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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> PJSC Bank "Finance And Credit" & Anor v Valentynovich & Ors  EWHC 2522 (Ch) (21 September 2021)
Cite as:  EWHC 2522 (Ch)
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BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
CHANCERY DIVISION (FINANCIAL LIST)
7 Rolls Building
London EC4A 1NL
B e f o r e :
|(1) PJSC BANK "FINANCE AND CREDIT"
(2) DEPOSIT GUARANTEE FUND OF UKRAINE
|- and -
|(1) KOSTYANTIN VALENTYNOVICH ZHEVAGO
(2) FROLD PROJECT LTD
(3) EASTROAD COMMERCE LLP
(4) PORTMAN SHIPPING UK LTD
(5) IAN ANTHONY PELLOW
Paul McGrath QC, Tom Ford and James Sheehan (instructed by Reynolds Porter Chamberlain LLP) for the 1st to 4th Defendants
Sa'ad Hossain QC and David Simpson (instructed by Farrer & Co LLP) for the 5th Defendant
Hearing dates: Monday 19, Tuesday 20 and Wednesday 21 July 2021
Crown Copyright ©
Sir Julian Flaux C:
Summary of the claimants' claims
Has the first defendant been validly served?
"Service of documents on directors, secretaries and others
(1) A document may be served on a person to whom this section applies by leaving it at, or sending it by post to, the person's registered address.
(2) This section applies to—
(a) a director or secretary of a company;
(4) For the purposes of this section a person's "registered address" means any address for the time being shown as a current address in relation to that person in the part of the register available for public inspection.
(8) Nothing in this section shall be read as affecting any enactment or rule of law under which permission is required for service out of the jurisdiction."
"It is a general principle of the common law that, absent a specific provision, as in the rules for service out of the jurisdiction, the courts only exercise jurisdiction against those subject to, i.e. within the jurisdiction."
"125. As for Mr Clarke's reliance upon s 1140(8), the answer to that submission was cogently provided by Master Marsh in his judgment:
'Section 1140(8) is explicable for the very reason that a director may opt to provide a service address which is outside the jurisdiction. Subsection (8) is designed to make clear that by providing a foreign address, a director is not agreeing that the English court will have jurisdiction to deal with any dispute concerning him. As the subsection makes clear, the general rule relating to permission for service outside the jurisdiction will still apply.'
126. Section 1140 was a new provision in company legislation and was brought fully into force on 1 October 2009. In paragraph  of his judgment, Master Marsh quoted the DTI's consultation paper on Company Law Reform dated March 2005 which, at paragraph 5.3, stated under the heading "Directors' Home addresses":
'... [I]t is important that the service address functions effectively, and the law will be tightened to increase the obligation on directors to keep the records up-to-date, and ensure that the address on the public record is fully effective for the service of documents …'
Master Marsh also quoted the commentary on clause 747 of the Bill (which eventually became s 1140 of the Act) as it was going through Parliament:
'This clause is a new provision. It ensures that the address on the public record for any director or secretary is effective for the service of documents on that person. Sub-section (3) provides that the address is effective even if the document has no bearing on the person's responsibilities as director or secretary.'
"It is fair to say that the statutory effect which section 1140 has been held to have or assumed to have is surprising, albeit when the wording of the section is read, it is easy to see why such findings or assumptions have been made, I have decided to follow those judgments at first instance."
Has the fifth defendant submitted to the jurisdiction?
"A case which was concerned with waiver of the right to object to the jurisdiction of the court also contains observations adverse to the appellants' contention. The case is Rein v. Stein (1892) 66 L.T. 469 where Cave J. in the Divisional Court said, at p. 471:
"It seems to me that, in order to establish a waiver, you must show that the party alleged to have waived his objection has taken some step which is only necessary or only useful if the objection has been actually waived, or if the objection has never been entertained at all."
