Case details

Livingston Properties Equities Inc and others (Respondents) v JSC MCC Eurochem and another (Appellants) (British Virgin Islands)

Case ID: JCPC 2019/0026

Jurisdiction: The Court of Appeal of the Eastern Caribbean Supreme Court (British Virgin Islands)

Case summary

Issue(s)

The Appellants commenced proceedings against the Respondents (and other defendants) in the BVI in 2015. The Appellants were initially granted permission to serve the proceedings on the defendants that are located outside of the BVI. The Respondents applied to set aside that permission and challenged the jurisdiction of the BVI court to try the claims. At first instance that application was dismissed but on appeal to the Eastern Caribbean Court of Appeal that decision was overturned and the EC CoA granted a stay of the proceedings on the basis that Russia was a more appropriate forum.

The central issues in the appeal are whether the EC CoA erred in finding that (i) Russia is an available forum with competent jurisdiction; and (ii) the more appropriate forum for trial of the case. The second issue concerns the EC CoA’s application of forum non conveniens principles and the relative weight that should be afforded to different factors in determining where is clearly and distinctly the most appropriate forum to try the underlying claims.

In reaching its decision, the EC CoA overruled the court of first instance in finding that the Claimants could not assume that the law of the forum governed the underlying claims and were under a positive obligation to plead and prove any applicable foreign law. Pursuant to that finding the EC CoA went on to find that Russian law governed the underlying dispute.

The EC CoA also found that the first instance court had placed too much weight on the fact that numerous of companies that had allegedly received bribe were domiciled in the BVI and that this should not be given substantial weight as a connecting factor.

The need for clarification as to how the BVI Courts should approach the two specific sub-issues described above was considered sufficiently important to warrant granting the Appellants with leave to appeal to the Privy Council.

Facts

The Appellants are affiliated companies involved in the sale of mineral fertiliser. The 8th Respondent, Mr Rogalskiy, and the 9th Respondent, Mr Pomytkin, were formerly senior employees of the Appellants and between them were largely responsible for the marketing and sales of the Appellants’ products.

It is alleged that Messrs Rogalskiy and Pomytkin formed a network of companies predominantly registered in the BVI for the purpose of receiving, concealing and laundering over $45 million. That money is said to have derived from secret commission payments received for the benefit of Messrs Rogalskiy and Pomytkin in return for sales of the Appellants’ products at undervalue, which caused the Appellants loss. The Respondents to the appeal are said to have been involved in the scheme. None are or were domiciled in Russia and it is alleged by the Appellants that the wrongdoing occurred outside of Russia.

Parties

Appellant(s)

JSC MCC Eurochem, Eurochem Trading GmBH

Respondent(s)
  1. Nimati International Trading Ltd
  2. Nautilus Services Ltd
  3. Global Med Services Inc
  4. Sevan Porperties Management Ltd; (5) Dearborn Enterprises Ltd (6) Gianthill Management Ltd; Dreymoor Fertilisers Overseas PTE Ltd
  5. Nedjet Baysan
  6. Kopist Holdings Ltd
  7. Itrade Fertilisers SA
  8. Fabio Scalambrin

Appeal

Justices

Lord Reed, Lord Carnwath, Lady Black, Lady Arden, Lord Kitchin

Hearing start date

05 Mar 2020

Hearing finish date

05 Mar 2020