Trafalgar Developments Ltd v Mazepin

• Jurisdiction: Ireland
• Judge: Mr. Justice David Barniville
• Judgment Date: 17 January 2019
• Neutral Citation: [2019] IEHC 7
• Docket Number: [2016 No. 9981 P.]
• Court: High Court
• Date: 17 January 2019

BETWEEN

TRAFALGAR DEVELOPMENTS LIMITED

INSTANTANIA HOLDINGS LIMITED

KAMARA LIMITED

and

BAIRIKI INCORPORATED

PLAINTIFFS

AND

DIMITRY MAZEPIN, OJSC UNITED CHEMICAL COMPANY URALCHEM, URALCHEM HOLDING PLC, EUROTOAZ LIMITED, ANDREY GENNADYEVICH BABICHEV, YULIA BOLOTNIKOVA, BELPORT INVESTMENTS LIMITED, MILKO EMILOV MINKOVSKI, ANDROULA CHARILAOU, DIMITRY KONYAEV

and

YEVGENIY YAKOVLEVICH SEDYKIN

DEFENDANTS

[2019] IEHC 7

Barniville J.

[2016 No. 9981 P.]

THE HIGH COURT

COMMERCIAL

Judgment in default of appearance – Injunctive relief – Ancillary relief – Plaintiffs seeking judgment in default of appearance – Whether the plaintiffs had satisfied the various requirements in order to obtain judgment in default of appearance

Facts: The plaintiffs, Trafalgar Developments Ltd, Instantania Holdings Ltd, Kamara Ltd and Bairiki Inc, applied to the High Court for judgment in default of appearance against the seventh defendant, Belport Investments Ltd, a company registered in Tortola in the British Virgin Islands, and the eleventh defendant, Mr Sedykin, a Russian citizen with an address in Togliatti City in the Samara Region of the Russian Federation. The application was made pursuant to O. 13 rr. 6 and 9 RSC. The plaintiffs also sought injunctive and ancillary reliefs in aid of execution, in the event that the judgment in default of appearance was granted by the court. The proceedings were commenced pursuant to leave granted by the High Court (McDermott J) on 7th November, 2016, by a plenary summons which was issued on 9th November, 2016. The plaintiffs claimed that the defendants (including Belport and Mr Sedykin) were co-conspirators in an alleged scheme which was intended wrongfully to divest the plaintiffs of their shares, or the benefit of their shares, in a Russian company called OJSC Togliattiazot. It was claimed that the defendants’ participation in that alleged scheme amounted to unlawful means conspiracy in tort, or alternatively, that the means employed by the defendants in aid of the alleged scheme, if lawful, were nonetheless actionable as being carried out for an unlawful end.

Held by Barniville J that the plaintiffs had satisfied the various requirements in order to obtain judgment in default of appearance against Belport and Mr Sedykin. In those circumstances, he granted the plaintiffs judgment in default of appearance against Belport and Mr Sedykin in the terms of paras. 155, 156, 157 and 158 of the prayer for relief in the amended statement of claim. He directed that the plaintiffs were entitled to damages as sought at paras. 159, 160 and 161 of the prayer for relief for any loss suffered by them; having regard to the provisions for O. 13, r. 9 RSC, such damages (if any) should be ascertained at the same time as the trial of the proceedings as against the other defendants to the proceedings. He was also satisfied that the plaintiffs were entitled to the injunctive relief set out para. 162 of the prayer for relied in the amended statement of claim. He held that the plaintiffs were also entitled to interest pursuant to statute under para. 163. As regards the reliefs sought at para. 164, he accepted, as counsel for the plaintiffs submitted at the hearing, that the relief referred to in that paragraph was more appropriately dealt with in the context of the plaintiffs’ application for injunctive and ancillary relief in aid of execution. He held that the plaintiffs were also entitled to costs under para. 165 of the prayer for relief.

Barniville J held that he would grant the injunctive reliefs sought in aid of execution at paras. 4, 5 and 6 and the disclosure orders sought at paras. 7, 8 and 9 of the notice of motion. He would not require an undertaking as to damages from the plaintiffs for the purposes of the orders made in respect of paras. 4,5, and 6 of the notice of motion. However, he would grant liberty to Belport and Mr Sedykin to appear and apply in relation to the terms of the injunctive and other ancillary relief granted in aid of execution, including on the question as to whether an undertaking as to damages should be required. Subject to that, however, he did not require such an undertaking from the plaintiffs.

Application granted.

