Trafalgar Developments Ltd and Others v Mazepin and Others

JurisdictionIreland
JudgeMr. Justice Denis McDonald
Judgment Date24 April 2023
Neutral Citation[2023] IEHC 195
Docket Number[No. 2016/9981 P.]
CourtHigh Court
Between
Trafalgar Developments Limited, Instantania Holdings Limited, Kamara Limited and Bairiki Incorporated
Plaintiffs
and
Dmitry Mazepin, OJSC United Chemical Company Uralchem, Uralchem Holding Plc, Eurotoaz Ltd, Andrey Gennadyevich Babichev, Yulia Bolotnikova, Belport Investments Ltd, Milko Emilov Minkovski, Androula Charilaou, Dmitry Konyaev and Yevgeniy Yakovlevich Sedykin and by Order JSC Khimakivinvest and Aktum Limited Liability Company
Defendants

[2023] IEHC 195

[No. 2016/9981 P.]

THE HIGH COURT

COMMERCIAL

Jurisdiction – Proper party to proceedings – Conspiracy – Twelfth defendant seeking to discharge the order granting liberty to the plaintiffs to serve notice of an amended concurrent plenary summons – Whether the twelfth defendant was a proper party to the proceedings

Facts: The plaintiffs, Trafalgar Developments Limited, Instantania Holdings Limited, Kamara Limited and Bairiki Incorporated, claimed that the first, second, third, sixth and tenth defendants (the existing UCCU defendants) had acted in concert with the remaining defendants to damage the plaintiffs’ interests in a large Russian company called OJSC Togliattiazot (ToAZ). The plaintiffs contended that this had been orchestrated by the first defendant, Mr Mazepin, who they claimed exercised control not only over the other UCCU defendants but also over the twelfth defendant, JSC Khimakivinvest (Kai). Kai applied to the High Court pursuant to O. 12, r. 26, seeking to discharge the order made by McDonald J on 25th January 2022 granting liberty to the plaintiffs to serve notice of an amended concurrent plenary summons on Kai at its registered address in Russia. Kai submitted that the plaintiffs had failed to establish that Kai was a necessary or proper party to the proceedings for the purposes of O. 11, r. 1(h). Kai submitted that the plaintiffs had failed to demonstrate that Ireland was the appropriate jurisdiction to hear and determine the claim against Kai. Kai contended that the court, in the exercise of its jurisdiction under O. 11, r. 2 and 5 ought to decline jurisdiction in the case against it.

Held by McDonald J that, on the basis of the affidavit evidence before the court and the case made in the statement of claim, the plaintiffs had made out a good arguable case that both the fourth defendant, Eurotoaz Limited (Eurotoaz), and Kai were parties to the same alleged conspiracy to injure the plaintiffs by taking the ToAZ shares from them by means of the various allegedly malicious or wrongful steps described in the statement of claim. It seemed to McDonald J to be self-evident that, if Kai was within the jurisdiction, it would undoubtedly have been joined as a co-defendant to the case made against Eurotoaz; the fact that Kai was involved in a different element of the conspiracy to Eurotoaz would make no difference. McDonald J was of the view that Kai was a proper party to the case in conspiracy brought against Eurotoaz and that, accordingly, the case against Kai fell within the ambit of O. 11, r. 1(h). McDonald J concluded that Ireland was the appropriate forum where the claim against Kai could most suitably be tried in the interests of all parties and the interests of justice. McDonald J held that, on the basis of the report of the plaintiffs’ Russian law expert, Mr Vaneev, they had an arguable basis to continue to maintain the proceedings in the capacity of trust managers.

McDonald J dismissed the application.

Application dismissed.

JUDGMENT of Mr. Justice Denis McDonald delivered on 24 th April 2023

The application before the court
1

. This judgment addresses an application by the twelfth named defendant (who I shall refer to as “Kai”), made pursuant to O.12, r. 26, seeking to discharge the order previously made by me on 25 th January 2022 granting liberty to the plaintiffs to serve notice of an amended concurrent plenary summons in these proceedings on Kai at its registered address in Russia, namely 2 Presnenskaya Embankment, 34–11 (34 th Floor), Moscow, 123112 Russian Federation. That order was made on foot of an ex parte application by the plaintiffs on the basis that Kai was a necessary or proper party to these proceedings for the purposes of O. 11, r. 1(h). Kai submits that the plaintiffs have failed to establish that Kai is a necessary or proper party to these proceedings. Kai further submits that, when all relevant factors are taken into account, the plaintiffs have failed to demonstrate that Ireland is the appropriate jurisdiction to hear and determine this claim against Kai. In such circumstances, Kai contends that the court, in the exercise of its jurisdiction under O. 11, r. 2 and 5 ought to decline jurisdiction in this case against it.