Applying that to the present case, the stay is not only useful if the objection to jurisdiction has been waived, because one principal purpose of the stay would be to postpone the inquiry into the questions upon which jurisdiction depends until the outcome of the Greek proceedings is known. In In re Dulles' Settlement (No. 2)  Ch. 842 the question was whether a father, who was an American resident outside England, had submitted to the jurisdiction of the English courts in a dispute about payment of maintenance to his child in England. He had been represented by counsel in the English court, who argued that he was not subject to their jurisdiction. Denning L.J. (as he then was) said at p. 850:
"I cannot see how anyone can fairly say that a man has voluntarily submitted to the jurisdiction of a court, when he has all the time been vigorously protesting that it has no jurisdiction. If he does nothing and lets judgment go against him in default of appearance, he clearly does not submit to the jurisdiction. What difference in principle does it make, if he does not merely do nothing, but actually goes to the court and protests that it has no jurisdiction? I can see no distinction at all."
That observation seems very apposite in the present case where the respondents have from the beginning been vigorously protesting that the English courts have no jurisdiction over them. The fact that they have simultaneously asked for a stay is, in the unusual circumstances of this case, in no way inconsistent with that protest."
"The general rule in the ordinary case in England is that the party alleged to have submitted to the jurisdiction of the English court must have "taken some step which is only necessary or only useful if" an objection to jurisdiction "has been actually waived, or if the objection has never been entertained at all": Williams & Glyn's Bank plc v Astro Dinamico Compania Naviera SA  1 WLR 438, 444 (HL) approving Rein v Stein (1892) 66 LT 469, 471 (Cave J)."
"It seems to me that when a Defendant has complied with CPR Part 11 with a view to challenging the jurisdiction of the Court, and the time for making his application under CPR Part 11(4) has not yet expired, then any conduct on his part said to amount to a submission to jurisdiction, and therefore a waiver of that right of challenge, must be wholly unequivocal."
"Mr Samek QC in his Skeleton Argument cited Briggs, "Civil Jurisdiction and Judgments" (6th Ed.) at para.5.30, for the proposition that applying to strike out a claim or for its summary dismissal as hopeless, in the alternative to a challenge to jurisdiction, "is fatal to [a defendant's] ability to pursue jurisdictional challenges". I agree with Prof. Briggs that a defendant should always consider carefully what it does and says in response to proceedings if it wishes or may wish to challenge jurisdiction and so needs to avoid doing or saying anything that might be taken as a submission. However, with respect to Mr Samek's argument, it simply does not follow that a defendant submits who (a) objects to jurisdiction, but also (b) indicates that if there were jurisdiction over it the claim should properly be struck out as hopeless anyway. Such a defendant does not submit to the jurisdiction, so as to defeat its primary application challenging jurisdiction, by making the alternative application (strike-out)."
"The relevant test is whether the party has by his conduct in the proceedings acted in such a way which is only necessary or only useful if objection to the jurisdiction of the court in question has been waived or has never been entertained at all: see Williams & Glyn's Bank v. Astro-Dinamico  1 WLR 438 at p444 approving Rein v. Stein (1892) 66 LT 469 at p471. The essence of the test is that – reflected in the word "only" – there has to be an unequivocal representation by word or conduct that objection is not taken to the relevant jurisdiction."
Forum non conveniens
In my opinion, having regard to the authorities (including in particular the Scottish authorities), the law can at present be summarised as follows.
(a) The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.
(b) As Lord Kinnear's formulation of the principle indicates, in general the burden of proof rests on the defendant to persuade the court to exercise its discretion to grant a stay (see, e.g., the Société du Gaz case, 1926 S.C.(H.L.) 13 , 21, per Lord Sumner; and Anson, Private International Law (1967) p. 150). It is however of importance to remember that each party will seek to establish the existence of certain matters which will assist him in persuading the court to exercise its discretion in his favour, and that in respect of any such matter the evidential burden will rest on the party who asserts its existence. Furthermore, if the court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial of the action, the burden will then shift to the plaintiff to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in this country (see (f), below).
