Lord Goldsmith QC of Debevoise & Plimpton and a team from Akin Gump have represented Russian state-owned oil company PJSC Tatneft in its successful appeal in the English Court of Appeal from a summary judgment decision of the English High Court, allowing the case to proceed to trial.
According to Debevoise, “Tatneft brought the original claim, arguing that the four Ukrainian defendants [Gennadiy Bogolyubov, Igor Kolomoisky, Alexander Yaroslavsky, and Pavel Ovcharenko] each took part in an alleged dishonest ‘oil payment siphoning’ scheme, which allowed them to misappropriate hundreds of millions of dollars from Tatneft. The sums were owed to Tatneft in respect of oil it delivered during 2007 to a refinery in Ukraine, owned by PJSC Transnational Financial and Industrial Company Ukrtatnafta (UTN). The sale of the oil to UTN took place via a variety of intermediary companies, some of which were directly or indirectly controlled by the defendants. The first instance hearing took place over five days, and involved some 70 hearing bundles, extensive skeleton arguments as well as submissions by some of the leading commercial silks in London. The defendants’ case was in that Tatneft’s claim had no merit and ought not to proceed further because there was ‘no real prospect of success.’ Mr. Justice Picken agreed with the defendants, and granted summary judgment against Tatneft on this basis.”
According to Debevoise, it was at this stage that Debevoise & Plimpton London Co-Managing Partner Lord Goldsmith was brought onto the case by Tatneft. “In oral argument before the Court of Appeal,” Debevoise reports, “Lord Goldsmith argued convincingly that there was ‘a real prospect of success’ of establishing the defendants were liable to pay Tatneft compensation for their role in the dishonest oil payment siphoning scheme. Lord Goldsmith further established that Tatneft was entitled to the bring the claims and effectively rebutted any argument that the claims were time-barred.
The court found unanimously in favour of Tatneft on each issue raised in the appeal, and in so doing established an important legal principle not previously decided by the English Courts.”
Goldsmith, who was instructed by Akin Gump, was the lead advocate making Tatneft’s arguments to the Court of Appeal, and was supported by Debevoise Associates Conway Blake, Constantin Klein, and Evgeny Samoylov. The counsel team also included Richard Millett QC, Paul McGrath QC, and David Davies, all of Essex Court Chambers. The Akin Gump team instructing both Goldsmith and the Essex Court Chambers team was led by Partner Ilya Rybalkin and included London Partner Richard Hornshaw, Moscow Counsels Ivan Meleshenko, Gayane Nadzharova, Pavel Kabatov, and Andrey Kulikov, London Counsel Tom Laidler, Moscow Associate Anastasia Konstantinova, London Associates Natascha Steiner-Smith, Hanna Wright, and Nick Turvey, and Junior Associate Anna Podkopayeva.
Moscow Debevoise & Plimpton Partner Alan Kartashkin commented that: “This is a significant and justified victory. It rightfully reverses the original position taken by the courts. It’s particularly pleasing that it was a unanimous judgement from all three judges, who each supported the arguments advanced by my London colleague and lead advocate Lord Goldsmith QC and the wider Tatneft team.”
Akin Gump Partner Ilya Rybalkin said, “We are pleased by today’s ruling by the Court that it was inappropriate for our client’s claim to be dismissed. This matter is now in a place where we always thought it should be: continuing to trial, where Tatneft looks forward to proving its claims for substantial damages.”
Editor’s Note: On March 13, 2018, the Court of Appeal refused an application by defendants for permission to appeal the UK Supreme Court’s ruling reported in this article. According to Akin Gump, “By order dated 13 March 2018, Lord Kerr, Lord Carnwath and Lord Briggs refused permission ⎯⎯ on the basis that the applications do not raise an arguable point of law of general public importance – and ordered the defendants to pay Tatneft’s costs. Amongst other things, this means that the Court of Appeal’s conclusions on the proper interpretation of CPR 17.4(2), and the doctrine of ‘relation back,’ remain in place. The case is now proceeding, with worldwide freezing orders in place in respect of three out of the four defendants; it is expected to be one of the largest pieces of litigation in the Commercial Court this year.”
