Trafalgar Developments Ltd v Mazepin

JurisdictionIreland
JudgeMr. Justice David Barniville
Judgment Date31 July 2019
Neutral Citation[2019] IEHC 610
CourtHigh Court
Docket Number[2016 No. 9981 P.]
Date31 July 2019
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 LIMITED, ANDREY GENNADYEVICH BABICHEV, YULIA BOLOTNIKOVA, BELPORT INVESTMENTS LIMITED, MILKO EMILOV MINKOVSKI, ANDROULA CHARILAOU, DMITRY KONYAEV

and

YEVGENIY YAKOVLEVICH SEDYKIN
DEFENDANTS

(DISCOVERY SOUGHT AS BETWEEN PLAINTIFFS AND FOURTH AND FIFTH DEFENDANTS)

[2019] IEHC 610

Barniville J.

[2016 No. 9981 P.]

THE HIGH COURT

COMMERCIAL

Discovery – Categories of documents – Communications – Plaintiffs seeking discovery – Whether the plaintiffs were entitled to discovery of the documents sought

Facts: The plaintiffs, Trafalgar Developments Ltd, Instantania Holdings Ltd, Kamara Ltd and Bairiki Inc, applied for discovery from the fourth and fifth defendants, Eurotoaz Ltd and Mr Babichev. The fourth and fifth defendants applied for discovery from the plaintiffs.

Directed by the High Court (Barniville J) that the fourth and fifth defendants make the following discovery to the plaintiff: (1) Category 2 – “Documents relevant to the plaintiffs’ claims that – (a) the bringing of the civil actions in Russia (referred to at paras. 54 and 55, 68 – 81 and 81 – 89 of the amended statement of claim and para. 14.1 of the defence of the fourth and fifth defendants); (b) the making of the criminal complaints to the Russian authorities (referred to in paras. 54 and 55, 56 – 58, 61 – 67 and 87 – 89 of the amended statement of claim and para. 14.3 of the defence of the fourth and fifth defendants) and (c) the making of regulatory complaints to the Russian authorities (referred to in paras. 56 and 59 – 60 of the amended statement of claim and para. 39 of the defence of the fourth and fifth defendants) formed and form part of the alleged scheme the subject of the proceedings (referred to at paras. 2 – 4, summarised at paras. 5 – 12 and described elsewhere in the amended statement of claim) including (but not limited to): (i) Communications between the fourth and fifth named defendants, their respective servants, agents or representatives (on the one hand) and any of the other defendants, their respective servants, agents or representatives (on the other hand) which relate to or concern the matters referred to at (a), (b) and (c) above and their alleged part in the alleged scheme; (ii) Documents recording, disclosing or evidencing the motivation, intention, objective aim and purpose of the fourth named defendant, its servants, agents, representatives or officers (including the fifth named defendant) in relation to the matters referred to at (a), (b) and (c) above. In respect of the period from 1st September, 2008 to 8th February, 2018”; (2) Category 8 – “All documents disclosing or evidencing the alleged ownership and control by the first defendant of the fourth defendant (whether by reason of the admitted ultimate beneficial ownership of the fourth defendant by the second defendant, through Benstock Finance Limited, or by reason of the admitted connection between the fifth defendant and Benstock to the second defendant, or otherwise) in respect of the period from 1st January, 2008 to 8th February, 2018.” (3) Category 9 – “Documents recording, evidencing or disclosing all or any communications between the fourth defendant, its servants or agents or representatives and the fifth defendant, his servants, agents or representatives relating to (a) the civil actions in Russia (referred to in Category 2(a)), (b) the criminal complaints to the Russian authorities (referred to in Category 2(b)) and (c) the regulatory complaints to the Russian authorities (referred to in Category 2(c)) which the plaintiffs claim formed and form part of the alleged scheme the subject of these proceedings in respect of the period from 1st January, 2011 to 8th February, 2018.”

Barniville J directed the plaintiffs to make the following discovery to the fourth and fifth defendants (over and above what had been agreed): (1) Category 2 – “Documents recording, evidencing or disclosing all or any communications between the fourth defendant, its servants or agents or representatives and the fifth defendant, his servants, agents or representatives relating to (a) the civil actions in Russia (referred to in Category 2(a)), (b) the criminal complaints to the Russian authorities (referred to in Category 2(b)) and (c) the regulatory complaints to the Russian authorities (referred to in Category 2(c)) which the plaintiffs claim formed and form part of the alleged scheme the subject of these proceedings, in respect of the period from 1st January, 2011 to 8th February, 2018”; (2) Category 4 – “All documents evidencing or relating to any loss allegedly suffered by the plaintiffs by reason of the matters in respect of which complaint is made in the amended statement of claim and evidencing or relating to the cause of any such alleged loss”; (3) Category 6 – “All documents evidencing any interest on the part of ToAZ in Eurotoaz Hungary” (i.e., on the terms offered by the plaintiffs); (4) Category 7 – “All documents relating to the awareness of ToAZ and/or the plaintiffs of the liquidation and/or dissolution of Eurotoaz Hungary.”