(c) The question being whether there is some other forum which is the appropriate forum for the trial of the action, it is pertinent to ask whether the fact that the plaintiff has, ex hypothesi, founded jurisdiction as of right in accordance with the law of this country, of itself gives the plaintiff an advantage in the sense that the English court will not lightly disturb jurisdiction so established. Such indeed appears to be the law in the United States, where "the court hesitates to disturb the plaintiff's choice of forum and will not do so unless the balance of factors is strongly in favor of the defendant,": see Scoles and Hay, Conflict of Laws (1982), p. 366, and cases there cited; and also in Canada, where it has been stated (see Castel, Conflict of Laws (1974), p. 282) that "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." This is strong language. However, the United States and Canada are both federal states; and, where the choice is between competing jurisdictions within a federal state, it is readily understandable that a strong preference should be given to the forum chosen by the plaintiff upon which jurisdiction has been conferred by the constitution of the country which includes both alternative jurisdictions.
A more neutral position was adopted by Lord Sumner in the Société du Gaz case, 1926 S.C.(H.L.) 13 , 21, where he said:
"All that has been arrived at so far is that the burden of proof is upon the defender to maintain that plea. I cannot see that there is any presumption in favour of the pursuer."
However, I think it right to comment that that observation was made in the context of a case where jurisdiction had been founded by the pursuer by invoking the Scottish principle that, in actions in personam, exceptionally jurisdiction may be founded by arrest of the defender's goods within the Scottish jurisdiction. Furthermore, there are cases where no particular forum can be described as the natural forum for the trial of the action. Such cases are particularly likely to occur in commercial disputes, where there can be pointers to a number of different jurisdictions (see, e.g., European Asian Bank A.G. v. Punjab and Sind Bank  2 Lloyd's Rep. 356 ), or in Admiralty, in the case of collisions on the high seas. I can see no reason why the English court should not refuse to grant a stay in such a case, where jurisdiction has been founded as of right. It is significant that, in all the leading English cases where a stay has been granted, there has been another clearly more appropriate forum - in The Atlantic Star  A.C. 436 (Belgium); in MacShannon's case  A.C. 795 (Scotland); in Trendtex  A.C. 679 (Switzerland); and in the The Abidin Daver  A.C. 398 (Turkey). In my opinion, the burden resting on the defendant is not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. In this way, proper regard is paid to the fact that jurisdiction has been founded in England as of right (see MacShannon's case  A.C. 795 , per Lord Salmon); and there is the further advantage that, on a subject where comity is of importance, it appears that there will be a broad consensus among major common law jurisdictions. I may add that if, in any case, the connection of the defendant with the English forum is a fragile one (for example, if he is served with proceedings during a short visit to this country), it should be all the easier for him to prove that there is another clearly more appropriate forum for the trial overseas.
(d) Since the question is whether there exists some other forum which is clearly more appropriate for the trial of the action, the court will look first to see what factors there are which point in the direction of another forum. These are the factors which Lord Diplock described, in MacShannon's case  A.C. 795, 812, as indicating that justice can be done in the other forum at "substantially less inconvenience or expense." Having regard to the anxiety expressed in your Lordships' House in the Société du Gaz case, 1926 SC (HL) 13 concerning the use of the word "convenience" in this context, I respectfully consider that it may be more desirable, now that the English and Scottish principles are regarded as being the same, to adopt the expression used by my noble and learned friend, Lord Keith of Kinkel, in https://uk.westlaw.com/Document/I155DBB20E42811DA8FC2A0F0355337E9/View/FullText.html?originationContext=document&transitionType=DocumentItem&contextData=(sc.Search) The Abidin Daver  AC 398, 415, when he referred to the "natural forum" as being "that with which the action had the most real and substantial connection." So it is for connecting factors in this sense that the court must first look; and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction (as to which see Crédit Chimique v James Scott Engineering Group Ltd 1982 S.L.T. 131), and the places where the parties respectively reside or carry on business.
(e) If the court concludes at that stage that there is no other available forum which is clearly more appropriate for the trial of the action, it will ordinarily refuse a stay; see, e.g., the decision of the Court of Appeal in European Asian Bank A.G. v. Punjab and Sind Bank  2 Lloyd's Rep. 356 . It is difficult to imagine circumstances where, in such a case, a stay may be granted.