Background
2

. The background to these proceedings is very fully described in the judgment of Barniville J. (as he then was) in Trafalgar Developments Ltd v. Mazepin [2022] IEHC 167. That judgment addresses a previous unsuccessful challenge to the jurisdiction of the Irish courts brought by the first, second, third, sixth and tenth defendants (who I shall refer to as “the existing UCCU defendants”). I should explain that the acronym UCCU is derived from the name of the second defendant, a Russian company alleged to be controlled by the first named defendant, Mr. Mazepin who is also alleged to exercise control over each of the third, sixth and tenth defendants. As described in more detail below, the plaintiffs' case is that the existing UCCU defendants have acted in concert with the remaining defendants to damage the plaintiffs' interests in a large Russian company called OJSC Togliattiazot ( “ToAZ”). The plaintiffs contend that this has been orchestrated by the first named defendant, Mr. Mazepin, who they claim exercises control not only over the other UCCU defendants but also over Kai. In this context, it should be noted that four of the existing UCCU defendants are nationals or companies incorporated in the Russian Federation. Where appropriate to do so, I will refer to those defendants as “the Russian UCCU defendants”. The third named defendant, Uralchem Holding plc ( “Holding”), is a Cypriot company. Given its establishment in an EU Member State, the jurisdiction asserted against Holding is different to that asserted against the Russian UCCU defendants or against Kai and, for that reason, it is unnecessary to consider its position further.

3

. I should explain that, in pursuing these proceedings against the Russian UCCU defendants, the plaintiffs relied on O. 11, r. 1(h) which, as noted above, is the same basis for asserting jurisdiction against Kai. They did so on the basis of a contention that the Russian UCCU defendants were necessary or proper parties to the proceedings brought in this jurisdiction against the fourth named defendant (who I shall refer to as “Eurotoaz”) which is incorporated in Ireland. Previously, Eurotoaz and the fifth named defendant, Mr. Babichev (a director of Eurotoaz who resides in Russia), had sought to dismiss or strike out the action against them on the basis that it was bound to fail or, alternatively, that it constituted an abuse of process. In addition, insofar as Mr. Babichev is concerned, he also sought an order staying the proceedings against him on the ground that Ireland was not the appropriate forum to hear the dispute against him (which lawyers refer to as the forum non conveniens ground). Those applications were rejected by Haughton J. in Trafalgar Developments Ltd v. Mazepin [2017] IEHC 721. In turn, the decision of Haughton J. was upheld by the Court of Appeal in Trafalgar Developments Ltd v. Mazepin [2019] IECA 218. Thereafter, the existing UCCU defendants (both Russian and Cypriot) contested jurisdiction but their application was rejected by Barniville J. in 2022. The approach taken by Barniville J. will be examined in more detail below. Before doing so, I should explain, in broad terms, the nature of the claim made by the plaintiffs.

4

. The plaintiffs are companies incorporated in a number of jurisdictions in the Caribbean. In the proceedings prior to the joinder of Kai, they claimed that the defendants have conspired together with a view to depriving the plaintiffs of shares that they held in ToAZ. As pleaded in the amended statement of claim, the plaintiffs maintained that they held the shares in ToAZ as owners. However as discussed further below, the case now made by the plaintiffs is that they held the shares as trust managers on behalf of other entities. ToAZ is said to be the largest producer of ammonia in Russia (principally for use as fertiliser). Prior to the events described below, the plaintiffs held 70% of the shares in ToAZ while UCCU was a minority shareholder. According to the second amended statement of claim delivered in the proceedings, the defendants have allegedly engaged in a conspiracy comprising a series of unlawful acts designed to wrest the shares from the plaintiffs and place them at the disposal of Mr. Mazepin or a company under his control. In para. 60 of his judgment delivered in March 2022, Barniville J. summarised the elements of the alleged scheme of conspiracy. These included the alleged making of unlawful threats to the effect that improper legal proceedings would be brought against the owners of the shares in the event that the plaintiffs were not prepared to allow their shares in ToAZ to be sold to the defendants at an undervalue; bringing multiple unfounded civil actions in the Russian courts; making multiple unfounded criminal complaints to the Russian authorities; deploying false evidence in support of the actions and complaints made by them; procuring oppressive and unjust court orders against the plaintiffs and securing improper arrest warrants. It is further alleged that the conspiracy involved putting undue and unlawful pressure on judges, criminal investigators and judicial officers in Russia with a view to making...

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