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Mrs Justice Moulder has today handed down judgment in PJSC Tatneft v Bogolyubov & Others, dismissing Tatneft’s $350 million claim against the four defendants in its entirety.
The 12-week trial which took place in October to December 2020 was the longest fully remote Commercial Court trial to date. The trial was the culmination of proceedings which were commenced in March 2016 when the Claimant also obtained a US$380 million worldwide freezing order against the defendants. The Court heard from witnesses and experts based in Russia, Ukraine, France and the US, who all gave evidence via video link, including remote simultaneous translation from Russian and Ukrainian into English.
Tatneft's claim against our client, Mr Kolomoisky, and three other Ukrainian individuals originated out of the supply of oil by Tatneft in 2007, through a chain of intermediary companies, to Ukrtatnafta JSC (“UTN”), the owner of an oil refinery in Kremenchug, Ukraine. Tatneft sold the oil via its commission agent, Kompaniya Suvar-Kazan LLC (“S-K”), with payment to be made back up the chain of companies to S-K, and then to Tatneft. In 2015, S-K entered bankruptcy and, in October 2015, it purported to assign various causes of action to Tatneft. Tatneft's own claim was already time-barred, but Tatneft brought a claim as assignee of S-K under Article 1064 of the Russian Civil Code (“RCC”), alleging that the Defendants had participated in a scheme to “siphon” oil payments out of the intermediaries through a series of sham transactions, thereby preventing payment by UTN up the chain to S-K.
Tatneft’s claim failed at the first hurdle after Mrs Justice Moulder concluded that the claim was time-barred under the 3-year Russian law limitation period. The Judge found that S-K had actual knowledge of the required elements of its right to bring a claim prior to 31 August 2010 (and, in any event, prior to 23 March 2013 when the 3-year Russian law limitation period expired). In reaching this conclusion, Mrs Justice Moulder considered the evidence of two senior individuals at Tatneft, concluding that both had given false evidence that was contradicted both by their own witness statements and also by contemporaneous documents. The Judge also noted that there was no satisfactory explanation for the absence of evidence from other key Tatneft employees who would have had knowledge of material events. As a result, it was unnecessary for the Judge to address a number of other issues presented during the trial.
As part of her analysis, the Judge also found that Tatneft had failed to preserve and provide proper disclosure of documents under its control. The judge noted that there was a striking lack of documents showing communications between Tatneft and S-K relevant to the issues. She also found Tatneft had failed to provide satisfactory evidence to the court concerning the deletion and loss of emails of two key Tatneft individuals for relevant date periods, in circumstances where document retention policies were purportedly in place. In addition, following our client's application to inspect legal advice over which Tatneft was found to have waived privilege, documents were disclosed during trial which contradicted the evidence of Tatneft's witnesses as to the nature of the 2015 assignment from S-K to Tatneft, casting doubt on Tatneft's case as first presented to the Court in 2016 and maintained for the next 4 years.
Tatneft spent some £87 million pursuing its claim to trial. However, as a result of the serious deficiencies in Tatneft’s evidence and the adverse inferences to be drawn, Mrs Justice Moulder concluded that the probability was that Tatneft had the requisite knowledge prior to August 2010, that Tatneft would have shared that knowledge with S-K at least prior to March 2013. Therefore, any claim S-K might have was time-barred, the defendants were not prevented from raising this defence, and Tatneft's assigned claim should be entirely dismissed.