(f) If however the court concludes at that stage that there is some other available forum which prima facie is clearly more appropriate for the trial of the action, it will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted. In this inquiry, the court will consider all the circumstances of the case, including circumstances which go beyond those taken into account when considering connecting factors with other jurisdictions. One such factor can be the fact, if established objectively by cogent evidence, that the plaintiff will not obtain justice in the foreign jurisdiction; see The Abidin Daver  AC 398, 411, per Lord Diplock, a passage which now makes plain that, on this inquiry, the burden of proof shifts to the plaintiff. How far other advantages to the plaintiff in proceeding in this country may be relevant in this connection, I shall have to consider at a later stage."
(1) Whether there is another available forum which is clearly and distinctly more appropriate than the English forum. The burden of proving this first limb rests on the defendants.
(2) If the defendants discharge that burden, then the Court will normally grant a stay unless there are circumstances by reason of which justice requires that the case is tried here. On that second limb, on which the burden is on the claimants, the Court will look at all the circumstances of the case including those which go beyond those taken into account when considering connecting factors with other jurisdictions.
The parties' submissions
"…it is a particularly unappealing prospect to ask a judge of this Court to express a view as to an area where Russian law appears to be hotly contentious and indeed in the process of development. This is the more so when any appeal from a decision on Russian law here would be impeded by being a decision on facts and expert evidence, where the Court of Appeal is very unlikely to interfere, whereas in Russia the full appeals process would be available."
"In my judgment, the Czech Republic is a distinctly more appropriate forum for the trial of this dispute than England. Indeed I think that it is the only appropriate forum. My reasons are as follows:
(2) The common feature of all the legal heads under which the claimant advances its claim in respect of the March 1998 transactions is that they all involve an allegation that those transactions were improper acts for IPB to enter into or its management to authorise in IPB's interest. If the claimant is right, the essence of the wrong done against IPB by the defendants was that they induced IPB's management to act in breach of its duties to IPB or improperly benefited from their spontaneous decision to behave in this way. This is, therefore, fundamentally a dispute about the internal management of a Czech company. Moreover, the assets of which IPB is said to have been wrongfully deprived, consist of companies which are not only incorporated in the Czech Republic, but carry on a substantial business there."
"It remains to deal with the alleged absence of proper procedures for cross-examination and disclosure. In my judgment the Claimant's criticisms on these counts are not justified. The evidence on this application discloses a state of affairs which is fairly typical of civil law jurisdictions. Judges have a discretion, either on the application of a party or of their own motion, to order the production of broadly defined categories of documents, but it is more common for them to order the disclosure of specific documents known to exist. As to oral evidence, the judge decides which witnesses are to be called, but the parties may propose witnesses and their proposals are usually accepted. The judge questions the witnesses, but the parties may do so after he has finished. Cross-examination is, on the evidence before me, a good deal less confrontational than it is in England, and subject to tighter control by the judge. It is plain that in the Czech courts both oral and documentary evidence will be deployed only to the extent that the Judge considers that the proper determination of the case requires it. The tenor of the evidence is that Czech judges are less inclined than English ones to allow latitude to advocates to follow up a line of investigation which cannot be seen in advance to be productive. None of this means that the interests of justice are not served by their proceedings. Criticisms such as the Claimant makes need to [be] kept in perspective. Cross-examination and disclosure of documents are both features of the common law tradition of England, and of other jurisdictions which ultimately derive their forensic procedure from England. They reflect an approach, now rather less fashionable even in England, which left the conduct of litigation, and in particular the obtaining and deployment of evidence, in the hands of the parties. In civil law jurisdictions the obtaining and deployment of evidence is controlled by the Judge who may be less exhaustive in his pursuit of relevant material than the parties would have been in their own interests. English procedure is exceptionally thorough, but it is also exceptionally expensive and demanding of court time. All judicial systems are more or less imperfect, because they represent a compromise between competing objectives. It is certainly not possible to say that the absence of extensive facilities for disclosure of documents and discovery makes substantial justice unobtainable, even in cases which are evidentially complex or arise out of commercial fraud."
