Is the door to England still that wide open for CIS disputes?

11 03 2013

Guest Post by AstapovLawyers International Law Group

6 February 2013 has marked lawyers’ calendars with an important message from the UK Supreme Court: English courts will not accept the jurisdiction over a dispute which has its “centre of gravity” in another country. In particular, the Supreme Court found that in a tort claim, where the key issues in the litigation would on the face of it be factual not legal, law governing the tort was of very little, if any, potency for the purposes of defining the appropriate forum. The Supreme Court also refused to invoke non-exclusive jurisdiction clauses in favour of English courts noting that the connection with another country was of such strength and importance that England could not be said to be clearly or distinctly the appropriate forum.

For the reasons explained below, Lord Neuberger PSC and Lord Mance, Lord Clarke, Lord Wilson and Lord Reed JJSC upheld the lower courts’ judgments dismissing the jurisdiction of English courts and claims on piercing the corporate veil in the widely reported case of VTB Capital plc (Appellant) v Nutritek International Corp and others (Respondents) [2013] UKSC 5. (On appeal from [2012] EWCA Civ 808 and [2011] EWHC 3107 (Ch) respectively.) See case preview on this blog here. Read the rest of this entry »





VTB v Nutritek: Piercing the Corporate Veil: UK Supreme Court Preview

9 11 2012

The truly important and absorbing case of VTB Capital plc (Appellant) v Nutritek International Corp and others (Respondents) UKSC 2012/0167 has made it to the UK’s court of final recourse which granted permission to appeal on 26 July 2012. The case is going to be heard for three days by Lords Neuberger, Mance, Clarke, Wilson and Reed JJSC from 12 to 14 November 2012 . There are a lot of issues in this case. Notably a couple of juicy ones are (1) whether the court can pierce the corporate veil and treat a person as a party to a contract if that person uses a puppet company to enter into a contract with a third party in order to perpetrate fraud on that third party and (2) when determining whether England is clearly the appropriate forum, is there a presumption that a defendant who has committed a wrong in England ought to answer for that wrong in England. For some reason this case is not being broadcast live. Maybe it is just too high profile and controversial to show live. Too bad …  because upon appeal to the UKSC, even Special Immigration Appeals Commission dealing with national cases are aired. 

Facts

VTB (“V”), a London-based bank (the appellant) entered a facility agreement with a Russian company (“R”) in 2007. Under that agreement, V loaned R $225m to fund the purchase of six Russian Dairy Plants (“the dairy companies”) from the first defendant (Nutritek, “D1”: the “defendants” (at first instance) also became the “respondents” in subsequent proceedings). R subsequently defaulted on the loan. In 2010, V began claims in deceit, alternatively conspiracy to defraud, against the defendants. In May 2011, Chief Master Weingarten granted permission to serve the claims on the defendants out of the jurisdiction. In August 2011, V obtained a worldwide freezing order against Konstantin Malofeev or “D4”: see below.

Read the rest of this entry »