affected by the Applicants' failure to make full and frank disclosure on the without notice application. The application notice did not contain an application to set aside paragraph 1 of the Order, which granted permission to serve out of the jurisdiction. Mr Friedman confirmed in his oral submissions that no such application was being made. The application was supported by a witness statement of Ms Susan Thackeray, a partner of Kingsley Napley LLP. 1291 Private Office also served an expert report on Liechtenstein Law from a Liechtenstein lawyer, Dr Oliver Nesensohn LLM of LNR Nesensohn Rabanser.

On the same day, 1291 Dubai applied to set aside the orders made by Foxton J granting permission to serve out of the jurisdiction (paragraph 1 of the Order) and for alternative service insofar as it concerned 1291 Dubai (paragraphs 2 (b) and (c)). 1291 Dubai also sought a declaration that the service of the NP Application by e-mail on 28 March 2024 was ineffective. The application was supported by (i) a witness statement of Edward Eurof Lloyd-Lewis, a partner in Clyde & Co LLP, and (ii) a witness statement of Marc-André Sola, the Senior Executive Officer of 1291 Dubai.

There was no equivalent application by 1291 UK, since that company had been served within the jurisdiction and was not affected by the Order. 1291 UK did however serve a witness statement from Mr David Gregory, one of the directors of 1291 UK. It was apparent from that statement that 1291 UK opposed the NP Application.

On 19 June 2024, Mr Bushell served a witness statement (his sixth – “Bushell 6”) which responded to the evidence hitherto served by the three Respondents. The Applicants also served an expert report from a Liechtenstein lawyer, Philip Raich of Ospelt & Partner Attorneys at Law.

The matter was listed for hearing on 26 June 2024, but was vacated by Calver J on 25 June because a 1-day time estimate was plainly inadequate. The case was then relisted for hearing during the vacation, on 20–21 August 2024, with 1 day pre-reading.

Prior to the vacated hearing on 26 June 2024, and subsequently prior to the relisted August hearing, the Applicants, 1291 Private Office and 1291 Dubai have served further evidence or reports, in summary as follows:

(1) In relation to the application concerning 1291 Private Office, there are two further reports on Liechtenstein law from Dr Nesensohn, and one further report from Mr Raich;

(2) Mr Lloyd-Lewis has served a second witness statement on behalf of 1291 Dubai;

(3) The Applicants and 1291 Dubai have each served expert evidence, in the form of letters, addressing issues of Dubai and DIFC law. 1291's evidence comprises two letters (dated 31 May 2024 and 21 June 2024) from Global Advocacy and Legal Counsel. The Applicants' evidence comprises two letters (dated 18 June 2024 and 13 August 2024) from DLA Piper Middle East LLP.

A2: The NP order sought

The substance of the NP relief sought by the Applicants is set out in Paragraphs 3 and 4 of their proposed draft Order, as follows:

“3. By [4.30pm] GMT on [•] 2024 (or by later date agreed in writing with the Applicants):

(a) the Respondents shall each provide the Applicants with an affidavit, in each case givenby an officer of the relevant Respondent with knowledge of the truth of the matters deposed to, that provides: (i) The identity of the source of the enquiry communicated by Mr Muggli to Mr Bedjaoui on 25 November 2021 (the “Enquiry”) or an explanation with full particularity as to why it cannot do so;

(ii) an explanation of the searches undertaken to identify the source of the Enquiry to include an explanation of whether relevant documents in its possession or control have been destroyed and, if so, why;

(iii) An explanation of the searches undertaken following the email of Mr Kuzovkov of 14 December 2023 to attempt to find the source of the Enquiry;

(iv) The identity of any of the Respondents' clients with whom any of the Respondents communicated in connection with (1) the Enquiry, (2) Mr Kuzovkov's...