"That leaves Mr Salzedo's first point, which is essentially that an entity such as RT, if it has participated in a conspiracy to strip its affiliates of their assets, is unlikely to stop there if proceedings are on foot which would have the effect, if successful, of unravelling the conspiracy, but would seek improperly to influence the outcome of those proceedings if it could. Mr Salzedo submitted that what emerges, particularly from the work of Professor Hendley is that there is a completely different cultural background and history in Russia compared with the United Kingdom in terms of influence being brought to bear on the judiciary. This is a point of some force, but ultimately I have concluded that, even if RT wanted to try to improperly influence the judges and their decisions, there is simply no cogent evidence of a risk that they would be able successfully to do so."
"Leaving aside questions as to the burden of proof, at common law the forum conveniens doctrine requires the English court to decide whether its jurisdiction or that of the suggested foreign court is the more suitable as a forum for the determination of the dispute between the parties. The traditional way in which this question has been framed speaks of the "forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice" (per Lord Collins JSC in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd  UKPC 7;  1 WLR 1804, para 88, adopting the language of Lord Goff in Spiliada Maritime Corpn v Cansulex Ltd ("The Spiliada")  AC 460). The requirement in complex litigation to define, at the outset, what is "the case" to be tried runs the risk that the court will by choosing a particular definition prejudge the outcome of the forum conveniens analysis, as the Court of Appeal decided had occurred at first instance in In re Harrods (Buenos Aires) Ltd  Ch 72. Harman J had characterised "the case" as a petition under the English Companies Act for relief for unfair prejudice in the conduct of the affairs of an English registered company, which made it "blindingly obvious" to him that England was the appropriate forum. But the company carried on business entirely in Argentina. The matters complained of all occurred there, where there was a parallel jurisdiction to provide relief under Argentinian legislation. So the Court of Appeal preferred Argentina as the appropriate forum. Like the Court of Appeal in the present case, we therefore prefer for present purposes to identify the dispute between the parties as the matter to be tried, lest reference to "the case" should introduce undue formalism into the analysis of a question of substance."
"it appears to me that it is important for the court to know what issues are likely to arise at the trial of the action on the merits. Only when the issues are identified will it be possible to compare the two jurisdictions. This principle is now stated in Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), para 11-143, in which, having stated the general principles much as above, the editors say that, in practice, the defendant should identify the issues which are appropriate to be tried in the foreign court. In the footnote to that sentence the editors referred to Limit (No 3) Ltd v PDV Insurance Co  EWCA Civ 383, at para 73 and Sawyer v Atari Interactive Inc  EWHC 2351 (Ch),  1 L. Pr. 129, at para 54. See also Islamic Republic of Pakistan v Zadari  EWHC 2411 (Comm), at para 138 and Novus Aviation Ltd v Onur Air Tasimacilik AS  EWCA Civ 122. Lawrence Collins J or Lawrence Collins LJ is the author of the relevant passage in each of those cases except the Limit (No 3) case, in which I admit to being the author.
193 I adhere to the view I expressed in that case, now supported by Dicey. As Eder J put it in Mujur Bakat Sdn Bhd v Uni Asia General Insurance Berhad  EWHC 643 (Comm), at para 9
"…in considering whether or not England is the most appropriate forum, it is necessary to have in mind the overall shape of any trial and, in particular what are, or what are at least likely to be, the issues between the parties and which will ultimately be required to be determined at any trial. These were originally set out in two letters …"
I stress that I do not mean that a defendant must set out his evidence in great detail, whether of foreign law or of fact. The purpose of the exercise is simply to state what the issues of fact are likely to be, so that the court can gauge whether England is clearly or distinctly the appropriate forum for the trial of the issues. This is of some importance in this case because no evidence was put before the court on the merits of the claims by or on behalf of Mr Malofeev. Moreover, Mr Hapgood QC submitted to the court in the course of the argument that Mr Malofeev was perfectly entitled to say and he does say to VTB, "You are accusing me of being a swindler, you get on and prove it." Mr Hapgood added that the matter proceeded in both courts below on the clear understanding that VTB will have to prove its case. As he put it, they will have to prove all five ingredients of a claim for fraudulent misrepresentation and a sixth ingredient in the case of conspiracy. It appears from what Mr Hapgood said that, at any rate at present, he has no positive case. It is of course true that a defendant in the position of Mr Malofeev is not bound to advance a positive case but, in the absence of a positive case, the focus of the court can only be on the ingredients of the claim. It should not speculate about the nature of any positive case that might be advanced in the future.