JUDGMENT of Mr. Justice David Barniville delivered on the 17th day of January, 2019

Introduction

1 This is my judgment on the plaintiffs” application for judgment in default of appearance against the seventh defendant, Belport Investments Limited (‘Belport’), a company registered in Tortola in the British Virgin Islands (‘BVI’), and the eleventh defendant, Mr. Yevgeniy Yakovlevich Sedykin (‘Mr. Sedykin’), a Russian citizen with an address in Togliatti City in the Samara Region of the Russian Federation. The application is made pursuant to O. 13 rr. 6 and 9 RSC, as amended. The plaintiffs also seek injunctive and ancillary reliefs in aid of execution, in the event that the judgment in default of appearance is granted by the court.

2 The proceedings were commenced pursuant to leave granted by the High Court (McDermott J.) on 7th November, 2016, by a plenary summons which was issued on 9th November, 2016. In short, the plaintiffs claim that the defendants (including Belport and Mr. Sedykin) are co-conspirators in an alleged scheme (the ‘Scheme’) which is intended wrongfully to divest the plaintiffs of their shares, or the benefit of their shares, in a Russian company called OJSC Togliattiazot (‘ToAZ’). It is claimed that the defendants” participation in this alleged Scheme amounts to unlawful means conspiracy in tort, or alternatively, that the means employed by the defendants in aid of the alleged Scheme, if lawful, are nonetheless actionable as being carried out for an unlawful end.

Motion for Judgment in Default of Appearance

3 The immediate background to the present application is that on 6th June, 2018, the plaintiffs issued a motion seeking judgment in default of appearance and injunctive and ancillary relief in aid of execution against Belport and Mr. Sedykin and against the first, second, third, sixth, ninth and tenth defendants.

4 The motion for judgment default of appearance and for the other reliefs referred to was listed for hearing on 28th July, 2018. On 13th July, 2018, a conditional appearance was filed on behalf of the first, second, third, sixth and tenth defendants. On 25th July, 2018, an unconditional appearance was filed on behalf of the ninth defendant. No appearance was filed on behalf of Belport or Mr. Sedykin. The plaintiffs proceeded with the motion as against those defendants only.

5 The plaintiffs” application was grounded on an affirmation of Mr. James Walfenzao, a director of the first named plaintiff, Trafalgar Developments Limited (‘Trafalgar’), dated 1st June, 2018. Further affidavit evidence was also adduced in support of the application. This evidence is contained in the affidavit of Ms. Karyn Harty sworn on 6th June, 2018, the affidavit of Mr. Evgeniy Korolev sworn on 3rd, October, 2017, the affidavit of Professor Richard Sakwa sworn on 4th June, 2018, the affidavit of Mr. Vladimir Gladyshev sworn on 1st June, 2018, the affidavit of Mr. Sergei Makhlai sworn on 10th April, 2017 and the affidavit of Mr. Andreas Zivy sworn on 6th April, 2017. In total the papers provided to the court for the purpose of this application for judgment in default of appearance comprised some seventeen lever arch folders (including a book of legal submissions and authorities).

6 The plaintiffs assert on the basis of the affidavit evidence and legal submissions that there has been a default in entering an appearance by Belport and Mr. Sedykin, that the default procedures under O. 13 RSC have been complied with and that the court can, therefore, be satisfied that it is entitled to grant judgment in default of appearance against Belport and Mr. Sedykin. In addition, although they take the view that they are not required under O. 13 RSC to do so, the plaintiffs have sought to verify their claims by means of this affidavit evidence.

7 In the event that I am disposed to granting judgment in default of appearance, the plaintiffs seek the following injunctive and ancillary reliefs against Belport and Mr. Sedykin:-

(a) Mareva type injunctive relief restraining Belport and Mr. Sedykin, their respective servants or agents, from reducing their personal assets, including assets in which these defendants hold any direct or indirect interest, below the sum of US$78,769,219.84 (or such other sum as the court considers appropriate) pending further order of the court.

(b) An order restraining Belport and Mr. Sedykin, their servants or agents from dealing with any direct or indirect interest of OJSC United Chemical Company Uralchem (‘ UCCU’), the second defendant, in the shares of ToAZ.

(c) An order restraining Belport and Mr. Sedykin from dealing with any assets in order to prevent or obstruct the plaintiffs from enforcing or recovering on foot of the judgment of this court or such damages as might be awarded on such judgment.

(d) An order requiring each of Belport and Mr. Sedykin to disclose on affidavit or equivalent document, all of their assets and liabilities (including any interest therein) to include assets in which the first or second defendant has a direct or indirect interest.

(e) An order requiring each of Belport and Mr. Sedykin to disclose on affidavit or equivalent document all bank accounts (and/or wallets in respect of any cryptocurrency) worldwide in which these defendants have a direct or indirect legal or beneficial interest.

(f) An order for disclosure on affidavit or equivalent document of all documents relating to any actions taken by these defendants, or on their behalf, to place their assets beyond the reach of the plaintiffs.

8 I will first outline in a little greater detail the factual background to this application and the manner in which the proceedings were commenced. I will then consider...