Application granted.

JUDGMENT of Mr. Justice David Barniville delivered on the 31st day of July, 2019
Introduction
1

This is my judgment on two applications for discovery made in these proceedings. The first application I consider in this judgment is the plaintiffs” application for discovery from the fourth and fifth defendants, Eurotoaz Limited (‘Eurotoaz’) and Andrey Gennadyevich Babichev (‘Mr. Babichev’). Mr. Babichev is a director of Eurotoaz. For ease of reference, I refer to Eurotoaz and Mr. Babichev in this judgment, where appropriate, together as ‘these defendants’. The second application dealt with in this judgment is the application by these defendants for discovery from the plaintiffs. A third application for discovery made by the plaintiffs as against another defendant, the ninth defendant (Ms. Charilaou), is the subject of a separate judgment which is also being delivered today.

2

The orders for discovery which I have decided to make as between the plaintiffs and those defendants are set out at paras. 89 and 90 below. My reasons for making those orders are set out in the body of this judgment.

A very brief description of the proceedings
3

These proceedings are complicated and involve entities incorporated in various jurisdictions in the Caribbean as well as individuals and entities incorporated and based in the Russian Federation, Cyprus, Bulgaria and Ireland. What follows is a description of the proceedings in necessarily truncated form. It will be appropriate to refer in somewhat greater detail to some of the matters specifically pleaded in the case in order to understand the disputed discovery being sought by the various parties.

4

The plaintiffs” claims may be summarised as follows. The plaintiffs, which are all companies incorporated in various jurisdictions in the Caribbean, claim that they own in excess of 70% of the shares in a company incorporated in the Russian Federation called OJSC Togliattiazot (‘ToAZ’), which is alleged by the plaintiffs to be the largest producer of trade ammonia in Russia and one of the world's largest producers and exporters of ammonia. The plaintiffs claim that the defendants (including these defendants) are co-conspirators in an alleged scheme which is intended wrongfully to divest the plaintiffs of their shares, or the benefit of their shares, in ToAZ for the benefit of the first defendant, Dmitry Mazepin (‘Mr. Mazepin’). Mr. Mazepin is described in the amended statement of claim as a Belarus-born Russian businessman and is alleged to be the ultimate beneficial owner and controller of the second defendant, OJSC United Chemical Company Uralchem (‘UCCU’), another company registered in the Russian Federation, whose business is the production and sale of chemical products including ammonia and ammonia-based products. It is alleged that UCCU is a direct competitor of ToAZ and that it acquired a minority shareholding in ToAZ in 2008, now holding approximately 9.9% of the issued share capital of ToAZ.

5

The plaintiffs claim that the alleged scheme displays many of the features of a ‘raider attack’ (the alleged features of which are set out at para. 38 of the amended statement of claim). The plaintiffs claim that the purpose of the alleged scheme to defraud the plaintiffs of their shares in ToAZ is consistent with the purpose of a ‘raider attack’ and that the unlawful acts alleged by the plaintiffs in the proceedings have many of the features of such an attack.

6

The plaintiffs claim that the alleged scheme comprises many different actions undertaken by the defendants over various periods. They allege that each defendant can be linked to Mr. Mazepin and/or UCCU, either directly or indirectly. The plaintiffs further allege that the remaining defendants (including these defendants) are linked through a common relationship with Mr. Mazepin, UCCU or the third defendant, Uralchem Holding plc (‘Holding’) and, in particular, with Mr. Mazepin who it is alleged is the controlling mind and will of UCCU and Holding and the instigator and orchestrator of the alleged scheme.

7

The plaintiffs claim that each of the defendants has acted on the basis of a shared combination or understanding with Mr. Mazepin and has been an active participant in the alleged scheme on foot of a common understanding reached with him. It is alleged that each of the defendants have acted in furtherance of a shared understanding to embark upon concerted action with the intention of causing loss to the plaintiffs through the expropriation of the rights deriving from their shares in ToAZ for the benefit of Mr. Mazepin and/or UCCU and/or Holding.

8

The amended statement of claim...

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