194 It was suggested in the course of the argument that the defendants could not plead a case or put forward a positive case because of the risk that they would submit to the jurisdiction. There is, in my opinion, no such risk. There is no reason why defendants should not put in a draft defence or evidence on the express basis that they are doing so without prejudice to their case on jurisdiction. I note in passing that it is the duty of the parties under CPR 1.3 to help the court to further the overriding objective, which is to deal with cases justly."
"The new defendants contend that in the Spiliada case, Lord Goff, in dealing with the question of the treatment of what had become known as a legitimate personal or juridical advantage, was in terms considering the trial of the action and not its aftermath. It is pointed out, correctly, that all the examples he gives relate to what might be described as the pre-judgment stage. I have no hesitation, though, in rejecting the submission. Litigation is not an end in itself. A plaintiff is concerned not only to obtain judgment in his favour, but to enforce it by whatever means are available to him so as actually to receive the compensation the court thought fit to award him. Advantages in the mechanics of enforcement in one jurisdiction, as opposed to another, are no less advantageous than advantages in the procedure whereby the judgment is obtained in the first place. The fact that Lord Goff did not advert to them expressly because they did not arise in the case with which he was dealing is no reason for denying legal recognition to the factually obvious."
"The independence of the judicial system and its immunity from economic and political influences in Ukraine remains questionable and the stability of existing legal frameworks may weaken further with future political changes in Ukraine. Because Ukraine is a civil law jurisdiction, judicial decisions generally have no precedential effect on subsequent decisions, and courts are generally not bound by earlier decisions taken under the same or similar circumstances which can result in the inconsistent application of Ukrainian legislation to resolve the same or similar disputes. In addition, court claims are often used in the furtherance of political aims. The Group may be subject to such claims and may not be able to receive a fair hearing."
"England is an available forum and the whole claim can be tried here. It is also a neutral, and highly respected, forum with no political commitment to either the Qatar or the Blockading States side in the Gulf crisis, giving its judgment a greater vindicatory worldwide force. In contrast a judgment from the UAE courts would not have that valued perceived international neutrality."
"I agree with Lord Clarke that a defendant could exhibit draft points of defence, but in many cases, it may be disproportionate to expect him to incur the costs of doing so before it has been decided whether the claim is to proceed at all."
"…it is accepted by both experts that a Czech judge hearing this dispute would probably not come to it with anything like the same background knowledge or the same experience of commercial documents and large-scale litigation as a Judge of the Commercial Court. However, I decline to deduce from this that Czech judges lack the experience to do justice in a case like this one. For different reasons, the same points could be made about many jurisdictions, including some with highly developed legal systems. In most state jurisdictions of the United States and in England for much of the nineteenth century a commercial dispute would be likely to come before a judge with no personal experience in the field and a jury with no experience of civil litigation at all. In France the tribunaux de commerce which routinely try commercial disputes are staffed by part-time laymen. These courts have to educate themselves by hearing the case, which is in the nature of judicial life. This state of affairs no doubt diminishes the efficiency of the system. But it would be absurd to say that substantial justice is not to be had in these places. Specialist Courts such as the Commercial Court are rare in the world of litigation, but even in the Commercial Court, judges have to deal from time to time with complex and wholly unfamiliar fields of business."
The WFO application
Applicable legal principles
"37. There has been much discussion of the meaning of the 'good arguable case' test since Mustill J's well-known observation in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft GmbH (The Niedersachsen)  2 Lloyd's Rep 600 at 605, namely that a good arguable case is a case "which is more than barely capable of serious argument, and yet not necessarily one which the judge believes to have a better than 50% chance of success".
38. The 'good arguable case' test was the subject of a comprehensive review by the Court of Appeal recently in Kaefer v. AMS  3 All ER 979 in the context of jurisdictional gateways. Green LJ (who gave the leading judgment, Davis and Asplin LJ concurring) conducted a magisterial analysis of the recent authorities, including Brownlie v. Four Seasons Holdings  UKSC 80 and Goldman Sachs International v. Novo Banco SA  UKSC 34. He observed at  that a test intended to be straightforward "had become befuddled by 'glosses', glosses upon gloss, 'explications' and 'reformulations'". The central concept at the heart of the test was "a plausible evidential basis" (see paragraphs -)."
"I also gratefully adopt (as the Judge did) the useful summary of some of the key principles applicable to the question of risk of dissipation by Mr Justice Popplewell (as he then was) in Fundo Soberano de Angola v dos Santos  EWHC 2199 (Comm) (subject to one correction which I note below):
(1) The claimant must show a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets. In this context dissipation means putting the assets out of reach of a judgment whether by concealment or transfer.
(2) The risk of dissipation must be established by solid evidence; mere inference or generalised assertion is not sufficient.
(3) The risk of dissipation must be established separately against each respondent.
(4) It is not enough to establish a sufficient risk of dissipation merely to establish a good arguable case that the defendant has been guilty of dishonesty; it is necessary to scrutinise the evidence to see whether the dishonesty in question points to the conclusion that assets [may be][*] dissipated. It is also necessary to take account of whether there appear at the interlocutory stage to be properly arguable answers to the allegations of dishonesty.
(5) The respondent's former use of offshore structures is relevant but does not itself equate to a risk of dissipation. Businesses and individuals often use offshore structures as part of the normal and legitimate way in which they deal with their assets. Such legitimate reasons may properly include tax planning, privacy and the use of limited liability structures.
(6) What must be threatened is unjustified dissipation. The purpose of a WFO is not to provide the claimant with security; it is to restrain a defendant from evading justice by disposing of, or concealing, assets otherwise than in the normal course of business in a way which will have the effect of making it judgment proof. A WFO is not intended to stop a corporate defendant from dealing with its assets in the normal course of its business. Similarly, it is not intended to constrain an individual defendant from conducting his personal affairs in the way he has always conducted them, providing of course that such conduct is legitimate. If the defendant is not threatening to change the existing way of handling their assets, it will not be sufficient to show that such continued conduct would prejudice the claimant's ability to enforce a judgment. That would be contrary to the purpose of the WFO jurisdiction because it would require defendants to change their legitimate behaviour in order to provide preferential security for the claim which the claimant would not otherwise enjoy.
(7) Each case is fact specific and relevant factors must be looked at cumulatively.
([*] Note: I have replaced the words "are likely to be" in sub-paragraph (4) with "may be")."
"(i) there is a real risk that a judgment or award will go unsatisfied, in the sense of a real risk that, unless restrained by injunction, the defendant will dissipate or dispose of his assets other than in the ordinary course of business…
(ii) that unless the defendant is restrained by injunction, assets are likely to be dealt with in such a way as to make enforcement of any award or judgment more difficult, unless those dealings can be justified for normal and proper business purposes…"
( of my judgment in Congentra AG v Sixteen Thirteen Marine SA ("The Nicholas M")  EWHC 1615 (Comm);  2 Lloyd's Rep 602).
"(1) The mere fact of delay in bringing an application for a freezing injunction or that it has first been heard inter partes, does not, without more, mean there is no risk of dissipation. If the court is satisfied on other evidence that there is a risk of dissipation, the court should grant the order, despite the delay, even if only limited assets are ultimately frozen by it;"
"There was clear scope for an inference of dissipation in the present case. The wrongdoing here comprised not merely dishonest conduct (or what Patten J in Field Press called 'an unfocussed allegation of dishonesty or fraud'), but wrongdoing which went to the very heart of the question of the risk of dissipation (in the words of Lloyd LJ in VTB Capital). It was the dishonesty which "pointed" to the risk of dissipation (in the words of Popplewell J in Fundo, supra at paragraph [86(4)]). In other words, both Lakatamia's claims or causes of action against Madam Su bore directly on the question of dissipation itself: both the unlawful means conspiracy and Marex causes of action themselves concerned her assisting in the act of dissipation, albeit of her son's funds, but dissipation nevertheless. The Judge had found (at paragraph  of his judgment) that that there was a good arguable case that Madam Su had previously helped her son, Mr Su, to hide or dissipate €27,127,855.01 of his assets, i.e. the Net Sale Proceeds. In these circumstances, common sense would suggest that there was a strong inference that there was a risk that she would do exactly the same in relation to her own assets in order to frustrate the enforcement of any judgment against her."
"Delay on the part of a party applying for a freezing injunction gives rise to rather more elusive considerations. It can be said that any serious delay means that an applicant does not genuinely believe there is any risk of dissipation or conversely (and more cynically) that, if a defendant is prone to dissipate his assets, such dissipation will have already occurred by the time a court is asked to intervene. This latter argument assumes that a defendant is already of dubious probity and it is a curious principle that would allow such a defendant to rely on his own dubious probity to avoid an order being made against him. The former argument is also open to the objection that it is the fact of the risk rather than a claimant's apprehension of it that should govern the court's decision."
Fifth defendant's strike-out application
The parties' submissions
"The claimant does not have to plead primary facts which are only consistent with dishonesty. The correct test is whether or not, on the basis of the primary facts pleaded, an inference of dishonesty is more likely than one of innocence or negligence. As Lord Millett put it, there must be some fact "which tilts the balance and justifies an inference of dishonesty". At the interlocutory stage, when the court is considering whether the plea of fraud is a proper one or whether to strike it out, the court is not concerned with whether the evidence at trial will or will not establish fraud but only with whether facts are pleaded which would justify the plea of fraud. If the plea is justified, then the case must go forward to trial and assessment of whether the evidence justifies the inference is a matter for the trial judge. This is made absolutely clear in the passage from Lord Hope's speech at -…"
"By reason of the facts and matters above, fault on the part of Mr Pellow, who was Portman's sole registered director and immediate controller (albeit acting as directed and instructed by Mr Zhevago) is presumed. In any event, and without prejudice to the burden on Mr Pellow to prove lack of fault, in relation to Portman's said unlawful conduct Mr Pellow acted intentionally because he knowingly sought to, and did, carry out Mr Zhevago's instructions in directing, causing and/or procuring Portman to participate in the Supply Contract Scheme. In this regard the Claimants will also rely on the fact that (i) Mr Pellow was at all material times accustomed to act on Mr Zhevago's instructions; (ii) Mr Pellow had approved filings and financial statements with Companies House representing that Portman was a dormant company in circumstances when he was executing documents on Portman's behalf relating to its Supply Contract with Zaliv Port, and thus he must have known such filings to be false and misleading; (iii) Mr Pellow caused Portman to execute the Supply Contract with Zaliv Port in the
knowledge that Portman had no intention, let alone ability, to comply with the same; (iv) Mr Pellow permitted Portman to receive the Payment of USD $3 million and in circumstances when he must have known that he and Portman were facilitating misappropriation of the Bank's monies."
"Further or in the alternative, the actions as aforesaid of Mr Zhevago, Frold, Eastroad, Portman and Mr Pellow (together with the other Suppliers and the said Bank officials) were (i) interconnected and cumulative acts and/or (ii) actions with unity of intent to cause the Bank harm and accordingly caused the Bank indivisible harm in the total sum of not less than USD 280,116,773 as set out in Section F above, for which each of them is jointly and severally liable pursuant to Article 1190 UCC."